VERSO PAPER S-1/A Filing

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                                         As filed with the Securities and Exchange Commission on April 2, 2008
                                                                                                                                             Registration No. 333-148201



                                                       UNITED STATES
                                           SECURITIES AND EXCHANGE COMMISSION
                                                                        Washington, D.C. 20549


                                                           AMENDMENT NO. 2 TO
                                                                FORM S-1
                                                         REGISTRATION STATEMENT
                                                                      UNDER
                                                             THE SECURITIES ACT OF 1933


                                                          VERSO PAPER CORP.
                                                              (Exact name of registrant as specified in its charter)




                      Delaware                                                         2621                                                   75-3217389
              (State or other jurisdiction of                              (Primary Standard Industrial                                       (I.R.S. Employer
             incorporation or organization)                                 Classification Code Number)                                      Identification No.)

                                                                6775 Lenox Center Court, Suite 400
                                                                 Memphis, Tennessee 38115-4436
                                                                         (901) 369-4100
                                                   (Address, including zip code, and telephone number, including area code,
                                                                 of the registrant’s principal executive offices)



                                                                       Michael A. Jackson
                                                              President and Chief Executive Officer
                                                                       Verso Paper Corp.
                                                               6775 Lenox Center Court, Suite 400
                                                                Memphis, Tennessee 38115-4436
                                                                         (901) 369-4100
                                      (Name, address, including zip code, and telephone number, including area code, of agent for service)



                                                                                  Copies to:
                         Raymond Y. Lin, Esq.                                                                            Michael Kaplan, Esq.
                        Dennis D. Lamont, Esq.                                                                          Davis Polk & Wardwell
                        Latham & Watkins LLP                                                                             450 Lexington Avenue
                           885 Third Avenue                                                                            New York, New York 10017
                       New York, New York 10022                                                                              (212) 450-4000
                            (212) 906-1200


      Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this registration
statement.
     If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, check the following box. 
     If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following
box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. 
     If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective registration statement for the same offering. 
     If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective registration statement for the same offering. 


The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the
registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in
accordance with Section 8(a) of the Securities Act of 1933 or until this registration statement shall become effective on such date as the
Commission, acting pursuant to said Section 8(a), may determine.
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The information in this prospectus is not complete and may be changed. We may not sell these securities until the
registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to
sell these securities and we are not soliciting an offer to buy these securities in any state where the offer or sale is not
permitted.

                                                   Subject to completion, dated April 2, 2008

PRELIMINARY PROSPECTUS



                                                                          Shares




                                                           Common Stock
This is an initial public offering of shares of common stock by Verso Paper Corp. We are offering              shares of our common stock.

Prior to the offering, there has been no public market for our common stock. It is currently estimated that the initial public offering price per
share of our common stock will be between $             and $      . We will apply to list our common stock for quotation on the New York
Stock Exchange under the symbol ―VRS.‖

Investing in our common stock involves a high degree of risk. Before buying any of these shares of our common stock, you should
carefully consider the risk factors described in “ Risk Factors ” beginning on page 15 of this prospectus.

                                                                                                               Per share                Total
Initial public offering price                                                                            $                       $
Underwriting discounts and commissions                                                                   $                       $
Proceeds, before expenses, to Verso Paper Corp.                                                          $                       $

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities
or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

The underwriters may also purchase up to an additional               shares of our common stock from our principal stockholder, Verso Paper
Management LP, an affiliate of Apollo Global Management LLC, at the initial public offering price, less the underwriting discounts and
commissions, within 30 days from the date of this prospectus. We will not receive any of the proceeds from the sale of the shares by the selling
stockholder.

The underwriters are offering the shares of our common stock pursuant to a firm commitment underwriting as described under ―Underwriting.‖
Delivery of the shares of common stock will be made on or about                , 2008.


                            Credit Suisse                                                                                                       Citi
                     Deutsche Bank Securities          Lehman Brothers           Merrill Lynch & Co.         Morgan Stanley

                                                   The date of this prospectus is         , 2008
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                                                          TABLE OF CONTENTS

Market and Industry Information                                                                                                                 ii
Prospectus Summary                                                                                                                              1
Risk Factors                                                                                                                                   15
Forward-Looking Statements                                                                                                                     25
Use of Proceeds                                                                                                                                26
Dividend Policy                                                                                                                                26
Cash and Capitalization                                                                                                                        27
Dilution                                                                                                                                       28
Selected Historical Combined Financial Data                                                                                                    29
Management’s Discussion and Analysis of Financial Condition and Results of Operations                                                          32
Industry                                                                                                                                       48
Business                                                                                                                                       52
Management                                                                                                                                     65
Compensation Discussion and Analysis                                                                                                           70
Executive Compensation                                                                                                                         78
Principal and Selling Stockholders                                                                                                             83
Certain Relationships and Related Party Transactions                                                                                           86
Description of Capital Stock                                                                                                                   88
Shares Eligible for Future Sale                                                                                                                90
Material U.S. Federal Income Tax Considerations for Non-U.S. Holders of Our Common Stock                                                       92
Underwriting                                                                                                                                   95
Legal Matters                                                                                                                                 100
Experts                                                                                                                                       100
Where You Can Find More Information                                                                                                           100
Index to Financial Statements                                                                                                                 F-1



      You should rely only on the information contained in this prospectus and any free writing prospectus prepared by or on behalf of
us or any information to which we have referred you. We have not authorized anyone to provide you with information that is different.
This document may only be used where it is legal to sell these securities.

     Until         , 2008 (25 days after the date of this prospectus), all dealers that effect transactions in these securities, whether or
not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealer’s obligation to deliver a
prospectus when acting as an underwriter and with respect to unsold allotments or subscriptions.

                                                                       i
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                                                MARKET AND INDUSTRY INFORMATION

       Market data and other statistical information used throughout this prospectus are based on independent industry publications, government
publications, reports by market research firms or other published independent sources. Some data are also based on our good faith estimates
which are derived from our review of internal surveys, as well as the independent sources listed above. Although we believe these sources are
reliable, we have not independently verified the information. Industry prices for coated paper provided in this prospectus are, unless otherwise
expressly noted, derived from Resource Information Systems, Inc., or ―RISI, Inc.‖ data. ―North American‖ data included in this prospectus that
has been derived from RISI, Inc. only includes data from the United States and Canada. U.S. industry pricing data included in this prospectus
has been derived from RISI, Inc. data; this data represents pricing from the eastern United States only (as defined by RISI, Inc.). Also, any
reference to (i) grade No. 3, grade No. 4 and grade No. 5 coated paper relates to 60 lb. basis weight, 50 lb. basis weight and 34 lb. basis weight,
respectively, (ii) lightweight coated groundwood paper refers to groundwood paper grades that are a 36 lb. basis weight or less, and
(iii) ultra-lightweight coated groundwood paper refers to groundwood paper grades that are a 30 lb. basis weight or less. The RISI, Inc. data
included in this prospectus has been derived from the following RISI, Inc. publications: RISI World Graphic Paper forecast, April 2008; RISI
North American Graphic Paper forecast, April 2008; and RISI Paper Trader: A Monthly Monitor of the North American Graphic Paper Market,
March 2008.

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                                                         PROSPECTUS SUMMARY

        This summary highlights important information about our business from this prospectus. Please review this prospectus in its entirety,
  including “Risk Factors” and our financial statements and the related notes, before you decide to invest. Unless otherwise noted, the terms
  the “company,” “Verso Paper,” “we,” “us,” “our” and “Successor” refer collectively to Verso Paper Corp., a Delaware corporation,
  and its subsidiaries after giving effect to the consummation of the Merger as described under “Prospectus Summary—The Merger.”
  References to the “Division” or “Predecessor” are to the Coated and Supercalendered Papers Division of International Paper Company.
  The term “International Paper” refers to our former parent, International Paper Company. Unless otherwise noted, references to
  “Apollo” throughout this prospectus refer to the affiliates of Apollo Global Management LLC that control us.



                                                                Our Company

       We are a leading North American supplier of coated papers to catalog and magazine publishers. The market for coated paper, which
  is comprised of coated groundwood paper and coated freesheet paper, is one of the most attractive segments of the paper industry due to its
  prospects for volume growth, continued improvement in pricing and the high value-added nature of its products. Coated paper is used
  primarily in media and marketing applications including catalogs, magazines and commercial printing applications, which include
  high-end advertising brochures, annual reports and direct mail advertising.

        We are North America’s second largest producer of coated groundwood paper, which is used primarily for catalogs and magazines.
  We are also North America’s lowest cost producer of coated freesheet paper, which is used primarily for annual reports, brochures and
  magazine covers. In addition to coated paper, we have a strategic presence in supercalendered paper, which is primarily used for retail
  inserts. We also produce and sell market pulp, which is used in the manufacture of printing and writing paper grades and tissue products.

       Our primary product lines include coated groundwood paper, coated freesheet paper, supercalendered paper and pulp. Our net sales
  by product line for the year ended December 31, 2007 are illustrated below:


                                                          Net Sales by Product Line




        We sell and market our products to approximately 100 customers which comprise 650 end-user accounts. We have long-standing
  relationships with many leading magazine and catalog publishers, commercial printers,


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  specialty retail merchandisers and paper merchants. We reach our end-users through several distribution channels including direct sales,
  commercial printers, paper merchants and brokers. The majority of our products are sold via contracts we maintain with our customers,
  which generally specify the volumes to be sold to the customer over the contract term, as well as the pricing parameters for those sales.
  Having a large portion of our sales volume under contract allows us to plan our production runs well in advance, optimizing production
  over our integrated mill system and thereby increasing overall efficiency and reducing our costs. Our key customers include leading
  magazine publishers such as Condé Nast Publications, Inc., National Geographic Society and Time Inc.; leading catalog producers such as
  Avon Products, Inc. and Sears Holdings Corporation; leading commercial printers such as Quad/Graphics, Inc. and RR Donnelley & Sons
  Company; and leading paper merchants and brokers such as Unisource Worldwide, Inc., the xpedx business unit of International Paper,
  A.T. Clayton & Co., Inc. and Clifford Paper, Inc.

        We operate 11 paper machines at four mills located in Maine, Michigan and Minnesota. The mills have a combined annual
  production capacity of 1,726,000 tons of coated paper, 102,000 tons of supercalendered paper and 874,000 tons of kraft pulp, of which
  610,000 tons is consumed internally and the remainder is sold as market pulp. Over our integrated mill system, the total volume of pulp
  purchased from third parties is approximately balanced by the amount of pulp that we sell to the market. As a result, our business is
  generally insulated from fluctuations in earnings caused by changes in the price of pulp. Our facilities are strategically located within close
  proximity to major publication printing customers, which affords us the ability to more quickly and cost-effectively deliver our products.
  Our facilities also benefit from convenient and cost-effective access to northern softwood fiber, which is required for the production of
  lightweight and ultra-lightweight coated groundwood papers, two of the more attractive grades of coated paper.

                                                               Industry Overview

        Based on 2007 sales, the size of the global coated paper industry is estimated to be approximately $49 billion, or 54 million tons of
  coated paper demand, including approximately $12 billion in North America, or 13 million tons of coated paper demand. In North
  America, coated papers are classified by brightness into five grades, labeled No. 1 to No. 5, with No. 1 having the highest brightness level
  and basis weight and No. 5 having the lowest brightness level and basis weight. Papers graded No. 1, No. 2 and No. 3 are typically coated
  freesheet grades. No. 4 and No. 5 papers are predominantly grades containing groundwood. Coated groundwood grades are the preferred
  grades for catalogs and magazines, while coated freesheet is more commonly used in commercial print applications. The coating process
  adds a smooth uniform finish to the paper, which produces superior color and print definition. As a result, major uses of coated papers
  include the printing of catalogs, magazines, annual reports, directories and advertising materials.

        The following key trends are currently affecting the North American coated paper industry:
       Growing consumption/demand . Coated paper demand is primarily driven by advertising and print media usage. North American
  coated paper consumption, which was 13.2 million tons in 2007, has grown at a 2.0% compound annual growth rate since 2001 due to the
  continued growth of paper used in catalog, magazine and commercial print applications.

       Reductions in production capacity and supply . In North America, supply is determined primarily by North American-based coated
  paper production and is supplemented by imports from Europe and Asia. As a result of recent capacity closures in the North American
  coated paper industry, the lack of any currently announced capacity additions and the stabilization of imports of coated paper into the
  United States, we believe that supply should be stable for the near future.


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        Favorable operating rates . According to RISI, Inc., the average operating rate for North American coated paper manufacturers,
  which measures the ratio of shipments from producers in a particular region to capacity of producers in the same region, rose from 86% in
  2001 to 97% in 2007, as shipments increased more than capacity during this time period. Following the recently announced reductions in
  North American production, 2007 coated paper operating rates would have been over 100% on a pro forma basis, reflecting the current
  tight supply conditions. Historically, high operating rates have resulted in increased prices for coated paper. RISI, Inc. expects the average
  operating rate for coated groundwood and coated freesheet to remain above 95% and 92% through 2012, respectively, with the average
  operating rate for coated groundwood expected to be 100% through 2009 because of trends in North American demand, recently completed
  and announced capacity closures, the lack of any major forecasted North American capacity additions and favorable import trends.

        Improving pricing . As a result of the trends identified above, coated paper pricing in the United States is increasing. We have
  announced and are implementing total price increases of $245 per ton on most grades of coated groundwood and $190 per ton on most
  grades of coated freesheet. As we began implementing these price increases, our weighted average paper prices rose from $797 per ton in
  the second quarter of 2007 to $840 per ton in the fourth quarter of 2007. We expect our weighted average paper prices to continue to
  increase as we further realize these price increases during 2008. In reflection of these market trends, RISI, Inc. forecasts that U.S. prices for
  grade No. 5 coated paper, 34 lb. basis weight, which is an industry benchmark for coated paper pricing, will rise from an average of $888
  per ton in the second quarter of 2007 to $1,100 per ton in the fourth quarter of 2008. In addition, RISI, Inc. estimates annual prices for this
  product to increase from an average of $923 per ton in 2007 to $1,083 per ton in 2008 and then to $1,140 per ton in 2009. See
  ―Management’s Discussion and Analysis of Financial Condition and Results of Operations—Selected Factors that Affect Our Operating
  Results.‖

                                                           Our Competitive Strengths

        We believe that our competitive strengths include the following:
       Well positioned to benefit from strengthening coated paper market fundamentals . We believe that we are well positioned to benefit
  from improving fundamentals in the coated paper industry, which are inherently linked to the balance of supply and demand. Since the
  second quarter of 2004, supply has decreased due to a reduction in production capacity in both North America and Europe, which was
  caused primarily by the closure of high cost coated paper mills by our competitors. These mills generally suffered from a combination of
  higher energy prices, changes in Canadian dollar and euro exchange rates and other inflationary factors. North American producers
  announced the shutdown of approximately 1.3 million tons of aggregate coated paper capacity beginning in the second half of 2007 and
  continuing throughout 2008, which represents approximately 11% of North American coated paper capacity. Based on favorable supply
  and demand trends, RISI, Inc. projects that North American coated paper operating rates will remain high for the foreseeable future, with
  coated groundwood operating rates expected by RISI, Inc. to be approximately 100% in 2008 and 2009.

        A leading manufacturer of coated paper products in North America . We are one of the largest coated paper manufacturers in North
  America based on production capacity. Within the overall North American coated paper market, we have a leading market share in North
  American coated groundwood production capacity. In addition, we are North America’s lowest cost producer of coated freesheet paper.
  Our size provides us with economies of scale, which enables us to optimize production across our integrated mill system to provide a broad
  spectrum of products and gives us the operational flexibility to adapt to our customers’ specific coated paper needs.

        Leading positions in the industry’s most attractive segments and products . We are a leading supplier of coated papers to U.S.
  catalog and magazine publishers. The catalog and magazine end-user segments are among the most attractive within the coated papers
  industry due to their long-term growth prospects, favorable industry


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  dynamics, blue-chip customer base and emphasis on product innovation and development. We maintain a leading position in the U.S.
  catalog and magazine end-user segments, with estimated segment shares of approximately 24% and 16% in 2007, respectively.

        In addition to being focused on the most attractive end-user segments, our product portfolio is also concentrated on the most
  attractive products in both the paper industry, in general, and the coated paper segment, specifically. Coated papers have been and are
  expected to be among the fastest growing paper grades in the paper industry, with North American coated paper demand having grown
  2.1% per annum since 2001, compared to a demand growth rate of negative 4.7% for newsprint and a demand growth rate of negative
  1.8% for uncoated freesheet paper. We are also specifically focused on the fastest growing portions of the coated paper market. For
  example, we are one of three major North American-based producers of ultra-lightweight coated groundwood paper. Ultra-light weight
  coated groundwood paper has experienced higher growth than the overall coated paper market, a trend we expect to continue as customers
  are increasingly demanding lower basis weight products in order to reduce their freight and postage costs. In addition, ultra-lightweight
  coated papers sell for higher prices and yield higher margins than their higher basis weight counterparts. We believe that we have a
  competitive advantage in ultra-lightweight coated paper grades due to our investment in specialized equipment and our internal
  development of special manufacturing processes.

        Strong relationships with attractive customer base . We have long-standing relationships with leading publishers, commercial
  printers, retail merchandisers and paper merchants. Our relationships with our 10 largest coated paper customers average more than 20
  years. These customers have historically had stable, on-going paper needs. Our strong relationships with the leading customers in the
  catalog and magazine end-user segments have allowed us to optimize our mill system to supply orders on an efficient, cost-effective basis.
  Due to the premium printing requirements of these end-users, we have also been able to shift our product mix towards higher value-added
  grades, such as lightweight and ultra-lightweight coated groundwood. In addition, 60% of our net sales in 2007 were made pursuant to
  contracts we maintain with our customers. These contracts help enable us to plan our production runs well in advance, thereby optimizing
  production over our integrated mill system, which reduces costs and increases overall efficiency. Our relationships with our key customers
  also allow us to maintain operating rates that are in excess of industry levels. For example, according to RISI, Inc., average operating rates
  for coated paper producers were 97% in 2007, while our operating rates were 99% in the same period.

        Well-invested, low-cost manufacturing facilities . We believe our coated paper mills are among the most efficient and lowest cost
  coated paper mills in the world based on the cash cost of delivery to Chicago. We attribute our manufacturing efficiency, in part, to the
  significant historical investments made in our mills. From 1985 to 2006, our former parent, International Paper, invested over $1.7 billion
  in growth capital expenditures for new machines, rebuilds, productivity enhancements and capacity expansions. In addition to these
  expenditures, over $800 million was invested by International Paper for maintenance and repairs of this equipment, as well as for certain
  environmental, health and safety projects. International Paper also improved the cost position of our system by closing over 500,000 tons
  of higher cost coated paper capacity. As a result, we are the owners of well-invested, low-cost production assets. Further, most of our paper
  production is at mills with integrated pulp production and energy co-generation facilities, which reduces our exposure to price volatility for
  energy and purchased pulp, two of our largest cost inputs. As we sell approximately the same amount of pulp as we purchase across our
  integrated production system, we are generally insulated from fluctuations in earnings caused by changes in pulp prices.

        Efficient, integrated supply chain with unique service solutions . Coated paper customers have become increasingly focused on
  supply chain efficiency, cost reduction and lead time minimization. Our Internet-based ordering platforms simplify ordering, tracking and
  invoicing, and are part of our strategy to continually reduce the cost to serve our customer base. In addition, we operate Nextier Solutions,
  an Internet-based system designed for collaborative production planning, procurement and inventory management processes throughout the
  supply chain. Our customers use our systems to maximize supply chain efficiencies, improve communication and reduce operating costs.
  We believe this provides us with a competitive advantage by enabling us to run our operations


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  more cost-effectively through better planning of manufacturing runs and tracking of costs and inventory. We also believe the strategic
  location of our mills and distribution centers near major end-use markets, such as New York and Chicago, affords us the ability to more
  quickly and cost-effectively deliver our products to those markets. This close proximity to our customers provides for enhanced customer
  service and allows us to minimize our freight and delivery costs.

       Experienced management team with proven track record . We believe our senior management team is a valuable asset to our
  business. This team has introduced industry-leading cost saving and efficiency programs and has lead the successful transition of our
  business from International Paper. In November 2006, Michael A. Jackson joined our business as President and Chief Executive Officer
  from Weyerhaeuser Company, where he most recently served as Senior Vice President in charge of the Cellulose Fibers, White Papers,
  Newsprint and Liquid Packaging Board businesses. Our senior management team averages approximately 20 years of experience in the
  paper and forest products industry.

                                                             Our Business Strategy

        Increase revenues . One of our key objectives is to profitably grow sales. We believe we can achieve this goal through the following
  strategies:
          •    Capitalize on favorable trends in our industry . The coated paper industry is currently benefiting from favorable supply and
               demand trends and high operating rates, which have resulted in rising sales prices. We are currently implementing several price
               increases with an announced total increase of $245 per ton on our coated groundwood grades and $190 per ton on most of our
               coated freesheet grades. We expect to grow our revenues and operating profits as these price increases are realized during
               2008. Based on our coated paper production capacity, a price increase of $50 per ton in average selling prices for coated paper,
               assuming volumes and costs remain constant, equates to $86 million in additional annual revenues and operating profits.
          •    Leverage our leading market position . We intend to further strengthen our leadership position by increasing our sales to both
               existing and new potential customers within the catalog and magazine segments, where, as industry leaders, we can offer an
               enhanced level of products and service. We believe that this competitive advantage will allow us to efficiently grow our
               business in line or in excess of market volume and price growth.
          •    Participate in ongoing coated paper industry consolidation. We believe that there may be opportunities to participate in the
               current trend of consolidation in the North American coated paper industry. We intend to evaluate and pursue acquisitions and
               strategic partnerships that we believe will increase our profitability, enhance economies of scale, and augment or diversify our
               existing customer base. Through strategic acquisitions and partnerships, we intend to continue to improve our absolute and
               relative cost position, supplement our organic growth prospects and enhance stockholder value.
          •    Focus on specialty and higher value-added products . In addition to participating in underlying market growth, we plan to
               grow revenues by focusing on specialty and high value-added products, which we expect to grow in excess of general market
               growth. As one of the three major North American-based producers of ultra-lightweight papers, we are positioned well with
               customers that want to lower postage and distribution expenses and thereby lower their total production costs. We expect the
               volumes and prices of ultra-lightweight papers to grow faster than the coated paper market in general, which provides us with
               an opportunity to leverage our production capabilities to garner additional revenues. In addition, we will continue to drive
               product performance improvements by taking advantage of technological advances and developing new products that meet the
               needs of our core catalog and magazine customers. We have a robust research and development effort that identifies,
               commercializes and capitalizes on new products and product innovations to generate additional sales opportunities.


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        Improve profitability . We intend to focus on productivity enhancements and on improving our cost platform through the following
  strategies:
          •    Increase productivity . Since 2001, we have significantly reduced production costs and enhanced manufacturing efficiency at
               our mills. During this period, we reduced total headcount by approximately 20% while overall productivity increased by 15%
               as measured by production tons per day and by approximately 50% as measured by tons produced per day per employee.
               Combined with strategies to reduce raw material usage, repair costs and manufacturing overhead, these initiatives have
               significantly improved financial and operating results. Going forward, we intend to selectively pursue cost reduction and
               efficiency improvement initiatives based on their cost to achieve, likely success and anticipated payback period.
          •    Improve operating performance . Through Realizable-GAP, or ―R-GAP,‖ our continuous process improvement program, we
               have implemented focused programs to optimize raw materials sourcing and usage, reduce repair costs and control overhead.
               We believe these process improvements, combined with our ability to generate a substantial portion of our energy needs and
               produce low cost pulp through our integrated pulp operations, will enhance our operating leverage, earnings and cash flow. We
               expect to continue to enhance and use our proprietary R-GAP process to identify more cost-saving opportunities which will
               improve the profitability of our mill network.

        Maximize cash flow . Since the acquisition of our business from International Paper, our senior management team has implemented a
  focused strategy to maximize profitability and cash flow. With this enhanced management focus, we have managed our working capital,
  capital expenditures and operational expenditures efficiently to optimize cash flow.

        As a result of our former parent’s significant growth capital expenditures, we believe that our capacity is sufficient to meet our
  current growth initiatives without significant additional spending and that future growth capital will be spent only upon the expectation of
  significant returns. Following 2008, our annual maintenance and environmental capital expenditures are expected to average approximately
  $40 million to $50 million per year for the next few years, which we believe will be sufficient to maintain our productivity and maximize
  cash flow.

       As a result of the way the acquisition of our business was structured, we also expect to pay minimal cash income taxes over the next
  few years due in part to high tax depreciation deductions we expect to realize. This tax depreciation should reduce future taxable profits
  from the business and minimize our cash income taxes.

        We expect that our relatively low maintenance and environmental capital expenditures, improved working capital management,
  further cost reductions and minimal cash income taxes will enhance our ability to generate cash flow. We intend to use our cash flow to
  repay our debt and to reinvest in the growth of our business.


                                                                  Risk Factors

       An investment in our common stock involves substantial risks and uncertainties. Some of the more significant challenges and risks
  include those associated with our susceptibility to conditions in the U.S. economy, our ability to pass through increases in our costs to our
  customers, the cost of energy and raw materials, the highly competitive nature of the industry in which we operate and our significant
  amount of indebtedness. See ―Risk Factors‖ for a discussion of the factors you should consider before investing in our common stock.


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                                                                 The Merger

        We, along with Verso Paper Two Corp., Verso Paper Three Corp., Verso Paper Four Corp. and Verso Paper Five Corp., are the
  wholly-owned subsidiaries of Verso Paper Management LP. Prior to the effective date of the registration statement of which this
  prospectus is a part, Verso Paper Two Corp., Verso Paper Three Corp., Verso Paper Four Corp. and Verso Paper Five Corp. will merge
  with and into us, and we will be the surviving corporation. The combination of us with these four entities is referred to throughout this
  prospectus as the ―Merger.‖ Upon consummation of the Merger, Verso Fiber Farm LLC, which is currently a wholly-owned subsidiary of
  Verso Paper Five Corp., will become our wholly-owned subsidiary. In connection with Verso Fiber Farm LLC becoming our
  wholly-owned subsidiary, we intend to use $           million of the net proceeds from this offering to repay the outstanding $3.1 million
  under the revolving credit facility and the $10.0 million senior secured term loan of Verso Fiber Farm LLC and to transfer the remainder of
  this amount to our parent, Verso Paper Management LP. See ―Use of Proceeds.‖ As a result of the Merger, Verso Paper LLC, the chief
  operating entity through which our business is operated, and each of its subsidiaries, which will include Verso Fiber Farm LLC, will
  become our wholly-owned indirect subsidiaries. Prior to the Merger, each of Verso Paper Corp., Verso Paper Two Corp., Verso Paper
  Three Corp. and Verso Paper Four Corp. are holding companies that indirectly own 40%, 30%, 20% and 10% of Verso Paper LLC and our
  other consolidated subsidiaries, respectively. Prior to the Merger, Verso Paper Five Corp. is a holding company that wholly owns Verso
  Fiber Farm LLC. See ―—Summary Corporate Structure Pre- and Post-Merger.‖
        Upon consummation of this offering, Apollo will continue to control us with beneficial ownership of           % of our common stock.
  Although Apollo will have the ability to substantially influence all matters requiring stockholder approval, Apollo does not maintain a role
  in our day-to-day management and operations other than through its representation on our board of directors by its employees, Messrs.
  Harris, Kleinman, Zaken and Sambur, solely in their capacity as directors, and any provision of financial and strategic consulting and
  advisory services under our management agreement with Apollo. The services under the management agreement are advisory in nature and
  do not provide Apollo with any authority to manage or operate our business and affairs. See ―Risk Factors—Risks Related to Our Common
  Stock—Apollo controls us, and its interests may conflict with or differ from your interests as a stockholder‖ and ―Certain Relationships
  and Related Party Transactions—Management Agreement.‖


                                                           Additional Information

       Our principal executive offices are located at 6775 Lenox Center Court, Suite 400, Memphis, Tennessee 38115-4436. Our telephone
  number is (901) 369-4100. Our web site address is www.versopaper.com . Information on our web site is not considered part of this
  prospectus.


                                                                       7
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                                          Summary Corporate Structure Pre- and Post-Merger

       The following chart represents our summary corporate structure prior to the Merger. The profit interests held by senior management
  in Verso Paper Management LP are non-voting. See ―Prospectus Summary—The Merger,‖ ―Compensation Discussion and
  Analysis—Elements of Executive Compensation‖ and ―Principal and Selling Stockholders.‖




        The following chart represents our summary corporate structure immediately following the consummation of the Merger and this
  offering. Verso Paper Corp. will be the surviving entity of the merger of Verso Paper Corp., Verso Paper Two Corp., Verso Paper Three
  Corp., Verso Paper Four Corp. and Verso Paper Five Corp. Upon consummation of this offering, members of management holding profit
  interests in Verso Paper Management LP will have the right to exchange these interests for shares of our common stock held by Verso
  Paper Management LP. See ―Prospectus Summary—The Merger,‖ ―Compensation Discussion and Analysis—Elements of Executive
  Compensation‖ and ―Principal and Selling Stockholders.‖




                                                                     8
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                                                                    The Offering

  Shares of common stock offered by us                             shares

  Common stock to be outstanding after this offering               shares

  Use of proceeds                                         We estimate that the net proceeds to us from this offering, after deducting
                                                          underwriting discounts and estimated offering expenses, will be approximately
                                                          $         million. We intend to use the net proceeds to repay the outstanding $3.1
                                                          million under the revolving credit facility and the $10.0 million senior secured term
                                                          loan of Verso Fiber Farm LLC and make a related transfer to our parent, Verso Paper
                                                          Management LP, to repay the outstanding $250.0 million senior unsecured term loan
                                                          facility of our subsidiary, Verso Paper Finance Holdings LLC, and for general
                                                          corporate purposes, including working capital, the expansion of our production
                                                          capabilities, research and development, purchases of capital equipment and potential
                                                          acquisitions of businesses that we believe are complementary to our business. See
                                                          ―Use of Proceeds.‖

  Dividend policy                                         We intend to pay quarterly cash dividends on our common stock at an initial annual
                                                          rate of $       per share. The declaration and payment of future dividends to holders
                                                          of our common stock will be at the discretion of our board of directors and will
                                                          depend on many factors, including our financial condition, earnings, legal
                                                          requirements, restrictions in our debt agreements and other factors our board of
                                                          directors may deem relevant. See ―Risk Factors—Risks Related to Our Common
                                                          Stock—We may be restricted from paying cash dividends on our common stock in
                                                          the future.‖

  Listing                                                 We will apply to have our common stock listed on the New York Stock Exchange
                                                          under the trading symbol ―VRS.‖

       The number of shares of common stock to be outstanding after this offering is based on            shares of common stock outstanding
  upon completion of the Merger and the filing of our amended and restated certificate of incorporation, and excludes         shares of
  common stock reserved for issuance under our equity compensation plans upon completion of this offering.

        Except as otherwise indicated, all information in this prospectus:
            •   gives effect to the Merger and the filing of our amended and restated certificate of incorporation, effecting a -for-1 stock
                split with respect to our common stock, which will occur prior to the effective date of the registration statement of which this
                prospectus is a part; and
            •   assumes no exercise by the underwriters of their option to purchase           additional shares from the selling stockholder in
                this offering. See ―Principal and Selling Stockholders.‖


                                                                            9
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                                                     Summary Combined Financial Data

        The following table presents our summary historical combined financial data. The following information is only a summary and
  should be read in conjunction with ―Management’s Discussion and Analysis of Financial Condition and Results of Operations‖ and the
  audited combined financial statements of the Coated and Supercalendered Papers Division of International Paper and the audited combined
  financial statements of Verso Paper Corp. and notes thereto included elsewhere in this prospectus, as well as the other financial information
  included in this prospectus.

        On August 1, 2006, our wholly-owned subsidiary, Verso Paper LLC, acquired the assets and certain of the liabilities of the Coated
  and Supercalendered Papers Division from International Paper, including the four mills located in Jay and Bucksport, Maine, Quinnesec,
  Michigan and Sartell, Minnesota, together with other related facilities and assets and certain administrative and sales and marketing
  functions, pursuant to the terms of a purchase and sale agreement entered into between Verso Paper LLC and International Paper on
  June 4, 2006. We, along with our subsidiaries, were formed by affiliates of Apollo Global Management LLC for the purpose of
  consummating the acquisition of the Coated and Supercalendered Papers Division from International Paper, or the ―Acquisition.‖ Unless
  otherwise noted, references to ―Apollo‖ throughout this prospectus refer to the affiliates of Apollo Global Management LLC that control
  us. In connection with the Acquisition, Verso Paper Holdings LLC issued $1,185 million of debt, which we refer to as the ―Financing,‖
  consisting of a $285 million term loan B facility, or the ―Term Loan B,‖ $600 million in aggregate principal amount of second priority
  senior secured notes and $300 million in aggregate principal amount of senior subordinated notes. We also obtained a $200 million
  revolving credit facility, which we refer to, together with the Term Loan B, as the ―senior secured credit facilities.‖ See ―Management’s
  Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources.‖

        The combined statement of operations data for the year ended December 31, 2005, and for the seven months ended July 31, 2006,
  have been derived from the combined financial statements of the Coated and Supercalendered Papers Division of International Paper,
  which we refer to as the ―Predecessor‖ or the ―Division,‖ which have been audited by Deloitte & Touche LLP an independent registered
  public accounting firm, and are included in this prospectus. The combined balance sheet data as of December 31, 2007, and the combined
  statement of operations data for the five months ended December 31, 2006, and the year ended December 31, 2007, have been derived
  from the combined financial statements of Verso Paper Corp, which we refer to as the ―Successor‖ which have been audited by Deloitte &
  Touche LLP, an independent registered public accounting firm, and are included in this prospectus.


                                                                       10
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                                                                     Predecessor Combined                                Successor Combined
                                                                                       Seven Months              Five Months
                                                               Year Ended                  Ended                    Ended               Year Ended
                                                               December 31,               July 31,               December 31,          December 31,
                                                                   2005                     2006                     2006                   2007
                                                                              (dollars and tons in millions, except per share data)
   Statement of Operations Data:
   Net sales                                                   $        1,603.8      $        904.4          $         706.8            $      1,628.8
   Costs and expenses:
        Costs of products sold exclusive of depreciation and
          amortization                                                  1,338.2               771.6                    589.3                   1,403.1
        Depreciation and amortization                                     129.4                72.7                     48.3                     123.2
        Selling, general and administrative expenses                       65.6                34.3                     14.4                      53.1
        Restructuring and other charges                                    10.4                (0.3 )                   10.1                      19.4
   Operating income (loss)                                                60.2                 26.1                      44.7                     30.0
   Interest expense                                                       14.8                  8.4                      49.1                    143.0
   Interest income                                                         —                    —                        (1.8 )                   (1.5 )
   Income (loss) before income taxes                                      45.4                 17.7                      (2.6 )                 (111.5 )
   Provision (benefit) for income taxes                                   17.9                  7.0                      —                        —
   Net income (loss)                                           $          27.5       $         10.7          $           (2.6 )         $       (111.5 )

   Per Share Data:
   Earnings (loss) per share                                                                                 $        (2,637 )          $    (111,463 )
   Common shares outstanding                                                                                           1,000                    1,000
   Statement of Cash Flows Data:
   Cash provided by operating activities                       $         116.8       $         39.3          $         128.2            $          15.0
   Cash used in investing activities                                     (53.0 )              (27.6 )               (1,402.0 )                    (69.1 )
   Cash (used in) provided by financing activities                       (63.8 )              (11.6 )                1,386.3                        0.2
   Other Financial and Operating Data:
   EBITDA(1)                                                   $          189.6      $         98.8          $          93.0            $        153.2
   Capital expenditures                                                    53.1                27.7                     27.8                      70.9
   Total tons sold                                                      2,024.9             1,145.0                    866.4                   2,096.3

                                                                                                                   As of December 31, 2007
                                                                                                                                                 As
                                                                                                          Actual                             Adjusted(2)
                                                                                                                     (dollars in millions)
   Balance Sheet Data:
   Cash and cash equivalents                                                                         $          58.5
   Working capital(3)                                                                                           87.2
   Property, plant and equipment, net                                                                        1,160.2
   Total assets                                                                                              1,603.5
   Total debt                                                                                                1,419.6
   Stockholders’ equity                                                                                        (75.1 )


                                                                   11
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  (1)    EBITDA consists of earnings before interest, taxes, depreciation and amortization. EBITDA is a measure commonly used in our
         industry and we present EBITDA to enhance your understanding of our operating performance. We use EBITDA as one criterion for
         evaluating our performance relative to that of our peers. We use EBITDA as an operating performance measure, and not a liquidity
         measure. We believe that EBITDA provides investors and analysts with a measure of operating results unaffected by differences in
         capital structures, capital investment cycles and ages of related assets among otherwise comparable companies. However, EBITDA
         is not a measurement of financial performance under accounting principles generally accepted in the United States, or ―U.S. GAAP,‖
         and our EBITDA may not be comparable to similarly titled measures of other companies. You should not consider our EBITDA as
         an alternative to operating or net income, determined in accordance with U.S. GAAP, as an indicator of our operating performance,
         or as an alternative to cash flows from operating activities, determined in accordance with U.S. GAAP, as an indicator of our cash
         flows or as a measure of liquidity.

        The following table reconciles net income (loss) to EBITDA for the periods presented:

                                                                            Predecessor Combined                               Successor Combined
                                                                                           Seven Months               Five Months
                                                                      Year Ended               Ended                     Ended                 Year Ended
                                                                      December 31,            July 31,               December 31,             December 31,
                                                                          2005                  2006                      2006                    2007
                                                                                                    (dollars in millions)
   Net income (loss)                                                 $         27.5         $         10.7         $         (2.6 )         $      (111.5 )
   Interest expense, net:                                                      14.8                    8.4                   47.3                   141.5
   Income tax expense                                                          17.9                    7.0                    —                       —
   Depreciation and amortization                                              129.4                   72.7                   48.3                   123.2
   EBITDA                                                            $        189.6         $         98.8         $         93.0           $       153.2
         (2)   The as adjusted combined balance sheet data reflects the balance sheet data as of December 31, 2007, adjusted for this offering
               and the use of the net proceeds therefrom. A $1.00 increase (decrease) in the assumed initial public offering price of
               $         per share, the mid-point of the range set forth on the cover of this prospectus, would increase (decrease) each of cash
               and cash equivalents, working capital, total assets and stockholders’ equity by $           million, assuming the number of shares
               offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the estimated
               underwriting discounts and commissions and estimated offering expenses payable by us.
         (3)   Working capital is defined as current assets net of current liabilities, excluding the current portion of long-term debt and the
               Division’s accounts payable to International Paper—net.


                                                                         12
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                                                             Covenant Compliance

         Certain covenants contained in the credit agreement governing our subsidiary’s senior secured credit facilities and the indentures
  governing our subsidiary’s outstanding notes (i) require the maintenance of a net first lien secured debt to Adjusted EBITDA ratio (as
  defined below) of 3.25 to 1.0 and (ii) restrict our ability to take certain actions such as incurring additional debt or making acquisitions if
  we are unable to meet defined Adjusted EBITDA to Fixed Charges (as defined below) and net senior secured debt to Adjusted EBITDA
  ratios. The covenants restricting our ability to incur additional indebtedness and make future acquisitions require a ratio of Adjusted
  EBITDA to Fixed Charges of 2.0 to 1.0 and a net senior secured debt to Adjusted EBITDA ratio of 6.0 to 1.0, in each case measured on a
  trailing four-quarter basis. For the purpose of calculating these ratios, pro forma effect is given to any repayment of debt, such as that
  contemplated with the net proceeds from this offering, as if such transaction occurred at the beginning of the trailing four-quarter period.
  Although we do not expect to violate any of the provisions in the agreements governing our outstanding indebtedness, these covenants can
  result in limiting our long-term growth prospects by hindering our ability to incur future indebtedness or grow through acquisitions. See
  ―Risk Factors—Our substantial indebtedness could adversely affect our financial health.‖

        Fixed Charges are consolidated interest expense excluding the amortization or write-off of deferred financing costs. Cash interest
  expense is adjusted in the table below to give effect to this offering and the use of the net proceeds therefrom. Adjusted EBITDA is
  EBITDA further adjusted to exclude unusual items and other pro forma adjustments permitted in calculating covenant compliance in the
  indentures governing our outstanding notes to test the permissibility of certain types of transactions. We believe that the inclusion of the
  supplemental adjustments applied in calculating Adjusted EBITDA and the adjustment to cash interest expense to give effect to this
  offering and the use of the net proceeds therefrom are appropriate to provide additional information to investors to demonstrate our
  compliance with our financial covenants and assess our ability to incur additional indebtedness in the future. However, Adjusted EBITDA
  is not a measurement of financial performance under U.S. GAAP, and Adjusted EBITDA may not be comparable to similarly titled
  measures of other companies. You should not consider our Adjusted EBITDA as an alternative to operating or net income, determined in
  accordance with U.S. GAAP, as an indicator of our operating performance, or as an alternative to cash flows from operating activities,
  determined in accordance with U.S. GAAP, as an indicator of our cash flows or as a measure of liquidity.


                                                                        13
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       The following table reconciles cash flow from operating activities to EBITDA and Adjusted EBITDA for the year ended December
  31, 2007.

                                                                                                                                    Successor
                                                                                                                                   Year Ended
                                                                                                                                   December 31,
                                                                                                                                       2007
                                                                                                                                    (dollars in
                                                                                                                                     millions)
   Cash flow from operating activities                                                                                            $        15.0
   Amortization of debt issuance costs                                                                                                     (6.7 )
   Interest income                                                                                                                         (1.5 )
   Interest expense                                                                                                                       143.0
   Loss on disposal of fixed assets                                                                                                        (1.0 )
   Other, net                                                                                                                               1.5
   Changes in assets and liabilities, net                                                                                                   2.9
   EBITDA                                                                                                                         $       153.2
   Operational improvements(a)                                                                                                              6.1
   Restructuring, severance and other(b)                                                                                                   19.4
   Non-cash compensation/benefits(c)                                                                                                        0.6
   Other items, net(d)                                                                                                                      8.0
   Adjusted EBITDA                                                                                                                $       187.3

   As adjusted cash interest expense(e)                                                                                           $       109.2
   Adjusted EBITDA to as adjusted cash interest expense(e)                                                                                  1.7
   Net senior secured debt to Adjusted EBITDA                                                                                               4.3
   Net first-lien secured debt to Adjusted EBITDA                                                                                           1.1


  (a)    Represents the benefit of lower wood cost at our Sartell mill resulting from the harvest of hybrid poplar from our fiber farm.
  (b)    Includes restructuring and severance as per our financial statements. Restructuring includes transition and other non-recurring costs
         associated with the Acquisition.
  (c)    Represents amortization of certain one-time benefit payments.
  (d)    Represents earnings adjustments for legal and consulting fees, and other miscellaneous non-recurring items.
  (e)    As adjusted cash interest expense gives effect to this offering and reflects a decrease in cash interest expense for the year ended
         December 31, 2007 equal to $27.8 million as a result of the repayment of the outstanding $250.0 million senior unsecured term loan
         facility of our subsidiary, Verso Paper Finance Holdings LLC, bearing interest at a rate equal to 9.5% as of December 31, 2007, and
         the repayment of the outstanding $3.1 million under the revolving credit facility and $10.0 million senior secured term loan of our
         subsidiary, Verso Fiber Farm LLC, bearing interest at a rate equal to 7.8% as of December 31, 2007, as if this offering and the use of
         the net proceeds therefrom were consummated on January 1, 2007. Cash interest expense represents gross interest expense related to
         the debt, excluding amortization of debt issuance costs.


                                                                         14
Table of Contents

                                                                 RISK FACTORS

      Purchasing our common stock in this offering involves a high degree of risk. You should carefully consider the following factors, in
addition to the other information contained in this prospectus, in deciding whether to invest in our common stock. This prospectus contains
forward-looking statements that involve risks and uncertainties. Our actual results may differ significantly from the results discussed in the
forward-looking statements. Factors that might cause such differences include those discussed below.

Risks Relating to our Business
We have limited ability to pass through increases in our costs to our customers. Increases in our costs or decreases in coated or
supercalendered paper prices could adversely affect our business, financial condition or results of operations.

      Our earnings are sensitive to price changes in coated or supercalendered paper. Fluctuations in paper prices (and coated paper prices in
particular) historically have had a direct effect on our net income (loss) and EBITDA for several reasons:
        •    Market prices for paper products are a function of supply and demand, factors over which we have limited control. We therefore
             have limited ability to control the pricing of our products. Market prices of grade No. 3, 60 lb. basis weight paper, which is an
             industry benchmark for coated freesheet paper pricing, have fluctuated since 2000 from a high of $980 per ton to a low of $705 per
             ton. In addition, market prices of grade No. 5, 34 lb. basis weight paper, which is an industry benchmark for coated groundwood
             paper pricing, have fluctuated between a high of $1,040 per ton to a low of $795 per ton over the same period. Because market
             conditions determine the price for our paper products, the price for our products could fall below our cash production costs.
        •    Market prices for paper products typically are not directly affected by raw material costs or other costs of sales, and consequently
             we have limited ability to pass through increases in our costs to our customers absent increases in the market price. In addition, a
             significant portion of our sales are pursuant to contracts that limit price increases. Thus, even though our costs may increase, we
             may not have the ability to increase the prices for our products, or the prices for our products may decline.
        •    The manufacturing of coated paper is highly capital-intensive and a large portion of our operating costs are fixed. Additionally,
             paper machines are large, complex machines that operate more efficiently when operated continuously. Consequently, both we and
             our competitors typically continue to run our machines whenever marginal sales exceed the marginal costs, adversely impacting
             prices at times of lower demand.

Therefore, our ability to achieve acceptable margins is principally dependent on (i) managing our cost structure, (ii) managing changes in raw
materials prices, which represent a large component of our operating costs and fluctuate based upon factors beyond our control and (iii) general
conditions in the paper market. If the prices of our products decline, or if our raw material costs increase, it could have a material adverse effect
on our business, financial condition and results of operations.

The paper industry is cyclical. Fluctuations in supply and demand for our products could materially adversely affect our business,
financial condition and results of operations.
     The paper industry is a commodity market to a significant extent and is subject to cyclical market pressures. North American demand for
coated and supercalendered paper products tends to decline during a weak U.S. economy. Accordingly, general economic conditions and
demand for magazines and catalogs may have a material adverse impact on the demand and prices for our products, which could have a
material adverse effect on our business, financial condition and results of operations. In addition, currency fluctuations can have a significant
impact on the supply of coated paper products in North America. If the U.S. dollar strengthens,

                                                                         15
Table of Contents

imports may increase, which would cause the supply of paper products available in the North American market to increase. Foreign
overcapacity also could result in an increase in the supply of paper products available in the North American market. In addition, capacity that
has been shutdown in North America could be started. An increased supply of paper available in North America could put downward pressure
on prices and/or cause us to lose sales to competitors, either of which could have a material adverse effect on our business, financial condition
and results of operations.

We have a limited operating history as a separate company. Accordingly, our Predecessor combined historical financial data may not
be representative of our results as a separate company.
       We operated as a division of International Paper prior to the Acquisition. Therefore, we have a very limited operating history as a
separate company. Our business strategy as an independent entity may not be successful on a long-term basis. Although International Paper,
after the completion of the Acquisition, generally no longer sells coated or supercalendered paper, we cannot assure you that our customers will
continue to do business with us on the same terms as when we were a division of International Paper. We may not be able to grow our business
as planned and may not remain a profitable business. In addition, the historical combined financial data included in this prospectus may not
necessarily reflect what our results of operations, financial condition and cash flows would have been had we been a separate independent
entity pursuing our own strategies during the periods presented. Our limited operating history as a separate entity makes evaluating our
business and our future financial prospects difficult. As a result, our business, financial condition and results of operations may differ
materially from our expectations based on the historical and pro forma financial data contained in the prospectus.

      Our cost structure following the Acquisition is not comparable to the cost structure that we experienced in prior periods and may not be
comparable to the cost structure that we have estimated for purposes of the pro forma financial statements included in this prospectus. Our
management has limited experience managing our business as a separate company with a significant amount of indebtedness. We cannot assure
you that our cost structure in future periods will be consistent with our current expectations or will permit us to operate our business profitably.

The markets in which we operate are highly competitive.
      Our business is highly competitive. Competition is based largely on price. We compete with foreign producers, some of which are lower
cost producers than we are or are subsidized by governments. We also face competition from numerous North American coated and
supercalendered paper manufacturers. Some of our competitors have advantages over us, including lower raw material and labor costs and
fewer environmental and governmental regulations to comply with than we do. Furthermore, some of our competitors have greater financial
and other resources than we do or may be better positioned than we are to compete for certain opportunities.

     Our non-U.S. competitors may develop a competitive advantage over us and other U.S. producers if the U.S. dollar strengthens in
comparison to the home currency of those competitors or ocean shipping rates decrease. If the U.S. dollar strengthens, if shipping rates
decrease or if overseas supply exceeds demand, imports may increase, which would cause the supply of coated paper products available in the
North American market to increase. An increased supply of coated paper could cause us to lower our prices or lose sales to competitors, either
of which could have a material adverse effect on our business, financial condition and results of operations.

      In addition, the following factors will affect our ability to compete:
        •    product availability;
        •    the quality of our products;
        •    our breadth of product offerings;
        •    our ability to maintain plant efficiencies and high operating rates;

                                                                         16
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        •    manufacturing costs per ton;
        •    customer service and our ability to distribute our products on time; and
        •    the availability and/or cost of wood fiber, market pulp, chemicals, energy and other raw materials and labor.

If we are unable to obtain energy or raw materials at favorable prices, or if we are unable to obtain raw materials at all, it could
adversely impact our business, financial condition and results of operations.
      We purchase wood fiber, market pulp, chemicals, energy and other raw materials from third parties. We may experience shortages of
energy supplies or raw materials or be forced to seek alternative sources of supply. If we are forced to seek alternative sources of supply, we
may not be able to obtain them on terms as favorable as our current terms or obtain them at all. In addition, the prices for energy and many of
our raw materials, especially petroleum-based chemicals, have been volatile and have increased over the last year. Prices are expected to
remain volatile for the foreseeable future. Chemical suppliers that use petroleum-based products in the manufacture of their chemicals may, due
to a supply shortage and cost increase, ration the amount of chemicals available to us and/or we may not be able to obtain the chemicals we
need to operate our business at favorable prices, if we are able to obtain them at all. In addition, certain specialty chemicals that we purchase
are available only from a small number of suppliers. If any of these suppliers were to cease operations or cease doing business with us, we may
be unable to obtain such chemicals at favorable prices, if we are able to obtain them at all.

      The supply of energy or raw materials may be adversely affected by, among other things, hurricanes and other natural disasters or an
outbreak or escalation of hostilities between the United States and any foreign power and, in particular, events in the Middle East. For example,
wood fiber is a commodity and prices historically have been cyclical. The primary source for wood fiber is timber. Environmental litigation
and regulatory developments have caused, and may cause in the future, significant reductions in the amount of timber available for commercial
harvest in Canada and the United States. In addition, future domestic or foreign legislation, litigation advanced by aboriginal groups, litigation
concerning the use of timberlands, the protection of endangered species, the promotion of forest biodiversity and the response to and prevention
of catastrophic wildfires and campaigns or other measures by environmental activists could also affect timber supplies. Availability of
harvested timber may further be limited by factors such as fire and fire prevention, insect infestation, disease, ice and wind storms, drought,
floods and other natural and man-made causes, thereby reducing supply and increasing prices. Additionally, due to increased fuel costs,
suppliers, distributors and freight carriers have charged fuel surcharges, which have increased our costs. Any significant shortage or significant
increase in our energy or raw material costs in circumstances where we cannot raise the price of our products due to market conditions could
have a material adverse effect on our business, financial condition and results of operations. Any disruption in the supply of energy or raw
materials could also affect our ability to meet customer demand in a timely manner and could harm our reputation. Furthermore, we may be
required to post letters of credit or other financial assurance obligations with certain of our energy and other suppliers, which could limit our
financial flexibility.

Currency fluctuations may adversely affect our business, financial condition and results of operations.
      We compete with producers in North America and abroad. Changes in the relative strength or weakness of the U.S. dollar may affect
international trade flows of coated paper products. A stronger U.S. dollar may attract imports from foreign producers, increase supply in the
United States, and have a downward effect on prices, while a weaker U.S. dollar may encourage U.S. exports. Variations in the exchange rates
between the U.S. dollar and other currencies, particularly the Canadian dollar and the euro, may significantly affect our competitive position,
including by making it more attractive for foreign producers to restart shut down paper mills or by increasing production capacity in North
America and Europe.

                                                                        17
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We are involved in continuous manufacturing processes with a high degree of fixed costs. Any interruption in the operations of our
manufacturing facilities may affect our operating performance.
      We seek to run our paper machines on a nearly continuous basis for maximum efficiency. Any unplanned plant downtime at any of our
paper mills results in unabsorbed fixed costs that negatively affect our results of operations for the period in which we experience the
downtime. Due to the extreme operating conditions inherent in some of our manufacturing processes, we may incur unplanned business
interruptions from time to time and, as a result, we may not generate sufficient cash flow to satisfy our operational needs. In addition, many of
the geographic areas where our production is located and where we conduct our business may be affected by natural disasters, including snow
storms, forest fires and flooding. Such natural disasters could cause our mills to stop running, which could have a material adverse effect on our
business, financial condition and results of operations. Furthermore, during periods of weak demand for paper products, we have in the past and
may in the future experience market-related downtime, which could have a material adverse effect on our financial condition and results of
operations.

Our operations require substantial ongoing capital expenditures, and we may not have adequate capital resources to fund all of our
required capital expenditures.
      Our business is capital intensive, and we incur capital expenditures on an ongoing basis to maintain our equipment and comply with
environmental laws, as well as to enhance the efficiency of our operations. Our capital expenditures were $71 million in 2007, including $39
million for maintenance and environmental capital expenditures. We expect to spend approximately $80 million on capital expenditures during
2008, including approximately $60 million for maintenance and environmental capital expenditures. Thereafter, our annual maintenance and
environmental capital expenditures are expected to average approximately $40 million to $50 million per year for the next few years. We
anticipate that our available cash resources and cash generated from operations will be sufficient to fund our operating needs and capital
expenditures for at least the next year. However, additional capital expenditures may be required in the future in order to maintain our
operations and ensure environmental compliance. If we require additional funds to fund our capital expenditures, we may not be able to obtain
them on favorable terms, or we may not be able to obtain them at all. If we cannot maintain or upgrade our facilities and equipment as we
require or as necessary to ensure environmental compliance, it could have a material adverse effect on our business, financial condition and
results of operations.

We depend on a small number of customers for a significant portion of our business.
      Our largest customer, the xpedx and Bulkley Dunton business units of International Paper, accounted for approximately 9% of our net
sales in 2007. In 2007, our 10 largest customers accounted for approximately 52% of our combined net sales, while our 10 largest end-users
accounted for approximately 29% of our combined net sales. The loss of, or reduction in orders from, any of these customers or other
customers could have a material adverse effect on our business, financial condition and results of operations, as could significant customer
disputes regarding shipments, price, quality or other matters.

We may not realize certain productivity enhancements or improvements in costs.
      As part of our business strategy, we intend to identify opportunities to improve profitability by reducing costs and enhancing productivity
to improve our results and offset anticipated raw material cost increases. Any cost savings or productivity enhancements that we realize from
such efforts may differ materially from our estimates. For example, we have several productivity enhancement initiatives to reduce waste and
increase the amount of uptime on our paper machines. We cannot assure you that these initiatives will be completed as anticipated or that the
benefits we expect will be achieved on a timely basis or if they are achieved at all.

Rising postal costs could weaken demand for our paper products.
     A significant portion of paper is used in magazines, catalogs and other promotional mailings. Many of these materials are distributed
through the mail. Future increases in the cost of postage could reduce the frequency of

                                                                       18
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mailings, reduce the number of pages in magazine and advertising materials and/or cause catalog and magazine publishers to use alternate
methods to distribute their materials. Any of the foregoing could decrease the demand for our products, which could materially adversely affect
our business, financial condition and results of operations.

Our business may suffer if we do not retain our senior management.
      We depend on our senior management. The loss of services of members of our senior management team could adversely affect our
business until suitable replacements can be found. There may be a limited number of persons with the requisite skills to serve in these positions
and we may be unable to locate or employ qualified personnel on acceptable terms. In addition, our future success requires us to continue to
attract and retain competent personnel.

A large percentage of our employees are unionized. Wage increases or work stoppages by our unionized employees may have a
material adverse effect on our business, financial condition and results of operations.
      As of December 31, 2007, approximately 35% of our employees were represented by labor unions under four collective bargaining
agreements at two of our mills. In 2007, we completed successful labor negotiations for three agreements that were up for renewal during the
year, and the new agreements will expire in 2011. We may become subject to material cost increases or additional work rules imposed by
agreements with labor unions. This could increase expenses in absolute terms and/or as a percentage of net sales. In addition, although we
believe we have good relations with our employees, work stoppages or other labor disturbances may occur in the future. Any of these factors
could negatively affect our business, financial condition and results of operations.

We depend on third parties for certain transportation services.
      We rely primarily on third parties for transportation of our products to our customers and transportation of our raw materials to us, in
particular, by truck and train. If any of our third-party transportation providers fail to deliver our products in a timely manner, we may be
unable to sell them at full value. Similarly, if any of our transportation providers fail to deliver raw materials to us in a timely manner, we may
be unable to manufacture our products on a timely basis. Shipments of products and raw materials may be delayed due to weather conditions,
strikes or other events. Any failure of a third-party transportation provider to deliver raw materials or products in a timely manner could harm
our reputation, negatively impact our customer relationships and have a material adverse effect on our business, financial condition and results
of operations. In addition, our ability to deliver our products on a timely basis could be adversely affected by the lack of adequate availability
of transportation services, especially rail capacity, whether because of work stoppages or otherwise. Furthermore, increases in the cost of our
transportation services, including as a result of rising fuel costs, could cause a material adverse effect on our business, financial condition and
results of operations.

We are subject to various environmental, health and safety laws and regulations that could impose substantial costs or other liabilities
upon us and may adversely affect our operating performance and financial condition.
      We are subject to a wide range of federal, state and local general and industry-specific environmental, health and safety laws and
regulations, including those relating to air emissions, wastewater discharges, solid and hazardous waste management and disposal and site
remediation. Compliance with these laws and regulations is a significant factor in our business. We have made, and will continue to make,
significant expenditures to comply with these requirements. In addition, we handle and dispose of wastes arising from our mill operations and
operate a number of on-site landfills to handle that waste. We maintain financial assurance for the projected cost of closure and post-closure
care for these landfill operations. We could be subject to potentially significant fines, penalties, criminal sanctions, plant shutdowns or
interruptions in operations for any failure to comply with

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applicable environmental, health and safety laws and regulations. Moreover, under certain environmental laws, a current or previous owner or
operator of real property, and parties that generate or transport hazardous substances that are disposed of at real property, may be held liable for
the full cost to investigate or clean up such real property and for related damages to natural resources. We may be subject to liability, including
liability for investigation and cleanup costs, if contamination is discovered at one of our or our Predecessor’s current or former paper mills,
other properties or other locations where we or our Predecessor have disposed of, or arranged for the disposal of, wastes. International Paper
has agreed to indemnify us, subject to certain limitations, for environmental liabilities associated with former properties and former off-site
shipments, as well as for a portion of certain other environmental liabilities. There can be no assurance that International Paper will perform
under any of its environmental indemnity obligations, and its failure to do so could have a material adverse effect on our financial condition
and results of operations. We also could be subject to claims brought pursuant to applicable laws or regulations for property damage or
personal injury resulting from the environmental impact of our operations, including due to human exposure to hazardous substances.
Increasingly stringent or new environmental requirements, more aggressive enforcement actions or policies, the discovery of unknown
conditions or the bringing of future claims may cause our expenditures for environmental matters to increase, and we may incur material costs
associated with these matters. For a further discussion of environmental laws and regulations that affect our business, including the capital
expenditures required to ensure environmental compliance, see ―Business—Environmental and Other Governmental Regulations‖ and
―Business—Legal Proceedings.‖

Our substantial indebtedness could adversely affect our financial health.
      We have and will continue to have a significant amount of indebtedness. On December 31, 2007, after giving effect to this offering and
the use of the net proceeds therefrom, we would have had total indebtedness of $1,156.5 million. After giving effect to this offering and the use
of the net proceeds therefrom, the total interest expense on our outstanding indebtedness for each of the next three fiscal years is equal to
$109.4 million, $109.2 million and $109.0 million, respectively (assuming the current prevailing interest rates on our outstanding floating rate
indebtedness remain the same and outstanding indebtedness is reduced by any required payment of debt).

      Our substantial indebtedness could have important consequences to you. For example, it could:
        •    increase our vulnerability to general adverse economic and industry conditions;
        •    require us to dedicate a substantial portion of our cash flow from operations to payments on our indebtedness, thereby reducing the
             availability of our cash flow to fund working capital, capital expenditures, research and development efforts and other general
             corporate purposes;
        •    increase our vulnerability to and limit our flexibility in planning for, or reacting to, changes in our business and the industry in
             which we operate;
        •    expose us to the risk of increased interest rates as borrowings under our senior secured credit facilities and our floating rate senior
             notes will be subject to variable rates of interest;
        •    place us at a competitive disadvantage compared to our competitors that have less debt; and
        •    limit our ability to borrow additional funds.

     In addition, the indentures governing our outstanding notes and our senior secured credit facilities contain financial and other restrictive
covenants that limit our ability to engage in activities that may be in our long-term best interests. Our failure to comply with those covenants
could result in an event of default which, if not cured or waived, could result in the acceleration of all of our debts.

     We and our subsidiaries may be able to incur substantial additional indebtedness in the future because the terms of the indentures
governing our outstanding notes and our senior secured credit facilities do not fully prohibit us or our subsidiaries from doing so. If new
indebtedness is added to our and our subsidiaries’ current debt levels, the related risks that we and they now face could intensify.

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We are a holding company with no operations of our own and depend on our subsidiaries for cash.
       All of our operations are conducted through our subsidiaries, and none of our subsidiaries is obligated to make funds available to us.
Accordingly, our ability to make payments on any indebtedness or distribute dividends to our stockholders is dependent on the earnings and the
distribution of funds from our subsidiaries. The terms of the senior secured credit facilities and the indentures governing the outstanding notes
of our subsidiaries significantly restrict our subsidiaries from paying dividends and otherwise transferring assets to us. Furthermore, our
subsidiaries are permitted under the terms of the senior secured credit facilities and indentures to incur additional indebtedness that may
severely restrict or prohibit the making of distributions, the payment of dividends or the making of loans by our subsidiaries to us. We cannot
assure you that the agreements governing the current and future indebtedness of our subsidiaries will permit our subsidiaries to provide us with
sufficient dividends, distributions or loans to fund our obligations or pay dividends to our stockholders.

Risks Related to Our Common Stock
There is no existing market for our common stock, and we do not know if one will develop to provide you with adequate liquidity.
      Prior to this offering, there has not been a public market for our common stock. We cannot predict the extent to which investor interest in
our company will lead to the development of an active trading market on the New York Stock Exchange or otherwise or how liquid that market
might become. If an active trading market does not develop, you may have difficulty selling any of our common stock that you buy. The initial
public offering price for the common stock will be determined by negotiations between us and the representatives of the underwriters and may
not be indicative of prices that will prevail in the open market following this offering. Consequently, you may not be able to sell our common
stock at prices equal to or greater than the price you paid in this offering.

The price of our common stock may fluctuate significantly, and you could lose all or part of your investment.
      Volatility in the market price of our common stock may prevent you from being able to sell your common stock at or above the price you
paid for your common stock. The market price of our common stock could fluctuate significantly for various reasons, including:
        •    our operating and financial performance and prospects;
        •    our quarterly or annual earnings or those of other companies in our industry;
        •    the public’s reaction to our press releases, other public announcements and filings with the U.S. Securities and Exchange
             Commission, or ―SEC;‖
        •    changes in earnings estimates or recommendations by research analysts who track our common stock or the stock of other
             companies in our industry;
        •    strategic actions by us or our competitors, such as acquisitions or restructurings;
        •    new laws or regulations or new interpretations of existing laws or regulations applicable to our business;
        •    changes in accounting standards, policies, guidance, interpretations or principles;
        •    changes in general conditions in the United States and global economies or financial markets, including those resulting from war,
             incidents of terrorism or responses to such events; and
        •    sales of common stock by us or members of our management team.

      In addition, in recent years, the stock market has experienced significant price and volume fluctuations. This volatility has had a
significant impact on the market price of securities issued by many companies, including

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companies in our industry. The changes frequently appear to occur without regard to the operating performance of the affected companies.
Hence, the price of our common stock could fluctuate based upon factors that have little or nothing to do with our company, and these
fluctuations could materially reduce our share price.

Delaware law and our charter documents may impede or discourage a takeover, which could cause the market price of our common
stock to decline.
      We are a Delaware corporation, and the anti-takeover provisions of Delaware law impose various impediments on the ability of a third
party to acquire control of us, even if a change of control would be beneficial to our existing stockholders. In addition, provisions of our
amended and restated certificate of incorporation and bylaws may make it more difficult for a third party to acquire, or prevent a third party
from acquiring, control of us without the approval of our board of directors. These provisions include:
        •    a staggered board of directors;
        •    the sole power of a majority of the board of directors to fix the number of directors;
        •    limitations on the removal of directors;
        •    the sole power of the board of directors to fill any vacancy on the board of directors, whether such vacancy occurs as a result of an
             increase in the number of directors or otherwise;
        •    the ability of our board of directors to designate one or more series of preferred stock and issue preferred stock without stockholder
             approval; and
        •    the inability of stockholders to act by written consent or to call special meetings.

These provisions of our amended and restated certificate of incorporation and bylaws could impede a merger, takeover or other business
combination involving us or the replacement of our management or discourage a potential investor from making a tender offer for our common
stock, which, under certain circumstances, could reduce the market value of our common stock. See ―Description of Capital Stock.‖

We may issue shares of preferred stock in the future that may adversely impact your rights as holders of our common stock.
      Our amended and restated certificate of incorporation will authorize us to issue up to               shares of one or more series of preferred
stock. Our board of directors will have the authority to fix and determine the relative rights and preferences of the preferred stock, as well as
the authority to issue such shares, without further stockholder approval. As a result, our board of directors could authorize the issuance of a
series of preferred stock that would grant to holders preferred rights to our assets upon liquidation, the right to receive dividends before
dividends are declared to holders of our common stock, and the right to the redemption of such preferred shares, together with a premium, prior
to the redemption of any common stock. To the extent that we do issue such additional shares of preferred stock, your rights as holders of
common stock could be impaired thereby, including, without limitation, dilution of your ownership interests in us. In addition, shares of
preferred stock could be issued with terms calculated to delay or prevent a change in control or make removal of management more difficult,
which may not be in your interest as holders of common stock.

We may be restricted from paying cash dividends on our common stock in the future.
      We currently intend to declare and pay regular quarterly cash dividends on our common stock. Any payment of future dividends will be
at the discretion of our board of directors and will depend on, among other things, our earnings, financial condition, capital requirements, level
of indebtedness, statutory and contractual restrictions applying to the payment of dividends, and other considerations that our board of directors
deems relevant. The terms of our senior secured credit facilities and indentures governing our outstanding notes may restrict us from paying
cash dividends on our common stock. With respect to each of these agreements, the payment of cash

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dividends on our common stock is considered a restricted payment and, with limited exceptions, we are restricted from paying any cash
dividends on our common stock unless we satisfy minimum requirements with respect to our cumulative consolidated net income. In
connection with the payment of any cash dividend, the terms of our senior secured credit facilities also require us to maintain our first lien
secured debt ratio and the terms of the indentures governing our outstanding notes require us to maintain our fixed charge coverage ratio. In
addition, we will be permitted under the terms of the agreements governing our outstanding debt to incur additional indebtedness that may
severely restrict or prohibit the payment of dividends. We cannot assure you that the agreements governing our current and future indebtedness
will permit us to pay dividends on our common stock. Accordingly, you may have to sell some or all of your common stock in order to
generate cash flow from your investment. You may not receive a gain on your investment when you sell your common stock, and you may lose
the entire amount of the investment.

You will suffer immediate and substantial dilution.
      The initial public offering price per share of our common stock is substantially higher than our as adjusted net tangible book value per
common share will be immediately after the offering. As a result, you will pay a price per share that substantially exceeds the book value of our
assets after subtracting our liabilities. At an assumed initial public offering price of $    , the mid-point of the range set forth on the cover
of this prospectus, you will incur immediate and substantial dilution in the amount of $          per share.

The requirements of being a public company may strain our resources and distract management.
      After the consummation of this offering, we will be subject to the reporting requirements of the Securities Exchange Act of 1934, or the
Exchange Act, and the Sarbanes-Oxley Act of 2002. The Exchange Act requires, among other things, that we file annual, quarterly and current
reports with respect to our business and financial condition. The Sarbanes-Oxley Act requires that we maintain effective disclosure controls and
procedures and internal control for financial reporting. These requirements may place a strain on our systems and resources. Under Section 302
of the Sarbanes-Oxley Act, as part of our periodic reports, our chief executive officer and our chief financial officer will be required to evaluate
the effectiveness of, and to report their conclusions regarding the effectiveness of, our disclosure controls and procedures and to certify that
they have done so. In addition, under Section 404 of the Sarbanes-Oxley Act, we will be required to include a report of management on our
internal control over financial reporting in our Annual Reports on Form 10-K and our independent public accountants auditing our financial
statements must attest to and report on management’s assessment of the effectiveness of our internal control over financial reporting. This
requirement will first apply to our Annual Report on Form 10-K for our fiscal year ending December 31, 2009, and the Annual Report on Form
10-K of our subsidiary, Verso Paper Holdings LLC, for its fiscal year ending December 31, 2008. In order to maintain and improve the
effectiveness of our disclosure controls and procedures and internal control over financial reporting, significant resources and management
oversight will be required. This may divert management’s attention from other business concerns, which could have a material adverse effect
on our business, financial condition, results of operations and cash flows. If we are unable to conclude that our disclosure controls and
procedures and internal control over financial reporting are effective, or if our independent public accounting firm is unable to provide us with
an unqualified report as to management’s assessment of the effectiveness of our internal control over financial reporting in future years,
investors may lose confidence in our financial reports and our stock price may decline.

Future sales of our common stock in the public market could lower our share price, and the exercise of outstanding stock options and
any additional capital raised by us through the sale of common stock may dilute your ownership in us.
     We may sell additional shares of common stock in subsequent public offerings. Our amended and restated certificate of incorporation will
authorize us to issue         shares of common stock, of which              shares will be outstanding upon consummation of this offering. This
number includes           shares that we are selling in this offering, which may be resold immediately in the public market. Of the
remaining           shares,    or % are restricted from immediate resale under the federal securities laws and the lock-up agreements
between

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our current stockholders and the underwriters described in ―Underwriting,‖ but may be sold into the market in the near future. These shares will
become available for sale at various times following the expiration of the lock-up agreements, which, without the prior consent of Credit Suisse
Securities (USA) LLC, is 180 days after the date of this prospectus (which period could be extended by the underwriters for up to an additional
34 days under certain circumstances). Immediately after the expiration of the 180-day lock-up period, the shares will be eligible for resale
pursuant to Rule 144 or Rule 701 under the Securities Act of 1933, or the ―Securities Act,‖ subject to volume limitations and applicable
holding period requirements. In addition, immediately following this offering, we intend to file a registration statement registering the offer and
sale of shares reserved for issuance under our 2008 Incentive Award Plan under the Securities Act, which shares will not be subject to the
180-day lock-up requirement.

      We cannot predict the size of future issuances of our common stock or the effect, if any, that future issuances and sales of our common
stock will have on the market price of our common stock. Sales of substantial amounts of our common stock (including shares issued in
connection with an acquisition), or the perception that such sales could occur, may adversely affect prevailing market prices for our common
stock.

Apollo controls us, and its interests may conflict with or differ from your interests as a stockholder.
      After the consummation of this offering, Apollo will beneficially own % of our common stock. If the underwriters exercise in full their
over-allotment option, Apollo will beneficially own % of our common stock. In addition, representatives of Apollo will have the ability to
prevent any transaction that requires the approval of directors. As a result, Apollo will have the ability to substantially influence all matters
requiring stockholder approval, including the election of our directors and the approval of significant corporate transactions such as mergers,
tender offers and the sale of all or substantially all of our assets. The interests of Apollo and its affiliates could conflict with or differ from your
interests as a holder of our common stock. For example, the concentration of ownership held by Apollo could delay, defer or prevent a change
of control of our company or impede a merger, takeover or other business combination which you may otherwise view favorably. Apollo may
also pursue acquisition opportunities that may be complementary to our business and, as a result, those acquisition opportunities may not be
available to us. A sale of a substantial number of shares of stock in the future by funds affiliated with our equity sponsor could cause our stock
price to decline in the future.

We are a “controlled company” within the meaning of the New York Stock Exchange rules and, as a result, will qualify for, and intend
to rely on, exemptions from certain corporate governance requirements.
      Upon the consummation of this offering, Apollo will continue to beneficially own a majority of our outstanding common stock. As a
result, we are a ―controlled company‖ within the meaning of the New York Stock Exchange corporate governance standards. Under the New
York Stock Exchange rules, a company of which more than 50% of the voting power is held by an individual, group or another company is a
―controlled company‖ and may elect not to comply with certain New York Stock Exchange corporate governance requirements, including:
        •    the requirement that a majority of the board of directors consist of independent directors;
        •    the requirement that we have a nominating/corporate governance committee that is composed entirely of independent directors
             with a written charter addressing the committee’s purpose and responsibilities;
        •    the requirement that we have a compensation committee that is composed entirely of independent directors with a written charter
             addressing the committee’s purpose and responsibilities; and
        •    the requirement for an annual performance evaluation of the nominating/corporate governance and compensation committees.

      Following this offering, we intend to utilize most of these exemptions. As a result, we will not have a majority of independent directors
and our nominating/corporate governance and compensation committees will not consist entirely of independent directors. Accordingly, you
will not have the same protections afforded to stockholders of companies that are subject to all of the New York Stock Exchange corporate
governance requirements.

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                                                  FORWARD-LOOKING STATEMENTS

      This prospectus, including the sections entitled ―Prospectus Summary‖ and ―Business,‖ contains forward-looking statements. These
statements relate to future events or our future financial performance, and involve known and unknown risks, uncertainties and other factors
that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of
activity, performance or achievements expressed or implied by these forward-looking statements. These risks and other factors include, among
other things, those listed in ―Risk Factors,‖ ―Management’s Discussion and Analysis of Financial Condition and Results of Operations‖ and
elsewhere in this prospectus. In some cases, you can identify forward-looking statements by terminology such as ―may,‖ ―should,‖ ―expects,‖
―intends,‖ ―plans,‖ ―anticipates,‖ ―believes,‖ ―estimates,‖ ―predicts,‖ ―potential,‖ ―continue,‖ ―assumption‖ or the negative of these terms or
other comparable terminology. These statements are only predictions. Actual events or results may differ materially. In evaluating these
statements, you should specifically consider various factors, including the risks outlined in ―Risk Factors.‖ These factors may cause our actual
results to differ materially from any forward-looking statement.

      Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results,
levels of activity, performance or achievements. These forward-looking statements are made as of the date of this prospectus and, except as
required under the federal securities laws and the rules and regulations of the SEC, we assume no obligation to update or revise them or to
provide reasons why actual results may differ.

      We do not undertake any responsibility to release publicly any revisions to these forward-looking statements to take into account events
or circumstances that occur after the date of this prospectus. Additionally, we do not undertake any responsibility to update you on the
occurrence of any unanticipated events which may cause actual results to differ from those expressed or implied by the forward-looking
statements contained in this prospectus.

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                                                              USE OF PROCEEDS

      We estimate that the net proceeds to us from this offering, after deducting underwriting discounts and estimated offering expenses, will
be approximately $         , based upon an assumed initial public offering price of $         per share, the mid-point of the price range set forth
on the cover of this prospectus.

      We intend to use approximately $            of the net proceeds from this offering to repay the outstanding $250.0 million senior unsecured
term loan facility of Verso Paper Finance Holdings LLC. The net proceeds from the incurrence of the senior unsecured term loan facility by
Verso Paper Finance Holdings LLC were distributed to our equity holders. The senior unsecured term loan facility matures on February 1,
2013, and accrues interest at rate equal to the London Interbank Offered Rate, or ―LIBOR,‖ plus 6.25%.

     In connection with Verso Fiber Farm LLC becoming our wholly-owned subsidiary upon consummation of the Merger, we intend to use
$         of the net proceeds from this offering to repay the outstanding $3.1 million under the revolving credit facility and $10.0 million senior
secured term loan of our subsidiary, Verso Fiber Farm LLC, and to transfer the remainder of this amount to our parent, Verso Paper
Management LP. The revolving credit facility and senior secured term loan of Verso Fiber Farm LLC each mature on August 1, 2010 and
accrue interest at a rate equal to LIBOR plus 3.00%.

      The remainder of the net proceeds will be used for general corporate purposes, including working capital, the expansion of our production
capabilities, research and development, purchases of capital equipment and potential acquisitions of businesses that we believe are
complementary to our business. We have not determined the specific portion of the net proceeds to be used for any of these purposes, and the
net proceeds from this offering have not been accounted for in our normal budgeting process. Although we have from time to time evaluated
possible acquisitions of companies and assets that are complementary to our business, we currently have no definitive commitments or
agreements to make any acquisitions, and we cannot assure you that we will make any acquisitions in the future. The amounts actually
expended for these purposes may vary significantly and will depend on a number of factors, including the amount of cash we generate from
future operations, the actual expenses of operating our business, opportunities that may be or become available to us and the other factors
described under ―Risk Factors.‖ In addition, we will retain broad discretion in the allocation of the net proceeds from this offering.

      A $1.00 increase (decrease) in the assumed initial public offering price of $      per share would increase (decrease) the net proceeds
to us from this offering by $        million, assuming the number of shares offered by us, as set forth on the cover page of this prospectus,
remains the same and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us.

     We will not receive any proceeds from the sale of shares by the selling stockholder in the event the underwriters exercise their option to
purchase additional shares in this offering. ―See Principal and Selling Stockholders.‖


                                                              DIVIDEND POLICY

      On January 31, 2007, proceeds in the amount of $250.0 million from the incurrence of the senior unsecured term loan facility by our
subsidiary, Verso Paper Finance Holdings LLC, were distributed to our equity holders. We intend to pay quarterly cash dividends on our
common stock at an initial annual rate of $          per share. However, there can be no assurance that we will declare or pay any cash
dividends. Any future determination relating to our dividend policy will be made at the discretion of our board of directors and will depend on
then existing conditions, including our financial condition, results of operations, contractual restrictions, capital requirements, business
prospects and other factors that our board of directors may deem relevant. Our ability to pay dividends on our common stock is limited by the
covenants of our senior secured credit facilities and the indentures governing our outstanding notes, and may be further restricted by the terms
of any of our future debt or preferred securities. See ―Risk Factors—We may be restricted from paying cash dividends on our common stock in
the future‖ and ―Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources.‖

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                                                         CASH AND CAPITALIZATION

     The following table sets forth our cash and cash equivalents and consolidated capitalization as of December 31, 2007, on an actual basis
and on an as adjusted basis after giving effect to this offering and the use of the net proceeds therefrom. You should read this table in
conjunction with ―Use of Proceeds,‖ ―Selected Historical Combined Financial Data,‖ ―Management’s Discussion and Analysis of Financial
Condition and Results of Operations‖ and our combined financial statements and their notes included elsewhere in this prospectus.

                                                                                                                                As of
                                                                                                                           December 31, 2007
                                                                                                                                                 As
                                                                                                                     Actual                  Adjusted(1)
                                                                                                                          (dollars in millions)
Cash                                                                                                             $        58.5

Debt:
  Short-term debt:
    Fiber farm revolving credit facility(2)                                                                      $         3.1
  Long-term debt, including current portion:
    Verso Paper Holdings revolving credit facility(2)                                                            $        —
    Fiber farm term loan                                                                                                 10.0
    Term loan B                                                                                                         256.5
    Second priority senior secured notes (fixed)                                                                        350.0
    Second priority senior secured notes (floating)                                                                     250.0
    Senior subordinated notes                                                                                           300.0
    Holding company term loan facility                                                                                  250.0
       Total long-term debt, excluding current portion                                                                1,416.4
            Total debt                                                                                           $    1,419.6
Stockholders’ Equity:
    Common stock, par value $0.01 per share; actual,         shares authorized,          shares
      issued and outstanding; as adjusted,        shares authorized,         shares issued and
      outstanding                                                                                                $        —
    Additional paid-in capital                                                                                           48.9
    Retained deficit                                                                                                   (114.1 )
    Accumulated other comprehensive income                                                                               (9.9 )
           Total stockholders’ equity                                                                                    (75.1 )
                Total capitalization                                                                             $    1,344.5



(1)    A $1.00 increase (decrease) in the assumed initial public offering price of $       per share, the mid-point of the range set forth on the
       cover of this prospectus, would increase (decrease) each of cash and cash equivalents, additional paid-in capital, total stockholders’
       equity and total capitalization by $       million, assuming the number of shares offered by us, as set forth on the cover page of this
       prospectus, remains the same and after deducting the estimated underwriting discounts and commissions and offering expenses payable
       by us.
(2)    Represents the revolving credit facilities of our subsidiaries, Verso Paper Holdings LLC, in the amount of $200.0 million, and Verso
       Fiber Farm LLC, in the amount of $5.0 million. No amounts were outstanding under the revolving credit facility of Verso Paper
       Holdings LLC at December 31, 2007, and there is currently $171.0 million of availability under the revolving credit facility after
       deducting $29.0 million of standby letters of credit that we have obtained. As of December 31, 2007, there was $3.1 million outstanding
       under Verso Fiber Farm LLC’s revolving credit facility, which will be repaid with the net proceeds from this offering.

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                                                                    DILUTION

      If you invest in our common stock, your interest will be diluted to the extent of the difference between the initial public offering price
per share and the net tangible book value per share after this offering.

      As of December 31, 2007, our net tangible book value was approximately $                   million, or $      per share. Net tangible book
value per share represents total tangible assets less total liabilities, divided by the number of shares of common stock outstanding as of
December 31, 2007. After giving effect to the issuance and sale of                     shares of common stock in this offering at an assumed initial
public offering price of $        , the mid-point of the offering range on the cover of this prospectus, deducting the estimated underwriting
discounts and offering expenses that we will pay and the application of the net proceeds therefrom as described under ―Use of Proceeds,‖ our
net tangible book value as of December 31, 2007, would have been approximately $                   million, or $       per share. This represents an
immediate increase in net tangible book value of $             per share to existing stockholders and an immediate dilution of $          per share
to new investors purchasing common stock in this offering. The following table illustrates this dilution on a per share basis:

Assumed initial public offering price per share                                                                                                $
    Net tangible book value per share as of December 31, 2007                                                     $
    Increase in net tangible book value per share attributable to this offering
Net tangible book value per share after this offering                                                                                          $
Dilution per share to new investors                                                                                                            $


       A $1.00 increase (decrease) in the assumed initial public offering price of $         per share would increase (decrease) our net tangible
book value by $          million, the net tangible book value per share after this offering by $        per share and the dilution to new investors
in this offering by $        per share, assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains
the same and after deducting the estimated underwriting discounts and commissions and offering expenses payable by us.

      The following table sets forth, as of December 31, 2007, the total number of shares of common stock owned by existing stockholders and
to be owned by new investors, the total consideration paid and to be paid by each group, and the average price per share paid by our existing
stockholders and to be paid by new investors purchasing shares of common stock in this offering, before deducting the estimated underwriting
discounts and offering expenses that we will pay:

                                                                                                                                                   Average
                                                                                                                                                   Price Per
                                                                      Shares Purchased                    Total Consideration                       Share
                                                                     Number       Percent                 Amount                 Percent
                                                                                                (dollars in millions, except share data)
Existing stockholders                                                                       %     $                                        %   $
New investors
     Total                                                                         100.0 %        $                              100.0 %       $


      A $1.00 increase (decrease) in the assumed initial public offering price of $         per share would increase (decrease) total
consideration and total average price per share paid by new investors by $           million and $       , respectively, assuming the number of
shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the estimated underwriting
discounts and commissions and offering expenses payable by us.

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                                                   SELECTED HISTORICAL COMBINED FINANCIAL DATA

      The following table sets forth our selected historical financial data. The selected historical statement of operations data for the year ended
December 31, 2005, and for the seven months ended July 31, 2006, have been derived from the combined financial statements of the Coated
and Supercalendered Papers Division of International Paper, or the ―Predecessor‖ or the ―Division,‖ which have been audited by Deloitte &
Touche LLP, an independent registered public accounting firm, and are included in this prospectus. The selected historical combined statement
of operations data for the years ended December 31, 2003 and 2004, and the combined balance sheet data as of December 31, 2003, 2004 and
2005, have been derived from the combined financial statements of the Coated and Supercalendered Papers Division of International Paper that
are not included in this prospectus. The selected balance sheet data as of December 31, 2006 and 2007, and the statement of operations data for
the five months ended December 31, 2006 and the year ended December 31, 2007, have been derived from the combined financial statements
of Verso Paper Corp., or the ―Successor,‖ which have been audited by Deloitte & Touche LLP, an independent registered public accounting
firm, and are included in this prospectus.

     Our selected historical combined financial data should be read in conjunction with ―Management’s Discussion and Analysis of Financial
Condition and Results of Operations‖ and our combined financial statements and the related notes thereto included elsewhere in this
prospectus.

                                                                                           Predecessor Combined                                      Successor Combined
                                                                                                                          Seven Months         Five Months            Year
                                                                                                                              Ended               Ended              Ended
                                                                                                                             July 31,          December 31,       December 31,
                                                                              Year Ended December 31,                          2006                2006               2007
                                                                           2003             2004              2005
                                                                                                                     (dollars in millions)
Statement of Operations Data:
Net sales                                                              $   1,343.1     $    1,463.3       $   1,603.8    $           904.4     $       706.8      $     1,628.8
Costs and expenses:
      Cost of products sold exclusive of depreciation and
          amortization                                                     1,154.1          1,272.5           1,338.2                771.6             589.3            1,403.1
      Depreciation and amortization                                          138.3            130.5             129.4                 72.7              48.3              123.2
      Selling, general and administrative expenses                            81.4             65.3              65.6                 34.3              14.4               53.1
      Restructuring and other charges                                          4.5              0.6              10.4                 (0.3 )            10.1               19.4

Operating income (loss)                                                      (35.2 )             (5.6 )          60.2                 26.1              44.7               30.0
Interest expense                                                              16.3               16.0            14.8                  8.4              49.1              143.0
Interest income                                                               (0.1 )             (0.3 )          —                    —                 (1.8 )             (1.5 )

Income (loss) before income taxes and cumulative effect of change in
   accounting principle                                                      (51.4 )          (21.3 )            45.4                 17.7               (2.6 )          (111.5 )
Provision (benefit) for income taxes                                         (19.8 )           (8.2 )            17.9                  7.0               —                 —

Income (loss) before cumulative effect of change in accounting
   principle                                                                 (31.6 )          (13.1 )            27.5                 10.7               (2.6 )          (111.5 )
Cumulative effect of change in accounting principle                           (0.7 )           —                 —                    —                  —                 —

Net income (loss)                                                      $     (32.3 )   $      (13.1 )     $      27.5    $            10.7     $         (2.6 )   $      (111.5 )



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                                                                Predecessor Combined                                                   Successor Combined
                                                                                                      Seven Months               Five Months
                                                                                                          Ended                     Ended            Year Ended
                                                                                                         July 31,                December 31,       December 31,
                                                      Year Ended December 31,                              2006                      2006               2007
                                               2003             2004                 2005
                                                                         (dollars and tons in millions, except per share data)
Per Share Data:
Earnings (loss) per share                                                                                                        $     (2,637 )     $    (111,463 )
Common shares outstanding                                                                                                               1,000               1,000

Balance Sheet Data:
Working capital(1)                         $      78.9      $      58.6          $       87.8                                    $      153.8       $         87.2
Property, plant and equipment, net             1,384.3          1,363.9               1,287.0                                         1,212.3              1,160.2
Total assets                                   1,603.4          1,585.0               1,534.1                                         1,711.0              1,603.5
Total debt                                       303.5            302.1                 301.2                                         1,169.3              1,419.6
Stockholders’ equity                           1,097.0          1,075.3               1,040.0                                           280.0                (75.1 )

Statement of Cash Flows Data:
Cash provided by operating activities      $      81.0      $        123.7       $     116.8         $          39.3             $      128.2       $          15.0
Cash used in investing activities               (135.2 )            (111.5 )           (53.0 )                 (27.6 )               (1,402.0 )               (69.1 )
Cash (used in) provided by financing
  activities                                      54.2               (12.2 )            (63.8 )                (11.6 )                1,386.3                      0.2

Other Financial and Operating
  Data:
EBITDA(2)                                  $     102.4      $     124.9          $      189.6        $         98.8              $       93.0       $        153.2
Capital expenditures                             133.3            111.3                  53.1                  27.7                      27.8                 70.9
Total tons sold                                1,934.6          2,064.6               2,024.9               1,145.0                     866.4              2,096.3

(1) Working capital is defined as current assets net of current liabilities, excluding the current portion of long-term debt and the Division’s
    accounts payable to International Paper—net.
(2) EBITDA consists of earnings before interest, taxes depreciation and amortization. EBITDA is a measure commonly used in our industry
    and we present EBITDA to enhance your understanding of our operating performance. We use EBITDA as one criterion for evaluating our
    performance relative to that of our peers. We believe that EBITDA is an operating performance measure, and not a liquidity measure, that
    provides investors and analysts with a measure of operating results unaffected by differences in capital structures, capital investment
    cycles and ages of related assets among otherwise comparable companies. However, EBITDA is not a measurement of financial
    performance under U.S. GAAP, and our EBITDA may not be comparable to similarly titled measures of other companies. You should not
    consider our EBITDA as an alternative to operating or net income, determined in accordance with U.S. GAAP, as an indicator of our
    operating performance, or as an alternative to cash flows from operating activities, determined in accordance with U.S. GAAP, as an
    indicator of our cash flows or as a measure of liquidity.
    The following table reconciles net income (loss) to EBITDA for the periods presented:

                                                                         Predecessor Combined                                     Successor Combined
                                                                                                           Seven                Five
                                                                                                          Months              Months               Year
                                                                                                           Ended               Ended              Ended
                                                                       Year Ended                         July 31,          December 31,       December 31,
                                                                       December 31,                         2006                2006               2007
                                                             2003              2004           2005
                                                                                                (dollars in millions)
    Statement of Operations Data:
    Net income (loss)                                      $ (32.3 )      $ (13.1 )       $    27.5 $         10.7         $         (2.6 )     $       (111.5 )
    Interest expense, net                                     16.2           15.7              14.8            8.4                   47.3                141.5
    Income tax expense (benefit)                             (19.8 )         (8.2 )            17.9            7.0                    —                    —
    Depreciation and amortization                            138.3          130.5             129.4           72.7                   48.3                123.2
    EBITDA                                                 $ 102.4        $ 124.9         $ 189.6 $           98.8         $         93.0       $       153.2
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    EBITDA, as defined above, for the seven months ended July 31, 2006, the five months ended December 31, 2005, and the year ended
December 31, 2007, was impacted by the following non-cash and unusual (income) expenses:

                                                                         Predecessor Combined                            Successor Combined
                                                                             Seven Months                 Five Months Ended                 Year Ended
                                                                                Ended                        December 31,                   December 31,
                                                                             July 31, 2006                        2006                          2007
                                                                                                   (dollars in millions)
Lease not assumed(a)                                                 $                     5.8         $                —                 $          —
Operational improvements(b)                                                                5.7                          2.5                          6.1
Restructuring, severance and other (c)                                                    (0.3 )                       10.1                         19.4
Non-cash compensation/benefits(d)                                                          5.0                          0.4                          0.6
Inventory fair value(e)                                                                   —                             5.9                          —
Other items, net(f)                                                                        8.1                         (8.2 )                        8.0
Total                                                                $                    24.3         $               10.7               $         34.1


(a) Represents the historical rent expense incurred on the Sartell property lease that was not assumed by us in the Acquisition.
(b) Represents expected earnings as a result of changes in the use of two of our paper machines at the Androscoggin mill prior to the
    Acquisition, and the benefit of lower wood cost at our Sartell mill resulting from the harvest of hybrid poplar from our fiber farm.
(c) Represents restructuring and severance as per our financial statements. Restructuring includes transition and other non-recurring costs
    associated with the Acquisition and carve out.
(d) Represents amortization of certain one-time benefit payments and non-cash benefit payments. Also includes the elimination of historical
    non-cash stock compensation costs previously incurred by us under International Paper’s compensation plan.
(e) Represents the fair value of inventory adjustment related to purchase accounting.
(f) Represents earnings adjustments for exceptional levels of bad debt expense, legal and consulting fees, and other miscellaneous
    non-recurring items, including adjustments for incremental estimated costs for activities previously part of the corporate allocation as well
    as other incremental costs we anticipated incurring on a stand-alone basis subsequent to the Acquisition.

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                                         MANAGEMENT’S DISCUSSION AND ANALYSIS OF
                                      FINANCIAL CONDITION AND RESULTS OF OPERATIONS

      The following discussion and analysis of our financial condition and results of operations covers periods prior to the Acquisition. For
comparison purposes, the results of operations for the year ended December 31, 2006, are presented on a combined basis, consisting of the
historical results of the Predecessor for the seven months ended July 31, 2006, and the results of the Successor for the period beginning
August 1, 2006 and ending on December 31, 2006. Accordingly, the discussion and analysis of historical periods do not fully reflect the
significant impact that the Acquisition has had on our financial statements. In addition, the statements in the discussion and analysis regarding
industry outlook, our expectations regarding the performance of our business and the other non-historical statements in the discussion and
analysis are forward-looking statements. These forward-looking statements are subject to numerous risks and uncertainties, including, but not
limited to, the risks and uncertainties described in “Risk Factors.” Our actual results may differ materially from those contained in or implied
by any forward-looking statements. You should read the following discussion together with “Risk Factors” and our consolidated and combined
financial statements included elsewhere in this prospectus.

Overview
      We are one of the leading North American suppliers of coated papers to catalog and magazine publishers. Coated paper is used primarily
in media and marketing applications, including catalogs, magazines, commercial printing applications, such as high-end advertising brochures,
annual reports and direct mail advertising. We are North America’s second largest producer of coated groundwood paper, which is used
primarily for catalogs and magazines. We are also one of North America’s largest producers of coated freesheet paper, which is used primarily
for upscale catalogs and magazines, annual reports and magazine covers. To complete our product offering to catalog and magazine customers,
we have a strategic presence in supercalendered paper, which is primarily used for retail inserts due to its relatively low cost. In addition, we
produce and sell market pulp, which is used in the manufacture of printing and writing paper grades and tissue products.

Stand-Alone Company
      On August 1, 2006, Apollo purchased the Coated and Supercalendered Papers Division and the fiber farm located near Alexandria,
Minnesota from International Paper. The Division was acquired under an asset purchase agreement. The Predecessor financial statements for
the periods presented represent the Division’s historical combined financial statements. The preparation of this information was based on
certain assumptions and estimates, including allocations of costs from International Paper. This financial information may not, however,
necessarily reflect the results of operations, financial positions and cash flows that would have occurred if the Division had been a separate,
stand-alone entity during the periods presented or our future results of operations, financial position and cash flows. For example, the historical
financial statements of the Predecessor in this report include expenses for certain corporate services provided by International Paper and
allocated based on various methods, including direct consumption, percent of capital employed, and number of employees. These historical
charges and allocations may not be representative of expenses that we will incur in future reporting periods as we operate as a stand-alone
entity.

Selected Factors that Affect our Operating Results
Net Sales
      Our sales, which we report net of rebates, allowances and discounts, are a function of the number of tons of paper that we sell and the
price at which we sell our paper. The coated paper industry is cyclical, which results in changes in both volume and price. Paper prices
historically have been a function of macro-economic factors which influence supply and demand. Price has historically been substantially more
variable than volume and can change significantly over relatively short time periods. In the second half of 2006, paper prices began to fall and

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continued to fall into the first half of 2007. We believe this price decline was driven by several factors, including high customer inventories,
high producer inventories and cautious purchasing by customers in advance of a scheduled postal rate increase. In the second half of 2007,
some of our North American competitors announced the shutdown of approximately 1.3 million tons of aggregate coated paper capacity, which
had become uncompetitive from a cost standpoint. This reduction was equivalent to 11% of North American coated paper capacity. As a result
of these recent reductions in production capacity and resulting increases in the average operating rate for North American coated paper
manufacturers, coated paper pricing began to strengthen in the second half of 2007. During the second quarter of 2007, we announced a $60 per
ton price increase on all coated paper grades, effective July 1. In reflection of the beginning of this price increase, our weighted average paper
prices rose from $797 per ton in the second quarter of 2007 to $840 per ton in the fourth quarter of 2007. We expect our weighted average
paper prices to continue to increase as we realize this price increase during 2008. We announced two additional price increases in the second
half of 2007, totaling a further $125 per ton on coated groundwood grades and another $70 per ton on coated freesheet grades. We began
implementing the first of these price increases in October 2007 and the other in January 2008. In the first quarter of 2008, we announced
another price increase, effective April 1, of an additional $60 per ton on all coated groundwood grades and another $60 per ton on coated
freesheet grades with a basis weight of 55 lbs or lighter.

      We are primarily focused on serving two end-user segments: (i) catalogs and (ii) magazines. In 2007, we believe we had a leading market
share for the catalog and magazine segments of coated papers. Coated paper demand is primarily driven by advertising and print media usage.
Advertising spending and magazine and catalog circulation tend to be correlated with GDP in the United States and rise with a strong economy.

      The majority of our products are sold via contracts we maintain with our customers. Contracted sales are more prevalent for coated
groundwood paper, as opposed to coated freesheet paper, which is more often sold without a contract. Our contracts generally specify the
volumes to be sold to the customer over the contract term, as well as the pricing parameters for those sales. Most of our contracts are negotiated
on an annual basis, with only a few having terms extending beyond one year. Typically, our contracts provide for quarterly price adjustments
based on market price movements. These contracts help enable us to plan our production runs well in advance, thereby optimizing production
over our integrated mill system.

      We reach our end-users through several channels, including printers, brokers, paper merchants and direct sales to end-users. We sell and
market our products to approximately 100 customers which comprise 650 end-user accounts. In 2007, no single customer accounted for more
than 10% of our total net sales.

Costs of Products Sold
      The principal components of our cost of sales are chemicals, wood, energy, labor, maintenance and depreciation and amortization. Costs
for commodities, including chemicals, wood and energy, are the most variable component of our cost of sales because the prices of many of the
commodities that we use can fluctuate substantially, sometimes within a relatively short period of time. In addition, our aggregate commodity
purchases fluctuate based on the volume of paper that we produce.

       After giving effect to the Acquisition, our cost of goods sold increased as a result of the purchase accounting treatment of the Acquisition.
Under the rules of purchase accounting, we adjusted the value of our assets (including the inventory we acquired) and liabilities at closing to
their respective estimated fair values. As a result of these adjustments to our asset basis, following the close of the Acquisition, our costs of
goods sold increased by such non-cash increase in our asset basis. However, this increase did not have a cash impact and did not affect our cost
of sales for any inventory produced after the close of the Acquisition.

      Chemicals. Chemicals utilized in the manufacturing of coated papers include latex, starch, calcium carbonate, titanium dioxide and
others. We purchase these chemicals from a variety of suppliers and are not dependent on any single supplier to satisfy our chemical needs. In
the near term, we expect the rate of inflation

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for our total chemical costs to be lower than that experienced over the last two years. However, we expect imbalances in supply and demand
will drive higher prices for certain chemicals such as starch and sodium chlorate.

      Wood. Our costs to purchase wood are affected directly by market costs of wood in our regional markets and indirectly by the effect of
higher fuel costs on logging and transportation of timber to our facilities. While we have in place fiber supply agreements that ensure a
substantial portion of our wood requirements, purchases under these agreements are typically at market rates. In 2008, we will begin to utilize
wood harvested from our 23,000-acre hybrid poplar fiber farm located near Alexandria, Minnesota, which should reduce our wood costs.

      Energy. We produce a large portion of our energy requirements, historically producing approximately 50% of our energy needs for our
coated paper mills from sources such as waste wood and paper, hydroelectric facilities, chemicals from our pulping process, our own steam
recovery boilers and internal energy cogeneration facilities. Our external energy purchases vary across each of our mills and include fuel oil,
natural gas, coal and electricity. While our internal energy production capacity mitigates the volatility of our overall energy expenditures, we
expect prices for energy to remain volatile for the foreseeable future and our energy costs will increase in a high energy cost environment. As a
result, high energy prices will have a negative impact on our profitability if we are not successful in mitigating these costs through added
operational efficiencies or other means. As prices fluctuate, we have some ability to switch between certain energy sources in order to
minimize costs. We also utilize derivatives contracts as part of our risk management strategy to manage our exposure to market fluctuations in
energy prices.

      Labor costs. Labor costs include wages, salary and benefit expenses attributable to our mill personnel. Mill employees at a
non-managerial level are compensated on an hourly basis. Management employees at our mills are compensated on a salaried basis. Wages,
salary and benefit expenses included in cost of sales do not vary significantly over the short term. In addition, we have not experienced
significant labor shortages.

     Maintenance. Maintenance expense includes day-to-day maintenance, equipment repairs and larger maintenance projects, such as paper
machine shutdowns for periodic maintenance. Day-to-day maintenance expenses have not varied significantly from year-to-year. Larger
maintenance projects and equipment expenses can produce year-to-year fluctuations in our maintenance expenses. In conjunction with our
periodic maintenance shutdowns, we have incidental incremental costs that are primarily comprised of unabsorbed fixed costs from lower
production volumes and other incremental costs for purchased materials and energy that would otherwise be produced as part of the normal
operation of our mills.

Depreciation and amortization
     Depreciation and amortization expense is lower after the Acquisition as a result of the lower asset bases assigned to property, plant, and
equipment. Under the rules of purchase accounting, we have adjusted the value of our assets and liabilities to their respective estimated fair
values and any excess of the purchase price over the fair market value of the net assets acquired was allocated to goodwill.

Selling, General and Administrative Expenses
      The principal components of our selling, general and administrative expenses are wages, salaries and benefits for our office personnel at
our headquarters and our sales force, travel and entertainment expenses, advertising expenses, expenses relating to certain information
technology systems and research and development expenses. Also included are allocations of costs for corporate functions historically provided
to us by International Paper. For further information about allocated costs, see ―—Corporate Allocations.‖ In addition, we pay a management
fee to Apollo on an annual basis pursuant to a management agreement we entered into with Apollo after the consummation of the Acquisition.
Upon consummation of this offering, we expect that the fee arrangement with Apollo will be terminated pursuant to the terms of the
management agreement.

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Taxes
       Prior to the Acquisition on August 1, 2006, the Division was included in the consolidated income tax returns of International Paper. In the
Predecessor combined financial statements included in this prospectus, income taxes have been presented based on a calculation of the income
tax benefit we estimate would have been generated if we had operated as a separate taxpayer. As a result, we have reflected U.S. federal and
state income tax expense (benefit) on our gains (losses) based on an allocated rate of 39.4% for the year ended December 31, 2005 and for the
seven months ended July 31, 2006. The Predecessor historically settled the current amount due to/from International Paper through a control
account. Income taxes have been provided for all items included in the historical statements of income included herein, regardless of when such
items were reported for tax purposes or when the taxes were actually paid or refunded. As a result of the Acquisition, there was a step-up in the
tax basis of our assets, significantly reducing our cash income tax payments. Accordingly, our historical income tax expense (benefit) may not
necessarily reflect and may differ materially from what our cash tax payments would have been or will be as a stand-alone entity.

Corporate Allocations
      The historical combined statement of operations for the Predecessor includes allocations of costs for certain corporate functions
historically provided to us by International Paper, including:
        •    General corporate expenses. This represents costs related to corporate functions such as accounting, tax, treasury, payroll and
             benefits administration, certain incentive compensation, risk management, legal, centralized transaction processing and information
             management and technology. These costs have historically been allocated primarily based on general factors and estimated use of
             services. These costs are included in selling, general and administrative expenses in the Predecessor’s historical combined
             statement of operations.
        •    Employee benefits and incentives. This represents fringe benefit costs and other incentives, including group health and welfare
             benefits, U.S. pension plans, U.S. post-retirement benefit plans and employee incentive compensation plans. These costs have
             historically been allocated on an active headcount basis for health and welfare benefits, including U.S. post-retirement plans, on the
             basis of salary for U.S. pension plans and on a specific identification basis for employee incentive compensation plans. These costs
             are included in costs of goods sold, selling, general and administrative expenses and restructuring charges in the Predecessor’s
             historical combined statement of operations.
        •    Interest expense and debt service costs. International Paper historically provided financing to us through cash flows from its other
             operations and debt incurred. The interest expense associated with incurred debt that has been allocated to us based on
             specifically-identified borrowings is included in interest expense, net in our statements of operations data. Costs associated with
             the debt are included in other expense (income) in the Predecessor’s historical combined statement of operations.

     Expense allocations from International Paper reflected in the income (loss) in the Predecessor’s historical combined statements of
operations were as follows:

                                                                                                                     Predecessor Combined
                                                                                                           Year Ended                    Seven Months
                                                                                                           December 31,                 Ended July 31,
                                                                                                               2005                          2006
                                                                                                                     (dollars in thousands)
General corporate expenses                                                                                $        44.0               $           19.5
Employee benefits and incentives(1)                                                                                23.9                           11.3
Interest expense and debt service costs                                                                            14.8                            8.4

(1)   Includes severance payments associated with various headcount reduction initiatives of $7.2 million for 2005.

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      Following the consummation of the Acquisition, we no longer have allocations for costs for certain corporate functions historically
provided to us by International Paper. We now receive services historically provided by International Paper from our internal operations or
third-party service providers. Accordingly, it is unlikely that the expenses we will incur as a stand-alone company for services that were
historically provided to us by International Paper will reflect the allocated costs included in the Predecessor’s combined financial statements.

Critical Accounting Policies and Significant Accounting Estimates
       Our accounting policies are fundamental to understanding management’s discussion and analysis of results of operations and financial
condition. Our combined condensed financial statements are prepared in conformity with accounting principles generally accepted in the
United States of America and follow general practices within the industries in which we operate. The preparation of the financial statements
requires management to make certain judgments and assumptions in determining accounting estimates. Accounting estimates are considered
critical if the estimate requires management to make assumptions about matters that were highly uncertain at the time the accounting estimate
was made, and different estimates reasonably could have been used in the current period, or changes in the accounting estimate are reasonably
likely to occur from period-to-period, that would have a material impact on the presentation of our financial condition, changes in financial
condition or results of operations.

      Management believes the following critical accounting policies are both important to the portrayal of our financial condition and results
of operations and require subjective or complex judgments. These judgments about critical accounting estimates are based on information
available to us as of the date of the financial statements.

      Accounting policies whose application may have a significant effect on the reported results of operations and financial position, and that
can require judgments by management that affect their application, include Statement of Financial Accounting Standards, or ―SFAS,‖ No. 5,
Accounting for Contingencies , SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets , SFAS No. 142, Goodwill and
Other Intangible Assets , SFAS No. 87, Employers’ Accounting for Pensions , and SFAS No. 158, Employers’ Accounting for Defined Benefit
Pension and Other Postretirement Plans .

       Impairment of long-lived assets and goodwill . Long-lived assets are reviewed for impairment upon the occurrence of events or changes
in circumstances that indicate that the carrying value of the assets may not be recoverable, as measured by comparing their net book value to
the estimated undiscounted future cash flows generated by their use.

      Goodwill and other intangible assets are accounted for in accordance with SFAS No. 142, Goodwill and Other Intangible Assets .
Intangible assets primarily consist of trademarks, customer-related intangible assets and patents obtained through business acquisitions.
Impairment is the condition that exists when the carrying amount of goodwill exceeds its implied fair value. The impairment evaluation of the
carrying amount of goodwill and other intangible assets with indefinite lives is conducted annually or more frequently if events or changes in
circumstances indicate that an asset might be impaired. Goodwill is evaluated at the reporting unit level. Goodwill has been allocated to the
―Coated‖ segment.

      The evaluation for impairment is performed by comparing the carrying amount of these assets to their estimated fair value. If impairment
is indicated, then an impairment charge is recorded to reduce the asset to its estimated fair value. The estimated fair value is generally
determined on the basis of discounted future cash flows. Management believes the accounting estimates associated with determining fair value
as part of the impairment test is a critical accounting estimate, because estimates and assumptions are made about our future performance and
cash flows. While management uses the best information available to estimate future performance and cash flows, future adjustments to
management’s projections may be necessary if economic conditions differ substantially from the assumptions used in making the estimates.

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      Pension and Postretirement Benefit Obligations. We offer various pension plans to employees. The calculation of the obligations and
related expenses under these plans requires the use of actuarial valuation methods and assumptions, including the expected long-term rate of
return on plan assets, discount rates, projected future compensation increases, and mortality rates. Actuarial valuations and assumptions used in
the determination of future values of plan assets and liabilities are subject to management judgment and may differ significantly if different
assumptions are used.

       Contingent liabilities. A liability is contingent if the amount or outcome is not presently known, but may become known in the future as a
result of the occurrence of some uncertain future event. We estimate our contingent liabilities based on management’s estimates about the
probability of outcomes and their ability to estimate the range of exposure. Accounting standards require that a liability be recorded if
management determines that it is probable that a loss has occurred and the loss can be reasonably estimated. In addition, it must be probable
that the loss will be confirmed by some future event. As part of the estimation process, management is required to make assumptions about
matters that are by their nature highly uncertain.

      The assessment of contingent liabilities, including legal contingencies, asset retirement obligations and environmental costs and
obligations, involves the use of critical estimates, assumptions and judgments. Management’s estimates are based on their belief that future
events will validate the current assumptions regarding the ultimate outcome of these exposures. However, there can be no assurance that future
events will not differ from management’s assessments.

Recent Accounting Developments
      Derivatives and Hedging Activities . In March 2008, the Financial Accounting Standards Board, or FASB, issued SFAS No. 161,
Disclosures about Derivative Instruments and Hedging Activities. SFAS No. 161 changes the disclosure requirements for derivative
instruments and hedging activities. Entities are required to provide enhanced disclosures about (a) how and why an entity uses derivative
instruments, (b) how derivative instruments and related hedged items are accounted for under Statement 133 and its related interpretations, and
(c) how derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows. SFAS
No. 161 is effective for fiscal years and interim periods beginning after November 15, 2008. Since SFAS No. 161 only addresses disclosure
requirements, the adoption of SFAS No. 161 will have no impact on our combined results of operations or combined financial position.

       Business Combinations. In December 2007, the FASB issued SFAS No. 141 (revised 2007), Business Combinations . SFAS No. 141-R
establishes principles and requirements for how an acquirer recognizes and measures identifiable assets acquired, liabilities assumed and
noncontrolling interests; recognizes and measures goodwill acquired in a business combination or gain from a bargain purchase; and establishes
disclosure requirements. SFAS No. 141-R is effective for business combinations for which the acquisition date is on or after the beginning of
the first annual reporting period beginning on or after December 15, 2008. Early adoption is prohibited. The impact of adopting SFAS No.
141-R is not expected to have a material impact on our combined results of operations or combined financial position.

      In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statements—an amendment of
ARB No. 51 . SFAS No. 160 establishes accounting and reporting standards for the noncontrolling interest in a subsidiary and for the
deconsolidation of a subsidiary. SFAS No. 160 is effective, on a prospective basis, for fiscal years, and interim periods within those years,
beginning on or after December 15, 2008. The presentation and disclosure requirements for existing minority interests should be applied
retrospectively for all periods presented. Early adoption is prohibited. The impact of adopting SFAS No. 160 is not expected to have a material
impact on our combined results of operations or combined financial position.

      Fair Value Option for Financial Assets and Financial Liabilities. In February 2007, the FASB issued SFAS No. 159, Fair Value Option
for Financial Assets and Financial Liabilities —including an amendment of FASB Statement No. 115 , which permits an entity to measure
certain financial assets and financial liabilities at fair

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value. SFAS No. 159’s objective is to improve financial reporting by allowing entities to mitigate volatility in reported earnings caused by the
measurement of related assets and liabilities using different attributes, without having to apply complex hedge accounting provisions. SFAS
No. 159 is effective as of the beginning of an entity’s fiscal year beginning after November 15, 2007. The impact of adopting SFAS No. 159 is
not expected to have a material impact on our combined results of operations or combined financial position.

       Fair Value Measurements. In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements . SFAS No. 157 does not
address ―what‖ to measure at fair value; instead, it addresses ―how‖ to measure fair value. SFAS No. 157 applies (with limited exceptions) to
existing standards that require assets and liabilities to be measured at fair value. SFAS No. 157 establishes a fair value hierarchy, giving the
highest priority to quoted prices in active markets and the lowest priority to unobservable data and requires new disclosures for assets and
liabilities measured at fair value based on their level in the hierarchy. SFAS No. 157 is effective for financial statements issued for fiscal years
beginning after November 15, 2007. However, FSP 157-2, Effective Date of FASB Statement No. 157 , delayed the implementation of SFAS
No. 157 for nonfinancial assets and nonfinancial liabilities, except for items that are recognized or disclosed at fair value in the financial
statements on a recurring basis, to years beginning after November 15, 2008. The impact of adopting SFAS No. 157 is not expected to have a
material impact on our combined results of operations or combined financial position.

Results of Operations
      The following table sets forth certain historical combined financial information for the years ended December 31, 2005, 2006 and 2007.
For comparison purposes, we have presented the results of operations for the year ended December 31, 2006, on a combined basis, consisting
of the historical results of operations of our Predecessor for the seven months ended July 31, 2006, and the historical results of operations for
the Successor for the five months ended December 31, 2006. We believe that this approach is beneficial to the reader by providing an
easier-to-read discussion of the results of operations and provides the reader with information from which to analyze our financial results that is
consistent with the manner that management reviews and analyzes results of operations.

      U.S. GAAP does not contemplate the combination of the financial results of our Predecessor and Successor, as the combined information
does not include any pro forma assumptions or adjustments and, as a result, does not fully reflect the significant impact the Acquisition has had
on our financial statements. In particular, the pro forma impact of fair value adjustments to personal property and other property and equipment
due to the allocation of the purchase price to assets acquired and liabilities assumed resulted in a lower depreciation expense for the Successor.
The pro forma impact of these adjustments on the Predecessor’s results of operations for the seven months ended July 31, 2006, would have
been a reduction of $5.4 million in depreciation expense. In addition, intangible assets recognized through the allocation of the purchase price
to assets acquired and liabilities assumed resulted in incremental amortization expense for the Successor. The pro forma impact on the
Predecessor’s results of operations for the seven months ended July 31, 2006, would have been $0.4 million of amortization expense, resulting
in a net pro forma reduction in depreciation and amortization expense of $5.0 million for the year ended December 31, 2006.

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      Cost of sales in the following discussion includes the cost of products sold and depreciation and amortization. The following table and
discussion should be read in conjunction with the information contained in our historical combined financial statements and the notes thereto
included elsewhere in this prospectus. However, our historical results of operations set forth below and elsewhere in this prospectus may not
necessarily reflect what would have occurred if we had been a separate, stand-alone entity during the periods presented or what will occur in
the future.

                                                                                                                          Non-GAAP
                                                                                                                           Combined
                                                                                                                           Successor
                                                                                                                             and
                                                                    Predecessor                       Successor           Predecessor          Successor
                                                                            Seven Months            Five Months
                                                           Year Ended            Ended                  Ended         Year Ended           Year Ended
                                                           December 31,         July 31,           December 31,       December 31,         December 31,
                                                               2005               2006                   2006             2006                 2007
                                                                                            (dollars in millions)
Net sales                                                 $    1,603.8 $          904.4           $        706.8      $       1,611.2      $      1,628.8
Cost and expenses:
     Cost of products sold excluding depreciation and
       amortization                                            1,338.2            771.6                    589.3              1,360.9             1,403.1
     Depreciation and amortization                               129.4             72.7                     48.3                121.0               123.2
     Selling, general, and administrative                         65.6             34.3                     14.4                 48.7                53.1
     Restructuring and other charges                              10.4             (0.3 )                   10.1                  9.8                19.4
     Operating income (loss)                                       60.2             26.1                    44.7                  70.8               30.0
     Interest expense                                              14.8              8.4                    49.1                  57.5              143.0
     Interest income                                                —                —                      (1.8 )                (1.8 )             (1.5 )
     Income (loss) before income taxes                             45.4             17.7                     (2.6 )               15.1             (111.5 )
     Income tax expense                                            17.9              7.0                     —                     7.0               —
     Net income (loss)                                    $        27.5 $           10.7          $          (2.6 )   $            8.1     $       (111.5 )


2007 Successor to 2006 Combined Successor and Predecessor
      Net Sales . Net sales for the year ended December 31, 2007 were $1,628.8 million compared to $1,611.2 million for the year ended
December 31, 2006, an increase of 1.1%. The increase was the result of a 4.2% increase in the tons sold in 2007. This increase was partially
offset by a 3.0% decrease in our average sales price per ton for all of our products over the comparable period.

      Net sales for our coated and supercalendered papers segment were $1,443.2 million for the year ended December 31, 2007, compared to
$1,425.2 million for the year ended December 31, 2006, an increase of 1.3%. The increase was primarily due to higher paper volumes, which
increased by 6.1% compared to 2006, partially offset by lower paper prices, which decreased 4.6% over the comparable period.

      Net sales for our hardwood market pulp segment were $148.0 million for the year ended December 31, 2007, compared to $147.0 million
for the year ended December 31, 2006, an increase of 0.7%. The increase was due to higher sales prices of 5.9%, while volumes decreased
5.0% due to an increase in internal consumption.

      Net sales for our other segment were $37.6 million for the year ended December 31, 2007, compared to $39.0 million for the year ended
December 31, 2006, a decrease of 3.7%. This decrease reflects a 4.1% decline in sales volume, partially offset by a 0.5% increase in average
sales prices compared to 2006.

     Cost of sales . Cost of sales for the year ended December 31, 2007, was $1,526.3 million compared to $1,481.9 million for the year ended
December 31, 2006, an increase of 3.0%, primarily driven by higher sales volume. Although the prices of certain commodities we use in our
production were higher in 2007, the operational efficiencies and improvements we have implemented, including through our R-GAP
improvement

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program, more than offset the increased prices of raw materials. Our gross margin, excluding depreciation and amortization, was 13.9% for the
year ended December 31, 2007, compared to 15.5% for the same period in 2006. This decline reflects the lower average sales prices in 2007.
Depreciation and amortization expense for the year ended December 31, 2007, was $123.2 million compared to $121.0 million for the year
ended December 31, 2006.

      Selling, general and administrative . Selling, general and administrative expenses were $53.1 million for the year ended December 31,
2007, compared to $48.7 million for the same period in 2006, an increase of 9.1%. For the period following the closing of the Acquisition,
selling, general and administrative expenses reflect the annual expenses we incurred as a stand-alone business. We expect these costs to
increase in 2008 as a result of further incremental costs associated with operating on a stand-alone basis subsequent to the Acquisition.

     Interest expense . Interest expense for the year ended December 31, 2007, increased to $143.0 million from $57.5 million for the same
period in 2006 due to the debt issued as part of the Acquisition and the issuance of the $250 million senior unsecured floating-rate term loan in
January 2007. Interest expense for the year ended December 31, 2007, includes $137.0 million of cash interest expense on our outstanding
indebtedness and $5.5 million of non-cash interest expense, including amortization of deferred debt issuance costs.

      Restructuring and other charges . Restructuring and other charges include one-time costs for us to operate as a stand-alone business. The
charges for the year ended December 31, 2007, were $19.4 million compared to $10.1 million for the five-month period ended December 31,
2006. In conjunction with the Acquisition, we entered into a transition services agreement with International Paper whereby International Paper
continued to provide certain services that were necessary for us to run as a stand-alone business. Included in restructuring and other charges for
the year ended December 31, 2007, were charges of $4.7 million incurred under the transition services agreement compared to $6.1 million for
the five months ended December 31, 2006. We are no longer operating under the transition services agreement.

     Income tax expense . For the year ended December 31, 2007, and for the five-month period from August 1, 2006 to December 31, 2006,
we incurred no income taxes, compared to income tax expense of $7.0 million for our Predecessor for the seven months ended July 31, 2006.

2006 Combined Successor and Predecessor to 2005 Predecessor
      Net Sales . Net sales for the year ended December 31, 2006 were $1,611.2 million compared to $1,603.8 million for the year ended
December 31, 2005, an increase of 0.5%. The increase was the result of a 1.1% increase in the average sales price per ton for all of our products
in 2006. This increase was partially offset by a 0.7% decrease in the tons sold over the comparable period.

      Net sales for our coated and supercalendered papers segment were $1,425.2 million for the year ended December 31, 2006, compared to
$1,400.6 million for the year ended December 31, 2005, an increase of 1.8%. The increase was primarily due to higher paper prices, which
increased by 0.9% compared to paper prices in 2005 and higher paper volumes of 0.8% over the comparable period.
      Net sales for our hardwood market pulp segment were $147.0 million for the year ended December 31, 2006, compared to $139.8 million
for the year ended December 31, 2005, an increase of 5.2%. The increase was due to higher sales prices of 5.9%, while volumes decreased
0.8% due to an increase in internal consumption.

      Net sales for our other segment were $39.0 million for the year ended December 31, 2006, compared to $63.4 million for the year ended
December 31, 2005, a decrease of 38.5%. The decrease was primarily due to the absence of sales in 2006 from paper machine No. 1 at our
Androscoggin mill, which was shutdown during 2005 and converted from the production of uncoated paper to the production of softwood pulp
used to supply our Bucksport mill.

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      Cost of sales . Cost of sales for the year ended December 31, 2006 was $1,481.9 million, which included a $5.9 million inventory fair
value adjustment, compared to $1,467.6 million for the year ended December 31, 2005, an increase of 1.0%. Our gross margin, excluding
depreciation expense, for the year ended December 31, 2006 was 15.5%, compared to 16.6% for the same period in 2005. Excluding the fair
value of inventory adjustment, the gross margin for the year ended December 31, 2006 was 15.9%. Depreciation expense for the year ended
December 31, 2006 was $121.0 million compared to $129.4 million for the year ended December 31, 2005.

      Selling, general and administrative . Selling, general and administrative expenses were $48.7 million for the year ended December 31,
2006, compared to $65.6 million for the same period in 2005, a decrease of 25.8%. The decrease is primarily due to the elimination of an
allocation from International Paper for corporate services related to the operation of paper machine No. 1 at the Androscoggin mill, which was
shutdown during 2005 and due to the elimination of an allocation from International Paper for corporate services during the five months ended
December 31, 2006 compared to receiving a full allocation for the year ended December 31, 2005. For the period following the closing of the
Acquisition, selling, general and administrative expenses reflect the actual expenses we incurred as a stand-alone business.

     Interest expense . Interest expense for the year ended December 31, 2006 was $57.5 million, compared to $14.8 million for the same
period in 2005 due to the debt incurred as a result of the Acquisition.

      Restructuring and other charges . Restructuring and other charges in the Successor period are one-time transaction costs for us to run as a
stand-alone business. The charges for the five-month period ended December 31, 2006, were $10.1 million which included $6.1 million of
transition service agreement costs. In the Predecessor period, restructuring and other charges are severance and related costs associated with the
permanent shutdown of the No. 1 paper machine at the Androscoggin mill. The charges for the year ended December 31, 2005, were $10.4
million, which included $3.2 million of asset impairment.

     Income tax expense. The income tax expense of $7.0 million for the year ended December 31, 2006, is a decrease in tax expense
compared to the year ended December 31, 2005 of $17.9 million, primarily due to our being treated as a partnership for federal tax purposes
during the period from August 1, 2006, through December 31, 2006.

Liquidity and Capital Resources
     We rely primarily upon cash flow from operations and borrowings under our revolving credit facilities to finance operations, capital
expenditures and fluctuations in debt service requirements.

      We believe that our ability to manage cash flow and working capital levels, particularly inventory and accounts payable, will allow us to
meet our current and future obligations, make scheduled principal and interest payments, and provide funds for working capital, capital
expenditures and other needs of the business for at least the next twelve months. However, no assurance can be given that this will be the case,
and we may require additional debt or equity financing to meet our working capital requirements. We expect to spend approximately $80
million on capital expenditures during 2008, including approximately $60 million for maintenance and environmental capital expenditures.
Thereafter, our annual maintenance and environmental capital expenditures are expected to average approximately $40 million to $50 million
per year for the next few years.

      In addition, as a holding company, our investments in our operating subsidiaries, including Verso Paper LLC, constitute substantially all
of our operating assets. Consequently, our subsidiaries conduct all of our consolidated operations and own substantially all of our operating
assets. Our principal source of the cash we need to pay our debts is the cash that our subsidiaries generate from their operations and their
borrowings. Our subsidiaries are not obligated to make funds available to us. The terms of the senior secured credit facilities and the indentures
governing the outstanding notes of our subsidiaries significantly restrict our subsidiaries from

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paying dividends and otherwise transferring assets to us. Furthermore, our subsidiaries will be permitted under the terms of the senior secured
credit facilities and the indentures to incur additional indebtedness that may severely restrict or prohibit the making of distributions, the
payment of dividends or the making of loans by such subsidiaries to us. Although the terms of the debt agreements of our subsidiaries do not
restrict our operating subsidiaries from obtaining funds from their respective subsidiaries to fund their operations and payments on
indebtedness, we cannot assure you that the agreements governing the current and future indebtedness of our subsidiaries will permit our
subsidiaries to provide us with sufficient dividends, distributions or loans to fund our obligations or pay dividends to our stockholders.

      Cash provided by operating activities . For the year ended December 31, 2007, our operating activities generated net cash of $15.0
million, compared to $167.5 million of net cash generated during the comparable period in 2006. The decline was primarily due to a net loss of
$111.5 million in 2007, compared to net income of $8.1 million in 2006. Operating activities in 2005 generated net cash of approximately
$116.8 million compared to $167.5 million in 2006. The increase in 2006 was primarily driven by improved operations and working capital
improvements.

      Cash used in investing activities . For the year ended December 31, 2007, we used $69.1 million of net cash in investing activities,
primarily due to investments in capital expenditures. This compares to $1,429.6 million of net cash used during the comparable period in 2006,
which reflects the $1.4 billion in cash paid for the Acquisition. In 2005, we used $53.0 million of net cash in investing activities, primarily due
to investments in capital expenditures.

     Cash used in financing activities . For the year ended December 31, 2007, the net impact of our financing activities was de minimis. The
proceeds from the incurrence of the senior unsecured term loan facility by our subsidiary, Verso Paper Finance Holdings LLC, on January 31,
2007, were distributed to our equity holders. In 2006, net cash provided by financing activities was $1,374.7 million, reflecting the net proceeds
from the debt issuance and equity contributions. In 2005, financing activities used $63.8 million, driven by distributions of operating cash
flows, net of investing activities, to International Paper.

     Indebtedness. Our aggregate indebtedness at December 31, 2007, was $1,419.6 million, including the current portion of our outstanding
borrowings.

      Our subsidiary, Verso Paper Holdings LLC, entered into senior secured credit facilities on August 1, 2006, consisting of:
        •    a $285 million term loan with a maturity of seven years, which was fully drawn on August 1, 2006; and
        •    a $200 million revolving credit facility with a maturity of six years. No amounts were outstanding as of December 31, 2007.
             Letters of credit of $29.4 million were issued as of December 31, 2007.

       The senior secured credit facilities of Verso Paper Holdings LLC are secured by first priority pledges of all the equity interests owned by
Verso Paper Holdings LLC in its subsidiaries. These senior secured credit facilities also are secured by first priority interests in, and mortgages
on, substantially all tangible and intangible assets of Verso Paper Holdings LLC and each of its direct and indirect subsidiaries. The term loan
facility bears interest at a rate equal to LIBOR plus 1.75% and the interest rate was 6.6% at December 31, 2007. The revolving credit facility
bears interest at a rate equal to LIBOR plus 2.00%. The obligations under the senior secured credit facilities of Verso Paper Holdings LLC are
unconditionally guaranteed by Verso Paper Finance Holdings LLC, parent company of Verso Paper Holdings LLC, and subject to certain
exceptions, each of its direct and indirect subsidiaries. In addition to paying interest on outstanding principal under these senior secured credit
facilities, Verso Paper Holdings LLC is required to pay a commitment fee to the lenders under the revolving credit facility in respect of
unutilized commitments at a rate equal to 0.50% per annum (subject to reduction upon attainment of certain first lien leverage ratios). Verso
Paper Holdings LLC also pays customary letter of credit and agency fees.

     The senior secured credit facilities of Verso Paper Holdings LLC are governed by a credit agreement, dated August 1, 2006, among
Verso Paper Finance Holdings LLC, Verso Paper Holdings LLC, the Lenders party

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thereto, Credit Suisse, Cayman Islands Branch, as Administrative Agent, Lehman Brothers Inc., as Syndication Agent, and Citigroup Global
Markets Inc. and Banc of America Securities LLC, as Documentation Agents.

      On August 1, 2006, Verso Paper Holdings LLC completed an offering of $350 million in aggregate principal amount of 9 / 8 %      1


second-priority senior fixed rate notes due 2014, $250 million in aggregate principal amount of second-priority senior secured floating rate
notes due 2014 and $300 million in aggregate principal amount of 11 / 8 % senior subordinated notes due 2016. The floating rate notes bear
                                                                         3


interest at a rate equal to LIBOR plus 3.75% and the interest rate was 8.7% at December 31, 2007. The proceeds of the note offerings were
used to finance the Acquisition and to pay related fees and expenses. Our second-priority senior secured notes have the benefit of a
second-priority security interest in the collateral securing our senior secured credit facilities. The fixed rate notes pay interest semi-annually and
the variable rate notes pay interest quarterly. The senior subordinated notes are unsecured and pay interest semi-annually.

      Our subsidiary, Verso Fiber Farm LLC, entered into senior secured credit facilities on August 1, 2006, consisting of:
        •    a $10 million term loan with a maturity of four years, which was fully drawn on August 1, 2006; and
        •    a $5 million revolving credit facility with a maturity of four years, of which $3.1 million was outstanding as of December 31,
             2007.

      The senior secured credit facilities of Verso Fiber Farm LLC are secured by first priority interests in, and mortgages on, substantially all
tangible and intangible assets of Verso Fiber Farm LLC. The fiber farm term loan facility bears interest at a rate equal to LIBOR plus 3.00%
and the interest rate at December 31, 2007 was 7.8%. The fiber farm revolving credit facility also bears interest at a rate equal to LIBOR plus
3.00%. All amounts outstanding under the senior secured credit facilities of Verso Fiber Farm LLC will be repaid with a portion of the net
proceeds from this offering.

      The senior secured credit facilities of Verso Fiber Farm LLC are governed by a credit agreement, dated August 1, 2006, among Verso
Fiber Farm LLC, the Lenders party thereto, and Credit Suisse, Cayman Islands Branch, as Administrative Agent.

      On January 31, 2007, our subsidiary, Verso Paper Finance Holdings LLC, entered into a $250 million senior unsecured term loan facility
with a maturity of six years. The loan allows the borrower to pay interest either in cash or in kind through the accumulation of the outstanding
principal amount. The senior unsecured term loan facility bears interest at a rate equal to LIBOR plus 6.25% and the interest rate at December
31, 2007 was 9.5%. The net proceeds from the incurrence of the term loan facility were distributed to our equity holders. All amounts
outstanding under the senior unsecured term loan facility of Verso Paper Finance Holdings LLC will be repaid with a portion of the net
proceeds from this offering.

     The senior unsecured term loan facility of Verso Paper Finance Holdings LLC is governed by a credit agreement, dated January 31, 2007,
among Verso Paper Finance Holdings LLC, Verso Paper Finance Holdings Inc., the Lenders party thereto, Credit Suisse, as Administrative
Agent, and Citigroup Global Markets Inc., as Syndication Agent.

      All of our senior secured credit facilities contain various restrictive covenants. They prohibit our subsidiaries from prepaying other
indebtedness and require us to maintain a maximum consolidated first lien leverage ratio. In addition, our senior secured credit facilities,
among other things, restrict our ability to incur indebtedness or liens, make investments or declare or pay any dividends. The indentures
governing our second priority senior secured notes and our senior subordinated notes limit our ability to, among other things, to (i) incur
additional indebtedness; (ii) pay dividends or make other distributions or repurchase or redeem our stock; (iii) make investments; (iv) sell
assets, including capital stock of restricted subsidiaries; (v) enter into agreements restricting our subsidiaries’ ability to pay dividends;
(vi) consolidate, merge, sell or otherwise

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dispose of all or substantially all of our assets; (vii) enter into transactions with our affiliates; and (viii) incur liens. As of December 31, 2007,
we believe we were in compliance with all of the covenants contained in the agreements governing our outstanding indebtedness.

Seasonality
      We are exposed to fluctuations in quarterly net sales volumes and expenses due to seasonal factors. These seasonal factors are common in
the paper industry. Typically, the first two quarters are our slowest quarters due to lower demand for coated paper during this period. Our third
quarter is generally our strongest quarter, reflecting an increase in printing related to end-of-year magazines, increased end-of-year direct
mailings and holiday season catalogs. Our working capital and accounts receivables generally peak in the third quarter, while inventory
generally peaks in the second quarter in anticipation of the third quarter season. We expect our seasonality trends to continue for the
foreseeable future.

Covenant Compliance
       Certain covenants contained in the credit agreement governing our senior secured credit facilities and the indentures governing our
outstanding notes (i) require the maintenance of a net first lien secured debt to Adjusted EBITDA (as defined below) ratio of 3.25 to 1.0 and
(ii) restrict our ability to take certain actions such as incurring additional debt or making acquisitions if we are unable to meet defined Adjusted
EBITDA to Fixed Charges (as defined below) and net senior secured debt to Adjusted EBITDA ratios. The covenants restricting our ability to
incur additional indebtedness and make future acquisitions require a ratio of Adjusted EBITDA to Fixed Charges of 2.0 to 1.0 and a ratio of net
senior secured debt to Adjusted EBITDA of 6.0 to 1.0, in each case measured on a trailing four-quarter basis. For the purpose of calculating
these ratios, pro forma effect is given to any repayment of debt, such as that contemplated with the net proceeds from this offering, as if such
transaction occurred at the beginning of the trailing four-quarter period. Although we do not expect to violate any of the provisions in the
agreements governing our outstanding indebtedness, these covenants can result in limiting our long-term growth prospects by hindering our
ability to incur future indebtedness or grow through acquisitions. See ―Risk Factors—Our substantial indebtedness could adversely affect our
financial health.‖

      Fixed Charges are consolidated interest expense excluding the amortization or write-off of deferred financing costs. Cash interest expense
is adjusted in the table below to give effect to this offering and the use of the net proceeds therefrom. Adjusted EBITDA is EBITDA further
adjusted to exclude unusual items and other pro forma adjustments permitted in calculating covenant compliance in the indentures governing
our notes to test the permissibility of certain types of transactions. We believe that the inclusion of the supplemental adjustments applied in
calculating Adjusted EBITDA and the adjustment to cash interest expense to give effect to this offering and the use of the net proceeds
therefrom are appropriate to provide additional information to investors to demonstrate our compliance with our financial covenants and assess
our ability to incur additional indebtedness in the future. However, EBITDA and Adjusted EBITDA are not measurements of financial
performance under U.S. GAAP, and our EBITDA and Adjusted EBITDA may not be comparable to similarly titled measures of other
companies. You should not consider our EBITDA or Adjusted EBITDA as an alternative to operating or net income, determined in accordance
with U.S. GAAP, as an indicator of our operating performance, or as an alternative to cash flows from operating activities, determined in
accordance with U.S. GAAP, as an indicator of our cash flows or as a measure of liquidity.

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        The following table reconciles cash flow from operating activities to EBITDA and Adjusted EBITDA for the year ended December 31,
2007.

                                                                                                                                      Successor
                                                                                                                                     Year Ended
                                                                                                                                     December 31,
                                                                                                                                         2007
                                                                                                                                      (dollars in
                                                                                                                                       millions)
Cash flow from operating activities                                                                                                 $        15.0
Amortization of debt issuance costs                                                                                                          (6.7 )
Interest income                                                                                                                              (1.5 )
Interest expense                                                                                                                            143.0
Loss on disposal of fixed assets                                                                                                             (1.0 )
Other, net                                                                                                                                    1.5
Changes in assets and liabilities, net                                                                                                        2.9
EBITDA                                                                                                                              $       153.2
Operational improvements(a)                                                                                                                   6.1
Restructuring, severance and other(b)                                                                                                        19.4
Non-cash compensation/ benefits(c)                                                                                                            0.6
Other items, net(d)                                                                                                                           8.0
Adjusted EBITDA                                                                                                                     $       187.3

As adjusted cash interest expense(e)                                                                                                $       109.2
Adjusted EBITDA to as adjusted cash interest expense(e)                                                                                       1.7
Net senior secured debt to Adjusted EBITDA                                                                                                    4.3
Net first-lien secured debt to Adjusted EBITDA                                                                                                1.1


(a)     Represents the benefit of lower wood cost at our Sartell mill resulting from the harvest of hybrid poplar from our fiber farm.
(b)     Includes restructuring and severance as per our financial statements. Restructuring includes transition and other non-recurring costs
        associated with the Acquisition.
(c)     Represents amortization of certain one-time benefit payments.
(d)     Represents earnings adjustments for legal and consulting fees, and other miscellaneous non-recurring items.
(e)     As adjusted cash interest expense gives effect to this offering and reflects a decrease in cash interest expense for the year ended
        December 31, 2007 equal to $27.8 million as a result of the repayment of the outstanding $250.0 million senior unsecured term loan
        facility of our subsidiary, Verso Paper Finance Holdings LLC, bearing interest at a rate equal to 9.5% as of December 31, 2007, and the
        repayment of the outstanding $3.1 million under the revolving credit facility and $10.0 million senior secured term loan of our
        subsidiary, Verso Fiber Farm LLC, bearing interest at a rate equal to 7.8% as of December 31, 2007, as if this offering and the use of the
        net proceeds therefrom were consummated on January 1, 2007. Cash interest expense represents gross interest expense related to the
        debt, excluding amortization of debt issuance costs.


Effect of Inflation
      While inflationary increases in certain input costs, such as energy, wood fiber and chemical costs, have an impact on our operating
results, changes in general inflation have had minimal impact on our operating results in the last three years. Sales prices and volumes are more
strongly influenced by supply and demand factors in specific markets and by exchange rate fluctuations than by inflationary factors. We cannot
assure you, however, that we will not be affected by general inflation in the future.

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Contractual Obligations
      The following table reflects our contractual obligations and commercial commitments as of December 31, 2007. Commercial
commitments include lines of credit, guarantees and other potential cash outflows resulting from a contingent event that requires our
performance pursuant to a funding commitment.

                                                                                                      Payments due by period(1)
                                                                                               Less than                                        More than
Contractual Obligations                                                            Total        1 year          1-3 years       3-5 years        5 years
                                                                                                         (dollars in millions)
Long-term debt(1)                                                              $   2,290.9    $   134.4       $    277.5       $   264.9    $     1,614.1
Operating leases                                                                      16.3          5.7              7.2             2.2              1.2
Purchase obligations(2)                                                              123.1         47.8             27.7             5.5             42.1
Other long-term liabilities reflected on our balance sheet under U.S.
  GAAP(3)                                                                              30.2          1.1              0.3             1.2             27.6
Total                                                                          $   2,460.5    $   189.0       $    312.7       $   273.8    $     1,685.0



(1)     Long-term debt includes principal payments, commitment fees and accrued interest payable. A portion of our interest expense is at a
        variable rate and has been calculated using current LIBOR. Actual payments could vary.
(2)     Purchase obligations include our unconditional purchase obligations for power purchase agreements (gas and electricity), machine
        clothing and other commitments for advertising, raw materials or storeroom inventory.
(3)     Other long-term liabilities reflected above represent the gross amount of asset retirement obligations.

Qualitative and Quantitative Disclosure about Market Risk
        We are exposed to market risk from fluctuations in our paper prices, interest rates and commodity prices for our inputs.

      Paper prices . Our sales, which we report net of rebates, allowances and discounts, are a function of the number of tons of paper that we
sell and the price at which we sell our paper. The coated paper industry is cyclical, which results in changes in both volume and price. Paper
prices historically have been a function of macro-economic factors, which influences supply and demand. Price has historically been
substantially more variable than volume and can change significantly over relatively short time periods.

      We are primarily focused on serving two end-user segments: catalogs and magazines. Coated paper demand is primarily driven by
advertising and print media usage. Advertising spending and magazine and catalog circulation tend to be correlated with GDP in the United
States and rise with a strong economy. The majority of our products are sold via contracts we maintain with our customers. Contracted sales are
more prevalent for coated groundwood paper, as opposed to coated freesheet paper, which is more often sold without a contract. Our contracts
generally specify the volumes to be sold to the customer over the contract term, as well as the pricing parameters for those sales. The large
portion of contracted sales allows us to plan our production runs well in advance, optimizing production over our integrated mill system and
thereby reducing costs and increasing overall efficiency.

     We reach our end-users through several channels, including printers, brokers, paper merchants and direct sales to end-users. We sell and
market our products to approximately 100 customers. In 2007, no single customer accounted for more than 10% of our total net sales.

      Interest Rate Risk. We issued fixed- and floating-rate debt to finance the Acquisition in order to manage our variability to cash flows from
interest rates. Borrowings under our senior secured credit facilities and our floating-rate notes accrue interest at variable rates, and a 100 basis
point increase in quoted interest rates on our debt balances outstanding as of December 31, 2007, after giving effect to this offering and the use
of proceeds therefrom, under our senior secured credit facilities and our floating-rate notes would increase our annual interest

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expense by $5.1 million. While we may enter into agreements limiting our exposure to higher interest rates, any such agreements may not offer
complete protection from this risk.

      Derivatives. In the normal course of business, we utilize derivatives contracts as part of our risk management strategy to manage our
exposure to market fluctuations in energy prices. These instruments are subject to credit and market risks in excess of the amount recorded on
the balance sheet in accordance with generally accepted accounting principles. Controls and monitoring procedures for these instruments have
been established and are routinely reevaluated. We have an Energy Risk Management Policy adopted by the Executive Committee of our
Board of Directors and monitored by an Energy Risk Management Committee, which is comprised of senior management. Credit risk
represents the potential loss that may occur because a party to a transaction fails to perform according to the terms of the contract. The measure
of credit exposure is the replacement cost of contracts with a positive fair value. We manage credit risk by entering into financial instrument
transactions only through approved counterparties. Market risk represents the potential loss due to the decrease in the value of a financial
instrument caused primarily by changes in commodity prices. We manage market risk by establishing and monitoring limits on the types and
degree of risk that may be undertaken. However, we do not hedge the entire exposure of our operations from commodity price volatility for a
variety of reasons. To the extent we do not hedge against commodity price volatility, our results of operations may be affected either favorably
or unfavorably by a shift in the future price curve. As of December 31, 2007, we had net unrealized losses of $1.4 million on open commodity
swaps. These swaps had maturities from one to 10 months. A 10% increase in commodity prices would have a negative impact of
approximately $1.8 million on the fair value of such instruments. This quantification of exposure to market risk does not take into account the
offsetting impact of changes in prices on anticipated future energy purchases.

      Commodity Price Risk. We are subject to changes in our cost of sales caused by movements underlying commodity prices. The principal
components of our cost of sales are chemicals, wood, energy, labor, maintenance and depreciation and amortization. Costs for commodities,
including chemicals, wood and energy, are the most variable component of our cost of sales because their prices can fluctuate substantially,
sometimes within a relatively short period of time. In addition, our aggregate commodity purchases fluctuate based on the volume of paper that
we produce.

               Chemicals . Chemicals utilized in the manufacturing of coated papers include latex, starch, calcium carbonate, titanium dioxide
      and others. We purchase these chemicals from a variety of suppliers and are not dependent on any single supplier to satisfy our chemical
      needs. In the near term, we expect the rate of inflation for our total chemical costs to be lower than that experienced over the last two
      years. However, we expect imbalances in supply and demand will drive higher prices for certain chemicals such as starch and sodium
      chlorate.

               Wood . Our costs to purchase wood are affected directly by market costs of wood in our regional markets and indirectly by the
      effect of higher fuel costs on logging and transportation of timber to our facilities. While we have in place fiber supply agreements that
      ensure a substantial portion of our wood requirements, purchases under these agreements are typically at market rates. In 2008, we will
      begin to utilize wood harvested from our 23,000-acre hybrid poplar fiber farm located near Alexandria, Minnesota, which should reduce
      our ongoing wood costs.

               Energy . We produce a large portion of our energy requirements, historically producing approximately 50% of our energy needs
      for our coated paper mills from sources such as waste wood and paper, hydroelectric facilities, chemicals from our pulping process, our
      own steam recovery boilers and internal energy cogeneration facilities. Our external energy purchases vary across each of our mills and
      include fuel oil, natural gas, coal and electricity. While our internal energy production capacity mitigates the volatility of our overall
      energy expenditures, we expect prices for energy to remain volatile for the foreseeable future and our energy costs will increase in a high
      energy cost environment. As prices fluctuate, we have some ability to switch between certain energy sources in order to minimize costs.
      We also utilize derivatives contracts as part of our risk management strategy to manage our exposure to market fluctuations in energy
      prices.

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                                                                   INDUSTRY

Coated Paper Industry Overview
      Based on 2007 sales, the size of the global coated paper industry is estimated to be approximately $49 billion, or 54 million tons of coated
paper shipments, including approximately $12 billion in North America, or 13 million tons of coated paper demand. In North America, coated
papers are classified by brightness into five grades, labeled No. 1 to No. 5, with No. 1 having the highest brightness level and No. 5 having the
lowest brightness level. Papers graded No. 1, No. 2 and No. 3 are typically coated freesheet grades. No. 4 and No. 5 papers are predominantly
groundwood containing grades. Coated groundwood grades are the preferred grades for catalogs and magazines, while coated freesheet is more
commonly used in commercial print applications. The coating process adds a smooth uniform finish to the paper, which produces superior
color and print definition. As a result, major uses of coated papers include the printing of catalogs, magazines, annual reports, directories and
advertising materials.

End-User Overview
      Catalogs . Catalog publishers are among the largest users of coated papers in North America with 2007 coated paper consumption of
approximately 2.7 million tons of the total 3.5 million tons of all types of paper consumed in United States catalog production. Large national
catalogs are published in a wide range of sizes and weights, requiring paper producers to offer a broad range of products to suit the individual
needs of different catalog retailers.

      According to RISI, Inc., coated groundwood represents approximately 62% of catalog paper demand in the United States, with coated
freesheet accounting for 14% and other types of paper accounting for the remaining 24%. Major growth drivers in this segment include
increasing demand for catalogs and higher page counts per catalog. Over the last four years, United States catalog sales have increased steadily,
driven by an increase in advertising spending and a trend toward more niche marketing by retailers. Demand for catalogs has recently benefited
from cross-marketing between retailer catalogs and websites that enable consumers to order catalog products on-line. This combination has
proven popular with consumers who prefer browsing catalogs to looking at products on-line but prefer the immediacy of ordering on-line to
ordering by telephone or mail.

      Magazines. Magazine publishers are among the largest users of coated papers in North America with 2007 coated paper consumption of
approximately 3.1 million tons of the total 3.5 million tons of all types of paper consumed in United States magazine publication. Due to their
high volume requirements and need for timely deliveries, magazine publishers tend to buy directly from large paper manufacturers who can
offer them certainty of supply and consistent quality. Magazine publishers frequently seek assistance from paper manufacturers with supply
chain management and require that suppliers comply with the publishers’ specific environmental standards.

      According to RISI, Inc., coated groundwood represents approximately 60% of magazine paper demand in the United States, with coated
freesheet accounting for 27% and other types of paper accounting for the remaining 13%. Major growth drivers in this segment include
advertising expenditures and new title launches. Within the magazine segment, however, there is significant variation in growth trends across
genres, with strong growth in lifestyle, sports, fashion and people magazines, offset by declining volumes in news and current events titles. The
combination of increasing ad pages and a rebound in magazine circulation is currently driving coated paper demand. Universal McCann, a
global media agency, forecasts U.S. advertising spending increased by 0.7% in 2007 to $284 billion. The recent growth in overall advertising
has fueled demand for magazine advertising spending.

     Commercial Print and Other. Commercial printers are significant end-users of coated papers with 2007 United States consumption of
approximately 3.9 million tons of the total 8.1 million tons of all types of paper consumed in United States commercial print applications.
According to RISI, Inc., coated freesheet represents

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approximately 35% of the total paper used in commercial print in the United States, with coated groundwood accounting for 13% of
consumption and other types accounting for the remaining 52%. Orders in the commercial print segment are typically for smaller volume print
runs that use primarily sheeted paper for annual reports, books, envelopes, labels, brochures, posters and specialty one-time publications.

Overview of Current Coated Paper Market Fundamentals
      The North American coated paper industry is cyclical, and like other cyclical industries, it is largely affected by the interplay of demand
and supply. However, unlike in other cyclical industries, volume is substantially less cyclical than price in the North American coated paper
industry. Current demand and supply factors affecting the coated paper industry and their trends are discussed below.

     Consumption/Demand. Coated paper demand is primarily driven by advertising and print media usage. North American customers
purchased approximately 13.2 million tons of coated paper in 2007. North American coated paper demand has increased 2.0% per annum since
2001, as the number of pages in advertising material and catalog circulation have increased. Since the end of 2003, demand has increased for
many of the principal end-uses of coated paper.

     The following chart shows historical and projected North American demand for coated paper and mill capacity and operating rates
according to RISI, Inc.:




     Production/Supply . In North America, supply is determined primarily by North American-based coated paper production and is
supplemented by imports from Europe and Asia. As a result of developments outlined below, both of these determinants of North American
coated paper supply are exhibiting trends leading to a stable long-term supply outlook.

      In the second half of 2007, in response to high input costs, the continued appreciation of the Canadian dollar, and poor selling conditions,
our North American competitors announced the closure of approximately 0.9 million tons of coated groundwood production capacity and 0.1
million tons of coated freesheet production capacity. The closures represent approximately 15% and 2% of North American production
capacity for coated groundwood and coated freesheet, respectively. The majority of these announced closures were Canadian facilities, which
have been at a cost disadvantage to U.S.-based mills due to the appreciation of the Canadian dollar. In addition, our competitors have recently
announced the shutdown of a further 0.3 million tons of coated

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paper capacity in 2008. There have been no recent announced capacity additions in North America. We estimate that the construction of a
state-of-the-art coated paper mill requires a lead time of at least three years and costs in excess of $400 million. The recent capacity
curtailments and the lack of any currently announced capacity additions provide for a stable supply outlook over the next three to four years.

       Since North American coated paper consumption exceeds North American coated paper production capacity, imports have been an
important source of supply for the North American coated paper market, though they are of differing importance for coated groundwood and
coated freesheet. Historically, coated freesheet imports have been relatively more important to North American supply as compared to coated
groundwood imports. A recent trend in the North American coated paper market has been a stabilization in imports. The volume of coated
paper imports from Europe and Asia is a function of (i) worldwide supply and demand for coated paper, (ii) the exchange rate of the U.S. dollar
relative to other currencies, especially the euro, (iii) market prices in North America and other markets, and (iv) the cost of ocean-going freight.
According to RISI, Inc., from 2001 to 2006, coated paper imports into North America increased from 1.4 million tons to 2.8 million tons.
However, several worldwide trends have prompted 2007 imports, as reported by RISI, Inc., to decline to 2.6 million tons. These trends include
the shutdown of 1.0 million tons of coated paper capacity in Europe which improves the balance of European supply and demand, the
continued strengthening of the euro and depreciation of the U.S. dollar, and the continued increases in freight rates. All of these factors make
exporting to North America less attractive to foreign producers.

      Another important distinction is the penetration of Asian coated paper imports. Coated groundwood is less penetrated by Asian imports
than is coated freesheet, as production of coated groundwood is dependent upon cost-effective access to northern softwood fiber, which is not
as prevalent in Asia. For example, through 2007, Asian producers supplied about 290,000 tons of North America’s coated groundwood supply,
or approximately 5% of North American coated groundwood supply. Over the same time period, Asian producers supplied about 630,000 tons
of North America’s coated freesheet supply, or approximately 10% of North American coated freesheet supply.

      As a result of recent capacity closures in the North American coated paper industry, the lack of any currently announced capacity
additions and the stabilization of imports of coated paper into the United States, we believe that supply should be stable for the near future.

      Operating Rates. According to RISI, Inc., the average operating rate for North American coated paper manufacturers, which measures the
ratio of shipments from producers in a particular region to capacity of producers in the same region, rose from 86% in 2001 to 97% in 2007, as
shipments increased more than capacity during this time period. Following the recently announced reductions in North American production,
2007 coated paper operating rates would have been over 100% on a pro forma basis, reflecting the current tight supply conditions. Historically,
high operating rates have resulted in increased prices for coated paper. RISI, Inc. expects the average operating rate for coated groundwood and
coated freesheet to remain above 95% and 92% through 2012, respectively, with the average operating rate for coated groundwood expected to
be 100% through 2009, because of North American demand trends, recently completed and announced capacity closures, the lack of any major
forecasted North American capacity additions and favorable import trends.

       Pricing. As a result of the trends identified above, coated paper pricing in the United States is increasing. As we began implementing
these price increases, our weighted average paper prices rose from $797 per ton in the second quarter of 2007 to $840 per ton in the fourth
quarter of 2007. We expect our weighted average paper prices to continue to increase as we further realize these price increases during 2008. In
the first quarter of 2008, we announced another price increase, effective April 1, of an additional $60 per ton on all coated groundwood grades
and another $60 per ton on coated freesheet grades with a basis weight of 55 lbs. or lighter. In reflection of these market trends, RISI, Inc.
forecasts that U.S. prices for grade No. 5 coated paper, 34 lb. basis weight, which is an industry benchmark for coated paper pricing, will rise
from an average of $888 per ton in the second quarter of 2007 to $1,100 per ton in the fourth quarter of 2008. In addition, RISI, Inc. estimates
annual prices for

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this product to increase from an average of $923 per ton in 2007 to $1,083 per ton in 2008 and then to $1,140 per ton in 2009. See
―Management Discussion and Analysis of Financial Conditions and Results of Operations—Selected Factors that Affect our Operating
Results.‖

     The following chart shows RISI, Inc.’s historical and projected U.S. prices per ton for grade No. 5 coated paper, 34 lb. basis weight, and
grade No. 3 coated paper, 60 lb. basis weight, for the periods indicated below:




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                                                                   BUSINESS

General
     We are a leading North American supplier of coated papers to catalog and magazine publishers. The market for coated paper, which is
comprised of coated groundwood paper and coated freesheet paper, is one of the most attractive segments of the paper industry due to its
prospects for volume growth, continued improvement in pricing and the high value-added nature of its products. Coated paper is used primarily
in media and marketing applications including catalogs, magazines and commercial printing applications, which include high-end advertising
brochures, annual reports and direct mail advertising.

      We are North America’s second largest producer of coated groundwood paper, which is used primarily for catalogs and magazines. We
are also North America’s lowest cost producer of coated freesheet paper, which is used primarily for annual reports, brochures and magazine
covers. In addition to coated paper, we have a strategic presence in supercalendered paper, which is primarily used for retail inserts. We also
produce and sell market pulp, which is used in the manufacture of printing and writing paper grades and tissue products.

     Our primary product lines include coated groundwood paper, coated freesheet paper, supercalendered paper and pulp. Our net sales by
product line for the year ended December 31, 2007 are illustrated below:


                                                          Net Sales by Product Line




       We sell and market our products to approximately 100 customers which comprise 650 end-user accounts. We have long-standing
relationships with many leading magazine and catalog publishers, commercial printers, specialty retail merchandisers and paper merchants. We
reach our end-users through several distribution channels including direct sales, commercial printers, paper merchants and brokers. The
majority of our products are sold via contracts we maintain with our customers, which generally specify the volumes to be sold to the customer
over the contract term, as well as the pricing parameters for those sales. Having a large portion of our sales volume under contract allows us to
plan our production runs well in advance, optimizing production over our integrated mill system and thereby increasing overall efficiency and
reducing our costs. Most of our contracts are negotiated on an annual basis. Typically, our contracts provide for quarterly price adjustments
based on market price movements. Our key customers include leading magazine publishers such as Condé Nast Publications, Inc., National
Geographic Society and Time Inc.; leading catalog producers such as Avon Products, Inc. and Sears Holdings Corporation; leading commercial
printers such as Quad/Graphics, Inc. and RR Donnelley & Sons Company; and leading paper merchants and brokers such as Unisource
Worldwide, Inc., the xpedx business unit of International Paper, A.T. Clayton & Co., Inc. and Clifford Paper, Inc.

     We operate 11 paper machines at four mills located in Maine, Michigan and Minnesota. The mills have a combined annual production
capacity of 1,726,000 tons of coated paper, 102,000 tons of supercalendered paper

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and 874,000 tons of kraft pulp, of which 610,000 tons are consumed internally and the remainder is sold as market pulp. Over our integrated
mill system, the total volume of pulp purchased from third parties is approximately balanced by the amount of pulp that we sell to the market.
As a result, our business is generally insulated from fluctuations in earnings caused by changes in the price of pulp. Our facilities are
strategically located within close proximity to major publication printing customers, which affords us the ability to more quickly and
cost-effectively deliver our products. Our facilities also benefit from convenient and cost-effective access to northern softwood fiber, which is
required for the production of lightweight and ultra-lightweight coated groundwood papers, two of the more attractive grades of coated paper.

Our Competitive Strengths
      We believe that our competitive strengths include the following:
      Well positioned to benefit from strengthening coated paper market fundamentals . We believe that we are well positioned to benefit
from improving fundamentals in the coated paper industry, which are inherently linked to the balance of supply and demand. Since the second
quarter of 2004, supply has decreased due to a reduction in production capacity in both North America and Europe, which was caused primarily
by the closure of high cost coated paper mills by our competitors. These mills generally suffered from a combination of higher energy prices,
changes in Canadian dollar and euro exchange rates and other inflationary factors. North American producers announced the shutdown of
approximately 1.3 million tons of aggregate coated paper capacity beginning in the second half of 2007 and continuing throughout 2008, which
represents approximately 11% of North American coated paper capacity. Based on favorable supply and demand trends, RISI, Inc. projects that
North American coated paper operating rates will remain high for the foreseeable future, with coated groundwood operating rates expected by
RISI, Inc. to be approximately 100% in 2008 and 2009.

      A leading manufacturer of coated paper products in North America . We are one of the largest coated paper manufacturers in North
America based on production capacity. Within the overall North American coated paper market, we have a leading market share in North
American coated groundwood production capacity. In addition, we are North America’s lowest cost producer of coated freesheet paper. Our
size provides us with economies of scale, which enables us to optimize production across our integrated mill system to provide a broad
spectrum of products and gives us the operational flexibility to adapt to our customers’ specific coated paper needs.

       Leading positions in the industry’s most attractive segments and products . We are a leading supplier of coated papers to U.S. catalog
and magazine publishers. The catalog and magazine end-user segments are among the most attractive within the coated papers industry due to
their long-term growth prospects, favorable industry dynamics, blue-chip customer base and emphasis on product innovation and development.
We budget over $3 million annually for the development of new products, product line extensions and material substitutions and/or alternatives
for our manufacturing processes. We commercialized seven products or product line extensions in each of the last two years and realized an
average of over $8 million in cost savings during the last two years as a result of material substitutions and product cost reduction efforts. We
maintain a leading position in the U.S. catalog and magazine end-user segments, with estimated segment shares of approximately 24% and
16% in 2007, respectively.

     In addition to being focused on the most attractive end-user segments, our product portfolio is also concentrated on the most attractive
products in both the paper industry, in general, and the coated paper segment, specifically. Coated papers have been and are expected to be
among the fastest growing paper grades in the paper industry, with North American coated paper demand having grown 2.1% per annum since
2001, compared to a demand growth rate of negative 4.7% for newsprint and a demand growth rate of negative 1.8% for uncoated freesheet
paper. We are also specifically focused on the fastest growing portions of the coated paper market. For example, we are one of three major
North American-based producers of ultra-lightweight coated groundwood paper. Ultra-lightweight coated groundwood paper has experienced
higher growth than the overall coated paper market, with shipments growing at a compound annual growth rate of approximately 6% since
2003. We expect this disproportionate growth in shipments to continue, as customers are increasingly demanding lower basis

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weight products in order to reduce their freight and postage costs. In addition to being one of the fastest growing coated paper segments,
ultra-lightweight coated papers sell for higher prices and yield higher margins than their higher basis weight counterparts. We believe that we
have a competitive advantage in ultra-lightweight coated paper grades due to our investment in specialized equipment and our internal
development of special manufacturing processes. Although our ultra-lightweight coated paper manufacturing processes are not protected by
patents, they are trade secrets and provide a considerable competitive advantage.

       Strong relationships with attractive customer base . We have long-standing relationships with leading publishers, commercial printers,
retail merchandisers and paper merchants. Our relationships with our 10 largest coated paper customers average more than 20 years. These
customers have historically had stable, on-going paper needs. Our strong relationships with the leading customers in the catalog and magazine
end-user segments have allowed us to optimize our mill system to supply orders on an efficient, cost-effective basis. Due to the premium
printing requirements of these end-users, we have been able to shift our product mix toward higher value-added grades, such as lightweight and
ultra-lightweight coated groundwood. In addition, 60% of our net sales in 2007 were made pursuant to contracts we maintain with our
customers. These contracts help enable us to plan our production runs well in advance, thereby optimizing production over our integrated mill
system, which reduces costs and increases overall efficiency. Our relationships with our key customers also allow us to maintain operating rates
that are in excess of industry levels. For example, according to RISI, Inc., average operating rates for coated paper producers were 97% in
2007, while our operating rates were 99% in the same period.

      Well-invested, low-cost manufacturing facilities . We believe our coated paper mills are among the most efficient and lowest cost coated
paper mills in the world based on the cash cost of delivery to Chicago. We attribute our manufacturing efficiency, in part, to the significant
historical investments made in our mills. From 1985 to 2006, our former parent, International Paper, invested over $1.7 billion in growth
capital expenditures for new machines, rebuilds, productivity enhancements and capacity expansions. In addition to these expenditures, over
$800 million was invested by International Paper for maintenance and repairs to this equipment, as well as for certain environmental, health
and safety projects. International Paper also improved the cost position of our system by closing over 500,000 tons of higher cost coated paper
capacity. As a result, we are the owners of well-invested, low-cost production assets. Further, most of our paper production is at mills with
integrated pulp production and energy co-generation facilities, which reduces our exposure to price volatility for energy and purchased pulp,
two of our largest cost inputs. As we sell approximately the same amount of pulp as we purchase across our integrated production system, we
are generally insulated from fluctuations in earnings caused by changes in pulp prices.

     In addition, we have meaningfully reduced our costs by consolidating operations and focusing on operational efficiency. For example,
through R-GAP, our continuous process improvement program, we have implemented focused programs to optimize raw materials sourcing
and usage, reduce repair costs and control overhead to generate ongoing sustainable cost savings. We will continue to utilize the proprietary
R-GAP process and other management tools to drive further cost reductions and operating improvements in our mill system.

      Efficient, integrated supply chain with unique service solutions . Coated paper customers have become increasingly focused on supply
chain efficiency, cost reduction and lead time minimization. Our Internet-based ordering platforms simplify ordering, tracking and invoicing,
and are part of our strategy to continually reduce the cost to serve our customer base. In addition, we operate Nextier Solutions, an Internet-
based system designed for collaborative production planning, procurement and inventory management processes throughout the supply chain.
Our customers use our systems to maximize supply chain efficiencies, improve communication and reduce operating costs. We believe this
provides us with a competitive advantage by enabling us to run our operations more cost-effectively through better planning of manufacturing
runs and tracking of costs and inventory. We also believe the strategic location of our mills and distribution centers near major end-use
markets, such as New York and Chicago, affords us the ability to more quickly and cost-effectively deliver our products to those markets. This
close proximity to our customers provides for enhanced customer service and allows us to minimize our freight and delivery costs.

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      Experienced management team with proven track record . We believe our senior management team is a valuable asset to our business.
This team has introduced industry-leading cost saving and efficiency programs and has lead the successful transition of our business from
International Paper. In November 2006, Michael A. Jackson joined our business as President and Chief Executive Officer from Weyerhaeuser
Company, where he most recently served as Senior Vice President in charge of the Cellulose Fibers, White Papers, Newsprint and Liquid
Packaging Board businesses. Our senior management team averages approximately 20 years experience in the paper and forest products
industry.

Our Business Strategy
      Increase revenues . One of our key objectives is to profitably grow sales. We believe we can achieve this goal through the following
strategies:
        •    Capitalize on favorable trends in our industry . The coated paper industry is currently benefiting from favorable supply and
             demand trends and high operating rates, which have resulted in rising sales prices. We are currently implementing several price
             increases with an announced total increase of $245 per ton on our coated groundwood grades and $190 per ton on most of our
             coated freesheet grades. We expect to grow our revenues and operating profits as these price increases are realized during 2008.
             Based on our coated paper production capacity, a price increase of $50 per ton in average selling prices for coated paper, assuming
             volumes and costs remain constant, equates to $86 million in additional annual revenues and operating profits.
        •    Leverage our leading market position . As a leader in the North American coated paper industry, we have strong industry insight
             and expertise, which we utilize to provide value-added services to our customers. We intend to further strengthen our leadership
             position by increasing our sales to both existing and new potential customers within the catalog and magazine segments, where, as
             industry leaders, we can offer an enhanced level of products and service. We believe that this competitive advantage will allow us
             to efficiently grow our business in line with or in excess of market volume and price growth.
        •    Participate in ongoing coated paper industry consolidation. We believe that there may be opportunities to participate in the current
             trend of consolidation in the North American coated paper industry. We intend to evaluate and pursue acquisitions and strategic
             partnerships that we believe will increase our profitability, enhance economies of scale, and augment or diversify our existing
             customer base. Through strategic acquisitions and partnerships, we intend to continue to improve our absolute and relative cost
             position, supplement our organic growth prospects, and enhance stockholder value.
        •    Focus on specialty and higher value-added products . In addition to participating in underlying market growth, we plan to grow
             revenues by focusing on specialty and high value-added products, which we expect to grow in excess of general market growth. As
             one of the three major North American-based producers of ultra-lightweight papers, we are positioned well with customers that
             want to lower postage and distribution expenses and thereby lower their total production costs. We expect the volumes and prices
             of ultra-lightweight papers to grow faster than the coated paper market in general, which provides us with an opportunity to
             leverage our production capabilities to garner additional revenues. In addition, we will continue to drive product performance
             improvements by taking advantage of technological advances and developing new products that meet the needs of our core catalog
             and magazine customers. We have a robust research and development effort that identifies, commercializes and capitalizes on new
             products and product innovations to generate additional sales opportunities.

      Improve profitability . We intend to focus on productivity enhancements and on improving our cost platform through the following
strategies:
        •    Increase productivity . Since 2001, we have significantly reduced production costs and enhanced manufacturing efficiency at our
             mills. During this period, we reduced total headcount by approximately 20% while overall productivity increased by 15% as
             measured by production tons per day and by

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              approximately 50% as measured by tons produced per day per employee. Combined with strategies to reduce raw material usage,
              repair costs and manufacturing overhead, these initiatives have significantly improved financial and operating results. Going
              forward, we intend to selectively pursue cost reduction and efficiency improvement initiatives based on their cost to achieve, likely
              success and anticipated payback period.
          •   Improve operating performance . Through R-GAP, we have implemented focused programs to optimize raw materials sourcing
              and usage, reduce repair costs and control overhead. We believe these process improvements, combined with our ability to
              generate a substantial portion of our energy needs and produce low-cost pulp through our integrated pulp operations, will enhance
              our operating leverage, earnings and cash flow. We expect to continue to enhance and use our proprietary R-GAP process to
              identify more cost-saving opportunities, which will improve the profitability of our mill network.

      Maximize cash flow . Since the acquisition of our business from International Paper, our senior management team has implemented a
focused strategy to maximize our profitability and cash flow. With this enhanced management focus, we have managed our working capital,
capital expenditures and operational expenditures efficiently to optimize cash flow.

      As a result of the significant growth capital expenditures by our former parent, we believe that our capacity is sufficient to meet our
current growth initiatives without significant additional spending and that future growth capital will be spent only upon the expectation of
significant returns. Following 2008, our annual maintenance and environmental capital expenditures are expected to average approximately
$40 million to $50 million per year for the next few years, which we believe will be sufficient to maintain our productivity and maximize cash
flow.

       We also expect to pay minimal cash income taxes over the next few years. We have significant net operating losses which we expect will
be available to reduce future taxable income. In addition, we expect to continue to have high tax depreciation deductions over the next few
years because of our recent capital expenditures and because the tax basis in a portion of our assets was stepped up when the business was
purchased from International Paper. This tax depreciation should reduce future taxable profits from the business and minimize our cash income
taxes.

      In addition, when we purchased the business from International Paper, we either did not assume, or were indemnified for, substantially all
of the legacy pension, post-retirement and legal, and certain of the environmental obligations and liabilities of the business.

      We expect that our relatively low maintenance and environmental capital expenditures, improved working capital management, further
cost reductions and minimal cash income taxes will enhance our ability to generate cash flow. We intend to use our cash flow to repay our debt
and to reinvest in the growth of our business.

Products
     We manufacture three main grades of paper: coated groundwood paper, coated freesheet paper and supercalendered paper. These paper
grades are differentiated primarily by their respective brightness, weight, print quality, bulk, opacity and strength. We also produce Northern
Bleached Hardwood Kraft, or ―NBHK,‖ pulp. The following table sets forth our principal products by 2007 combined tons sold and as a
percentage of our 2007 combined net sales (tons in thousands, dollars in millions):

Product                                                                                                               Tons Sold         Net Sales
                                                                                                                    tons          %     $           %
Coated groundwood paper                                                                                             1,063         51    856          53
Coated freesheet paper                                                                                                600         29    520          32
Supercalendered paper                                                                                                 105          5     68           4
Pulp                                                                                                                  281         13    148           9
Other                                                                                                                  47          2     37           2
     Total                                                                                                          2,096     100      1,629        100

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     As a result of our scale and technological capabilities, we are able to offer our customers a broad product offering, from ultra-lightweight
coated groundwood to heavyweight coated freesheet and supercalendered papers. Our customers have the opportunity to sole-source all of their
coated paper needs from us while optimizing their choice of paper products. As our customers’ preferences change, they can switch paper
grades to meet their desired balance between cost and performance attributes while maintaining their relationship with us. This ―one-stop shop‖
marketing approach engenders customer loyalty and contributes to the efficiency of our sales organization.

       We are also one of the largest rotogravure lightweight coated paper manufacturers in North America. Rotogravure printing is a technique
for transferring ink onto coated papers, which typically results in a sharper image with truer colors and less ink trapping than in other printing
processes but generally requires a smaller and higher-quality paper. Additionally, we are the only manufacturer in North America with the
technological expertise to supply both rotogravure coated groundwood and coated freesheet. This provides us with a significant competitive
advantage when selling to customers with long-run, mass publishing needs, as they generally prefer rotogravure products.

      Coated groundwood paper . Coated groundwood paper includes a fiber component produced through a mechanical pulping process. The
use of such fiber results in a bulkier and more opaque paper that is better suited for applications where lighter weights and/or higher stiffness
are required, such as catalogs and magazines. In addition to mechanical pulp, coated groundwood paper typically includes a kraft pulp
component to improve brightness and print quality.

      Coated freesheet paper. Coated freesheet paper is made from bleached kraft pulp, which is produced using a chemical process to break
apart wood fibers and dissolve impurities such as lignin. The use of kraft pulp results in a bright, heavier-weight paper with excellent print
qualities, which is well-suited for high-end commercial applications and premium magazines. Coated freesheet contains primarily kraft pulp,
with less than 10% mechanical pulp in its composition.

       Supercalendered paper. Supercalendered paper consists of groundwood fibers and a very high filler content but does not receive a
separate surface coating. Instead, the paper is passed through a supercalendering process in which alternating steel and filled rolls ―iron‖ the
paper, giving it a gloss and smoothness that makes it resemble coated paper. Supercalendered papers are primarily used for retail inserts, due to
their relatively low price point.

      Pulp. We produce and sell NBHK pulp. NBHK pulp is produced through the chemical kraft process using hardwoods. Hardwoods
typically have shorter length fibers than softwoods and are used to smooth paper. Kraft describes pulp produced using a chemical process,
whereby wood chips are combined with chemicals and steam to separate the wood fibers. The fibers are then washed and pressure screened to
remove the chemicals and lignin which originally held the fibers together. Finally, the pulp is bleached to the necessary whiteness and
brightness. Kraft pulp is used in applications where brighter and whiter paper is required.

      Over our integrated mill system, the total volume of pulp purchased from third parties is approximately balanced by the amount of pulp
that we sell to the market. This feature substantially insulates our business from exposure to fluctuations in the price of pulp.

      Other products. We also offer recycled paper to help meet specific customer requirements. Additionally, we offer customized product
solutions for strategic accounts by producing paper grades with customer-specified weight, brightness and pulp mix characteristics, providing
customers with cost benefits and/or brand differentiation.

Manufacturing
     We operate 11 paper machines at four mills located in Maine, Michigan and Minnesota. The mills have a combined annual production
capacity of 1,726,000 tons of coated paper, 102,000 tons of supercalendered paper

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and 874,000 tons of kraft pulp, of which 610,000 tons is consumed internally and the remainder is sold as market pulp. Our facilities are
strategically located within close proximity to major publication printing customers. The facilities also benefit from convenient and
cost-effective access to northern softwood fiber, which is required for the production of lightweight and ultra-lightweight coated papers. All
mills and machines operate seven days a week on a twenty-four hours per day basis.

      The following table sets forth the locations of our mills, the products that they produce, and other key operating information:

                                                                                                                         Paper            Production
Mill Locations                           Products                                                                       Machines          Capacity*
Jay (Androscoggin), ME                   lightweight coated groundwood                                                         2           375,800
                                         lightweight coated freesheet                                                          1           218,900
                                         pulp                                                                                              422,500
Bucksport, ME                            lightweight and ultra-lightweight coated groundwood and high bulk
                                         specialty coated groundwood                                                           4           516,500
Quinnesec, MI                            coated freesheet                                                                                  400,000
                                         pulp                                                                                  1           451,500
Sartell, MN                              lightweight and ultra-lightweight coated groundwood                                   1           214,800
                                         supercalendered                                                                       2           102,000

* We produce 874,000 tons of kraft pulp, of which 610,000 tons are consumed internally and the remainder is sold as market pulp. This data
  does not include our production capacity for other pulp grades, the entirety of which is consumed internally in the production process for
  our coated paper.

      We believe we have the lowest cost coated freesheet assets in North America and a highly competitive cost position in coated
groundwood. From 1985 to 2006, International Paper invested over $1.7 billion in growth capital expenditures for new machines, product
enhancements and capacity expansions. In addition, during this period over $800 million was spent for maintenance and repairs to this
equipment as well as for certain environmental, health and safety projects. As a result of these expenditures, we believe that our capacity is
sufficient to meet our current growth initiatives without significant additional spending.

      The basic raw material of the papermaking process is wood pulp. The first stage of papermaking involves converting wood logs to pulp
through either a mechanical or chemical process. Before logs can be processed into pulp, they are passed through a debarking drum to remove
the bark. Once separated, the bark is burned as fuel in bark bailers. The wood logs are composed of small cellulose fibers which are bound
together by a glue-like substance called lignin. The cellulose fibers are separated from each other through either a mechanical or a kraft pulping
process.

      After the pulping phase, the fiber furnish is run onto the forming fabric of the paper machine. On the forming fabric, the fibers become
interlaced, forming a mat of paper, and much of the water is extracted. The paper web then goes through a pressing and drying process to
extract the remaining water. After drying, the web receives a uniform layer of coating that makes the paper smooth and provides uniform ink
absorption. After coating, the paper goes through a calendering process that provides a smooth finish by ironing the sheet between multiple soft
nips that consist of alternating hard (steel) and soft (cotton or synthetic) rolls. At the dry end, the paper is wound onto spools to form a machine
reel and then rewound and slit into smaller rolls on a winder. Finally, the paper is wrapped, labeled and shipped.

      Catalog and magazine publishers with longer print runs tend to purchase paper in roll form for use in web printing, a process of printing
from a reel of paper as opposed to individual sheets of paper, in order to minimize costs. In contrast, commercial printers typically buy large
quantities of sheeted paper in order to satisfy the short-run printing requirements of their customers. We believe that producing sheeted paper is
a less attractive

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product as it requires additional processing, bigger inventory stocks, a larger sales and marketing team and a different channel strategy. For this
reason, we have pursued a deliberate strategy of configuring our manufacturing facilities to produce all web-based papers, which are shipped in
roll form, and have developed relationships with third-party converters to address any sheeted paper needs of our key customers.

      We utilize a manufacturing excellence program, named R-GAP, to ensure timely and accurate reporting, encourage faster operator
involvement and provide an overall culture of continuous process improvement. We use multi-variable testing, lean manufacturing, center of
excellence teams, source-of-loss initiatives and best practice sharing to constantly improve our manufacturing processes and products. Since
2001, three of our four facilities have participated in OSHA’s Voluntary Protection Program which recognizes outstanding safety programs and
performance.

Raw Materials and Suppliers
      Our key cost inputs in the papermaking process are wood fiber, market pulp, chemicals and energy.

       Wood Fiber. We source our wood fiber from a broad group of timberland and sawmill owners located in our regions, as well from our
fiber farm located near Alexandria, Minnesota.

       Kraft Pulp. Overall, we produce 874,000 tons of kraft pulp, with 422,500 tons of pulp at the Androscoggin mill and 451,500 tons of pulp
at the Quinnesec mill, of which a total of 610,000 tons are consumed internally. We supplement our internal production of kraft pulp with
purchases from third parties. In 2007, these purchases were approximately 187,000 tons of pulp. We purchase the pulp requirements from a
variety of suppliers and are not dependent on any single supplier to satisfy our pulp needs. We offset pulp purchases with open-market sales.
Over our integrated mill system, the total volume of pulp purchased from third parties is approximately balanced by the amount of pulp that we
sell to the market. This feature substantially insulates our business from exposure to fluctuations in the price of pulp.

      Chemicals. Chemicals utilized in the manufacturing of coated papers include latex, starch, calcium carbonate, titanium dioxide and
others. We purchase these chemicals from a variety of suppliers and are not dependent on any single supplier to satisfy our chemical needs.

       Energy. We produce a large portion of our energy requirements, historically producing approximately 50% of our energy needs for our
coated paper mills from sources such as waste wood and paper, hydroelectric facilities, chemicals from our pulping process, our own steam
recovery boilers and internal energy cogeneration facilities. Our external energy purchases vary across each one of our mills and include fuel
oil, natural gas, coal and electricity. While our internal energy production capacity and ability to switch between certain energy sources
mitigates the volatility of our overall energy expenditures, we expect prices for energy to remain volatile for the foreseeable future and our
overall costs to increase in a high energy cost environment. We also utilize derivatives contracts as part of our risk management strategy to
manage risks associated with market fluctuations in energy prices.

Sales, Marketing and Distribution
      We reach our end-users through several sales channels. These include selling directly to end-users and through brokers, merchants and
printers. We sell and market products to approximately 100 customers which comprise 650 end-user accounts.

      Sales to End-Users. In 2007, we sold approximately 43% of our manufacturing output directly to end-users, most of which are catalog
and magazine publishers for our paper products. Customers for our pulp products are mostly other paper manufacturers. These customers are
typically large, sophisticated buyers who have the scale, resources and expertise to procure paper directly from manufacturers.

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     Sales to Brokers and Merchants. Our largest indirect paper sales by volume are through brokers and merchants who resell the paper to
end-users. In 2007, our total sales to brokers and merchants represented 48% of our total sales.

      Brokers typically act as an intermediary between paper manufacturers and smaller end-users who do not have the scale or resources to
cost effectively procure paper directly from manufacturers. The majority of sales to brokers are resold to catalog publishers. We work closely
with brokers to achieve share targets in the catalog, magazine and insert end-user segments through collaborative selling.

      Merchants are similar to brokers in that they act as an intermediary between the manufacturer and the end-user. However, merchants
generally take physical delivery of the product and keep inventory on hand. Merchants tend to deal with smaller end-users that lack the scale to
warrant direct delivery from the manufacturer. Coated freesheet comprises the majority of our sales to merchants. In most cases, because they
are relatively small, the ultimate end-users of paper sold through merchants are generally regional or local catalog or magazine publishers. Our
merchant customers include major paper distributors such as xpedx, a division of International Paper, and Unisource Worldwide, Inc., which
are large organizations with a broad, diversified client base.

      Sales to Printers. In 2007, our sales to printers represented 8% of our total sales. Nearly all of our sales were to the five largest
publication printers in the United States. Printers also effectively act as an intermediary between manufacturers and end-users in that they
directly source paper for printing/converting and then resell it to their customers as a finished product.

       The majority of our paper products are delivered directly from our manufacturing facilities to the printer, regardless of the sales channel.
In order to serve the grade No. 3 coated freesheet segment, we maintain a network of distribution centers located in the West, Midwest, South
and Northeast close to our customer base to provide quick delivery. The majority of our pulp products are delivered to our customers’ paper
mills.

      Our sales force is organized around our sales channels. We maintain an active dialogue with all of our major customers and track product
performance and demand across grades. We have a team of sales representatives and marketing professionals organized into three major sales
groups that correspond with our sales channels: direct sales support; support to brokers and merchants; and printer support.

      The majority of our products are sold via contracts that we maintain with our customers. Contracted sales are more prevalent for coated
groundwood paper, as opposed to coated freesheet paper, which is more often sold without a contract. Our contracts generally specify the
volumes to be sold to the customer over the contract term, as well as the pricing parameters for those sales. The large portion of contracted
sales allows us to plan our production runs well in advance, optimizing production over our integrated mill system and thereby reducing costs
and increasing overall efficiency.

       Part of our strategy is to continually reduce the cost to serve our customer base through e-commerce initiatives which allow for simplified
electronic ordering, tracking and invoicing. In 2007, approximately 28%, or 500,000 tons, of our total coated paper sales volume were placed
through our online ordering platforms. Orders placed through our online ordering platforms accounted for $410 million, or 28%, of our total
sales in 2007. We are focused on further developing our technology platform and e-commerce capabilities. To this end, we operate Nextier
Solutions, an Internet-based system that has become an industry standard for collaborative production planning, procurement and inventory
management process throughout the supply chain. Our customers and competitors use the system to maximize supply chain efficiencies,
improve communication and reduce operating costs. Nextier Solutions enables subscribers to monitor their inventories and place orders.
Participants pay us subscription and transaction fees for system usage. By leveraging our leadership position in e-commerce for coated papers
distribution and management, we should realize a meaningful competitive advantage in our sales, marketing and distribution functions.

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Customers
      We serve the catalog, magazine, insert and commercial printing markets and have developed long-standing relationships with the premier
North American catalog and magazine publishers. The length of our relationships with our top 10 customers averages more than 20 years, and
no single customer accounted for more than 10% of our net sales in 2006. Our key customers include leading magazine publishers such as
Condé Nast Publications, Inc., National Geographic Society and Time Inc.; leading catalog producers such as Avon Products, Inc., and Sears
Holding Corporation; leading commercial printers such as Quad/Graphics, Inc., and RR Donnelley & Sons Company; and leading paper
merchants and brokers such as A.T. Clayton & Co., Inc., Unisource Worldwide, Inc., the xpedx business unit of International Paper, and
Clifford Paper, Inc. See ―Risk Factors—We depend on a small number of customers for a significant portion of our business.‖ Although we
gain and lose customers from time to time in the normal course of our business operations, we are unaware of any of our long-standing
customer relationships being negatively affected by our transition from being a division of International Paper.

      Our net sales, excluding pulp sales, by end-user segment for the year ended December 31, 2007, are illustrated below:

                                                        Net Sales by End-User Segment




Research and Development
     The primary function of our research and development efforts is to work with customers in developing and modifying products to
accommodate their evolving needs and to identify cost saving opportunities within our operations.

      Examples of our research and development efforts implemented over the past several years include:
        •    high-bulk offset and rotogravure coated groundwood;
        •    lightweight grade No. 4 coated groundwood;
        •    ultra-lightweight grade No. 5 coated groundwood; and
        •    rotogravure coated freesheet.

Intellectual Property
      We have several patents and patent applications in the United States and various foreign countries. These patents and patent applications
generally relate to various paper manufacturing methods and equipment which may become commercially viable in the future. In addition, we
have filed trademark applications for ―Verso‖ and ―Verso Paper‖ and, in connection with the Acquisition, acquired several trademarks relating
to our products, including Influence , Velocity , Liberty , Advocate and Trilogy . In addition to the intellectual property that we own, a
                                     ®           ®          ®            ®             ®


significant portion of intellectual property used in our business is licensed on a perpetual, royalty-free, non-exclusive basis from International
Paper.

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     Although, in the aggregate, our patents, trademarks, copyrights, and the intellectual property licensed from International Paper are
material to our business, financial condition and results of operations, we believe that the loss of any one or any related group of intellectual
property rights would not have a material adverse effect on our business, financial condition or results of operations.

Competition
     Our business is highly competitive. A significant number of North American competitors produce coated and supercalendered papers, and
several overseas manufacturers, principally from Europe, export to North America. We compete based on a number of factors, including:
        •    price;
        •    product availability;
        •    the quality of our products;
        •    our breadth of product offerings;
        •    our ability to maintain plant efficiencies and high operating rates and thus lower our average;
        •    manufacturing costs per ton;
        •    customer service and our ability to distribute our products on time; and
        •    the availability and/or cost of wood fiber, market pulp, chemicals, energy and other raw materials and labor.

      Foreign competition in North America is also affected by the exchange rate of the U.S. dollar relative to other currencies, especially the
euro, market prices in North America and other markets, worldwide supply and demand, and the cost of ocean-going freight.

      While our product offering is broad in terms of grades produced (from supercalendered and ultra-lightweight coated groundwood
offerings to heavier-weight coated freesheet products), we are focused on producing coated groundwood and coated freesheet in roll form. This
strategy is driven by our alignment with catalog and magazine end-users which tend to purchase paper in roll form for use in long runs of web
printing in order to minimize costs. Our principal competitors include NewPage Corporation, Bowater Incorporated, UPM-Kymmene
Corporation and Sappi Limited, all of which have North American assets. UPM and Sappi are headquartered overseas and also have overseas
manufacturing facilities. See ―Risk Factors—The markets in which we operate are highly competitive.‖

Employees
      As of December 31, 2007, we had approximately 2,900 employees, of whom approximately 35% are unionized and 77% are hourly
employees. Employees at two of our four mills are represented by labor unions under a total of four collective bargaining agreements. In 2007,
we completed successful labor negotiations for three agreements that were up for renewal during the year. These new agreements will expire in
2011.

      We have not experienced any work stoppages during the past several years. We believe that we have good relations with our employees.

Properties
      Our corporate headquarters are located in Memphis, Tennessee. We operate 11 paper machines at four mills located in Maine, Michigan
and Minnesota. We own our principal manufacturing facilities. We also own five hydroelectric dams, four of which provide hydroelectric
power to our Androscoggin mill and the fifth of which services our Sartell mill. In addition, we own 16 and lease 4 woodyards for the purpose
of storage and loading of forest products and lease a number of sales offices.

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      Our headquarters and material facilities as of December 31, 2007, are shown in the following table:

                    Location                                                       Use                                            Owned/Leased
Memphis, TN                                       corporate headquarters                                                    leased
Jay (Androscoggin), ME                            paper mill/kraft pulp                                                     owned
Bucksport, ME                                     paper mill                                                                owned
Quinnesec, MI                                     paper mill/kraft pulp                                                     owned
Sartell, MN                                       paper mill                                                                owned
West Chester, OH                                  sales, distribution and customer service                                  leased

Environmental and Other Governmental Regulations
      We are subject to federal, state and local environmental, health and safety laws and regulations, including the Federal Water Pollution
Control Act of 1972, or ―Clean Water Act,‖ the Federal Clean Air Act, the Federal Resource Conservation and Recovery Act and the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, or ―CERCLA,‖ the Federal Occupational Health and
Safety Act and analogous state and local laws. Our operations are also subject to two regional regimes designed to address climate change, the
Regional Greenhouse Gas Initiative and Midwestern Greenhouse Gas Reduction Accord, and may in the future be subject to additional federal,
state or local legislation related to climate change. Among our activities subject to environmental regulation are the emissions of air pollutants,
discharges of wastewater and stormwater, operation of dams, storage, treatment and disposal of materials and waste, and remediation of soil,
surface water and ground water contamination. Many environmental laws and regulations provide for substantial fines or penalties and criminal
sanctions for any failure to comply. In addition, failure to comply with these laws and regulations could result in the interruption of our
operations and, in some cases, facility shutdowns.

      Certain of these environmental laws, such as CERCLA and analogous state laws, provide for strict, and under certain circumstances, joint
and several liability for investigation and remediation of the release of hazardous substances into the environment, including soil and
groundwater. These laws may apply to properties presently or formerly owned or operated by an entity or its predecessors, as well as to
conditions at properties at which wastes attributable to an entity or its predecessors were disposed. Under these environmental laws, a current
or previous owner or operator of real property, and parties that generate or transport hazardous substances that are disposed of at real property,
may be held liable for the cost to investigate or clean up such real property and for related damages to natural resources. We handle and dispose
of wastes arising from our mill operations, including disposal at on-site landfills. We are required to maintain financial assurance for the
expected cost of landfill closure and post-closure care. We may be subject to liability, including liability for investigation and cleanup costs, if
contamination is discovered at one of our current or former sites or another location where we have disposed of, or arranged for the disposal of,
wastes. We could be subject to potentially significant liabilities under, or fines or penalties for any failure to comply with, any environmental
law or regulation. See ―Risk Factors—Risks Related to Our Business—We are subject to various environmental, health and safety laws and
regulations that could impose substantial costs or other liabilities upon us and may adversely affect our operating performance and financial
condition.‖

      Compliance with environmental laws and regulations is a significant factor in our business. We have made, and will continue to make,
significant expenditures to comply with these requirements. We anticipate that environmental compliance will continue to require increased
capital expenditures over time as environmental laws or regulations, or interpretations thereof, change, new environmental laws and regulations
are promulgated or the nature of our operations require us to make significant additional capital expenditures. A significant portion of
anticipated environmental capital expenditures in 2008 will be spent in connection with emission control technology and wastewater effluent
controls required to comply with the Federal Clean Air Act and Clean Water Act, including the so-called ―Cluster Rule‖ regulations
promulgated by the Environmental Protection Agency in 1998. In addition, our mills will incur increased operating expenses associated with
compliance with the Cluster Rule regulations and the operation of the required control equipment and may incur

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additional operating expenses to comply with climate change legislation, including by purchasing emissions allowances in regional cap and
trade schemes. We incurred environmental capital expenditures of $10.3 million in 2006 and $3.4 million in 2007, and we expect to incur
additional environmental capital expenditures of $5.8 million in 2008.

      We anticipate that the new wastewater discharge limits recently imposed at our Androscoggin mill will necessitate capital expenditures
for additional wastewater controls and related improvements as well as increased operational and maintenance costs at the mill. See
―Business—Legal Proceedings‖ for a description of this matter. We are in the process of identifying and evaluating a series of capital projects
that allow us to continue complying with the new discharge limits while preserving our normal operating conditions at the mill. International
Paper has agreed to indemnify us, subject to certain limitations, for 50% of our capital expenditures, as well as 50% of our operational and
maintenance costs, required to be incurred for the purpose of complying with the new discharge limits. Based on the information that we have
now, we do not believe that any capital expenditures and increased operational and maintenance costs that may result from the new discharge
limits will have a material impact on our business, financial condition, results of operations or cash flows. However, any unexpected costs or
operational changes that result from complying with the new discharge limits, including as a result of unanticipated operational downtime, may
have an adverse effect on our results of operations.

      Permits are required for the operation of our mills and related facilities. The permits are subject to renewal, modification and revocation.
We and others have the right to challenge our permit conditions through administrative and legal appeals and review processes. Governmental
authorities have the power to enforce compliance with the permits, and violators are subject to civil and criminal penalties, including fines,
injunctions or both. Other parties also may have the right to pursue legal actions to enforce compliance with the permits.

Legal Proceedings
     We are involved from time to time in legal proceedings incidental to the conduct of our business. Although the amount of liability that
may result from these proceedings cannot be ascertained, we believe that, in the aggregate, they will not result in liabilities that are material to
our business, financial condition, results of operations, or cash flows.

      In 2005, the Maine Department of Environmental Protection issued a wastewater discharge permit to International Paper for the
Androscoggin mill. Shortly thereafter, International Paper, a local public utility company and several environmental interest groups challenged
the terms of the permit in an administrative review proceeding before the Maine Board of Environmental Protection, or ―BEP.‖ The review of
the Androscoggin mill’s permit was consolidated with reviews of other parties’ permits affecting water quality in the portion of the
Androscoggin River downstream from our mill. In February 2008, the BEP issued a final order that imposed more stringent limits on the
wastewater discharges from the Androscoggin mill. See ―Business—Environmental and Other Governmental Regulations‖ for a discussion of
the spending impact of this matter.

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                                                              MANAGEMENT

Executive Officers and Directors
     The following table provides information regarding our executive officers and directors upon consummation of this offering. The
executive officers and directors of all of our operating subsidiaries and their principal responsibilities are substantially the same.

Name                                                                   Age   Position(s)
Michael A. Jackson                                                     59    President, Chief Executive Officer and Director
Robert P. Mundy                                                        45    Senior Vice President and Chief Financial Officer
Lyle J. Fellows                                                        51    Senior Vice President of Manufacturing
Michael A. Weinhold                                                    43    Senior Vice President of Sales and Marketing
Benjamin Hinchman, IV                                                  60    Vice President and Chief Information Officer
Peter H. Kesser                                                        50    Vice President, General Counsel and Secretary
Craig J. Liska                                                         51    Vice President of Sustainability
Ricardo Moncada                                                        54    Vice President of Human Resources
Michael E. Ducey                                                       59    Director
Joshua J. Harris                                                       43    Director
Scott M. Kleinman                                                      35    Director
David W. Oskin                                                         65    Director
L.H. Puckett, Jr.                                                      59    Director
Jordan C. Zaken                                                        33    Director
David B. Sambur                                                        27    Director

      Michael A. Jackson . Mr. Jackson was named our President and Chief Executive Officer and a member of our Board of Directors in
November 2006. He succeeded L.H. Puckett, Jr., who retired as President and Chief Executive Officer but remains one of our directors. Before
joining us, Mr. Jackson worked at Weyerhaeuser Company from 1977 to 2006. During a 29-year career with Weyerhaeuser, he served as
Senior Vice President responsible for the Cellulose Fibers, White Papers, Newsprint and Liquid Packaging Board businesses from 2004 to
2006, Vice President of the Fine Papers business from 2002 to 2004, Vice President of the Business Papers business from 2000 to 2002, Vice
President of the Recycling business from 1998 to 2000, Vice President of Human Resources and Quality for the Container Board Packaging
business from 1993 to 1997, and General Manager of the Tri-Wall business and other packaging plants from 1990 to 1993. On behalf of
Weyerhaeuser, Mr. Jackson also served from 2005 to 2006 as Chairman of the Board of North Pacific Paper Corporation (NORPAC), a joint
venture with Japan’s Nippon Paper Industries which produces newsprint and uncoated groundwood paper.

      Robert P. Mundy . Mr. Mundy has been our Senior Vice President and Chief Financial Officer since August 2006. He has 25 years of
finance and accounting experience in the paper industry. Mr. Mundy joined us from International Paper where he worked from 1983 to 2006.
At International Paper, he served as Director of Finance of our business from 2002 to 2006, Director of Finance Projects from 2001 to 2002,
Controller of Masonite Corporation from 1999 to 2001, Controller of the Petroleum and Minerals business from 1996 to 1999, and in other
business functions including company-wide SAP implementation, corporate internal audit, and manufacturing and operational finance at three
pulp and paper mills.

      Lyle J. Fellows . Mr. Fellows has been our Senior Vice President of Manufacturing since August 2006. He has 27 years of manufacturing
experience in the paper industry. Before joining us, Mr. Fellows worked for International Paper from 1981 to 2006, where he served as Vice
President of Manufacturing for our business from 2003 to 2006, Manager of the pulp and paper mill in Courtland, Alabama, from 2001 to
2003, Manager of the pulp and paper mill in Saillat, France, from 2000 to 2001, Manufacturing Director of the Arizona Chemical business in
Europe from 1998 to 1999, Technical Director of the White Papers business in Europe from 1994 to 1997, and in various manufacturing
positions at the pulp and paper mill in Pine Bluffs, Arkansas, from 1981 to 1994.

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      Michael A. Weinhold. Mr. Weinhold has been our Senior Vice President of Sales and Marketing since August 2006. With 21 years of
sales, marketing and manufacturing experience in the paper industry, he is responsible for our sales, marketing, supply chain, customer
technical service, e-commerce, product development and Nextier Solutions functions. Mr. Weinhold previously worked in various sales,
marketing and management positions in our business at International Paper from 2000 to 2006 and at Champion International Corporation from
1994 to its acquisition by International Paper in 2000. His most recent positions in our business at International Paper were as Business
Manager from 2004 to 2006, Business Manager of Sales and Marketing from 2003 to 2004, and Director of Marketing and Product
Development from 2001 to 2003.

       Benjamin Hinchman, IV . Mr. Hinchman has been our Vice President and Chief Information Officer since August 2006. He has 38 years
of experience in the information technology field, during which he has implemented and managed information systems supporting
manufacturing, quality control, research and development, sales, order fulfillment, distribution, warehousing, finance and e-commerce. Before
joining us, Mr. Hinchman worked at International Paper from 1999 to 2006, where he served as Director of Information Technology of our
business in 2006, Director of Information Technology of the xpedx business from 2002 to 2006, and Director of Strategic Technologies from
2000 to 2001. Mr. Hinchman worked for Union Camp Corporation as Director of Information Services for the Fine Papers division from 1995
to its acquisition by International Paper in 1999. He previously worked in various other businesses, holding positions of increasing
responsibility in information technology.

     Peter H. Kesser . Mr. Kesser has been our Vice President, General Counsel and Secretary since December 2006. During a legal career of
almost 25 years, he has concentrated his practice in the areas of corporate, securities, mergers and acquisitions, and commercial law while
working for major law firms and public companies. Mr. Kesser was a shareholder with Baker Donelson Bearman Caldwell & Berkowitz PC
from 1999 to 2006. He was Vice President, Associate General Counsel and Assistant Secretary of Promus Hotel Corporation, a leading lodging
company, from 1998 to 1999. Mr. Kesser was Vice President, General Counsel and Secretary of Arcadian Corporation, a leading nitrogen
chemical producer, from 1993 to 1997. He was an attorney with Bracewell & Patterson LLP from 1983 to 1992. Mr. Kesser is the former
Chairman of the Business Law section of the Tennessee Bar Association.

      Craig J. Liska. Mr. Liska has been our Vice President of Sustainability since October 2006. He is responsible for integrating our
sustainability principles of balancing environmental, social and economic values into decisions affecting all aspects of our business as well as
for managing our environmental, health and safety functions. Mr. Liska previously worked at Motorola, Inc., from 1990 to 2006 in various
environmental positions of increasing responsibility, most recently serving as Corporate Director of International Environment, Health and
Safety from 2000 to 2006. Prior to entering the private sector, he was an environmental regulator with the United States Environmental
Protection Agency from 1985 to 1989 and with the Illinois Environmental Protection Agency from 1980 to 1985.

      Ricardo Moncada . Mr. Moncada has been our Vice President of Human Resources since October 2006. He also served briefly as a
human resources consultant for us from June to September 2006 under a transitional arrangement with International Paper. Mr. Moncada has
29 years of experience in the human resources field. He joined us from International Paper where he worked from 1991 to 2006. At
International Paper, Mr. Moncada was Vice President of Human Resources of the xpedx business from 2001 to 2006, Director of Human
Resources of the Beverage Packaging business from 1997 to 2000, and Vice President of Human Resources of Propal, a joint venture between
International Paper and W.R. Grace Co., from 1991 to 1997. He previously worked in human resources with Weyerhaeuser Company from
1986 to 1991 and with Norton Company from 1978 to 1986.

      Michael E. Ducey . Mr. Ducey has been one of our directors since March 2007. He was President and Chief Executive Officer and a
director of Compass Minerals International, Inc., a producer of salt and specialty fertilizers, from 2002 to 2006, and he remains a consultant to
Compass Minerals. Mr. Ducey previously worked for Borden Chemical, Inc., a diversified chemical company, from 1972 to 2002. During his
30-year career with

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Borden Chemical, he held various management, sales, marketing, planning and commercial development positions, most recently serving as
President and Chief Executive Officer from 1999 to 2002 and Executive Vice President and Chief Operating Officer from 1997 to 1999. Mr.
Ducey also is a director of UAP Holding Corp., the parent of United Agri Products, Inc.

     Joshua J. Harris . Mr. Harris has been one of our directors since August 2006. He is President and a Founding Partner of Apollo
Management, L.P., which was started in 1990. Mr. Harris was a member of the Mergers and Acquisitions Department of Drexel Burnham
Lambert Incorporated. He also is a director of AP Alternative Assets, L.P., Apollo Global Management LLC, Berry Plastics Group, Inc.,
CEVA International, Inc., Hexion Specialty Chemicals, Inc., Metals USA Holdings Corp., Momentive Performance Materials Inc., and
Noranda Aluminum Holding Corporation.

      Scott M. Kleinman. Mr. Kleinman has been one of our directors since August 2006. He is a Partner at Apollo Management, L.P., where
he has worked since 1996. Mr. Kleinman was employed by Smith Barney Inc. in its Investment Banking division from 1994 to 1995. He also is
a director of Hexion Specialty Chemicals, Inc., Momentive Performance Materials Inc., Realogy Corporation and Noranda Aluminum Holding
Corporation.

       David W. Oskin . Mr. Oskin has been one of our directors since January 2007. He has been President of Four Winds Ventures, LLC, a
private investment company, since 2005. Mr. Oskin worked for 29 years in the paper and forest products industries in various management,
distribution, sales and marketing, quality management, human resources and other positions. He spent most of his career with International
Paper, where he worked initially from 1975 to 1991 and then again as an Executive Vice President from 1996 to 2003. Between his stints with
International Paper, Mr. Oskin was Managing Director and Chief Executive Officer of Carter Holt Harvey Limited, a New Zealand based forest
products company. Mr. Oskin also is a director of Pacific Millennium Corporation, Samling Global Limited, and Big Earth Publishing LLC,
and he serves as Chairman of the Board of Trustees of Widener University.

      L. H. Puckett, Jr. Mr. Puckett has been one of our directors since August 2006. He also was our President and Chief Executive Officer
from August 2006 to his retirement in November 2006. Mr. Puckett worked in the paper industry for 32 years in various sales, marketing and
management capacities. Before joining us, he worked at International Paper from 1999 to 2006, where he served as Senior Vice President
responsible for our business from 2000 to 2006 and Vice President responsible for the Commercial Printing and Imaging Papers businesses
from 1999 to 2000. Mr. Puckett worked at Union Camp Corporation from 1974 to its acquisition by International Paper in 1999, where he most
recently served from 1998 to 1999 as Senior Vice President responsible for the Fine Papers division, which included the uncoated freesheet,
pulp and bleached paperboard businesses.

      Jordan C. Zaken. Mr. Zaken has been one of our directors since August 2006. He is a Partner at Apollo Management, L.P., where he has
worked since 1999. Mr. Zaken was employed by Goldman, Sachs & Co. in its Mergers and Acquisitions Department from 1997 to 1999. He
also is a director of Hexion Specialty Chemicals, Inc.

     David B. Sambur . Mr. Sambur has been one of our directors since February 2008. He is a principal at Apollo Management, L.P., where
he has worked since 2004. Mr. Sambur was a member of the Leveraged Finance Group of Salomon Smith Barney Inc. from 2002 to 2004. Mr
Sambur graduated summa cum laude and Phi Beta Kappa from Emory University with a BA in economics.

Committees of our board of directors
      Upon consummation of this offering, our board of directors will have three standing committees: an audit committee, a compensation
committee and a corporate governance and nominating committee, each operating under charters that have been adopted by our board of
directors. Following the consummation of this offering, we will be a ―controlled‖ company pursuant to the rules of the New York Stock
Exchange. As a result, we are not required to have a majority of independent directors on our board of directors or have compensation and

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nominating/corporate governance committees comprised of independent directors. We are required, however, to have an audit committee with
one independent director during the 90-day period beginning on the date of effectiveness of the registration statement filed with the SEC in
connection with this offering and of which this prospectus is a part. After such 90-day period and until one year from the date of effectiveness
of the registration statement, we are required to have a majority of independent directors on our audit committee. Thereafter, we are required to
have an audit committee comprised entirely of independent directors.

Audit Committee
      Upon consummation of this offering, the audit committee will consist of Messrs.            ,         , and         (of whom
Messrs.           and          have been deemed independent pursuant to Rule 10A-3 of the Exchange Act by our board of directors and
Mr.           will be nominated as chair of the audit committee). The duties and responsibilities of the audit committee include recommending
the appointment or termination of the engagement of independent accountants, overseeing the independent auditor relationship and reviewing
significant accounting policies and controls. We intend to appoint additional independent directors to our audit committee to replace
Mr.           as soon as possible following the consummation of this offering, but no later than one year after the consummation of this offering.
At least one of these individuals will satisfy the New York Stock Exchange standard of possessing accounting or related financial management
expertise and qualify as an independent audit committee financial expert under the Exchange Act. The charter of the audit committee will be
available on our web site at www.versopaper.com .

Compensation Committee
      Following the completion of this offering, the compensation committee will consist of Messrs.       ,          and          . The duties
and responsibilities of the compensation committee include reviewing and approving the compensation of officers and directors, except that the
compensation of officers serving on any committee is determined by our board of directors. The compensation of all officers other than our
chief executive officer, Michael A. Jackson, is approved by our board of directors based on recommendations by Mr. Jackson and the
compensation committee. Mr. Jackson’s compensation is determined by our board of directors upon the recommendation of the compensation
committee. The charter of our compensation committee will be available on our web site at www.versopaper.com .

Corporate Governance and Nominating Committee
      Following the completion of this offering, we intend to form a corporate governance and nominating committee. We expect the duties of
the corporate governance and nominating committee to include identifying individuals qualified to become members of our board of directors,
consistent with criteria approved by our board of directors; overseeing the organization of our board of directors to discharge the board’s duties
and responsibilities properly and efficiently; identifying best practices and recommending corporate governance principles, including giving
proper attention and making effective responses to stockholder concerns regarding corporate governance; and developing and recommending to
our board of directors a set of corporate governance guidelines and principles applicable to us. We expect other specific duties of the corporate
governance and nominating committee to include annually assessing the size and composition of our board of directors; developing
membership qualifications for our board committees; monitoring compliance with board and board committee membership criteria; annually
reviewing and recommending directors for continued service; coordinating and assisting management and our board in recruiting new members
to our board of directors; reviewing governance-related stockholder proposals and recommending board responses; and overseeing the
evaluation of our board of directors and management. The charter of our corporate governance and nominating committee will be available on
our web site at www.versopaper.com .

      Apollo controls a majority of our common stock and, therefore, has the power to control our affairs and policies. Apollo also controls the
election of our directors and the appointment of our management.

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Board structure and compensation
      Our board of directors is currently comprised of eight directors. Upon consummation of this offering, our board of directors will be
divided into three classes, each of whose members will serve for staggered three-year terms. Messrs.           and          will serve in the
class of directors whose terms will expire at our 2009 annual stockholders meeting; Messrs.              ,         and            will serve in
the class of directors whose terms will expire at our 2010 annual stockholders meeting; and Messrs.          ,        and            will serve in
the class of directors whose terms will expire at our 2011 annual stockholders meeting. Because only one-third of our directors are elected at
each annual meeting, two annual stockholders meetings could be required for the stockholders to change a majority of the board.

      Our directors are reimbursed for their out-of-pocket expenses. The directors who are not also our employees also receive compensation
for their service on our board of directors. Upon consummation of this offering, each of our non-employee directors will receive an annual
retainer fee of $        . These directors will receive a fee of $     for each board meeting attended ($         if telephonic). The chair of
the audit committee will receive an additional $           .

Compensation committee interlocks and insider participation
      None of our executive officers serves, or in the past has served, as a member of the board of directors or compensation committee of any
entity that has one or more executive officers who serve on our board of directors or compensation committee.

Code of ethics
      In connection with this offering, our board of directors will adopt a code of ethics that applies to all of our directors, officers and
employees, including our chief executive officer and chief financial officer. The code addresses, among other things, honesty and ethical
conduct, conflicts of interest, compliance with laws, regulations and policies, including disclosure requirements under the federal securities
laws, confidentiality, trading on insider information and reporting of violations to the code. Upon adoption, a copy of our code of ethics will be
posted on our web site at www.versopaper.com .

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                                                COMPENSATION DISCUSSION AND ANALYSIS

Overview of Executive Compensation
      Our philosophy is that executive compensation should be competitive in the marketplace in which we compete for executive talent, but
structured to emphasize incentive-based compensation and determined by the achievement of both company and individual performance
objectives. In principle, we believe that:
        •    annual base salaries should be competitive with the marketplace average;
        •    the combination of variable annual compensation and long-term incentive compensation should stress the achievement of
             short-term and long-term performance objectives and should provide the opportunity to earn more than the marketplace average for
             performance that exceeds targeted levels;
        •    long-term incentive compensation opportunities should be targeted at levels that exceed those of our peer group companies; and
        •    equity ownership by the members of our executive management team should be encouraged in order to align the short-term and
             long-term interests of our executive officers with those of the holders of our equity interests.

       We periodically review our compensation practices with reference to wage surveys conducted by compensation consulting firms. This
data is integral to our decisions regarding appropriate levels of executive compensation, but we do not benchmark any component of our
executive compensation against a specific group of companies or set compensation levels at a designated percentile of peer group
compensation. Instead, survey data is used as a general cross-reference to verify that our compensation is at a compensation level that will
allow us to attract, retain and motivate members of our management team. For our decisions with respect to 2007 executive compensation, we
utilized compensation data and analysis in the 2006 Forest Products Industry Compensation Association Survey conducted by the Stanton
Group (the ―2006 FPICA Survey‖), the 2007 Forest Products Industry Compensation Association Survey conducted by the Stanton Group (the
―2007 FPICA Survey‖ and, together with the 2006 FPICA Survey, the ―FPICA Surveys‖) and a customized compensation study by Valere
Consulting LLC (the ―Valere Report‖). We reviewed 2006 FPICA data in conjunction with 2007 FPICA data in order to determine trendlines
in peer group compensation. Our peer group is comprised of the forest paper industry companies that participated in the 2007 FPICA Survey
and the companies studied for the Valere Report, which, in addition to the companies participating in the 2006 FPICA Survey, included
manufacturing and paper industry companies similar in size to us that participated in online surveys and published surveys and a large sample
of private equity portfolio companies. The list set forth below includes peer group members that are listed by name in the 2007 FPICA Survey
and the Valere Report, but does not include the many manufacturing and paper industry companies that participated in online surveys and
published studies that were not specified by name in aggregate survey data.

                   Accellent Inc.                                AMH Holdings Inc.                                 Appleton
                  Appleton Coated                               Avago Technologies                      Blue Ridge Paper Products, Inc.
                Boise Cascade, LLC                                   Bowater, Inc.                        Buckeye Technologies, Inc.
                     Caraustar                                Deltic Timber Corporation                      EXCO Resources Inc.
                 Fraser Papers, Inc.                                   Glatfelter                     Graphic Packaging International, Inc.
         Green Diamond Resource Company                   Hancock Forest Management, Inc.                     International Paper
             Jazz Pharmaceuticals Inc.                              Language Line                                LIN TV Corp
       Longview Fibre Paper & Packaging, Inc.               Lousiana-Pacific Corporation                        MeadWestvaco
                Menasha Packaging                             Myllykoski North America                       NewPage Corporation
             Pacific Lumber Company                       Packaging Corporation of America             Plum Creek Timber Company, Inc.
                Pope & Talbot, Inc.                       Port Townsend Paper Corporation                    Potlatch Corporation
                   Primedia Inc.                                       Rayonier                            Regency Energy Partners
               Rock-Tenn Company                                 Rockwood Holdings                    Roseburg Forest Products Company
             Safety Products Holdings                      Sappi Fine Paper North America                         Sealy Corp.
                     SierraPine                             Simpson Investment Company                 Smurfit-Stone Container Company

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             Sonoco Products Company                               SP Newsprint Company                                 Stora Enso
               Swanson Group, Inc.                                     Temple Inland                             Timber Products Company
               UPM-Kymmene, Inc.                                      Viasystems, Inc.                               West Fraser, Inc.
             West Linn Paper Company                                Westervelt Company                            Weyerhaeuser Company

Elements of Executive Compensation
      Our compensation program for executives consists of the following key elements: annual base salary, a performance-based annual bonus
and long-term equity-based awards, as well as certain perquisites and other benefits, including employer contributions to tax-qualified and
non-qualified defined contribution retirement plans.

      We believe that this approach best serves our interests and the holders of our equity interests. It enables us to meet the requirements of the
highly competitive environment in which we operate while ensuring that our executive officers are compensated in a way that advances both
the short-term and long-term interests of the holders of our equity interests. The variable annual bonus permits individual performance to be
recognized and is based, in significant part, on an evaluation of the contribution made by the executive to our overall performance. Long-term
equity-based awards relate a significant portion of long-term remuneration directly to appreciation in the value of our equity interests. This type
of compensation is intended to align the interests of management with those of the holders of our equity interests, and further serves to promote
an executive’s continued service to the organization.

      Base Salary
      We determine base salaries for our executive officers based on each executive’s position level, taking into account the market salary
range for our peer group of companies determined by reference to aggregate survey data. Base salaries are intended to be competitive with the
market average. It is our philosophy that total compensation should be weighted less towards fixed compensation and more towards variable
performance-based compensation. We intend to continue this shift in total compensation from fixed compensation towards variable
compensation opportunities that stress performance.

      Annual Bonus
      Under our management incentive plan (the ―Verso Incentive Plan‖ or ―VIP‖), our executive officers have an annual incentive (bonus)
opportunity with awards based on the achievement of specified performance goals. For purposes of the 2007 management incentive plan,
specific targets were established with respect to a combination of four core measures for 2007 performance, upon which a specified percentage
of the overall bonus pool was based, as follows: (i) 2007 earnings before interest, taxes, depreciation and amortization, adjusted for expenses
such as start-up costs and/or financial accounting changes, if any (―Adjusted EBITDA‖) (60% of the overall bonus pool, with threshold, target,
above target and maximum performance levels of $200 million, $220, million, $230 million and $260 million, respectively), (ii) average
month-end working capital improvement (―Working Capital‖) (20% of the overall bonus pool, with threshold, target and maximum
performance levels of $60 million, $54 million and $46 million respectively), (iii) reduction of realizable gap (―R-GAP Reduction‖) (10% of
the overall bonus pool, with threshold, target and maximum performance levels of $31 million, $37 million and $50 million respectively), and
(iv) margin quality improvement (10% of the overall bonus pool, with threshold, target and maximum performance levels of $8 million, $10
million and $12 million respectively). Each of the performance targets for the four performance measures was established with reference to our
historical performance, with adjustments based on expected changes during the current year.

     Individual VIP awards are paid from a bonus pool that is funded based on our achievement of these annual performance goals. The
amount of the bonus pool is subject to upward or downward adjustment by the compensation committee based on extraordinary or other
unanticipated events and conditions. Once the amount

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of the bonus pool is determined, we distribute individual VIP awards, within the limits of the pool, based on our evaluation of individual,
departmental and functional contributions to our achievement of the performance goals. For 2007, our actual results with respect to the four
performance measures corresponded to a funding level of approximately 20% for the bonus pool, which our compensation committee adjusted
to a funding level of approximately 40% to take into account unanticipated changes in sales volume and sales price. As reflected in the
Summary Compensation Table below, the individual evaluations of our executive officers were such that each of them received approximately
40% of the target VIP bonus payable to such executive officer for 2007.

      Unit Investment and Award Program
      We have established a long-term equity-based compensation program pursuant to which our executive officers have made an investment
in non-voting capital interests (―Class A Units‖) in our parent, Verso Paper Management LP. The Class A Units purchased by the executives
are intended to be substantially economically equivalent to the securities acquired by Apollo in connection with the Acquisition.

      In connection with their investment in the Class A Units, our executive officers are entitled to receive awards in the form of non-voting
profit interests (―Class B Units‖ and ―Class C Units‖) in our parent, Verso Paper Management LP, which entitle the executives to share in
future profits of the business. The Class B Units, which are intended to be substantially economically equivalent to stock options that vest
based on the passage of time, generally vest in five equal annual installments, subject to continuous employment through each applicable
vesting date. The Class C Units, which are intended to be substantially economically equivalent to stock options that vest based on the
achievement of performance criteria, will generally vest only upon the achievement of a specified internal rate of return.

      Our parent has also awarded Class D Units, which are intended to be substantially economically equivalent to stock options that are fully
vested as of the date of grant, to our non-employee directors under the Limited Partnership Agreement of Verso Paper Management LP (the
―LP Agreement‖). For more information on the Class D Units, see ―Executive Compensation—Director Compensation.‖

     All executive officers investing in Class A Units and receiving awards of Class B Units and Class C Units are required to execute the LP
Agreement and become limited partners thereunder. Under the LP Agreement, the Units purchased or held by the executives are generally
subject to transfer restrictions, tag-along rights, drag-along rights, repurchase rights and piggy-back registration rights.

      Simultaneously with this offering, the LP Agreement will be amended (as amended, the ―Amended LP Agreement‖) such that each holder
will have the right, subject to certain conditions as described below, to require that Verso Paper Management LP effect an exchange of his
Units for shares of our common stock held by Verso Paper Management LP, in accordance with the following procedures. After (i) the date on
which the Units were purchased or (ii) the date on which the Units vest, as the case may be, each holder may opt to exercise his exchange right
with respect to all or a portion of such holder’s Units. Upon proper exercise of any holder’s exchange right, Verso Paper Management LP will
be required to effect the exchange by delivering shares of our common stock held by it to such holder in an amount equal to the number of
Units being exchanged, calculated on a one-to-one basis. The ability of each executive to exercise the exchange right with respect to any Units
that he holds will be subject to transfer restrictions, repurchase rights and piggy-back registration rights, to the extent that each such restriction
or right applies to the Units held by such executive under the existing LP Agreement. The tag-along and drag-along rights set forth in the
existing LP Agreement terminate immediately upon the consummation of this offering.

      Analysis
     For 2007, the total compensation (excluding equity-based incentive compensation) of the named executive officers was within
approximately 75% to 125% of the weighted average compensation amounts reported for our

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peer group companies in the FPICA Surveys. The base salary amounts paid to the named executive officers were approximately at the midpoint
salary range of the market average for our peer group companies as determined by reference to the 2007 FPICA Survey, which may be adjusted
to reflect an individual named executive officer’s position and experience. For 2007, we confirmed that each named executive officer’s base
salary was well within the trendlines for minimum and maximum salary parameters reported by our peer group in the FPICA Surveys, and we
determined that each named executive officer’s base salary was within approximately 15% of the applicable midpoint salary reported in the
2007 FPICA Survey. The base salary amount for each named executive officer constituted approximately 55-61% of the total compensation for
each such named executive officer. This range of percentages reflects our intention to provide for a meaningful portion of each named
executive officer’s compensation to be performance based. The addition of the 2008 Incentive Award Plan and the Senior Executive Bonus
Plan (as described below) further demonstrates our intention to continue this shift in total compensation from fixed compensation towards
variable compensation opportunities that emphasize and reward performance.

      The VIP awards focus on short-term retention and incentive goals. For 2007, the VIP performance goals included a combination of
financial targets (e.g., Adjusted EBITDA and Working Capital) and goals relating to core strategic initiatives (e.g., R-GAP Reduction and
margin quality improvement). Also, the position and duties of a named executive officer and the relative market average as determined by
reference to aggregate survey data for such position was factored into the value of the 2007 VIP award to each such named executive officer.

     The awards of Class B Units and Class C Units focus on long-term retention and incentive goals. In 2006, each named executive officer
was assigned to an award tier and awarded Class B and Class C Units according to the estimated value of such named executive officer’s
opportunity and expected ability to affect results.

      2008 Incentive Award Plan
      Prior to the completion of this offering, we intend to adopt the 2008 Incentive Award Plan. The principal purpose of the 2008 Incentive
Award Plan will be to promote the success and enhance the value of our company by linking the personal interests of selected employees,
consultants and directors to those of our stockholders and by providing such individuals with an incentive for outstanding performance. The
2008 Incentive Award Plan is further intended to attract, retain and motivate selected employees, consultants and directors through the granting
of stock-based compensation awards.

      The 2008 Incentive Award Plan will provide for a variety of such awards, including non-qualified stock options, or ―NSOs,‖ incentive
stock options, or ―ISOs‖ (within the meaning of Section 422 of the Internal Revenue Code, or the ―Code‖), stock appreciation rights, restricted
stock awards, restricted stock unit awards, deferred stock awards, dividend equivalents, performance share awards, performance-based awards,
stock payment awards and other stock-based awards. We will determine a specified number of shares of common stock to be reserved for
issuance under the 2008 Incentive Award Plan. We will also establish a maximum number of shares which may be subject to awards granted
under the 2008 Incentive Award Plan to any individual in any calendar year, as well as a maximum dollar amount that may be paid in cash to
any individual in any calendar year with respect to any performance based-awards; provided, that this limitation will not apply prior to the
consummation of this offering, and following such consummation, this limitation will not apply until the earliest of: (a) the first material
modification of the 2008 Incentive Award Plan (including any increase in the number of

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shares reserved for issuance under the 2008 Incentive Award Plan); (b) the issuance of all of the shares of common stock reserved for issuance
under the 2008 Incentive Award Plan; (c) the expiration of the 2008 Incentive Award Plan; (d) the first meeting of stockholders at which
members of the board are to be elected, which occurs after the close of the third calendar year following the calendar year in which any of our
equity securities are registered under Section 12 of the Exchange Act; or (e) such other date required by Section 162(m) of the Code and the
rules and regulations promulgated thereunder.

      Administration . The 2008 Incentive Award Plan will be administered by our board of directors, unless and until the board delegates
administration to the compensation committee or other applicable committee of the board. The compensation committee may delegate
administration to one or more members of our board of directors. Our board of directors, or the compensation committee if so empowered, will
have the power to interpret the 2008 Incentive Award Plan and to adopt such rules for the administration, interpretation and application of the
2008 Incentive Award Plan according to its terms. Our board of directors or the compensation committee shall determine the number of shares
of common stock that will be subject to each award. Our compensation committee may take into account the recommendations of our senior
management in determining the award recipients and the terms and conditions of such awards. Our board of directors may not delegate to the
compensation committee or otherwise, the power to grant stock awards to our independent directors.

      Grant of Awards. Certain employees, consultants and directors will be eligible to be granted awards under the 2008 Incentive Award
Plan. Our board of directors, or the compensation committee if so empowered, will determine:
        •    which employees, consultants and directors are to be granted awards;
        •    the type of award that is granted;
        •    the number of shares subject to the awards; and
        •    the terms and conditions of such awards, consistent with the 2008 Incentive Award Plan. Our board of directors, or the
             compensation committee if so empowered, will have the discretion, subject to the limitations of the 2008 Incentive Award Plan and
             applicable laws, to grant ISOs, NSOs, stock bonuses and rights to acquire restricted stock (except that only our employees may be
             granted ISOs).

      Limitation on ISO Treatment . Even if an option is designated as an ISO, no option will qualify as an ISO if the aggregate fair market
value of the stock (as determined as of the date of grant) with respect to all of a holder’s ISOs exercisable for the first time during any calendar
year under the 2008 Incentive Award Plan exceeds $100,000. Any option failing to qualify as an ISO will be deemed to be an NSO.

      Stock Option Exercise Price. Our board of directors, or the compensation committee if so empowered, shall set the per share exercise
price, subject to the following rules:
        •    in the case of ISOs and NSOs, the per share option exercise price shall not be less than 100% of the fair market value of shares of
             our common stock on the grant date; and
        •    for any persons owning (within the meaning of Section 424(d) of the Code) more than 10% of the total combined voting power of
             all classes of our capital stock or of any of our subsidiaries, the per share exercise price shall be not less than 110% of the fair
             market value of the shares of our common stock on the grant date. The fair market value of a share of our common stock as of a
             given date will be determined in good faith by our board of directors.

      Expiration of Stock Options . The term of an option is set by our board of directors, or the compensation committee if so empowered,
subject to the following conditions: (1) no option term shall be longer than ten years from the date of grant; and (2) the option term for an ISO
granted to a person owning more than 10% of the total combined voting power of all classes of our capital stock shall not exceed five years
from the date of grant. Upon

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termination of an outstanding option holder’s services with us, the holder may exercise his or her options within the period of time specified in
the option grant, to the extent that the options were vested at the time of termination. Options granted under the 2008 Incentive Award Plan
must be exercised within one year if the holder’s services are terminated due to death or disability, or by the date of expiration of the option as
set forth in the option agreement, whichever is earlier.

      Other Equity Awards . In addition to stock options, the compensation committee may also grant to certain employees, consultants and
directors stock appreciation rights, restricted stock awards, restricted stock unit awards, deferred stock awards, dividend equivalents,
performance share awards, performance-based awards, stock payment awards or other stock-based awards, with such terms and conditions as
our board of directors (or, if applicable, the compensation committee) may, subject to the terms of the 2008 Incentive Award Plan, establish.
Under the 2008 Incentive Award Plan, performance-based stock awards are intended to comply with the requirements of Section 162(m) of the
Code and its underlying regulations, in order to allow these awards, when payable, to be fully tax deductible by us.

      Performance Bonus Awards. Under the 2008 Incentive Award Plan, the compensation committee has the authority in its discretion to
make performance-based cash bonus payments to our designated employees, including our executive officers, with respect to a specified period
(for example, a calendar year). Such bonuses are payable upon the attainment of pre-established performance goals. Such performance goals
may relate to one or more corporate business criteria with respect to us or any of our subsidiaries, including but not limited to: net earnings
(either before or after interest, taxes, depreciation and amortization), Adjusted EBITDA, economic value-added, sales or revenue, net income
(either before or after taxes), operating earnings, cash flow (including, but not limited to, operating cash flow and free cash flow), cash flow
return on capital, return on net assets, return on stockholders’ equity, return on assets, return on capital, stockholder returns, return on sales,
gross or net profit margin, productivity, expense, margins, operating efficiency, customer satisfaction, working capital, earnings per share, price
per share of our common stock, and market share, any of which may be measured either in absolute terms or as compared to any incremental
increase or as compared to results of a peer group. The compensation committee will select the participants who are eligible to receive
performance-based cash bonuses and the performance goals to be utilized with respect to the participants, establish the bonus formulas for of
each participant’s annual bonus, and certify whether the performance goals have been met with respect to any given performance period.

      Adjustments of Awards . In the event a stock dividend, stock split, combination, merger, consolidation, spin-off, recapitalization or other
change in our capitalization affects our common stock in a manner that causes dilution or enlargement of benefits or potential benefits under
the 2008 Incentive Award Plan, as determined by our board of directors, or the compensation committee, if so empowered, then our board of
directors or the compensation committee shall equitably adjust:
        •    the aggregate number of, and kind of, shares of our common stock subject to the 2008 Incentive Award Plan;
        •    the number of, and kind of, shares of our common stock subject to the outstanding awards;
        •    the price per share of our common stock upon exercise of outstanding options; and
        •    the terms and conditions of any outstanding awards, including the financial or other performance targets specified in each option
             agreement for determining the exercisability of options.

      Change in Control. In connection with any change in control (as defined in the 2008 Incentive Award Plan), except as may otherwise be
provided in any applicable award or employment agreement and unless awards granted under the 2008 Incentive Award Plan are converted,
assumed or replaced by a successor entity, the awards will automatically become fully vested and exercisable and all forfeiture restrictions with
respect to such awards shall lapse prior to the consummation of the change in control. In addition, with respect to any awards, in connection
with any change in control (or other unusual or nonrecurring transaction affecting us or our combined

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financial statements), our board of directors or the compensation committee, in its sole discretion, may: (i) provide for the termination of any
award in exchange for an amount of cash, if any, equal to the amount that would have been payable upon the exercise of such award or
realization of the participant’s rights as of the date of such change in control or other transaction; (ii) purchase any outstanding awards for a
cash amount or replace outstanding awards with other rights or property; (iii) provide that after the occurrence of the transaction, the award
cannot vest, be exercised or become payable; (iv) provide that only for a specified period of time after such transaction, an award shall be
exercisable or payable or fully vested with respect to all shares covered thereby, notwithstanding anything to the contrary in the 2008 Incentive
Award Plan or the applicable award agreement; or (v) provide that each outstanding award shall be assumed or substituted for an equivalent
award, right or property by any successor corporation. Any such action may be effectuated by the compensation committee either by the terms
of the applicable option agreement or by action of the compensation committee taken prior to the change in control.

      Amendment and Termination. Our board of directors, or the compensation committee if so empowered, is generally authorized to adopt,
amend and rescind rules relating to the administration of the 2008 Incentive Award Plan, and our board of directors is authorized to amend,
suspend and terminate the 2008 Incentive Award Plan. We have attempted to structure the 2008 Incentive Award Plan in a manner such that
remuneration attributable to stock options and other awards will not be subject to the deduction limitation contained in Section 162(m) of the
Code. However, we must generally obtain approval of our stockholders: (i) to increase the number of shares of our common stock that may be
issued under the 2008 Incentive Award Plan; (ii) to extend the limit on the period during which options may be granted; or (iii) to the extent
required by applicable law, rule or regulation (including any applicable NASD rule).

      Senior Executive Bonus Plan
      Prior to the completion of this offering, we intend to adopt the Senior Executive Bonus Plan. The Senior Executive Bonus Plan is
intended to provide an incentive for superior work and to motivate covered key executives toward even greater achievement and business
results, to tie their goals and interests to those of ours and our stockholders and to enable us to attract and retain highly qualified executives.

      The Senior Executive Bonus Plan is a performance-based bonus plan under which our designated key executives, including our executive
officers, are eligible to receive bonus payments with respect to a specified period (for example, our fiscal year). Bonuses are generally payable
under the Senior Executive Bonus Plan upon the attainment of pre-established performance goals. Notwithstanding the foregoing, we may pay
bonuses (including, without limitation, discretionary bonuses) to participants under the Senior Executive Bonus Plan based upon such other
terms and conditions as the compensation committee may in its discretion determine.

      Performance goals under the Senior Executive Bonus Plan may relate to one or more corporate business criteria with respect to us or any
of our subsidiaries, including but not limited to: net income (loss) (either before or after interest, taxes, depreciation and/or amortization),
Adjusted EBITDA, sales or revenue, acquisitions or strategic transactions, operating income (loss), cash flow (including, without limitation,
operating cash flow and free cash flow), return on capital, return on assets (including, without limitation, return on net assets), return on
stockholders’ equity, economic value added, stockholder returns, return on sales, gross or net profit margin, productivity, expenses, margins,
operating efficiency, customer satisfaction, working capital, earnings (loss) per share, price per share of equity securities, market share and
number of customers, any of which may be measured either in absolute terms or as compared to any incremental increase or decrease, or as
compared to results of a peer group.

      The Senior Executive Bonus Plan is administered by the compensation committee. The compensation committee will select the
participants in the Senior Executive Bonus Plan and the performance goals to be utilized with respect to the participants, establish the bonus
formulas for each participant’s annual bonus, and certify whether any applicable performance goals have been met with respect to a given
performance period. We

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may amend or terminate the Senior Executive Bonus Plan at any time in our sole discretion. Any amendments to the Senior Executive Bonus
Plan will require stockholder approval only to the extent required by applicable law, rule or regulation.

      Perquisites and Other Benefits
    We provide financial counseling benefits for our named executive officers. For more information on perquisites, see ―Executive
Compensation—Summary Compensation Table.‖

     Our named executive officers are entitled to participate in and receive employer contributions to our 401(k) plan and salaried
supplemental retirement plan. For more information on employer contributions to our tax-qualified defined contribution retirement plans, see
―Executive Compensation—Summary Compensation Table.‖

      In 2007, we established a non-qualified deferred compensation plan that allows eligible participants, including our named executive
officers, to defer portions of their annual base salary and annual bonus, as well as to receive employer matching contributions with respect to
deferrals, that would exceed IRS limits under our 401(k) plan. We funded a rabbi trust in connection with the deferred compensation plan.

      Our named executive officers are eligible to participate in the same benefit plans provided to our other salaried employees, including
health and welfare plans.

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                                                       EXECUTIVE COMPENSATION

      The tables in this section of the prospectus provide information regarding the compensation that we paid and provided to our named
executive officers and directors for 2007. The footnotes to these tables provide important information to explain the values presented in the
tables and are an important part of our disclosures related to our executive officer and director compensation.

Summary Compensation Table
      The following table sets forth information regarding compensation that we paid and provided to our named executive officers for 2007:

                                                                                                Non-Equity
                                                                               Option          Incentive Plan     All Other
          Name and Principal Position           Year        Salary            Awards(2)        Compensation     Compensation             Total
Michael A. Jackson
  President, Chief Executive Officer, and
  Director                                      2007     $ 408,333 (1)        $ 66,355        $     166,240     $     55,663 (3)     $ 696,591
Robert P. Mundy
  Senior Vice President and Chief
  Financial Officer                             2007     $ 235,175               14,653       $      67,430     $     54,699 (4)     $ 371,957
Lyle J. Fellows
  Senior Vice President of
  Manufacturing                                 2007     $ 259,880               14,653       $      78,060     $     81,404 (5)     $ 433,997
Michael A. Weinhold
  Senior Vice President of Sales and
  Marketing                                     2007     $ 255,161               14,653       $      67,430     $     50,826 (6)     $ 388,070
Peter H. Kesser
  Vice President, General Counsel and
  Secretary                                     2007     $ 238,750                9,769       $      59,930     $     21,680 (7)     $ 330,129

(1)   In January 2008, Mr. Jackson’s annual base salary was increased from $400,000 to $450,000, with retroactive effect to November 1,
      2007, as described below under ―Employment Agreements — Michael A. Jackson.‖ Such retroactive base salary increase was provided
      in the form of a lump sum payment equal to the aggregate amount of base salary that would otherwise have been paid from November
      2007 through January 2008, had such pay increase taken effect on November 1, 2007.
(2)   Represents 2007 FAS123R expense relating to Class B Units, without any reduction for risk of forfeiture.
(3)   Mr. Jackson received $11,853 in employer matching contributions to the 401(k) plan, $9,000 in employer contributions to the salaried
      supplemental retirement plan, $8,590 in deferred compensation, $2,947 for financial counseling and $23,273 in relocation reportable
      income.
(4)   Mr. Mundy received $11,718 in employer matching contributions to the 401(k) plan, $11,250 in employer contributions to the salaried
      supplemental retirement plan, $4,338 in deferred compensation, $4,614 for financial counseling and $22,779 for unused vacation.
(5)   Mr. Fellows received $8,963 in employer matching contributions to the 401(k) plan, $20,537 in employer contributions to the salaried
      supplemental retirement plan, $21,593 in deferred compensation, $5,000 for financial counseling, $25,289 for unused vacation and $22
      as gift/awards.
(6)   Mr. Weinhold received $11,700 in employer matching contributions to the 401(k) plan, $11,250 in employer contributions to the salaried
      supplemental retirement plan, $5,079 in deferred compensation, $3,025 for 2007 financial counseling and $19,772 for unused vacation.
(7)   Mr. Kesser received $11,700 in employer matching contributions to the 401(k) plan, $9,000 in employer contributions to the salaried
      supplemental retirement plan and $980 in deferred compensation.

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Grants of Plan-Based Awards
      The following table sets forth information regarding awards of Class B Units and Class C Units granted to our named executive officers
in 2007:

                                                                                                              All Other
                                                                                                               Awards:                Grant Date
                                                                                                              Number of              Fair Value of
                                         Name                                                Grant Date        Units (#)             Awards ($)(3)
Michael A. Jackson                                                                             02/16/07          6,666 (1)       $        266,641
                                                                                               02/16/07         13,333 (2)                    —

(1)   Award of Class B Units.
(2)   Award of Class C Units.
(3)   Represents grant date fair value of awards of Class B Units and Class C Units in accordance with FAS 123R.

Employment Agreements
      Michael A. Jackson. Effective November 20, 2006, we entered into an employment agreement with Michael A. Jackson, pursuant to
which Mr. Jackson will serve as our Chief Executive Officer for a three-year term, with automatic renewal for additional one-year periods
unless either party gives notice of non-extension in accordance with the terms of the agreement.

      Under Mr. Jackson’s employment agreement, he is entitled to receive an annual base salary of $400,000, subject to increase at the
discretion of our Board of Directors. His salary was increased from $400,000 to $450,000 in January 2008 with retroactive effect to the first
day of November 2007, the month during which he completed his first year of employment with us. Mr. Jackson also is entitled to receive an
annual bonus with a target bonus equal to 100% of his then current annual base salary. In connection with Mr. Jackson’s relocation to
Memphis, Tennessee, the employment agreement also provides for a lump sum payment of $10,000 and the reimbursement of certain
relocation expenses incurred by Mr. Jackson. The employment agreement also provides for the grant to Mr. Jackson of a sign-on award,
effective November 20, 2006, of 2,000 Class A Units, 1,667 Class B Units and 3,334 Class C Units. In addition to the foregoing award under
his employment agreement, on February 16, 2007, Mr. Jackson purchased an additional 8,000 Class A Units and received additional grants of
6,666 Class B Units and 13,333 Class C Units—for a total of 10,000 Class A Units, 8,333 Class B Units and 16,667 Class C Units.

      The employment agreement will terminate upon Mr. Jackson’s death and may be terminated by us upon the Disability of Mr. Jackson, by
us for or without Cause, or by Mr. Jackson for or without Good Reason (as each capitalized term is defined in the agreement). Upon the
termination of Mr. Jackson’s employment for any reason, he will be entitled to receive (1) any unpaid amount of his annual base salary through
the date of termination, (2) any annual bonus that he earned for any year ended prior to the date of termination and that is unpaid as of such
date, (3) any reimbursable expenses owed to him, (4) any accrued vacation pay owed to him, (5) any amount arising from his participation in
our employee benefit plans and programs, (6) continued health insurance coverage for up to 24 months after the date of termination, (7)
reimbursement for any group life insurance conversion costs, and (8) a contribution to our deferred compensation plan in respect of his lost
retirement benefits during the 24-month period after the date of termination. If Mr. Jackson’s employment is terminated by us without Cause or
by him for Good Reason, Mr. Jackson will be entitled to receive, in addition to the payments and benefits described in the preceding sentence,
(1) his annual base salary for 18 months after the date of termination and (2) an amount equal to 1.5 multiplied by the amount, if any, of the
annual bonus payable to him with respect to the year immediately preceding the year in which the date of termination occurs.

      Under his employment agreement, Mr. Jackson is subject to non-disclosure and non-disparagement obligations in perpetuity, as well as
certain non-competition and non-solicitation obligations during the term and the 18-month period following the termination of his employment
for any reason.

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Outstanding Equity Awards
    The following table shows the outstanding awards of Class B Units and Class C Units held by our named executive officers as of
December 31, 2007:

                                                                                                                                    Equity Incentive
                                                                                              Equity Incentive                       Plan Awards:
                                                                                               Plan Awards:                         Market or Payout
                                                                                              Number of Units                        Value of Units
                                                                                               That Have Not                         That Have Not
                                     Name                                                        Vested (#)                           Vested ($)(3)
Michael A. Jackson                                                                                      6,667 (1)                                 —
                                                                                                       16,667 (2)                                 —
Robert P. Mundy                                                                                         1,500 (1)                                 —
                                                                                                        3,750 (2)                                 —
Lyle J. Fellows                                                                                         1,500 (1)                                 —
                                                                                                        3,750 (2)                                 —
Michael A. Weinhold                                                                                     1,500 (1)                                 —
                                                                                                        3,750 (2)                                 —
Peter H. Kesser                                                                                         1,167 (1)                                 —
                                                                                                        2,917 (2)                                 —

(1)   Awards of Class B Units, which vest in five annual installments of 20% each beginning on August 1, 2007.
(2)   Awards of Class C Units, which will vest only if certain performance targets are met.
(3)   The market or payout value of the unvested Class B Units and Class C Units is not determinable, because there is no public market for
      the Class B Units and Class C Units. The Class B Units and Class C Units represent profit interests in Verso Paper Management LP,
      which will have value only if the value of Verso Paper Management LP increases following the date on which the awards of such Class
      B Units and Class C Units are granted and only after the aggregate amount of capital contributions in respect of all Class A Units has
      been repaid to the holders of Class A Units.

Units Vested
      The following table shows the number of Class B Units that vested for each of our named executive officers in 2007. No Class C Units
vested in 2007.

                                         Name                                                                  Equity Incentive Plan Awards
                                                                                                      Number of Units
                                                                                                       Acquired on                     Value Realized
                                                                                                       Vesting (#)(1)                  on Vesting (2)
Michael A. Jackson                                                                                               1,666                            —
Robert P. Mundy                                                                                                    375                            —
Lyle J. Fellows                                                                                                    375                            —
Michael A. Weinhold                                                                                                375                            —
Peter H. Kesser                                                                                                    291                            —

(1)   Awards of Class B Units, which vest in five annual installments of 20% each beginning on August 1, 2007.
(2)   The market value of vested Class B Units is not determinable, because there is no public market for the Class B units. The Class B Units
      represent profit interests in Verso Paper Management LP, which will have value only if the value of Verso Paper Management LP
      increases following the date on which the awards of such Class B Units are granted and only after the aggregate amount of capital
      contributions in respect of all Class A Units has been repaid to the holders of Class A Units.

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Potential Payments Upon Termination of Employment or Change in Control
      Employee Severance Plan. Under our employee severance plan, each of our named executive officers is eligible to receive a termination
allowance in the event of a termination of employment due to certain events, including the executive’s job elimination, a facility closing, the
executive’s disability, or the executive’s inability to perform the requisite duties of his position despite his reasonable efforts. The termination
allowance is a lump-sum amount equal to the number of years or partial years of applicable service with us multiplied by the amount of two
weeks of base salary. The termination allowance may not be less than the amount of four weeks of base salary. In addition, it is our practice to
provide a pro rata amount of annual VIP bonus compensation that would have otherwise been paid to the executive officer if employment had
continued through the end of the applicable calendar year.

      Confidentiality and Non-Competition Agreements. Each of our named executive officers (with the exception of Mr. Jackson) is a party to
a confidentiality and non-competition agreement, pursuant to which the executive is subject to non-competition obligations for 12 months
following termination of employment. The confidentiality and non-competition agreement provides that if the executive is unable, despite
diligent search, to obtain employment consistent with his experience and education, the executive may be entitled to a monthly severance
benefit equal to his monthly base pay received in the month prior to the month in which such termination of employment occurs, payable for
each month or partial month of unemployment during the 12-month non-competition period. The executive’s entitlement to this ―pay for no
play‖ monthly severance benefit is subject to our receipt and reasonable verification of the executive’s written notice of the efforts he has made
to secure employment that does not conflict with his non-competition obligations. In addition, the executive is entitled to receive the annual
bonus for the year preceding the executive’s termination (to the extent not previously paid), a prorated amount of the executive’s annual bonus
for the year in which the executive’s termination occurred, continued health insurance coverage for up to 24 months after the date of
termination, reimbursement for any group life insurance conversion costs, and a contribution to our deferred compensation plan in respect of
the executive’s lost retirement benefits during the 24-month period after the date of termination.

      Estimated Severance Payments. Assuming the termination of employment of all of our named executive officers as of December 31,
2007, under the circumstances described above, the executives would be entitled to the following severance payments under our employee
severance plan and the applicable employment agreement (in the case of Mr. Jackson) or confidentiality and non-competition agreement (in the
case of the other named executive officers):

                                                                                                     Employee
                                                                                                     Severance      Applicable
                                           Name                                                        Plan         Agreement               Total(2)
Michael A. Jackson                                                                                         —       $ 675,000 (1)         $ 675,000
Robert P. Mundy                                                                                  $ 227,788         $ 236,900             $ 464,688
Lyle J. Fellows                                                                                  $ 273,127         $ 263,011             $ 536,138
Michael A. Weinhold                                                                              $ 138,402         $ 257,032             $ 395,434
Peter H. Kesser                                                                                  $      18,462     $ 240,000             $ 258,462




(1)   This amount assumes an annual base salary of $450,000, which reflects the increase in Mr. Jackson’s annual base salary in January 2008
      with retroactive effect to November 1, 2007 (as described above under ―Employment Agreements — Michael A. Jackson‖). This amount
      includes only the portion of Mr. Jackson’s severance payment equal to 1.5 times his annual base salary, as no annual bonus was payable
      in respect of the calendar year immediately preceding the assumed year of termination. To the extent that an annual bonus is payable to
      Mr. Jackson in respect of 2008 or later, his severance payment also would include an amount equal to 1.5 times the annual bonus payable
      with respect to the year immediately preceding the year in which any such termination of employment occurs.
(2)   Total does not include the value of unused vacation days or a prorated annual bonus under the VIP.

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      Class C Unit Awards. In the event of (i) the termination of employment of one of our named executive officers without ―Cause‖ (as
defined in the LP Agreement) on or following August 1, 2007, (ii) a ―Change in Control‖ (as defined in the LP Agreement) occurs within six
months following the date of such termination, and (iii) a specified internal rate of return is achieved at the time of such Change in Control,
then the Class C Units held by such terminated executive officer will accelerate and vest in full as of the date of such Change in Control. None
of our named executive officers receives any other incremental benefits due to a Change in Control, and in the event of a named executive
officer’s termination of employment in connection with a Change in Control, the executive will be eligible to receive only the severance
benefits described above.

Director Compensation
     The following table provides a summary of compensation paid to our non-employee directors for 2007. The table shows the amounts
earned by such persons for services rendered to us in all capacities in which they served.

                                                                                            Fees Earned
                                                                                             or Paid in          Option
                                        Name                                                  Cash (1)           Awards                  Total
Michael E. Ducey                                                                            $    46,000         $ 79,038 (2)         $ 125,038
Joshua J. Harris                                                                            $    56,000                              $ 56,000
Scott M. Kleinman                                                                           $    60,000                              $ 60,000
David W. Oskin                                                                              $    58,000                              $ 58,000
L.H. Puckett, Jr.                                                                           $    46,000                              $ 46,000
Jordan C. Zaken                                                                             $    60,000                              $ 60,000

(1)   Represents fees paid in cash during 2007.
(2)   Represents 2007 FAS 123R expense relating to the grant to Mr. Ducey of an award of 2,000 Class D Units in 2007. The Class D Units
      are intended to be substantially economically equivalent to stock options that are fully vested as of the date of grant.

Compensation Committee Report
     The Compensation Committee is currently composed of Scott M. Kleinman and Jordan C. Zaken. The members of the Compensation
Committee have reviewed and discussed with management the Compensation Discussion and Analysis set forth above. Based on the foregoing
review and discussion and such other matters the Compensation Committee deemed relevant and appropriate, the Compensation Committee
recommended to our Board of Directors that the Compensation Discussion and Analysis be included in this prospectus.

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                                                PRINCIPAL AND SELLING STOCKHOLDERS

      We are a wholly-owned, direct subsidiary of Verso Paper Management LP. Verso Paper Investments LP is the general partner of Verso
Paper Management LP and controls all of the voting interests in Verso Paper Management LP. In connection with the Transactions, Apollo and
International Paper made investments in Verso Paper Investments LP, and certain members of our senior management made investments in
Verso Paper Management LP. Verso Paper Investments Management LLC, an affiliate of Apollo Global Management LLC, is the general
partner of Verso Paper Investments LP and controls all of the voting interests in Verso Paper Investments LP. International Paper’s limited
partner interest in Verso Paper Investments LP does not have any voting power, and International Paper does not hold any voting securities of
Verso Paper Investments LP. Through its control of Verso Paper Investments LP, Apollo controls, and after this offering will continue to
control us.

      The following table sets forth sets forth information regarding the beneficial ownership of our shares of common stock before and after
the consummation of this offering that are held by:
        •    each person who is known to us to be the beneficial owner of more than 5% of our outstanding shares of common stock;
        •    each of our directors and named executive officers; and
        •    all of our directors and executive officers as a group.

      Except as otherwise indicated, the persons or entities listed below have sole voting and investment power with respect to the shares
beneficially owned by them. Verso Paper Management LP, an affiliate of Apollo Global Management LLC and our principal stockholder
following the consummation of this offering, will sell up to           shares of our common stock in this offering in the event the underwriters
exercise their right to purchase additional shares.

      For purposes of this table, ―beneficial ownership‖ is determined in accordance with Rule 13d-3 under the Securities Exchange Act of
1934, pursuant to which a person or group of persons is deemed to have beneficial ownership of any shares of common stock that such person
or group has the right to acquire within 60 days after the date of this prospectus. For purposes of computing the percentage of outstanding
shares of our common stock held by each person or group of persons named above, any shares that such person or group has the right to
acquire within 60 days after the date of this prospectus are deemed to be outstanding but are not deemed to be outstanding for the purpose of
computing the percentage ownership of any other person.

                                                                                                   Beneficial ownership        Beneficial ownership
                                                                                                    after this offering             assuming
                                                                                                       assuming no                 full exercise
                                                                                                   exercise of option to           of option to
                                                                Beneficial ownership               purchase additional         purchase additional
Name and Address of Owner                                       prior to this offering                    shares                      shares
                                                             Number              Percent         Number            Percent   Number           Percent
Apollo(1)                                                                                100 %
Michael A. Jackson(2)(3)                                         —                       —
Robert P. Mundy(2)(4)                                            —                       —
Lyle J. Fellows(2)(5)                                            —                       —
Michael A. Weinhold(2)(6)                                        —                       —
Peter H. Kesser(2)(7)                                            —                       —
Michael E. Ducey(2)(8)                                           —                       —
David W. Oskin(2)(9)                                             —                       —
L.H. Puckett, Jr.(2)(10)                                         —                       —
Joshua J. Harris(11)(12)                                                                 100 %
Scott M. Kleinman(11)(13)                                                                100 %
Jordan C. Zaken(11)(14)                                                                  100 %
David B. Sambur(15)                                              —                       —
All directors and officers as a group                                                    100 %

*     Signifies less than 1%.

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(1)   All of our outstanding shares of common stock are currently owned by Verso Paper Management LP . Verso Paper Investments LP is the
      general partner of Verso Paper Management LP, and Verso Paper Investments Management LLC is the general partner of Verso Paper
      Investments LP. CMP Apollo LLC is the sole and managing member of Verso Paper Investments Management LLC, Apollo
      Management VI, L.P. (―Management VI‖) is the sole and managing member of CMP Apollo LLC, AIF VI Management, LLC (―AIF VI
      LLC‖) is the general partner of Management VI, Apollo Management, L.P. (―Apollo Management‖) is the sole member and manager of
      AIF VI LLC, and Apollo Management GP, LLC (―Apollo Management GP‖) is the general partner of Apollo Management. Leon Black,
      Joshua Harris and Marc Rowan are the principal executive officers and directors of Apollo Management GP. Each of Verso Paper
      Investments LP, Verso Paper Investments Management LLC, CMP Apollo LLC, Management VI, AIF VI LLC, Apollo Management,
      Apollo Management GP and Messrs. Black, Harris and Rowan disclaims beneficial ownership of the shares owned by Verso Paper
      Management LP, except to the extent of any pecuniary interest therein. The address of Messrs. Black, Harris and Rowan, and of each of
      Verso Paper Management LP, Verso Paper Investments LP, Verso Paper Investments Management LLC, CMP Apollo LLC,
      Management VI, AIF VI LLC, Apollo Management and Apollo Management GP is c/o Apollo Management VI, L.P., 9 West 57th Street,
      New York, NY 10019.
(2)   The address of Messrs. Jackson, Mundy, Fellows, Weinhold, Kesser, Ducey, Oskin and Puckett is c/o Verso Paper Corp., 6775 Lenox
      Court, Suite 400, Memphis, Tennessee 38115-4436. Each of Messrs. Jackson, Mundy, Fellows, Weinhold and Kesser hold non-voting
      limited partner interests in Verso Paper Management LP.
(3)   Includes               shares of common stock held by Verso Paper Management LP to be received upon the exchange of Class A Units
      as well as Class B and C Units that are vested on the date of this prospectus or will be vested within 60 days thereafter.
(4)   Includes               shares of common stock held by Verso Paper Management LP to be received upon the exchange of Class A Units
      as well as Class B and C Units that are vested on the date of this prospectus or will be vested within 60 days thereafter.
(5)   Includes               shares of common stock held by Verso Paper Management LP to be received upon the exchange of Class A Units
      as well as Class B and C Units that are vested on the date of this prospectus or will be vested within 60 days thereafter.
(6)   Includes               shares of common stock held by Verso Paper Management LP to be received upon the exchange of Class A Units
      as well as Class B and C Units that are vested on the date of this prospectus or will be vested within 60 days thereafter.
(7)   Includes               shares of common stock held by Verso Paper Management LP to be received upon the exchange of Class A Units
      as well as Class B and C Units that are vested on the date of this prospectus or will be vested within 60 days thereafter.
(8)   Includes                shares of common stock held by Verso Paper Management LP to be received upon the exchange of Class D Units
      that are vested on the date of this prospectus or will be vested within 60 days thereafter.
(9)   Includes                shares of common stock held by Verso Paper Management LP to be received upon the exchange of Class D Units
      that are vested on the date of this prospectus or will be vested within 60 days thereafter.
(10) Includes               shares of common stock held by Verso Paper Management LP to be received upon the exchange of Class A Units
     as well as Class B and C Units that are vested on the date of this prospectus or will be vested within 60 days thereafter.
(11) Includes               shares of common stock beneficially owned by Verso Paper Management LP, an affiliate of Apollo Global
     Management LLC, as to which each of Messrs. Harris, Kleinman and Zaken, each of whom are partners of Apollo Management,
     expressly disclaim beneficial ownership, except to the extent of any pecuniary interest. The shares of common stock beneficially owned
     by Apollo are held directly by Verso Paper Management LP. The address of Messrs. Harris, Kleinman and Zaken is c/o Apollo
     Management VI, L.P., 9 West 57th Street, New York, New York 10019.

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(12) Includes                shares of common stock held by Verso Paper Management LP to be received upon the exchange of Class D Units
     that are vested on the date of this prospectus or will be vested within 60 days thereafter.
(13) Includes                shares of common stock held by Verso Paper Management LP to be received upon the exchange of Class D Units
     that are vested on the date of this prospectus or will be vested within 60 days thereafter.
(14) Includes                shares of common stock held by Verso Paper Management LP to be received upon the exchange of Class D Units
     that are vested on the date of this prospectus or will be vested within 60 days thereafter.
(15) Includes                shares of common stock held by Verso Paper Management LP to be received upon the exchange of Class D Units
     that are vested on the date of this prospectus or will be vested within 60 days thereafter. The address of Mr. Sambur is c/o Apollo
     Management VI, L.P., 9 West 57th Street, New York, New York 10019.

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                                CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

     The following discussion reflects our relationships and related party transactions as of and since the effective date of the Transactions and
does not reflect relationships prior to that time.

Management Agreement
       Upon completion of the Acquisition, Apollo entered into a management agreement with our indirect parent, Verso Paper Investments LP,
and our subsidiary, Verso Paper Holdings LLC, relating to the provision of certain financial and strategic advisory services and consulting
services. Under the agreement, upon our written request, Apollo has agreed to advise us with respect to matters that relate to proposed financial
transactions, acquisitions and other significant business matters. We pay Apollo an annual fee for its consulting and advising services in an
amount equal to the greater of $2.5 million and 1.25% of our Adjusted EBITDA, as defined in the indentures governing our outstanding notes.
In addition, Apollo has an exclusive right to act, subject to certain exceptions, in return for additional fees to be mutually agreed by the parties
to the management agreement, as our financial advisor or investment banker for any merger, acquisition, disposition, financing or the like if we
decide we need to engage someone to fill such role. We agreed to indemnify Apollo and their directors, officers and representatives for losses
relating to the services contemplated by the management agreement and the engagement of affiliates of Apollo pursuant to, and the
performance by them of the services contemplated by, the management agreement. Since August 1, 2006, we have paid fees to Apollo totaling
$5.3 million, which includes the fee we paid Apollo for its advisory services in connection with the Acquisition. Upon consummation of this
offering, the fee arrangement with Apollo will be terminated pursuant to the terms of the management agreement. Pursuant to the terms of the
management agreement, Apollo will receive a final fee in the amount of $            upon the consummation of this offering.

Transition Arrangements
      Upon completion of the Acquisition, we entered into a transition services agreement with International Paper whereby International Paper
provided us with certain services specified in the agreement that are necessary for us to run as a stand-alone business. Among the transitional
services provided by International Paper or its designated third-party providers were technical services, application support and maintenance,
financial services, telecommunications services, payroll, health and welfare benefits administration, real estate support and research and
development support services. The transition services agreement provided for terms generally ranging from six to twelve months following the
consummation of the Acquisition. The transition services agreement has expired, and we no longer receive any transitional services from
International Paper.

Supply Agreement
      Upon completion of the Acquisition, we entered into an agreement with International Paper’s beverage packaging business pursuant to
which we arranged for the sale of coated groundwood paper produced from one of its paper machines at its Pine Bluff, Arkansas, mill for a
selling commission of 3%. This agreement required that we sell 100% of the output of coated paper from this mill until the end of 2006 at then
prevailing market prices. This agreement has expired.

Management Limited Partnership Agreement
      In connection with the Acquisition, our direct parent, Verso Paper Management LP, Apollo and certain members of management who
invested in Verso Paper Management LP entered into the LP Agreement. Each of our executive officers is a party to the LP Agreement. The LP
Agreement provides for customary restrictions on transfer, put and call rights, tag-along rights, drag-along rights and registration rights which
apply to their limited partner interests in Verso Paper Management LP. The LP Agreement also contains customary non-solicitation and
non-competition covenants applicable to management for one year following the termination of employment. Verso Paper Investments LP, our
indirect parent, also entered into an agreement with International Paper granting similar rights described above.

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       Simultaneously with this offering, the LP Agreement will be amended such that each holder will have the right, subject to certain
conditions as described below, to require that Verso Paper Management LP effect an exchange of his Units for shares of our common stock
held by Verso Paper Management LP, in accordance with the following procedures. After (i) the date on which the Units were purchased or (ii)
the date on which the Units vest, as the case may be, each holder may opt to exercise his exchange right with respect to all or a portion of such
holder’s Units. Upon proper exercise of any holder’s exchange right, Verso Paper Management LP will be required to effect the exchange by
delivering shares of our common stock held by it to such holder in an amount equal to the number of Units being exchanged, calculated on a
one-to-one basis. The ability of each executive to exercise the exchange right with respect to any Units that he holds will be subject to transfer
restrictions, repurchase rights and piggy-back registration rights, to the extent that each such restriction or right applies to the Units held by
such executive under the existing LP Agreement. The tag-along and drag-along rights set forth in the existing LP Agreement terminate
immediately upon the consummation of this offering.

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                                                     DESCRIPTION OF CAPITAL STOCK

       The following is a description of the material terms of our amended and restated certificate of incorporation and bylaws as each will be
in effect as of the consummation of the Merger. We refer you to our amended and restated certificate of incorporation and bylaws, copies of
which have been filed as exhibits to the registration statement relating to this offering.

      Upon completion of this offering, there will be           shares of common stock outstanding and no shares of preferred stock
outstanding.

Common Stock
      Pursuant to our amended and restated certificate of incorporation, we will be authorized to issue up to                 shares of common
stock, $0.01 par value per share. Holders of common stock will be entitled to one vote for each share held on all matters submitted to a vote of
stockholders and will not have cumulative voting rights. Accordingly, holders of a majority of the shares of common stock entitled to vote in
any election of directors may elect all of the directors standing for election. Holders of common stock are entitled to receive ratably such
dividends, if any, as may be declared by our board of directors out of funds legally available therefor, subject to any preferential dividend rights
of outstanding preferred stock. Upon our liquidation, dissolution or winding up, the holders of common stock are entitled to receive ratably our
net assets available after the payment of all debts and other liabilities and subject to the prior rights of any outstanding preferred stock. Holders
of our common stock have no preemptive, subscription, redemption or conversion rights. The outstanding shares of common stock are, and the
shares offered by us hereby will be, when issued and paid for, fully paid and nonassessable. If we issue any preferred stock, the rights,
preferences and privileges of holders of common stock will be subject to, and may be adversely affected by, the rights of the holders of our
preferred stock. See ―—Preferred Stock.‖

Preferred Stock
      Pursuant to the terms of our amended and restated certificate of incorporation, we will be authorized to issue up to              shares of
preferred stock, $0.01 par value per share. Our board of directors is authorized, subject to any limitations prescribed by law, without further
stockholder approval, to issue such shares of preferred stock in one or more series. Each such series of preferred stock shall have such rights,
preferences, privileges and restrictions, including voting rights, dividend rights, conversion rights, redemption privileges and liquidation
preferences, as shall be determined by our board of directors.

      The purpose of authorizing our board of directors to issue preferred stock and determine its rights and preferences is to eliminate delays
associated with a stockholder vote on specific issuances. The issuance of preferred stock, while providing desirable flexibility in connection
with possible acquisitions and other corporate purposes, could have the effect of making it more difficult for a third party to acquire, or of
discouraging a third party from attempting to acquire, a majority of our outstanding voting stock. The existence of the authorized but
undesignated preferred stock may have a depressive effect on the market price of our common stock.

Certain Corporate Anti-Takeover Provisions
      Our amended and restated certificate of incorporation and bylaws will contain a number of provisions relating to corporate governance
and to the rights of stockholders. Certain of these provisions may be deemed to have a potential ―anti-takeover‖ effect in that such provisions
may delay, defer or prevent a change of control of the Company. These provisions include:

Preferred Stock
     Our board of directors has authority to issue series of preferred stock with such voting rights and other powers as the board of directors
may determine, as described above.

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Classified Board
     Our board of directors will be classified into three classes. Each director will serve a three year term and will stand for re-election once
every three years.

Removal of Directors, Vacancies
      Our stockholders will be able to remove directors only for cause and only by the affirmative vote of the holders of a majority of the
outstanding shares of our capital stock entitled to vote in the election of directors. Vacancies on our board of directors may be filled only by a
majority of our board of directors.

No Cumulative Voting
       Our amended and restated certificate of incorporation will provide that stockholders do not have the right to cumulative votes in the
election of directors. Cumulative voting rights would have been available to the holders of our common stock if our amended and restated
certificate of incorporation had not negated cumulative voting.

No Stockholder Action by Written Consent; Calling of Special Meetings of Stockholders
     Our amended and restated certificate of incorporation will not permit stockholder action without a meeting by consent except for the
unanimous consent of all holders of our common stock. They also will provide that special meetings of our stockholders may be called only by
our board of directors or the chairman of our board of directors.

Advance Notice Requirements for Stockholder Proposals and Director Nominations
     Our bylaws will provide that stockholders seeking to nominate candidates for election as directors or to bring business before an annual
meeting of stockholders must provide timely notice of their proposal in writing to the corporate secretary.

      Stockholders at an annual meeting may only consider proposals or nominations specified in the notice of meeting or brought before the
meeting by or at the direction of our board of directors or by a stockholder of record on the record date for the meeting, who is entitled to vote
at the meeting and who has delivered timely written notice in proper form to our secretary of the stockholder’s intention to bring such business
before the meeting.

Delaware Takeover Statute
     Our amended and restated articles of incorporation provides that we are not governed by Section 203 of the General Corporation Law of
Delaware which, in the absence of such provisions, would have imposed additional requirements regarding mergers and other business
combinations.

Transfer Agent and Registrar
      The transfer agent and registrar for the common stock is          .

Exchange Listing
      We will apply for listing of our common stock on the New York Stock Exchange under the symbol ―VRS.‖

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                                                  SHARES ELIGIBLE FOR FUTURE SALE

      We cannot predict what effect, if any, market sales of shares of common stock or the availability of shares of common stock for sale will
have on the market price of our common stock. Nevertheless, sales of substantial amounts of common stock in the public market, or the
perception that such sales could occur, could materially and adversely affect the market price of our common stock and could impair our future
ability to raise capital through the sale of our equity or equity-related securities at a time and price that we deem appropriate.

      Upon the closing of this offering, we will have outstanding an aggregate of approximately                shares of common stock. Of the
outstanding shares, the shares sold in this offering will be freely tradable without restriction or further registration under the Securities Act,
except that any shares held by our ―affiliates,‖ as that term is defined under Rule 144 of the Securities Act, may be sold only in compliance
with the limitations described below. The remaining outstanding shares of common stock will be deemed ―restricted securities‖ as that term is
defined under Rule 144. Restricted securities may be sold in the public market only if registered or if they qualify for an exemption from
registration under Rule 144 under the Securities Act, which are summarized below.

Rule 144
      The availability of Rule 144 will vary depending on whether restricted shares are held by an affiliate or a non-affiliate. Under Rule 144 as
in effect on the date of this prospectus, once we have been a reporting company subject to the reporting requirements of Section 13 or
Section 15(d) of the Exchange Act for 90 days, an affiliate who has beneficially owned restricted shares of our common stock for at least six
months would be entitled to sell within any three-month period a number of shares that does not exceed the greater of either of the following:
        •    1% of the number of shares of common stock then outstanding, which will equal               shares immediately after this offering;
             and
        •    the average weekly trading volume of our common stock during the four calendar weeks preceding the filing of a notice on
             Form 144 with respect to the sale.

      However, the six month holding period increases to one year in the event we have not been a reporting company for at least 90 days. In
addition, any sales by affiliates under Rule 144 are also limited by manner of sale provisions and notice requirements and the availability of
current public information about us.

      The volume limitation, manner of sale and notice provisions described above will not apply to sales by non-affiliates. For purposes of
Rule 144, a non-affiliate is any person or entity who is not our affiliate at the time of sale and has not been our affiliate during the preceding
three months. Once we have been a reporting company for 90 days, a non-affiliate who has beneficially owned restricted shares of our common
stock for six months may rely on Rule 144 provided that certain public information regarding us is available. The six month holding period
increases to one year in the event we have not been a reporting company for at least 90 days. However, a non-affiliate who has beneficially
owned the restricted shares proposed to be sold for at least one year will not be subject to any restrictions under Rule 144 regardless of how
long we have been a reporting company.

Rule 701
       Under Rule 701, common stock acquired upon the exercise of certain currently outstanding options or pursuant to other rights granted
under our stock plans may be resold, to the extent not subject to lock-up agreements, (1) by persons other than affiliates, beginning 90 days
after the effective date of this offering, subject only to the manner-of-sale provisions of Rule 144, and (2) by affiliates, subject to the
manner-of-sale, current public information and filing requirements of Rule 144, in each case, without compliance with the one-year holding
period requirement of Rule 144.

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Form S-8 Registration Statements
      We intend to file one or more registration statements on Form S-8 under the Securities Act following this offering to register our shares of
common stock that are issuable pursuant to our 2008 Incentive Award Plan. These registration statements are expected to become effective
upon filing. Shares covered by these registration statements will then be eligible for sale in the public markets, subject to any applicable
lock-up agreements and to Rule 144 limitations applicable to affiliates.

Lock-Up Agreements
     We, our officers, directors and certain of our existing security holders have agreed with the underwriters not to sell, dispose of or hedge
any of their common stock or securities convertible into or exchangeable for shares of common stock, during the period from the date of this
prospectus continuing through the date 180 days after the date of this prospectus, except with the prior written consent of Credit Suisse
Securities (USA) LLC.

     The 180-day restricted period described in the preceding paragraph will be automatically extended if: (1) during the last 17 days of the
180-day restricted period we issue an earnings release or announce material news or a material event; or (2) prior to the expiration of the
180-day restricted period, we announce that we will release earnings results during the 16-day period beginning on the last day of the 180-day
period, in which case, the restrictions described in the preceding paragraph will continue to apply until the expiration of the 18-day period
beginning on the issuance of the earnings release of the announcement of the material news or material event. See ―Underwriting.‖

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                                      MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS
                                        FOR NON-U.S. HOLDERS OF OUR COMMON STOCK

      The following is a general discussion of certain material United States federal income tax consequences relating to the purchase,
ownership and disposition of our common stock by a non-United States holder, but is not a complete analysis of all the potential tax
consequences relating thereto. This discussion does not constitute tax advice. For the purposes of this discussion, a non-United States holder is
any beneficial owner of our common stock that for United States federal income tax purposes is not a ―United States person,‖ and that holds
our common stock as a capital asset for U.S. federal income tax purposes (generally, property held for investment). For purposes of this
discussion, the term United States person means:
        •    an individual citizen or resident of the United States;
        •    a corporation (or other entity taxable as a corporation) created or organized in the United States or under the laws of the United
             States or any state thereof or the District of Columbia;
        •    an estate whose income is subject to United States federal income tax regardless of its source; or
        •    a trust (x) if a court within the United States is able to exercise primary supervision over the administration of the trust and one or
             more United States persons have the authority to control all substantial decisions of the trust or (y) which has made a valid election
             to be treated as a United States person under applicable United States Treasury regulations.

      If a partnership (or an entity treated as a partnership for U.S. federal income tax purposes) holds our common stock, the tax treatment of a
partner will generally depend on the status of the partner and upon the activities of the partnership. Accordingly, partnerships which hold our
common stock and partners in such partnerships should consult their own tax advisors.

       This discussion does not address all aspects of United States federal income taxation that may be relevant in light of a non-United States
holder’s special tax status or special circumstances. Former citizens or residents of the United States, insurance companies, tax-exempt
organizations, partnerships or other pass-through entities for U.S. federal income tax purposes, dealers in securities, banks or other financial
institutions, ―controlled foreign corporations,‖ ―passive foreign investment companies,‖ corporations that accumulate earnings to avoid United
States federal income tax and investors that hold our common stock as part of a hedge, straddle or conversion transaction are among those
categories of potential investors that are subject to special rules not covered in this discussion.

      This discussion does not assume any aspects of United States federal estate or gift taxation. In addition, this discussion does not address
any tax consequences arising under the laws of any state, local or non-United States taxing jurisdiction. Furthermore, the following discussion
is based on current provisions of the Internal Revenue Code of 1986, as amended, and Treasury Regulations and administrative and judicial
interpretations thereof, all as in effect on the date hereof, and all of which are subject to change, possibly with retroactive effect. No ruling has
been or will be sought from the Internal Revenue Service, or the IRS, with respect to the matters discussed below, and there can be no
assurance that the IRS will not take a contrary position regarding the tax consequences of the acquisition, ownership or disposition of our
common stock, or that any such contrary position would not be sustained by a court. Accordingly, each non-United States holder should consult
its own tax advisors regarding the United States federal, state, local and non-United States income and other tax consequences of acquiring,
holding and disposing of our common stock.

Dividends
      Distributions on our common stock generally will constitute dividends for United States federal income tax purposes to the extent paid
from our current or accumulated earnings and profits, as determined under United States federal income tax principles. Amounts not treated as
dividends for United States federal income tax

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purposes will constitute a return of capital and will first be applied against and reduce a holder’s adjusted tax basis in the common stock, but
not below zero, and then the excess, if any, will be treated as gain from the sale of the common stock.

      Amounts treated as dividends paid to a non-United States holder generally will be subject to withholding of United States federal income
tax either at a rate of 30% of the gross amount of the dividends or such lower rate as may be specified by an applicable income tax treaty. In
order to receive a reduced treaty rate, a non-United States holder must generally provide a valid IRS Form W-8BEN or other successor form
certifying qualification for the reduced rate.

      Dividends received by a non-United States holder that are effectively connected with a United States trade or business conducted by the
non-United States holder (and, if a treaty applies, attributable to the non-United States holder’s U.S. permanent establishment) are exempt from
such withholding tax. In order to obtain this exemption, a non-United States holder must provide a valid IRS Form W-8ECI or other successor
form properly certifying such exemption. However, such effectively connected dividends, although not subject to withholding tax, are
generally taxed at the same graduated rates applicable to United States persons, net of allowable deductions and credits. In addition to the
graduated tax, dividends received by a corporate non-United States holder that are effectively connected with a United States trade or business
of such holder may also be subject to a branch profits tax at a rate of 30% or such lower rate as may be specified by an applicable tax treaty.

      A non-United States holder may obtain a refund of any excess amounts withheld if an appropriate claim for refund is filed timely with the
IRS. If a non-United States holder holds our common stock through a foreign partnership or a foreign intermediary, the foreign partnership or
foreign intermediary will also be required to comply with additional certification requirements.

Gain on disposition of common stock
     A non-United States holder generally will not be subject to United States federal income tax on any gain realized upon the sale or other
disposition of our common stock unless:
        •    the gain is effectively connected with a United States trade or business of the non-United States holder and, if a tax treaty applies,
             is attributable to a United States permanent establishment maintained by such non-United States holder;
        •    the non-United States holder is an individual who is present in the United States for a period or periods aggregating 183 days or
             more during the taxable year in which the sale or other disposition occurs and other conditions are met; or
        •    our common stock constitutes a United States real property interest within the meaning of Code section 897(c)(2) by reason of our
             status as a ―United States real property holding corporation,‖ or ―USRPHC,‖ for United States federal income tax purposes at any
             time within the shorter of the five-year period preceding the disposition or the holder’s holding period for our common stock, the
             ―applicable period.‖

      Generally, a corporation is a ―United States real property holding corporation‖ if the fair market value of its ―United States real property
interests‖ equals or exceeds 50% of the sum of the fair market value of its worldwide real property interests plus its other assets used or held for
use in a trade or business. We believe that we are not currently and do not anticipate becoming a USRPHC. However, because the
determination of whether we are a USRPHC depends on the fair market value of our United States real property interests relative to the fair
market value of our other business assets, there can be no assurance that we will not become a USRPHC in the future. Even if we become a
USRPHC, as long as our common stock is regularly traded on an established securities market, within the meaning of the applicable Treasury
Regulations, such common stock will be treated as a United States real property interest with respect to a particular non-United States holder
only if such non-United States holder actually or constructively held more than 5 percent of such regularly traded common stock during the
applicable period.

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       Unless an applicable tax treaty provides otherwise, gain described in the first bullet point above generally will be subject to the United
States federal income tax imposed on net income on the same basis that applies to United States persons generally and, for corporate holders
under certain circumstances, the branch profits tax, but will generally not be subject to withholding tax. Gain described in the second bullet
point above (which may be offset by United States source capital losses) will be subject to a flat 30% United States federal income tax. Gain
described in the third bullet point above generally will be taxed in the same manner as gain described in the first bullet point above, except that
the branch profits tax will not apply. Non-United States holders should consult any applicable income tax treaties that may provide for different
rules.

Backup withholding and information reporting
      Generally, we must report annually to the IRS the amount of dividends paid, the name and address of the recipient, and the amount, if
any, of tax withheld, together with other information. A similar report is sent to the holder. These information reporting requirements apply
even if withholding was not required because the dividends were effectively connected dividends or withholding was reduced or eliminated by
an applicable tax treaty. Pursuant to tax treaties or other agreements, the IRS may make its reports available to tax authorities in the recipient’s
country of residence.

       Backup withholding (currently at a rate of 28%) will generally not apply to payments of dividends made by us or our paying agents, in
their capacities as such, to a non-United States holder if the holder has provided the certification described above that it is not a United States
person or has otherwise established an exemption, provided we or the paying agent have no actual knowledge or reason to know that the
beneficial owner is a United States person.

      Payments of the proceeds from a disposition (including a redemption) effected outside the United States by a non-United States holder
made by or through a foreign office of a broker generally will not be subject to information reporting or backup withholding. However,
information reporting (but generally not backup withholding) will apply to such a payment if the broker is a United States person, a controlled
foreign corporation for United States federal income tax purposes, a foreign person 50% or more of whose gross income is effectively
connected with a United States trade or business for a specified three year period, or a foreign partnership if (1) at any time during its tax year,
one or more of its partners are United States persons who, in the aggregate, hold more than 50 percent of the income or capital interest in such
partnership or (2) at any time during its tax year, it is engaged in the conduct of a trade or business in the United States, unless the broker has
documentary evidence in its records that the beneficial owner of the disposed stock is a non-United States holder or an exemption is otherwise
established, provided that the broker has no knowledge or reason to know that the beneficial owner is a United States person.

      Payment of the proceeds from a disposition by a non-United States holder of common stock made by or through the United States office
of a broker may be subject to information reporting and backup withholding will apply unless the non-United States holder certifies as to its
non-United States holder status under penalties of perjury or otherwise establishes an exemption from information reporting and backup
withholding, provided that the broker has no knowledge or reason to know that the beneficial owner is a United States person.

      Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules may be allowed as a refund or a
credit against a non-United States holder’s United States federal income tax liability provided the required information is furnished timely to
the IRS.

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                                                                 UNDERWRITING

      Under the terms and subject to the conditions contained in an underwriting agreement dated              , 2008, we have agreed to sell to
the underwriters named below, for whom Credit Suisse Securities (USA) LLC and Citigroup Global Markets Inc. are acting as representatives,
and each of the underwriters have severally agreed to purchase the following respective numbers of shares of common stock:

      Name                                                                                                                         Number of Shares
      Credit Suisse Securities (USA) LLC
      Citigroup Global Markets Inc.
      Deutsche Bank Securities Inc.
      Lehman Brothers Inc.
      Merrill Lynch, Pierce, Fenner & Smith
                   Incorporated
      Morgan Stanley & Co. Incorporated
      Total

      The underwriting agreement provides for a firm commitment underwriting, and if the underwriters purchase any of the shares presented
in the table above, they must purchase all of the shares. The underwriting agreement also provides that the underwriters’ obligation to purchase
shares of common stock depends on the satisfaction of the conditions contained in the underwriting agreement including:
        •     the obligation to purchase all of the shares of common stock offered hereby (other than those shares of common stock covered by
              their option to purchase additional shares as described below), if any of the shares are purchased;
        •     the representations and warranties made by us to the underwriters are true;
        •     there is no material change in our business or the financial markets; and
        •     we deliver customary closing documents to the underwriters.

Commissions and Expenses
      The following table summarizes the underwriting discounts and commissions we and the selling stockholder will pay to the underwriters.
These amounts are shown assuming both no exercise and full exercise of the underwriters’ option to purchase up to an
additional         shares from the selling stockholder. The underwriting fee is the difference between the initial price to the public and the
amount the underwriters pay to us for the shares.

                                                                                   Per Share                                        Total
                                                                   Without Over-               With Over-          Without Over-               With Over-
                                                                    allotment                  allotment            allotment                  allotment
Underwriting discounts and commissions paid by us
Underwriting discounts and commissions paid by
   selling stockholder
       The representatives of the underwriters has advised us that the underwriters propose to offer the shares of common stock directly to the
public at the public offering price on the cover of this prospectus and to selected dealers, which may include the underwriters, at such offering
price less a selling concession not in excess of $          per share. The underwriters may allow, and the selected dealers may re-allow, a
discount from the concession not in excess of $            per share to brokers and dealers. After the offering, the representatives may change the
offering price and other selling terms.

    The expenses of the offering that are payable by us are estimated to be approximately $                 (excluding underwriting discounts and
commissions).

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Option to Purchase Additional Shares
      Verso Paper Management LP, our principal stockholder and an affiliate of Apollo Global Management, LLC, has granted the
underwriters an option exercisable for 30 days after the date of this prospectus, to purchase, from time to time, in whole or in part, up to an
aggregate of           shares of our common stock held by it at the public offering price less underwriting discounts and commissions. This
option may be exercised if the underwriters sell more than            shares in connection with this offering. To the extent the underwriters
exercise this option, each underwriter will be committed, so long as the conditions of the underwriting agreement are satisfied, to purchase a
number of additional shares of common stock proportionate to that underwriter’s initial commitment as indicated in the preceding table, and
Verso Paper Management LP will be obligated to sell the additional shares of common stock to the underwriters.

Lock-Up Agreements
      We, all of our directors and executive officers and our existing stockholders have agreed that, without the prior written consent of Credit
Suisse Securities (USA) LLC, we and they will not directly or indirectly, (1) offer for sale, sell, pledge, or otherwise dispose of (or enter into
any transaction or device that is designed to, or could be expected to, result in the disposition by any person at any time in the future of) any
shares of common stock (including, without limitation, shares of common stock that may be deemed to be beneficially owned by us or them in
accordance with the rules and regulations of the SEC and shares of common stock that may be issued upon exercise of any options or warrants)
or securities convertible into or exercisable or exchangeable for common stock, (2) enter into any swap or other derivatives transaction that
transfers to another, in whole or in part, any of the economic consequences of ownership of the common stock, (3) make any demand for or
exercise any right or file or cause to be filed a registration statement, including any amendments thereto, with respect to the registration of any
shares of common stock or securities convertible, exercisable or exchangeable into common stock or any of our other securities, or (4) publicly
disclose the intention to do any of the foregoing for a period of 180 days after the date of this prospectus. Gifts to immediate family members
and certain other transfers or dispositions can be made prior to the end of the lock-up period, provided that the recipient of the shares agrees in
writing to be bound by the same restrictions on the transfer of shares. A sale of shares subject to lock-up agreements is also permitted prior to
the end of the lock-up period in connection with a qualifying merger or reorganization of the company.

      The 180-day restricted period described in the preceding paragraph will be extended if:
        •    during the last 17 days of the 180-day restricted period we issue an earnings release or material news or a material event relating to
             us occurs; or
        •    prior to the expiration of the 180-day restricted period, we announce that we will release earnings results during the 16-day period
             beginning on the last day of the 180-day period, in which case the restrictions described in the preceding paragraph will continue to
             apply until the expiration of the 18-day period beginning on the issuance of the earnings release or the announcement of the
             material news or occurrence of a material event, unless such extension is waived in writing by the representatives.

      Credit Suisse Securities (USA) LLC, in its sole discretion, may release the common stock and other securities subject to the lock-up
agreements described above in whole or in part at any time with or without notice. When determining whether or not to release common stock
and other securities from lock-up agreements, the representatives will consider, among other factors, the holder’s reasons for requesting the
release, the number of shares of common stock and other securities for which the release is being requested and market conditions at the time.

Offering Price Determination
      Prior to this offering, there has been no public market for our common stock. The initial public offering price will be negotiated between
the representatives and us. In determining the initial public offering price of our common stock, the representatives will consider:
        •    the history and prospects for the industry in which we compete;
        •    our financial information;

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        •    the ability of our management and our business potential and earning prospects;
        •    the prevailing securities markets at the time of this offering; and
        •    the recent market prices of, and the demand for, publicly traded shares of generally comparable companies.

Indemnification
     We have agreed to indemnify the underwriters against certain liabilities, including liabilities under the Securities Act, liabilities arising
from breaches of the representations and warranties contained in the underwriting agreement and to contribute to payments that the
underwriters may be required to make for these liabilities.

Stabilization, Short Positions and Penalty Bids
      The underwriters may engage in stabilizing transactions, short sales and purchases to cover positions created by short sales, and penalty
bids or purchases for the purpose of pegging, fixing or maintaining the price of our common stock, in accordance with Regulation M under the
Exchange Act.
        •    Stabilizing transactions permit bids to purchase the underlying security so long as the stabilizing bids do not exceed a specified
             maximum.
        •    A short position involves a sale by the underwriters of shares in excess of the number of shares the underwriters are obligated to
             purchase in the offering, which creates the syndicate short position. This short position may be either a covered short position or a
             naked short position. In a covered short position, the number of shares involved in the sales made by the underwriters in excess of
             the number of shares they are obligated to purchase is not greater than the number of shares that they may purchase by exercising
             their option to purchase additional shares. In a naked short position, the number of shares involved is greater than the number of
             shares in their option to purchase additional shares. The underwriters may close out any short position by either exercising their
             option to purchase additional shares, in whole or in part, and/or purchasing shares in the open market. In determining the source of
             shares to close out the short position, the underwriters will consider, among other things, the price of shares available for purchase
             in the open market as compared to the price at which they may purchase shares through their option to purchase additional shares.
             A naked short position is more likely to be created if the underwriters are concerned that there could be downward pressure on the
             price of the shares in the open market after pricing that could adversely affect investors who purchase in the offering.
        •    Syndicate covering transactions involve purchases of the common stock in the open market after the distribution has been
             completed in order to cover syndicate short positions.
        •    Penalty bids permit the representatives to reclaim a selling concession from a syndicate member when the common stock originally
             sold by the syndicate member is purchased in a stabilizing or syndicate covering transaction to cover syndicate short positions.

      These stabilizing transactions, syndicate covering transactions and penalty bids may have the effect of raising or maintaining the market
price of our common stock or preventing or retarding a decline in the market price of our common stock. As a result, the price of our common
stock may be higher than the price that might otherwise exist in the open market. These transactions may be effected on the New York Stock
Exchange or otherwise and, if commenced, may be discontinued at any time.

      Neither we nor any of the underwriters make any representation or prediction as to the direction or magnitude of any effect that the
transactions described above may have on the price of the common stock. In addition, neither we nor any of the underwriters make
representation that the underwriters will engage in these stabilizing transactions or that any transaction, once commenced, will not be
discontinued without notice.

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Electronic Distribution
      A prospectus in electronic format may be made available on the Internet sites or through other online services maintained by one or more
of the underwriters and/or selling group members participating in this offering, or by their affiliates. In those cases, prospective investors may
view offering terms online and, depending upon the particular underwriter or selling group member, prospective investors may be allowed to
place orders online. The underwriters may agree with us to allocate a specific number of shares for sale to online brokerage account holders.
Any such allocation for online distributions will be made by the underwriters on the same basis as other allocations.

      Other than the prospectus in electronic format, the information on any underwriter’s or selling group member’s website and any
information contained in any other website maintained by an underwriter or selling group member is not part of the prospectus or the
registration statement of which this prospectus forms a part, has not been approved and/or endorsed by us or any underwriter or selling group
member in its capacity as underwriter or selling group member and should not be relied upon by investors.

New York Stock Exchange
      We intend to apply to list our shares of common stock for quotation on the New York Stock Exchange under the symbol ―VRS.‖

Discretionary Sales
      The underwriters have informed us that they do not intend to confirm sales to discretionary accounts that exceed 5% of the total number
of shares offered by them.

Stamp Taxes
      Purchasers of the shares of our common stock offered in this prospectus may be required to pay stamp taxes and other charges under the
laws and practices of the country of purchase, in addition to the offering price listed on the cover page of this prospectus. Accordingly, we urge
you to consult a tax advisor with respect to whether you may be required to pay those taxes or charges, as well as any other tax consequences
that may arise under the laws of the country of purchase.

Relationships
      The underwriters may in the future perform investment banking and advisory services for us from time to time for which they may in the
future receive customary fees and expenses.

European Economic Area
       In relation to each member state of the European Economic Area that has implemented the Prospectus Directive (each, a relevant member
state), with effect from and including the date on which the Prospectus Directive is implemented in that relevant member state (the relevant
implementation date), an offer of securities described in this prospectus may not be made to the public in that relevant member state prior to the
publication of a prospectus in relation to the securities that has been approved by the competent authority in that relevant member state or,
where appropriate, approved in another relevant member state and notified to the competent authority in that relevant member state, all in
accordance with the Prospectus Directive, except that, with effect from and including the relevant implementation date, an offer of securities
may be offered to the public in that relevant member state at any time:
        •    to any legal entity that is authorized or regulated to operate in the financial markets or, if not so authorized or regulated, whose
             corporate purpose is solely to invest in securities or

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        •    to any legal entity that has two or more of (1) an average of at least 250 employees during the last financial year; (2) a total balance
             sheet of more than €43,000,000 and (3) an annual net turnover of more than €50,000,000, as shown in its last annual or
             consolidated accounts or
        •    in any other circumstances that do not require the publication of a prospectus pursuant to Article 3 of the Prospectus Directive.

     Each purchaser of securities described in this prospectus located within a relevant member state will be deemed to have represented,
acknowledged and agreed that it is a ―qualified investor‖ within the meaning of Article 2(1)(e) of the Prospectus Directive.

     For purposes of this provision, the expression an ―offer to the public‖ in any relevant member state means the communication in any form
and by any means of sufficient information on the terms of the offer and the securities to be offered so as to enable an investor to decide to
purchase or subscribe the securities, as the expression may be varied in that member state by any measure implementing the Prospectus
Directive in that member state, and the expression ―Prospectus Directive‖ means Directive 2003/71/EC and includes any relevant implementing
measure in each relevant member state.

      The sellers of the securities have not authorized and do not authorize the making of any offer of securities through any financial
intermediary on their behalf, other than offers made by the underwriters with a view to the final placement of the securities as contemplated in
this prospectus. Accordingly, no purchaser of the securities, other than the underwriters, is authorized to make any further offer of the securities
on behalf of the sellers or the underwriters.

United Kingdom
      This prospectus is only being distributed to, and is only directed at, persons in the United Kingdom that are qualified investors within the
meaning of Article 2(1)(e) of the Prospectus Directive (―Qualified Investors‖) that are also (i) investment professionals falling within
Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the ―Order‖) or (ii) high net worth entities,
and other persons to whom it may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (all such persons together being
referred to as ―relevant persons‖). This prospectus and its contents are confidential and should not be distributed, published or reproduced (in
whole or in part) or disclosed by recipients to any other persons in the United Kingdom. Any person in the United Kingdom that is not a
relevant persons should not act or rely on this document or any of its contents.

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                                                              LEGAL MATTERS

     The validity of the shares of common stock sold in this offering will be will be passed upon for us by Latham & Watkins LLP, New
York, New York. Certain legal matters relating to the validity of this offering will be passed upon for the underwriters by Davis Polk &
Wardwell, New York, New York.


                                                                   EXPERTS

      The combined financial statements of the Coated and Supercalendered Papers Division of International Paper Company (Predecessor) for
the year ended December 31, 2005, and for the seven months ended July 31, 2006, and the combined financial statements of Verso Paper One
Corp. (which has been renamed Verso Paper Corp.), Verso Paper Two Corp., Verso Paper Three Corp., Verso Paper Four Corp., and Verso
Paper Five Corp. (collectively the ―Company‖), legal entities under common control of Verso Paper Management LP, as of December 31, 2006
and 2007, and for the five months ended December 31, 2006 and the year ended December 31, 2007, included in this prospectus and the related
financial statement schedule included elsewhere in the registration statement have been audited by Deloitte & Touche LLP, an independent
registered public accounting firm, as stated in their reports appearing herein and elsewhere in this Registration Statement, which reports
(1) express an unqualified opinion on the combined financial statements of the Coated and Supercalendered Papers Division of International
Paper Company and which includes an explanatory paragraph referring to the preparation of the combined financial statements from the
separate records maintained by the Coated and Supercalendered Papers Division of International Paper Company and International Paper
Company and that the combined financial statements may not be indicative of the conditions that would have existed or the results of
operations if the Coated and Supercalendered Papers Division of International Paper Company had operated as an unaffiliated entity, and
(2) express an unqualified opinion on the combined financial statements and financial statement schedule of Verso Paper Corp. and which
includes explanatory paragraphs relating to Verso Paper Corp.’s change to adopt Statement of Financial Accounting Standard No. 158 and to
the acquisition of the Predecessor business, and has been so included in reliance upon the report of such firm given upon their authority as
experts in accounting and auditing.


                                             WHERE YOU CAN FIND MORE INFORMATION

      This prospectus is part of a registration statement on Form S-1 that we have filed with the Securities and Exchange Commission under the
Securities Act of 1933 covering the common stock we are offering. As permitted by the rules and regulations of the SEC, this prospectus omits
certain information contained in the registration statement. For further information with respect to us and our common stock, you should refer
to the registration statement and to its exhibits and schedules. We make reference in this prospectus to certain of our contracts, agreements and
other documents that are filed as exhibits to the registration statement. For additional information regarding those contracts, agreements and
other documents, please see the exhibits attached to this registration statement.

      You can read and copy the registration statement and the exhibits and schedules filed with the registration statement or any reports,
statements or other information we have filed or file, at the public reference facilities maintained by the SEC at 100 F Street, N.E., Washington,
D.C. 20549. You may also obtain copies of the documents from such offices upon payment of the prescribed fees. You may call the SEC at
1-800-SEC-0330 for further information on the operation of the public reference room. You may also request copies of the documents upon
payment of a duplicating fee by writing to the SEC. In addition, the SEC maintains a web site that contains reports and other information
regarding registrants (including us) that file electronically with the SEC, which you can access at www.sec.gov .

      In addition, you may request copies of this filing and such other reports as we may determine or as the law requires at no cost, by
telephone at (901) 369-4185, or by mail to Verso Paper Corp., 6775 Lenox Center Court, Suite 400, Memphis, Tennessee 38115-4436. Our
web site address is www.versopaper.com . Information on our web site is not considered part of this prospectus.

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                                             I NDEX TO FINANCIAL STATEMENTS

                                                                                                                                Page
Verso Paper Corp. (Successor) and the Coated and Supercalendered Papers Division of International Paper Company
  (Predecessor)
    Report of Independent Registered Public Accounting Firm                                                                      F-2
    Combined Balance Sheets                                                                                                      F-3
    Combined Statements of Operations                                                                                            F-4
    Combined Statement of Changes in Stockholders’ Equity                                                                        F-5
    Combined Statements of Cash Flows                                                                                            F-6
    Notes to Combined Financial Statements as of December 31, 2006 and for the Period August 1, 2006 (Date of Acquisition) to
      December 31, 2006                                                                                                          F-7
    Notes to Combined Financial Statements as of December 31, 2005 and for the Years Ended December 31, 2005 and 2004 and for
      the Seven-Month Period Ended July 31, 2006                                                                                F-28

                                                                 F-1
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 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of
Verso Paper Corp.
Memphis, Tennessee

       We have audited the accompanying combined balance sheets of Verso Paper One Corp. (which has been renamed Verso Paper Corp.),
Verso Paper Two Corp., Verso Paper Three Corp., Verso Paper Four Corp., and Verso Paper Five Corp. (collectively, the ―Company‖), legal
entities under common control of Verso Paper Management LP, as of December 31, 2007 and 2006 (Successor Company balance sheets), and
the related combined statements of operations, changes in stockholders’ equity, and cash flows for the year ended December 31, 2007 and the
five months ended December 31, 2006 (Successor Company operations). We have also audited the accompanying combined statements of
operations and cash flows of the Coated & Supercalendered Papers Division of International Paper Company (the ―Predecessor‖) for the seven
months ended July 31, 2006, and the year ended December 31, 2005 (Predecessor operations). These financial statements are the responsibility
of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

      We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those
standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.
Our audits include consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.
Accordingly, we express no such opinion . An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

      In our opinion, the Successor Company combined financial statements present fairly, in all material respects, the financial position of the
Company as of December 31, 2007 and 2006, and the results of its operations and its cash flows for the year ended December 31, 2007 and the
five months ended December 31, 2006, in conformity with accounting principles generally accepted in the United States of America. Further,
in our opinion, the Predecessor combined financial statements referred to above present fairly, in all material respects, the results of operations
and cash flows of the Predecessor for the seven months ended July 31, 2006, and the year ended December 31, 2005, in conformity with
accounting principles generally accepted in the United States of America.

    As discussed in Note 1 to the Successor Company combined financial statements, the Company adopted Statement of Financial
Accounting Standards (―SFAS‖) No. 158, Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans—an
Amendment of FASB Statements No. 87, 88, 106, and 132 ( R) , as of December 31, 2006.

     As discussed in Note 3 to the Successor Company combined financial statements, on August 1, 2006, the Company acquired the
Predecessor.

      As discussed in Note 1 to the Predecessor combined financial statements, the accompanying Predecessor combined financial statements
have been prepared from the separate records maintained by the Predecessor and International Paper Company and may not necessarily be
indicative of the conditions that would have existed or the results of operations if the Predecessor had been operated as an unaffiliated
company. Portions of certain expenses represent allocations made from corporate-office items applicable to International Paper Company as a
whole.

/s/ Deloitte & Touche LLP

Memphis, Tennessee
March 31, 2008

                                                                        F-2
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                                                VERSO PAPER CORP. (SUCCESSOR)
                                                   COMBINED BALANCE SHEETS

                                                                                                        December 31,         December 31,
(In thousands of U.S. dollars)                                                                              2007                 2006
ASSETS
Current Assets
    Cash                                                                                            $         58,533     $        112,479
    Accounts receivable—net                                                                                  121,189              113,430
    Accounts receivable from International Paper Company—net                                                  12,318                8,217
    Inventories                                                                                              119,620              140,503
    Prepaid expenses and other assets                                                                          3,935                5,880
           Total Current Assets                                                                              315,595              380,509
      Property, plant and equipment—net                                                                    1,160,239            1,212,256
      Reforestation                                                                                           11,144               10,007
      Intangibles and other assets—net                                                                        97,785               89,544
      Goodwill                                                                                                18,695               18,695
      TOTAL ASSETS                                                                                  $      1,603,458     $      1,711,011

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities
    Accounts payable                                                                                $        128,372     $        117,108
    Accounts payable to International Paper Company                                                            3,872               29,273
    Accrued liabilities                                                                                       93,012               80,362
    Short-term borrowings                                                                                      3,125                  —
    Current maturities of long-term debt                                                                       2,850                2,850
          Total Current Liabilities                                                                          231,231              229,593
      Long-term debt                                                                                       1,413,588            1,166,438
      Other liabilities                                                                                       33,740               34,961
         Total Liabilities                                                                                 1,678,559            1,430,992
    Commitments and contingencies (Note 16)                                                                      —                    —
Stockholders’ Equity
    Common stock—par value $0.01 (1,000 shares authorized and issued)                                            —                    —
    Paid-in-capital                                                                                           48,869              290,397
    Retained deficit                                                                                        (114,100 )             (2,637 )
    Accumulated other comprehensive loss                                                                      (9,870 )             (7,741 )
            Total Stockholders’ Equity                                                                       (75,101 )            280,019
      TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY                                                    $      1,603,458     $      1,711,011


                                          See notes to Successor’s combined financial statements.

                                                                   F-3
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                                    VERSO PAPER CORP. (SUCCESSOR) AND
              COATED AND SUPERCALENDERED PAPERS DIVISION OF INTERNATIONAL PAPER (PREDECESSOR)
                                                        COMBINED STATEMENTS OF OPERATIONS

                                                                                    Successor Combined                        Predecessor Combined
                                                                                                                          Seven
                                                                                                  Five Months            Months                  Year
                                                                            Year Ended               Ended                Ended                 Ended
                                                                            December 31,          December 31,           July 31,            December 31,
(In thousands of U.S. dollars, except per share data)                           2007                  2006                 2006                  2005
Net Sales                                                               $      1,628,753         $       706,833     $ 904,417            $    1,603,846

COSTS AND EXPENSES:
Cost of products sold exclusive of depreciation and
  amortization                                                                 1,403,055                 589,283          771,576              1,338,256
Depreciation and amortization                                                    123,169                  48,330           72,674                129,355
Selling, general, and administrative expenses                                     53,165                  14,393           34,348                 65,569
Restructuring and other charges                                                   19,395                  10,126             (322 )               10,419
OPERATING INCOME                                                                    29,969                44,701           26,141                  60,247

Interest income                                                                    (1,544 )               (1,798 )            (23 )                   (39 )
Interest expense                                                                  142,976                 49,136            8,414                  14,823
INCOME (LOSS) BEFORE INCOME TAXES                                                 (111,463 )              (2,637 )         17,750                  45,463
INCOME TAX EXPENSE                                                                     —                     —              6,993                  17,913
NET INCOME (LOSS)                                                       $         (111,463 )     $        (2,637 )   $     10,757         $        27,550

Loss per share                                                          $         (111,463 )     $        (2,637 )
Common shares outstanding                                                            1,000                 1,000


Included in the financial statement line items above are related
  party transactions as follows (Notes 14 and 15, respectively):
Net Sales                                                               $         191,358        $        71,541     $     83,797         $      167,933
Purchases included in cost of products sold                                        17,242                  2,515          119,471                198,234
Selling, general, and administrative expenses                                         —                      —             25,481                 35,707
Restructuring and other charges                                                     7,506                  6,100              —                      —

                        See notes to Successor’s combined financial statements and Predecessor’s combined financial statements.

                                                                            F-4
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                                                         VERSO PAPER CORP.
    COMBINED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY FOR THE PERIOD AUGUST 1, 2006 (DATE OF
                                ACQUISITION) TO DECEMBER 31, 2006
                              AND THE YEAR ENDED DECEMBER 31, 2007

                                                                                                            Accumulated
                                                                                                               Other                 Total
                                                   Common                                   Retained       Comprehensive         Stockholders’
(In thousands of U.S. dollars)                      Stock           Paid-in-Capital          Deficit           Loss                 Equity
Date of acquisition—August 1, 2006:
Capital contributions                              $    —       $          290,000      $          —       $         —       $        290,000
Net loss and comprehensive loss                         —                      —                (2,637 )             —                 (2,637 )
Equity award expense                                    —                      397                 —                 —                    397
Adjustment to initially apply FASB No. 158              —                      —                   —              (7,741 )             (7,741 )
Ending balance—December 31, 2006                   $    —       $          290,397      $       (2,637 )   $      (7,741 )   $        280,019

Beginning balance—January 1, 2007                  $    —       $          290,397      $      (2,637 )    $      (7,741 )   $        280,019
Net loss                                                —                      —             (111,463 )              —               (111,463 )
Other comprehensive income (loss):
  Net unrealized (losses) on derivative
     financial instruments                              —                       —                  —              (2,095 )              (2,095 )
  Defined benefit pension plan:
        Plan amendments                                 —                       —                  —                (846 )                (846 )
        Net gain                                        —                       —                  —                  27                    27
        Prior service cost amortization                 —                       —                  —                 785                   785
Comprehensive loss                                      —                       —            (111,463 )           (2,129 )           (113,592 )
Cash distributions                                      —                  (242,153 )              —                 —               (242,153 )
Equity award expense                                    —                       625                —                 —                    625
Ending balance—December 31, 2007                   $    —       $            48,869     $    (114,100 )    $      (9,870 )   $        (75,101 )


                                          See notes to Successor’s combined financial statements.

                                                                     F-5
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                                      VERSO PAPER CORP. (SUCCESSOR) AND
                  COATED AND SUPERCALENDERED PAPERS DIVISION OF INTERNATIONAL PAPER COMPANY
                                               (PREDECESSOR)
                                                 COMBINED STATEMENTS OF CASH FLOWS

                                                                            Successor Combined                        Predecessor Combined
                                                                                           Five Months                                    Year
                                                                   Year Ended                 Ended            Seven Months              Ended
                                                                   December 31,            December 31,           Ended               December 31,
(In thousands of U.S. dollars)                                         2007                    2006            July 31, 2006              2005
Cash Flows From Operating Activities:
    Net income (loss)                                             $   (111,463 )        $         (2,637 )     $     10,757         $      27,550
Adjustments to reconcile net income (loss) to net cash
  provided by (used in) operating activities
    Depreciation and amortization                                      123,217                    48,330             72,674               129,355
    Amortization of debt issuance costs                                  6,721                     2,289                —                     —
    Loss on disposal of fixed assets                                       942                        71              1,262                 6,043
    Other—net                                                           (1,504 )                     —                  686                 1,696
    Changes in assets and liabilities:
         Accounts receivable                                           (11,803 )                 (32,302 )           23,253               (30,502 )
         Inventories                                                    20,171                     5,438            (55,256 )                 432
         Prepaid expenses and other assets                              (8,226 )                 (11,435 )           (6,396 )                 604
         Accounts payable                                              (14,194 )                  64,800             (8,690 )              (4,162 )
         Accrued liabilities                                            11,118                    53,649                983               (14,249 )
Net cash provided by operating activities                               14,979                  128,203              39,273               116,767

Cash Flows From Investing Activities:
    Proceeds from sale of fixed assets                                   1,789                      —                    32                   117
    Cash paid for acquisition                                              —                 (1,374,221 )               —                     —
    Capital expenditures                                               (70,864 )                (27,790 )           (27,655 )             (53,096 )
Net cash used in investing activities                                  (69,075 )             (1,402,011 )           (27,623 )             (52,979 )

Cash Flows From Financing Activities:
    Repayments of debt                                                  (2,850 )                (25,713 )           (18,754 )                (963 )
    Net proceeds from debt issuance                                    250,000                1,195,000                 —                     —
    Dividends paid                                                    (242,153 )                    —                   —                     —
    Equity contributions (distributions)                                   —                    261,397               7,105               (62,816 )
    Short-term borrowing                                                 3,125                      —                   —                     —
    Debt issue costs                                                    (7,972 )                (44,398 )               —                     —
Net cash provided by (used in) financing activities                         150               1,386,286             (11,649 )             (63,779 )

Change In Cash                                                         (53,946 )                112,478                     1                    9
Cash:
    Beginning of period                                                112,479                            1              46                     37
      End of period                                               $     58,533          $       112,479        $         47         $           46

Supplemental Schedule Of Non-Cash Financing
  Activities:
    Non-cash equity investment                                    $         —           $         29,000       $        —           $          —

                        See notes to Successor’s combined financial statements and Predecessor’s combined financial statements.

                                                                         F-6
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                                                    VERSO PAPER CORP. (SUCCESSOR)
                                                 Notes to Combined Financial Statements
                    As of December 31, 2007 and for the Period August 1, 2006 (Date of Acquisition) to December 31, 2006

1. SUMMARY OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES
      Nature of our Business —Verso Paper Corp. (the ―Company‖), indirect parent company of Verso Paper Finance Holdings LLC and
Verso Paper Holdings LLC and a direct subsidiary of Verso Paper Management LP, is a holding company whose subsidiaries operate in three
operating segments: coated and supercalendared papers; hardwood market pulp; and other, consisting of specialty industrial paper. The
Company’s core business platform is as a producer of coated freesheet, coated groundwood, and uncoated supercalendered papers. These
products serve customers in the catalog, magazine, inserts, and commercial print markets. The Company includes mills and related woodyards
in Bucksport and Jay, Maine; Quinnesec, Michigan; and Sartell, Minnesota. The Company also includes investments in two energy producing
assets located at the Bucksport and Jay, Maine, facilities and a hardwood plantation located near Alexandria, Minnesota.

       Basis of Presentation —The accompanying combined financial statements include the accounts of Verso Paper One Corp. (which has
been renamed Verso Paper Corp.), Verso Paper Two Corp., Verso Paper Three Corp., Verso Paper Four Corp., and Verso Paper Five Corp.
(collectively, the ―Company‖), legal entities under common control of Verso Paper Management LP. The entities were formed on August 1,
2006, to acquire the net assets of the Coated and Supercalendered Papers Division of International Paper Company and the assets and certain
liabilities of Hybrid Poplar Fiber Farm (―Fiber Farm‖) from International Paper, as of August 1, 2006. See Note 3. As a result of the
Company’s 90% ownership interest, the Company pushed down its basis to the underlying assets and liabilities acquired based on the estimated
fair values. The combined financial statements include the accounts of Verso Paper Finance Holdings LLC and its wholly-owned, controlled
majority-owned and financially controlled subsidiaries. Verso Paper Finance Holdings Inc. is a wholly–owned subsidiary with no separate
operations. All intercompany balances and transactions are eliminated.

      Prior to the consummation of this offering, Verso Paper Two Corp., Verso Paper Three Corp., Verso Paper Four Corp., and Verso Paper
Five Corp. will merge with and into Verso Paper Corp. (the ―Merger‖). Upon consummation of the Merger, Verso Fiber Farm LLC, which is
currently a wholly-owned subsidiary of Verso Paper Five Corp., will become our wholly-owned subsidiary. In connection with Verso Fiber
Farm LLC becoming our wholly-owned subsidiary, the Company intends to use a part of the net proceeds from this offering to repay the
outstanding $10.0 million senior secured term loan of Verso Fiber Farm LLC and to transfer the remainder of this amount to its parent, Verso
Paper Management LP.

      Use of Estimates —The preparation of financial statements in conformity with accounting principles generally accepted in the United
States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure
of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the
reporting periods. Actual results could differ from these estimates.

      Revenue Recognition —Sales are net of rebates, allowances and discounts. Revenue is recognized when the customer takes title and
assumes the risks and rewards of ownership. Revenue is recorded at the time of shipment for terms designated f.o.b. (free on board) shipping
point. For sales transactions designated f.o.b. destination, which include export sales, revenue is recorded when the product is delivered to the
customer’s site and when title and risk of loss are transferred.

      Shipping and Handling Costs —Shipping and handling costs, such as freight to customer destinations, are included in cost of products
sold in the accompanying combined statement of operations. These costs, when included in the sales price charged for the Company’s products,
are recognized in net sales.

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      Planned Maintenance Costs —Maintenance costs for major planned maintenance shutdowns in excess of $0.5 million are deferred over
the period in which the maintenance shutdowns occur and expensed ratably over the period until the next major planned shutdown, since the
Company believes that operations benefit throughout that period from the maintenance work performed. Other maintenance costs are expensed
as incurred.

      Earnings Per Share —The Company computes earnings per share by dividing net income by the weighted average number of common
shares outstanding for each period.

      Cash and Cash Equivalents —Cash includes highly liquid investments with a maturity of three months or less at the date of purchase.

      Fair Value of Financial Instruments —Due to the short maturities of the Company’s receivables and payables, the carrying values of
these financial instruments approximate their fair values. The fair value of debt was approximately $1.4 billion at December 31, 2007.

      Concentrations of Credit Risk —Financial instruments, which consist primarily of trade accounts receivable, expose the Company to
concentrations of credit risk. The Company continually monitors the creditworthiness of its customers to whom credit is granted in the normal
course of business. Trade accounts receivable balances for net sales to unaffiliated customers were approximately $123.4 million at December
31, 2007, compared to $115.4 million at December 31, 2006.

      The Company establishes its allowance for doubtful accounts based upon factors surrounding the credit risks of specific customers,
historical trends, and other information. The allowance for doubtful accounts was approximately $1.7 million at December 31, 2007, compared
to $1.9 million at December 31, 2006. Bad debt expense was negligible for the year ended December 31, 2007, and for the five-month period
ended December 31, 2006.

      Inventories and Replacement Parts and Other Supplies —Inventory values include all costs directly associated with manufacturing
products: materials, labor, and manufacturing overhead. These values are presented at the lower of cost or market. Costs of raw materials,
work-in-progress, and finished goods are determined using the first-in, first-out method. Replacement parts and other supplies are stated using
the average cost method and are reflected in Inventories and Other assets in the combined balance sheet (see Notes 4 and 6).

      Property, Plant and Equipment —Plant, property, and equipment is stated at cost, net of accumulated depreciation. Interest is capitalized
on projects meeting certain criteria and is included in the cost of the assets. The capitalized interest is depreciated over the same useful lives as
the related assets. Expenditures for major repairs and improvements are capitalized, whereas normal repairs and maintenance are expensed as
incurred. Interest costs of $1.2 million was capitalized in 2007 and $0.2 million was capitalized in the five-month period ended December 31,
2006.

      Depreciation and amortization are computed using the straight line method for all assets over the assets’ estimated useful lives. Estimated
useful lives are as follows:

                                                                                                                Years
            Building                                                                                          20–40
            Machinery and equipment                                                                           10–20
            Furniture and office equipment                                                                    3–10
            Computer hardware                                                                                  3–6
            Leasehold improvements                                                                Over the terms of the leases or
                                                                                                      the useful life of the
                                                                                                         improvements.

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        Reforestation —At December 31, 2007, the Company owned or leased approximately 23,000 acres of hybrid poplar plantations.
Timberlands are stated at cost, including capitalized costs attributable to reforestation efforts (i.e., costs for site preparation, planting stock,
labor, herbicide, fertilizer, and any other costs required to establish timber on land that was previously not forested). From August 1, 2006,
(date of acquisition) through December 31, 2007, the Company has been primarily engaged in developing its Hybrid Poplar Fiber Farm and is
still in a development stage. Costs attributable to timberlands are charged against income as trees are cut. The rate charged will be determined
annually based on the relationship of incurred costs to estimated current merchantable volume.

      Impairment of Long-Lived Assets —Long-lived assets are reviewed for impairment upon the occurrence of events or changes in
circumstances that indicate that the carrying value of the assets may not be recoverable, as measured by comparing their net book value to the
estimated undiscounted future cash flows generated by their use. Impaired assets are recorded at estimated fair value, determined principally
using discounted cash flows.

      Deferred Financing Costs —The Company capitalizes costs incurred in connection with borrowings or establishment of credit facilities.
These costs are amortized as an adjustment to interest expense over the life of the borrowing or life of the credit facility using the effective
interest method. In the case of early debt principal repayments, the Company adjusts the value of the corresponding deferred financing costs
with a charge to other expense, and similarly adjusts the future amortization expense.

      Goodwill and Intangible Assets —The Company accounts for goodwill and other intangible assets in accordance with Statement of
Financial Accounting Standards No. 142, Goodwill and Other Intangible Assets . Intangible assets primarily consist of trademarks,
customer-related intangible assets and patents obtained through business acquisitions. The useful lives of trademarks were determined to be
indefinite and, therefore, these assets are not amortized. Customer-related intangible assets are amortized over their estimated useful lives of
approximately twenty-five years. Patents are amortized over their remaining legal lives of ten years.

       The impairment evaluation of the carrying amount of goodwill and other intangible assets with indefinite lives is conducted annually or
more frequently if events or changes in circumstances indicate that an asset might be impaired. Goodwill is evaluated at the reporting unit level.
Goodwill has been allocated to the ―Coated‖ segment. The evaluation for impairment is performed by comparing the carrying amount of these
assets to their estimated fair value. If the carrying amount exceeds the reporting unit fair value, then the second step of the goodwill impairment
test is performed to determine the amount of the impairment loss.

      Environmental Costs and Obligations —Costs associated with environmental obligations, such as remediation or closure costs, are
accrued when such costs are probable and reasonably estimable. Such accruals are adjusted as further information develops or circumstances
change. Costs of future expenditures for environmental obligations are discounted to their present value when the expected cash flows are
reliably determinable.

      Equity Compensation —The Company accounts for equity awards in accordance with Statement of Financial Accounting Standards
No. 123 (Revised) Share-Based Payment (SFAS No. 123(R)). SFAS No. 123(R) requires that all equity awards to employees be expensed over
the period of the award. The Company applies the Black-Scholes method of valuation to determine share-based compensation expense.

      Asset Retirement Obligations —In accordance with the provisions of Statement of Financial Accounting Standards No. 143, Accounting
for Asset Retirement Obligations , a liability and an asset are recorded equal to the present value of the estimated costs associated with the
retirement of long-lived assets where a legal or contractual obligation exists. The liability is accreted over time, and the asset is depreciated
over its useful life. The Company’s asset retirement obligations under this standard relate to closure and post-closure costs for landfills.
Revisions to the liability could occur due to changes in the estimated costs or timing of closure, or possible new federal or state regulations
affecting the closure.

                                                                         F-9
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      On December 31, 2007, the Company had approximately $0.8 million of restricted cash related to an asset retirement obligation in the
state of Michigan that is reflected in Other assets in the accompanying balance sheet. This cash deposit is required by the state and may only be
used for the future closure of a landfill.

      The following table presents an analysis related to asset retirement obligations:

                                                                                          Year Ended                  Five Months Ended
                                                                                          December 31,                   December 31,
            (in thousands of U.S. dollars)                                                    2007                           2006
            Asset retirement obligations, August 1                                        $     11,855               $           12,357
            New liabilities                                                                        310                              —
            Accretion expense                                                                      583                              258
            Settlement of existing liabilities                                                  (1,063 )                           (760 )
            Adjustment to existing liabilities                                                     (71 )                            —
            Asset retirement obligations, December 31                                     $     11,614               $           11,855


      This liability is related to landfill closure and post-closure care and is included in Other liabilities in the accompanying balance sheet.

       Income Taxes —The Company accounts for income taxes using the liability method pursuant to Statement of Financial Accounting
Standards No. 109, ―Accounting for Income Taxes‖ (SFAS No. 109). Under this method, the Company recognizes deferred tax assets and
liabilities for the expected tax consequences of temporary differences between the tax bases of assets and liabilities and their reported amounts
using enacted tax rates in effect for the year the differences are expected to reverse. The Company records a valuation allowance to reduce the
deferred tax assets to the amount that is more likely than not to be realized.

      Postretirement Benefits —Pension plans cover substantially all of the Company’s employees. The defined benefit plan is funded in
conformity with the funding requirements of applicable government regulations. Prior service costs are amortized on a straight-line basis over
the estimated remaining service periods of employees. Certain employees are covered by defined contribution plans. The Company’s
contributions to these plans are based on a percentage of employees’ compensation or employees’ contributions. These plans are funded on a
current basis.

     The company adopted the provisions of Statement of Financial Accounting Standards No. 158, Employers’ Accounting for Defined
Benefit Pension and Other Postretirement Plans , an amendment of FASB Statements No. 87, 88, 106, and 132(R) as of December 31, 2006.
The measurement date is December 31, 2006.

2. RECENT ACCOUNTING DEVELOPMENTS
      Derivatives and Hedging Activities —In March 2008, the Financial Accounting Standards Board, or FASB, issued SFAS No. 161,
Disclosures about Derivative Instruments and Hedging Activities. SFAS No. 161 changes the disclosure requirements for derivative
instruments and hedging activities. Entities are required to provide enhanced disclosures about (a) how and why an entity uses derivative
instruments, (b) how derivative instruments and related hedged items are accounted for under Statement 133 and its related interpretations, and
(c) how derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows. SFAS
No. 161 is effective for fiscal years and interim periods beginning after November 15, 2008. Since SFAS No. 161 only addresses disclosure
requirements, the adoption of SFAS No. 161 will have no impact on our combined results of operations or combined financial position.
      Business Combinations —In December 2007, the FASB issued SFAS No. 141 (revised 2007), Business Combinations . SFAS No. 141-R
establishes principles and requirements for how an acquirer recognizes and

                                                                        F-10
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measures identifiable assets acquired, liabilities assumed and noncontrolling interests; recognizes and measures goodwill acquired in a business
combination or gain from a bargain purchase; and establishes disclosure requirements. SFAS No. 141-R is effective for business combinations
for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. Early
adoption is prohibited. The impact of adopting SFAS No. 141-R is not expected to have a material impact on our combined results of
operations or combined financial position.

      In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statements—an amendment of
ARB No. 51 . SFAS No. 160 establishes accounting and reporting standards for the noncontrolling interest in a subsidiary and for the
deconsolidation of a subsidiary. SFAS No. 160 is effective, on a prospective basis, for fiscal years, and interim periods within those years,
beginning on or after December 15, 2008. The presentation and disclosure requirements for existing minority interests should be applied
retrospectively for all periods presented. Early adoption is prohibited. The impact of adopting SFAS No. 160 is not expected to have a material
impact on our combined results of operations or combined financial position.

       Fair Value Option for Financial Assets and Financial Liabilities —In February 2007, the FASB issued SFAS No. 159, Fair Value
Option for Financial Assets and Financial Liabilities — including an amendment of FASB Statement No. 115 , which permits an entity to
measure certain financial assets and financial liabilities at fair value. SFAS No. 159’s objective is to improve financial reporting by allowing
entities to mitigate volatility in reported earnings caused by the measurement of related assets and liabilities using different attributes, without
having to apply complex hedge accounting provisions. SFAS No. 159 is effective as of the beginning of an entity’s fiscal year beginning after
November 15, 2007. The impact of adopting SFAS No. 159 is not expected to have a material impact on our combined results of operations or
combined financial position.

      Defined Benefit Pension and Other Postretirement Plans —In September 2006, the FASB issued SFAS No. 158, Employers’
Accounting for Defined Benefit Pension and Other Postretirement Plans — an amendment of FASB Statements No. 87, 88, 106, and 132(R) ,
which requires the recognition of the overfunded or underfunded status of a defined benefit postretirement plan as an asset or liability in the
statements of condition. SFAS No. 158 does not change measurement or recognition requirements for periodic pension and postretirement
costs. SFAS No. 158 also provides that changes in the funded status of a defined benefit postretirement plan should be recognized in the year
such changes occur through comprehensive income. As a result of adopting SFAS No. 158 as of December 31, 2006, unrecognized prior
service costs were recognized as a component of accumulated other comprehensive income resulting in a reduction in equity of $7.7 million.

       Accounting for Planned Major Maintenance Activities —In September 2006, the FASB issued FASB Staff Position (FSP) AUG AIR-1,
Accounting for Planned Major Maintenance Activities . This FSP eliminates the accrue-in-advance method of accounting for planned major
maintenance activities from the American Institute of Certified Public Accountants’ Audit and Accounting Guide, Audits of Airlines (the
Airline Guide). This method of accounting for planned major maintenance activities was eliminated due to the FASB’s belief that the resultant
liability does not meet the definition of a liability in FASB Concepts Statement No. 6, Elements of Financial Statements . As a result of the
elimination of the accrue-in-advance method, the Airline Guide, which provides guidance for all industries that conduct planned major
maintenance activities, permits the use of one of the following three remaining methods: (1) direct expensing, (2) built-in overhaul, and
(3) deferral. This FSP is effective for fiscal year beginning after December 15, 2006, with early adoption permitted so long as it is as of the
beginning of the entity’s fiscal year. We adopted the FSP at its inception by electing the deferral method.

       Fair Value Measurements —In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements . SFAS No. 157 does not
address ―what‖ to measure at fair value; instead, it addresses ―how‖ to measure fair value. SFAS No. 157 applies (with limited exceptions) to
existing standards that require assets and liabilities to be measured at fair value. SFAS No. 157 establishes a fair value hierarchy, giving the
highest priority to quoted prices in active markets and the lowest priority to unobservable data and requires new disclosures for assets and
liabilities measured at fair value based on their level in the hierarchy. SFAS No. 157 is

                                                                        F-11
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effective for financial statements issued for fiscal years beginning after November 15, 2007. However, FSP 157-2, ―Effective Date of FASB
Statement No. 157,‖ delayed the implementation of SFAS No. 157 for nonfinancial assets and nonfinancial liabilities, except for items that are
recognized or disclosed at fair value in the financial statements on a recurring basis, to years beginning after November 15, 2008. The impact of
adopting SFAS No. 157 is not expected to have a material impact on our combined results of operations or combined financial position.

      Sales, Use and Excise Taxes —In June 2006, the FASB ratified the consensuses reached by the Emerging Issues Task Force in Issue
No. 06-3, How Taxes Collected from Customers and Remitted to Governmental Authorities Should be Presented in the Income Statement (That
is, Gross Versus Net Presentation) . Issue No. 06-3 requires disclosure of an entity’s accounting policy regarding the presentation of taxes
assessed by a governmental authority that are directly imposed on a revenue-producing transaction between a seller and a customer, including
sales, use, value added and some excise taxes. We present such taxes on a net basis (excluded from revenues and costs). The adoption of Issue
No. 06-3 in 2007 had no impact on our combined results of operations or combined financial position.

      Accounting for Uncertainty in Income Taxes —In June 2006, the FASB issued Interpretation No. 48, Accounting for Uncertainty in
Income Taxes — an interpretation of FASB Statement No. 109 , or FIN 48 . FIN 48 clarifies the accounting for uncertainty in income taxes
recognized in a company’s financial statements and prescribes a recognition threshold and measurement attribute for the financial statement
recognition and measurement of a tax position taken or expected to be taken in a tax return. FIN 48 also provides guidance on description,
classification, interest and penalties, accounting in interim periods, disclosure, and transition. FIN 48 is effective for fiscal years beginning after
December 15, 2006. We applied the provisions of this interpretation beginning January 1, 2007. The adoption of FIN 48 did not have a material
impact on our combined results of operations or combined financial position.

     Accounting for Certain Hybrid Financial Instruments —In February 2006, the FASB issued SFAS No. 155, Accounting for Certain
Hybrid Financial Instruments—an Amendment of FASB Statements No. 133 and 140 , which provides entities relief from having to separately
determine the fair value of an embedded derivative that would otherwise be required to be bifurcated in accordance with SFAS No. 133. SFAS
No. 155 was effective for all financial instruments acquired, issued, or subject to a remeasurement event occurring after January 1, 2007. The
adoption of SFAS No. 155 did not have a material impact on our combined results of operations or combined financial position.

3. ACQUISITION
      On August 1, 2006, Verso Paper Corp. acquired the Coated and Supercalendered Papers Division of International Paper Company, or the
―Division‖ or the ―Predecessor,‖ a producer of coated freesheet, coated groundwood, and uncoated supercalendered papers. The purchase price
for the Division as of the acquisition date was $1.4 billion. The purchase price was paid partially in cash and partially through a 10% limited
partnership interest in Verso Paper Investment, LP., Verso Paper Corp.’s indirect parent company.

      The Company has allocated the purchase price to the Division’s assets acquired and liabilities assumed at estimated fair values adjusted
for the 10% carryover basis of the assets as of the acquisition date. The excess of the purchase price over the fair value of the net assets
acquired has been reflected as goodwill.

                                                                         F-12
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     The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at August 1, 2006 (date of
acquisition) (in thousands of U.S. dollars):

      Current assets                                                                                                       $      237,072
      Plant, property, and equipment                                                                                            1,232,587
      Intangible assets                                                                                                            35,912
      Goodwill                                                                                                                     18,695
      Other Assets                                                                                                                  4,511
            Total assets acquired                                                                                               1,528,777
      Current liabilities                                                                                                          110,255
      Long-term obligations                                                                                                         25,301
            Total liabilities assumed                                                                                              135,556
            Net assets acquired                                                                                            $    1,393,221


      Identifiable Intangible Assets                                                                         Life              Amount
      Non-amortizable
      Trademarks                                                                                            Indefinite     $         21,473
      Amortizable
      Customer relationships                                                                                 25 years                13,291
      Patents                                                                                                10 years                 1,148
      Total Intangible Assets                                                                                              $         35,912


      The acquisition agreement contains various representations, warranties and covenants customary to transactions of this type.

      On August 1, 2006, Verso Fiber Farm LLC acquired the Hybrid Poplar Fiber Farm (Fiber Farm), a hardwood plantation owned by
International Paper Company. The purchase price for Fiber Farm as of the acquisition date was $10 million.

      The Company has allocated the purchase price to the Fiber Farm’s assets acquired and liabilities assumed at estimated fair values. The
following table summarizes the estimated fair values of the assets acquired and liabilities assumed at August 1, 2006 (date of acquisition)

      Current assets                                                                                                           $          2
      Property, plant and equipment                                                                                                     267
      Reforestation                                                                                                                   9,749
            Total assets acquired                                                                                                    10,018
      Current liabilities                                                                                                                18
      Long-term obligations                                                                                                             —
            Total liabilities assumed                                                                                                     18
            Net assets acquired                                                                                                $ 10,000

                                                                     F-13
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4. INVENTORIES
      Inventories by major category include the following:

                                                                                                      December 31,         December 31,
      (in thousands of U.S. dollars)                                                                      2007                 2006
      Raw materials                                                                               $        19,918         $       22,147
      Woodyard logs                                                                                         3,209                  5,026
      Work-in-process                                                                                      19,565                 19,012
      Finished goods                                                                                       48,167                 63,894
      Replacement parts and other supplies                                                                 28,761                 30,424
      Inventories                                                                                 $       119,620         $      140,503


5. PROPERTY, PLANT AND EQUIPMENT
      Property, plant and equipment is as follows:

                                                                                                  December 31,           December 31,
      (in thousands of U.S. dollars)                                                                  2007                   2006
      Land and land improvements                                                              $           28,017     $           26,114
      Building and leasehold improvements                                                                172,189                167,843
      Machinery and equipment                                                                          1,096,429              1,048,153
      Construction-in-progress                                                                            29,406                 17,689
                                                                                                       1,326,041              1,259,799
      Less: accumulated depreciation                                                                    (165,802 )              (47,543 )
      Plant, property, and equipment                                                          $        1,160,239     $        1,212,256


    Depreciation expense was $119.4 million for the year ended December 31, 2007, and was $48.0 million for the five months ended
December 31, 2006.

6. INTANGIBLES AND OTHER ASSETS
      Intangibles and other assets consist of the following:

                                                                                                  December 31,             December 31,
      (in thousands of U.S. dollars)                                                                  2007                     2006
      Amortizable intangible assets:
      Customer relationships—net of accumulated amortization of $1.8 million and
        $0.2 million, respectively                                                                $       11,470          $       13,070
      Patents—net of accumulated amortization of $0.16 million and $0.05 million,
        respectively                                                                                          985                   1,100
      Total amortizable intangible assets                                                                 12,455                  14,170
      Unamortizable intangible assets:
      Trademarks                                                                                          21,473                  21,473
      Other assets:
      Financing costs—net of accumulated amortization of $9.1 million and $2.3 million,
        respectively                                                                                      43,410                  42,109
      Deferred major repair                                                                                5,328                   6,008
      Deferred software cost-net of accumulated amortization of $1.3 million                               3,765                     —
      Replacement parts—net                                                                                4,932                   1,729
      Other                                                                                                6,422                   4,055
      Total other assets                                                                                  63,857                  53,901
      Intangibles and other assets                                                                $       97,785          $       89,544
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      Approximately $1.7 million and $0.3 million of intangible amortization are reflected in depreciation and amortization expense for the
year ended December 31, 2007 and for the five months ended December 31, 2006, respectively.

     Estimated amortization expense of intangibles is expected to be $1.6 million, $1.4 million, $1.3 million, $1.1 million and $0.9 million in
2008, 2009, 2010, 2011 and 2012, respectively.

      Software cost incurred as part of a major systems project was capitalized in 2007 and is being amortized over its anticipated useful life of
approximately three years. Approximately $1.3 million of software amortization is reflected in depreciation and amortization expense for the
year ended December 31, 2007.

7. ACCRUED LIABILITIES
       A summary of accrued liabilities is as follows:

                                                                                                          December 31,               December 31,
       (in thousands of U.S. dollars)                                                                         2007                       2006
       Payroll and employee benefit costs                                                                $     33,488                $        31,741
       Accrued interest                                                                                        36,727                         31,914
       Accrued sales rebates                                                                                   10,900                          8,520
       Accrued taxes—other than income                                                                          2,573                          6,568
       Freight and other                                                                                        9,324                          1,619
       Accrued liabilities                                                                               $     93,012                $        80,362


8. LONG-TERM DEBT
       A summary of long-term debt is as follows:

                                                                                                                    December 31,             December 31,
(in thousands of U.S. Dollars)                                             Maturity             Rate                    2007                     2006
Fiber Farm Term Loan                                                        8/1/2010       LIBOR + 3.00%        $         10,000         $         10,000
First Priority Term Loan B                                                  8/1/2013       LIBOR + 1.75%                 256,438                  259,288
Second Priority Senior Secured Notes – Fixed                                8/1/2014               9.13%                 350,000                  350,000
Second Priority Senior Secured Notes – Floating                             8/1/2014       LIBOR + 3.75%                 250,000                  250,000
Senior Subordinated Notes                                                   8/1/2016              11.38%                 300,000                  300,000
Senior Unsecured Term Loan                                                  2/1/2013       LIBOR + 6.25%                 250,000                      —
                                                                                                                       1,416,438                1,169,288
Less current maturities                                                                                                   (2,850 )                 (2,850 )
Long-term debt                                                                                                  $      1,413,588         $      1,166,438


     Verso Paper Holdings LLC (―Holdings‖) and Verso Paper Inc. (―issuers‖), entered into Senior Secured Credit Facilities on August 1,
2006, which consist of:
         •     a $285 million term loan facility, with a maturity of seven years, which was fully drawn on August 1, 2006;
         •     a $200 million revolving credit facility with a maturity of six years. No amounts were outstanding at December 31, 2007 or 2006.
               Letters of credit of $29.4 million and $35.3 million were issued as of December 31, 2007 and 2006, respectively.

      The Senior Secured Credit Facilities are secured by first priority pledges of all the equity interests owned by Holdings in its subsidiaries.
The Senior Secured Credit Facilities are also secured by first priority interests in, and mortgages on, substantially all tangible and intangible
assets and each of Holdings direct and indirect subsidiaries.

                                                                        F-15
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      The obligations under the Senior Secured Credit Facilities are unconditionally guaranteed by Verso Paper Finance Holdings LLC, parent
company of Holdings, and subject to certain exceptions, each of Holdings direct and indirect domestic subsidiaries. The term loan facility bears
interest at a rate equal to LIBOR plus 1.75% and the interest rate was 6.6% at December 31, 2007, and 7.1% at December 31, 2006. The
revolving credit facility bears interest at a rate equal to LIBOR plus 2.00%. In addition to paying interest on outstanding principal under these
senior secured credit facilities, Verso Paper Holdings LLC is required to pay a commitment fee to the lenders under the revolving credit facility
in respect of unutilized commitments at a rate equal to 0.50% per annum (subject to reduction upon attainment of certain first lien leverage
ratios). Verso Paper Holdings LLC also pays customary letter of credit and agency fees.

       In addition, on August 1, 2006, Holdings completed an offering of $350 million 9 / 8 % Second Priority Senior Secured Fixed Rate
                                                                                            1


Notes due 2014, $250 million Second Priority Senior Secured Floating Rate Notes due 2014, and $300 million 11 / 8 % Senior Subordinated
                                                                                                                       3


Notes due 2016. The floating-rate notes bear interest at a rate equal to LIBOR plus 3.75% and the interest rate was 8.7% at December 31, 2007,
and 9.1% at December 31, 2006. The proceeds of the offerings were used to finance the Acquisition and to pay related fees and expenses. The
second-priority senior secured notes have the benefit of a second-priority security interest in the collateral securing the senior secured credit
facilities. The fixed rate notes pay interest semi-annually and the variable rate notes pays interest quarterly. The senior subordinated notes are
unsecured and pay interest semi-annually.

      On January 31, 2007, we entered into a $250 million senior unsecured term loan facility with a maturity of six years. The loan allows us
to pay interest either in cash or in kind through the accumulation of the outstanding principal amount. The senior unsecured term loan facility
bears interest at a rate equal to LIBOR plus 6.25% and the interest rate at December 31, 2007 was 9.5%. The net proceeds from the incurrence
of the term loan facility were distributed to our equity holders.

       The Senior Secured Credit Facilities contain various restrictive covenants. They prohibit Holdings from prepaying other indebtedness and
require Holdings to maintain a maximum consolidated first lien leverage ratio. In addition, the Senior Secured Credit Facilities, among other
things, restrict Holdings ability to incur indebtedness or liens, make investments or declare or pay any dividends. The indentures governing the
Second Priority Senior Secured Notes and the Senior Subordinated Notes limit Holdings ability to, among other things, to (i) incur additional
indebtedness; (ii) pay dividends or make other distributions or repurchase or redeem stock; (iii) make investments; (iv) sell assets, including
capital stock of restricted subsidiaries; (v) enter into agreements restricting its subsidiaries’ ability to pay dividends; (vi) consolidate, merge,
sell or otherwise dispose of all or substantially all of its assets; (vii) enter into transactions with our affiliates; and (viii) incur liens. As of
December 31, 2007, Holdings was in compliance with all covenants.

      Verso Fiber Farm LLC, entered into Senior Secured Credit Facilities on August 1, 2006, which consist of:
        •    a $10 million term loan facility, with a maturity of four years, which was fully drawn on August 1, 2006; and
        •    a $5 million revolving credit facility with a maturity of four years, of which $3.1 million was outstanding at December 31, 2007.
             No amounts were outstanding under this facility at December 31, 2006.

       The Senior Secured Credit Facilities of Verso Fiber Farm LLC are secured by first priority pledges of all of the equity interests owned by
Verso Fiber Farm LLC and in its subsidiaries. These Senior Secured Credit Facilities are also secured by first priority interests in, and
mortgages on, substantially all tangible and intangible assets of Verso Fiber Farm LLC and each of its direct and indirect subsidiaries. The term
loan facility bears interest at a rate equal to LIBOR plus 3.0%, and the interest rate at December 31, 2007 was 7.8%. The revolving credit
facility bears interest at a rate equal to LIBOR plus 3.0%, and the interest rate at December 31, 2007 was 7.8%. The Senior Secured Credit
Facilities contain various restrictive covenants which, among other things, restrict Verso Fiber Farm LLC’s ability to incur additional
indebtedness or liens, make investments or declare or

                                                                        F-16
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pay any dividends or make other distributions on equity interests; consolidate, merge, sell or otherwise dispose of all or substantially all of its
assets; and enter into transactions with affiliates.

       The Company is structured as a holding company and substantially all of its assets are held by its subsidiaries. Consequently, the
Company’s subsidiaries conduct all of its consolidated operations and own substantially all of its operating assets. The terms of the senior
secured credit facilities and the indentures governing the outstanding notes of the Company’s subsidiaries significantly restrict its subsidiaries
from paying dividends and otherwise transferring assets to the Company. Although the terms of the debt agreements do not restrict the
Company’s operating subsidiaries from obtaining funds from their respective subsidiaries to fund their operations and payments on
indebtedness, the debt agreements may not permit them to provide the Company with sufficient dividends, distributions or loans to fund the
Company’s obligations or pay dividends to its stockholders. The Company’s total deficit of $75.1 million at December 31, 2007 compared to
total assets of $280.0 million at December 31, 2006 represent investments in subsidiaries at equity and are equal to total stockholder’s equity.
The Company’s net loss of $111.5 million for the year ended December 31, 2007 compared to $2.6 million for the five-month period ended
December 31, 2006 represents its equity in undistributed net loss of subsidiaries. The Company had no cash flows for the year ended December
31, 2007, nor for the five months ended December 31, 2006.

      The payments required under the long-term debt listed above during the years following December 31, 2007, are set forth below:

      2008                                                                                                                      $           2,850
      2009                                                                                                                                  2,850
      2010                                                                                                                                 12,850
      2011                                                                                                                                  2,850
      2012                                                                                                                                  2,850
      Thereafter                                                                                                                        1,392,188
      Long-term debt                                                                                                            $       1,416,438


     Interest expense was $137.0 million and $132.2 million of interest was paid during the year ended December 31, 2007. Interest expense
was $47.1 million and $15.0 million of interest was paid during the five-month period ended December 31, 2006. In conjunction with the
Acquisition, we assumed none of the historical debt of the Predecessor.

      Amortization of debt issuance costs was $6.7 million for the year ended December 31, 2007, and is included in interest expense in the
consolidated statement of operations. Amortization of debt issuance costs was $2.3 million for the five-month period ended December 31,
2006.

9. OTHER LIABILITIES
      Other liabilities consist of the following:

                                                                                                          December 31,              December 31,
      (in thousands of U.S. dollars)                                                                          2007                      2006
      Asset retirement obligations                                                                        $     11,614              $     11,855
      Pension benefit obligation                                                                                 9,980                    10,299
      Deferred income taxes                                                                                      8,144                     8,144
      Other, primarily environmental obligations                                                                 4,002                     4,663
      Other liabilities                                                                                   $     33,740              $     34,961


                                                                        F-17
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10. RETIREMENT PLANS
Defined Benefit Plan
      The Company maintains a defined benefit pension plan that provides retirement benefits to hourly employees in Androscoggin,
Bucksport and Sartell hired prior to July 1, 2004. These employees generally are eligible to participate in the plan upon completion of one year
of service and attainment of age 21. Employees hired after June 30, 2004, who are not eligible for this pension plan receive an additional
company contribution to their savings plan (see ―Other Plan‖). The plan provides defined benefits based on years of credited services times a
specified flat dollar benefit rate.

         The following table summarizes the net periodic benefit cost for the periods ended December 31, 2007 and 2006:

                                                                                                                                Five Months
                                                                                                     Year Ended                    Ended
                                                                                                     December 31,               December 31,
      (In thousands of U.S. dollars)                                                                     2007                       2006
      Components of net periodic benefit cost:
      Service cost                                                                                  $       5,278               $      2,090
      Interest cost                                                                                           611                        193
      Expected return on plan assets                                                                         (229 )                      —
      Amortization of prior service cost                                                                      785                        327
      Net periodic benefit cost                                                                     $       6,445               $      2,610


     The following table provides detail on prior service cost and net actuarial gain (loss) recognized in accumulated other comprehensive
income at December 31, 2007 and 2006:

      (In thousands of U.S. dollars)                                                                                  2007            2006
      Amounts recognized in accumulated other comprehensive income:
      Prior service cost                                                                                            $ 7,803         $ 7,741
      Net (gain) loss                                                                                                   (27 )           —

     The estimated prior service cost that will be amortized from accumulated other comprehensive income into net periodic pension cost
during 2008 is $0.9 million. We expect no plan assets to be returned to the Company in 2008.

     The Company makes contributions that are sufficient to fully fund its actuarially determined costs, generally equal to the minimum
amounts required by the Employee Retirement Income Security Act (ERISA). The Company made contributions of $6.9 million in 2007, with
$4.7 million attributable to the 2007 plan year and $2.2 attributable to the 2006 plan year. The Company made a contribution of $1.5 million in
January 2008 attributable to the 2007 plan year. In 2008, the Company expects to make an additional contribution of $1.5 million related to the
2007 plan year and contributions of $6.3 million related to the 2008 plan year.

                                                                      F-18
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        The following table sets forth a reconciliation of the plan’s benefit obligation plan assets and funded status at December 31, 2007 and
2006:

                                                                                                                               Five Months
                                                                                                        Year Ended                Ended
                                                                                                        December 31,           December 31,
      (In thousands of U.S. dollars)                                                                        2007                   2006
      Change in Projected Benefit Obligation:
      Benefit obligation at beginning of period                                                        $     10,351           $            —
      Service cost                                                                                            5,278                     2,090
      Interest cost                                                                                             611                       193
      Plan amendments                                                                                           846                       —
      Prior service liability                                                                                   —                       8,068
      Actuarial (gain) loss                                                                                    (341 )                     —
      Benefits paid                                                                                             (37 )                     —
      Benefit obligation on December 31                                                                $     16,708           $        10,351

      Change in Plan Assets:
      Plan assets at fair value, beginning of fiscal year                                              $         —            $          —
      Actual net return on plan assets                                                                           (85 )                   —
      Employer contributions                                                                                   6,850                     —
      Benefits paid                                                                                              (37 )                   —
      Plan assets at fair value, end of fiscal year                                                            6,728                     —
      Unfunded projected benefit obligation recognized on the Combined Balance Sheets
        as a long-term liability                                                                       $      (9,980 )        $     (10,351 )


        The accumulated benefit obligation at December 31, 2007 and 2006 is $16.7 million and $10.4 million, respectively.

        The following table summarizes expected future pension benefit payments:

      (In thousands of U.S. dollars)
      2008                                                                                                                         $       147
      2009                                                                                                                                 299
      2010                                                                                                                                 498
      2011                                                                                                                                 741
      2012                                                                                                                               1,069
      2013-2017                                                                                                                         10,410

      The Company evaluates its actuarial assumptions annually as of December 31, (the measurement date) and considers changes in those
long-term factors based upon market conditions and the requirements of SFAS No. 87, ―Employers’ Accounting for Pension.‖ These
assumptions are used to calculate benefit obligations as of December 31 of the current year, and pension expense to be recorded for the
following year. The discount rate assumption reflects the yield on a portfolio of high quality fixed-income instruments that have a similar
duration to the plan’s liabilities. The expected long-term rate of return assumption reflects the average return expected on the assets invested to
provide for the plan’s liabilities.

                                                                        F-19
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      The actuarial assumptions used in the defined benefit pension plan were as follows:

                                                                                                                            2007            2006
      Weighted average assumptions used to determine benefit obligations as of December 31
        measurement date:
      Discount rate                                                                                                         6.00 %          5.75 %
      Rate of compensation increase                                                                                         N/A             N/A
      Weighted average assumptions used to determine net periodic benefit cost for the fiscal year:
      Discount rate                                                                                                         5.75 %          5.75 %
      Rate of compensation increase                                                                                         N/A             N/A
      Expected long-term return on plan assets                                                                              8.00            N/A

      The Company’s primary investment objective is to ensure, over the long-term life of the pension plan, an adequate pool of sufficiently
liquid assets to support the benefit obligations. In meeting this objective, the pension plan seeks to achieve a high level of investment return
through long-term stock and bond investment strategies, consistent with a prudent level of portfolio risk. Any volatility in investment
performance compared to investment objectives should be explainable in terms of general economic and market conditions. It is not
contemplated at this time that any derivative instruments will be used to achieve investment objectives. The expected return on plan assets
assumption for 2008 will be 8.00 percent.

      The following table provides the pension plan’s asset allocation on December 31, 2007:

                                                                               Targeted
                                                                               Allocation                 % of Plan Assets on December 31
                                                                                                      2007                            2006
      Equity Securities
        Large capital equity                                                         26.4 %              25.5 %                       N/A
        Small capital equity                                                          4.6                 4.4                         N/A
        International equity                                                         17.0                17.0                         N/A
      Other securities
        Bond fund                                                                    47.0                48.2                         N/A
        Fixed income fund                                                             5.0                 4.9                         N/A


Defined Contribution Plan
     The Company sponsors a defined contribution plan to provide salaried and Quinnesec hourly employees an opportunity to accumulate
personal funds and to provide additional benefits for retirement.

     As determined by the provisions of the plan, the Company contributes annually a percentage of earnings. The percentage is based on age
and years of credited service for employees hired prior to July 1, 2004 and a fixed percentage of earnings to employees hired after June 30,
2004. Expense under this plan was $8.6 million for the year ended December 31, 2007, and was $2.3 million for the five-month period ended
December 31, 2006.

Other Plan
     The Company sponsors a 401K plan to provide salaried and hourly employees an opportunity to accumulate personal funds and to
provide additional benefits for retirement. Contributions may be made on a before-tax basis to the plan.

      As determined by the provisions of the plan, the Company matches the employees’ basic voluntary contributions. Such contributions to
the plans totaled approximately $2.5 million for the year ended December 31, 2007, and $2.3 million for the five months ended December 31,
2006.

                                                                       F-20
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11. MANAGEMENT EQUITY AWARDS
      Certain members of management were granted the right to purchase ―Class A‖ units of Verso Paper Management LP (a limited partner of
the ultimate parent of the Company). For each ―Class A‖ unit purchased, a specified number of ―Class B‖ and ―Class C‖ units were granted.
The Class B units vest over a 5 year period, 20% at the end of each year of service. The Class C units will vest only if certain performance
targets are met. Directors were granted ―Class D‖ units of Verso Paper Management LP and these Class D units are vested at acquisition date.

      The fair value of the Class D units granted to directors and restricted Class B units granted to management was approximately $0.3
million in 2007 and $1.4 million in 2006. Equity award expense of $0.6 million was recognized for the year ended December 31, 2007, while
$0.4 million was recognized in the five months ended December 31, 2006. The remaining compensation expense will be recognized over the
vesting period with the offsetting credit to Paid-in-Capital.

     Assumptions applied under the Black-Scholes option pricing model are as follows: expected term of five years, volatility rate of 36.65%
based on industry historical volatility rate, no expected dividends and average risk free rate of 4.7% in 2007 and 4.1% in 2006.

12. BUCKSPORT ENERGY ASSET INVESTMENT
      The Company has a joint ownership interest with Bucksport Energy LLC, an unrelated third party, in a cogeneration power plant
producing steam and electricity. The plant was built in 2000 by the two parties and is located in Bucksport, Maine. The plant supports the
Bucksport paper mill. The mill owns 28% of the steam and electricity produced by the plant. The mill may purchase its remaining steam and
electrical needs from the plant at market rates. Each owner, Verso Bucksport LLC and Bucksport Energy LLC, owns its proportional share of
the assets. The Company accounts for this investment under the proportional consolidation method. Power generation and operating expenses
are divided on the same basis as ownership. The Bucksport mill has cash which is restricted in its use and may be used only to fund the ongoing
energy operations of this investment. Approximately $0.2 million of restricted cash is included in prepaid expenses and other assets in the
accompanying combined balance sheet at December 31, 2007 and 2006. Balances included in the accompanying combined balance sheet
related to this investment are as follows:

                                                                                                       December 31,            December 31,
      (in thousands of dollars)                                                                            2007                    2006
      Other receivables                                                                               $          61           $          59
      Other current assets                                                                                      256                     259
      Total current assets                                                                            $         317           $         318

      Property, plant, and equipment                                                                  $      10,301           $     10,301
      Accumulated depreciation                                                                                 (807 )                 (237 )
      Net property, plant, and equipment                                                              $       9,494           $     10,064

      Current liabilities                                                                             $         (84 )         $        (103 )


13. DERIVATIVES
      In the normal course of business, the Company utilizes derivatives contracts as part of its risk management strategy to manage our
exposure to market fluctuations in energy prices. These instruments are subject to credit and market risks in excess of the amount recorded on
the balance sheet in accordance with generally accepted accounting principles. Controls and monitoring procedures for these instruments have
been established and are routinely reevaluated. Credit risk represents the potential loss that may occur because a party to a transaction fails to
perform according to the terms of the contract. The measure of credit exposure is the replacement cost of

                                                                       F-21
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contracts with a positive fair value. The Company manages credit risk by entering into financial instrument transactions only through approved
counterparties. Market risk represents the potential loss due to the decrease in the value of a financial instrument caused primarily by changes
in commodity prices. The Company manages market risk by establishing and monitoring limits on the types and degree of risk that may be
undertaken.

      Derivative instruments are recorded on the balance sheet as other assets or other liabilities measured at fair value. Fair value is defined as
the amount the Company would receive or pay in the market to replace the derivatives as of the valuation date. Fair value is determined using
available market information. For a cash flow hedge accounted for under SFAS No. 133, ―Accounting for Derivative Instruments and Hedging
Activities,‖ changes in the fair value of the derivative instrument, to the extent that it is effective, are recorded in accumulated other
comprehensive income and subsequently reclassified to earnings as the hedged transaction impacts net income. Any ineffective portion of a
cash flow hedge is recognized currently in earnings. Cash flows from derivative contracts are reported as operating activities on the Statements
of Cash Flows.

     The Company enters into short-term, fixed-price swaps as hedges designed to mitigate the risk of changes in commodity prices for future
purchase commitments. Fixed-price swaps involve the exchange of net cash settlements, based on changes in the price of the underlying
commodity index compared to the fixed price offering, at specified intervals without the exchange of any underlying principal.

      Effective November 1, 2007, the Company designated its hedge relationships as cash flow hedges under SFAS No. 133. For the period of
time these hedge relationships were not designated under SFAS No. 133, the swaps were measured at fair value with gains or losses included in
current earnings. Subsequent to designation, net losses attributable to effective hedging were recorded in accumulated other comprehensive
income, and the ineffective portion continued to be recognized in cost of products sold.

      In 2007 the Company entered into these energy swaps to fix the price of purchases of natural gas for consumption, with the objective of
minimizing or protecting against the impact of adverse price changes in the energy market. However, we do not hedge the entire exposure of
our operations from commodity price volatility for a variety of reasons. To the extent we do not hedge against commodity price volatility, our
results of operations may be affected either favorably or unfavorably by a shift in the future price curve. During 2007, net settlements on these
swaps resulted in an increase of $2.8 million in cost of products sold. On December 31, 2007, the fair values of these swaps were unrealized
losses of $1.4 million. Net unrealized gains on open derivative contracts of $0.7 million were recognized in cost of products sold in 2007. In
addition, net losses related to the effective portion of SFAS No. 133 hedges of $2.1 million were recorded in accumulated other comprehensive
income on December 31, 2007. Net losses included in other comprehensive income on December 31, 2007, are expected to be reclassified into
cost of products sold in the same period when the hedged cash flows affect earnings and will decrease income or increase expense on the
respective hedged cash flows. Assuming no change in open cash flow derivative hedge positions, the net losses are expected to be reclassified
into earnings within the next year.

14. RELATED PARTY TRANSACTIONS
      In conjunction with the Acquisition, we entered into a transition service agreement with International Paper whereby International Paper
will continue to provide certain services specified in the agreement that are necessary for us to run as a stand-alone business. The charges for
the year ended December 31, 2007 were $4.7 million and were $6.1 million for the five-month period ended December 31, 2006. As of July 31,
2007, we substantially discontinued the usage of services under this agreement.

      The Company had net sales to International Paper of approximately $191.4 million for the period ended December 31, 2007 and $71.5
million for the five months ended December 31, 2006. The Company had purchases from International Paper of approximately $17.2 million
for the year ended December 31, 2007 and $2.5 million for the five months ended December 31, 2006.

                                                                        F-22
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       In 2006, fees of $2.5 million were paid to Apollo as part of the Acquisition transaction costs. For subsequent periods, Apollo entered into
a management agreement with us relating to the provision of certain financial and strategic advisory services and consulting services. We paid
Apollo an annual fee of $2.8 million for its management services and advice in 2007. Also, under the management agreement, Apollo has the
right to act, in return for additional fees, as our financial advisor or investment banker for any merger, acquisition, disposition, finance or the
like if we decide we need to engage someone to fill such role. We agreed to indemnify Apollo and its affiliates and their directors, officers and
representatives for losses relating to the services contemplated by the management agreement and the engagement of affiliates of Apollo
pursuant to, and the performance by them of the services contemplated by, the management agreement.

      Upon completion of the Acquisition, we entered into an agreement with International Paper’s Packaging business pursuant to which we
will arrange for the sale of coated groundwood paper produced from one of its paper machines at its Pine Bluff, Arkansas, mill for a selling
commission of 3%. This agreement will require that we sell 100% of the output of coated paper from this mill until the end of 2006 at then
prevailing market price. The commission was approximately $0.9 million for the five months ended December 31, 2006.

15. RESTRUCTURING AND OTHER CHARGES
      Restructuring and other charges are comprised of transition and other non-recurring costs associated with the acquisition and carve out of
our operations from those of International Paper; including costs of a transition service agreement with International Paper, technology
migration costs, consulting and legal fees, and other one-time costs related to us operating as a stand-alone business. The charges for the year
ended December 31, 2007, were $19.4 million, which included $4.7 million of transition service agreement costs. The charges for the
five-month period ended December 31, 2006 were $10.1 million which included $6.1 million of transition service agreement costs.

16. INCOME TAXES
      The following is a summary of the components of the provision (benefit) for income taxes:

                                                                                                                               Five Months
                                                                                                     Year Ended                   Ended
                                                                                                     December 31,              December 31,
      (In thousands of U.S. dollars)                                                                     2007                      2006
      Current tax (benefit):
          U.S. federal                                                                               $        —               $         —
          U.S. state and local                                                                                —                         —
                                                                                                     $        —               $         —
      Deferred tax provision:
          U.S. federal                                                                               $    (34,068 )           $        (706 )
          U.S. state and local                                                                             (6,428 )                    (165 )
                                                                                                          (40,496 )                    (871 )
      Valuation allowance                                                                                  40,496                       871
      Income tax provision                                                                           $        —               $         —


                                                                       F-23
Table of Contents

      A reconciliation of income tax expense using the statutory federal income tax rate compared with actual income tax expense follows:

                                                                                                                               Five Months
                                                                                                     Year Ended                   Ended
                                                                                                     December 31,              December 31,
      (In thousands of U.S. dollars)                                                                     2007                      2006
      Ended Tax at Statutory U.S. Rate of 34%                                                       $       (37,897 )         $        (785 )
      Increase (decrease) resulting from:
           State income taxes (benefit)                                                                         (18 )                    (2 )
           Meals and entertainment                                                                              152                      22
           Nondeductible lobbying expenses                                                                       30                       3
           Other                                                                                                —                       —
           Disallowed interest                                                                                1,479                     —
      Net permanent differences                                                                              1,643                       23
      State income taxes (benefit)                                                                          (4,242 )                   (109 )
      Valuation allowance                                                                                   40,496                      871
      Total income tax provision                                                                    $           —             $         —


      The following is a summary of the significant components of our deferred tax position:

                                                                                                        December 31,           December 31,
      (In thousands of U.S. dollars)                                                                        2007                   2006
      Deferred tax assets:
          Compensation reserves                                                                         $      1,175          $        543
          Inventory capitalization                                                                             1,018                 1,064
          Unrealized hedge losses                                                                                794                   —
          Pension                                                                                              2,949                 2,936
          Net operating loss and credit carryforwards                                                         95,986                 5,834
          Property, plant and equipment                                                                          —                  11,211
          Other                                                                                                  810                   479
      Gross deferred tax assets                                                                              102,732                22,067
      Less: valuation allowance                                                                              (54,450 )             (12,996 )
            Deferred tax assets, net of allowance                                                       $     48,282          $       9,071
      Deferred tax liabilities
          Prepaid expenses                                                                              $       (825 )        $     (1,418 )
          Intangible assets                                                                                  (12,868 )             (13,518 )
          Deferred repair charges                                                                             (2,021 )              (2,279 )
          Property, plant and equipment                                                                      (40,436 )                 —
          Other                                                                                                 (276 )                 —
      Total deferred tax liabilities                                                                         (56,426 )        $    (17,215 )
            Net deferred taxes                                                                          $      (8,144 )       $      (8,144 )


      The valuation allowance for deferred tax assets as of December 31, 2007 and 2006 was $54.4 million and $13.0 million respectively. The
change in the valuation allowance of $41.4 million relates to the increase in net deferred tax assets for federal income taxes and for some states,
since it is more likely than not that we will not recognize these benefits as defined in SFAS No. 109.

      Income tax benefits related to the pension prior service liability have been credited to other comprehensive income. The benefits have
been reduced by a valuation allowance of $2.9 million. Income tax benefits related to

                                                                       F-24
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hedging activity have been credited to other comprehensive income, and the benefits have been reduced by a valuation allowance of $0.8
million. The portion of the valuation allowance for which subsequently recognized tax benefits will be allocated to reduce goodwill is $9.2
million.

      The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which
those temporary differences become deductible. Based upon our current period loss and our lack of historical earnings, management believes it
is more likely than not that the Company will not realize the benefits of those deductible differences, net of the existing valuation allowance on
December 31, 2007.

     The Company has federal net operating loss carryforwards totaling approximately $252.8 million and $15.3 million on December 31,
2007 and 2006 which will begin to expire in 2026.

     The Company has state net operating loss carryforwards totaling approximately $252.8 million and $15.3 million on December 31, 2007
and 2006 which will begin to expire in 2011.

17. COMMITMENT AND CONTINGENCIES
      Operating Leases —The Company has entered into operating lease agreements, which expire at various dates through 2013, related to
certain machinery and equipment used in its manufacturing process. Rental expense under operating leases amounted to $5.8 million for the
year ended December 31, 2007, and $2.2 million for the five months ended December 31, 2006.

      The following, as of December 31, 2007, represents the future minimum rental payments due under non-cancelable operating leases that
have initial or remaining lease terms in excess of one year.

      (in thousands of U.S. dollars)
      2008                                                                                                                        $    5,673
      2009                                                                                                                             4,683
      2010                                                                                                                             2,484
      2011                                                                                                                             1,385
      2012                                                                                                                               826
      Thereafter                                                                                                                       1,283
      Total                                                                                                                       $ 16,334


      Purchase obligations —The Company has entered into unconditional purchase obligations in the ordinary course of business for the
purchase of certain raw materials, energy, and services. At December 31, 2007, total unconditional purchase obligations were $123 million, due
as follows: 2008–$48 million; 2009–$15 million; 2010–$12 million; 2011–$3 million; 2012–$3 million; and thereafter–$42 million.

                                                                       F-25
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      Verso Paper Employee Severance Plan —Under the Verso Paper Employee Severance Plan, each of our named executive officers is
eligible to receive a termination allowance in the event of a termination of employment due to certain events, including the executive’s job
elimination, a facility closing, the executive’s disability, or the executive’s inability to perform the requisite duties of his position despite his
reasonable efforts.

      The termination allowance is a lump sum amount equal to the number of years or partial years of applicable service with the company,
multiplied by the amount of two weeks of base salary. The termination allowance may not be less than the amount of four weeks of base salary.
In addition to the termination allowance under the Verso Paper Employee Severance Plan, it is our practice to provide a pro rata amount of
annual VIP bonus compensation that would have otherwise been paid to the executive officer if employment had continued through the end of
the applicable calendar year.

      Contingencies —Contingent liabilities arise in the ordinary course of business, including those related to litigation. Various claims are
pending against the Company and its subsidiaries. Although the Company cannot predict the outcome of these claims, after consulting with
counsel, management is of the opinion that when resolved, these claims will not have a material adverse effect on the combined financial
statements of the Company.

      In 2005, the Maine Department of Environmental Protection issued a wastewater discharge permit to International Paper for the
Androscoggin mill. Shortly thereafter, International Paper, a local public utility company and several environmental interest groups challenged
the terms of the permit in an administrative review proceeding before the Maine Board of Environmental Protection, or ―BEP.‖ The review of
the Androscoggin mill’s permit was consolidated with reviews of other parties’ permits affecting water quality in the portion of the
Androscoggin River downstream from our mill. In February 2008, the BEP issued a final order that imposed more stringent limits on the
wastewater discharges from the Androscoggin mill.

      In connection with the Acquisition, we assumed a twelve-year supply agreement with Thilmany LLC for the products produced from our
paper machine No. 5 at the Androscoggin mill. This agreement requires Thilmany to pay us a variable charge for the paper purchased and a
fixed charge for the availability of the No. 5 paper machine. We are responsible for the No. 5 machine’s routine maintenance and Thilmany is
responsible for any capital expenditures specific to the machine. As defined in the agreement, Thilmany has the right to terminate the
agreement if certain events occur.

                                                                         F-26
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18. INFORMATION BY INDUSTRY SEGMENT
      The Company operates in three operating segments, Coated and supercalendered papers, Hardwood market pulp, and Other, consisting of
specialty industrial paper and the fiber farm. The Company operates in one geographic segment, the United States. The Company’s core
business platform is as a producer of coated freesheet, coated groundwood, and uncoated supercalendared papers. These products serve
customers in the catalog, magazine, inserts, and commercial print markets.

        The following table summarizes the industry segments for the period ended December 31, 2007 and 2006:

                                                                                                                Year         Five Months
                                                                                                               Ended            Ended
                                                                                                            December 31,     December 31,
(In thousands of U.S. dollars)                                                                                  2007             2006
Net Sales:
     Coated and supercalendered                                                                         $      1,443,170     $   631,897
     Hardwood market pulp                                                                                        148,007          58,405
     Other                                                                                                        37,576          16,531
Total                                                                                                   $      1,628,753     $   706,833

Operating Income:
    Coated and supercalendered                                                                          $         (1,506 )   $    35,319
    Hardwood market pulp                                                                                          35,808          10,475
    Other                                                                                                         (4,333 )        (1,093 )
Total                                                                                                   $         29,969     $    44,701

Depreciation and Amortization:
    Coated and supercalendered                                                                          $        102,161     $    39,894
    Hardwood market pulp                                                                                          18,278           7,527
    Other                                                                                                          2,730             909
Total                                                                                                   $        123,169     $    48,330

Capital Spending:
    Coated and supercalendered                                                                          $         65,179     $    26,243
    Hardwood market pulp                                                                                           2,649             814
    Other                                                                                                          3,036             733
Total                                                                                                   $         70,864     $    27,790


                                                                    F-27
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                                     COATED AND SUPERCALENDERED PAPERS DIVISION OF
                                      INTERNATIONAL PAPER COMPANY (PREDECESSOR)
                                                 Notes to Combined Financial Statements
                                                         As of December 31, 2005
                                                and for the Year Ended December 31, 2005
                                           and for the Seven-Month Period Ended July 31, 2006

1. BASIS OF PRESENTATION
       The accompanying combined financial statements have been prepared from the separate records maintained by the Coated and
Supercalendered Papers Division and International Paper Company and include allocations of certain IPCO corporate costs and expenses. The
liabilities associated with the IPCO corporate costs and expenses have not been allocated to the Division in the accompanying combined
balance sheets. These costs and obligations are those of IPCO, not the Division. These liabilities primarily include workers compensation and
general liability insurance reserves, payroll taxes and pension, postretirement and postemployment liabilities. In accordance with SFAS No. 57,
Related Party Disclosures, related party transactions cannot be presumed to be carried out on an arm’s-length basis as the requisite conditions
of competitive, free-market dealing may not exist. These combined financial statements may not necessarily be indicative of the conditions that
would have existed, or the results of operations that would have resulted, had the Division been operated as an unaffiliated company.

      The Coated and Supercalendered Papers Division of International Paper Company (the ―Predecessor‖ or the ―Division‖) operates in three
operating segments: coated and supercalendered papers; hardwood market pulp; and other, consisting of uncoated copy paper and specialty
industrial paper. The Division’s core business platform is as a producer of coated freesheet, coated groundwood, and uncoated supercalendered
papers. These products serve customers in the catalog, magazine, inserts, and commercial print markets. The Division includes mills and
related woodyards in Bucksport and Jay, Maine; Quinnesec, Michigan; and Sartell, Minnesota. The Division also includes investments in two
energy producing assets located at the Bucksport and Jay, Maine, facilities.

      During the periods presented, the Division was under the control of International Paper Company (IPCO). The operating results and
financial position of the Division were impacted by the nature of this relationship (see Note 4).

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
      Use of Estimates —The preparation of financial statements in conformity with accounting principles generally accepted in the United
States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure
of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the
reporting periods. Actual results could differ from these estimates.

      Revenue Recognition —Sales are reported net of rebates, allowances and discounts. Revenue is recognized when the customer takes title
and assumes the risks and rewards of ownership. Revenue is recorded at the time of shipment for terms designated f.o.b. (free on board)
shipping point. For sales transactions designated f.o.b. destination, which include export sales, revenue is recorded when the product is
delivered to the customer’s site and when title and risk of loss are transferred.

      Shipping and Handling Costs —Shipping and handling costs, such as freight to customer destinations, are included in cost of products
sold in the accompanying combined statements of operations. These costs, when included in the sales price charged for the Division’s products,
are recognized in net sales.

      Annual Maintenance Costs —Annual maintenance costs for major planned maintenance shutdowns in excess of $1.0 million are
expensed ratably over the year in which the maintenance shutdowns occur since the Company believes that operations benefit throughout the
year from the maintenance work performed. These

                                                                     F-28
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costs, including manufacturing variances and out-of-pocket costs that are directly related to the shutdown, are fully expensed in the year of the
shutdown with no amounts remaining accrued at year-end. Other maintenance costs are expensed as incurred.

      Affiliate Transactions —All intradivision transactions have been eliminated (see Note 4).

      Cash —Cash includes highly liquid investments with a maturity of three months or less at the date of purchase.

      Fair Value of Financial Instruments —Due to the short maturities of the Division’s receivables and payables, the carrying values of
these financial instruments approximate their fair values. The fair value of the Division’s debt is estimated based on current rates offered for
debt of the same maturity.

     Concentrations of Credit Risk —Financial instruments, which consist primarily of trade accounts receivable, expose the Division to
concentrations of credit risk. The Division continually monitors the creditworthiness of its customers to whom credit is granted in the normal
course of business.

      The Division establishes its allowance for doubtful accounts based upon factors surrounding the credit risks of specific customers,
historical trends, and other information. Bad debt expense was approximately $1.0 million for the seven months ended July 31, 2006 and
approximately $0.2 million for the year ended December 31, 2005.

      Inventories and Replacement Parts and Other Supplies —Inventory values include all costs directly associated with manufacturing
products: materials, labor, and manufacturing overhead. These values are presented at the lower of cost or market. Costs of raw materials,
work-in-progress, and finished goods are determined using the first-in, first-out method. Replacement parts and other supplies are stated using
the average cost method.

      Plant, Property, and Equipment —Plant, property, and equipment is stated at cost, net of accumulated depreciation. Interest is
capitalized on projects meeting certain criteria and is included in the cost of the assets. The capitalized interest is depreciated over the same
useful lives as the related assets. Expenditures for major repairs and improvements are capitalized, whereas normal repairs and maintenance are
expensed as incurred.

      Depreciation and amortization are computed using the units of production method for paper machines and related equipment and the
straight line method for all other assets over the assets’ estimated useful lives. The useful life of machinery and equipment is not expected to
differ significantly between the units of production method and the straight line method.

      Estimated useful lives are as follows:

                                                                                                               Years
            Building                                                                                         20–40
            Machinery and equipment                                                                          10–20
            Furniture and office equipment                                                                   3–10
            Computer hardware                                                                                 3–6
            Leasehold improvements                                                               Over the terms of the leases or
                                                                                                     the useful life of the
                                                                                                        improvements.

     Capitalized Software —Software is capitalized and amortized over its anticipated useful life, approximately three years. Approximately
$0.6 million of software amortization is reflected in depreciation and amortization expense for 2005. Software is fully amortized as of
December 31, 2005.

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      Impairment of Long-Lived Assets —Long-lived assets are reviewed for impairment upon the occurrence of events or changes in
circumstances that indicate that the carrying value of the assets may not be recoverable, as measured by comparing their net book value to the
estimated undiscounted future cash flows generated by their use. Impaired assets are recorded at estimated fair value, determined principally
using discounted cash flows.

      Asset Retirement Obligations —In accordance with the provisions of Statement of Financial Accounting Standards (―SFAS‖) No. 143,
Accounting for Asset Retirement Obligations , a liability and an asset are recorded equal to the present value of the estimated costs associated
with the retirement of long-lived assets where a legal or contractual obligation exists. The liability is accreted over time, and the asset is
depreciated over its useful life. The Division’s asset retirement obligations under this standard relate to closure and post-closure costs for
landfills.

      Income Taxes —The Division’s operating results are included in the income tax returns of IPCO. For the operating results included in
the IPCO income tax returns, a charge in lieu of income taxes has been allocated by IPCO to the Division, representing a portion of IPCO’s
consolidated tax provision. This tax rate considers IPCO’s federal rate and the state tax apportionment of the various states in which the
Division operates. The rate may be different than that determined if the Division were an incorporated entity computing its taxes on a separate
return basis.

      Environmental Costs and Obligations —Costs associated with environmental obligations, such as remediation or closure costs, are
accrued when such costs are probable and reasonably estimable. Such accruals are adjusted as further information develops or circumstances
change. Costs of future expenditures for environmental obligations are discounted to their present value when the expected cash flows are
reliably determinable.

3. SUPPLEMENTAL FINANCIAL STATEMENT INFORMATION
     Interest payments for the seven months ended July 31, 2006, were $7.6 million and were $15.2 million for the year ended December 31,
2005. Total interest expense was $8.4 million for the seven months ended July 31, 2006 and was $14.8 million for the year ended
December 31, 2005. In conjunction with the Acquisition, Verso Paper Corp. assumed none of historical debt associated with the Predecessor.

       Interest costs related to the development of certain long–term assets are capitalized and amortized over the related assets’ estimated useful
lives. Allocated capitalized net interest costs from IPCO to the Division were $0.2 million in 2005.

4. TRANSACTIONS WITH IPCO AND AFFILIATES
      Certain services are provided to the Division by IPCO, including corporate management, legal, accounting and tax, treasury, payroll and
benefits administration, certain incentive compensation, risk management, information technology and centralized transaction processing.
These expenses are included in Selling, general and administrative expenses and Cost of products sold in the accompanying combined
statements of operations. Expenses for such corporate services included in Selling, general and administrative expenses totaled $25.5 million
for the seven months ended July 31, 2006 and $35.7 million for the year ended December 31, 2005. Expenses for such corporate services in
Cost of products sold totaled $6.2 million for the seven months ended July 31, 2006, and $8.3 million for the year ended December 31, 2005.
These costs are allocated from IPCO to the Division based on various methods, including direct consumption, percent of capital employed, and
number of employees.

      Substantially, all employees hired prior to July 2004, and retirees of the Division, participate in IPCO’s pension plans and are eligible to
receive retirement benefits. IPCO allocates service cost to the Division based upon a percent-of-pay for salaried employees and a calculated flat
amount for hourly employees. During the seven-month period ended July 31, 2006, IPCO allocated periodic pension costs to the Division of
$7.5 and during the year ended December 31, 2005, IPCO allocated periodic pension costs to the Division of $9.1 million.

                                                                       F-30
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      IPCO provides certain retiree health care and life insurance benefits to a majority of the Division’s salaried employees and certain of the
Division’s hourly employees. IPCO allocates postretirement benefit costs to the Division based upon a percent-of-pay for salaried employees
and a calculated flat amount for hourly employees. During the seven month period ended July 31, 2006, IPCO allocated postretirement benefit
costs to the Division of $0.8 million and during the year ended December 31, 2005, IPCO allocated postretirement benefit costs to the Division
of $2.7 million.

      The Division had net sales to IPCO of approximately $83.8 million for the seven months ended July 31, 2006, and $167.9 million for the
year ended December 31, 2005. The Division had purchases from IPCO of approximately $119.5 million for the seven months ended July 31,
2006, and $198.2 million for the year ended December 31, 2005.

5. INCOME TAXES
      The results of operations of the Division are included in the income tax returns of IPCO. In the accompanying combined financial
statements, the Division has reflected U.S. federal and state income tax expense on its gains based on an allocated rate of 39.4% for seven
months ended July 31, 2006, and for the year ended December 31, 2005. The Division settles the current amount due to/from IPCO through the
Divisional control account. Income taxes have been provided for all items included in the historical statements of income included herein,
regardless of when such items were reported for tax purposes or when the taxes were actually paid or refunded.

6. DIVISIONAL CONTROL ACCOUNT
      C&SC Papers operates as a division of IPCO. Accordingly, certain operating, financing, and investing activities of the Division are
funded through inter-divisional transactions with IPCO and its other operating divisions and subsidiaries. The accompanying combined balance
sheets reflect these amounts in the Divisional control account.

      Intercompany sales and purchases with wholly-owned entities of IPCO may result in payables or receivables that have not been settled
through the divisional control account at July 31, 2006, and December 31, 2005. Such amounts are reported separately from the divisional
control account. Trade and non-trade transactions that involve U.S. locations are allowed to accumulate in the intercompany accounts. Trade
transactions involving non-U.S. locations are settled with cash according to the terms of the sale. Non-trade transactions involving non-U.S.
locations are settled with cash by the end of each calendar quarter. There has been no direct interest income or expense allocated to the
Division by IPCO with respect to the Divisional control account or other net receivables or payables due to/from IPCO.

      The changes in the Divisional control account are as follows:

                                                                                         Seven Months Ended                   Year Ended
                                                                                             July 31, 2006                 December 31, 2005
      Balance at January 1                                                              $        1,039,988             $          1,075,254
          Net Income                                                                                10,757                           27,550
          Contribution of net assets by IPCO(1)                                                     13,342                              —
          Funding (distributed to) provided by IPCO                                                  7,105                          (62,816 )
      Balance—End of Period                                                             $        1,071,192             $          1,039,988


      (1)    In July 2006, IPCO transferred woodyard logs inventory and related assets to the Division with a book value of $13.3 million.

                                                                      F-31
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7. RESTRUCTURING AND OTHER CHARGES
      In March 2005, IPCO announced the indefinite shutdown of the No. 1 paper machine at the Jay, Maine mill. Effective December 2005,
IPCO permanently decommissioned the No. 1 paper machine and began conversion of it to a pulp dryer. A charge of $6.6 million for severance
and related costs was recorded related to the termination of approximately 90 employees. Severance totaling $4.1 million and $0.8 million was
paid to employees in December 2005 and January 2006, respectively. In addition, a charge of $3.2 million for an asset impairment was
recorded for the No. 1 paper machine and related assets. This machine was a component of the Other operating segment until December 2005
when it was reclassified to the Pulp operating segment.

8. COMMITMENTS AND CONTINGENCIES
      Operating Leases —The Division has entered into operating lease agreements, which expire at various dates through 2013, related to
certain machinery and equipment used in its manufacturing process. Rental expense under operating leases amounted to $13.3 million for the
year ended December 31, 2005.

     The building and land related to the Sartell mill No. 3 paper machine are leased under a long-term operating lease. The lease was
remeasured to fair value upon IPCO’s acquisition of Champion International Corporation resulting in an unfavorable fair value adjustment
which is being amortized as rent expense over the life of the lease.

      Pulp purchase commitment —In December 2004, IPCO entered into a 10-year pulp purchase agreement with the buyer of IPCO’s
former Weldwood business. This take-or-pay agreement requires IPCO to purchase 170,000 tons of NBSK pulp at market prices at the time of
order and IPCO has allocated approximately 110,000 tons of the required purchases to the Division. In 2005, pulp prices under this agreement
ranged between $500 per ton and $550 per ton with an average of approximately $525 per ton. This purchased pulp represents approximately
one-third of the Division’s purchased pulp needs. This agreement is transferable with appropriate consent from the seller.

      Wood Supply Agreement —IPCO’s Forest Resources business supplies the Division’s mills with their fiber needs at market prices. The
Division’s mills receive fiber in various forms (chips, tree length, and custom cut) and species: softwood (pine, spruce, and fir) and hardwood
(aspen, maple, and oak). In December 2004, IPCO completed the sale of 1.1 million acres of forestlands in Maine and New Hampshire. As part
of that sale, IPCO also entered into a 50-year wood supply agreement. The wood supply agreement covers the Division’s Bucksport and Jay,
Maine mills. Wood is delivered at market prices in effect at the time of delivery to the mills. IPCO must purchase a base volume as defined in
the agreement and also has the ability to purchase additional wood fiber, defined as ―option‖ volume. The volumes, base and option, are
computed as a percentage of the estimated annual harvest. Base volume per year is approximately 310,000 tons, which is roughly 13% of the
mills’ wood needs. The agreement includes a limitation of damages section under which IPCO’s maximum potential damages for a default are
$15.00 per ton of wood delivered in the first year. This amount is approximately $4.7 million. The supply agreement is assignable by either
party with mutual consent.

      Androscoggin—PM 5 Agreement —In June 2005, IPCO sold its Industrial Papers business. As part of this transaction, IPCO and the
Division entered into a 12-year contract manufacturing arrangement with the buyer, Thilmany LLC. (―Thilmany‖), for production from the Jay,
Maine mill’s No. 5 paper machine. IPCO deferred approximately $32.5 million of the sales proceeds, to reflect the contract manufacturing
agreement. The deferred proceeds are earned by IPCO as volume is produced in accordance with the contract manufacturing agreement. This
agreement requires Thilmany to pay the Division a variable charge for the paper purchased and a fixed charge for the availability of the No. 5
paper machine. The deferred amount and related amortization are obligations of IPCO and are not recorded on the Division’s financial
statements. The Division’s sales of paper produced on the No. 5 paper machine were approximately $41.8 million for the year ended
December 31, 2005. Prior to June 2005, the sales from No. 5 paper machine were primarily to IPCO’s Industrial Paper’s Division. The
Division is responsible for the No. 5 paper machine’s routine maintenance capital, and Thilmany is

                                                                     F-32
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responsible for any capital expenditures specific to the No. 5 paper machine. As defined in the agreement, Thilmany has the right to terminate
the agreement if certain events occur, such as IPCO’s failure to produce product for a 75-day consecutive period. Following a 30-day period
after such a failure to produce, IPCO would be subject to a penalty payment based on the prior 12-month EBITDA from products produced on
the machine multiplied by a factor. The factor at the beginning of the agreement is five and decreases ratably over the life of the agreement.
Thilmany has not notified IPCO or the Division of any failure to perform and no liability is accrued. The agreement is transferable with
appropriate consent from Thilmany.

       Litigation —In March 2006, the Division received approximately $1.0 million from Androscoggin Energy LLC (―AELLC‖), as a result
of the settlement of a billing dispute. AELLC was a supplier of energy to the Jay, Maine facility that ceased operations in November 2004 and
filed for Chapter 11 bankruptcy.

      The Division has various other lawsuits, claims, and contingent liabilities arising from the conduct of its business; however, in the
opinion of management, they are not expected to have a material adverse effect on the combined results of operations, cash flows, or financial
position of the Division.

9. INFORMATION BY INDUSTRY SEGMENT
     The Division operates in three operating segments, Coated and supercalendered papers, Hardwood market pulp, and Other, consisting of
uncoated copy paper and specialty industrial paper. The Division operates in one geographic segment, the United States. The Division’s core
business platform is as a producer of coated freesheet, coated groundwood, and uncoated supercalendered papers. These products serve
customers in the catalog, magazine, inserts, and commercial print markets.

                                                                     F-33
Table of Contents

      For management purposes, the operating performance of the Division is reported based on earnings before interest and taxes, excluding
the cumulative effect of accounting changes:

                                                                                             Seven Months Ended                  Year Ended
                                                                                                 July 31, 2006                December 31, 2005
Net Sales:
     Coated                                                                                 $          793,308            $          1,402,958
     Pulp                                                                                               88,634                         139,825
     Other                                                                                              22,475                          61,063
Total                                                                                       $          904,417            $          1,603,846

Operating Income (Loss):
    Coated                                                                                  $            14,971           $              78,827
    Pulp                                                                                                 10,346                          10,893
    Other                                                                                                   825                         (29,473 )
Total                                                                                       $            26,142           $              60,247

Depreciation and Amortization:
    Coated                                                                                  $            60,881           $            107,623
    Pulp                                                                                                 10,417                         16,282
    Other                                                                                                 1,376                          5,450
Total                                                                                       $            72,674           $            129,355

Property, Plant, and Equipment:
    Coated                                                                                                                $          1,064,760
    Pulp                                                                                                                               207,438
    Other                                                                                                                               14,844
Total                                                                                                                     $          1,287,042

Capital Spending:
    Coated                                                                                  $            26,449           $              47,088
    Pulp                                                                                                    839                           5,286
    Other                                                                                                   367                             722
Total                                                                                       $            27,655           $              53,096


10. SUBSEQUENT EVENT INFORMATION
      On August 1, 2006, IPCO completed the previously announced sale of the Division to Verso Paper LLC, an affiliate of Apollo
Management, L.P., for approximately $1.4 billion. The purchase price was paid partially in cash and partially through a 10% limited
partnership interest in Verso Paper Investments LP, Verso Paper LLC’s indirect parent company.

                                                                    F-34
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                     COMMON STOCK




                            Prospectus




                    Dated                , 2008
Table of Contents

                                                                     PART II

                                        INFORMATION NOT REQUIRED IN THE PROSPECTUS

ITEM 13.      Other Expenses of Issuance and Distribution.
      The following table sets forth all expenses other than the underwriting discount, payable by the Registrant in connection with the sale of
the common shares being registered. All amounts shown are estimates except for the SEC registration fee.

      SEC registration fee                                                                                                    $ 10,591.50
      FINRA fee                                                                                                               $ 35,000.00
      Legal fees and expenses                                                                                                 $2,000,000.00
      Printing and engraving expenses                                                                                         $ 250,000.00
      Blue sky fees                                                                                                           $    5,000.00
      NYSE fees                                                                                                               $ 100,000.00
      Transfer agent fees                                                                                                     $ 10,000.00
      Accounting fees and expenses                                                                                            $ 600,000.00
      Miscellaneous                                                                                                           $1,000,000.00
           Total                                                                                                              $4,010,591.50

ITEM 14.      Indemnification of Officers and Directors.
      Verso Paper Corp. is incorporated under the laws of the state of Delaware.

       Section 145 of the Delaware General Corporation Law, or the ―DGCL,‖ provides that a corporation may indemnify any person, including
an officer or director, who was or is, or is threatened to be made, a party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (other than an action by or in the right of such corporation), by reason of the fact that
such person is or was a director, officer, employee or agent of such corporation, or is or was serving at the request of such corporation as a
director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise. The indemnity may include
expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in
connection with such action, suit or proceeding, provided such person acted in good faith and in a manner such person reasonably believed to
be in or not opposed to the best interests of such corporation, and, with respect to any criminal actions and proceedings, had no reasonable
cause to believe that his conduct was unlawful. A Delaware corporation may indemnify any person, including an officer or director, who was
or is, or is threatened to be made, a party to any threatened, pending or contemplated action or suit by or in the right of such corporation, under
the same conditions, except that such indemnification is limited to expenses (including attorneys’ fees) actually and reasonably incurred by
such person, and except that no indemnification is permitted without judicial approval if such person is adjudged to be liable to such
corporation. Where an officer or director of a corporation is successful, on the merits or otherwise, in the defense of any action, suit or
proceeding referred to above, or any claim, issue or matter therein, the corporation must indemnify that person against the expenses (including
attorneys’ fees) which such officer or director actually and reasonably incurred in connection therewith.

      The amended and restated certificate of incorporation of Verso Paper Corp. will provide for the indemnification of directors, officers and
employees to the fullest extent permitted by the DGCL. In addition, as permitted by the DGCL, the amended and restated certificate of
incorporation of Verso Paper Corp. will provide that none of its directors will be personally liable to it or its stockholders for monetary
damages for breach of fiduciary duty as a director, except to the extent such exemption from liability or limitation thereof is not permitted
under the DGCL as currently in effect or as the same may hereafter be amended.

                                                                       II-1
Table of Contents

      The amended and restated by-laws of Verso Paper Corp. will provide for the indemnification of all of their respective current and former
directors and current or former officers to the fullest extent permitted by the DGCL.

Item 15.      Recent Sales of Unregistered Securities.
      In connection with the Acquisition on August 1, 2006, the Registrant issued 1,000 shares of common stock to Verso Paper Management
LP for an aggregate purchase price of approximately $290 million. This transaction was exempt from the registration requirements pursuant to
Section 4(2) of the Securities Act of 1933, as amended, as a transaction by the Registrant not involving a public offering. We determined that
the purchaser of the securities was a sophisticated investor and was provided access to all relevant information necessary to evaluate the
investment.

Item 16.      Exhibits and Financial Statement Schedules.
      (a) Exhibits
     See the Exhibit Index beginning on the page II-5 for a list of exhibits filed as part of this registration statement on Form S-1, which
Exhibit Index is incorporated herein by reference.

      (b) Financial Statement Schedules


                                               Schedule II – Valuation and Qualifying Accounts

                                                 Verso Paper Corp. (Successor) and
                       Coated and Supercalendered Papers Division of International Paper Company (Predecessor)
                                                 Valuation and Qualifying Accounts
                       Years Ended December 31, 2004, 2005, and Seven Months Ended July 31, 2006 (Predecessor)
                                        and Five Months Ended December 31, 2006 (Successor)

                                                                                                                                          Balance at
                                                                                                                                             End
                                                                                                   Additions           Deductions         of Period
                                                                                  Balance at       Charged to          Charge-off
                                                                                  Beginning         Cost and            Against
                                                                                  of Period         Expenses           Allowances
Allowance for uncollectible accounts included under the balance sheet
  caption ―Accounts receivable‖ (Predecessor):
    Year Ended December 31, 2005                                                 $    8,897        $      200         $    (1,795 )      $     7,302
     Seven Months Ended July 31, 2006                                            $    7,302        $      856         $    (6,323 )      $     1,835
Allowance for uncollectible accounts included under the balance sheet
  caption ―Accounts receivable‖ (Successor):
    Five Months Ended December 31, 2006                                          $    1,835        $      102         $      —           $     1,937
     Year Ended December 31, 2007                                                $    1,937        $     (258 )       $        (2 )      $     1,677


Item 17.      Undertakings
      Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a
director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities being

                                                                        II-2
Table of Contents

registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be
governed by the final adjudication of such issue.

      The undersigned registrant hereby undertakes that:
       (1) For the purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus
filed as a part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to
Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared
effective.

      (2) For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.

       The undersigned registrant hereby undertakes to provide to the underwriters at the closing specified in the underwriting agreement
certificates in such denominations and registered in such names as required by the underwriter to permit prompt delivery to each purchaser.

                                                                        II-3
Table of Contents

                                                                 SIGNATURE

     Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Memphis, State of Tennessee, on April 2, 2008.

                                                                                      VERSO PAPER CORP.

                                                                                      By:      / S / M ICHAEL A. J ACKSON
                                                                                               Michael A. Jackson
                                                                                               President, Chief Executive Officer and Director

     Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the
capacities and on the dates indicated.

                        Signature                                      Title                                           Date
                                                    President, Chief Executive Officer and
        /S/    M ICHAEL A. J ACKSON                   Director (Principal Executive Officer)                      April 2, 2008
                    Michael A. Jackson

                                                    Senior Vice President and Chief
                                                      Financial Officer (Principal Financial
         /S/    R OBERT P. M UNDY                     and Accounting Officer)                                     April 2, 2008
                    Robert P. Mundy

                            *                       Director                                                      April 2, 2008
                     Joshua J. Harris

                            *                       Director                                                      April 2, 2008
                    Scott M. Kleinman

                            *                       Director                                                      April 2, 2008
                     Jordan C. Zaken

                            *                       Director                                                      April 2, 2008
                     David W. Oskin

                                                                      II-4
Table of Contents

                        Signature                   Title       Date

                            *            Director           April 2, 2008
                     L.H. Puckett, Jr.

                            *            Director           April 2, 2008
                     Michael E. Ducey

                            *            Director           April 2, 2008
                     David B. Sambur


        */S/        R OBERT P. M UNDY                       April 2, 2008
                     Robert P. Mundy
                     Attorney-in-fact

                                                    II-5
Table of Contents

                                                         EXHIBIT INDEX

Exhibit No.         Description of Exhibit
     1.1†           Form of Underwriting Agreement.
     2.1            Agreement of Purchase and Sale dated as of June 4, 2006, among International Paper Company, Verso Paper
                    Investments LP and Verso Paper LLC (incorporated by reference to Exhibit 2.1 in Amendment No. 1 to the
                    Registration Statement of Verso Paper Holdings LLC on Form S-4 (Registration No. 333-142283) filed on June 29,
                    2007).
   2.2**            Amendment No. 1 to Agreement of Purchase and Sale, dated as of August 1, 2006, among International Paper
                    Company, Verso Paper Investments LP and Verso Paper LLC.
   2.3**            Amendment No. 2 to Agreement of Purchase and Sale, dated as of May 31, 2007, among International Paper
                    Company, Verso Paper Investments LP and Verso Paper LLC.
     3.1†           Form of Amended and Restated Certificate of Incorporation of Verso Paper Corp.
     3.2†           Form of Amended and Restated Bylaws of Verso Paper Corp.
     4.1†           Specimen common stock certificate of Verso Paper Corp.
     5.1†           Opinion of Latham & Watkins LLP, special counsel to Verso Paper Corp.
   10.1             Credit Agreement, dated as of August 1, 2006, among Verso Paper Finance Holdings LLC, Verso Paper Holdings
                    LLC, the Lenders party thereto, Credit Suisse, Cayman Islands Branch, as Administrative Agent, Lehman Brothers
                    Inc., as Syndication Agent, and Citigroup Global Markets Inc. and Banc of America Securities LLC, as Documentation
                    Agents (incorporated by reference to Exhibit 10.1 in Amendment No. 1 to the Registration Statement of Verso Paper
                    Holdings LLC on Form S-4 (Registration No. 333-142283) filed on June 29, 2007).
   10.2             Guarantee and Collateral Agreement, dated as of August 1, 2006, among Verso Paper Finance Holdings LLC, Verso
                    Paper Holdings LLC, the Subsidiaries identified therein and Credit Suisse, Cayman Islands Branch, as Administrative
                    Agent (incorporated by reference to Exhibit 10.2 in Amendment No. 1 to the Registration Statement of Verso Paper
                    Holdings LLC on Form S-4 (Registration No. 333-142283) filed on June 29, 2007).
   10.3             Intellectual Property Security Agreement, dated as of August 1, 2006, made by Verso Paper Holdings LLC, Verso
                    Paper Inc., Verso Paper LLC, Verso Androscoggin LLC, Verso Bucksport LLC, Verso Quinnesec LLC, Verso Sartell
                    LLC and Nextier Solutions Corporation in favor of Wilmington Trust Company, as Collateral Agent (incorporated by
                    reference to Exhibit 10.3 in Amendment No. 1 to the Registration Statement of Verso Paper Holdings LLC on Form
                    S-4 (Registration No. 333-142283) filed on June 29, 2007).
   10.4             Management and Transaction Fee Agreement, dated as of August 1, 2006, among Verso Paper LLC, Verso Paper
                    Investments LP, Apollo Management V, L.P. and Apollo Management VI, L.P. (incorporated by reference to Exhibit
                    10.4 in Amendment No. 1 to the Registration Statement of Verso Paper Holdings LLC on Form S-4 (Registration No.
                    333-142283) filed on June 29, 2007).
   10.5             Employment Agreement, dated as of November 16, 2006, between Michael A. Jackson and Verso Paper Holdings
                    LLC (incorporated by reference to Exhibit 10.5 in Amendment No. 1 to the Registration Statement of Verso Paper
                    Holdings LLC on Form S-4 (Registration No. 333-142283) filed on June 29, 2007).
   10.6             Letter Agreement, dated as of November 16, 2006, between Michael A. Jackson and Verso Paper Holdings LLC
                    (incorporated by reference to Exhibit 10.6 in Amendment No. 1 to the Registration Statement of Verso Paper Holdings
                    LLC on Form S-4 (Registration No. 333-142283) filed on June 29, 2007).
Table of Contents

Exhibit No.         Description of Exhibit
10.7*               First Amendment to Employment Agreement dated as of January 1, 2008, between Michael A. Jackson and Verso Paper
                    Holdings LLC.
10.8*               Second Amended and Restated Limited Partnership Agreement of Verso Paper Management LP dated as of February
                    26, 2008.
10.9†               Form of Third Amended and Restated Limited Partnership Agreement of Verso Paper Management LP.
10.10               Letter Agreement dated as of February 16, 2007, between Verso Paper Management LP and Michael A. Jackson
                    (incorporated by reference to Exhibit 10.8 in Amendment No. 1 to the Registration Statement of Verso Paper Holdings
                    LLC on Form S-4 (Registration No. 333-142283) filed on June 29, 2007).
10.11               Letter Agreement dated as of November 1, 2006, between Verso Paper Management LP and L.H. Puckett (incorporated
                    by reference to Exhibit 10.9 in Amendment No. 1 to the Registration Statement of Verso Paper Holdings LLC on Form
                    S-4 (Registration No. 333-142283) filed on June 29, 2007).
10.12*              Confidentiality and Non-Competition Agreement, dated as of January 1, 2008, between Robert P. Mundy and Verso
                    Paper Holdings LLC.
10.13*              Confidentiality and Non-Competition Agreement, dated as of January 1, 2008, between Lyle J. Fellows and Verso Paper
                    Holdings LLC.
10.14*              Confidentiality and Non-Competition Agreement, dated as of January 1, 2008, between Michael A. Weinhold and Verso
                    Paper Holdings LLC.
10.15*              Confidentiality and Non-Competition Agreement, dated as of January 1, 2008, between Peter H. Kesser and Verso
                    Paper Holdings LLC.
10.16               Indenture relating to the Second Priority Senior Secured Floating Rate Notes due 2014 and the 9 / 8 % Second Priority
                                                                                                                   1


                    Senior Secured Fixed Rate Notes due 2014, dated as of August 1, 2006, among Verso Paper Holdings LLC, Verso Paper
                    Inc., the Guarantors named therein and Wilmington Trust Company, as Trustee (incorporated by reference to Exhibit
                    4.1 in Amendment No. 1 to the Registration Statement of Verso Paper Holdings LLC on Form S-4 (Registration
                    No. 333-142283) filed on June 29, 2007).
10.17               Indenture relating to the 11 / 8 % Senior Subordinated Notes due 2016, dated as of August 1, 2006, among Verso
                                               3


                    Paper Holdings LLC, Verso Paper Inc., the Guarantors named therein and Wilmington Trust Company, as Trustee
                    (incorporated by reference to Exhibit 4.6 in Amendment No. 1 to the Registration Statement of Verso Paper Holdings
                    LLC on Form S-4 (Registration No. 333-142283) filed on June 29, 2007).
10.18               Intercreditor Agreement, dated as August 1, 2006, among Credit Suisse, Cayman Islands Branch, as Intercreditor Agent,
                    Wilmington Trust Company, as Trustee, Verso Paper Finance Holdings LLC, Verso Paper Holdings LLC and the
                    Subsidiaries of Verso Paper Holdings LLC listed on Schedule I thereto (incorporated by reference to Exhibit 4.11 in
                    Amendment No. 1 to the Registration Statement of Verso Paper Holdings LLC on Form S-4 (Registration No.
                    333-142283) filed on June 29, 2007).
10.19               Collateral Agreement, dated as of August 1, 2006, among Verso Paper Holdings LLC, Verso Paper Inc., the
                    Subsidiaries identified therein and Wilmington Trust Company, as Collateral Agent (incorporated by reference to
                    Exhibit 4.12 in Amendment No. 1 to the Registration Statement of Verso Paper Holdings LLC on Form S-4
                    (Registration No. 333-142283) filed on June 29, 2007).
Table of Contents

Exhibit No.         Description of Exhibit
10.20               Intellectual Property Security Agreement, dated as of August 1, 2006, made by Verso Paper Finance Holdings LLC, Verso
                    Paper Holdings LLC, Verso Paper Inc., Verso Paper LLC, Verso Androscoggin LLC, Verso Bucksport LLC, Verso
                    Quinnesec LLC, Verso Sartell LLC and NexTier Solutions Corporation in favor of Credit Suisse, Cayman Islands Branch,
                    as Administrative Agent (incorporated by reference to Exhibit 4.13 in Amendment No. 1 to the Registration Statement of
                    Verso Paper Holdings LLC on Form S-4 (Registration No. 333-142283) filed on June 29, 2007).
10.21**             Credit Agreement, dated January 31, 2007, among Verso Paper Finance Holdings LLC, Verso Paper Finance Holdings Inc.,
                    the Lenders party thereto, Credit Suisse, as Administrative Agent, and Citigroup Global Markets Inc., as Syndication Agent.
21**                Subsidiaries of the Registrant.
23.1†               Consent of Latham & Watkins LLP, special counsel to Verso Paper Corp. (included in Exhibit 5.1).
23.2*               Consent of Deloitte & Touche LLP, Independent Registered Public Accounting Firm.
23.3**              Power of Attorney.
99.1**              Consent of Resource Information Systems, Inc.

* Filed herewith.
** Previously filed.
† To be filed by amendment.
                                                                                                                                  Exhibit 10.7

                                                        FIRST AMENDMENT
                                                               TO
                                                     EMPLOYMENT AGREEMENT

      This First Amendment to Employment Agreement (this ― Amendment ‖) is made and entered into as of January 1, 2008, by and between
Mike Jackson (the ― Executive ‖) and Verso Paper Holdings LLC, a Delaware limited liability company (together with any of its subsidiaries
and affiliates as may employ the Executive from time to time, and any successor(s) thereto, the ― Company ‖).

      Introduction . Reference is made to the Employment Agreement dated November 16, 2006 (the ― Agreement ‖), between the Executive
and the Company. The Executive and the Company desire to amend the Agreement as provided herein. Based on such premise, and for certain
good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Executive and the Company hereby agree as
follows:

     1.     Amendment of Section 5(a) . Section 5(a) of the Agreement is amended by adding the following at the end of such provision:
           * * * In addition, the Company shall (i) provide to Executive the employment-related benefits described in the attached Exhibit A
           for up to twenty-four (24) months following the Date of Termination, in accordance with and subject to the terms and conditions set
           forth in Exhibit A; and (ii) contribute on the Executive’s behalf an amount equal to his Lost Retirement Benefits (as defined below)
           to the Company’s Deferred Compensation Plan. As used in this Agreement, the term ― Lost Retirement Benefits ‖ shall mean the
           projected value of employer contributions under the Company’s Retirement Savings Plan, Deferred Compensation Plan, and
           Supplemental Salaried Retirement Savings Plan (collectively, the ― Plans ‖) that the Executive would have received had he
           remained actively employed with the Company during the twenty-four (24) months following the Date of Termination. The
           determination of the Lost Retirement Benefits shall be made by the Company, in its sole and absolute discretion, and shall be based
           on (i) the Annual Base Salary per month in effect in the month immediately preceding the Date of Termination and (ii) the
           assumption that the Executive’s salary deferrals during such twenty-four (24) month period are in such amounts as would produce
           the maximum possible matching contribution by the Company under the Plans. The Company shall contribute on the Executive’s
           behalf the value of his Lost Retirement Benefits to the Company’s Deferred Compensation Plan in a lump sum payment as soon as
           reasonably practicable after the determination of the Lost Retirement Benefits is made;

     2.     Addition of Exhibit A . Exhibit A is added to the Agreement after the signature page as follows:
                                                                 EXHIBIT A
                                                 EMPLOYMENT-RELATED BENEFITS

     Benefits:
             •     Coverage under the Company’s Medical and Dental Plan for the Executive and his or her eligible dependents for up to
                   twenty-four (24) months.
             •     Reimbursement for (i) all costs to convert to an individual policy the basic life insurance coverage on the Executive’s life
                   only, in such amount as in effect on the Date of Termination, and (ii) the premiums necessary to continue such converted
                   coverage for up to twenty-four (24) months. Reimbursement shall be conditioned on the Executive providing the Company
                   with satisfactory evidence that the conversion costs and premiums have been incurred.

     Additional Terms and Conditions:
             •     The Company shall pay the Executive an amount equal to the aggregate of any and all federal, state and local income tax
                   imposed on the Executive resulting from the benefits set forth above, as determined by the Company in its sole and absolute
                   discretion.
             •     Benefit coverage/reimbursement is subject to early termination upon the Executive’s re-employment with comparable
                   benefits available, as determined by the Company in its sole and absolute discretion.
             •     The Company reserves the right to modify, revoke, suspend, terminate or change any or all of its benefit plans, programs or
                   policies, in whole or in part, at any time and from time to time, and with or without notice, provided that any such change or
                   modification is applicable to all similarly situated employees of the Company.

      3.    Effect of Amendment. All of the terms and provisions of the Agreement shall remain in full force and effect as previously written
except as expressly modified by this Amendment. In the event of any conflict between the terms and provisions set forth in this Amendment
and the terms and provisions set forth in the Agreement, the terms and provisions set forth in this Amendment shall take precedence.

                                                                       2
IN WITNESS WHEREOF, the parties have executed and delivered this Amendment as of the date first set forth above.


                                                                           EXECUTIVE:


                                                                           /s/ Mike Jackson
                                                                           Mike Jackson


                                                                           COMPANY:

                                                                           VERSO PAPER HOLDINGS LLC


                                                                           By:    /s/ Scott M. Kleinman
                                                                                  Scott M. Kleinman
                                                                                  Chairman of the Board

                                                             3
                                      Exhibit 10.8

                                EXECUTION COPY



SECOND AMENDED AND RESTATED

LIMITED PARTNERSHIP AGREEMENT

              OF

 VERSO PAPER MANAGEMENT LP



       F EBRUARY 26, 2008
                                                    TABLE OF CONTENTS

                                                                                Page
                                                          ARTICLE I
                                                 FORMATION OF THE PARTNERSHIP
1.1    Recitals                                                                   1
1.2    Name                                                                       1
1.3    Principal Place of Business                                                2
1.4    Certificate of Limited Partnership                                         2
1.5    Designated Agent for Service of Process                                    2
1.6    Term                                                                       2
                                                          ARTICLE II
                                                        DEFINED TERMS
2.1    1933 Act                                                                   2
2.2    1934 Act                                                                   2
2.3    Accountants                                                                2
2.4    Act                                                                        2
2.5    Actions                                                                    2
2.6    Additional Limited Partners                                                3
2.7    Adjusted Capital Account                                                   3
2.8    Adjusted Capital Account Deficit                                           3
2.9    Affiliate                                                                  3
2.10   Agreement                                                                  3
2.11   Apollo                                                                     3
2.12   Apollo Group                                                               3
2.13   Applicable Percentage                                                      4
2.14   Business Day                                                               4
2.15   Capital Account                                                            4
2.16   Capital Contribution                                                       5
2.17   Call Right                                                                 5
2.18   Cash                                                                       5
2.19   Cash Equivalents                                                           5
2.20   Cash Receipts                                                              6
2.21   Cause                                                                      6
2.22   Change of Control                                                          6
2.23   Class A Invested Capital                                                   6
2.24   Class A Unit                                                               6
2.25   Class B Unit                                                               7
2.26   Class C Unit                                                               7
2.27   Class D Unit                                                               7
2.28   Class D-1 Unit                                                             7
2.29   Closing Date                                                               7
2.30   Code                                                                       7
2.31   Commission                                                                 7
2.32   Confidential Information                                                   7
2.33   Cost                                                                       7
2.34   Deemed Retained Vested Unit Cost                                           7
2.35   Depreciation                                                               7
2.36   Distributable Cash                                                         7
2.37   Disability                                                                 8
2.38   Drag-Along Notice                                                          8
2.39   Drag-Along Participation Percentage                                        8
2.40   Drag-Along Right                                                           8
2.41   Drag-Along Sale                                                            8
2.42   Drag-Along Transferee                                                      8
2.43   Drag-Along Sellers                                                         8
2.44   Eligible Units                                                             8
2.45   Equity Units                                                               8
2.46   Exempt Class C Units                                                       8
2.47   Fair Market Value                                                          8
2.48    Final Prospectus                      8
2.49    Financing Default                     8
2.50    Forfeiting Partner                    8
2.51    Forfeiture Transfer                   8
2.52    Forfeited Unit Transferees            8
2.53    General Partner                       9
2.54    Gross Asset Value                     9
2.55    Indemnitee                           10
2.56    Independent Third Party              10
2.57    Initial Equity Stake                 10
2.58    Initial Public Offering              10
2.59    Initial Repurchase Deadline          10
2.60    Interest                             10
2.61    Investor Investment                  10
2.62    Investor IRR                         10
2.63    IPO Entity                           11
2.64    Issuer Common Stock                  11
2.65    Liabilities                          11
2.66    Limited Partner                      11
2.67    Management Limited Partner           11
2.68    Manager Permitted Transferee         11
2.69    Non-Employee Directors               11
2.70    Nonrecourse Deductions               11
2.71    Nonrecourse Liability                11
2.72    Other Invested Capital               12
2.73    Parent Issuer                        12
2.74    Partner Minimum Gain                 12
2.75    Partner Nonrecourse Debt             12
2.76    Partner Nonrecourse Deduction        12
2.77    Partners                             12
2.78    Partnership                          12
2.79    Partnership Minimum Gain             12
2.80    Partnership Subsidiary               12
2.81    Percentage Interest                  12
2.82    Permitted Transfer                   12
2.83    Permitted Transferee                 12
2.84    Person                               12
2.85    Prior Agreement                      12
2.86    Profits Interest                     12
2.87    Profits and Losses                   13
2.88    Proxy                                13
2.89    Public Share FMV                     14
2.90    Purchase Agreement                   14
2.91    Qualified IPO                        14
2.92    Registrable Securities               14
2.93    Registration Expenses                14
2.94    Regulations                          14
2.95    Restricted Period                    14
2.96    Reserves                             14
2.97    Restructuring Event                  14
2.98    Retained Vested Units                15
2.99    Sale Date                            15
2.100   Securities Indemnified Party         15
2.101   Securities Indemnifying Party        15
2.102   Services                             15
2.103   Solvent Reorganization               15
2.104   Strike Price Factor                  15
2.105   Subject Units                        15
2.106   Subsidiary or Subsidiaries           16
2.107   Subsidiary IPO                       16
2.108   Tag-Along Election Period            16
2.109   Tag-Along Notice                     16
2.110   Tag-Along Participation Percentage   16
2.111   Tag-Along Right                                                          16
2.112   Tag-Along Sale                                                           16
2.113   Tag-Along Transferee                                                     16
2.114   Tag-Along Sellers                                                        16
2.115   Tax Matters Partner                                                      16
2.116   Term                                                                     16
2.117   Termination Event                                                        16
2.118   Termination of Services                                                  16
2.119   Transfer                                                                 17
2.120   Unit or Units                                                            17
2.121   Units Buyer                                                              17
2.122   Unvested Units                                                           17
2.123   Verso Company Board of Directors                                         17
2.124   Verso Paper Holdings                                                     17
2.125   Verso Paper Investments                                                  17
2.126   Verso Paper Investments Limited Partner                                  17
2.127   Vested Units                                                             17
2.128   Work Product                                                             17
                                                           ARTICLE III
                                                      PARTNERS AND CAPITAL
3.1     General Partner                                                          17
3.2     Limited Partners                                                         17
3.3     Additional Limited Partners                                              18
3.4     Partnership Capital; Units                                               18
3.5     Liability of Partners                                                    18
3.6     Certificate of Interest                                                  18
                                                             ARTICLE IV
                                                           DISTRIBUTIONS
4.1     Distributions                                                            20
4.2     Withholding                                                              20
4.3     Distribution In Kind                                                     21
4.4     Limitation on Distributions                                              21
                                                        ARTICLE V
                                             ALLOCATIONS OF PROFITS AND LOSSES
5.1     In General                                                               21
5.2     Allocations of Profits and Losses                                        22
5.3     Limitation on Allocation of Losses                                       22
5.4     Special Allocation Provisions                                            22
5.5     Curative Allocations                                                     23
5.6     Additional Provisions                                                    24
5.7     Tax Reporting                                                            24
5.8     Tax Treatment of Partnership Interests Subject to Vesting                24
5.9     Proposed Regulations                                                     25
5.10    Forfeitures                                                              25

                                                                    i
                                                                                     Page
                                                     ARTICLE VI
                                  RIGHTS, POWERS AND DUTIES OF THE GENERAL PARTNER
6.1    Management of the Partnership                                                  26
6.2    Reliance by Third Parties                                                      28
6.3    Restrictions on Authority of General Partner                                   28
6.4    Duties and Obligations of General Partner                                      28
6.5    Liability of General Partner; Indemnification                                  29
6.6    Competitive Opportunity                                                        31
                                                     ARTICLE VII
                                   ADMISSION OF SUCCESSOR AND ADDITIONAL GENERAL
                                     PARTNERS; WITHDRAWAL OF GENERAL PARTNER
7.1    Admission of Successor or Additional General Partners                          32
7.2    Liability of a Withdrawn General Partner                                       32
                                                           ARTICLE VIII
                                        TRANSFERS OF LIMITED PARTNERS’ INTERESTS
8.1    Restrictions on Transfers of Interests                                         32
8.2    Call Option                                                                    33
8.3    Vesting Ceases upon a Termination of Services                                  37
8.4    Accelerated Vesting                                                            37
8.5    Redemption of Equity Units                                                     37
8.6    Redemptions                                                                    38
                                                       ARTICLE IX
                                          DRAG-ALONG RIGHT AND TAG-ALONG RIGHT
9.1    Drag-Along Rights                                                              38
9.2    Tag-Along Rights                                                               39
                                                       ARTICLE X
                                    DISSOLUTION AND LIQUIDATION OF THE PARTNERSHIP
10.1   Events Causing Dissolution                                                     40
10.2   Effect of Dissolution                                                          41
10.3   Capital Contribution upon Dissolution                                          41
10.4   Liquidation                                                                    41
                                                        ARTICLE XI
                                             BOOKS AND RECORDS, ACCOUNTING,
                                          INFORMATION RIGHTS, TAX ELECTIONS, ETC.
11.1   Books and Records                                                              42
11.2   Accounting and Fiscal Year                                                     42
11.3   Information and Audit Rights                                                   42

                                                           ii
                                                                                               Page
11.4       Designation of Tax Matters Partner                                                      43
                                                         ARTICLE XII
                                            CERTAIN RIGHTS AND AGREEMENTS OF THE
                                               MANAGEMENT LIMITED PARTNERS
12.1       Registration Rights.                                                                    43
12.2       Non-Solicitation; Non-Compete; Confidentiality                                          48
12.3       Voting Agreement                                                                        51
                                                     ARTICLE XIII
                                INVESTMENT REPRESENTATIONS, WARRANTIES AND COVENANTS
13.1       Representations, Warranties and Covenants of Management Limited Partners                52
13.2       Investment Intention and Restrictions on Disposition                                    52
13.3       Securities Laws Matters                                                                 53
13.4       Ability to Bear Risk                                                                    53
13.5       Access to Information; Sophistication; Lack of Reliance                                 53
13.6       Accredited Investor; Exemption from Registration                                        54
13.7       Additional Representations and Warranties                                               54
13.8       Certain Management Limited Partners                                                     55
                                                              ARTICLE XIV
                                                            OTHER PROVISIONS
14.1       Appointment of General Partner as Attorney-in-Fact                                      55
14.2       Amendments                                                                              56
14.3       Security Interest and Right of Set-Off                                                  57
14.4       Binding Provisions                                                                      57
14.5       Applicable Law                                                                          57
14.6       Entire Agreement                                                                        57
14.7       Counterparts                                                                            57
14.8       Separability of Provisions                                                              57
14.9       Article and Section Titles                                                              57
14.10      Disputes; Attorneys’ Fees                                                               57
14.11      Management Limited Partner’s Services                                                   58
14.12      Spousal Consent                                                                         58
14.13      Waiver of Jury Trial                                                                    58

EXHIBITS

A — PARTNER’S NAME, ADDRESS, CAPITAL CONTRIBUTION, UNITS, AND VESTING SCHEDULE AND/OR PERCENTAGE
    INTEREST (AS APPLICABLE)

                                                                 iii
                                                     AMENDED AND RESTATED
                                                 LIMITED PARTNERSHIP AGREEMENT

                                                                     OF

                                                   VERSO PAPER MANAGEMENT LP

           THIS SECOND AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT (the ― Agreement ‖) OF VERSO
PAPER MANAGEMENT LP, formerly known as CMP Management LP (the ― Partnership ‖), is made and entered into as of February 26,
2008, by and among Verso Paper Investments LP (formerly known as CMP Investments LP), a Delaware limited partnership (― Verso Paper
Investments ‖), as the General Partner and as a Limited Partner, and the Management Limited Partners, each as a Limited Partner. Capitalized
terms used in this Agreement shall have the meanings ascribed to them in Article II.


                                                           ARTICLE I
                                                  FORMATION OF THE PARTNERSHIP

     1.1 Recitals .
           WHEREAS, the Partnership was formed upon the filing of the Certificate of Limited Partnership with the Secretary of State of the
State of Delaware on June 6, 2006;

           WHEREAS, on December 5, 2006, the General Partner amended and restated the Limited Partnership Agreement of Verso Paper
Management LP dated November 1, 2006 (as amended, the ― Prior Agreement ‖) to provide for the admission of, and issuance of Class D Units
to, the Management Limited Partners designated as Non-Employee Directors;

            WHEREAS, the General Partner wishes to amend and restate the Prior Agreement in accordance with Section 14.2 thereof to
provide for (i) the admission of David B. Sambur as a Management Limited Partner designated as a Non-Employee Director, and (ii) the
issuance of Class D-1 Units to David B. Sambur, in each case in connection with David B. Sambur being appointed as a Non-Employee
Director hereunder and in exchange for Services performed or to be performed by David B. Sambur for the benefit of the Partnership and its
Subsidiaries;

            WHEREAS, the Class D-1 Units shall have the same characteristics as the Class D Units issued pursuant to the Prior Agreement,
for all purposes of this Agreement except as otherwise set forth in Section 3.4;

            NOW, THEREFORE, in consideration of the mutual covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties to this Agreement hereby agree as follows:
     1.2 Name . The name of the Partnership shall be ―Verso Paper Management LP‖, or such other name as the General Partner may hereafter
designate by notice in writing to the Limited Partners.
     1.3 Principal Place of Business . The principal place of business of the Partnership shall be 9 West 57 Street, New York, New York
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10019, or such other place within or outside the State of Delaware as the General Partner may hereafter designate by notice in writing to the
Limited Partners. The Partnership may maintain such other offices and places of business as the General Partner may deem advisable.

     1.4 Certificate of Limited Partnership . The General Partner has caused to be executed and filed a Certificate of Limited Partnership in the
Office of the Secretary of State of the State of Delaware on June 6, 2006, as required by Section 17-201 of the Act. The General Partner may
execute and file any duly authorized amendments to the Certificate of Limited Partnership from time to time in a form prescribed by the Act.
The General Partner will also cause to be made, on behalf of the Partnership, such additional filings and recordings as the General Partner
deems necessary or advisable.

     1.5 Designated Agent for Service of Process . National Registered Agents is designated as the agent of the Partnership on whom process
against the Partnership may be served. The address within the State of Delaware to which the Secretary of State shall mail a copy of any
process against the Partnership served upon him is: 160 Greentree Drive, Suite 101, Dover, Delaware 19904, County of Kent.

     1.6 Term . The term of the Partnership commenced on the date that the Certificate of Limited Partnership was filed with the Office of the
Secretary of State of the State of Delaware and will continue until the first to occur of the events enumerated in Section 10.1.


                                                                 ARTICLE II
                                                               DEFINED TERMS

            The following defined terms shall, unless the context otherwise requires, have the meanings specified in this Article II. The singular
shall be deemed to refer to the plural, the masculine gender shall be deemed to refer to the feminine and neuter, and vice versa, as the context
may require. The terms ―include‖ or ―including‖ shall be deemed to be followed by the phrase ―without limitation‖.
       2.1     ― 1933 Act ‖ shall mean the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
       2.2     ― 1934 Act ‖ shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated
               thereunder.
       2.3     ― Accountants ‖ means a firm of independent accountants as may be engaged from time to time by the General Partner for the
               Partnership.
       2.4     ― Act ‖ means the Revised Uniform Limited Partnership Act of the State of Delaware, as amended or modified from time to
               time.
       2.5     ― Actions ‖ has the meaning set forth in Section 6.5.3.

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       2.6    ― Additional Limited Partners ‖ means those Persons admitted to the Partnership pursuant to Section 3.3 of this Agreement.
       2.7    ― Adjusted Capital Account ‖ means, with respect to any Partner, the balance in such Partner’s Capital Account as of the end of
              the relevant fiscal year, after giving effect to the following adjustments:
              2.7.1 Add to such Capital Account the following items:
                    (a) The amount which such Partner is obligated to contribute to the Partnership upon liquidation of such Partner’s Interest;
              and
                   (b) The amount which such Partner is obligated to restore or is deemed to be obligated to restore to the Partnership
              pursuant to the penultimate sentences of Regulations Sections 1.704-2(i)(5) and 1.704-2(g)(1); and
             2.7.2 Subtract from such Capital Account such Partner’s share of the items described in Regulations Sections
        1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5) and 1.704-1(b)(2)(ii)(d)(6).
       2.8    ― Adjusted Capital Account Deficit ‖ means, with respect to any Partner, the deficit balance, if any, in such Partner’s Adjusted
              Capital Account as of the end of the relevant fiscal year.

           The foregoing definitions of Adjusted Capital Account and Adjusted Capital Account Deficit are intended to comply with the
provisions of Regulations Section 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.
       2.9    ― Affiliate ‖ means, when used with reference to a specified Person, (a) any Person who directly or indirectly controls, is
              controlled by or is under common control with the specified Person, or (b) any Person who, directly or indirectly, is the
              beneficial owner of ten percent (10%) or more of any class of equity securities of the specified Person, or of which the specified
              Person, directly or indirectly, is the owner of ten percent (10%) or more of any class of equity securities.
       2.10   ― Agreement ‖ means this Amended and Restated Limited Partnership Agreement, as amended or restated from time to time.
       2.11   ― Apollo ‖ means Verso Paper Apollo LLC and Verso Paper Investment Management LLC.
       2.12   ― Apollo Group ‖ means, collectively, Apollo, Apollo Investment Fund VI, L.P. and each of its Affiliates and any other
              investment fund or vehicle managed by Apollo Management VI, L.P. or any of its Affiliates (including any successors or
              assigns of any such manager but excluding the Verso Paper Investments LP and any of its Subsidiaries).

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2.13   ― Applicable Percentage ‖ means, subject to Section 8.3 and Section 8.4, (1) zero percent (0%) during the period commencing
       on the Sale Date and ending on the day before the first anniversary of the Sale Date; (2) twenty percent (20%) during the period
       commencing on the first anniversary of the Sale Date and ending on the day before the second anniversary of the Sale Date;
       (3) forty percent (40%) during the period commencing on the second anniversary of the Sale Date and ending on the day before
       the third anniversary of the Sale Date; (4) sixty percent (60%) during the period commencing on the third anniversary of the
       Sale Date and ending on the day before the fourth anniversary of the Sale Date; (5) eighty percent (80%) during the period
       commencing on the fourth anniversary of the Sale Date and ending on the day before the fifth anniversary of the Sale Date and
       (6) one hundred percent (100%) from and after the fifth anniversary of the Sale Date; provided that, with respect to Units
       acquired by a Management Limited Partner on or prior to November 1, 2006, solely for purposes of this definition of
       ―Applicable Percentage,‖ any reference to the anniversary of the Sale Date shall instead be a reference to the anniversary of
       August 1, 2006. In addition, with respect to each Management Limited Partner whose Termination of Services is due to his
       death or Disability or whose Services are terminated by the Partnership or its Subsidiaries without Cause at any time during the
       final six months in any vesting year, the Applicable Percentage of such Management Limited Partner’s Class B Units shall
       include an additional pro-rata percentage determined on a quarterly basis and based on the number of completed quarters that
       have elapsed during such vesting year on or prior to the date of such Terminated Services.
2.14   ― Business Day ‖ means any day on which banks are required to be open to conduct business in New York City.
2.15   ― Capital Account ‖ means, with respect to each Partner, an account maintained for such Partner on the Partnership’s books and
       records in accordance with the following provisions:
        2.15.1 To each Partner’s Capital Account there shall be added (a) the amount of (i) Cash and (ii) the Gross Asset Value of any
 property contributed to the Partnership by such Partner, (b) such Partner’s distributive share of (i) Profits and (ii) any items in the
 nature of income or gain which are specially allocated pursuant to Article V of this Agreement and (c) the amount of any Partnership
 liabilities assumed by such Partner or which are secured by any Partnership property distributed to such Partner.
        2.15.2 From each Partner’s Capital Account there shall be subtracted (a) the amount of (i) cash and (ii) the Gross Asset Value of
 any Partnership property distributed to such Partner pursuant to any provision of this Agreement (other than amounts paid as interest
 or in repayment of principal on any loan by a Partner to the Partnership), (b) such Partner’s distributive share of (i) Losses and (ii) any
 items in the nature of expenses or losses which are specially allocated pursuant to Article V of this Agreement and (c) the amount of
 any liabilities of such Partner assumed by the Partnership or which are secured by any property contributed by such Partner to the
 Partnership.

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       2.15.3 In determining the amount of any liability for purposes of Sections 2.15.1 and 2.15.2 of this Agreement, there shall be
 taken into account Code Section 752(c) and any other applicable provisions of the Code and the Regulations.
       2.15.4 If any Interest is transferred in accordance with the terms of this Agreement, the transferee shall succeed to a pro rata
 share of the transferor’s Capital Account, based on the ratio that the portion of the Interest transferred bears to the total Interest of the
 transferor immediately before the transfer.
       2.15.5 A Partner who has more than one Interest shall have a single Capital Account that reflects all such Interests regardless of
 the class of Interests owned by such Partner and regardless of the time or manner in which such Interests were acquired.
       2.15.6 The provisions of this Section 2.15 and the other provisions of this Agreement relating to the maintenance of Capital
 Accounts are intended to comply with Regulations Sections 1.704-1(b) and 1.704-2 and shall be interpreted and applied in a manner
 consistent with such Regulations. In the event that the General Partner shall determine that it is prudent to modify the manner in which
 Capital Accounts, or any additions or subtractions thereto, are computed in order to comply with such Regulations, the General Partner
 shall be entitled to make such modification; provided that it is not likely to have a material effect on the amounts distributable to any
 Partner pursuant to Section 10.4 of this Agreement upon dissolution of the Partnership. The General Partner shall also make (a) any
 adjustments that are necessary or appropriate to maintain equality between the Capital Accounts of the Partners and the amount of
 Partnership capital reflected on the Partnership’s balance sheet, as computed for book purposes, in accordance with Regulations
 Section 1.704-1(b)(2)(iv)(q), and (b) any appropriate modifications in the event that unanticipated events might otherwise cause this
 Agreement not to comply with Regulations Sections 1.704-1(b) and 1.704-2.
2.16   ― Capital Contribution ‖ means, with respect to any Partner, the amount of money and the initial Gross Asset Value of any
       property (other than money) contributed to the Partnership by such Partner (reduced by the amount of any liabilities of such
       Partner assumed by the Partnership or which are secured by any property contributed by such Partner to the Partnership).
2.17   ― Call Right ‖ has the meaning set forth in Section 8.2.1.
2.18   ― Cash ‖ means cash or Cash Equivalents.
2.19   ― Cash Equivalents ‖ means (i) securities issued or directly and fully guaranteed or insured by the full faith and credit of United
       States government, (ii) certificates of deposit or bankers acceptances with maturities of one year or less from institutions with at
       least $1 billion in capital and surplus and whose long-term debt is rated at least ―A-1‖ by Moody’s or the equivalent by
       Standard & Poor’s; (iii) commercial paper issued by a corporation rated at least ―A-1‖ by Moody’s or the equivalent by
       Standard and Poor’s and in each case maturing within one year; and (iv) investment funds investing at least ninety-five (95%) of
       their assets in cash or assets of the types described in clauses (i) through (iv) above.

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2.20   ― Cash Receipts ‖ means, with respect to any fiscal period, all Cash receipts of the Partnership, whether ordinary or
       extraordinary, including, without limitation, Cash interest, Cash dividends or Cash distributions from Partnership investments.
2.21   ― Cause ‖, when used in connection with a Termination of Services of a Management Limited Partner, has the same meaning
       ascribed to such term in any written agreement relating to Services or any severance agreement then in effect between such
       Management Limited Partner and the Partnership or one of its Subsidiaries or, if no such agreement containing a definition of
       ―Cause‖ is then in effect, means a Termination of Services of the Management Limited Partner by the Partnership or any
       Subsidiary thereof due to the Management Limited Partner’s (i) material breach of his obligations under any material ancillary
       agreement entered into in connection with the consummation of the transaction contemplated by the Purchase Agreement which
       he fails to cure within ten (10) days after receipt of a written notice of such breach; (ii) gross negligence in the performance or
       intentional non-performance of his duties which he fails to cure within ten (10) days after receipt of a written notice of such
       negligence; (iii) breach of the Partnership’s or any of its Subsidiaries’ written policies or procedures which causes or is
       reasonably expected to cause material harm to the Partnership or its Subsidiaries; (iv) intentional misconduct which causes or is
       reasonably expected to cause material harm to the Partnership or its Subsidiaries or their business reputations; (v) commission of
       a felony or a crime of moral turpitude; (vi) commission of a material act of dishonesty involving the Partnership or its
       Subsidiaries or (vii) failure to follow any lawful directive of the General Partner or of the Verso Company Board of Directors
       delivered to the Management Limited Partner.
2.22   ― Change of Control ‖ shall mean the consummation of any transaction or series of transactions (including any merger or
       consolidation) the result of which is that any Person, other than the Apollo Group or an Affiliate of the Apollo Group, becomes
       the beneficial owner, directly or indirectly, of (i) more than fifty percent (50%) of the voting securities of the Partnership or its
       successor entity or (ii) all or substantially all of the consolidated assets of the Partnership and its Subsidiaries. For purposes of
       this definition, ―substantially all‖ means at least eighty percent (80%) of the assets of the Partnership and its Subsidiaries on a
       consolidated basis.
2.23   ― Class A Invested Capital ‖ means, with respect to each Partner at any time, the aggregate amount of Capital Contributions
       made in respect of all Class A Units held by such Partner less all distributions made to such Partner pursuant to Section 4.1.1.
2.24   ― Class A Unit ‖ means an Interest in the Partnership designated as a Class A Unit.

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2.25   ― Class B Unit ‖ means an Interest in the Partnership designated as a Class B Unit.
2.26   ― Class C Unit ‖ means an Interest in the Partnership designated as a Class C Unit.
2.27   ― Class D Unit ‖ means an Interest in the Partnership designated as a Class D Unit and an Interest in the Partnership designated
       as a Class D-1 Unit, collectively.
2.28   ― Class D-1 Unit ‖ means an Interest in the Partnership designated as a Class D-1 Unit.
2.29   ― Closing Date ‖ means the date of the Closing as defined under the Purchase Agreement.
2.30   ― Code ‖ means the Internal Revenue Code of 1986, as amended (or any corresponding provision or provisions of succeeding
       law).
2.31   ― Commission ‖ means the United States Securities and Exchange Commission.
2.32   ― Confidential Information ‖ has the meaning set forth in Section 12.2.5(b).
2.33   ― Cost ‖ means, with respect to a Partner, the price per Unit paid by such Partner (as proportionately adjusted for all subsequent
       distributions of equity and other similar recapitalizations). For the avoidance of doubt, the ―Cost‖ for Class B Units, Class C
       Units and Class D Units shall be zero, unless otherwise specified in any grant agreement for such Unit.
2.34   ― Deemed Retained Vested Unit Cost ‖ is an amount equal to the product of (A) the Strike Price Factor as such term is used in
       Section 8.2.7 (determined on a per Unit basis) and (B) the number of Retained Vested Units.
2.35   ― Depreciation ‖ means, for each fiscal year or other period, an amount equal to the depreciation, amortization or other cost
       recovery deduction allowable with respect to an asset for such year or other period, except that if the Gross Asset Value of an
       asset differs from its adjusted basis for federal income tax purposes at the beginning of such year or other period, Depreciation
       shall be an amount which bears the same ratio to such beginning Gross Asset Value as the federal income tax depreciation,
       amortization or other cost recovery deduction for such year or other period bears to such beginning adjusted tax basis; provided
       that if the federal income tax depreciation, amortization or other cost recovery deduction for such year is zero, Depreciation
       shall be determined with reference to such beginning Gross Asset Value using any reasonable method selected by the General
       Partner.
2.36   ― Distributable Cash ‖ means, with respect to any fiscal period, Cash Receipts for such fiscal period plus any Cash Receipts
       from prior period that have not been distributed less amounts set aside for the restoration, increase or creation of Reserves.

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2.37   ― Disability ‖ when used in connection with a Termination of Services of a Management Limited Partner, has the same meaning
       ascribed to such term in any written agreement relating to Services or any severance agreement then in effect between such
       Management Limited Partner and the Partnership or one of its Subsidiaries or, if no such agreement containing a definition of
       ―Disability‖ is then in effect, means, with respect to each Management Limited Partner, that the Management Limited Partner’s
       absence from his or her duties with the Partnership and its Subsidiaries for not less than twelve (12) consecutive months as a
       result of incapacity due to mental or physical illness.
2.38   ― Drag-Along Notice ‖ has the meaning set forth in Section 9.1.1.
2.39   ― Drag-Along Participation Percentage ‖ has the meaning set forth in Section 9.1.2.
2.40   ― Drag-Along Right ‖ has the meaning set forth in Section 9.1.1.
2.41   ― Drag-Along Sale ‖ has the meaning set forth in Section 9.1.1.
2.42   ― Drag-Along Transferee ‖ has the meaning set forth in Section 9.1.1.
2.43   ― Drag-Along Sellers ‖ has the meaning set forth in Section 9.1.1.
2.44   ― Eligible Units ‖ has the meaning set forth in Section 8.2.2.
2.45   ― Equity Units ‖ means the Class B Units, Class C Units and Class D Units.
2.46   ― Exempt Class C Units ‖ has the meaning set forth in Section 8.3.
2.47   ― Fair Market Value ‖ with respect to any Units, shall be the fair value of such Units determined from time to time in good faith
       by the General Partner using its reasonable business judgment taking into account the priority of distributions pursuant to
       Section 4.1.
2.48   ― Final Prospectus ‖ has the meaning set forth in Section 12.1.11.
2.49   ― Financing Default ‖ shall mean an event which would constitute (or with notice or lapse of time or both would constitute) an
       event of default (which event of default has not been cured) under or would otherwise violate or breach (i) any financing
       arrangement of the Partnership, any of its Subsidiaries or a Parent Issuer in effect as of the time of the aforementioned event,
       and any extensions, renewals, refinancings or refundings thereof in whole or in part; and (ii) any provision of the Partnership’s,
       any of its Subsidiary’s or Parent Issuer’s constitutional documents.
2.50   ― Forfeiting Partner ‖ has the meaning set forth in Section 8.2.7.
2.51   ― Forfeiture Transfer ‖ has the meaning set forth in Section 5.10.
2.52   ― Forfeited Unit Transferees ‖ has the meaning set forth in Section 5.10.

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2.53   ― General Partner ‖ means Verso Paper Investments, or if a successor General Partner is appointed under Sections 7.1.1 or 7.1.2,
       then such successor General Partner.
2.54   ― Gross Asset Value ‖ means, with respect to any asset, the asset’s adjusted basis for federal income tax purposes, except as
       follows:
       2.54.1 The initial Gross Asset Value of any asset contributed by a Partner to the Partnership shall be the gross Fair Market Value
 of such asset, as determined by the contributing Partner and the Partnership.
      2.54.2 The Gross Asset Values of all Partnership assets shall be adjusted to equal their respective gross Fair Market Values, as
 determined by the General Partner, immediately prior to the following times:
         (a) the acquisition of an additional Interest (other than in connection with the execution of this Agreement) by a new or
   existing Partner in exchange for a Capital Contribution, if the General Partner reasonably determines that such adjustment is
   necessary or appropriate to reflect the relative economic Interests of the Partners;
         (b) the distribution by the Partnership to a Partner of more than a de minimis amount of Partnership property as consideration
   for an Interest, if the General Partner reasonably determines that such adjustment is necessary or appropriate to reflect the relative
   economic Interests of the Partners in the Partnership;
         (c) the liquidation of the Partnership within the meaning of Regulations Section 1.704-1(b)(2)(ii)( g ); and
        (d) at such other times as the General Partner shall reasonably determine necessary or advisable in order to comply with
   Regulations Sections 1.704-1(b) and 1.704-2.
       2.54.3 The Gross Asset Value of any Partnership asset distributed to a Partner shall be the gross Fair Market Value of such asset
 on the date of distribution as determined in good faith by the General Partner.
       2.54.4 The Gross Asset Values of Partnership assets shall be increased (or decreased) to reflect any adjustments to the adjusted
 basis of such assets pursuant to Code Section 734(b) or Code Section 743(b), but only to the extent that such adjustments are taken
 into account in determining Capital Accounts pursuant to Regulations Section 1.704-1(b)(2)(iv)(m); provided that Gross Asset Values
 shall not be adjusted pursuant to this Section 2.53.4 to the extent that the General Partner determines that an adjustment pursuant to
 Section 2.53.2 of this Agreement is necessary or appropriate in connection with a transaction that would otherwise result in an
 adjustment pursuant to this Section 2.53.4.

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       2.54.5 If the Gross Asset Value of a Partnership asset has been determined or adjusted pursuant to Section 2.53.1, 2.53.2 or
 2.53.4 of this Agreement, such Gross Asset Value shall thereafter be adjusted by the Depreciation taken into account with respect to
 such asset for purposes of computing Profits and Losses.
2.55   ― Indemnitee ‖ has the meaning set forth in Section 6.5.3.
2.56   ― Independent Third Party ‖ means any Person who, immediately prior to the contemplated transaction, is not a member of the
       Apollo Group or an Affiliate of any member of the Apollo Group.
2.57   ― Initial Equity Stake ‖ means the number of Class A Units held directly or indirectly by the Apollo Group as of the Closing
       Date.
2.58   ― Initial Public Offering ‖ means the closing of the first public offering of and sale of equity securities of the Partnership (or of
       any other entity or entities created through any Solvent Reorganization or any entity expressly designated by the General Partner
       as the issuer in a Subsidiary IPO) in a primary or secondary offering pursuant to an effective registration statement filed by the
       Partnership under the 1933 Act.
2.59   ― Initial Repurchase Deadline ‖ has the meaning set forth in Section 8.2.1.
2.60   ― Interest ‖ means the entire ownership interest of a Partner in the Partnership at any particular time, including, without
       limitation, the right of such Partner to any and all benefits to which a Partner may be entitled as provided in this Agreement,
       together with the obligations of such Partner to comply with all of the terms and provisions of this Agreement.
2.61   ― Investor Investment ‖ means direct or indirect investments in Units of the Partnership made by the Apollo Group on or after
       the Closing Date, but excluding any purchases or repurchases of Units from any Person other than the Partnership.
2.62   ― Investor IRR ‖ means the pretax compounded annual internal rate of return calculated on a quarterly basis realized by the
       Apollo Group on the Investor Investment, based on the aggregate amount invested by the Apollo Group for all Investor
       Investments and the aggregate amount of actual Cash received by the Apollo Group in respect of all Investor Investments,
       assuming all Investor Investments were purchased by one Person and were held continuously by such Person. The Investor IRR
       shall be determined based on the actual time of each Investor Investment and actual Cash received by the Apollo Group as a
       return on each Investor Investment (including by way of a Transfer of Units); provided that the calculation of the Investor IRR
       for actual Cash received prior to the third anniversary of the Closing Date will be calculated as if such Cash had been received
       on the third anniversary of the Closing Date. Actual Cash received consists of any Cash dividends, Cash distributions, Cash
       sales or Cash interest made by the Partnership or any Subsidiary in respect of such Investor Investment

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       during such period, but excludes any other amounts payable that are not directly attributable to an Investor Investment (such as
       fees for goods or services rendered).
2.63   ― IPO Entity ‖ means the issuer in an Initial Public Offering, including a Qualified IPO.
2.64   ― Issuer Common Stock ‖ means common stock of the same class as that offered to the public (a) with respect to an Initial
       Public Offering by the IPO Entity in an Initial Public Offering, including a Qualified IPO, (b) with respect to a Subsidiary IPO,
       by such Subsidiary conducting such Public Offering, or (c) any securities into which such common stock is exchanged,
       converted or reclassified, including pursuant to any merger, reorganization or reclassification.
2.65   ― Liabilities ‖ has the meaning set forth in Section 6.5.3.
2.66   ― Limited Partner ‖ means each of the Management Limited Partners, the Verso Paper Investments Limited Partner, and each
       other Person admitted to the Partnership as an Additional Limited Partner.
2.67   ― Management Limited Partner ‖ means each Person who is listed as a Management Limited Partner on Exhibit A hereto.
2.68   ― Manager Permitted Transferee ‖ means, with respect to any Management Limited Partner, a transferee in (i) a Transfer upon
       the death of such Management Limited Partner to his/her executors, administrators, testamentary trustees, legatees or
       beneficiaries, (ii) a Transfer by such Management Limited Partner for estate planning purposes to a limited partnership, limited
       liability company, trust or custodianship, the beneficiaries of which may include only such Management Limited Partner, his/her
       spouse (or ex-spouse) or his/her lineal descendants (including adopted), but only if, (x) in the case of clauses (i) and (ii), such
       transferee becomes a party to, and is bound to the same extent as such Management Limited Partner by the terms of, this
       Agreement and (y) in the case of a Transfer described in clause (ii), the General Partner has given its prior, written approval to
       such Transfer (which approval shall not be unreasonably withheld).
2.69   ― Non-Employee Directors ‖ means, collectively, the Management Limited Partners designated as non-employee directors on
       Exhibit A hereto.
2.70   ― Nonrecourse Deductions ‖ has the meaning set forth in Regulations Sections 1.704-2(b)(1) and 1.704-2(c).
2.71   ― Nonrecourse Liability ‖ has the meaning set forth in Regulations Section 1.704-2(b)(3) and 1.752-1(a)(2).

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2.72   ― Other Invested Capital ‖ means, with respect to any Partner at any time, the aggregate amount of Capital Contributions made
       by such Partner in respect of all Units of a particular class, other than Class A Units.
2.73   ― Parent Issuer ‖ means any entity directly or indirectly holding equity interests in the Partnership if all or substantially all of the
       assets held by such entity constitute interests in the Partnership.
2.74   ― Partner Minimum Gain ‖ means an amount, with respect to each Partner Nonrecourse Debt, equal to the Partnership Minimum
       Gain that would result if such Partner Nonrecourse Debt were treated as a Nonrecourse Liability, determined in accordance with
       Regulations Section 1.704-2(i).
2.75   ― Partner Nonrecourse Debt ‖ has the meaning set forth in Regulations Section 1.704-2(b)(4).
2.76   ― Partner Nonrecourse Deduction ‖ has the meaning set forth in Regulations Section 1.704-2(i).
2.77   ― Partners ‖ means, collectively, the General Partner and the Limited Partners.
2.78   ― Partnership ‖ means the limited partnership formed under this Agreement.
2.79   ― Partnership Minimum Gain ‖ has the meaning set forth in Regulations Sections 1.704-2(b)(2) and 1.704-2(d)(1).
2.80   “ Partnership Subsidiary ‖ means a Subsidiary of the Partnership (including Verso Paper Holdings).
2.81   ― Percentage Interest ‖ means with respect to any Partner and any class of Units, such Partner’s percentage interest in the
       Partnership with respect to such Units calculated as a fraction, the numerator of which is the number of such Units held by such
       Partner and the denominator of which is the total number of such Units outstanding.
2.82   ― Permitted Transfer ‖ has the meaning set forth in Section 8.1.1.
2.83   ― Permitted Transferee ‖ means any Person who acquires Interests pursuant to a Permitted Transfer.
2.84   ― Person ‖ means any individual, partnership, corporation, limited liability company, trust, estate or other entity.
2.85   ― Prior Agreement ‖ has the meaning set forth in Section 1.1.
2.86   ― Profits Interest ‖ has the meaning set forth in Section 5.8.

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2.87   ― Profits ‖ and ― Losses ‖ means an amount equal to the Partnership’s taxable income or loss with respect to the relevant period,
       determined in accordance with Code Section 703(a) (for this purpose, all items of income, gain, loss or deduction required to be
       stated separately pursuant to Code Section 703(a)(1) shall be included in taxable income or loss), with the following
       adjustments:
       2.87.1 Any income of the Partnership that is exempt from federal income tax and not otherwise taken into account in computing
 Profits and Losses pursuant to this Section 2.83 shall be added to such taxable income or loss.
      2.87.2 Any expenditures of the Partnership described in Code Section 705(a)(2)(B) or treated as Code Section 705(a)(2)(B)
 expenditures pursuant to Regulations Section 1.704-1(b)(2)(iv)(i), and not otherwise taken into account in computing Profits or Losses
 pursuant to this Section 2.86, shall be subtracted from such taxable income or loss.
       2.87.3 If the Gross Asset Value of any Partnership asset is adjusted pursuant to Section 2.53.2 or 2.53.3 of this Agreement, the
 amount of such adjustment shall be taken into account in the taxable year of adjustment as gain or loss from the disposition of such
 asset for purposes of computing Profits or Losses.
       2.87.4 Gain or loss resulting from any disposition of Partnership property with respect to which gain or loss is recognized for
 federal income tax purposes shall be computed by reference to the Gross Asset Value of the property disposed of, notwithstanding that
 the adjusted tax basis of such property differs from its Gross Asset Value.
       2.87.5 In lieu of the depreciation, amortization and other cost recovery deductions taken into account in computing such taxable
 income or loss, there shall be taken into account Depreciation for such fiscal year or other period, computed in accordance with
 Section 2.34 of this Agreement.
       2.87.6 Notwithstanding any other provision of this Section 2.86, any items which are specially allocated pursuant to Article V of
 this Agreement shall not be taken into account in computing Profits or Losses.
       2.87.7 To the extent an adjustment to the adjusted tax basis of any Partnership asset pursuant to Code Section 734(b) or Code
 Section 743(b) is required pursuant to Regulations Section 1.704-1(b)(2)(iv)(m)(4) to be taken into account in determining Capital
 Accounts as a result of a distribution other than in liquidation of a Partner’s Interest, the amount of such adjustment shall be treated as
 an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases the basis of the asset) from the
 disposition of the asset and shall be taken into account for the purposes of computing Profits and Losses.
2.88   ― Proxy ‖ has the meaning set forth in Section 12.3.1.

                                                                 13
2.89   ― Public Share FMV ‖, per share of Issuer Common Stock, as of any determination date, shall mean the closing price as reported
       on the principal national securities exchange on which such shares are listed or admitted to trading, or, if the shares are not listed
       or admitted on a national securities exchange, the closing price as quoted on any market in which such shares are regularly
       quoted.
2.90   ― Purchase Agreement ‖ has the meaning set forth in Section 1.1.
2.91   ― Qualified IPO ‖ means an Initial Public Offering pursuant to an effective registration statement (other than on Form S-4, S-8
       or their equivalents) filed under the 1933 Act, which yields net proceeds in excess of $100 million.
2.92   ― Registrable Securities ‖ means (i) Units and (ii) any securities owned or to be acquired in respect of Units in connection with a
       recapitalization, merger, consolidation, exchange or other reorganization of the Partnership (or any successor entity) or Solvent
       Reorganization, or by way of stock dividend or stock split, in each case, now or hereafter owned by any Partner. As to any
       particular Registrable Securities, once issued, such Registrable Securities shall cease to be Registrable Securities when (i) a
       registration statement with respect to the sale by the applicable Partner of such securities has become effective under the 1933
       Act and such securities have been disposed of in accordance with such registration statement, (ii) such securities have been
       distributed to the public pursuant to Rule 144 (or any successor provision) under the 1933 Act, (iii) such securities have been
       otherwise transferred, new certificates for such securities not bearing a legend restricting further transfer have been delivered by
       the Partnership and subsequent disposition of such securities does not require registration or qualification of such securities
       under the 1933 Act or any state securities or blue sky law then in force, (iv) such securities are eligible to be sold pursuant to
       Rule 144(k) (or any successor provision) under the 1933 Act or (v) such securities have ceased to be outstanding.
2.93   ― Registration Expenses ‖ has the meaning set forth in Section 12.1.5.
2.94   ― Regulations ‖ means the Income Tax Regulations, including Temporary Regulations, promulgated under the Code, as such
       Regulations may be amended from time to time (including corresponding provisions of succeeding regulations).
2.95   ― Restricted Period ‖ has the meaning set forth in Section 12.2.2.
2.96   ― Reserves ‖ means funds set aside or amounts allocated to reserves that shall be maintained in amounts deemed sufficient by
       the General Partner for working capital, to pay expenses or as a provision for potential liabilities or to pay obligations of the
       Partnership.
2.97   ― Restructuring Event ‖ has the meaning set forth in Section 12.3.3.

                                                                 14
2.98   ― Retained Vested Units ‖ means, with respect to any Management Limited Partner who is deemed to forfeit a number of Vested
       Units pursuant to Section 8.2.7, the number of Vested Units retained by such Management Limited Partner.
2.99   ― Sale Date ‖ means, with respect to any Unit, the date on which such Unit was first issued by the Partnership.
2.100 ― Securities Indemnified Party ‖ has the meaning set forth in Section 12.1.8.
2.101 ― Securities Indemnifying Party ‖ has the meaning set forth in Section 12.1.8.
2.102 ― Services ‖ means (i) a Management Limited Partner’s employment if the Management Limited Partner is an employee of the
      Partnership or any of its Subsidiaries, (ii) a Management Limited Partner’s services as a consultant, if the Management Limited
      Partner is a consultant to the Partnership or any of its Subsidiaries, and (iii) a Management Limited Partner’s services as a
      non-employee director, if the Management Limited Partner is a non-employee member of the board of directors of a Subsidiary
      of the Partnership.
2.103 ― Solvent Reorganization ‖ means any solvent reorganization of the Partnership, including by merger, consolidation,
      recapitalization, Transfer or sale of shares or assets, or contribution of assets and/or liabilities, or any liquidation, exchange of
      securities, conversion of entity, migration of entity, formation of new entity, or any other transaction or group of related
      transactions (in each case other than to or with an unaffiliated third party), in which:
            (i) all holders of the same class of equity securities of the Partnership are offered a substantially similar amount of
 consideration in respect of such equity securities;
            (ii) the Apollo Group’s pro rata indirect and each Management Limited Partner’s direct economic interests in the
 Partnership, relative to each other and all other holders of equity securities of the Partnership, are preserved in all material respects;
 and
             (iii) the rights and obligations of the Apollo Group and each Partner under this Agreement are preserved in all material
 respects.
2.104 ― Strike Price Factor ‖ means an amount equal to a fraction, (i) the numerator of which is the sum of (1) the product obtained by
      multiplying the number of Subject Units issued to such Forfeiting Partner on the Closing Date and the Cost to the Apollo Group
      for a Class A Unit purchased on the Closing Date, and (2) for each issuance of Subject Units after the Closing Date, the product
      obtained by multiplying the number of Subject Units issued to a Forfeiting Partner on such date and the Fair Market Value of a
      Class A Unit on such date, and (ii) the denominator of which is the number of Subject Units held by such Forfeiting Partner.
2.105 ― Subject Units ‖ has the meaning set forth in Section 8.2.7.

                                                                  15
2.106 ― Subsidiary ‖ or ― Subsidiaries ‖ means, with respect to any Person, (i) any corporation, limited liability company, association
      or other business entity of which more than fifty percent (50%) of the total voting power of the equity interests entitled (without
      regard to the occurrence of any contingency) to vote in the election of the board of directors (or the functional equivalent
      thereto) thereof are at the time owned or controlled, directly or indirectly, by such Person or one or more of the other
      Subsidiaries of that Person (or a combination thereof); and (ii) any partnership (a) the sole general partner or the sole managing
      general partner of which is such Person or a Subsidiary of such Person or (b) the only general partners of which are such Person
      or of one or more Subsidiaries of such Person (or any combination thereof).
2.107 ― Subsidiary IPO ‖ means a public offering and sale of equity securities of a Subsidiary of the Partnership or any successor
      corporation in any transaction or series of related transactions, pursuant to an effective registration statement (other than on
      Form S-4, S-8 or their equivalents) filed under the 1933 Act.
2.108 ― Tag-Along Election Period ‖ has the meaning set forth in Section 9.2.2.
2.109 ― Tag-Along Notice ‖ has the meaning set forth in Section 9.2.1.
2.110 ― Tag-Along Participation Percentage ‖ has the meaning set forth in Section 9.2.2.
2.111 ― Tag-Along Right ‖ has the meaning set forth in Section 9.2.1.
2.112 ― Tag-Along Sale ‖ has the meaning set forth in Section 9.2.1.
2.113 ― Tag-Along Transferee ‖ has the meaning set forth in Section 9.2.1.
2.114 ― Tag-Along Sellers ‖ has the meaning set forth in Section 9.2.1.
2.115 ― Tax Matters Partner ‖ has the meaning set forth in Section 11.4.
2.116 ― Term ‖ has the meaning set forth in Section 12.3.1.
2.117 ― Termination Event ‖ has the meaning set forth in Section 8.2.1.
2.118 ― Termination of Services ‖ means (i) if the Management Limited Partner is an employee of the Partnership or any Subsidiary,
      the termination of the Management Limited Partner’s employment with the Partnership and each Subsidiary as to which such
      Management Limited Partner is an employee for any reason, (ii) if the Management Limited Partner is a consultant to the
      Partnership or any Subsidiary, the termination of the Management Limited Partner’s consulting relationship with the Partnership
      or its Subsidiary for any reason, and (iii) if the Management Limited Partner is a non-employee members of the board of
      directors of a Subsidiary of the Partnership, the termination of the Management Limited Partner’s directorship with the
      Subsidiary for any reason.

                                                                16
       2.119 ― Transfer ‖ has the meaning set forth in Section 8.1.1.
       2.120 ― Unit ‖ or ― Units ‖ means, with respect to each Partner, the Class A Units, Class B Units, Class C Units and Class D Units held
             by such Partner based on a Partner’s Percentage Interest. A Unit may represent a general partnership Interest if held by the
             General Partner or a limited partnership Interest if held by a Limited Partner.
       2.121 ― Units Buyer ‖ has the meaning set forth in Section 8.2.3.
       2.122 ― Unvested Units ‖ means, as of the date of any determination, with respect to the Equity Units held by a Management Limited
             Partner, the number of such Equity Units that are not Vested Units.
       2.123 ― Verso Company Board of Directors ‖ means the board of directors or similar governing body having the authority to conduct
             the affairs of any entity that directly or indirectly owns the Business (as such term is defined in the Purchase Agreement).
       2.124 ― Verso Paper Holdings ‖ has the meaning set forth in Section 1.1.
       2.125 ― Verso Paper Investments ‖ has the meaning set forth in the preamble.
       2.126 ― Verso Paper Investments Limited Partner ‖ means Verso Paper Investments, as Limited Partner, and transferees of its Limited
             Partnership Interests under this Agreement.
       2.127 ― Vested Units ‖ means, subject to Section 8.3 and Section 8.4, as of the date of any determination, with respect to: (i) the Class
             B Units held by a Management Limited Partner, the number of such Class B Units equal to product of the total number of such
             Class B Units times the Applicable Percentage; (ii) the Class C Units held by a Management Limited Partner if the Investor IRR
             is equal to or exceeds twenty-five percent (25%); (iii) any Exempt Class C Units and (iv) the Class D Units held by a
             Non-Employee Director, one hundred percent (100%) of such Class D Units.
       2.128 ― Work Product ‖ has the meaning set forth in Section 12.2.5(c).


                                                              ARTICLE III
                                                         PARTNERS AND CAPITAL

     3.1 General Partner . The name, address, Capital Contribution, number of Units, and, if the General Partner determines appropriate,
Percentage Interest of the General Partner are set forth in an Exhibit A delivered to the General Partner.

     3.2 Limited Partners . The name, address, Capital Contribution, number and vesting schedule (if applicable) of Units, and, if the General
Partner determines appropriate, Percentage Interest of a Limited Partner are set forth in an Exhibit A delivered to such Limited Partner.

                                                                        17
      3.3 Additional Limited Partners . The General Partner is authorized to admit one or more Additional Limited Partners to the Partnership
from time to time, on terms and conditions established by the General Partner. Subject to the terms and provisions contained in this Agreement,
no action or consent by the Limited Partners shall be required in connection with the admission of any Additional Limited Partner. As a
condition to being admitted to the Partnership, each Additional Limited Partner shall execute an agreement to be bound by the terms of this
Agreement. The name, address, Capital Contribution, number and vesting schedule (if applicable) of Units, and, if the General Partner
determines appropriate, Percentage Interest of any Additional Limited Partner shall be set forth in an Exhibit A delivered to such Additional
Limited Partner.

      3.4 Partnership Capital; Units . The Partnership capital consists of Class A Units, Class B Units, Class C Units and Class D Units, each
having the designations, powers, preferences, rights, qualifications, limitations and restrictions set forth or referred to in this Agreement. The
General Partner is authorized to cause the Partnership to issue additional Units or new classes of units, which new units may have rights and
preferences different from the Units. No Partner shall be paid interest on any Capital Contribution or Capital Account. The Partnership shall not
redeem or repurchase any Interest, and no Partner shall have the right to withdraw, or receive any return of, its Capital Contribution or Capital
Account, except as specifically provided herein. Immediately prior to the issuance of the Class D-1 Units, the Partnership shall adjust the Gross
Asset Values of all Partnership assets to equal their respective gross Fair Market Value and the Capital Accounts of the Partners other than
David B. Sambur, shall be appropriately adjusted. For the avoidance of doubt, the Class D-1 Units shall be identical to all other Class D Units,
except that (i) the initial Capital Account Balance associated with the Class D-1 Units shall be zero, and, as a result, (ii) the allocations of
Profits and Losses pursuant to Section 5.2 with respect to such Units will differ.

        3.5 Liability of Partners . No Limited Partner shall be liable for the debts, liabilities, contracts or any other obligations of the Partnership,
and a Limited Partner shall be liable only to make its Capital Contribution and shall not be required to lend any funds to the Partnership or,
after its Capital Contribution has been paid, to make any further Capital Contribution to the Partnership. The General Partner shall have no
personal liability for repayment to the Limited Partners of their Capital Contributions, or for repayment to the Partnership of the negative
amounts of such Limited Partners’ Capital Accounts, if any. Any Limited Partner may enforce its rights to payment of any distributions by the
Partnership against the other Partners in the event that such distribution is made to the other Partners but such Limited Partner does not receive
its share thereof as provided under the terms of this Agreement; provided , however , that such Limited Partner (i) may only seek to enforce
such rights against those Partners that received such distribution and (ii) may not seek to enforce such rights against such other Partners unless
it first uses its commercially reasonable efforts to obtain its share of the distribution from the Partnership.

      3.6 Certificate of Interest .
            3.6.1 Certificate . Interests may, at the discretion of the General Partner, be represented by a certificate of limited partnership. If
      issued, the exact contents of a certificate of limited partnership may be determined by action of the General Partner but

                                                                           18
shall be issued substantially in conformity with the following requirements: (i) the certificates of limited partnership shall be respectively
numbered serially, as they are issued, shall be impressed with the seal of the Partnership, if any, and shall be signed by an officer of the
General Partner on behalf of the Partnership; (ii) each certificate of limited partnership shall state the name of the Partnership, the fact
that the Partnership is organized under the laws of the State of Delaware as a limited partnership, the name of the Person to whom the
certificate is issued, the date of issue and the class of Interests represented thereby and the number of Units represented thereby; (iii) each
certificate of limited partnership shall be otherwise in such form as may be determined by the General Partner and (iv) each certificate
shall be stamped or otherwise imprinted with a legend in substantially the following form, or such legend as may be specified in other
agreements between the Partnership and its Limited Partners:
      ―THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN TRANSFER AND OTHER
      RESTRICTIONS SET FORTH IN THE LIMITED PARTNERSHIP AGREEMENT OF VERSO PAPER MANAGEMENT LP
      DATED NOVEMBER 1, 2006 AND, AMONG OTHER THINGS, MAY NOT BE OFFERED OR SOLD EXCEPT IN
      COMPLIANCE WITH SUCH TRANSFER RESTRICTIONS. COPIES OF SUCH AGREEMENT ARE ON FILE AT THE
      OFFICES OF VERSO PAPER MANAGEMENT LP AND ARE AVAILABLE WITHOUT CHARGE UPON WRITTEN
      REQUEST THEREFOR. THE HOLDER OF THIS CERTIFICATE, BY ACCEPTANCE OF THIS CERTIFICATE, AGREES TO
      BE BOUND BY ALL OF THE PROVISIONS OF THE AFORESAID AGREEMENT AS THEY RELATE TO SUCH HOLDER.‖
      3.6.2 Cancellation of Certificate . To the extent certificates are issued, except as herein provided with respect to lost, stolen, or
destroyed certificates, no new certificates of limited partnership shall be issued in lieu of previously issued certificates of limited
partnership until former certificates for a like number of limited partnership interests shall have been surrendered and cancelled. Upon
any Transfer of Interests in accordance with the terms and provisions contained in this Agreement, the General Partner shall cause the
Partnership to cancel certificate(s), if any, representing the Interests held by the transferring Partner and to issue or reissue, as the case
may be, upon consummation of such Transfer new certificate(s) representing the Interests held by the assignee and the Interests held by
the transferring Partner, as applicable.
       3.6.3 Replacement of Lost, Stolen, or Destroyed Certificate . Any Partner claiming that his, her or its certificate of limited
partnership is lost, stolen, or destroyed may make an affidavit or affirmation of that fact and request a new certificate. Upon the giving of
a satisfactory indemnity, bond or other surety to the Partnership as required by the General Partner, a new certificate may be issued of the
same tenor and representing the same Interests as was represented by the certificate alleged to be lost, stolen, or destroyed.

                                                                    19
           3.6.4 Voting Rights . Except as otherwise required by law, Partners holding Class A Units shall be entitled to one vote per Class A
     Unit for each matter on which the Partners are entitled to vote. Class B Units, Class C Units and Class D Units shall not have any voting
     rights, except as may otherwise be required by law. With respect to any matter, Verso Paper Investments LLC may vote its Class A Units
     as a Limited Partner in its sole discretion and shall not owe a fiduciary duty to any other Partner with respect to its voting decisions.


                                                                   ARTICLE IV
                                                                 DISTRIBUTIONS

     4.1 Distributions . Except as otherwise provided in this Agreement, distributions shall be made at such times and in such amounts as the
General Partner determines in its discretion, and shall be distributed as follows:
           4.1.1 first, pro rata to the holders of Class A Units to the extent of the Class A Invested Capital;
            4.1.2 second, to the holders of Units other than Class A Units in proportion to the Other Invested Capital (if any) of such holders,
     until such holders have received an amount equal to their Other Invested Capital (if any);
          4.1.3 third, pro rata , to the holders of Retained Vested Units, in accordance with the amount of their relative Deemed Retained
     Vested Unit Cost, until each such holder has received an amount equal to such holder’s Deemed Retained Vested Unit Cost;
           4.1.4 fourth, pro rata , to the holders of Class A Units and the holders of Class B Units and Class D Units until the Investor IRR is
     equal to or exceeds twenty-five percent (25%);
           4.1.5 fifth, pro rata , to the holders of the Class C Units, until an amount is distributed equal to the product of (A) the aggregate
     amount distributed to the holders of the Class A Units and the holders of the Class B Units and Class D Units pursuant to the foregoing
     clause 4.1.4 and (B) the proportion that the Class C Units bear to the total outstanding Class A Units, Class B Units, Class C Units and
     Class D Units;
           4.1.6 Last, pro rata , to the holders of Units in the proportion that their Units bear to all Units.

      4.2 Withholding . The Partnership may withhold distributions or portions thereof only if it is required to do so by any applicable rule,
regulation, or law, and each Partner hereby authorizes the Partnership to withhold from or pay on behalf of or with respect to such Partner any
amount of federal, state, local or foreign taxes that the General Partner determines that the Partnership is required to withhold or pay with
respect to any amount distributable or allocable to such Partner pursuant to this Agreement. Any amount paid on behalf of or with respect to a
Partner pursuant to this Section 4.2 shall constitute a loan by the Partnership to such Partner, which loan shall be repaid by such Partner within
fifteen (15) days after notice from the

                                                                          20
Partnership that such payment must be made unless: (i) the Partnership withholds such payment from a distribution which would otherwise be
made to the Partner or (ii) the General Partner determines, in its sole and absolute discretion, that such payment may be satisfied out of
Distributable Cash which would, but for such payment, be distributed to the Partner. Any amounts withheld pursuant to this Section 4.2 shall
be treated as having been distributed to such Partner. Each Partner hereby unconditionally and irrevocably grants to the Partnership a security
interest in such Partner’s Interest in the Partnership to secure such Partner’s obligation to pay to the Partnership any amounts required to be
paid pursuant to this Section 4.2. In the event that a Partner fails to pay any amounts owed to the Partnership pursuant to this Section 4.2 when
due, the remaining Partners may, in their respective sole and absolute discretion, elect to make the payment to the Partnership on behalf of such
defaulting Partner, and in such event shall be deemed to have loaned such amount to such defaulting Partner and shall succeed to all rights and
remedies of the Partnership as against such defaulting Partner (including, without limitation, the right to receive distributions). Any amounts
payable by a Partner hereunder shall bear interest at the prime rate as published from time to time in The Wall Street Journal (but not higher
than the maximum lawful rate) from the date such amount is due ( i.e. , fifteen (15) days after demand) until such amount is paid in full. Each
Partner shall take such actions as the Partnership shall request in order to perfect or enforce the security interest created hereunder. A Partner’s
obligations hereunder shall survive the dissolution, liquidation, or winding up of the Partnership.

       4.3 Distribution In Kind . If the Partnership makes a distribution in kind, for purposes of this Article IV, the value of all property
distributed to any Partner shall be the Fair Market Value of such property on the date of distribution. The Partner’s Capital Accounts and the
Profits and Losses of each class of Units shall be adjusted to reflect the manner in which the unrealized income, gain, loss and deduction
inherent in such securities or other property (that has not been previously reflected in the Capital Accounts) would be allocated among the
relevant Partners if there were a taxable disposition of such securities or other property for the Gross Asset Value on the date of distribution,
followed by a decrease in such Partner’s Capital Accounts as if the distribution were a distribution of cash to the extent of the Gross Asset
Value of such securities of other property on the date of distribution. Securities distributed in kind pursuant to this Section 4.3 shall be subject
to such conditions and restrictions as the General Partner determines are required or advisable to ensure compliance with applicable laws.

       4.4 Limitation on Distributions . Notwithstanding the distribution priority and entitlements set forth in Section 4.1, no distribution shall
be made to any holder on account of an Unvested Unit, but the amount that otherwise would have been distributable in respect of such Units
shall be paid to the holders of such Unvested Units as and when such Unvested Units become Vested Units. Amounts not distributed pursuant
to this Section 4.4 shall be treated for purposes of applying Section 4.1 as having been distributed to the holder of the Unvested Unit.


                                                             ARTICLE V
                                                  ALLOCATIONS OF PROFITS AND LOSSES

       5.1 In General . Profits and Losses of the Partnership shall be determined and allocated with respect to each fiscal year of the Partnership
as of the end of such year and at such times as the Gross Asset Value of any Partnership property is adjusted pursuant to Section 2.57. Subject
to the other provisions of this Article V, an allocation to a Partner of a share of Profits or Losses shall be treated as an allocation of the same
share of each item of income, gain, loss and deduction that is taken into account in computing Profits or Losses.

                                                                         21
       5.2 Allocations of Profits and Losses . Except as otherwise provided in this Article V, Profits and Losses shall be allocated for each fiscal
year or other period to the Partners such that the positive balance of the Adjusted Capital Account of each Partner immediately following such
allocation is, as closely as possible, equal (proportionately) to the amount of the distributions that would be made to such Partner pursuant to
Section 4.1 if the Partnership sold all of its assets for an amount equal to their Gross Asset Value and all Partnership liabilities were satisfied
(limited with respect to each nonrecourse liability to the Gross Asset Value of the assets securing such liability) and the remaining cash was
distributed in accordance with the priority set forth in Section 4.1.

      5.3 Limitation on Allocation of Losses . The Losses allocated to any Partner pursuant to Section 5.2 of this Agreement shall not exceed
the maximum amount of Losses that can be so allocated without causing such Partner to have an Adjusted Capital Account Deficit at the end of
any fiscal year. All Losses in excess of the limitation set forth in this Section 5.3 with respect to any Partner shall be allocated to other Partners
in accordance with this Section 5.3 and to the extent Losses exceed the limitation set forth in this Section 5.3 with respect to each Limited
Partner, such amount of any remaining Losses shall be allocated to the General Partner.

      5.4 Special Allocation Provisions .
            5.4.1 Minimum Gain Chargeback . Notwithstanding any other provision of this Article V, if there is a net decrease in Partnership
      Minimum Gain during any Partnership fiscal year, each Partner shall be specially allocated items of Partnership income and gain for such
      year (and, if necessary, subsequent years) in an amount equal to such Partner’s share of the net decrease in Partnership Minimum Gain,
      determined in accordance with Regulations Section 1.704-2(g)(2). This Section 5.4.1 is intended to comply with the minimum gain
      chargeback requirement of Regulations Section 1.704-2(f) and shall be interpreted consistently therewith.
            5.4.2 Partner Minimum Gain Chargeback . If there is a net decrease in Partner Minimum Gain attributable to a Partner Nonrecourse
      Debt during any Partnership fiscal year, each Partner who has a share of the Partner Minimum Gain attributable to such Partner Recourse
      Debt, determined in accordance with Regulations Section 1.704-2(i)(5), shall be specially allocated items of Partnership income and gain
      for such fiscal year (and, if necessary, subsequent years) in an amount equal to such Partner’s share of the net decrease in Partner
      Minimum Gain attributable to such Partner Nonrecourse Debt, determined in a manner consistent with the provisions of Regulations
      Section 1.704-2(g)(2). This Section 5.4.2 is intended to comply with the partner nonrecourse debt minimum gain chargeback requirement
      of Regulations Section 1.704-2(i)(4) and shall be interpreted consistently therewith.
           5.4.3 Qualified Income Offset . If any Partner unexpectedly receives any adjustment, allocation or distribution of the type
      contemplated by Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5) or (6), items of Partnership income and gain shall be

                                                                         22
     specially allocated to such Partner in an amount and manner sufficient to eliminate the Adjusted Capital Account Deficit of such Partner
     as quickly as possible. It is intended that this Section 5.4.3 qualify and be construed as a ―qualified income offset‖ within the meaning of
     Regulations Section 1.704-1(b)(2)(ii)(d).
           5.4.4 Adjusted Capital Account Deficit . If the allocation of Loss to a Partner as provided in Section 5.2 hereof would create or
     increase an Adjusted Capital Account Deficit, there shall be allocated to such Partner only that amount of Loss as will not create or
     increase an Adjusted Capital Account Deficit. The Loss that would, absent the application of the preceding sentence, otherwise be
     allocated to such Partner shall be allocated to the other Partners in accordance with their Interests, subject to the limitations of this
     Section 5.4.4
           5.4.5 Section 754 Election . To the extent that an adjustment to the adjusted tax basis of any Partnership asset pursuant to Code
     Section 734(b) or Code Section 743(b) is required, pursuant to Regulations Section 1.704-1(b)(2)(iv)(m)(2) or Regulations
     Section 1.704-1(b)(2)(iv)(m)(4), to be taken into account in determining Capital Accounts as the result of a distribution to a Partner in
     complete liquidation of its Interest in the Partnership, the amount of such adjustment to the Capital Accounts shall be treated as an item of
     gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and such gain or loss shall be
     specially allocated to the Partners in accordance with their interests in the Partnership in the event that Regulations
     Section 1.704-1(b)(2)(iv)(m)(2) applies, or to the Partners to whom such distribution was made in the event that Regulations
     Section 1.704-1(b)(2)(iv)(m)(4) applies.
          5.4.6 Nonrecourse Deductions . Nonrecourse Deductions for any fiscal year or other period shall be specially allocated to the
     Partners in proportion to their Percentage Interests.
           5.4.7 Partner Nonrecourse Deductions . Partner Nonrecourse Deductions for any fiscal year or other period shall be specially
     allocated to the Partner who bears the economic risk of loss with respect to the Partner Nonrecourse Debt to which such Partner
     Nonrecourse Deductions are attributable.
            5.4.8 Excess Nonrecourse Liabilities . Solely for purposes of determining a Partner’s proportionate share of the ―excess nonrecourse
     liabilities‖ of the Partnership within the meaning of Regulations Section 1.752-3(a)(3), the Partners’ interests in Partnership profits are in
     proportion to their Percentage Interests.

      5.5 Curative Allocations . The allocations set forth in Sections 5.3 and 5.4 of this Agreement (the ― Regulatory Allocations ‖) are
intended to comply with certain requirements of Regulations Sections 1.704-1(b) and 1.704-2(i). Notwithstanding any other provisions of this
Article V, the Regulatory Allocations shall be taken into account in allocating other Profits, Losses and items of income, gain, loss and
deduction to the Partners so that, to the maximum extent possible, at any point in time the Partners’ Capital Accounts shall reflect the manner in
which distributions would be made to the Partners, if the Partnership were liquidated and the proceeds of such liquidation were distributed to
the Partners in accordance with Section 10.4 of this Agreement.

                                                                        23
      5.6 Additional Provisions .
            5.6.1 Except as otherwise provided in this Section 5.6.1 for income tax purposes, under the Code and Regulations, each Partnership
      item income, gain, loss and deduction shall be allocated between the Partners as its correlative item of ―book‖ income, gain, loss or
      deduction is allocated pursuant to this Article V. Notwithstanding the foregoing provisions of this Article V, income, gain, loss and
      deduction with respect to property contributed to the Partnership by a Partner shall be allocated among the Partners, pursuant to
      Regulations promulgated under Code Section 704(c), so as to take account of the variation, if any, between the adjusted basis of such
      property to the Partnership and its initial Gross Asset Value (computed in accordance with Section 2.52 of this Agreement). In the event
      the Gross Asset value of any Partnership asset is adjusted pursuant to Section 2.52.2 of this Agreement, subsequent allocations of income,
      gain, loss and deduction with respect to such asset shall take account of the variation, if any, between the adjusted basis of such asset for
      federal income tax purposes and its Gross Asset Value in the same manner as under Code Section 704(c) and the applicable Regulations.
      Any elections or other decisions relating to the allocations pursuant to this Section 5.6.1 shall be made by the General Partner in its sole
      discretion. Allocations pursuant to this Section 5.6.1 are solely for purposes of federal, state and local income taxes and shall not affect,
      or in any way be taken into account in computing, any Partner’s Capital Account or share of Profits, Losses, other tax items or
      distributions pursuant to any provision of this Agreement.
            5.6.2 In the event that the Code or any Regulations require allocations of items of income, gain, loss, deduction or credit different
      from those set forth in this Agreement, upon the advice of the Partnership’s Accountants, the General Partner is hereby authorized to
      make new allocations in reliance upon the Code, the Regulations and such advice of the Partnership’s Accountants, such new allocations
      shall be deemed to be made pursuant to the fiduciary obligation of the General Partner to the Partnership and the Limited Partners, and no
      such new allocation shall give rise to any claim or cause of action by any Limited Partner.

      5.7 Tax Reporting . The Partners acknowledge and are aware of the income tax consequences of the allocations made by this Article V
and hereby agree to be bound by the provisions of this Article V in reporting their shares of Partnership income, gain, loss and deductions for
federal, state and local income tax purposes.

       5.8 Tax Treatment of Partnership Interests Subject to Vesting . The Partnership and each Partner agree to treat any Units other than
Class A Units as a separate ―Profits Interest‖ within the meaning of Rev. Proc. 93-27, 1993-2 C.B. 343. Absent a change in law, the Partnership
shall treat a Partner holding a Profits Interest as the owner of such Profits Interest from the date such Profits Interest is granted, and shall file its
IRS form 1065, and issue appropriate Schedule K-1s to such Partner, allocating to such Partner its distributive share of all items of income,
gain, loss, deduction and credit associated with such Profits Interest as if it were

                                                                           24
fully vested. Each such Partner agrees to take into account such distributive share in computing its Federal income tax liability for the entire
period during which it holds the Profits Interest. Except as required pursuant to a ―Determination‖ as defined in Code Section 1313(a) or a
change in law, the Partnership and each Partner agree not to claim a deduction (as wages, compensation or otherwise) for the fair market value
of such Profits Interest issued to a Partner, either at the time of grant of the Profits Interest, or at the time the Profits Interest becomes
substantially vested. The undertakings contained in this Section 5.8 shall be construed in accordance with Section 4 of Rev. Proc. 2001-43,
2001-2 C.B. 191. The provisions of this Section 5.8 shall apply regardless of whether or not the holder of a Profits Interest files an election
pursuant to Section 83(b) of the Code.

      5.9 Proposed Regulations . Each Partner authorizes the General Partner to elect to apply the safe harbor set forth in Proposed Treasury
Regulation § 1.83-3(l) (under which the fair market value of a partnership interest that is transferred in connection with the performance of
services is treated as being equal to the liquidation value of that interest) if such proposed Treasury Regulation or a similar Treasury Regulation
becomes a Regulation. If the General Partner determines that the Partnership should make such election, the Partners hereby authorize the
General Partner to amend this Agreement to provide (i) the Partnership is authorized and directed to elect the safe harbor, (ii) the Partnership
and each of its Partners (including any person to whom a partnership interest is transferred in connection with the performance of services)
agrees to comply with all requirements of the safe harbor with respect to all interests transferred in connection with the performance of services
while such election remains in effect and (iii) the Partnership and each of its Partners agree to take all actions necessary, including providing
the Partnership with any required information, to permit the Partnership to comply with the requirements set forth or referred to in the
applicable Regulations for such election to be effective. The Partners authorize the General Partner to amend this Agreement to modify Article
V to the extent the General Partner determines in its discretion that such modification is necessary or desirable as a result of the issuance of
Treasury Regulations relating to the tax treatment of the transfer of an interest in connection with the performance of services. Notwithstanding
anything to the contrary in this Agreement, the General Partner shall not be required to obtain the Partner’s consent to amend the agreement in
accordance with this Section 5.9 and each Partner agrees that it will be legally bound by any such amendment.

      5.10 Forfeitures . In the event of a forfeiture of a Unit, such Unit and the Capital Account associated therewith, if any, shall be transferred
(the ― Forfeiture Transfer ‖) to the other Partners pro rata in accordance with Capital Accounts (the ― Forfeited Unit Transferees ‖). If the
Forfeiture Transfer gives rise to the receipt of taxable income to the Forfeited Unit Transferee pursuant to Section 83 of the Code in the year of
the Forfeiture Transfer or any subsequent year, any deduction to which the Partnership is entitled pursuant to Section 83 of the Code as a result
of such income receipt shall be allocated among the Partners (other than the Forfeited Unit Transferee) in the taxable year of the Forfeiture
Transfer and any subsequent year in which the Forfeited Unit Transferee recognizes income as a result of the Forfeiture Transfer so as to
minimize any income or gain required to be recognized by the Partnership as a result of the Forfeiture Transfer and any excess deduction shall
be allocated to the Forfeited Unit Transferee or in such other manner as the Board deems to be appropriate to the extent permitted by law.

                                                                         25
                                                   ARTICLE VI
                                RIGHTS, POWERS AND DUTIES OF THE GENERAL PARTNER

6.1 Management of the Partnership .
      6.1.1 The General Partner shall conduct, direct and exercise full control over all activities of the Partnership and its Subsidiaries.
Subject to the terms and provisions hereof, except as otherwise expressly provided in the Agreement, all management powers over the
business and affairs of the Partnership and its Subsidiaries shall be exclusively vested in the General Partner (or, in the case of the
Subsidiaries, an entity controlled by the General Partner), and no Limited Partner shall have any rights of control or management power
over the business and affairs of the Partnership or its Subsidiaries. The General Partner shall, in addition to the powers now or hereafter
granted a general partner of a limited partnership under applicable law or which are granted to the General Partner under any other
provisions of this Agreement, have full power and authority to do all things deemed necessary, convenient or desirable by it to conduct
the business of the Partnership and the Subsidiaries (without any vote or consent of any Limited Partner, except as expressly provided
herein), including, without limitation:
          (a) the making of any expenditures, the guaranteeing of liabilities and the incurring of any obligations not otherwise
     prohibited by Section 6.3 it deems necessary for the conduct of the activities of the Partnership;
          (b) the acquisition, disposition, mortgage, pledge, encumbrance, hypothecation or exchange of any or all of the assets of the
     Partnership and the merger or other combination of the Partnership with or into another entity;
           (c) the use of the assets of the Partnership (including, without limitation, cash on hand) for any Partnership purpose and on
     any terms it sees fit, including, without limitation, the financing of the conduct of the operations of the Partnership, the repayment
     of obligations of the Partnership, and the investing of funds in the operations of the Partnership;
          (d) the negotiation and execution of any terms deemed desirable in its sole discretion and the performance of any contracts,
     conveyances or other instruments that it considers useful or necessary for the conduct of the operations of the Partnership or the
     implementation of its powers under this Agreement;
           (e) the setting of reserves or the making of distributions of cash or property under Article IV;
           (f) the selection and dismissal of employees of the Partnership or outside attorneys, accountants, consultants, agents and
     contractors and the determination of their compensation and other terms of employment or hiring;
           (g) the maintenance of such insurance for the benefit of the Partnership and the Partners as it deems necessary;

                                                                  26
     (h) the formation of, or acquisition of an interest in, and the contribution of property to, any Subsidiary;
      (i) the control of any matters affecting the rights and obligations of the Partnership, including the conduct of litigation and the
incurring of legal expense and the settlement (or the consent to judgment) of claims and litigation;
     (j) the sale of additional Interests (represented by Units or newly issued units) to any Limited Partners or Additional Limited
Partner at such times and on such terms as it deems to be in the best interests of the Partnership (including amending this
Agreement to give effect to same);
     (k) the amending of this Agreement to reflect the addition of Additional Limited Partners or the reduction of Capital Accounts
upon the return of capital to the Partners;
     (l) the redemption or repurchase of Units, which need not be on a pro rata basis, including, in the event of a Subsidiary IPO,
the making of such distributions to, or redemptions from any Partner as it may deem necessary or appropriate in order to, provide
such Partner with an economic benefit that is substantially similar to the economic benefit that such Partner would have received in
terms of timing and amount had the Partnership elected to conduct an Initial Public Offering through the issuance of Registrable
Securities subject to the limitations set forth in Section 12.1;
     (m) the incurrence of indebtedness for borrowed money or other debt;
     (n) the lending of money, the guaranteeing of or other contracting for indebtedness and other liabilities, the bringing and
defending of actions at law or in equity and the indemnification of any Person against liabilities and contingencies to the extent
permitted by law;
     (o) the determination of the appropriate accounting method or methods to be used by the Partnership;
       (p) the commencement of any case, proceeding or action under any laws relating to bankruptcy, insolvency, reorganization or
relief of debtors, seeking to have an order for relief entered with respect to the Partnership or adjudicating the Partnership bankrupt
or insolvent, or seeking reorganization, arrangement, adjustment, winding-up, liquidation, dissolution, composition or other relief
with respect to the Partnership’s debts, or the cooperation with any involuntary action or proceeding seeking the same with respect
to the Partnership;
     (q) implementing a Solvent Reorganization, including amending this Agreement to give effect to same; and
     (r) except for clauses (e), (k), (l), and (q), to cause any of the foregoing actions with respect to the Subsidiaries.

                                                             27
            6.1.2 No Limited Partner, in such capacity, shall execute any documents for the Partnership or transact any business on its account
     or its behalf.

      6.2 Reliance by Third Parties . Notwithstanding any other provision of this Agreement to the contrary, any Person dealing with the
Partnership shall be entitled to rely exclusively on the representations of the General Partner as to its power and authority to enter into
arrangements and shall be entitled to deal with the General Partner as if it were the sole party in interest therein, both legally and beneficially.
In no event shall any Person dealing with the General Partner or the General Partner’s representative with respect to any business or property of
the Partnership be obligated to ascertain that the terms of this Agreement have been complied with, or be obligated to inquire into the necessity
or expedience of any act or action of the General Partner or the General Partner’s representative; and every contract, agreement, instrument or
document executed by the General Partner or the General Partner’s representative with respect to any business or property of the Partnership
shall be conclusive evidence in favor of any and every Person relying thereon or claiming thereunder that: (a) at the time of the execution
and/or delivery thereof this Agreement was in full force and effect, (b) such instrument or document was duly executed in accordance with the
terms and provisions of this Agreement and is binding upon the Partnership and (c) the General Partner or the General Partner’s representative
was duly authorized and empowered to execute and deliver any and every such instrument or document for and on behalf of the Partnership.

     6.3 Restrictions on Authority of General Partner .
           6.3.1 Without the consent of all of the Partners, the General Partner shall not have the authority to:
                 (a) amend this Agreement in violation of Section 13.2;
                 (b) possess Partnership property for other than a Partnership purpose;
                 (c) admit a Person as a General Partner, except as provided in this Agreement;
                (d) take any action, or fail to take any action, that would cause the Partnership to be treated as other than a partnership for U.S.
           Federal Tax purposes;
                 (e) take any action, or fail to take any action in violation of the terms of this Agreement; or
                 (f) knowingly perform any act that would subject any Limited Partner to liability as a general partner in any jurisdiction.

     6.4 Duties and Obligations of General Partner .
          6.4.1 The General Partner shall take any and all actions which may be necessary, appropriate or advisable for the continuation of the
     Partnership’s existence as a limited partnership under the laws of the State of Delaware (and under the laws of each

                                                                        28
other jurisdiction in which such existence is necessary to protect the limited liability of the Limited Partners or to enable the Partnership
to conduct the business in which it is engaged) and activities related thereto.
      6.4.2 The General Partner shall devote to the Partnership such time as may be necessary for the proper performance of its duties
hereunder, but the officers and directors of the General Partner shall not be required to devote their full time to the performance of such
duties.
      6.4.3 The General Partner shall not participate in or consent to the purchase, sale, exchange or other trading of Interests in a manner
that may fairly result in the classification of the Partnership as a ―publicly traded partnership‖ within the meaning of Code
Section 7704(b).
       6.4.4 The General Partner shall take such action as may be necessary or appropriate in order to form or qualify the Partnership
under the laws of any jurisdiction in which the Partnership does business or in which such formation or qualification is necessary in order
to protect the limited liability of the Limited Partners or in order to continue in effect such formation or qualification. The General Partner
shall file or cause to be filed for recordation in the office of the appropriate authorities of the State of Delaware, and in each other
jurisdiction in which the Partnership is formed or qualified, such certificates (including, without limitation, limited partnership and
fictitious name certificates) and other documents as are required by the statutes, rules or regulations of such jurisdictions.

6.5 Liability of General Partner; Indemnification .
        6.5.1 Exculpation . To the fullest extent permitted by law, neither the General Partner nor its Affiliates, nor the officers, directors,
employees, partners, stockholders, members or agents of any of the foregoing, shall be liable to the Partnership or to any Partner for any
losses sustained or liabilities incurred as a result of any act or omission taken or suffered by the General Partner or any such other Person
if (i) the act or failure to act of the General Partner or such other Person was in good faith and in a manner it believed to be in, or not
contrary to, the best interests of the Partnership, and (ii) the conduct of the General Partner or such other Person did not constitute (a) any
act or omission resulting in a criminal conviction therefor which is affirmed by the highest court of applicable jurisdiction, (b) fraud,
(c) willful misconduct or (d) gross negligence. The termination of an action, suit or proceeding by judgment, order, settlement or upon a
plea of nolo contendere or its equivalent shall not, in and of itself, create a presumption or otherwise constitute evidence that the General
Partner or such other Person is not entitled to exculpation hereunder.
      6.5.2 Actions of Other Partners or Agents . The General Partner, in its capacity as General Partner of the Partnership, shall not be
liable to the Partnership or any other Partner for any action taken by any other Partner, nor shall the General Partner (in the absence of
fraud, willful misconduct, gross negligence or any act or omission resulting in a criminal conviction therefor which is affirmed by the
highest court of applicable

                                                                    29
jurisdiction) be liable to the Partnership or any other Partner for any action of any agent of the Partnership which has been selected in
good faith by the General Partner with reasonable care.
       6.5.3 Indemnification . The Partnership shall indemnify and hold harmless the General Partner and its Affiliates, the Limited
Partners and all officers, directors, employees, partners, stockholders, members and agents of any of the foregoing (each, an ― Indemnitee
‖), to the fullest extent permitted by law from and against any and all losses, claims, demands, costs, damages, liabilities, expenses
(including, without limitation, costs of investigation and attorneys’ fees and disbursements), judgments, fines, settlements and other
amounts, of any nature whatever, known or unknown, liquidated or unliquidated (collectively, ― Liabilities ‖) arising out of, resulting
from or relating or incidental to any and all claims, demands, actions, suits or proceedings, whether civil, criminal, administrative or
investigative (collectively, ― Actions ‖), in which the Indemnitee may be involved or threatened to be involved, as a party or otherwise,
relating to the performance or nonperformance of any act concerning the activities of the Partnership or the performance by such
Indemnitee of any of the General Partner’s responsibilities hereunder, unless the Indemnitee’s conduct constituted fraud, willful
misconduct, gross negligence or any act or omission resulting in a criminal conviction therefor which is affirmed by the highest court of
applicable jurisdiction. The termination of an action, suit or proceeding by judgment, order, settlement or upon a plea of nolo contendere
or its equivalent shall not, in and of itself, create a presumption or otherwise constitute evidence that the Indemnitee is not entitled to
indemnification hereunder; provided that a final, non-appealable judgment or order adverse to the Indemnitee expressly covering the
indemnification exceptions set forth above may constitute evidence that the Indemnitee is not so entitled to indemnification.
      6.5.4 Advancement of Expenses . Expenses incurred by an Indemnitee in defending any Action subject to this Section 6.5 shall be
advanced by the Partnership prior to any judgment or settlement of such Action (but not during any appeal therefrom) entered by any
court of competent jurisdiction, which includes a finding that such Indemnitee’s conduct constituted fraud, willful misconduct, gross
negligence or any act or omission resulting in a criminal conviction therefor which is affirmed by the highest court of applicable
jurisdiction, but only if the Partnership has received a written commitment by or on behalf of the Indemnitee to repay such advances to
the extent that, and at such time as, it has been determined by a final, non-appealable judgment or settlement entered by any court of
competent jurisdiction that the act or failure to act of the Indemnitee was not in good the indemnitee was not entitled to indemnification
under Section 6.5.3. Notwithstanding the foregoing, no expenses shall be advanced if a court of competent jurisdiction determines that
any indemnification or advance of expenses is unlawful.
      6.5.5 Indemnitee Obligations . Each Indemnitee shall use commercially reasonable efforts to pursue any insurance, contribution or
indemnity claims it may have against third parties with respect to the expenses incurred in defending any Action subject to this
Section 6.5; provided that no such claims, nor any efforts or obligation hereunder, shall delay the availability of the advances provided in
this Section 6.5.5. Each

                                                                  30
     Indemnitee, other than the General Partner, shall obtain the written consent of the General Partner prior to entering into any compromise
     or settlement which would result in an obligation of the Partnership to indemnify such Indemnitee.
         6.5.6 No Third-Party Beneficiaries . The provisions of this Section 6.5 are for the benefit of the Indemnitees and shall not be
     deemed to create any rights for the benefit of any other Person.
           6.5.7 Good Faith Reliance . The General Partner and its Affiliates shall at all times act in a manner that is consistent with its implied
     contractual covenant of good faith and fair dealing. So long as the General Partner and its Affiliates act in a manner consistent with the
     implied contractual covenant of good faith and fair dealing and with the express provisions of this Agreement, the General Partner and its
     Affiliates shall not be in breach of any duties (including, without limitation, fiduciary duties) in respect of the Partnership and/or any
     Limited Partner otherwise applicable at law or in equity. The provisions of this Agreement, to the extent that they expand, restrict or
     eliminate the duties and liabilities of the General Partner and its Affiliates otherwise existing at law or in equity, are agreed by the
     Partners to replace fully and completely such other duties and liabilities of the General Partner and its Affiliates.

       6.6 Competitive Opportunity . Subject to the last sentence of this Section 6.6, nothing in this Agreement shall restrict or prohibit any of
(i) the Partners that are not Management Limited Partners or (ii) any Non-Employee Directors or (iii) any of their respective Affiliates from
having business interests and engaging in business activities in addition to those relating to the Partnership, including, without limitation,
business interests and activities in direct competition with the Partnership or any of its Subsidiaries. None of the other Partners shall have any
rights by virtue of this Agreement in any business ventures of any single Partner or any of such single Partner’s Affiliates. None of the General
Partner, as such, the Partners that are not Management Limited Partners and the Non-Employee Directors and none of their respective Affiliates
shall be obligated to refer investment opportunities to the Partnership, and none of them shall be restricted in any investments it may make,
regardless of whether such investment opportunity or investment may be deemed to be a business venture or prospective business venture in
which the Partnership could have an interest or expectancy, (a ― Competitive Opportunity ‖). Each of the General Partner, as such, the Partners
that are not Management Limited Partners, the Non-Employee Directors and their respective Affiliates shall have the right to take any
investment opportunity for its own account (as a Partner or fiduciary), and to recommend, assign or otherwise transfer any investment
opportunity to, or deal in any investment opportunity with, any other Person, regardless of whether such investment opportunity may be
deemed to be a ― Competitive Opportunity ‖. None of the General Partner, as such, the Partners that are not Management Limited Partners and
none of their respective Affiliates shall be obligated to do or perform any act or thing in connection with the business of the Partnership not
expressly set forth in this Agreement. Nothing in this Section 6.6 shall eliminate, limit or change the fiduciary duties of the General Partner
under applicable law.

                                                                        31
                                                          ARTICLE VII
                                        ADMISSION OF SUCCESSOR AND ADDITIONAL GENERAL
                                          PARTNERS; WITHDRAWAL OF GENERAL PARTNER

      7.1 Admission of Successor or Additional General Partners .
            7.1.1 The General Partner may at any time designate one or more Persons to be its successor or to be an additional General Partner,
      in each case with such participation in the General Partner’s Interest as it and such successors or additional General Partners may agree
      upon; provided that the Interests of the other Partners shall not be affected thereby.
            7.1.2 Except in connection with a Transfer to a successor or additional General Partner pursuant to Section 7.1.1 of this Agreement,
      the General Partner shall not have any right to retire or withdraw voluntarily from the Partnership, or to sell, transfer or assign its Interest,
      except that it may cause to be admitted to the Partnership as an additional General Partner or Partners, or substitute in its stead as the
      General Partner, any entity which has, by merger, consolidation or otherwise, acquired substantially all of its assets or stock and
      continued its business; provided that the Interests of the other Partners shall not be affected thereby.
            7.1.3 By execution of this Agreement, each of the Limited Partners hereby consents to the admission of any Person as a successor
      or additional General Partner pursuant to Sections 7.1.1 and 7.1.2 of this Agreement. In each such case, such admission shall, without any
      further consent or approval of the Limited Partners, be an act of all the Limited Partners.
            7.1.4 Any voluntary withdrawal by the General Partner from the Partnership, or any Transfer by the General Partner of its Interest,
      shall be effective only upon the admission in accordance with Section 7.1.1 or 7.1.2 of this Agreement of a successor or additional
      General Partner, as the case may be.

      7.2 Liability of a Withdrawn General Partner . Any General Partner who, for any reason, voluntarily or involuntarily withdraws from the
Partnership, or Transfers its Interest, shall be and remain liable for all obligations and liabilities incurred by it as a General Partner prior to the
time that such Transfer becomes effective as provided in Section 7.1 of this Agreement, but it shall be free of any obligation or liability as a
General Partner incurred on account of the activities of the Partnership from and after the time that such Transfer becomes effective.


                                                             ARTICLE VIII
                                              TRANSFERS OF LIMITED PARTNERS’ INTERESTS

      8.1 Restrictions on Transfers of Interests .
           8.1.1 Until the first anniversary of the occurrence of an Initial Public Offering, except as required by law, no Management Limited
      Partner may directly or indirectly,

                                                                          32
sell, contract to sell, give, assign, hypothecate, pledge, encumber, grant a security interest in, offer, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of any
economic, voting or other rights in or to (collectively, ― Transfer ―) any Units except pursuant to (i) Sections 8.2, 9.1, 9.2 and 12.3 hereof
or (ii) a Transfer to a Manager Permitted Transferee (each a ― Permitted Transfer ‖).
     8.1.2 Following the first anniversary of an Initial Public Offering and the expiration of any underwriter or Partnership ―lock-up‖
agreement to which a Management Limited Partner is bound applicable to such Initial Public Offering, each Management Limited Partner
may only Transfer its Units pursuant to (i) a Permitted Transfer, (ii) a Transfer in accordance with Article XII hereof or (iii) a Transfer
conducted in accordance with the requirements of Rule 144 promulgated under the 1933 Act; provided that no Management Limited
Partner shall make a Transfer pursuant to this clause (iii) without the prior, written approval of the General Partner.
      8.1.3 No Transfer by any Management Limited Partner may be made pursuant to this Article VIII unless (i) the transferee has
agreed in writing to be bound by the terms and conditions of this Agreement (other than if the Transfer is conducted in accordance with
Section 12.1 hereof or the requirements of Rule 144 promulgated under the 1933 Act), (ii) the Transfer complies in all respects with the
applicable provisions of this Agreement, (iii) the Transfer complies in all respects with applicable federal and state securities laws,
including the 1933 Act and (iv) the Transfer is made in compliance with all applicable Partnership policies and restrictions (including any
trading ―window periods‖ or other policies regulating insider trading); provided that the conditions to Transfer described in clause
(i) above shall not apply to a Transfer pursuant to Sections 8.2, 9.1, 9.2 or 12.3 hereof.
      8.1.4 No Transfer by any Management Limited Partner may be made pursuant to this Article VIII (except if pursuant to an effective
registration statement under the 1933 Act) unless and until such Management Limited Partner has first delivered to the Partnership an
opinion of counsel (reasonably acceptable in form and substance to the Partnership) that neither registration nor qualification under the
1933 Act and applicable state securities laws is required in connection with such Transfer; provided that the conditions to Transfer
described in this Section 8.1.4 shall not apply to a Transfer pursuant to Sections 8.2, 9.1, 9.2 or 12.3 hereof.
    8.1.5 This Section 8.1 shall apply with respect to all Units held at any time by any Management Limited Partner, regardless of the
manner in which such Management Limited Partner initially acquired such Unit.

8.2 Call Option .
      8.2.1 If a Management Limited Partner ceases to provide Services for the benefit of the Partnership and its Subsidiaries for any of
the reasons set forth in clauses (a), (b) or (c) below (each such event a ― Termination Event ‖), the Partnership shall have the right but not
the obligation to purchase (the ― Call Right ‖) from time to time after such

                                                                    33
termination of Services (x) in the case of any Unit acquired prior to the Termination Event, for a period of nine (9) months immediately
following the date of the Termination Event and (y) in the case of any Unit acquired after the Termination Event, for a period of nine
(9) months immediately following the Sale Date with respect to such Unit (the final day of each of the aforementioned periods being
hereinafter referred to as the ― Initial Repurchase Deadline ‖), and such Management Limited Partner shall be required to sell to the
Partnership, any or all of such Units then held by such Management Limited Partner (it being understood that if Units of any class subject
to repurchase hereunder may be repurchased at different prices, the Partnership, at its sole discretion, may elect to repurchase all or any
portion of the Units of such class, including purchasing only such lower priced Units), at a price per Unit equal to the applicable purchase
price determined pursuant to Section 8.2.3; provided , however , that notwithstanding the foregoing Section 8.2.1, in no event shall the
Partnership purchase any Units pursuant to the Call Right prior to the day immediately following the six (6) month anniversary of the
date the Management Limited Partner first acquired such Units:
          (a) if such Management Limited Partner’s Services for the benefit of the Partnership and its Subsidiaries is terminated due to
     the Disability or death of the Management Limited Partner;
          (b) if such Management Limited Partner’s Services for the benefit of the Partnership and its Subsidiaries, as applicable, is
     terminated by the Partnership and its Subsidiaries without Cause; or
          (c) if such Management Limited Partner’s Services for the benefit of the Partnership and its Subsidiaries, as applicable, is
     terminated by the Partnership or any of its Subsidiaries for Cause or is terminated by the Management Limited Partner for any
     reason.
           Any Units purchased by the Partnership shall be canceled.
           Notwithstanding anything to the contrary in this Section 8.2, the Call Right shall not apply to any Units held by a
Management Limited Partner after the one-year anniversary of the date of an Initial Public Offering other than any Units the purchase
price of which pursuant to Section 8.2.3 is equal to Cost;
      8.2.2 In the event that the Partnership elects not to exercise its Call Right, the Partnership shall provide written notice to the Apollo
Group on or at any time prior to the Initial Repurchase Deadline of (i) its decision not to purchase some or all of such Units and (ii) the
number of such Management Limited Partner’s Eligible Units (defined below) which the Partnership will not purchase, and the Apollo
Group shall have the right but not the obligation to purchase and such Management Limited Partner shall be required to sell to the Apollo
Group, any or all of the Class A Units and Vested Units (the ― Eligible Units ‖) then held by such Management Limited Partner at a price
per Unit equal to the applicable purchase price determined pursuant to Section 8.2.3. The Apollo Group’s rights to purchase such Eligible
Units and each Management Limited Partner’s corresponding obligation to sell such Eligible Units shall terminate on the later of (i) the

                                                                   34
thirtieth (30th) day following receipt of such notice or (ii) the Initial Repurchase Deadline. Upon receipt of the written notice described
above, the Apollo Group shall within ten (10) days of receipt of the Partnership’s notice provide written notice to the Partnership. Upon
receipt of the Apollo Group’s notice, the Partnership will notify the Management Limited Partner of its election, specifying that it is
willing to purchase all or a portion of the Eligible Units, and the Management Limited Partner will be obligated to sell to the Apollo
Group the number of Eligible Units elected to be purchased by the Apollo Group.
      8.2.3 In the event of a purchase by the Partnership pursuant to Section 8.2.1 and/or the Apollo Group pursuant to Section 8.2.2
(each a ― Units Buyer ‖), the purchase price shall be:
           (a) in the case of a Termination Event specified in Section 8.2.1(a) or 8.2.1(b):
           (i) for Class A Units and Vested Units, a price per Unit equal to the Fair Market Value as of the repurchase date; and
           (ii) for Unvested Units, a price per Unit equal to the lesser of (1) the Fair Market Value as of the repurchase date and (2) Cost.
           (b) in the case of a Termination Event specified in Section 8.2.1(c), for Class A Units, Vested Units and Unvested Units, a
     price per Unit equal to the lesser of (1) the Fair Market Value as of the repurchase date and (2) Cost.
        8.2.4 The Units Buyer may pay the purchase price for such Units (i) by delivery of funds deposited into an account designated by
the Management Limited Partner, a bank cashier’s check, a certified check or a company check of the Units Buyer for the purchase price;
(ii) if the Units Buyer is the Partnership and is prohibited from paying cash by financing or liquidity constraints and is unable to pay the
purchase price as provided in clause (iii), by delaying the exercise of the purchase right described under Section 8.2.1 until the earlier of
(x) when the financing restrictions lapse and (y) when the Partnership is able to pay the purchase price as provided in clause (iii); or
(iii) if the Units Buyer is the Partnership and has the right to purchase such Units during the period following an Initial Public Offering or
Subsidiary IPO (including in respect of a purchase that was delayed pursuant to clause (ii)), by delivery of a number of shares of Issuer
Common Stock determined by dividing (A) the aggregate purchase price of the Units being sold by such Management Limited Partner by
(B) the Public Share FMV as of the close of trading on the trading day immediately prior to the delivery thereof to the Management
Limited Partner. Notwithstanding anything to the contrary in this Agreement, the Partnership may deduct and withhold from the amounts
otherwise payable pursuant to this Agreement such amounts as necessary to comply with the Code, or any other provision of
applicable law, with respect to the making of such payment.

                                                                   35
      8.2.5 Notwithstanding anything to the contrary elsewhere herein, the Partnership shall not be obligated to purchase any Units at any
time pursuant to this Section 8.2, regardless of whether it has delivered a notice of its election to purchase any such Units, (i) to the extent
that (A) the purchase of such Units (together with any other purchases of Units pursuant to Sections 8.2 or 9.2 hereof, or pursuant to
similar provisions in any other agreements with other investors of which the Partnership has at such time been given or has given notice)
or (B) in the event of an election to purchase such Units with shares of Issuer Common Stock, the issuance of such shares, the purchase of
such shares by the Partnership or the distribution of such shares to the Management Limited Partner would result (x) in a violation of any
law, statute, rule, regulation, policy, order, writ, injunction, decree or judgment promulgated or entered by any governmental authority
applicable to the Partnership or any of its Subsidiaries or any of its or their assets (including any unavailability of a registration statement
or exemption from registration necessary to allow delivery of shares of Issuer Common Stock to the Management Limited Partner),
(y) after giving effect thereto (including any dividends or other distributions or loans from a Subsidiary of the Partnership to the
Partnership in connection therewith), in a Financing Default or (z) in the Partnership being required to disgorge any profit pursuant to
Section 16(b) of the 1934 Act, (ii) if immediately prior to such purchase of Units, issuance of Issuer Common Stock or purchase of shares
of Issuer Common Stock, as the case may be, there exists a Financing Default which prohibits such issuance or purchase (including any
dividends or other distributions or loans from a Subsidiary of the Partnership to the Partnership in connection therewith), or (iii) if the
Partnership does not have funds available to effect such purchase of Units or Issuer Common Stock The Partnership shall within thirty
(30) days of learning of any such fact so notify the Management Limited Partner that it is not obligated to purchase such Units and has
deferred its right to make such purchase until the earliest date on which such violation, potential liability under the 1933 Act or 1934 Act,
Financing Default or unavailability of funds would not result therefrom or has ceased. The Partnership agrees to use commercially
reasonable efforts to cure any such Financing Default that is curable. To the extent that, pursuant to this Section 8.2.5, the Partnership is
not obligated to pay for a Management Limited Partner’s Units in accordance with one of the payment methods described in the first
sentence of Section 8.2.4, the Partnership shall, except as otherwise permitted by this Section 8.2.5, be required to pay for such Units
pursuant to an alternate method of payment described in the first sentence of Section 8.2.4.
      8.2.6 Notwithstanding anything to the contrary contained in this Section 8.2, any Units which the Partnership has elected to
purchase from a Management Limited Partner, but which in accordance with Section 8.2.5 are not purchased at the applicable time
provided in this Section 8.2, shall be purchased by the Partnership on the tenth (10 ) Business Day after such date or dates that it is no
                                                                                      th


longer permitted to defer purchasing such Units under Section 8.2.5, and the Partnership shall give such Management Limited Partner
five (5) Business Days’ prior notice of any such purchase.
      8.2.7 In the event that neither the Partnership nor the Apollo Group exercises its Call Right or right to purchase Eligible Units, as
applicable, pursuant to this Section 8.2, with respect to any Management Limited Partner, such Management Limited Partner (a ―
Forfeiting Partner ‖) shall be deemed to have forfeited that number of Vested Units

                                                                   36
     calculated as follows: (i) the number of Vested Units subject to the Call Right (― Subject Units ‖) held by such Forfeiting Partner
     multiplied by (ii) a fraction (A) the numerator of which is the product of (1) the Strike Price Factor (as proportionally adjusted for all cash
     distributions pursuant to Section 4.1.1 of this Agreement and all subsequent distributions of equity and other similar recapitalizations) and
     (2) the number of such Subject Units and (B) the denominator of which is the product of (1) the Fair Market Value of a Class A Unit as of
     date of the Termination of Services and (2) the number of Subject Units.

             Notwithstanding the foregoing, Section 8.2.7 shall not be applicable to any securities into which Equity Units are converted or
exchanged pursuant to a transaction in which such Equity Units are converted into or exchanged for Class A Units or the same class of
securities that the Class A Units are converted into or exchanged for. Section 8.2.7 shall have no force or effect after any transaction in which
all of the Units are converted into or otherwise exchanged for the same class of equity securities.

      8.3 Vesting Ceases upon a Termination of Services . In the event of any Termination of Services, unless otherwise determined by the
General Partner, all Unvested Units held by the Management Limited Partner whose Service terminated shall cease vesting from and after such
Termination of Services; provided , however , that if (i) a Management Limited Partner’s Services are terminated by the Partnership and its
Subsidiaries without Cause on or following the first anniversary of the Closing Date, (ii) a Change of Control occurs within six (6) months
immediately following the date of Termination of Services and (iii) at the time of such Change of Control the Investor IRR is equal to or
exceeds twenty-five percent (25%), then all Class C Units shall become vested as of the date of such Change of Control (the ― Exempt Class C
Units ‖).

      8.4 Accelerated Vesting . The General Partner may from time to time accelerate the vesting of the Equity Units, including in connection
with a Change of Control. In such event, the General Partner shall use its reasonable best efforts to comply with Section 280G and 409A of the
Code, to the extent applicable, so as to avoid the assessment on any Management Limited Partner of any excise tax or penalty tax under such
Code sections, including, if applicable, by submitting any such acceleration to Unit-holder approval.

       8.5 Redemption of Equity Units . In connection with any Change of Control transaction or Initial Public Offering, the Partnership shall
have the right to redeem, prior to such Change of Control transaction and, if the Partnership elects not to so redeem, the Apollo Group shall
have the right but not the obligation to purchase, prior to such Change of Control transaction, the Equity Units in exchange for the
consideration per Equity Unit that the Management Limited Partners would have been entitled to receive had such Equity Units been sold in
such Change of Control transaction or Initial Public Offering. At least ten (10) days prior to the consummation of any such redemption or
purchase, the Partnership or the Apollo Group, as applicable, shall provide written notice of its intention to redeem or purchase such Equity
Units, as applicable (the ― Redemption Notice ‖). The Redemption Notice shall set forth in reasonable detail the terms and conditions of such
redemption or purchase, as applicable, including, without limitation, (i) the number of Equity Units that would be redeemed or purchased,
(ii) the price to be paid for such Equity Units, (iii) all other material terms of the proposed redemption or purchase, and (iv) notice that the
Partnership or the Apollo Group intends to redeem or purchase, as applicable, such Equity Units.

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      8.6 Redemptions . For purposes of this Article VIII, distributions to a Partner in redemption (in whole or in part) of a Partner’s Units shall
be treated as a distribution.


                                                           ARTICLE IX
                                              DRAG-ALONG RIGHT AND TAG-ALONG RIGHT

     9.1 Drag-Along Rights .
            9.1.1 If at any time prior to a Qualified IPO any or all of the Apollo Group, the Verso Paper Investment Limited Partner or the
     General Partner (collectively, the ― Drag-Along Sellers ‖) propose a sale of Units then held by them to any Independent Third Party (a ―
     Drag-Along Transferee ‖) constituting at least ten percent (10%) of the Initial Equity Stake in a transaction or series of transactions
     (including, without limitation, pursuant to a purchase of Units, tender offer, merger or other business combination transaction or
     otherwise) (a ― Drag-Along Sale ‖), the Drag-Along Sellers may elect to require all other Partners to sell their Units in the Drag-Along
     Sale pursuant to this Section 9.1 (the ― Drag-Along Right ‖). At least twenty (20) days prior to the consummation of any such Drag-Along
     Sale, the Drag-Along Sellers shall provide written notice of their intention to exercise the Drag-Along Right to the other Partners (the ―
     Drag-Along Notice ‖). The Drag-Along Notice shall set forth in reasonable detail the terms and conditions of the Drag-Along Sale,
     including, without limitation, (i) the number of Units that would be Transferred by the Drag-Along Sellers, (ii) the price to be paid for the
     Units of the Drag-Along Sellers that would be Transferred, (iii) all other material terms of the proposed Drag-Along Sale, and (iv) notice
     that the Drag-Along Sellers are electing to exercise the Drag-Along Right.
           9.1.2 In the event the Drag-Along Sellers elect to exercise the Drag-Along Right, each other Partner shall participate in the
     Drag-Along Sale by selling a number of Units of such other Partner equal to the product obtained by multiplying (i) the number Units
     owned by such other Partner on the date of the Drag-Along Sale by (ii) a fraction, the numerator of which is equal to the number of Units
     proposed to be sold by the Drag-Along Sellers and the denominator of which is the aggregate number of Units owned by the Drag-Along
     Sellers prior to such sale (the ― Drag-Along Participation Percentage ‖).
           9.1.3 The Transfer of Units to the Drag-Along Transferee by the Drag-Along Sellers and the other Partners pursuant to this
     Section 9.1 shall be consummated simultaneously. The delivery by each selling Partner of a limited partnership interest power or such
     other instrument of Transfer reasonably acceptable to the Drag-Along Transferee shall be made at the time such Drag-Along Sale is
     consummated against payment of the purchase price for such Units. To the extent that the Partners (or any successors thereto) are to
     provide any indemnification or otherwise assume any other post-closing liabilities in connection with any Drag-Along Sale, the
     Drag-Along Sellers and all other Partners selling Units in a transaction under this Section 9.1 shall do so on a pro rata basis in an amount
     not to exceed the proceeds received by them individually in such Drag-Along Sale. Furthermore, each selling Partner shall be required to
     give customary representations and warranties, including, without limitation, title to Interests conveyed, legal authority, and
     non-contravention of other agreements to which it is a

                                                                        38
party. Each selling Partner shall be required to enter into any instrument, undertaking or obligation necessary or reasonably requested and
deliver all documents necessary or reasonably requested in connection with such Drag-Along Sale (as specified in the Drag-Along
Notice) in connection with this Section 9.1.
       9.1.4 If, at any time prior to a Qualified IPO, the Apollo Group proposes a sale of any of the equity of a Parent Issuer then held by
the Apollo Group to any Independent Third Party in a transaction or series of transactions (including, without limitation, pursuant to a
purchase of Units, tender offer, merger or other business combination transaction or otherwise), the General Partner may elect to require
all other Partners to sell their Units in the Drag-Along Sale pursuant to this Section 9.1 in an equivalent amount and at an equivalent price
as if the Drag-Along Sellers proposed to sell the number of Units that indirectly correspond to the equity of the Parent Issuer so proposed
to be sold and the Drag-Along Sellers had elected its Drag-Along Right pursuant to this Section 9.1.

9.2 Tag-Along Rights .
       9.2.1 Subject to Section 9.2.5, if at any time prior to a Qualified IPO all or any of the Apollo Group, the Verso Paper Investment
Limited Partner or the General Partner (the ― Tag-Along Sellers ‖) propose a Transfer for value of Units held by them to any Independent
Third Party (a ― Tag-Along Transferee ‖) in a transaction or series of transactions constituting a Change of Control, then, unless the
Tag-Along Sellers previously elected to exercise the Drag-Along Right pursuant to Section 9.1, each other Partner shall have the right to
participate in such Transfer for value (a ― Tag-Along Sale ‖) pursuant to this Section 9.2 (the ― Tag-Along Right ‖). At least ten (10) days
prior to the consummation of any such Tag-Along Sale, the transferring Tag-Along Sellers shall provide written notice of their intention
to Transfer their Units to the other Partners (the ― Tag-Along Notice ‖). The Tag-Along Notice shall set forth in reasonable detail the
terms and conditions of the Tag-Along Sale, including, without limitation, (i) the aggregate number of Units that would be Transferred
(or if greater, the aggregate number of Units which the Tag-Along Transferee would be willing to purchase), (ii) the price to be paid for
such Units, and (iii) all other material terms of the proposed Tag-Along Sale.
      9.2.2 If any other Partner elects to exercise the Tag-Along Right, each such Partner shall provide written notice of such election to
the transferring Tag-Along Sellers within five (5) Business Days of receipt of the Tag-Along Notice (the ― Tag-Along Election Period ‖).
Should any other Partner fail to provide such written notice to the transferring Tag-Along Sellers by the end of the Tag-Along Election
Period, then none of such other Partner’s Units will be included in the Tag-Along Sale and such other Partner’s Tag-Along Right with
respect to such Tag-Along Sale shall terminate automatically. In the event any Partner exercises the Tag-Along Right, each such
exercising Partner shall Transfer in the Tag-Along Sale a number of Units equal to the product obtained by multiplying (i) the number of
Units proposed to be purchased by or Transferred to the Tag-Along Transferee by (ii) a fraction, the numerator of which is equal to the
number of Units owned by the exercising Partner and the denominator of which is the aggregate number of Units owned by Partners who
propose to Transfer in the Tag-Along Sale (the ― Tag-Along Participation Percentage ‖).

                                                                  39
      9.2.3 The Tag-Along Sale of Units collectively by the transferring Partners to the Tag-Along Transferee pursuant to this Section 9.2
shall be consummated simultaneously. The delivery by the transferring Partners of a limited partnership interest power or such other
instrument of Transfer reasonably acceptable to the Tag-Along Transferee shall be made at the time such Tag-Along Sale is
consummated against payment of the purchase price for such Interests to the selling Partners. The consummation of such proposed
Tag-Along Sale shall occur in the sole discretion of the selling Tag-Along Sellers, who shall have no liability or obligation whatsoever to
any other Partner participating therein. To the extent that the transferring Partners are to provide any indemnification or otherwise assume
any other post-closing liabilities in connection with a Tag-Along Sale pursuant to this Section 9.2, the selling Partners shall do so on a pro
rata basis in an amount not to exceed the proceeds received by them in such Tag-Along Sale. Furthermore, each transferring Partner shall
be required to give customary representations and warranties to the Tag-Along Transferee, including, without limitation, title Interests
conveyed, legal authority, and non-contravention of other agreements to which it is a party. Each selling Partner shall be required to enter
into any instrument, undertaking or obligation necessary or reasonably requested and deliver all documents necessary or reasonably
requested in connection with such Tag-Along Sale in connection with this Section 9.2.
      9.2.4 If at any time prior to a Qualified IPO the Apollo Group proposes a Transfer for value to any Independent Third Party in a
transaction or series of transactions of any equity in a Parent Issuer then held by the Apollo Group and none of the Tag-Along Sellers
previously elected to exercise the Drag-Along Right pursuant to Section 9.1, then each other Partner shall have the right to participate in
such Transfer for value with respect to its Units in an equivalent amount and at an equivalent price as if the Tag-Along Sellers proposed
to Transfer the number of Units that indirectly correspond to the equity of the Parent Issuer so proposed to be Transferred and such other
Partner had elected to participate in such Transfer for value pursuant to this Section 9.2.
      9.2.5 Notwithstanding any provisions of this Section 9.2, during the first twelve (12) months of this Agreement, the Verso Paper
Investments Limited Partner, the General Partner or the Apollo Group may transfer any Units then owned by them without complying
with any provisions of this Section 9.2, so long as such transfer would not be deemed to be a Change of Control.


                                                    ARTICLE X
                                 DISSOLUTION AND LIQUIDATION OF THE PARTNERSHIP

10.1 Events Causing Dissolution . The Partnership shall dissolve upon the happening of any of the following events:
     10.1.1 The sale or other disposition of all of the property and assets of the Partnership;

                                                                  40
           10.1.2 The election by the General Partner to dissolve the Partnership;
           10.1.3 Judicial dissolution; or
           10.1.4 The removal of the General Partner or the occurrence of any other event that causes the General Partner to cease to be a
     general partner of the Partnership; provided that the Partnership shall not be dissolved or required to be wound up in connection with any
     of the events specified in this Section 10.1.4 if a successor or additional General Partner has been admitted to the Partnership in
     accordance with Sections 7.1.1 or 7.1.2.

       10.2 Effect of Dissolution . The dissolution of the Partnership shall be effective on the day on which the event occurs giving rise to the
dissolution, but the Partnership shall not terminate until this Agreement has been cancelled and the assets of the Partnership shall have been
distributed as provided in Section 10.4 of this Agreement. Notwithstanding the dissolution of the Partnership, prior to the termination of the
Partnership, the business of the Partnership and the affairs of the Partners, as such, shall continue to be governed by this Agreement.

      10.3 Capital Contribution upon Dissolution . Each Partner shall look solely to the assets of the Partnership for all distributions with
respect to the Partnership, its Capital Contribution thereto, its Capital Account and its share of Profits or Losses and shall have no recourse
therefor (upon dissolution or otherwise) against the General Partner or any Limited Partner.

     10.4 Liquidation .
           10.4.1 Upon dissolution of the Partnership, the General Partner shall liquidate the assets of the Partnership and, after allocating all
     income, gain, loss and deductions resulting therefrom to the Partners pursuant to Article V of this Agreement, shall apply and distribute
     the proceeds thereof, as promptly as reasonably practicable, but, subject to Section 10.4.2, within ninety (90) days following such
     dissolution, as follows:
                 (a) first, to the payment of the obligations of the Partnership to third parties, to the expenses of liquidation and to the setting
           up of any Reserves for contingencies which the General Partner may consider necessary or appropriate; and
                (b) thereafter, to the Partners pro rata in accordance with the positive balances in the Partners’ respective Capital Accounts,
           determined after taking into account all Capital Account adjustments for the Partnership taxable year during which such liquidation
           occurs (other than those made as a result of the distributions set forth in this Section 10.4.1(b), by the end of the taxable year in
           which such liquidation occurs or, if later, within ninety (90) days after the date of the liquidation.

                                                                         41
            10.4.2 Notwithstanding Section 10.4.1 of this Agreement, in the event that the General Partner determines that an immediate sale of
     all or any portion of the Partnership’s assets would cause undue loss to the Partners, the General Partner, in order to avoid such loss, may,
     after giving notice to all of the Limited Partners, to the extent not then prohibited by the Act, either defer liquidation of and withhold from
     distributions for a reasonable time, any assets of the Partnership except those necessary to satisfy the Partnership’s debts and obligations,
     or distribute the assets to the Partners in kind.
          10.4.3 The General Partner shall cause the cancellation of this Agreement following the liquidation and distribution of all of the
     Partnership’s assets.


                                                           ARTICLE XI
                                                BOOKS AND RECORDS, ACCOUNTING,
                                             INFORMATION RIGHTS, TAX ELECTIONS, ETC.

     11.1 Books and Records .
            11.1.1 The books and records of the Partnership shall be maintained at the principal office of the Partnership and shall be available
     (except for the number of Units or Percentage Interest of Partners other than the requesting Partner) for examination there by any Partner
     or its duly authorized representatives at any and all reasonable times. To the extent permitted by law, the General Partner shall permit
     Limited Partners and their assignees to inspect and copy such books and records at the Partnership’s expense. The Partnership shall
     maintain such books and records and provide such financial or other statements as the General Partner in its sole discretion deems
     advisable, subject to the requirements of this Agreement.
           11.1.2 The Accountants shall review all annual financial statements of the Partnership, which statements shall be prepared in
     accordance with generally accepted accounting principles, and shall review or prepare for execution by the General Partner all tax returns
     of the Partnership.

      11.2 Accounting and Fiscal Year . Subject to Code Section 448, the books of the Partnership shall be kept on such method of accounting
for tax and financial reporting purposes as may be determined by the General Partner. The fiscal year of the Partnership shall end on
December 31 of each year or on such other date permitted under the Code as the General Partner shall determine.

     11.3 Information and Audit Rights .
           11.3.1 Information Rights . In addition to any rights under applicable law, the Management Limited Partner shall have the right to
     financial and business information that any bondholder (including the information that would be provided to a Rule 144A investor)
     receives from the Partnership or any Subsidiary of the Partnership.
          11.3.2 Audit Rights . The Management Limited Partner shall have the right to request and receive information from the General
     Partner with respect to the calculation of the Investor IRR and payments made in connection therewith.

                                                                        42
      11.4 Designation of Tax Matters Partner . The General Partner is hereby designated as the ―Tax Matters Partner‖ of the Partnership under
Code Section 6231(a)(7) to manage administrative tax proceedings conducted at the Partnership level by the Internal Revenue Service with
respect to Partnership matters. Any Partner or assignee may participate in such administrative proceedings relating to the determination of
Partnership items at the Partnership level, to the extent permitted by the Code. Expenses of such administrative proceedings undertaken by the
Tax Matters Partner shall be paid from Partnership assets. Each Limited Partner or assignee that elects to participate in such proceedings shall
be responsible for its own expenses incurred in connection with such participation. The cost of any adjustments to a Limited Partner or
assignee, and the cost of any resulting audits or adjustments of a Limited Partner’s or assignee’s tax return, will be borne solely by the affected
Limited Partner or assignee.


                                                           ARTICLE XII
                                              CERTAIN RIGHTS AND AGREEMENTS OF THE
                                                 MANAGEMENT LIMITED PARTNERS

     12.1 Registration Rights .
           12.1.1 In the event that the Partnership proposes to register any Registrable Securities under the 1933 Act (other than a registration
     statement on Form S-4 or Form S-8), whether for its own account or the account of any Partner, the Partnership shall give the Partners
     prompt written notice of its intention to effect such a registration and shall include in such registration on the same terms as the sale of
     securities in connection with such registration, all Registrable Securities requested in writing by the Partners for inclusion therein within
     ten (10) days after the giving of such notice by the Partnership. If at any time after giving written notice of its intention to register any
     Registrable Securities and prior to the effective date of the registration statement filed in connection with such registration, the
     Partnership determines for any reason not to proceed with the proposed registration, the Partnership may at its election give written notice
     of such determination to the Partners and thereupon shall be relieved of its obligation to register any Registrable Securities in connection
     with such registration (but not from its obligation to pay the Registration Expenses incurred in connection therewith). A Partner shall be
     permitted to withdraw all or part of its Registrable Securities from a registration pursuant to this Section 12.1.1 at any time prior to the
     effectiveness of such Registration Statement except in an underwritten offering where such Partner has previously committed to the
     underwriters that it would participate in such offering.
          12.1.2 If the registration of which the Partnership gives notice is for a registered public offering involving an underwriting, the
     Partnership shall so advise each of the Partners as a part of the written notice given pursuant to Section 12.1. In such event, the right of
     each of the Partners to registration pursuant to this Section 12.1 shall be conditioned upon such Partner’s participation in such
     underwriting and the inclusion of such Partner’s Registrable Securities in the underwriting to the extent provided herein. The Partners
     whose Registrable Securities are to be included in such registration shall (together with the Partnership) enter into an underwriting
     agreement in customary form with the representative of the underwriter or underwriters selected for underwriting by the

                                                                        43
Partnership. Notwithstanding any other provision of this Section 12.1, if the representative of the underwriter or underwriters determines
that marketing factors require a limitation on the number of securities to be underwritten, such representative may (subject to the
allocation priority set forth below) limit the number of Registrable Securities to be included in the registration and underwriting. The
Partnership shall so advise all holders of Registrable Securities requesting registration, and the number of shares of Registrable Securities
that are entitled to be included in the registration and underwriting shall be allocated in the following manner: (i) first, one hundred
percent (100%) of the securities the Partnership, or the Person initiating such registration, proposes to sell, and (ii) second, to the extent of
the amount of securities which all other Persons have requested to be included in such registration, which, in the opinion of the managing
underwriter or underwriters, can be sold without the adverse effect referred to above, such amount to be allocated first, to the General
Partner and the Verso Paper Investments Limited Partner and second, pro rata among the Management Limited Partners, based upon the
relative aggregate amount of gross proceeds to be received by any such Management Limited Partner in the offering (and for purposes of
calculating the foregoing amount, any shares sold by a Management Limited Partner to the Partnership pursuant to a termination of
employment without Cause shall be deemed to be the first shares available to be included in such Underwritten Offering by such
Management Limited Partner). If any Partner disapproves of the terms of any such underwriting, it may elect to withdraw therefrom by
written notice to the Partnership and the underwriter. Any Registrable Securities or other securities excluded or withdrawn from such
underwriting shall be withdrawn from such registration except where such Partner has previously committed to the underwriters that it
would participate in such offering.
      12.1.3 In the event any Partner requests inclusion in a registration pursuant to this Section 12.1 in connection with a distribution of
Registrable Securities to its partners, the registration shall provide for a resale by such partners, if requested by such Partner. Each of the
Partners holding Registrable Securities included in any registration shall furnish to the Partnership such information regarding such
Partner and the distribution proposed by such Partner as the Partnership may reasonably request in writing and as shall be reasonably
required in connection with any registration, qualification or compliance referred to in this Section 12.1.
      12.1.4 Notwithstanding anything contained herein to the contrary, the Partnership shall have the right to require the Partners to
suspend offers and sales of Registrable Securities included on any registration statement filed whenever, and for so long as, in the
reasonable good faith judgment of the Partnership either (A) an event has occurred which makes any statement made in such registration
statement or related prospectus or document incorporated therein or deemed to be incorporated therein by reference untrue in any material
respect or which requires the making of any changes in such registration statement or prospectus so that it will not contain any untrue
statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not
misleading; or (B) it is advisable to suspend use of the prospectus due to pending corporate developments public filings with the
Commission or similar events; provided , however , that the aggregate number of days included in any such suspension period shall not
exceed one hundred and eighty (180) days in any twelve (12) month period.

                                                                    44
       12.1.5 The Partnership shall bear all expenses incident to its performance of or compliance with this Section 12.1, including,
without limitation, all registration and filing fees, fees and expenses of compliance with securities or blue sky laws (including fees and
disbursements of counsel for any underwriters in connection with blue sky qualifications of the Registrable Securities), listing application
fees, printing expenses, transfer agent’s and registrar’s fees, cost of distributing prospectuses in preliminary and final form as well as any
supplements thereto, fees and disbursements of counsel for the Partnership and all independent certified public accountants and other
Persons retained by the Partnership, messenger, telephone and delivery expenses, the fees and expenses incurred in connection with the
listing of the securities to be registered on any securities exchange or national market system, (including the expenses of any annual audit,
special audit, quarterly review and ―comfort‖ letters required by or incident to such performance and compliance), rating agency fees,
securities laws liability insurance (if the Partnership so desires (or if the underwriters of the applicable offering so require)), the fees and
disbursements of underwriters (including, without limitation, all fees and expenses of any ―qualified independent underwriter‖ required
by the rules of the National Association of Securities Dealers) customarily paid by issuers or sellers of securities in public equity
offerings, the expenses customarily borne by the issuers of securities in a ―road show‖ presentation to potential investors, the fees and
expenses of other persons retained by the Partnership and all fees and expenses of any Partner participating in a registration pursuant
hereto (including fees and expenses of designated counsel), other than underwriting discounts or commissions or transfer taxes
attributable to the sale of Registrable Securities by such Partner (all such expenses so borne by the Partnership being herein called ―
Registration Expenses ‖).
       12.1.6 To the extent permitted by law, the Partnership will indemnify each of the Partners, as applicable, each of its officers,
directors (or Persons in similar positions), members and partners, and each Person controlling each of the Partners within the meaning of
the 1933 Act or the 1934 Act, with respect to each registration which has been effected pursuant to this Section 12.1, and each
underwriter, if any, and each person who controls any underwriter within the meaning of the 1933 Act or the 1934 Act, against all claims,
losses, damages and liabilities (or actions in respect thereof) arising out of or based on: (A) any untrue statement (or alleged untrue
statement) of a material fact contained in any registration statement, including any preliminary or final prospectus contained therein and
any amendments or supplements thereto, incident to any such registration; (B) any omission (or alleged omission) to state therein a
material fact required to be stated therein or necessary to make the statements therein not misleading; or (C) any violation by the
Partnership of the 1933 Act, the 1934 Act, any state securities or blue sky laws or any rule or regulation thereunder in connection with
any such registration, and will reimburse each of the Partners, each of its officers, directors (or Persons in similar positions), members and
partners, and each Person controlling each of the Partner, each such underwriter and each Person who controls any such underwriter, for
any legal and any other expenses reasonably incurred in connection with investigating and defending any such claim, loss, damage,
liability or action; provided that the

                                                                   45
Partnership will not be liable in any such case to the extent that any such claim, loss, damage, liability or expense arises out of or is based
on (y) any untrue statement or omission based upon written information furnished to the Partnership by the Partner or underwriter and
stated to be specifically for use therein or (z) the failure of the Partner or any agent acting on behalf of the Partner to timely deliver a
prospectus, except those cases where such failure was a result of the act(s) or failure to act by the Partnership. The indemnity agreement
contained in this Section 12.1.6 shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such
settlement if effected without the consent of the Partnership, which consent shall not be unreasonably withheld.
      12.1.7 To the extent permitted by law, each of the Partners will, if Registrable Securities held by it are included in the securities as
to which such registration, qualification or compliance is being effected, indemnify the Partnership, each of its directors and officers and
each underwriter, if any, of the Partnership’s securities covered by such a registration statement and each person who controls the
Partnership or such underwriter within the meaning of the 1933 Act or the 1934 Act, against all claims, losses, damages and liabilities (or
actions in respect thereof) arising out of or based on: (A) any untrue statement (or alleged untrue statement) of a material fact contained in
any such registration statement, including any preliminary or final prospectus contained therein and any amendments or supplements
thereto, made by such Partner; or (B) any omission (or alleged omission) to state therein a material fact required to be stated therein or
necessary to make the statements by such Partner therein not misleading, and will reimburse the Partnership and such directors, officers,
underwriters or control persons for any legal or any other expenses reasonably incurred in connection with investigating or defending any
such claim, loss, damage, liability or action, in each case to the extent, but only to the extent, that such untrue statement (or alleged untrue
statement) or omission (or alleged omission) is made in such registration statement, including any preliminary or final prospectus
contained therein and any amendments or supplements thereto, in reliance upon and in conformity with written information furnished to
the Partnership by such Partner and stated to be specifically for use therein; provided , however , that the obligations of each of the
Partners hereunder shall be limited to an amount equal to the net proceeds to such Partner of securities sold as contemplated herein,
except in the case of willful fraud by such Partner, and that the indemnity agreement contained in this Section 12.1.7 shall not apply to
amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement if effected without the consent of the
Partner, which consent shall not be unreasonably withheld.
      12.1.8 Each party entitled to indemnification under this Section 12.1 (each, a ― Securities Indemnified Party ‖) shall give notice to
the party required to provide indemnification (the ― Securities Indemnifying Party ‖) promptly after such Securities Indemnified Party has
actual knowledge of any claim as to which indemnity may be sought, and shall permit the Securities Indemnifying Party to assume the
defense of any such claim or any litigation resulting therefrom; provided that counsel for the Securities Indemnifying Party, who shall
conduct the defense of such claim or any litigation resulting therefrom, shall be approved by the Securities Indemnified Party (whose
approval shall not unreasonably be withheld) and the Securities Indemnified Party may

                                                                   46
participate in such defense at such party’s expense (unless the Securities Indemnified Party shall have reasonably concluded that there
may be a conflict of interest between the Securities Indemnifying Party and the Securities Indemnified Party in such action, in which case
the fees and expenses of counsel shall be at the expense of the Indemnifying Party); and provided , further , that the failure of any
Securities Indemnified Party to give notice as provided herein shall not relieve the Securities Indemnifying Party of its obligations under
this Section 12.1 unless the Securities Indemnifying Party is materially prejudiced thereby in its ability to defend such action. No
Securities Indemnifying Party, in the defense of any such claim or litigation shall, except with the written consent of each Securities
Indemnified Party, consent to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof
the giving by the claimant or plaintiff to such Securities Indemnified Party of a release from all liability in respect to such claim or
litigation. Each Securities Indemnified Party shall furnish such information regarding itself or the claim in question as a Securities
Indemnifying Party may reasonably request in writing and as shall be reasonably required in connection with the defense of such claim
and litigation resulting therefrom.
      12.1.9 If the indemnification provided for in this Section 12.1 is held by a court of competent jurisdiction to be unavailable to a
Securities Indemnified Party with respect to any loss, liability, claim, damage or expense referred to herein, then the Securities
Indemnifying Party, in lieu of indemnifying such Securities Indemnified Party hereunder, shall contribute to the amount paid or payable
by such Securities Indemnified Party as a result of such loss, liability, claim, damage or expense in such proportion as is appropriate to
reflect the relative fault of the Securities Indemnifying Party on the one hand, and of the Securities Indemnified Party on the other, in
connection with the statements or omissions which resulted in such loss, liability, claim, damage or expense, as well as any other relevant
equitable considerations. The relative fault of the Securities Indemnifying Party and of the Securities Indemnified Party shall be
determined by reference to, among other things, whether the untrue (or alleged untrue) statement of a material fact or the omission (or
alleged omission) to state a material fact relates to information supplied by the Securities Indemnifying Party or by the Securities
Indemnified Party and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement
or omission.
      12.1.10 Notwithstanding the foregoing, to the extent that the provisions on indemnification and contribution contained in the
underwriting agreement entered into in connection with any underwritten public offering contemplated by this Agreement are in conflict
with the foregoing provisions, the provisions in such underwriting agreement shall be controlling.
      12.1.11 The foregoing indemnity agreement of the Partnership and Partners is subject to the condition that, insofar as they relate to
any loss, claim, liability or damage arising out of a statement made in or omitted from a preliminary prospectus but eliminated or
remedied in the amended prospectus on file with the Commission at the time the registration statement in question becomes effective or
the amended prospectus filed with the Commission pursuant to Commission Rule 424(b) (the ― Final Prospectus ‖), such indemnity or
contribution agreement shall not inure to the benefit of any underwriter

                                                                  47
or Partner if a copy of the Final Prospectus was furnished to the underwriter or Partner and was not furnished to the Person asserting the
loss, liability, claim or damage at or prior to the time such action is required by the 1933 Act.
      12.1.12 The General Partner shall cause or shall have caused any Subsidiary engaged in a Subsidiary IPO to grant registration rights
to the Partnership substantially similar to the registration rights granted to the Verso Paper Investments Limited Partner and the General
Partner in this Section 12.1.

12.2 Non-Solicitation; Non-Compete; Confidentiality .
      12.2.1 Each Management Limited Partner shall be bound by the non-compete and non-solicitation provisions contained in this
Section 12.2, unless (i) such Management Limited Partner is a Non-Employee Director or (ii) unless such Management Limited Partner is
a party to an employment or other agreement with the Partnership or any of its Subsidiaries which contains non-compete and
non-solicitation provisions or otherwise expressly waives the provisions of this Section 12.2, in which event such Management Limited
Partner shall only be bound by the non-compete and non-solicitation provisions contained in such employment agreement or the
provisions of such other agreement and shall not be bound by the provisions of this Section 12.2.
      12.2.2 During the period (the ― Restricted Period ‖) commencing on the date hereof and ending on the later of (a) the first
anniversary of the date of the Termination of Services of the Management Limited Partner or (b) the last day of the period during which
the Management Limited Partner is paid severance by the Partnership or any of its Subsidiaries under any plan, program, agreement or
arrangement (which severance is at least equivalent in amount per payroll period to the base salary earned by such Management Limited
Partner in the regular payroll period immediately prior to his or her Termination of Services), the Management Limited Partner shall not
directly or indirectly through another Person (i) induce or attempt to induce any employee of the Partnership or any Subsidiary of the
Partnership to leave the employ of the Partnership or such Subsidiary, or in any way interfere with the relationship between the
Partnership or any such Subsidiary, on the one hand, and any employee thereof, on the other hand, (ii) hire any person who was an
employee of the Partnership or any Subsidiary of the Partnership (or any predecessor thereof), or (iii) induce or attempt to induce any
customer, supplier, licensee or other business relation of the Partnership or any Subsidiary of the Partnership to cease doing business with
the Partnership or such Subsidiary, or in any way interfere with the relationship between any such customer, supplier, licensee or business
relation, on the one hand, and the Partnership or any such Subsidiary, on the other hand.
      12.2.3 Each Management Limited Partner acknowledges that, in the course of his or her employment with the Partnership and/or its
Subsidiaries and their predecessors, he or she has become familiar, or will become familiar, with the Partnership’s and its Subsidiaries’
and their predecessors’ trade secrets and with other confidential information concerning the Partnership, its Subsidiaries and their
respective predecessors and that his or her services have been and will be of special, unique and extraordinary value to the Partnership
and its Subsidiaries. Therefore, each Management Limited Partner agrees

                                                                 48
that, during the Restricted Period, such Management Limited Partner shall not directly or indirectly, engage in any business that competes
with the business of the Partnership or its Subsidiaries as of the date hereof or during the Restricted Period anywhere in the world in
which the Partnership or its Subsidiaries is doing business. For purposes of this Section 12.2.3, the phrase ―directly or indirectly engage
in‖ shall include any direct or indirect ownership or profit participation interest in such enterprise, whether as an owner, stockholder,
partner, joint venturer or otherwise, and shall include any direct or indirect participation in such enterprise as an employee, consultant,
licensor of technology or otherwise; provided , however , that nothing in this Section 12.2.3 shall prohibit any Management Limited
Partner from being a passive owner of not more than two percent (2%) of the outstanding stock of any class of a corporation which is
publicly traded, so long as such Management Limited Partner has no active participation in the business of such corporation.
      12.2.4 Each Management Limited Partner understands that the foregoing restrictions may limit his ability to earn a livelihood in a
business similar to the business of the Partnership and any of its Subsidiaries, but he nevertheless believes that he has received and will
receive sufficient consideration and other benefits as an employee of the Partnership and as otherwise provided hereunder or as described
in the recitals hereto to clearly justify such restrictions which, in any event (given his education, skills and ability), such Management
Limited Partner does not believe would prevent him from otherwise earning a living. Each Management Limited Partner has carefully
considered the nature and extent of the restrictions placed upon him by this Agreement, and hereby acknowledges and agrees that the
same are reasonable in time and territory and do not confer a benefit upon the Partnership disproportionate to the detriment which the
same may cause such Management Limited Partner.

     12.2.5 Confidential Information; Work Product .
           (a) Each Management Limited Partner agrees that such Management Limited Partner shall not disclose or use at any time,
     either during any period in which such Management Limited Partner provides Services or thereafter, any Confidential Information
     (as hereinafter defined) of which such Management Limited Partner is or becomes aware, whether or not such information is
     developed by him, except to the extent that such disclosure or use is directly related to and required by such Management Limited
     Partner’s performance in good faith of duties assigned to such Management Limited Partner by the Partnership or any of its
     Subsidiaries. Such Management Limited Partner will take reasonable steps to safeguard Confidential Information in his possession
     and to protect it against disclosure, misuse, espionage, loss and theft. Such Management Limited Partner shall deliver to the
     Partnership at the termination of any period during which such Management Limited Partner provides Services, or at any time the
     Partnership may request, all memoranda, notes, plans, records, reports, computer tapes and software and other documents and data
     (and copies thereof) relating to the Confidential Information or the Work Product (as hereinafter defined) of the business of the
     Partnership or any of its Subsidiaries which such Management Limited Partner may then possess or have under his control.

                                                                 49
       (b) As used in this Agreement, the term ― Confidential Information ‖ means information that is not generally known to the
public and that is used, developed or obtained by the Partnership or any of its Subsidiaries in connection with its business,
including, but not limited to, information, observations and data obtained by such Management Limited Partner while employed by
the Partnership or any of its Subsidiaries or any predecessors thereof (including those obtained prior to the date of this Agreement)
concerning (i) the business or affairs of the Partnership or any of its Subsidiaries (or such predecessors), (ii) products or services,
(iii) fees, costs and pricing structures, (iv) designs, (v) analyses, (vi) drawings, photographs and reports, (vii) computer software,
including operating systems, applications and program listings, (viii) flow charts, manuals and documentation, (ix) data bases,
(x) accounting and business methods, (xi) inventions, devices, new developments, methods and processes, whether patentable or
unpatentable and whether or not reduced to practice, (xii) customers and clients and customer or client lists, (xiii) other
copyrightable works, (xiv) all production methods, processes, technology and trade secrets, and (xv) all similar and related
information in whatever form. Confidential Information will not include any information that has been published in a form
generally available to the public prior to the date such Management Limited Partner proposes to disclose or use such information.
Confidential Information will not be deemed to have been published merely because individual portions of the information have
been separately published, but only if all material features comprising such information have been published in combination.
      (c) As used in this Agreement, the term ― Work Product ‖ means all inventions, innovations, improvements, technical
information, systems, software developments, methods, designs, analyses, drawings, reports, service marks, trademarks, trade
names, logos and all similar or related information (whether patentable or unpatentable) which relates to the Partnership’s or any of
its Subsidiaries’ actual or anticipated business, research and development or existing or future products or services and which are
conceived, developed or made by such Management Limited Partner (whether or not during usual business hours and whether or
not alone or in conjunction with any other person) while employed (and for the Restricted Period if and to the extent such Work
Product results from any work performed for the Partnership, any use of the Partnership’s premises or property or any use of the
Partnership’s Confidential Information) by the Partnership (including those conceived, developed or made prior to the date of this
Agreement) together with all patent applications, letters patent, trademark, trade name and service mark applications or
registrations, copyrights and reissues thereof that may be granted for or upon any of the foregoing.
     (d) To the extent, if any, that such Management Limited Partner retains any right, title or interest with respect to any Work
Product that he develops during his employment with the Partnership, such Management Limited

                                                            50
     Partner grants to the Partnership an irrevocable, paid-up, transferable, sub-licensable, worldwide right and license (i) to modify all
     or any portion of such Work Product, including, without limitation, the making of additions to or deletions from such Work
     Product, regardless of the medium (now or hereafter known) into which such Work Product may be modified and regardless of the
     effect of such modifications on the integrity of such Work Product, and (ii) to identify such Management Limited Partner, or not to
     identify such Management Limited Partner, as one or more authors of or contributors to such Work Product or any portion thereof,
     whether or not such Work Product or any portion thereof have been modified. Such Management Limited Partner further waives
     any ―moral‖ rights, or other rights with respect to attribution of authorship or integrity of such Work Product that you may have
     under any applicable law, whether under copyright, trademark, unfair competition, defamation, right of privacy, contract, tort or
     other legal theory.
       12.2.6 Specific Enforcement . The Management Limited Partners acknowledge and agree that irreparable damage would occur in
the event that the provisions of this Section 12.2 were not performed in accordance with their specific terms or were otherwise breached.
It is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent breaches of the provisions of this
Agreement and to enforce specifically the terms and provisions hereof, this being in addition to any other remedy to which they may be
entitled at law or in equity.

12.3 Voting Agreement .
      12.3.1 Each Management Limited Partner hereby revokes any and all prior proxies or powers of attorney in respect of any of such
Management Limited Partner’s Units and constitutes and appoints Apollo Management VI, L.P., or any nominee of Apollo Management
VI, L.P., with full power of substitution and resubstitution, at any time from the date hereof until the earlier of (such earlier date, the ―
Term ‖) (i) the termination of this Agreement pursuant to Section 1.6 hereof and (ii) the consummation of an Initial Public Offering, as its
true and lawful attorney and proxy (its ― Proxy ‖), and in its name, place and stead, to vote each of such Units (whether such shares are
currently held or may be acquired in the future by such Management Limited Partner) as its Proxy, at every annual, special, adjourned or
postponed meeting of the limited Partners of the Partnership, including the right to sign its name (as member) to any consent, certificate
or other document relating to the Partnership that the laws of the state of Delaware may permit or require with respect to any matter
referred to be voted on by the limited Partners of the Partnership; provided that the Proxy does not apply to any matter as to which
holders of Class B Units or Class C Units, as the case may be, are entitled to vote as a class or with respect to any amendment or waiver
of this Agreement. THE FOREGOING PROXY AND POWER OF ATTORNEY ARE IRREVOCABLE AND COUPLED WITH AN
INTEREST THROUGHOUT THE TERM.
     12.3.2 No Proxies for or Encumbrances on Management Limited Partner Units . Except pursuant to the terms of this Agreement,
during the Term and prior to an Initial Public Offering, no Management Limited Partner shall, without the prior written consent

                                                                  51
      of Apollo Management VI, L.P., directly or indirectly, (i) grant any proxies (other than pursuant to Section 12.3.1 above) or enter into any
      voting trust or other agreement or arrangement with respect to the voting of any Units held by such Management Limited Partner or
      (ii) except as otherwise permitted hereby, Transfer any such Management Limited Partner’s Units.
            12.3.3 Restructuring Event . The Partnership may, at the discretion of the General Partner and in accordance with applicable U.S.
      state and federal law (including the 1933 Act and the 1934 Act and the rules promulgated thereunder), effect a reorganization,
      reclassification, conversion, merger, recapitalization or restructuring (each, a ― Restructuring Event ‖) pursuant to which the Limited
      Partners would become limited partners or shareholders of a new partnership, limited liability company or corporation and cease to be
      Limited Partners of the Partnership or receive different securities of the Partnership. The units, shares or other equity interests provided to
      each Management Limited Partner pursuant to such Restructuring Event would provide each Management Limited Partner with
      substantially similar economic and other rights and privileges as such Management Limited Partner had as a Limited Partner of the
      Partnership prior to such Restructuring Event and which are consistent with the rights and preferences attendant to the Units held by the
      Management Limited Partners immediately prior to such Restructuring Event. It is contemplated that the Management Limited Partners,
      the company formed by such Restructuring Event and, in the discretion of the Apollo Group, the Apollo Group, would enter a partnership
      agreement, limited liability company agreement or management shareholders agreement, as the case may be, in conjunction with such
      Restructuring Event, containing provisions substantially similar to the provisions of this Agreement. The Management Limited Partners
      hereby agree to enter into any such Management Limited Partners agreement or management shareholders agreement.


                                                      ARTICLE XIII
                                 INVESTMENT REPRESENTATIONS, WARRANTIES AND COVENANTS

      13.1 Representations, Warranties and Covenants of Management Limited Partners . Reserved.

      13.2 Investment Intention and Restrictions on Disposition . Each Management Limited Partner represents and warrants that such
Management Limited Partner is acquiring the Units solely for such Management Limited Partner’s own account for investment and not with a
view to resale in connection with, any distribution thereof. Each Management Limited Partner agrees that such Management Limited Partner
will not, directly or indirectly, Transfer any of the Units (or solicit any offers to buy, purchase or otherwise acquire or take a pledge of any of
the Units) or any interest therein or any rights relating thereto or offer to Transfer, except in compliance with the 1933 Act, all applicable state
securities or ―blue sky‖ laws and this Agreement, as the same shall be amended from time to time. Any attempt by a Management Limited
Partner, directly or indirectly, to Transfer, or offer to Transfer, any Units or any interest therein or any rights relating thereto without complying
with the provisions of this Agreement, shall be void and of no effect.

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      13.3 Securities Laws Matters . Each Management Limited Partner acknowledges receipt of advice from the Partnership that (a) the Units
have not been registered under the 1933 Act or qualified under any state securities or ―blue sky‖ laws, (b) it is not anticipated that there will be
any public market for the Units, (c) the Units must be held indefinitely and such Management Limited Partner must continue to bear the
economic risk of the investment in the Units unless the Units are subsequently registered under the 1933 Act and such state laws or an
exemption from registration is available, (d) Rule 144 promulgated under the 1933 Act (― Rule 144 ‖) is not presently available with respect to
sales of any securities of the Partnership and the Partnership has made no covenant to make Rule 144 available and Rule 144 is not anticipated
to be available in the foreseeable future, (e) when and if the Units may be disposed of without registration in reliance upon Rule 144, such
disposition can be made only in limited amounts and in accordance with the terms and conditions of such Rule and the provisions of this
Agreement, (f) if the exemption afforded by Rule 144 is not available, public sale of the Units without registration will require the availability
of an exemption under the 1933 Act, (g) restrictive legends shall be placed on any certificate representing the Units, and (h) a notation shall be
made in the appropriate records of the Partnership indicating that the Units are subject to restrictions on transfer and, if the Partnership should
in the future engage the services of a transfer agent, appropriate stop-transfer instructions will be issued to such transfer agent with respect to
the Units.

      13.4 Ability to Bear Risk . Each Management Limited Partner represents and warrants that (i) such Management Limited Partner’s
knowledge and experience in financial and business matters are such that such Management Limited Partner is capable of evaluating the merits
and risks of the investment in the Units; (ii) such Management Limited Partner’s financial situation is such that such Management Limited
Partner can afford to bear the economic risk of holding the Units for an indefinite period; and (iii) such Management Limited Partner can afford
to suffer the complete loss of such Management Limited Partner’s investment in the Units.

      13.5 Access to Information; Sophistication; Lack of Reliance . Each Management Limited Partner represents and warrants that (a) such
Management Limited Partner is familiar with the business and financial condition, properties, operations and prospects of the Partnership and
its Subsidiaries and that such Management Limited Partner has been granted the opportunity to ask questions of, and receive answers from,
representatives of the Partnership concerning the Partnership and its Subsidiaries and the terms and conditions of the purchase of the Units and
to obtain any additional information that such Management Limited Partner deems necessary, (b) such Management Limited Partner’s
knowledge and experience in financial and business matters is such that such Management Limited Partner is capable of evaluating the merits
and risk of the investment in the Units and (c) such Management Limited Partner has carefully reviewed the terms and provisions of this
Agreement and has evaluated the restrictions and obligations contained therein. In furtherance of the foregoing, each Management Limited
Partner represents and warrants that (i) no representation or warranty, express or implied, whether written or oral, as to the financial condition,
results of operations, prospects, properties or business of the Partnership and its Subsidiaries or as to the desirability or value of an investment
in the Partnership has been made to such Management Limited Partner by or on behalf of the Partnership, (ii) such Management Limited
Partner has relied upon such Management Limited Partner’s own independent appraisal and investigation, and the advice of such Management
Limited Partner’s own counsel, tax advisors and other advisors, regarding the risks of an

                                                                         53
investment in the Partnership and (iii) such Management Limited Partner will continue to bear sole responsibility for making its own
independent evaluation and monitoring of the risks of its investment in the Partnership.

      13.6 Accredited Investor; Exemption from Registration . Each Management Limited Partner represents and warrants that such
Management Limited Partner is an ―accredited investor‖ as such term is defined in Rule 501(a) of Regulation D promulgated under the 1933
Act and, in connection with the execution of this Agreement, agrees to deliver such certificates to that effect as the Board may request;
provided that, to the extent that any such Management Limited Partner does not qualify as an ―accredited investor,‖ such Management Limited
Partner acknowledges and agrees that the offering of the Units hereunder is intended to be exempt from registration under the 1933 Act, by
virtue of Section 4(2) of the 1933 Act and/or the provisions of Regulation D and/or Rule 701 promulgated under the 1933, or in reliance upon
another specific exemption therefrom, which exemption may depend upon, among other things, the bona fide nature of the Management
Limited Partner’s investment intent, status as an employee, director or bona fide consultant of or to the Partnership, and representations as
expressed herein.

       13.7 Additional Representations and Warranties . Each Management Limited Partner represents and warrants that (a) such Management
Limited Partner has duly executed and delivered this Agreement; (b) all actions required to be taken by or on behalf of such Management
Limited Partner to authorize it to execute, deliver and perform its obligations under this Agreement have been taken and this Agreement
constitutes such Management Limited Partner’s legal, valid and binding obligation, enforceable against such Management Limited Partner in
accordance with the terms hereof; (c) the execution and delivery of this Agreement and the consummation by such Management Limited
Partner of the transactions contemplated hereby in the manner contemplated hereby do not and will not conflict with, or result in a breach of
any terms of, or constitute a default under, any agreement or instrument or any statute, law, rule or regulation, or any judgment, decree, writ,
injunction, order or award of any arbitrator, court or governmental authority which is applicable to such Management Limited Partner or by
which such Management Limited Partner or any material portion of its properties is bound; (d) no consent, approval, authorization, order,
filing, registration or qualification of or with any court, governmental authority or third person is required to be obtained by such Management
Limited Partner in connection with the execution and delivery of this Agreement or the performance of such Management Limited Partner’s
obligations hereunder; (e) if such Management Limited Partner is an individual, such Management Limited Partner is a resident of the state set
forth below such Management Limited Partner’s name on the signature page hereof; and (f) if such Management Limited Partner is not an
individual, such Management Limited Partner’s principal place of business and mailing address is in the state or foreign jurisdiction set forth
below the Management Limited Partner’s signature on the signature page.

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     13.8 Certain Management Limited Partners . Notwithstanding anything to the contrary contained herein, the representations and
warranties under this Article XIII shall be deemed not to be made by Management Limited Partners not executing this Agreement or a joinder
agreement to this Agreement.

                                                              ARTICLE XIV
                                                            OTHER PROVISIONS

     14.1 Appointment of General Partner as Attorney-in-Fact .
           14.1.1 Each Limited Partner, including, without limitation, each Additional Limited Partner, by its execution of this Agreement,
     irrevocably constitutes and appoints the General Partner as its true and lawful attorney-in-fact with full power and authority in its name,
     place and stead to execute, acknowledge, deliver, swear to, file and record at the appropriate public offices such documents as may be
     necessary or appropriate to carry out the provisions of this Agreement, including, without limitation:
                 (a) All certificates and other instruments (including, without limitation, counterparts of this Agreement), and all amendments
           thereto, which the General Partner deems appropriate to form, qualify or continue the Partnership as a limited partnership (or a
           partnership in which the Limited Partners will have limited liability comparable to that provided in the Act), in the jurisdictions in
           which the Partnership may conduct business or in which such formation, qualification or continuation is, in the opinion of the
           General Partner, necessary or desirable to protect the limited liability of the Limited Partners.
                (b) All instruments which the General Partner deems appropriate to reflect a change or modification of the Partnership
           adopted in accordance with the terms of this Agreement.
               (c) All conveyances of property, and all other instruments, which the General Partner reasonably deems necessary in order to
           complete a dissolution and termination of the Partnership pursuant to this Agreement.
           14.1.2 The appointment by all Limited Partners of the General Partner as attorney-in-fact shall be deemed to be a power coupled
     with an interest, in recognition of the fact that each of the Partners under this Agreement will be relying upon the power of the General
     Partner to act as contemplated by this Agreement in any filing and other action by it on behalf of the Partnership, shall survive the
     bankruptcy, death, adjudication of incompetence or insanity, other incapacity or dissolution of any Person hereby giving such power, and
     the transfer or assignment of all or any portion of the Interests of such Person, and shall not be affected by the subsequent incapacity of
     the principal; provided that in the event of the assignment by a Limited Partner of all of its Interests, the foregoing power of attorney of
     the assignor Limited Partner shall survive such assignment only until such time as the assignee shall have been admitted to the
     Partnership and all required documents and instruments shall have been duly executed, filed and recorded to effect such substitution.

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14.2 Amendments .
      14.2.1 Each Additional Limited Partner, additional General Partner and successor General Partner shall become a signatory hereto
by signing such number of counterpart signature pages to this Agreement, a power of attorney to the General Partner, and such other
instruments, in such manner, as the General Partner shall determine. By so signing, each Additional Limited Partner, additional General
Partner or successor General Partner, as the case may be, shall be deemed to have adopted and to have agreed to be bound by all of the
provisions of this Agreement.
      14.2.2 In addition to other amendments authorized herein or required by law, amendments may be made to this Agreement from
time to time by the General Partner with the consent of the Limited Partners holding a majority of the outstanding Units; provided that an
amendment which adversely affects one or more Partners in a manner that does not similarly affect all other Partners (other than through
economic or voting dilution) shall also require the consent of such Partner (or if more than one Partner is similarly adversely affected,
then consent by the Partners holding a majority of the outstanding Units held by such similarly adversely affected Partners shall be
required).
      14.2.3 In addition to other amendments authorized herein, amendments may be made to this Agreement from time to time by the
General Partner, without the consent of any of the Limited Partners: (a) to delete or add any provision of this Agreement required to be so
deleted or added by any federal or state official, which addition or deletion is deemed by such official to be for the benefit or protection of
the Limited Partners; (b) to alter the interest or rights of any Partner in profits, losses or distributions hereunder to reflect the issuance of
Interests to an Additional Limited Partner in accordance with the terms of this Agreement; (c) to take such actions as may be necessary (if
any) to insure that the Partnership will be treated as a partnership, and that each Limited Partner will be treated as a limited partner, for
federal income tax purposes; provided that no amendment shall be adopted pursuant to this Section 14.2.3 unless the adoption thereof
does not affect the limited liability of the Limited Partners or the status of the Partnership as a partnership for federal income tax
purposes; (d) to issue additional Units or new classes of units having rights and preferences different from the Units to Limited Partners
or Additional Limited Partners; or (e) to implement a Solvent Reorganization.
      14.2.4 If this Agreement is amended as a result of adding or substituting a Limited Partner or increasing the investment of a Limited
Partner, the amendment to this Agreement shall be sufficient when it is signed by the General Partner and by the Person to be substituted
or added or who is increasing its investment in the Partnership, and, if a Limited Partner is to be substituted, by the assigning Limited
Partner. If this Agreement is amended to reflect the designation of an additional General Partner, the amendment to this Agreement shall
be sufficient when it is signed by the other General Partner or General Partners and by the additional General Partner. If this Agreement is
amended to reflect the withdrawal of a General Partner and if the business of the Partnership is to be continued, the amendment to this
Agreement shall be sufficient when it is signed by the withdrawing General Partner (and such General Partner hereby so agrees) and by
the remaining or successor General Partner or General Partners.

                                                                    56
           14.2.5 In making any amendments, there shall be prepared and filed by the General Partner such documents and certificates as may
     be required under the Act and under the laws of any other jurisdiction applicable to the Partnership.

       14.3 Security Interest and Right of Set-Off . As security for any withholding tax or other liability or obligation to which the Partnership
may be subject as a result of any act or status of any Limited Partner, or to which the Partnership may become subject with respect to the
Interest of any Limited Partner, the Partnership shall have (and each Limited Partner hereby grants to the Partnership) a security interest in all
Distributable Cash distributable to such Limited Partner to the extent of the amount of such withholding tax or other liability or obligation. The
Partnership shall have a right of set-off against such distributions of Distributable Cash in the amount of such withholding tax or other liability
or obligation. Any amount withheld pursuant to the Code or any other provision of federal, state or local tax or other law with respect to any
distribution to a Partner shall be treated as an amount distributed to such Partner for all purposes under this Agreement.

     14.4 Binding Provisions . The covenants and agreements contained herein shall be binding upon, and inure to the benefit of, the heirs,
executors, administrators, personal representatives, successors and permitted assigns of the respective parties hereto.

     14.5 Applicable Law . This Agreement shall be construed and enforced in accordance with the Act and other laws of the State of
Delaware.

      14.6 Entire Agreement . This Agreement, the Purchase Agreement, certain letter agreements of equal date herewith (or made in
connection with the Prior Agreement) among parties hereto and any applicable Unit Subscription Agreement constitute the entire agreement of
the parties as to the subject matter hereof and supersede any and all prior agreements, understandings and negotiations relating to such subject
matter.

      14.7 Counterparts . This Agreement may be executed in several counterparts, all of which together shall constitute one agreement binding
on all parties hereto, notwithstanding that all of the parties have not signed the same counterpart.

      14.8 Separability of Provisions . Each provision of this Agreement shall be considered separable, and if for any reason any provision or
provisions hereof are determined to be invalid and contrary to any existing or future law, such invalidity shall not impair the operation or effect
of those portions of this Agreement which are valid.

      14.9 Article and Section Titles . Article and Section titles are for descriptive purposes only and shall not control or alter the meaning of
this Agreement as set forth in the text.

      14.10 Disputes; Attorneys’ Fees . In the event that any dispute between the parties hereto should result in litigation or arbitration, (i) such
dispute shall be brought in the courts of New York County, New York or in the United States District Court for the Southern District of New
York, or shall be conducted before an arbitrator in New York, New York, as applicable, and

                                                                         57
(ii) the prevailing party in such dispute shall be entitled to recover from the other party all reasonable fees, costs and expenses of enforcing any
right of the prevailing party, including without limitation, reasonable attorneys’ fees and expenses, all of which shall be deemed to have
accrued upon the commencement of such action and shall be paid whether or not such action is prosecuted to judgment. Any judgment or order
entered in such action shall contain a specific provision providing for the recovery of attorneys’ fees and costs incurred in enforcing such
judgment and an award of prejudgment interest from the date of the breach at the maximum rate of interest allowed by law. For the purposes of
this Section 14.10: (a) attorneys’ fees shall include, without limitation, fees incurred in the following: (i) post-judgment motions, (ii) contempt
proceedings, (iii) garnishment, levy, and debtor and third party examinations, (iv) discovery, and (v) bankruptcy litigation; and (b) ―prevailing
party‖ shall mean the party who is determined in the proceeding to have prevailed or who prevails by dismissal, default or otherwise.

     14.11 Management Limited Partner’s Services . Nothing contained in this Agreement shall be deemed to obligate the Partnership or any
Subsidiary to employ or retain any Management Limited Partner in any capacity whatsoever or to prohibit or restrict the Partnership (or any
Subsidiary) from terminating the Services of the Management Limited Partner at any time or for any reason whatsoever, with or without Cause.

       14.12 Spousal Consent . The spouses of the individual Management Limited Partners are fully aware of, understand and fully consent and
agree to the provisions of this Agreement and its binding effect upon any community property interests or similar marital property interests in
the Units they may now or hereafter own, and agree that the termination of their marital relationship with any Management Limited Partner for
any reason shall not have the effect of removing any Unit otherwise subject to this Agreement from the coverage of this Agreement and that
their awareness, understanding, consent and agreement are evidenced by their signing this Agreement. Furthermore, each individual
Management Limited Partner agrees to cause his or her spouse (and any subsequent spouse) to execute and deliver, upon the request of the
Partnership, a counterpart of this Agreement, or a spousal joinder to this Agreement.

    14.13 Waiver of Jury Trial . BECAUSE DISPUTES ARISING IN CONNECTION WITH COMPLEX FINANCIAL TRANSACTIONS
ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN EXPERIENCED AND EXPERT PERSON AND THE PARTIES
WISH APPLICABLE STATE AND FEDERAL LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE
THAT THEIR DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE
BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OR ARBITRATION, THE PARTIES HERETO WAIVE
ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT OR PROCEEDING BROUGHT TO ENFORCE OR DEFEND ANY RIGHT
OR REMEDIES UNDER THIS AGREEMENT OR ANY DOCUMENTS ENTERED INTO IN CONNECTION WITH THIS AGREEMENT
AND THE TRANSACTIONS CONTEMPLATED HEREIN.

                                                             [Signature pages follow]

                                                                         58
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first written above.

                                                                     GENERAL PARTNER
                                                                     VERSO PAPER INVESTMENTS LP
                                                                          By:       VERSO PAPER INVESTMENTS
                                                                                     MANAGEMENT LLC

                                                                       By:
                                                                       Name:
                                                                       Title:
                        2 Amended and Restated Verso Paper Management LP Agreement
                         nd
                                         NON-EMPLOYEE DIRECTOR LIMITED
                                          PARTNER


                                         Name: David Sambur

2 Amended and Restated Verso Paper Management LP Agreement
 nd
                                                                                                                                 Exhibit 10.12

                                   CONFIDENTIALITY AND NON-COMPETITION AGREEMENT

     This Confidentiality and Non-Competition Agreement (this ― Agreement ‖) is entered into as of January 1, 2008, by and between Verso
Paper Holdings LLC, a Delaware limited liability company (― Verso Paper ‖), and Robert P. Mundy (― Employee ‖), to allow Employee to
have access to certain valuable competitive information and business relationships of Verso Paper while also providing protection for such
information and relationships.

     WHEREAS, Verso Paper is willing to employ Employee in the position of Senior Vice President, Chief Financial Officer and Assistant
Secretary, and Employee is willing to accept such employment upon the terms and conditions set forth herein; and,

     WHEREAS, Verso Paper is willing to provide Employee with certain benefits, as set forth herein, even after the employment relationship
with Employee has ended in order to protect its valuable competitive information and business relationships; and

     WHEREAS, after having ample opportunity to discuss, negotiate, and revise as necessary, the parties are willing to enter into this
Agreement;

     NOW, THEREFORE, the parties hereto agree as follows:

     1. Definitions. As used in this Agreement, the terms:
           (a) ― Protected Information ‖ shall mean all information, documents or materials, owned, developed or possessed by Verso Paper or
     any employee while in the employ of Verso Paper, whether in tangible or intangible form, which (i) Verso Paper takes reasonable
     measures to maintain in secrecy, and (ii) pertains in any manner to Verso Paper’s business, including but not limited to Research and
     Development (as defined below); customers or prospective customers, targeted national accounts, or strategies or data for identifying and
     satisfying their needs; present or prospective business relationships; present, short term, or long term strategic plans; acquisition
     candidates; plans for corporate restructuring; products under consideration or development; cost, margin or profit information; data from
     which any of the foregoing types of information could be derived; human resources (including compensation information and internal
     evaluations of the performance, capability and potential of Verso Paper employees); business methods, data bases and computer
     programs. The fact that individual elements of the information that constitutes Protected Information may be generally known does not
     prevent an integrated compilation of information, whether or not reduced to writing, from being Protected Information if that integrated
     whole is not generally known.
           (b) ― Research and Development ‖ shall include, but not be limited to (i) all short term and long term basic, applied and
     developmental research and technical assistance and specialized research support of customers or active prospects, targeted national
     accounts, of Verso Paper operating divisions; (ii) information relating to manufacturing and converting processes, methods, techniques
     and equipment and the improvements and innovations relating to same; quality control procedures and equipment; identification,
     selection, generation and propagation of tree species having improved characteristics; forest resource management; innovation and
     improvement to manufacturing and converting processes such as shipping, pulping bleaching chemical recovery papermaking, coating
     and calendaring processes and in equipment for use in such processes; reduction and remediation of environmental discharges;
     minimization or elimination of solid and liquid waste; use and optimization of raw materials in manufacturing processes; recycling and
     manufacture paper products; recycling of other paper or pulp products; energy conservation; computer software and application of
     computer controls to manufacturing
and quality control operations and to inventory control; radio frequency identification and its use in paper and packaging products; and
product process improvement development or evaluation; and (iii) information about methods, techniques, products equipment, and
processes which Verso Paper has learned do not work or do not provide beneficial results (―negative know-how‖) as well as those which
do work which provide beneficial results.
      (c) ― Unauthorized ‖ shall mean (i) in contravention of Verso Paper’s policies or procedures; (ii) otherwise inconsistent with Verso
Paper’s measures to protect its interests in the Protected Information; (iii) in contravention of any lawful instruction or directive, either
written or oral, of an Verso Paper employee empowered to issue such instruction or directive; (iv) in contravention of any duty existing
under law or contract; or (v) to the detriment of Verso Paper.

2. Confidentiality.
      (a) Employee acknowledges and agrees that by reason of employment with Verso Paper as a senior level executive in the position
of Senior Vice President, Chief Financial Officer and Assistant Secretary, Employee has been and will be entrusted with Protected
Information and may develop Protected Information, that such information is valuable and useful to Verso Paper, that it would also be
valuable and useful to competitors and others who do not know it and that such information constitutes confidential and proprietary trade
secrets of Verso Paper. While an employee or consultant of Verso Paper, or at any time thereafter, regardless of the reasons for leaving
Verso Paper, Employee agrees not to use or disclose, directly or indirectly, any Protected Information in an Unauthorized manner or for
any Unauthorized purpose unless such information shall have become generally known in the relevant industry or independently
developed with no assistance from Employee. Further, promptly upon termination, for any reason, of Employee’s employment with
Verso Paper or upon the request of Verso Paper Employee agrees to deliver to Verso Paper all property and materials and copies thereof
within Employee’s possession or control which belong to Verso Paper or which contain Protected Information and to permanently delete
upon Verso Paper’s request all Protected Information from any computers or other electronic storage media Employee owns or uses.
       (b) While an employee of Verso Paper and after termination of Employee’s employment with Verso Paper for any reason,
Employee agrees not to take any actions which would constitute or facilitate the Unauthorized use or disclosure of Protected Information,
including transmitting or posting such Protected Information on the internet, anonymously or otherwise. Employee further agrees to take
all reasonable measures to prevent the Unauthorized use and disclosure of Protected Information and to prevent Unauthorized persons or
entities from obtaining or using Protected Information.
      (c) If Employee becomes legally compelled (by deposition, interrogatory, request for documents, subpoena, investigation, demand,
order or similar process) to disclose any Protected Information, then before any such disclosure may be made, Employee shall
immediately notify Verso Paper thereof and, at Verso Paper’s expense, shall consult with Verso Paper on the advisability of taking steps
to resist or narrow such request and cooperate with Verso Paper in any attempt to obtain a protective order or other appropriate remedy or
assurance that the Protected Information will be afforded confidential treatment. If such protective order or other appropriate remedy is
not obtained, Employee shall furnish only that portion of the Protected Information that it is advised by legal counsel is legally required to
be furnished.

                                                                   2
     3. Non-Competition.
           (a) Employee acknowledges and agrees that the business of Verso Paper and its customers is worldwide in scope, Verso Paper’s
     competitors and customers are located throughout the world, and Verso Paper’s strategic planning and Research and Development
     activities have application throughout the world and are for the benefit of customers and Verso Paper’s business throughout the world,
     and therefore, the restrictions on Employee’s competition after employment as described below apply to anywhere in the world in which
     Verso Paper or its subsidiaries are doing business. Employee acknowledges that any such competition within that geographical scope will
     irreparably injure Verso Paper. Employee acknowledges and agrees that, for that reason, the prohibitions on competition described below
     are reasonably tailored to protect Verso Paper.
          (b) While an employee or consultant of Verso Paper, Employee agrees not to compete in any manner, either directly or indirectly
     and whether for compensation or otherwise, with Verso Paper or to assist any other person or entity to compete with Verso Paper in the
     business of coated and supercalendared paper products or the operation of coated and supercalendared paper mills anywhere in the world.
          (c) After the termination of Employee’s employment with Verso Paper for any reason, Employee agrees that for a period of twelve
     (12) months (the ― Non-Compete Period ‖) following such termination Employee will not compete with Verso Paper anywhere in the
     world in which Verso Paper or its subsidiaries are doing business:
                (i) by producing, developing, selling or marketing, or assisting others to produce, develop, sell or market in the business of
           coated and supercalendared paper products or the operation of coated and supercalendared paper mills;
                 (ii) by engaging in any sales, marketing, Research and Development or managerial duties (including, without limitation,
           financial, human resources, strategic planning, or operation duties) for, whether as an employee, consultant, or otherwise, any entity
           which produces, develops, sells or markets in the business of coated and supercalendared paper products or the operation of coated
           and supercalendared paper mills;
                 (iii) by owning, managing, operating, controlling or consulting for any entity which produces, develops, sells or markets in the
           business of coated and supercalendared paper products or the operation of coated and supercalendared paper mills, provided that
           this Section 3(c)(iii) shall not prohibit Employee from being a passive owner of not more than two percent (2%) of the outstanding
           stock of any class of a corporation that is publicly traded, so long as Employee has no active participation in the business of such
           corporation; or
                (iv) by soliciting the business of any actual or active prospective customers, or targeted national accounts of Verso Paper for
           any product, process or service which is competitive with the products, processes, or services of Verso Paper, namely any products,
           processes or services of the business of coated and supercalendared paper products or the operation of coated and supercalendared
           paper mills, whether existing or contemplated for the future, on which Employee has worked, or concerning which Employee has in
           any manner acquired knowledge or Protected Information about, during the twenty four (24) months preceding termination of
           Employee’s employment.

      It shall not be a violation of this provision for Employee to accept employment with a non-competitive division or business unit of a
multi-divisional company some of whose divisions or business units are competitors of Verso Paper, so long as Employee does not engage in,
oversee, provide input or

                                                                        3
information regarding, or participate in any manner in the activities described in this paragraph as they relate to the division or business unit
which is a competitor of Verso Paper. Employee shall not assist others in engaging in activities which Employee is not permitted to take.

      4. Non-Solicitation/Non-Hire. During the term of Employee’s employment at Verso Paper and for twelve (12) months following the
termination, for any reason, of employment, Employee agrees that Employee will not, either on Employee’s own behalf or on behalf of any
other person or entity, directly or indirectly, hire, solicit, retain or encourage to leave the employ of Verso Paper (or assist any other person or
entity in hiring, soliciting, retaining or encouraging) any person who is then or was within six (6) months of the date of such hiring an
employee of Verso Paper.

      5. Tolling Period of Restrictions. Employee agrees that the periods of non-competition and non-solicitation/non-hire set forth in
Sections 3 and 4, respectively, shall be extended by the period of violation if Employee is found to be in violation of those provisions.

      6. Post-Termination Payments and Benefits. Upon the termination of Employee’s employment with Verso Paper for any reason, in
consideration of Employee’s compliance with all his obligations under this Agreement (including, without limitation, his obligations under
Sections 2, 3(c) and 4), and provided that Employee complies with all such obligations, Verso Paper shall provide post-termination payments
and benefits to Employee as follows:
            (a) During the Non-Compete Period, if Employee is unable, despite diligent search, to obtain employment consistent with
      Employee’s experience and education, Employee shall so notify Verso Paper in writing, describing in reasonable detail the efforts
      Employee has made to secure such employment that does not conflict with Employee’s non-compete obligations. Upon receipt and
      reasonable verification of the information contained in such notice, Verso Paper shall make monthly payments to Employee in an amount
      equal to Employee’s monthly base salary in effect in the month immediately preceding the termination of his employment, less applicable
      tax and other withholdings, for each month (or prorated for periods less than a month) of such unemployment during the Non-Compete
      Period. Before the close of each month for which Employee seeks such payment, Employee shall advise Verso Paper in writing of
      Employee’s efforts to obtain non-competitive employment and shall certify that although Employee diligently sought such employment,
      Employee was unable to obtain it.
             (b) Verso Paper shall pay to Employee an amount equal to the sum of the incentive awards, if any, payable to Employee under the
      Verso Paper Incentive Plan (the ― Incentive Plan ‖) for (i) the year immediately preceding the year in which termination of employment
      occurred, to the extent not previously paid to Employee, and (ii) the year in which such termination occurred, prorated for the period of
      the year in which Employee was employed by Verso Paper, in each case less applicable tax and other withholdings (collectively, the ―
      Incentive Payment ‖). The determination of the Incentive Payment shall be made by Verso Paper, in its sole and absolute discretion, and,
      with respect to the year in which termination occurred, shall be based on (i) Employee’s monthly base salary in effect in the month
      immediately preceding the termination of his employment and (ii) the assumptions relative to the Incentive Plan that (A) Employee was
      employed by Verso Paper during the entire year and is otherwise eligible and qualified to receive the Incentive Payment, (B) Employee’s
      monthly base salary remained in effect and was not changed during the remainder of the year, and (C) Employee achieved all of his
      individual performance measures, if any, during the year. Verso Paper shall make the Incentive Payment to Employee at the same time
      that it makes other incentive payments under the Incentive Plan to the employees of Verso Paper.
           (c) Verso Paper shall (i) continue Employee’s coverage of the employment-related benefits described in Exhibit A for up to
      twenty-four (24) months following Employee’s termination of

                                                                          4
     employment with Verso Paper, in accordance with and subject to the terms and conditions set forth in the attached Exhibit A, and
     (ii) contribute on Employee’s behalf an amount equal to his Lost Retirement Benefits (as defined below) to the Verso Paper Deferred
     Compensation Plan. As used in this Agreement, the term ― Lost Retirement Benefits ‖ shall mean the projected value of employer
     contributions under the Verso Paper Retirement Savings Plan, the Verso Paper Deferred Compensation Plan, and the Verso Paper
     Supplemental Salaried Retirement Savings Plan (collectively, the ― Plans ‖) that Employee would have received had he remained actively
     employed with Verso Paper during the twenty-four (24) months following Employee’s termination of employment with Verso Paper. The
     determination of the Lost Retirement Benefits shall be made by Verso Paper, in its sole and absolute discretion, and shall be based on
     (i) Employee’s monthly base salary in effect in the month immediately preceding the termination of his employment and (ii) the
     assumption that Employee’s salary deferrals during such twenty-four (24) month period are in such amounts as would produce the
     maximum possible matching contribution by Verso Paper under the Plans. Verso Paper shall contribute on Employee’s behalf the value
     of his Lost Retirement Benefits to the Verso Paper Deferred Compensation Plan in a lump sum payment as soon as reasonably practicable
     after the determination of the Lost Retirement Benefits is made.

      7. Duty to Show Agreement to Prospective Employer. During Employee’s employment with Verso Paper and for twelve (12) months
thereafter, Employee shall, prior to accepting other employment, provide a copy of this Agreement to any recruiter who assists Employee in
locating employment other than with Verso Paper and to any prospective employer with which Employee discusses potential employment.

       8. Representations, Warranties and Acknowledgements. In addition to the representations, warranties and obligations set forth
throughout this Agreement, Employee acknowledges that (a) Protected Information is commercially and competitively valuable to Verso Paper
and critical to its success; (b) the Unauthorized use or disclosure of Protected Information or the violation of the covenants set forth in Sections
2, 3, or 4 would cause irreparable harm to Verso Paper; (c) by this Agreement, Verso Paper is taking reasonable steps to protect its legitimate
interests in its Protected Information; (d) Employee has developed, or will develop legally unique relationships with customers of Verso Paper;
and (e) nothing herein shall prohibit Verso Paper from pursuing any remedies whether in law or equity, available to Verso Paper for breach or
threatened breach of this Agreement. Employee further acknowledges and agrees that as a senior executive of Verso Paper Employee performs
unique and valuable services to Verso Paper of an intellectual character and that Employee’s services will be difficult for Verso Paper to
replace. Employee further acknowledges and agrees that Verso Paper is providing Employee with significant consideration in this Agreement
for entering into the Agreement and that Verso Paper’s remedies for any breach of this Agreement are in addition to and not in place of any
other remedies Verso Paper may have at law or equity or under any other agreements.

      9. Section 409A of the Code. The parties hereto acknowledge and agree that, to the extent applicable, this Agreement shall be interpreted
in accordance with, and incorporate the terms and conditions required by, Section 409A of the Internal Revenue Code of 1986, as amended,
and the Department of Treasury Regulations and other interpretive guidance issued thereunder, including without limitation any such
regulations or other guidance that may be issued after the date hereof (― Section 409A ‖). Notwithstanding any provision of this Agreement to
the contrary, in the event that Verso Paper determines that any amounts payable hereunder will be immediately taxable to Employee under
Section 409A, Verso Paper and Employee shall cooperate in good faith to (a) adopt such amendments to this Agreement and appropriate
policies and procedures, including amendments and policies with retroactive effect, that they mutually determine to be necessary or appropriate
to preserve the intended tax treatment of the benefits provided by this Agreement, to preserve the economic benefits of this Agreement, and to
avoid less favorable accounting or tax consequences for Verso Paper and/or (b) take such other actions as mutually determined to be necessary
or appropriate to exempt any amounts payable hereunder from

                                                                         5
Section 409A or to comply with the requirements of Section 409A and thereby avoid the application of penalty taxes thereunder. In addition,
and notwithstanding any provision of this Agreement to the contrary, to the extent subject to Section 409A, payment to a ―specified employee‖
as defined in Section 409A(2)(B)(i) shall not be made before the date which is six (6) months after the date of termination of employment.

     10. General.
           (a) Employee acknowledges and agrees that the parties have attempted to limit Employee’s right to compete only to the extent
     necessary to protect Verso Paper from unfair competition and protect the legitimate interests of Verso Paper. If any provision or clause of
     this Agreement or portion thereof shall be held by any court of competent jurisdiction to be illegal, void or unenforceable in such
     jurisdiction, the remainder of such provisions shall not thereby be affected and shall be given full effect, without regard to the invalid
     portion. It is the intention of the parties and Employee agrees, that if any court construes any provision or clause of this Agreement or any
     portion thereof to be illegal, void or unenforceable because of the duration of such provision or the area or matter covered thereby, such
     court shall reduce the duration, area or matter of such provision and in its reduced form, such provision shall then be enforceable and
     shall be enforced.
           (b) Employee acknowledges that neither this Agreement nor any provision hereof can be modified, abrogated or waived except in a
     written document signed by the Vice President of Human Resource or the President and Chief Executive Officer of Verso Paper, or in the
     event of the absence of either of these executives or the vacancy of either of these positions, such other officer of Verso Paper as Verso
     Paper’s Board of Directors shall designate in writing.
           (c) This Agreement shall be governed by and in accordance with the laws and public policies of the State of Delaware.
          (d) Employee hereby consents to the jurisdiction of and agrees that any claim arising out of or relating to this Agreement may be
     brought in the courts of the State of Delaware.
          (e) This Agreement and any rights thereunder may be assigned by Verso Paper and if so assigned shall operate to protect the
     Protected Information and relationships of Verso Paper as well as such information and relationships of the assignee.
            (f) Should either party to this Agreement breach any of the terms of this Agreement, that party shall pay to the non-defaulting party
     all of the non-defaulting party’s costs and expenses, including attorney’s and experts’ fees in enforcing the provisions of the Agreement
     as to which a breach is found.
          (g) Employee agrees that Verso Paper’s determination not to enforce this or similar agreements as to specific violations shall not
     operate as a waiver or release of Employee’s obligations under this Agreement.
           (h) Employee understands that Employee owes fiduciary and common law duties to Verso Paper in addition to the covenants set
     forth above prohibiting the misuse or disclosure of trade secrets or confidential information and the unlawful interference with Verso
     Paper’s business and customer relationships.
           (i) Employee acknowledges and agrees that Verso Paper has advised Employee that Employee may consult with an independent
     attorney before signing this Agreement.

                                                                        6
          (j) This Agreement sets forth the entire agreement of the parties, and fully supersedes any and all prior agreements or
     understandings between the parties pertaining to the subject matter hereof.

      IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and delivered effective as of the date first set
forth above.

                                                                                      VERSO PAPER HOLDINGS LLC

                                                                                      By: /s/ Michael A. Jackson
                                                                                          Michael A. Jackson
                                                                                          President and Chief Executive Officer

                                                                                      /s/ Robert P. Mundy
                                                                                      Robert P. Mundy

                                                                       7
                                                                  EXHIBIT A

                                                  EMPLOYMENT-RELATED BENEFITS

Benefits:
     •      Coverage under Verso Paper Medical and Dental Plan for Employee and his or her eligible dependents for up to twenty-four
            (24) months.
     •      Reimbursement for (i) all costs to convert to an individual policy the basic life insurance coverage on Employee’s life only, in such
            amount as in effect at termination of employment, and (ii) the premiums necessary to continue such converted coverage for up to
            twenty-four (24) months. Reimbursement shall be conditioned on Employee providing Verso Paper with satisfactory evidence that
            the conversion costs and premiums have been incurred.

Additional Terms and Conditions:
     •      Verso Paper shall pay Employee an amount equal to the aggregate of any and all federal, state and local income tax imposed on
            Employee resulting from the benefits set forth above, as determined by Verso Paper in its sole and absolute discretion.
     •      Benefit coverage/reimbursement is subject to early termination upon Employee’s re-employment with comparable benefits
            available, as determined by Verso Paper in its sole and absolute discretion.
     •      Verso Paper reserves the right to modify, revoke, suspend, terminate or change any or all of its benefit plans, programs or policies,
            in whole or in part, at any time and from time to time, and with or without notice, provided that any such change or modification is
            applicable to all similarly situated employees of Verso Paper.

                                                                        8
                                                                                                                                 Exhibit 10.13

                                   CONFIDENTIALITY AND NON-COMPETITION AGREEMENT

     This Confidentiality and Non-Competition Agreement (this ― Agreement ‖) is entered into as of January 1, 2008, by and between Verso
Paper Holdings LLC, a Delaware limited liability company (― Verso Paper ‖), and Lyle J. Fellows (― Employee ‖), to allow Employee to have
access to certain valuable competitive information and business relationships of Verso Paper while also providing protection for such
information and relationships.

      WHEREAS, Verso Paper is willing to employ Employee in the position of Senior Vice President - Manufacturing, and Employee is
willing to accept such employment upon the terms and conditions set forth herein; and,

     WHEREAS, Verso Paper is willing to provide Employee with certain benefits, as set forth herein, even after the employment relationship
with Employee has ended in order to protect its valuable competitive information and business relationships; and

     WHEREAS, after having ample opportunity to discuss, negotiate, and revise as necessary, the parties are willing to enter into this
Agreement;

     NOW, THEREFORE, the parties hereto agree as follows:

     1. Definitions. As used in this Agreement, the terms:
           (a) ― Protected Information ‖ shall mean all information, documents or materials, owned, developed or possessed by Verso Paper or
     any employee while in the employ of Verso Paper, whether in tangible or intangible form, which (i) Verso Paper takes reasonable
     measures to maintain in secrecy, and (ii) pertains in any manner to Verso Paper’s business, including but not limited to Research and
     Development (as defined below); customers or prospective customers, targeted national accounts, or strategies or data for identifying and
     satisfying their needs; present or prospective business relationships; present, short term, or long term strategic plans; acquisition
     candidates; plans for corporate restructuring; products under consideration or development; cost, margin or profit information; data from
     which any of the foregoing types of information could be derived; human resources (including compensation information and internal
     evaluations of the performance, capability and potential of Verso Paper employees); business methods, data bases and computer
     programs. The fact that individual elements of the information that constitutes Protected Information may be generally known does not
     prevent an integrated compilation of information, whether or not reduced to writing, from being Protected Information if that integrated
     whole is not generally known.
           (b) ― Research and Development ‖ shall include, but not be limited to (i) all short term and long term basic, applied and
     developmental research and technical assistance and specialized research support of customers or active prospects, targeted national
     accounts, of Verso Paper operating divisions; (ii) information relating to manufacturing and converting processes, methods, techniques
     and equipment and the improvements and innovations relating to same; quality control procedures and equipment; identification,
     selection, generation and propagation of tree species having improved characteristics; forest resource management; innovation and
     improvement to manufacturing and converting processes such as shipping, pulping bleaching chemical recovery papermaking, coating
     and calendaring processes and in equipment for use in such processes; reduction and remediation of environmental discharges;
     minimization or elimination of solid and liquid waste; use and optimization of raw materials in manufacturing processes; recycling and
     manufacture paper products; recycling of other paper or pulp products; energy conservation; computer software and application of
     computer controls to manufacturing
and quality control operations and to inventory control; radio frequency identification and its use in paper and packaging products; and
product process improvement development or evaluation; and (iii) information about methods, techniques, products equipment, and
processes which Verso Paper has learned do not work or do not provide beneficial results (―negative know-how‖) as well as those which
do work which provide beneficial results.
      (c) ― Unauthorized ‖ shall mean (i) in contravention of Verso Paper’s policies or procedures; (ii) otherwise inconsistent with Verso
Paper’s measures to protect its interests in the Protected Information; (iii) in contravention of any lawful instruction or directive, either
written or oral, of an Verso Paper employee empowered to issue such instruction or directive; (iv) in contravention of any duty existing
under law or contract; or (v) to the detriment of Verso Paper.

2. Confidentiality.
      (a) Employee acknowledges and agrees that by reason of employment with Verso Paper as a senior level executive in the position
of Senior Vice President - Manufacturing, Employee has been and will be entrusted with Protected Information and may develop
Protected Information, that such information is valuable and useful to Verso Paper, that it would also be valuable and useful to
competitors and others who do not know it and that such information constitutes confidential and proprietary trade secrets of Verso Paper.
While an employee or consultant of Verso Paper, or at any time thereafter, regardless of the reasons for leaving Verso Paper, Employee
agrees not to use or disclose, directly or indirectly, any Protected Information in an Unauthorized manner or for any Unauthorized
purpose unless such information shall have become generally known in the relevant industry or independently developed with no
assistance from Employee. Further, promptly upon termination, for any reason, of Employee’s employment with Verso Paper or upon the
request of Verso Paper Employee agrees to deliver to Verso Paper all property and materials and copies thereof within Employee’s
possession or control which belong to Verso Paper or which contain Protected Information and to permanently delete upon Verso Paper’s
request all Protected Information from any computers or other electronic storage media Employee owns or uses.
       (b) While an employee of Verso Paper and after termination of Employee’s employment with Verso Paper for any reason,
Employee agrees not to take any actions which would constitute or facilitate the Unauthorized use or disclosure of Protected Information,
including transmitting or posting such Protected Information on the internet, anonymously or otherwise. Employee further agrees to take
all reasonable measures to prevent the Unauthorized use and disclosure of Protected Information and to prevent Unauthorized persons or
entities from obtaining or using Protected Information.
      (c) If Employee becomes legally compelled (by deposition, interrogatory, request for documents, subpoena, investigation, demand,
order or similar process) to disclose any Protected Information, then before any such disclosure may be made, Employee shall
immediately notify Verso Paper thereof and, at Verso Paper’s expense, shall consult with Verso Paper on the advisability of taking steps
to resist or narrow such request and cooperate with Verso Paper in any attempt to obtain a protective order or other appropriate remedy or
assurance that the Protected Information will be afforded confidential treatment. If such protective order or other appropriate remedy is
not obtained, Employee shall furnish only that portion of the Protected Information that it is advised by legal counsel is legally required to
be furnished.

                                                                   2
     3. Non-Competition.
           (a) Employee acknowledges and agrees that the business of Verso Paper and its customers is worldwide in scope, Verso Paper’s
     competitors and customers are located throughout the world, and Verso Paper’s strategic planning and Research and Development
     activities have application throughout the world and are for the benefit of customers and Verso Paper’s business throughout the world,
     and therefore, the restrictions on Employee’s competition after employment as described below apply to anywhere in the world in which
     Verso Paper or its subsidiaries are doing business. Employee acknowledges that any such competition within that geographical scope will
     irreparably injure Verso Paper. Employee acknowledges and agrees that, for that reason, the prohibitions on competition described below
     are reasonably tailored to protect Verso Paper.
          (b) While an employee or consultant of Verso Paper, Employee agrees not to compete in any manner, either directly or indirectly
     and whether for compensation or otherwise, with Verso Paper or to assist any other person or entity to compete with Verso Paper in the
     business of coated and supercalendared paper products or the operation of coated and supercalendared paper mills anywhere in the world.
          (c) After the termination of Employee’s employment with Verso Paper for any reason, Employee agrees that for a period of twelve
     (12) months (the ― Non-Compete Period ‖) following such termination Employee will not compete with Verso Paper anywhere in the
     world in which Verso Paper or its subsidiaries are doing business:
                (i) by producing, developing, selling or marketing, or assisting others to produce, develop, sell or market in the business of
           coated and supercalendared paper products or the operation of coated and supercalendared paper mills;
                 (ii) by engaging in any sales, marketing, Research and Development or managerial duties (including, without limitation,
           financial, human resources, strategic planning, or operation duties) for, whether as an employee, consultant, or otherwise, any entity
           which produces, develops, sells or markets in the business of coated and supercalendared paper products or the operation of coated
           and supercalendared paper mills;
                 (iii) by owning, managing, operating, controlling or consulting for any entity which produces, develops, sells or markets in the
           business of coated and supercalendared paper products or the operation of coated and supercalendared paper mills, provided that
           this Section 3(c)(iii) shall not prohibit Employee from being a passive owner of not more than two percent (2%) of the outstanding
           stock of any class of a corporation that is publicly traded, so long as Employee has no active participation in the business of such
           corporation; or
                (iv) by soliciting the business of any actual or active prospective customers, or targeted national accounts of Verso Paper for
           any product, process or service which is competitive with the products, processes, or services of Verso Paper, namely any products,
           processes or services of the business of coated and supercalendared paper products or the operation of coated and supercalendared
           paper mills, whether existing or contemplated for the future, on which Employee has worked, or concerning which Employee has in
           any manner acquired knowledge or Protected Information about, during the twenty four (24) months preceding termination of
           Employee’s employment.

      It shall not be a violation of this provision for Employee to accept employment with a non-competitive division or business unit of a
multi-divisional company some of whose divisions or business units are competitors of Verso Paper, so long as Employee does not engage in,
oversee, provide input or

                                                                        3
information regarding, or participate in any manner in the activities described in this paragraph as they relate to the division or business unit
which is a competitor of Verso Paper. Employee shall not assist others in engaging in activities which Employee is not permitted to take.

      4. Non-Solicitation/Non-Hire. During the term of Employee’s employment at Verso Paper and for twelve (12) months following the
termination, for any reason, of employment, Employee agrees that Employee will not, either on Employee’s own behalf or on behalf of any
other person or entity, directly or indirectly, hire, solicit, retain or encourage to leave the employ of Verso Paper (or assist any other person or
entity in hiring, soliciting, retaining or encouraging) any person who is then or was within six (6) months of the date of such hiring an
employee of Verso Paper.

      5. Tolling Period of Restrictions. Employee agrees that the periods of non-competition and non-solicitation/non-hire set forth in
Sections 3 and 4, respectively, shall be extended by the period of violation if Employee is found to be in violation of those provisions.

      6. Post-Termination Payments and Benefits. Upon the termination of Employee’s employment with Verso Paper for any reason, in
consideration of Employee’s compliance with all his obligations under this Agreement (including, without limitation, his obligations under
Sections 2, 3(c) and 4), and provided that Employee complies with all such obligations, Verso Paper shall provide post-termination payments
and benefits to Employee as follows:
            (a) During the Non-Compete Period, if Employee is unable, despite diligent search, to obtain employment consistent with
      Employee’s experience and education, Employee shall so notify Verso Paper in writing, describing in reasonable detail the efforts
      Employee has made to secure such employment that does not conflict with Employee’s non-compete obligations. Upon receipt and
      reasonable verification of the information contained in such notice, Verso Paper shall make monthly payments to Employee in an amount
      equal to Employee’s monthly base salary in effect in the month immediately preceding the termination of his employment, less applicable
      tax and other withholdings, for each month (or prorated for periods less than a month) of such unemployment during the Non-Compete
      Period. Before the close of each month for which Employee seeks such payment, Employee shall advise Verso Paper in writing of
      Employee’s efforts to obtain non-competitive employment and shall certify that although Employee diligently sought such employment,
      Employee was unable to obtain it.
             (b) Verso Paper shall pay to Employee an amount equal to the sum of the incentive awards, if any, payable to Employee under the
      Verso Paper Incentive Plan (the ― Incentive Plan ‖) for (i) the year immediately preceding the year in which termination of employment
      occurred, to the extent not previously paid to Employee, and (ii) the year in which such termination occurred, prorated for the period of
      the year in which Employee was employed by Verso Paper, in each case less applicable tax and other withholdings (collectively, the ―
      Incentive Payment ‖). The determination of the Incentive Payment shall be made by Verso Paper, in its sole and absolute discretion, and,
      with respect to the year in which termination occurred, shall be based on (i) Employee’s monthly base salary in effect in the month
      immediately preceding the termination of his employment and (ii) the assumptions relative to the Incentive Plan that (A) Employee was
      employed by Verso Paper during the entire year and is otherwise eligible and qualified to receive the Incentive Payment, (B) Employee’s
      monthly base salary remained in effect and was not changed during the remainder of the year, and (C) Employee achieved all of his
      individual performance measures, if any, during the year. Verso Paper shall make the Incentive Payment to Employee at the same time
      that it makes other incentive payments under the Incentive Plan to the employees of Verso Paper.
           (c) Verso Paper shall (i) continue Employee’s coverage of the employment-related benefits described in Exhibit A for up to
      twenty-four (24) months following Employee’s termination of

                                                                          4
     employment with Verso Paper, in accordance with and subject to the terms and conditions set forth in the attached Exhibit A, and
     (ii) contribute on Employee’s behalf an amount equal to his Lost Retirement Benefits (as defined below) to the Verso Paper Deferred
     Compensation Plan. As used in this Agreement, the term ― Lost Retirement Benefits ‖ shall mean the projected value of employer
     contributions under the Verso Paper Retirement Savings Plan, the Verso Paper Deferred Compensation Plan, and the Verso Paper
     Supplemental Salaried Retirement Savings Plan (collectively, the ― Plans ‖) that Employee would have received had he remained actively
     employed with Verso Paper during the twenty-four (24) months following Employee’s termination of employment with Verso Paper. The
     determination of the Lost Retirement Benefits shall be made by Verso Paper, in its sole and absolute discretion, and shall be based on
     (i) Employee’s monthly base salary in effect in the month immediately preceding the termination of his employment and (ii) the
     assumption that Employee’s salary deferrals during such twenty-four (24) month period are in such amounts as would produce the
     maximum possible matching contribution by Verso Paper under the Plans. Verso Paper shall contribute on Employee’s behalf the value
     of his Lost Retirement Benefits to the Verso Paper Deferred Compensation Plan in a lump sum payment as soon as reasonably practicable
     after the determination of the Lost Retirement Benefits is made.

      7. Duty to Show Agreement to Prospective Employer. During Employee’s employment with Verso Paper and for twelve (12) months
thereafter, Employee shall, prior to accepting other employment, provide a copy of this Agreement to any recruiter who assists Employee in
locating employment other than with Verso Paper and to any prospective employer with which Employee discusses potential employment.

       8. Representations, Warranties and Acknowledgements. In addition to the representations, warranties and obligations set forth
throughout this Agreement, Employee acknowledges that (a) Protected Information is commercially and competitively valuable to Verso Paper
and critical to its success; (b) the Unauthorized use or disclosure of Protected Information or the violation of the covenants set forth in Sections
2, 3, or 4 would cause irreparable harm to Verso Paper; (c) by this Agreement, Verso Paper is taking reasonable steps to protect its legitimate
interests in its Protected Information; (d) Employee has developed, or will develop legally unique relationships with customers of Verso Paper;
and (e) nothing herein shall prohibit Verso Paper from pursuing any remedies whether in law or equity, available to Verso Paper for breach or
threatened breach of this Agreement. Employee further acknowledges and agrees that as a senior executive of Verso Paper Employee performs
unique and valuable services to Verso Paper of an intellectual character and that Employee’s services will be difficult for Verso Paper to
replace. Employee further acknowledges and agrees that Verso Paper is providing Employee with significant consideration in this Agreement
for entering into the Agreement and that Verso Paper’s remedies for any breach of this Agreement are in addition to and not in place of any
other remedies Verso Paper may have at law or equity or under any other agreements.

      9. Section 409A of the Code. The parties hereto acknowledge and agree that, to the extent applicable, this Agreement shall be interpreted
in accordance with, and incorporate the terms and conditions required by, Section 409A of the Internal Revenue Code of 1986, as amended,
and the Department of Treasury Regulations and other interpretive guidance issued thereunder, including without limitation any such
regulations or other guidance that may be issued after the date hereof (― Section 409A ‖). Notwithstanding any provision of this Agreement to
the contrary, in the event that Verso Paper determines that any amounts payable hereunder will be immediately taxable to Employee under
Section 409A, Verso Paper and Employee shall cooperate in good faith to (a) adopt such amendments to this Agreement and appropriate
policies and procedures, including amendments and policies with retroactive effect, that they mutually determine to be necessary or appropriate
to preserve the intended tax treatment of the benefits provided by this Agreement, to preserve the economic benefits of this Agreement, and to
avoid less favorable accounting or tax consequences for Verso Paper and/or (b) take such other actions as mutually determined to be necessary
or appropriate to exempt any amounts payable hereunder from

                                                                         5
Section 409A or to comply with the requirements of Section 409A and thereby avoid the application of penalty taxes thereunder. In addition,
and notwithstanding any provision of this Agreement to the contrary, to the extent subject to Section 409A, payment to a ―specified employee‖
as defined in Section 409A(2)(B)(i) shall not be made before the date which is six (6) months after the date of termination of employment.

     10. General.
           (a) Employee acknowledges and agrees that the parties have attempted to limit Employee’s right to compete only to the extent
     necessary to protect Verso Paper from unfair competition and protect the legitimate interests of Verso Paper. If any provision or clause of
     this Agreement or portion thereof shall be held by any court of competent jurisdiction to be illegal, void or unenforceable in such
     jurisdiction, the remainder of such provisions shall not thereby be affected and shall be given full effect, without regard to the invalid
     portion. It is the intention of the parties and Employee agrees, that if any court construes any provision or clause of this Agreement or any
     portion thereof to be illegal, void or unenforceable because of the duration of such provision or the area or matter covered thereby, such
     court shall reduce the duration, area or matter of such provision and in its reduced form, such provision shall then be enforceable and
     shall be enforced.
           (b) Employee acknowledges that neither this Agreement nor any provision hereof can be modified, abrogated or waived except in a
     written document signed by the Vice President of Human Resource or the President and Chief Executive Officer of Verso Paper, or in the
     event of the absence of either of these executives or the vacancy of either of these positions, such other officer of Verso Paper as Verso
     Paper’s Board of Directors shall designate in writing.
           (c) This Agreement shall be governed by and in accordance with the laws and public policies of the State of Delaware.
          (d) Employee hereby consents to the jurisdiction of and agrees that any claim arising out of or relating to this Agreement may be
     brought in the courts of the State of Delaware.
          (e) This Agreement and any rights thereunder may be assigned by Verso Paper and if so assigned shall operate to protect the
     Protected Information and relationships of Verso Paper as well as such information and relationships of the assignee.
            (f) Should either party to this Agreement breach any of the terms of this Agreement, that party shall pay to the non-defaulting party
     all of the non-defaulting party’s costs and expenses, including attorney’s and experts’ fees in enforcing the provisions of the Agreement
     as to which a breach is found.
          (g) Employee agrees that Verso Paper’s determination not to enforce this or similar agreements as to specific violations shall not
     operate as a waiver or release of Employee’s obligations under this Agreement.
           (h) Employee understands that Employee owes fiduciary and common law duties to Verso Paper in addition to the covenants set
     forth above prohibiting the misuse or disclosure of trade secrets or confidential information and the unlawful interference with Verso
     Paper’s business and customer relationships.
           (i) Employee acknowledges and agrees that Verso Paper has advised Employee that Employee may consult with an independent
     attorney before signing this Agreement.

                                                                        6
          (j) This Agreement sets forth the entire agreement of the parties, and fully supersedes any and all prior agreements or
     understandings between the parties pertaining to the subject matter hereof.

      IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and delivered effective as of the date first set
forth above.

                                                                                      VERSO PAPER HOLDINGS LLC

                                                                                      By: /s/ Michael A. Jackson
                                                                                          Michael A. Jackson
                                                                                          President and Chief Executive Officer

                                                                                      /s/ Lyle J. Fellows
                                                                                      Lyle J. Fellows

                                                                       7
                                                                  EXHIBIT A

                                                  EMPLOYMENT-RELATED BENEFITS

Benefits:
     •      Coverage under Verso Paper Medical and Dental Plan for Employee and his or her eligible dependents for up to twenty-four
            (24) months.
     •      Reimbursement for (i) all costs to convert to an individual policy the basic life insurance coverage on Employee’s life only, in such
            amount as in effect at termination of employment, and (ii) the premiums necessary to continue such converted coverage for up to
            twenty-four (24) months. Reimbursement shall be conditioned on Employee providing Verso Paper with satisfactory evidence that
            the conversion costs and premiums have been incurred.

Additional Terms and Conditions:
     •      Verso Paper shall pay Employee an amount equal to the aggregate of any and all federal, state and local income tax imposed on
            Employee resulting from the benefits set forth above, as determined by Verso Paper in its sole and absolute discretion.
     •      Benefit coverage/reimbursement is subject to early termination upon Employee’s re-employment with comparable benefits
            available, as determined by Verso Paper in its sole and absolute discretion.
     •      Verso Paper reserves the right to modify, revoke, suspend, terminate or change any or all of its benefit plans, programs or policies,
            in whole or in part, at any time and from time to time, and with or without notice, provided that any such change or modification is
            applicable to all similarly situated employees of Verso Paper.

                                                                        8
                                                                                                                                 Exhibit 10.14

                                   CONFIDENTIALITY AND NON-COMPETITION AGREEMENT

     This Confidentiality and Non-Competition Agreement (this ― Agreement ‖) is entered into as of January 1, 2008, by and between Verso
Paper Holdings LLC, a Delaware limited liability company (― Verso Paper ‖), and Michael A. Weinhold (― Employee ‖), to allow Employee to
have access to certain valuable competitive information and business relationships of Verso Paper while also providing protection for such
information and relationships.

      WHEREAS, Verso Paper is willing to employ Employee in the position of Senior Vice President – Sales and Marketing, and Employee is
willing to accept such employment upon the terms and conditions set forth herein; and,

     WHEREAS, Verso Paper is willing to provide Employee with certain benefits, as set forth herein, even after the employment relationship
with Employee has ended in order to protect its valuable competitive information and business relationships; and

     WHEREAS, after having ample opportunity to discuss, negotiate, and revise as necessary, the parties are willing to enter into this
Agreement;

     NOW, THEREFORE, the parties hereto agree as follows:

     1. Definitions. As used in this Agreement, the terms:
           (a) ― Protected Information ‖ shall mean all information, documents or materials, owned, developed or possessed by Verso Paper or
     any employee while in the employ of Verso Paper, whether in tangible or intangible form, which (i) Verso Paper takes reasonable
     measures to maintain in secrecy, and (ii) pertains in any manner to Verso Paper’s business, including but not limited to Research and
     Development (as defined below); customers or prospective customers, targeted national accounts, or strategies or data for identifying and
     satisfying their needs; present or prospective business relationships; present, short term, or long term strategic plans; acquisition
     candidates; plans for corporate restructuring; products under consideration or development; cost, margin or profit information; data from
     which any of the foregoing types of information could be derived; human resources (including compensation information and internal
     evaluations of the performance, capability and potential of Verso Paper employees); business methods, data bases and computer
     programs. The fact that individual elements of the information that constitutes Protected Information may be generally known does not
     prevent an integrated compilation of information, whether or not reduced to writing, from being Protected Information if that integrated
     whole is not generally known.
           (b) ― Research and Development ‖ shall include, but not be limited to (i) all short term and long term basic, applied and
     developmental research and technical assistance and specialized research support of customers or active prospects, targeted national
     accounts, of Verso Paper operating divisions; (ii) information relating to manufacturing and converting processes, methods, techniques
     and equipment and the improvements and innovations relating to same; quality control procedures and equipment; identification,
     selection, generation and propagation of tree species having improved characteristics; forest resource management; innovation and
     improvement to manufacturing and converting processes such as shipping, pulping bleaching chemical recovery papermaking, coating
     and calendaring processes and in equipment for use in such processes; reduction and remediation of environmental discharges;
     minimization or elimination of solid and liquid waste; use and optimization of raw materials in manufacturing processes; recycling and
     manufacture paper products; recycling of other paper or pulp products; energy conservation; computer software and application of
     computer controls to manufacturing
and quality control operations and to inventory control; radio frequency identification and its use in paper and packaging products; and
product process improvement development or evaluation; and (iii) information about methods, techniques, products equipment, and
processes which Verso Paper has learned do not work or do not provide beneficial results (―negative know-how‖) as well as those which
do work which provide beneficial results.
      (c) ― Unauthorized ‖ shall mean (i) in contravention of Verso Paper’s policies or procedures; (ii) otherwise inconsistent with Verso
Paper’s measures to protect its interests in the Protected Information; (iii) in contravention of any lawful instruction or directive, either
written or oral, of an Verso Paper employee empowered to issue such instruction or directive; (iv) in contravention of any duty existing
under law or contract; or (v) to the detriment of Verso Paper.

2. Confidentiality.
      (a) Employee acknowledges and agrees that by reason of employment with Verso Paper as a senior level executive in the position
of Senior Vice President – Sales and Marketing, Employee has been and will be entrusted with Protected Information and may develop
Protected Information, that such information is valuable and useful to Verso Paper, that it would also be valuable and useful to
competitors and others who do not know it and that such information constitutes confidential and proprietary trade secrets of Verso Paper.
While an employee or consultant of Verso Paper, or at any time thereafter, regardless of the reasons for leaving Verso Paper, Employee
agrees not to use or disclose, directly or indirectly, any Protected Information in an Unauthorized manner or for any Unauthorized
purpose unless such information shall have become generally known in the relevant industry or independently developed with no
assistance from Employee. Further, promptly upon termination, for any reason, of Employee’s employment with Verso Paper or upon the
request of Verso Paper Employee agrees to deliver to Verso Paper all property and materials and copies thereof within Employee’s
possession or control which belong to Verso Paper or which contain Protected Information and to permanently delete upon Verso Paper’s
request all Protected Information from any computers or other electronic storage media Employee owns or uses.
       (b) While an employee of Verso Paper and after termination of Employee’s employment with Verso Paper for any reason,
Employee agrees not to take any actions which would constitute or facilitate the Unauthorized use or disclosure of Protected Information,
including transmitting or posting such Protected Information on the internet, anonymously or otherwise. Employee further agrees to take
all reasonable measures to prevent the Unauthorized use and disclosure of Protected Information and to prevent Unauthorized persons or
entities from obtaining or using Protected Information.
      (c) If Employee becomes legally compelled (by deposition, interrogatory, request for documents, subpoena, investigation, demand,
order or similar process) to disclose any Protected Information, then before any such disclosure may be made, Employee shall
immediately notify Verso Paper thereof and, at Verso Paper’s expense, shall consult with Verso Paper on the advisability of taking steps
to resist or narrow such request and cooperate with Verso Paper in any attempt to obtain a protective order or other appropriate remedy or
assurance that the Protected Information will be afforded confidential treatment. If such protective order or other appropriate remedy is
not obtained, Employee shall furnish only that portion of the Protected Information that it is advised by legal counsel is legally required to
be furnished.

                                                                   2
     3. Non-Competition.
           (a) Employee acknowledges and agrees that the business of Verso Paper and its customers is worldwide in scope, Verso Paper’s
     competitors and customers are located throughout the world, and Verso Paper’s strategic planning and Research and Development
     activities have application throughout the world and are for the benefit of customers and Verso Paper’s business throughout the world,
     and therefore, the restrictions on Employee’s competition after employment as described below apply to anywhere in the world in which
     Verso Paper or its subsidiaries are doing business. Employee acknowledges that any such competition within that geographical scope will
     irreparably injure Verso Paper. Employee acknowledges and agrees that, for that reason, the prohibitions on competition described below
     are reasonably tailored to protect Verso Paper.
          (b) While an employee or consultant of Verso Paper, Employee agrees not to compete in any manner, either directly or indirectly
     and whether for compensation or otherwise, with Verso Paper or to assist any other person or entity to compete with Verso Paper in the
     business of coated and supercalendared paper products or the operation of coated and supercalendared paper mills anywhere in the world.
          (c) After the termination of Employee’s employment with Verso Paper for any reason, Employee agrees that for a period of twelve
     (12) months (the ― Non-Compete Period ‖) following such termination Employee will not compete with Verso Paper anywhere in the
     world in which Verso Paper or its subsidiaries are doing business:
                (i) by producing, developing, selling or marketing, or assisting others to produce, develop, sell or market in the business of
           coated and supercalendared paper products or the operation of coated and supercalendared paper mills;
                 (ii) by engaging in any sales, marketing, Research and Development or managerial duties (including, without limitation,
           financial, human resources, strategic planning, or operation duties) for, whether as an employee, consultant, or otherwise, any entity
           which produces, develops, sells or markets in the business of coated and supercalendared paper products or the operation of coated
           and supercalendared paper mills;
                 (iii) by owning, managing, operating, controlling or consulting for any entity which produces, develops, sells or markets in the
           business of coated and supercalendared paper products or the operation of coated and supercalendared paper mills, provided that
           this Section 3(c)(iii) shall not prohibit Employee from being a passive owner of not more than two percent (2%) of the outstanding
           stock of any class of a corporation that is publicly traded, so long as Employee has no active participation in the business of such
           corporation; or
                (iv) by soliciting the business of any actual or active prospective customers, or targeted national accounts of Verso Paper for
           any product, process or service which is competitive with the products, processes, or services of Verso Paper, namely any products,
           processes or services of the business of coated and supercalendared paper products or the operation of coated and supercalendared
           paper mills, whether existing or contemplated for the future, on which Employee has worked, or concerning which Employee has in
           any manner acquired knowledge or Protected Information about, during the twenty four (24) months preceding termination of
           Employee’s employment.

      It shall not be a violation of this provision for Employee to accept employment with a non-competitive division or business unit of a
multi-divisional company some of whose divisions or business units are competitors of Verso Paper, so long as Employee does not engage in,
oversee, provide input or

                                                                        3
information regarding, or participate in any manner in the activities described in this paragraph as they relate to the division or business unit
which is a competitor of Verso Paper. Employee shall not assist others in engaging in activities which Employee is not permitted to take.

      4. Non-Solicitation/Non-Hire. During the term of Employee’s employment at Verso Paper and for twelve (12) months following the
termination, for any reason, of employment, Employee agrees that Employee will not, either on Employee’s own behalf or on behalf of any
other person or entity, directly or indirectly, hire, solicit, retain or encourage to leave the employ of Verso Paper (or assist any other person or
entity in hiring, soliciting, retaining or encouraging) any person who is then or was within six (6) months of the date of such hiring an
employee of Verso Paper.

      5. Tolling Period of Restrictions. Employee agrees that the periods of non-competition and non-solicitation/non-hire set forth in
Sections 3 and 4, respectively, shall be extended by the period of violation if Employee is found to be in violation of those provisions.

      6. Post-Termination Payments and Benefits. Upon the termination of Employee’s employment with Verso Paper for any reason, in
consideration of Employee’s compliance with all his obligations under this Agreement (including, without limitation, his obligations under
Sections 2, 3(c) and 4), and provided that Employee complies with all such obligations, Verso Paper shall provide post-termination payments
and benefits to Employee as follows:
            (a) During the Non-Compete Period, if Employee is unable, despite diligent search, to obtain employment consistent with
      Employee’s experience and education, Employee shall so notify Verso Paper in writing, describing in reasonable detail the efforts
      Employee has made to secure such employment that does not conflict with Employee’s non-compete obligations. Upon receipt and
      reasonable verification of the information contained in such notice, Verso Paper shall make monthly payments to Employee in an amount
      equal to Employee’s monthly base salary in effect in the month immediately preceding the termination of his employment, less applicable
      tax and other withholdings, for each month (or prorated for periods less than a month) of such unemployment during the Non-Compete
      Period. Before the close of each month for which Employee seeks such payment, Employee shall advise Verso Paper in writing of
      Employee’s efforts to obtain non-competitive employment and shall certify that although Employee diligently sought such employment,
      Employee was unable to obtain it.
             (b) Verso Paper shall pay to Employee an amount equal to the sum of the incentive awards, if any, payable to Employee under the
      Verso Paper Incentive Plan (the ― Incentive Plan ‖) for (i) the year immediately preceding the year in which termination of employment
      occurred, to the extent not previously paid to Employee, and (ii) the year in which such termination occurred, prorated for the period of
      the year in which Employee was employed by Verso Paper, in each case less applicable tax and other withholdings (collectively, the ―
      Incentive Payment ‖). The determination of the Incentive Payment shall be made by Verso Paper, in its sole and absolute discretion, and,
      with respect to the year in which termination occurred, shall be based on (i) Employee’s monthly base salary in effect in the month
      immediately preceding the termination of his employment and (ii) the assumptions relative to the Incentive Plan that (A) Employee was
      employed by Verso Paper during the entire year and is otherwise eligible and qualified to receive the Incentive Payment, (B) Employee’s
      monthly base salary remained in effect and was not changed during the remainder of the year, and (C) Employee achieved all of his
      individual performance measures, if any, during the year. Verso Paper shall make the Incentive Payment to Employee at the same time
      that it makes other incentive payments under the Incentive Plan to the employees of Verso Paper.
           (c) Verso Paper shall (i) continue Employee’s coverage of the employment-related benefits described in Exhibit A for up to
      twenty-four (24) months following Employee’s termination of

                                                                          4
     employment with Verso Paper, in accordance with and subject to the terms and conditions set forth in the attached Exhibit A, and
     (ii) contribute on Employee’s behalf an amount equal to his Lost Retirement Benefits (as defined below) to the Verso Paper Deferred
     Compensation Plan. As used in this Agreement, the term ― Lost Retirement Benefits ‖ shall mean the projected value of employer
     contributions under the Verso Paper Retirement Savings Plan, the Verso Paper Deferred Compensation Plan, and the Verso Paper
     Supplemental Salaried Retirement Savings Plan (collectively, the ― Plans ‖) that Employee would have received had he remained actively
     employed with Verso Paper during the twenty-four (24) months following Employee’s termination of employment with Verso Paper. The
     determination of the Lost Retirement Benefits shall be made by Verso Paper, in its sole and absolute discretion, and shall be based on
     (i) Employee’s monthly base salary in effect in the month immediately preceding the termination of his employment and (ii) the
     assumption that Employee’s salary deferrals during such twenty-four (24) month period are in such amounts as would produce the
     maximum possible matching contribution by Verso Paper under the Plans. Verso Paper shall contribute on Employee’s behalf the value
     of his Lost Retirement Benefits to the Verso Paper Deferred Compensation Plan in a lump sum payment as soon as reasonably practicable
     after the determination of the Lost Retirement Benefits is made.

      7. Duty to Show Agreement to Prospective Employer. During Employee’s employment with Verso Paper and for twelve (12) months
thereafter, Employee shall, prior to accepting other employment, provide a copy of this Agreement to any recruiter who assists Employee in
locating employment other than with Verso Paper and to any prospective employer with which Employee discusses potential employment.

       8. Representations, Warranties and Acknowledgements. In addition to the representations, warranties and obligations set forth
throughout this Agreement, Employee acknowledges that (a) Protected Information is commercially and competitively valuable to Verso Paper
and critical to its success; (b) the Unauthorized use or disclosure of Protected Information or the violation of the covenants set forth in Sections
2, 3, or 4 would cause irreparable harm to Verso Paper; (c) by this Agreement, Verso Paper is taking reasonable steps to protect its legitimate
interests in its Protected Information; (d) Employee has developed, or will develop legally unique relationships with customers of Verso Paper;
and (e) nothing herein shall prohibit Verso Paper from pursuing any remedies whether in law or equity, available to Verso Paper for breach or
threatened breach of this Agreement. Employee further acknowledges and agrees that as a senior executive of Verso Paper Employee performs
unique and valuable services to Verso Paper of an intellectual character and that Employee’s services will be difficult for Verso Paper to
replace. Employee further acknowledges and agrees that Verso Paper is providing Employee with significant consideration in this Agreement
for entering into the Agreement and that Verso Paper’s remedies for any breach of this Agreement are in addition to and not in place of any
other remedies Verso Paper may have at law or equity or under any other agreements.

      9. Section 409A of the Code. The parties hereto acknowledge and agree that, to the extent applicable, this Agreement shall be interpreted
in accordance with, and incorporate the terms and conditions required by, Section 409A of the Internal Revenue Code of 1986, as amended,
and the Department of Treasury Regulations and other interpretive guidance issued thereunder, including without limitation any such
regulations or other guidance that may be issued after the date hereof (― Section 409A ‖). Notwithstanding any provision of this Agreement to
the contrary, in the event that Verso Paper determines that any amounts payable hereunder will be immediately taxable to Employee under
Section 409A, Verso Paper and Employee shall cooperate in good faith to (a) adopt such amendments to this Agreement and appropriate
policies and procedures, including amendments and policies with retroactive effect, that they mutually determine to be necessary or appropriate
to preserve the intended tax treatment of the benefits provided by this Agreement, to preserve the economic benefits of this Agreement, and to
avoid less favorable accounting or tax consequences for Verso Paper and/or (b) take such other actions as mutually determined to be necessary
or appropriate to exempt any amounts payable hereunder from

                                                                         5
Section 409A or to comply with the requirements of Section 409A and thereby avoid the application of penalty taxes thereunder. In addition,
and notwithstanding any provision of this Agreement to the contrary, to the extent subject to Section 409A, payment to a ―specified employee‖
as defined in Section 409A(2)(B)(i) shall not be made before the date which is six (6) months after the date of termination of employment.

     10. General.
           (a) Employee acknowledges and agrees that the parties have attempted to limit Employee’s right to compete only to the extent
     necessary to protect Verso Paper from unfair competition and protect the legitimate interests of Verso Paper. If any provision or clause of
     this Agreement or portion thereof shall be held by any court of competent jurisdiction to be illegal, void or unenforceable in such
     jurisdiction, the remainder of such provisions shall not thereby be affected and shall be given full effect, without regard to the invalid
     portion. It is the intention of the parties and Employee agrees, that if any court construes any provision or clause of this Agreement or any
     portion thereof to be illegal, void or unenforceable because of the duration of such provision or the area or matter covered thereby, such
     court shall reduce the duration, area or matter of such provision and in its reduced form, such provision shall then be enforceable and
     shall be enforced.
           (b) Employee acknowledges that neither this Agreement nor any provision hereof can be modified, abrogated or waived except in a
     written document signed by the Vice President of Human Resource or the President and Chief Executive Officer of Verso Paper, or in the
     event of the absence of either of these executives or the vacancy of either of these positions, such other officer of Verso Paper as Verso
     Paper’s Board of Directors shall designate in writing.
           (c) This Agreement shall be governed by and in accordance with the laws and public policies of the State of Delaware.
          (d) Employee hereby consents to the jurisdiction of and agrees that any claim arising out of or relating to this Agreement may be
     brought in the courts of the State of Delaware.
          (e) This Agreement and any rights thereunder may be assigned by Verso Paper and if so assigned shall operate to protect the
     Protected Information and relationships of Verso Paper as well as such information and relationships of the assignee.
            (f) Should either party to this Agreement breach any of the terms of this Agreement, that party shall pay to the non-defaulting party
     all of the non-defaulting party’s costs and expenses, including attorney’s and experts’ fees in enforcing the provisions of the Agreement
     as to which a breach is found.
          (g) Employee agrees that Verso Paper’s determination not to enforce this or similar agreements as to specific violations shall not
     operate as a waiver or release of Employee’s obligations under this Agreement.
           (h) Employee understands that Employee owes fiduciary and common law duties to Verso Paper in addition to the covenants set
     forth above prohibiting the misuse or disclosure of trade secrets or confidential information and the unlawful interference with Verso
     Paper’s business and customer relationships.
           (i) Employee acknowledges and agrees that Verso Paper has advised Employee that Employee may consult with an independent
     attorney before signing this Agreement.

                                                                        6
          (j) This Agreement sets forth the entire agreement of the parties, and fully supersedes any and all prior agreements or
     understandings between the parties pertaining to the subject matter hereof.

      IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and delivered effective as of the date first set
forth above.

                                                                                      VERSO PAPER HOLDINGS LLC

                                                                                      By: /s/ Michael A. Jackson
                                                                                          Michael A. Jackson
                                                                                          President and Chief Executive Officer

                                                                                      /s/ Michael A. Weinhold
                                                                                      Michael A. Weinehold

                                                                       7
                                                                  EXHIBIT A

                                                  EMPLOYMENT-RELATED BENEFITS

Benefits:
     •      Coverage under Verso Paper Medical and Dental Plan for Employee and his or her eligible dependents for up to twenty-four
            (24) months.
     •      Reimbursement for (i) all costs to convert to an individual policy the basic life insurance coverage on Employee’s life only, in such
            amount as in effect at termination of employment, and (ii) the premiums necessary to continue such converted coverage for up to
            twenty-four (24) months. Reimbursement shall be conditioned on Employee providing Verso Paper with satisfactory evidence that
            the conversion costs and premiums have been incurred.

Additional Terms and Conditions:
     •      Verso Paper shall pay Employee an amount equal to the aggregate of any and all federal, state and local income tax imposed on
            Employee resulting from the benefits set forth above, as determined by Verso Paper in its sole and absolute discretion.
     •      Benefit coverage/reimbursement is subject to early termination upon Employee’s re-employment with comparable benefits
            available, as determined by Verso Paper in its sole and absolute discretion.
     •      Verso Paper reserves the right to modify, revoke, suspend, terminate or change any or all of its benefit plans, programs or policies,
            in whole or in part, at any time and from time to time, and with or without notice, provided that any such change or modification is
            applicable to all similarly situated employees of Verso Paper.

                                                                        8
                                                                                                                                 Exhibit 10.15

                                   CONFIDENTIALITY AND NON-COMPETITION AGREEMENT

     This Confidentiality and Non-Competition Agreement (this ― Agreement ‖) is entered into as of January 1, 2008, by and between Verso
Paper Holdings LLC, a Delaware limited liability company (― Verso Paper ‖), and Peter H. Kesser (― Employee ‖), to allow Employee to have
access to certain valuable competitive information and business relationships of Verso Paper while also providing protection for such
information and relationships.

      WHEREAS, Verso Paper is willing to employ Employee in the position of Vice President, General Counsel and Secretary, and Employee
is willing to accept such employment upon the terms and conditions set forth herein; and,

     WHEREAS, Verso Paper is willing to provide Employee with certain benefits, as set forth herein, even after the employment relationship
with Employee has ended in order to protect its valuable competitive information and business relationships; and

     WHEREAS, after having ample opportunity to discuss, negotiate, and revise as necessary, the parties are willing to enter into this
Agreement;

     NOW, THEREFORE, the parties hereto agree as follows:

     1. Definitions. As used in this Agreement, the terms:
           (a) ― Protected Information ‖ shall mean all information, documents or materials, owned, developed or possessed by Verso Paper or
     any employee while in the employ of Verso Paper, whether in tangible or intangible form, which (i) Verso Paper takes reasonable
     measures to maintain in secrecy, and (ii) pertains in any manner to Verso Paper’s business, including but not limited to Research and
     Development (as defined below); customers or prospective customers, targeted national accounts, or strategies or data for identifying and
     satisfying their needs; present or prospective business relationships; present, short term, or long term strategic plans; acquisition
     candidates; plans for corporate restructuring; products under consideration or development; cost, margin or profit information; data from
     which any of the foregoing types of information could be derived; human resources (including compensation information and internal
     evaluations of the performance, capability and potential of Verso Paper employees); business methods, data bases and computer
     programs. The fact that individual elements of the information that constitutes Protected Information may be generally known does not
     prevent an integrated compilation of information, whether or not reduced to writing, from being Protected Information if that integrated
     whole is not generally known.
           (b) ― Research and Development ‖ shall include, but not be limited to (i) all short term and long term basic, applied and
     developmental research and technical assistance and specialized research support of customers or active prospects, targeted national
     accounts, of Verso Paper operating divisions; (ii) information relating to manufacturing and converting processes, methods, techniques
     and equipment and the improvements and innovations relating to same; quality control procedures and equipment; identification,
     selection, generation and propagation of tree species having improved characteristics; forest resource management; innovation and
     improvement to manufacturing and converting processes such as shipping, pulping bleaching chemical recovery papermaking, coating
     and calendaring processes and in equipment for use in such processes; reduction and remediation of environmental discharges;
     minimization or elimination of solid and liquid waste; use and optimization of raw materials in manufacturing processes; recycling and
     manufacture paper products; recycling of other paper or pulp products; energy conservation; computer software and application of
     computer controls to manufacturing
and quality control operations and to inventory control; radio frequency identification and its use in paper and packaging products; and
product process improvement development or evaluation; and (iii) information about methods, techniques, products equipment, and
processes which Verso Paper has learned do not work or do not provide beneficial results (―negative know-how‖) as well as those which
do work which provide beneficial results.
      (c) ― Unauthorized ‖ shall mean (i) in contravention of Verso Paper’s policies or procedures; (ii) otherwise inconsistent with Verso
Paper’s measures to protect its interests in the Protected Information; (iii) in contravention of any lawful instruction or directive, either
written or oral, of an Verso Paper employee empowered to issue such instruction or directive; (iv) in contravention of any duty existing
under law or contract; or (v) to the detriment of Verso Paper.

2. Confidentiality.
      (a) Employee acknowledges and agrees that by reason of employment with Verso Paper as a senior level executive in the position
of Vice President, General Counsel and Secretary, Employee has been and will be entrusted with Protected Information and may develop
Protected Information, that such information is valuable and useful to Verso Paper, that it would also be valuable and useful to
competitors and others who do not know it and that such information constitutes confidential and proprietary trade secrets of Verso Paper.
While an employee or consultant of Verso Paper, or at any time thereafter, regardless of the reasons for leaving Verso Paper, Employee
agrees not to use or disclose, directly or indirectly, any Protected Information in an Unauthorized manner or for any Unauthorized
purpose unless such information shall have become generally known in the relevant industry or independently developed with no
assistance from Employee. Further, promptly upon termination, for any reason, of Employee’s employment with Verso Paper or upon the
request of Verso Paper Employee agrees to deliver to Verso Paper all property and materials and copies thereof within Employee’s
possession or control which belong to Verso Paper or which contain Protected Information and to permanently delete upon Verso Paper’s
request all Protected Information from any computers or other electronic storage media Employee owns or uses.
       (b) While an employee of Verso Paper and after termination of Employee’s employment with Verso Paper for any reason,
Employee agrees not to take any actions which would constitute or facilitate the Unauthorized use or disclosure of Protected Information,
including transmitting or posting such Protected Information on the internet, anonymously or otherwise. Employee further agrees to take
all reasonable measures to prevent the Unauthorized use and disclosure of Protected Information and to prevent Unauthorized persons or
entities from obtaining or using Protected Information.
      (c) If Employee becomes legally compelled (by deposition, interrogatory, request for documents, subpoena, investigation, demand,
order or similar process) to disclose any Protected Information, then before any such disclosure may be made, Employee shall
immediately notify Verso Paper thereof and, at Verso Paper’s expense, shall consult with Verso Paper on the advisability of taking steps
to resist or narrow such request and cooperate with Verso Paper in any attempt to obtain a protective order or other appropriate remedy or
assurance that the Protected Information will be afforded confidential treatment. If such protective order or other appropriate remedy is
not obtained, Employee shall furnish only that portion of the Protected Information that it is advised by legal counsel is legally required to
be furnished.

                                                                   2
     3. Non-Competition.
           (a) Employee acknowledges and agrees that the business of Verso Paper and its customers is worldwide in scope, Verso Paper’s
     competitors and customers are located throughout the world, and Verso Paper’s strategic planning and Research and Development
     activities have application throughout the world and are for the benefit of customers and Verso Paper’s business throughout the world,
     and therefore, the restrictions on Employee’s competition after employment as described below apply to anywhere in the world in which
     Verso Paper or its subsidiaries are doing business. Employee acknowledges that any such competition within that geographical scope will
     irreparably injure Verso Paper. Employee acknowledges and agrees that, for that reason, the prohibitions on competition described below
     are reasonably tailored to protect Verso Paper.
          (b) While an employee or consultant of Verso Paper, Employee agrees not to compete in any manner, either directly or indirectly
     and whether for compensation or otherwise, with Verso Paper or to assist any other person or entity to compete with Verso Paper in the
     business of coated and supercalendared paper products or the operation of coated and supercalendared paper mills anywhere in the world.
          (c) After the termination of Employee’s employment with Verso Paper for any reason, Employee agrees that for a period of twelve
     (12) months (the ― Non-Compete Period ‖) following such termination Employee will not compete with Verso Paper anywhere in the
     world in which Verso Paper or its subsidiaries are doing business:
                (i) by producing, developing, selling or marketing, or assisting others to produce, develop, sell or market in the business of
           coated and supercalendared paper products or the operation of coated and supercalendared paper mills;
                 (ii) by engaging in any sales, marketing, Research and Development or managerial duties (including, without limitation,
           financial, human resources, strategic planning, or operation duties) for, whether as an employee, consultant, or otherwise, any entity
           which produces, develops, sells or markets in the business of coated and supercalendared paper products or the operation of coated
           and supercalendared paper mills;
                 (iii) by owning, managing, operating, controlling or consulting for any entity which produces, develops, sells or markets in the
           business of coated and supercalendared paper products or the operation of coated and supercalendared paper mills, provided that
           this Section 3(c)(iii) shall not prohibit Employee from being a passive owner of not more than two percent (2%) of the outstanding
           stock of any class of a corporation that is publicly traded, so long as Employee has no active participation in the business of such
           corporation; or
                (iv) by soliciting the business of any actual or active prospective customers, or targeted national accounts of Verso Paper for
           any product, process or service which is competitive with the products, processes, or services of Verso Paper, namely any products,
           processes or services of the business of coated and supercalendared paper products or the operation of coated and supercalendared
           paper mills, whether existing or contemplated for the future, on which Employee has worked, or concerning which Employee has in
           any manner acquired knowledge or Protected Information about, during the twenty four (24) months preceding termination of
           Employee’s employment.

      It shall not be a violation of this provision for Employee to accept employment with a non-competitive division or business unit of a
multi-divisional company some of whose divisions or business units are competitors of Verso Paper, so long as Employee does not engage in,
oversee, provide input or

                                                                        3
information regarding, or participate in any manner in the activities described in this paragraph as they relate to the division or business unit
which is a competitor of Verso Paper. Employee shall not assist others in engaging in activities which Employee is not permitted to take.

      4. Non-Solicitation/Non-Hire. During the term of Employee’s employment at Verso Paper and for twelve (12) months following the
termination, for any reason, of employment, Employee agrees that Employee will not, either on Employee’s own behalf or on behalf of any
other person or entity, directly or indirectly, hire, solicit, retain or encourage to leave the employ of Verso Paper (or assist any other person or
entity in hiring, soliciting, retaining or encouraging) any person who is then or was within six (6) months of the date of such hiring an
employee of Verso Paper.

      5. Tolling Period of Restrictions. Employee agrees that the periods of non-competition and non-solicitation/non-hire set forth in
Sections 3 and 4, respectively, shall be extended by the period of violation if Employee is found to be in violation of those provisions.

      6. Post-Termination Payments and Benefits. Upon the termination of Employee’s employment with Verso Paper for any reason, in
consideration of Employee’s compliance with all his obligations under this Agreement (including, without limitation, his obligations under
Sections 2, 3(c) and 4), and provided that Employee complies with all such obligations, Verso Paper shall provide post-termination payments
and benefits to Employee as follows:
            (a) During the Non-Compete Period, if Employee is unable, despite diligent search, to obtain employment consistent with
      Employee’s experience and education, Employee shall so notify Verso Paper in writing, describing in reasonable detail the efforts
      Employee has made to secure such employment that does not conflict with Employee’s non-compete obligations. Upon receipt and
      reasonable verification of the information contained in such notice, Verso Paper shall make monthly payments to Employee in an amount
      equal to Employee’s monthly base salary in effect in the month immediately preceding the termination of his employment, less applicable
      tax and other withholdings, for each month (or prorated for periods less than a month) of such unemployment during the Non-Compete
      Period. Before the close of each month for which Employee seeks such payment, Employee shall advise Verso Paper in writing of
      Employee’s efforts to obtain non-competitive employment and shall certify that although Employee diligently sought such employment,
      Employee was unable to obtain it.
             (b) Verso Paper shall pay to Employee an amount equal to the sum of the incentive awards, if any, payable to Employee under the
      Verso Paper Incentive Plan (the ― Incentive Plan ‖) for (i) the year immediately preceding the year in which termination of employment
      occurred, to the extent not previously paid to Employee, and (ii) the year in which such termination occurred, prorated for the period of
      the year in which Employee was employed by Verso Paper, in each case less applicable tax and other withholdings (collectively, the ―
      Incentive Payment ‖). The determination of the Incentive Payment shall be made by Verso Paper, in its sole and absolute discretion, and,
      with respect to the year in which termination occurred, shall be based on (i) Employee’s monthly base salary in effect in the month
      immediately preceding the termination of his employment and (ii) the assumptions relative to the Incentive Plan that (A) Employee was
      employed by Verso Paper during the entire year and is otherwise eligible and qualified to receive the Incentive Payment, (B) Employee’s
      monthly base salary remained in effect and was not changed during the remainder of the year, and (C) Employee achieved all of his
      individual performance measures, if any, during the year. Verso Paper shall make the Incentive Payment to Employee at the same time
      that it makes other incentive payments under the Incentive Plan to the employees of Verso Paper.
           (c) Verso Paper shall (i) continue Employee’s coverage of the employment-related benefits described in Exhibit A for up to
      twenty-four (24) months following Employee’s termination of

                                                                          4
     employment with Verso Paper, in accordance with and subject to the terms and conditions set forth in the attached Exhibit A, and
     (ii) contribute on Employee’s behalf an amount equal to his Lost Retirement Benefits (as defined below) to the Verso Paper Deferred
     Compensation Plan. As used in this Agreement, the term ― Lost Retirement Benefits ‖ shall mean the projected value of employer
     contributions under the Verso Paper Retirement Savings Plan, the Verso Paper Deferred Compensation Plan, and the Verso Paper
     Supplemental Salaried Retirement Savings Plan (collectively, the ― Plans ‖) that Employee would have received had he remained actively
     employed with Verso Paper during the twenty-four (24) months following Employee’s termination of employment with Verso Paper. The
     determination of the Lost Retirement Benefits shall be made by Verso Paper, in its sole and absolute discretion, and shall be based on
     (i) Employee’s monthly base salary in effect in the month immediately preceding the termination of his employment and (ii) the
     assumption that Employee’s salary deferrals during such twenty-four (24) month period are in such amounts as would produce the
     maximum possible matching contribution by Verso Paper under the Plans. Verso Paper shall contribute on Employee’s behalf the value
     of his Lost Retirement Benefits to the Verso Paper Deferred Compensation Plan in a lump sum payment as soon as reasonably practicable
     after the determination of the Lost Retirement Benefits is made.

      7. Duty to Show Agreement to Prospective Employer. During Employee’s employment with Verso Paper and for twelve (12) months
thereafter, Employee shall, prior to accepting other employment, provide a copy of this Agreement to any recruiter who assists Employee in
locating employment other than with Verso Paper and to any prospective employer with which Employee discusses potential employment.

       8. Representations, Warranties and Acknowledgements. In addition to the representations, warranties and obligations set forth
throughout this Agreement, Employee acknowledges that (a) Protected Information is commercially and competitively valuable to Verso Paper
and critical to its success; (b) the Unauthorized use or disclosure of Protected Information or the violation of the covenants set forth in Sections
2, 3, or 4 would cause irreparable harm to Verso Paper; (c) by this Agreement, Verso Paper is taking reasonable steps to protect its legitimate
interests in its Protected Information; (d) Employee has developed, or will develop legally unique relationships with customers of Verso Paper;
and (e) nothing herein shall prohibit Verso Paper from pursuing any remedies whether in law or equity, available to Verso Paper for breach or
threatened breach of this Agreement. Employee further acknowledges and agrees that as a senior executive of Verso Paper Employee performs
unique and valuable services to Verso Paper of an intellectual character and that Employee’s services will be difficult for Verso Paper to
replace. Employee further acknowledges and agrees that Verso Paper is providing Employee with significant consideration in this Agreement
for entering into the Agreement and that Verso Paper’s remedies for any breach of this Agreement are in addition to and not in place of any
other remedies Verso Paper may have at law or equity or under any other agreements.

      9. Section 409A of the Code. The parties hereto acknowledge and agree that, to the extent applicable, this Agreement shall be interpreted
in accordance with, and incorporate the terms and conditions required by, Section 409A of the Internal Revenue Code of 1986, as amended,
and the Department of Treasury Regulations and other interpretive guidance issued thereunder, including without limitation any such
regulations or other guidance that may be issued after the date hereof (― Section 409A ‖). Notwithstanding any provision of this Agreement to
the contrary, in the event that Verso Paper determines that any amounts payable hereunder will be immediately taxable to Employee under
Section 409A, Verso Paper and Employee shall cooperate in good faith to (a) adopt such amendments to this Agreement and appropriate
policies and procedures, including amendments and policies with retroactive effect, that they mutually determine to be necessary or appropriate
to preserve the intended tax treatment of the benefits provided by this Agreement, to preserve the economic benefits of this Agreement, and to
avoid less favorable accounting or tax consequences for Verso Paper and/or (b) take such other actions as mutually determined to be necessary
or appropriate to exempt any amounts payable hereunder from

                                                                         5
Section 409A or to comply with the requirements of Section 409A and thereby avoid the application of penalty taxes thereunder. In addition,
and notwithstanding any provision of this Agreement to the contrary, to the extent subject to Section 409A, payment to a ―specified employee‖
as defined in Section 409A(2)(B)(i) shall not be made before the date which is six (6) months after the date of termination of employment.

     10. General.
           (a) Employee acknowledges and agrees that the parties have attempted to limit Employee’s right to compete only to the extent
     necessary to protect Verso Paper from unfair competition and protect the legitimate interests of Verso Paper. If any provision or clause of
     this Agreement or portion thereof shall be held by any court of competent jurisdiction to be illegal, void or unenforceable in such
     jurisdiction, the remainder of such provisions shall not thereby be affected and shall be given full effect, without regard to the invalid
     portion. It is the intention of the parties and Employee agrees, that if any court construes any provision or clause of this Agreement or any
     portion thereof to be illegal, void or unenforceable because of the duration of such provision or the area or matter covered thereby, such
     court shall reduce the duration, area or matter of such provision and in its reduced form, such provision shall then be enforceable and
     shall be enforced.
           (b) Employee acknowledges that neither this Agreement nor any provision hereof can be modified, abrogated or waived except in a
     written document signed by the Vice President of Human Resource or the President and Chief Executive Officer of Verso Paper, or in the
     event of the absence of either of these executives or the vacancy of either of these positions, such other officer of Verso Paper as Verso
     Paper’s Board of Directors shall designate in writing.
           (c) This Agreement shall be governed by and in accordance with the laws and public policies of the State of Delaware.
          (d) Employee hereby consents to the jurisdiction of and agrees that any claim arising out of or relating to this Agreement may be
     brought in the courts of the State of Delaware.
          (e) This Agreement and any rights thereunder may be assigned by Verso Paper and if so assigned shall operate to protect the
     Protected Information and relationships of Verso Paper as well as such information and relationships of the assignee.
            (f) Should either party to this Agreement breach any of the terms of this Agreement, that party shall pay to the non-defaulting party
     all of the non-defaulting party’s costs and expenses, including attorney’s and experts’ fees in enforcing the provisions of the Agreement
     as to which a breach is found.
          (g) Employee agrees that Verso Paper’s determination not to enforce this or similar agreements as to specific violations shall not
     operate as a waiver or release of Employee’s obligations under this Agreement.
           (h) Employee understands that Employee owes fiduciary and common law duties to Verso Paper in addition to the covenants set
     forth above prohibiting the misuse or disclosure of trade secrets or confidential information and the unlawful interference with Verso
     Paper’s business and customer relationships.
           (i) Employee acknowledges and agrees that Verso Paper has advised Employee that Employee may consult with an independent
     attorney before signing this Agreement.

                                                                        6
          (j) This Agreement sets forth the entire agreement of the parties, and fully supersedes any and all prior agreements or
     understandings between the parties pertaining to the subject matter hereof.

      IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and delivered effective as of the date first set
forth above.

                                                                                      VERSO PAPER HOLDINGS LLC

                                                                                      By: /s/ Michael A. Jackson
                                                                                          Michael A. Jackson
                                                                                          President and Chief Executive Officer

                                                                                      /s/ Peter H. Kesser
                                                                                      Peter H. Kesser

                                                                       7
                                                                  EXHIBIT A

                                                  EMPLOYMENT-RELATED BENEFITS

Benefits:
     •      Coverage under Verso Paper Medical and Dental Plan for Employee and his or her eligible dependents for up to twenty-four
            (24) months.
     •      Reimbursement for (i) all costs to convert to an individual policy the basic life insurance coverage on Employee’s life only, in such
            amount as in effect at termination of employment, and (ii) the premiums necessary to continue such converted coverage for up to
            twenty-four (24) months. Reimbursement shall be conditioned on Employee providing Verso Paper with satisfactory evidence that
            the conversion costs and premiums have been incurred.

Additional Terms and Conditions:
     •      Verso Paper shall pay Employee an amount equal to the aggregate of any and all federal, state and local income tax imposed on
            Employee resulting from the benefits set forth above, as determined by Verso Paper in its sole and absolute discretion.
     •      Benefit coverage/reimbursement is subject to early termination upon Employee’s re-employment with comparable benefits
            available, as determined by Verso Paper in its sole and absolute discretion.
     •      Verso Paper reserves the right to modify, revoke, suspend, terminate or change any or all of its benefit plans, programs or policies,
            in whole or in part, at any time and from time to time, and with or without notice, provided that any such change or modification is
            applicable to all similarly situated employees of Verso Paper.

                                                                        8
                                                                                                                                     Exhibit 23.2

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM AND REPORT ON SCHEDULE
We consent to the use in this Amendment No 2 to Registration Statement No. 333-148201 of our report dated March 31, 2008 (which report
expresses an unqualified opinion on the combined financial statements of Verso Paper One Corp. (which has been renamed Verso Paper
Corp.), Verso Paper Two Corp., Verso Paper Three Corp., Verso Paper Four Corp., and Verso Paper Five Corp., (collectively the ―Company‖)
(―Successor‖) and includes an explanatory paragraph relating to Verso Paper Corp.’s change in accounting policy to adopt Statement of
Financial Accounting Standard No. 158 and to the acquisition of the predecessor business and expresses an unqualified opinion on the
combined financial statements of the Coated and Supercalendered Papers Division of International Paper Company (―Predecessor‖) and
includes an explanatory paragraph referring to the preparation of the combined financial statements from separate records maintained by the
Coated and Supercalendered Papers Division of International Paper Company and the International Paper Company and that the combined
financial statements may not be indicative of the conditions that would have existed or the results of operations if the Coated and
Supercalendered Papers Division of International Paper Company had operated as an unaffiliated entity, appearing in the Prospectus, which is a
part of such Registration Statement, and to the reference to us under the headings ―Selected Historical Combined Financial Data‖ and
―Experts‖ in such Prospectus.

Our audits of the combined financial statements referred to in our aforementioned report also included the financial statement schedule listed in
Item 16. This financial statement schedule is the responsibility of management. Our responsibility is to express an opinion based on our audits.
In our opinion, such financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly
in all material respects, the information set forth therein.

/s/ Deloitte & Touche LLP
Memphis, Tennessee
March 31, 2008
reserve the economic benefits of this Agreement, and to
avoid less favorable accounting or tax consequences for Verso Paper and/or (b) take such other actions as mutually determined to be necessary
or appropriate to exempt any amounts payable hereunder from

                                                                          5
Section 409A or to comp ly with the requirements of Section 409A and thereby avoid the application of penalty taxes thereunder. In addition,
and notwithstanding any provision of this Agreement to the contrary, to the extent subject to Section 409A, pay ment to a ―specified emp loyee‖
as defined in Section 409A(2)(B)(i) shall not be made before the date which is six (6) months after the date of termination of emp loyment.

     10. General.
           (a) Emp loyee acknowledges and agrees that the parties have attempted to limit Emp loyee ’s right to compete only to the extent
     necessary to protect Verso Paper fro m unfair co mpetition and protect the legitimate interests of Verso Paper. If any provisio n or clause of
     this Agreement or portion thereof shall be held by any court of co mpetent jurisdiction to be illegal, vo id or unenforceable in such
     jurisdiction, the remainder o f such provisions shall not thereby be affected and shall be g iven full effect, without regard t o the invalid
     portion. It is the intention of the parties and Emp loyee agrees, that if any court construes any provision or clause of this Agreement or any
     portion thereof to be illegal, void or unenforceable because of the duration of such provision or the area or matter covered thereby, such
     court shall reduce the duration, area or matter of such provision and in its reduced form, such provision shall then be enforceable and
     shall be enforced.
           (b) Emp loyee acknowledges that neither this Agreement nor any provision hereof can be modified, abrogated or waived except in a
     written document signed by the Vice President of Hu man Resource or the President and Chief Executive Officer of Verso Paper, or in the
     event of the absence of either of these executives or the vacancy of either of these positions, such other officer of Verso P aper as Verso
     Paper’s Board of Directors shall designate in writ ing.
           (c) Th is Agreement shall be governed by and in accordance with the laws and public policies of the State of Delaware.
          (d) Emp loyee hereby consents to the jurisdiction of and agrees that any claim arising out of or relating to this Agreement ma y b e
     brought in the courts of the State of Delaware.
          (e) Th is Agreement and any rights thereunder may be assigned by Verso Paper an d if so assigned shall operate to protect the
     Protected Information and relat ionships of Verso Paper as well as such information and relat ionships of the assignee.
            (f) Should either party to this Agreement breach any of the terms of this Agreement, that pa rty shall pay to the non-defaulting party
     all of the non-defaulting party’s costs and expenses, including attorney’s and experts’ fees in enforcing the provisions of the Agreement
     as to which a breach is found.
          (g) Emp loyee agrees that Verso Paper’s determination not to enforce this or similar agreements as to specific vio lations shall not
     operate as a waiver or release of Emp loyee’s obligations under this Agreement.
           (h) Emp loyee understands that Emp loyee owes fiduciary and co mmon law duties to Verso Paper in addition to the covenants set
     forth above prohibiting the misuse or disclosure of trade secrets or confidential information and the unlawful interference w ith Verso
     Paper’s business and customer relationships.
           (i) Emp loyee acknowledges and agrees that Verso Paper has advised Emp loyee that Employee may consult with an independent
     attorney before signing this Agreement.

                                                                        6
          (j) This Agreement sets forth the entire agreement of the parties, and fully supersedes any and all prior agreements or
     understandings between the parties pertaining to the subject matter hereof.

      IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and delivered effective as of the date first set
forth above.

                                                                                      VERSO PA PER HOLDINGS LLC

                                                                                      By: /s/ Michael A. Jackson
                                                                                          Michael A. Jackson
                                                                                          President and Chief Executive Officer

                                                                                      /s/ Peter H. Kesser
                                                                                      Peter H. Kesser

                                                                       7
                                                                  EXHIB IT A

                                                  EMPLOYMENT-RELATED B ENEFITS

Benefits:
     •      Coverage under Verso Paper Medical and Dental Plan for Employee and his or her eligible dependents for up to twenty -four
            (24) months.

     •      Reimbursement for (i) all costs to convert to an individual policy the basic life insurance coverage on Employee ’s life only, in s uch
            amount as in effect at termination of emp loy ment, and (ii) the premiu ms necessary to continue such converted coverage for up to
            twenty-four (24) months. Reimbu rsement shall be conditioned on Emp loyee providing Verso Paper with satisfactory evidence that
            the conversion costs and premiu ms have been incurred.

Additional Terms and Conditions:
     •      Verso Paper shall pay Emp loyee an amount equal to the aggregate of any and all federal, state and local income tax imposed on
            Emp loyee resulting fro m the benefits set forth above, as determined by Verso Paper in its sole and absolute discretion.
     •      Benefit coverage/reimbursement is subject to early termination upon Emp loyee ’s re-employ ment with co mparable benefits
            available, as determined by Verso Paper in its sole and absolute discretion.

     •      Verso Paper reserves the right to modify, revoke, suspend, terminate or change any or all of its benefit plans, programs or policies,
            in whole or in part, at any time and fro m time to time, and with or without notice, provided that any such change or modifica tio n is
            applicable to all similarly situated emp loyees of Verso Paper.

                                                                        8
                                                                                                                                     Exhi bit 23.2

CONS ENT OF INDEPENDENT REGIS TERED PUB LIC ACCOUNTING FIRM AND REPORT ON SCHED ULE
We consent to the use in this Amendment No 2 to Reg istration Statement No. 333-148201 of our report dated March 31, 2008 (which report
expresses an unqualified opinion on the combined financial statements of Verso Paper One Corp. (which has been renamed Ve rso Paper
Corp.), Verso Paper Two Corp., Verso Paper Three Corp., Verso Paper Four Corp., and Verso Paper Five Corp., (co llect ively t he ―Co mpany‖)
(―Successor‖) and includes an exp lanatory paragraph relating to Verso Paper Corp. ’s change in accounting policy to adopt Statement of
Financial Accounting Standard No. 158 and to the acquisition of the predecessor business and expresses an unqualified opin ion on the
combined financial statements of the Coated and Supercalendered Papers Division of International Paper Co mpany (―Predecessor‖) and
includes an exp lanatory paragraph referring to the preparation of the comb ined financial statements fro m separate records maintained by the
Coated and Supercalendered Papers Div ision of International Paper Co mpany and the International Paper Co mpany and that the comb ined
financial statements may not be indicative of the conditions that would have existed or the results of operations if the Coat ed and
Supercalendered Papers Div ision of International Paper Co mpany had operated as an unaffiliated entity, appearing in the Prospectus, which is a
part of such Registration Statement, and to the reference to us under the headings ―Selected Historical Co mbined Financial Data‖ and
―Experts‖ in such Prospectus.

Our audits of the comb ined financial statements referred to in our aforementioned report also included the financial statement schedule listed in
Item 16. This financial statement schedule is the responsibility of management. Our responsibility is to express an opinion based on our audits.
In our opinion, such financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly
in all material respects, the information set forth therein.

/s/ Deloitte & Touche LLP
Memphis, Tennessee
March 31, 2008