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TABLE OF CONTENTS


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ARTICLE I

DEFINITIONS

SECTION 1.01	Terms Defined in this Section		1
SECTION 1.02	Other Definitions		9
SECTION 1.03	Interpretation		11

ARTICLE II

THE ARRANGEMENT AND THE MERGER

SECTION 2.01	Formation of Parent; Merger Sub		12
SECTION 2.02	The Merger		12
SECTION 2.03	The Arrangement		13
SECTION 2.04	Certain Implementation Steps by ACI		13
SECTION 2.05	Certain Implementation Steps by Bowater and Parent		14
SECTION 2.06	Interim Order		14
SECTION 2.07	Closing		15
SECTION 2.08	Joint Proxy Statement; Meetings; Change in Recommendation		15
SECTION 2.09	Additional Securities Matters		17
SECTION 2.10	Cooperation in Filings		18
SECTION 2.11	Execution of Transaction Documents		19
SECTION 2.12	Issuance of Stock in the Arrangement		19

ARTICLE III

EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES

SECTION 3.01	Effect on Capital Stock		20
SECTION 3.02	Exchange of Certificates		21
SECTION 3.03	Bowater Stock Options and Other Stock-Based Awards		25

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF BOWATER

SECTION 4.01	Organization, Standing and Corporate Power		27
SECTION 4.02	Subsidiaries		27
SECTION 4.03	Capital Structure		27
SECTION 4.04	Authority; Noncontravention		28
SECTION 4.05	Bowater Public Documents		30
SECTION 4.06	Information Supplied		32
SECTION 4.07	Undisclosed Liabilities		32


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SECTION 4.08	Absence of Certain Changes or Events		32
SECTION 4.09	Litigation		33
SECTION 4.10	Bowater Material Contracts		33
SECTION 4.11	Compliance with Laws; Environmental Matters		35
SECTION 4.12	Labor Relations and Other Employment Matters		36
SECTION 4.13	Pension and Benefits Compliance		36
SECTION 4.14	Taxes		41
SECTION 4.15	Title to Properties		43
SECTION 4.16	Intellectual Property		43
SECTION 4.17	State Takeover Laws; Bowater Certificate Provisions; Rights Agreements		44
SECTION 4.18	Brokers and Other Advisors		44
SECTION 4.19	Opinion of Financial Advisors		44
SECTION 4.20	Insurance		44
SECTION 4.21	Vote Required		45
SECTION 4.22	CallCo and ExchangeCo Status		45
SECTION 4.23	Exchangeable Shares		45
SECTION 4.24	No Other Representations or Warranties		45

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF ACI

SECTION 5.01	Organization, Standing and Corporate Power		46
SECTION 5.02	Subsidiaries		46
SECTION 5.03	Capital Structure		47
SECTION 5.04	Authority; Noncontravention		47
SECTION 5.05	ACI Public Documents		49
SECTION 5.06	Information Supplied		51
SECTION 5.07	Undisclosed Liabilities		51
SECTION 5.08	Absence of Certain Changes or Events		51
SECTION 5.09	Litigation		51
SECTION 5.10	ACI Material Contracts		52
SECTION 5.11	Compliance with Laws; Environmental Matters		53
SECTION 5.12	Labor Relations and Other Employment Matters		54
SECTION 5.13	Pension and Benefits Compliance		55
SECTION 5.14	Taxes		59
SECTION 5.15	Title to Properties		61
SECTION 5.16	Intellectual Property		62
SECTION 5.17	Brokers and Other Advisors		62
SECTION 5.18	Opinion of Financial Advisors		63
SECTION 5.19	Insurance		63
SECTION 5.20	Vote Required		63
SECTION 5.21	No Other Representations or Warranties		63


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ARTICLE VI

COVENANTS RELATING TO THE BUSINESS

SECTION 6.01