EX-10.37 9 dex1037.htm EXHIBIT 10.37 Exhibit 10.37

EXHIBIT 10.37

AMENDED AND RESTATED
PURCHASE AND CONTRIBUTION AGREEMENT

Dated as of January 31, 2008

Among

ABITIBI-CONSOLIDATED INC.

and

ABITIBI CONSOLIDATED SALES CORPORATION

as Sellers

and

ABITIBI-CONSOLIDATED U.S. FUNDING CORP.

as Purchaser

TABLE OF CONTENTS


		Page
ARTICLE I DEFINITIONS			1
	SECTION 1.01. Certain Defined Terms		1
	SECTION 1.02. Other Terms		12

ARTICLE II AMOUNTS AND TERMS OF PURCHASES AND CONTRIBUTIONS			12
	SECTION 2.01. Facility		12
	SECTION 2.02. Making Purchases		13
	SECTION 2.03. Collections		14
	SECTION 2.04. Settlement Procedures		15
	SECTION 2.05. Payments and Computations, Etc		16
	SECTION 2.06. Contributions		16
	SECTION 2.07. Payments Free and Clear of Taxes, Etc		16
	SECTION 2.08. Repurchase Option		18

ARTICLE III CONDITIONS OF PURCHASES			18
	SECTION 3.01. Conditions Precedent to Initial Purchase from the Sellers		18
	SECTION 3.02. Conditions Precedent to All Purchases		20

ARTICLE IV REPRESENTATIONS AND WARRANTIES			21
	SECTION 4.01. Representations and Warranties of the Sellers		21

ARTICLE V COVENANTS			25
	SECTION 5.01. Covenants of the Sellers		25
	SECTION 5.02. Covenant of the Sellers and the Purchaser		29

ARTICLE VI ADMINISTRATION AND COLLECTION			30
	SECTION 6.01. Designation of Servicer		30
	SECTION 6.02. Duties of Servicer		30
	SECTION 6.03. Servicer Fee		32
	SECTION 6.04. Certain Rights of the Purchaser		32
	SECTION 6.05. Rights and Remedies		33
	SECTION 6.06. Transfer of Records to Purchaser		34
	SECTION 6.07. Limitation on Activities of Servicer in Canada		34

ARTICLE VII EVENTS OF TERMINATION			35
	SECTION 7.01. Events of Termination		35

ARTICLE VIII INDEMNIFICATION			37
	SECTION 8.01. Indemnities by the Sellers		37


		Page
ARTICLE IX MISCELLANEOUS			40
	SECTION 9.01. Amendments, Etc		40
	SECTION 9.02. Notices, Etc		40
	SECTION 9.03. Binding Effect; Assignability		41
	SECTION 9.04. Costs, Expenses and Taxes		41
	SECTION 9.05. No Proceedings		41
	SECTION 9.06. [Intentionally Omitted]		42
	SECTION 9.07. GOVERNING LAW		42
	SECTION 9.08. Third Party Beneficiary		42
	SECTION 9.09. Execution in Counterparts		42
	SECTION 9.10. Consent to Jurisdiction		42
	SECTION 9.11. Judgment		43
	SECTION 9.12. Execution by ACI		43
	SECTION 9.13. Language		43
	SECTION 9.14. Acknowledgment		43

EXHIBITS


EXHIBIT A		Credit and Collection Policy
EXHIBIT B		Deposit Accounts
EXHIBIT C		Form of Deferred Purchase Price Note
EXHIBIT D		[Intentionally Omitted]
EXHIBIT E		Addresses and Prior Names
EXHIBIT F		Seller UCC and PPSA Information
EXHIBIT G		Form of Notice of Continuance and Change of Address
EXHIBIT H		Form of Notice of Amalgamation
EXHIBIT I		Form of Notice of Change of Address

ANNEX A		Insurance Policy

AMENDED AND RESTATED
PURCHASE AND CONTRIBUTION AGREEMENT

Dated as of January 31, 2008

ABITIBI-CONSOLIDATED INC., a Canadian corporation, and ABITIBI CONSOLIDATED SALES CORPORATION, a Delaware corporation (each, a "Seller" and together, the "Sellers"), and ABITIBI-CONSOLIDATED U.S. FUNDING CORP., a Delaware corporation (the "Purchaser"), agree as follows:

PRELIMINARY STATEMENTS. (1) Certain terms which are capitalized and used throughout this Agreement (in addition to those defined above) are defined in Article I of this Agreement.

(2) The Sellers and the Purchaser are parties to that certain Purchase and Contribution Agreement dated as of October 27, 2005 (as amended prior to the date hereof, the "Original PCA").

(3) The Sellers have sold Receivables to the Purchaser and wish to continue to sell Receivables to the Purchaser, and the Purchaser is prepared to purchase such Receivables on the terms set forth herein.

(4) The U.S. Seller has also contributed, and may wish to continue to contribute, Receivables to the capital of the Purchaser on the terms set forth herein.

(5) The parties hereto wish to amend and restate the Original PCA in its entirety.

NOW, THEREFORE, the parties agree that the Original PCA is amended and restated to read in its entirety as follows:

ARTICLE I

DEFINITIONS

SECTION 1.01. Certain Defined Terms. As used in this Agreement, the following terms shall have the following meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined):

"ACCC" means Abitibi-Consolidated Company of Canada, a Canadian corporation.

"ACI" means Abitibi-Consolidated Inc., a Canadian corporation.

"ACSC" means Abitibi Consolidated Sales Corporation, a Delaware corporation.

"Adverse Claim" means a lien, security interest, mortgage, pledge, assignment, hypothec, hypothecation, privilege, title retention or other charge or encumbrance, or any other type of preferential arrangement (which, for the avoidance of doubt, does not include Taxes not yet due and payable).

"Affiliate" means, as to any Person, any other Person that, directly or indirectly, is in control of, is controlled by or is under common control with such Person or is a director or officer of such Person.

"Agent" has the meaning specified in the RPA.

"Alternate Base Rate" means a fluctuating interest rate per annum as shall be in effect from time to time, which rate shall be at all times equal to the highest of:

(a) the rate of interest announced publicly by Citibank, N.A. in New York, New York, from time to time as Citibank, N.A.'s base rate;

(b) 1/2 of one percent above the latest three-week moving average of secondary market morning offering rates in the United States for three-month certificates of deposit of major United States money market banks, such three-week moving average being determined weekly on each Monday (or, if such day is not a Business Day, on the next succeeding Business Day) for the three-week period ending on the previous Friday by Citibank, N.A. on the basis of such rates reported by certificate of deposit dealers to and published by the Federal Reserve Bank of New York or, if such publication shall be suspended or terminated, on the basis of quotations for such rates received by Citibank, N.A. from three New York certificate of deposit dealers of recognized standing selected by Citibank, N.A., in either case adjusted to the nearest 1/4 of one percent or, if there is no nearest 1/4 of one percent, to the next higher 1/4 of one percent; and

"Amalgamated Entity " has the meaning specified in the definition of "Amalgamation" set forth below.

"Amalgamation" means the amalgamation of the Continued Entity with a newly incorporated Nova Scotia limited liability company, as described in more detail in Exhibit H (the resulting entity, the "Amalgamated Entity").

"Amalgamation Effective Date" has the meaning specified in Section 9.01(d).

"Amalgamation Opinion" has the meaning specified in Section 9.01(c)(B).

"Approved Country" means the United States, Canada, and any other country outside of the European Area other than those:

(i) whose government or central bank (x) shall have prohibited the sale of the currency of such country in exchange for United States dollars or shall have admitted in writing its inability to pay its debts as the same become due, (y) shall have declared a moratorium on the payment of its debts or the debts of any national governmental authority of such country, or (z) shall have ceased to be a member of the international Monetary Fund or ceased to be eligible to use the resources of the International Monetary Fund; or

(ii) with respect to which the United States shall have imposed economic sanctions.

"Bank Agreement" means the Credit Agreement dated as of October 3, 2005 among ACI and Abitibi-Consolidated Company of Canada, as borrowers, Canadian Imperial Bank of Commerce and the other financial institutions from time to time party thereto, as the same may be amended, restated or supplemented from time to time.

"Business Day" means any day on which banks are not authorized or required to close in London, New York City or Montreal.

"Canadian Dollar" or "CAD" means dollars in the lawful currency of Canada.

"Canadian Seller" means ACI.

"Change of Address" means the first change of address of the principal place of business, chief executive office and location of receivables records of ACSC hereunder as described in the Notice of Change of Address.

"Change of Address Effective Date" has the meaning specified in Section 9.01(e).

"Collections" means, with respect to any Receivable, all cash collections and other cash proceeds of such Receivable, including, without limitation, (i) all cash proceeds of Related Security with respect to such Receivable, (ii) all funds deemed to have been received by a Seller or any other Person as a Collection pursuant to Section 2.04 and (iii) any Insurance Proceeds received with respect to such Receivable.

"Continuance" means ACI's continuance of itself under the laws of Nova Scotia and the related change of the address of its registered office, as described in more detail in Exhibit G (such continued entity, the "Continued Entity").

"Continuance Effective Date" has the meaning specified in Section 9.01(c).

"Continued Entity" has the meaning specified in the definition of "Continuance" set forth above.

"Contract" means an agreement between a Seller and an Obligor (including, in the case of any open account agreement, an invoice), pursuant to or under which such Obligor shall be obligated to pay for merchandise, insurance or services from time to time.

"Contributed Receivable" has the meaning specified in Section 2.06.

"Control Event" means any event which constitutes a "Control Event" under the RPA.

"Credit and Collection Policy" means those receivables credit and collection policies and practices of the applicable Seller in effect on the date of this Agreement applicable to the Receivables and described in Exhibit A hereto, as modified in compliance with this Agreement.

"Debt" means (i) indebtedness for borrowed money, (ii) obligations evidenced by bonds, debentures, notes or other similar instruments, (iii) obligations to pay the deferred purchase price of property or services, (iv) obligations as lessee under leases which shall have been or should be, in accordance with generally accepted accounting principles, recorded as capital leases, and (v) obligations under direct or indirect guaranties in respect of, and obligations (contingent or otherwise) to purchase or otherwise acquire, or otherwise to assure a creditor against loss in respect of, indebtedness or obligations of others of the kinds referred to in clauses (i) through (iv) above.

"Debt Rating" for any Person, means the public rating by S&P of such Person's long term non credit enhanced, senior unsecured debt, or the corporate family rating assigned to such Person by Moody's.

"Defaulted Receivable" means a Receivable:

(i) as to which any payment, or part thereof, remains unpaid for more than 90 days from the original due date for such payment;

(ii) as to which the Obligor thereof or any other Person obligated thereon has taken any action, or suffered any event to occur, of the type described in Section 7.01(g);

(iii) which, consistent with the Credit and Collection Policy, would be written off the relevant Seller's books as uncollectible; or

(iv) for which the relevant Seller has (or, consistent with its Credit and Collection Policy, should have) established an Obligor specific reserve for nonpayment.

"Deferred Purchase Price" means the portion of the Purchase Price of Purchased Receivables purchased from and originated by the U.S. Seller on any Purchase Date exceeding the amount of the Purchase Price under Section 2.02 to be paid in cash to the U.S. Seller. The obligations of the Purchaser in respect of the Deferred Purchase Price due to the U.S. Seller shall be evidenced by the Purchaser's subordinated promissory note to such Seller in the form of Exhibit C hereto.

"Delinquent Receivable" means a Receivable that is not a Defaulted Receivable and:

(i) as to which any payment, or part thereof, remains unpaid for more than 30, but not more than 90, days from the original due date for such payment or

(ii) which, consistent with the Credit and Collection Policy, would be classified as delinquent by the applicable Seller.

"Deposit Account" means an account maintained at a Deposit Bank into which (i) Collections in the form of checks and other items are deposited that have been sent to one or more Lock-Boxes by Obligors and/or (ii) Collections in the form of electronic funds transfers and other items are paid directly by Obligors.

"Deposit Account Agreement" means an agreement among a Seller, the Purchaser (or its assignees or designees) and any Deposit Bank in form and substance satisfactory to the Purchaser (or its assignees or designees) in substantially the form of Annex B to the RPA.

"Deposit Bank" means any of the banks holding one or more Deposit Accounts.

"Diluted Receivable" means, without duplication, that portion (and only that portion) of any Receivable which is either (a) reduced or canceled as a result of (i) any defective, rejected or returned merchandise or services, any cash discount, or any failure by the applicable Seller to deliver any merchandise or provide any services or otherwise to perform under the underlying Contract, (ii) any change in the terms of, or cancellation of, a Contract or any cash discount, discount for quick payment or other adjustment by the applicable Seller which reduces the amount payable by the Obligor on the related Receivable (except any such change or cancellation resulting from or relating to the financial inability to pay or insolvency of the Obligor of such Receivable) or (iii) any setoff by an Obligor in respect of any claim by such Obligor as to amounts owed by it on the related Receivable (whether such claim arises out of the same or a related transaction or an unrelated transaction), (b) subject to any specific dispute, offset, counterclaim or defense whatsoever (except the discharge in bankruptcy of the Obligor thereof) or (c) the outstanding balance of the related invoice that was reversed due to unship-reship transactions; provided that Diluted Receivables are calculated assuming that all chargebacks are resolved in the Obligor's favor.

"Discount" means, in respect of each Purchase from the Canadian Seller, 1% of the Outstanding Balance of the Receivables that are the subject of such Purchase and, in respect of each Purchase from the U.S. Seller, 1% of the Outstanding Balance of the Receivables that are the subject of such Purchase (for the purposes of calculating Tangible Net Worth, the Discount shall be the Discount applicable to the U.S. Seller); provided, however, any of the foregoing Discounts may be revised prospectively by request of any of the parties hereto to reflect changes in recent experience with respect to write-offs, timing and cost of Collections and cost of funds, provided that such revision is consented to by each of the relevant parties (it being understood that each party agrees to duly consider such request but shall have no obligation to give such consent).

"Dollar Equivalent" means, as of any date, the amount obtained by applying the rate for converting currency into Dollars at the spot rate of exchange for that currency as reasonably determined and advised by the Agent.

"Dollars" or "$" means dollars in the lawful currency of the United States.

"Eligible Obligor" means an Obligor which:

(i) has a billing address in an Approved Country; and

(ii) is not a Person with respect to which the United States, Canada or any other Approved Country shall have imposed sanctions; and

(iii) is not in violation of any applicable law, rule or regulation relating to terrorism or money-laundering ("Anti-Terrorism Laws"), including Executive Order No. 13224 on Terrorist Financing, effective September 24, 2001 (the "Executive Order"), and the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Public Law 107-56 and the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada); and

(iv) is not a Person (A) that is listed in the annex to, or otherwise subject to the provisions of, the Executive Order, (B) that is owned or controlled by, or acting for or on behalf of, any Person that is listed in the annex to, or is otherwise subject to the provisions of, the Executive Order, (C) with which an Affected Person or an Originator is prohibited from dealing or otherwise engaging in any transaction by any Anti-Terrorism Law, (D) that commits, threatens or conspires to commit or supports "terrorism" as defined in the Executive Order, or (E) that is named as a "specifically designated national and blocked person" on the most current list published by the U.S. Treasury Department Office of Foreign Assets Control at its official website or any replacement website or other replacement official publication of such list or any similar lists published in any other Approved Country; and

(v) is not a Person (A) whose property or interest in property is otherwise blocked or subject to blocking pursuant to Section 1 of the Executive Order or any other Anti-Terrorism Law, or (B) that engages in any dealings or transactions prohibited by Section 2 of the Executive Order or any other Anti-Terrorism Law, or is otherwise associated with any such Person in any manner violative of such Section 2 or any other Anti-Terrorism Law.

"Eligible Receivable" means a Receivable:

(i) (x) the related Obligor of which is (A) Vertis Inc. or (B) American Color Graphics, Inc., or (y) which is, prior to any Insurance Policy Event, fully insured (to the extent provided for therein) by the Insurance Policy;

(ii) the Obligor of which is an Eligible Obligor, is not an Affiliate of any of the parties hereto, and is not a Canadian federal or provincial Crown corporation;

(iii) the Obligor of which is not a government or a governmental subdivision or agency; provided, however, that if, at the time of the transfer thereof under this Agreement, a Receivable satisfies all of the requirements of an Eligible Receivable other than this clause (iii), such Receivable shall be an Eligible Receivable, but only to the extent that including such Receivable as an Eligible Receivable will not cause the aggregate Outstanding Balance of all Receivables included as Eligible Receivables, the Obligor of which is a government or a governmental subdivision or agency, to exceed 1% of the aggregate Outstanding Balance of all Eligible Receivables;

(iv) which, at the time of the transfer thereof under this Agreement, is not a Defaulted Receivable;

(v) the Obligor of which, at the time of the transfer of such Receivable under this Agreement, is not the Obligor of any Defaulted Receivables which in the aggregate constitute 10% or more of the aggregate Outstanding Balance of all Receivables of such Obligor;

(vi) which has been billed and, according to the Contract related thereto, is required to be paid in full within 60 days of the original billing date therefor or, prior to any Insurance Policy Event, within 90 days of the original billing date therefor if the "maximum payment terms" with respect to such Receivable set forth in the Insurance Policy permits such payment terms;

(vii) which is an obligation representing all or part of the sales price of merchandise, insurance or services within the meaning of Section 3(c)(5) of the Investment Company Act of 1940, as amended, and the nature of which is such that its purchase with the proceeds of notes would constitute a "current

transaction" within the meaning of Section 3(a)(3) of the Securities Act of 1933, as amended;

(viii) which (A) in the case of a Receivable originated by the U.S. Seller, is an "account" or "payment intangible" within the meaning of Article 9 of the UCC of the applicable jurisdictions governing the perfection of the transfer of such Receivable under this Agreement and (B) in the case of a Receivable originated by the Canadian Seller, is an "account" or "intangible" within the meaning of the PPSA or a "claim" under the Civil Code of Quebec;

(ix) which (A) in the case of a Receivable originated by the U.S. Seller, is denominated and payable only in Dollars in the United States, (B) in the case of an International Receivable originated by the Canadian Seller, is denominated and payable only in Dollars in the United States, and (C) in the case of a Receivable other than an International Receivable originated by the Canadian Seller, is denominated and payable only in Dollars or Canadian Dollars in Canada;

(x) which arises under a Contract which, together with such Receivable, is in full force and effect and constitutes the legal, valid and binding obligation of the Obligor of such Receivable and is not subject to any Adverse Claim or any dispute, offset, counterclaim or defense whatsoever (except the potential discharge in bankruptcy of such Obligor) and is not settled on a net basis;

(xi) which represents a bona fide obligation of the Obligor of such Receivable to pay the stated amount;

(xii) as to which the applicable Seller has satisfied and fully performed all obligations with respect to such Receivable required to be fulfilled by it other than customary warranty obligations, and no further action is required to be performed by any Person with respect thereto other than payment thereon by the applicable Obligor;

(xiii) which, together with the Contract related thereto, does not contravene in any material respect any laws, rules or regulations applicable thereto (including, without limitation, laws, rules and regulations relating to usury, consumer protection, truth in lending, fair credit billing, fair credit reporting, equal credit opportunity, fair debt collection practices and privacy) and with respect to which no party to the Contract related thereto is in violation of any such law, rule or regulation in any material respect;

(xiv) which arises under a Contract which does not contain a legally enforceable provision requiring the Obligor under such Contract to consent to the transfer, sale or assignment of the rights of the applicable Seller under such Contract (unless a written consent of such Obligor has been obtained) or that

otherwise purports to restrict the ability of the Purchaser or its assignees to exercise their rights under this Agreement, including, without limitation, their right to review the related invoice or the payment terms of such Contract;

(xv) which arose from the sale of goods or the rendering of services in the ordinary course of the applicable Seller's business;

(xvi) which, at the time of the transfer of such Receivable under this Agreement, has not been extended, rewritten or otherwise modified from the original terms thereof;

(xvii) the transfer, sale or assignment of which does not contravene any applicable law, rule or regulation;

(xviii) which (A) satisfies all applicable requirements of the Credit and Collection Policy and (B) complies with such other criteria and requirements (other than those relating to the collectibility of such Receivable) as the Purchaser or its assignee may from time to time specify to the Sellers on account of bona fide credit reasons upon 30 days' notice; and

(xix) which, if the Obligor thereof has a billing address in Canada, satisfies the requirements of Sections 4.01(r) and (s).

"European Area" means the United Kingdom, Belgium, Ireland and Germany.

"Event of Termination" has the meaning specified in Section 7.01.

"Facility Termination Date" means the earliest of (i) the "Facility Termination Date" (as such term is defined in the RPA), (ii) the date determined pursuant to Section 7.01 and (iii) the date which the Sellers designate by at least five Business Days' notice to the Purchaser and (prior to the RPA Final Payment Date) the Agent.

"Federal Funds Rate" means, for any period, a fluctuating interest rate per annum equal for each day during such period to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published for such day (or, if such day is not a Business Day, for the next preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so published for any day which is a Business Day, the average of the quotations for such day on such transactions received by Citibank, N. A. from three Federal funds brokers of recognized standing selected by it.

"Finance Charge" means, with respect to any Receivable, any interest, finance charges or other similar charges payable at any time by an Obligor in connection with such Receivable not having been paid on the due date thereof.

"Four Party Agreement" has the meaning specified in the RPA.

"General Trial Balance" of either Seller on any date means such Seller's accounts receivable trial balance (whether in the form of a computer printout, magnetic tape or diskette) on such date, listing Obligors and the Receivables respectively owed by such Obligors on such date together with the aged Outstanding Balances of such Receivables, in form and substance satisfactory to the Purchaser.

"GST" means all goods and services tax payable under Part IX of the Excise Tax Act (Canada), all QST and all harmonized sales tax in the Provinces of Nova Scotia, Newfoundland and New Brunswick payable under the Excise Tax Act (Canada), as such statutes may be amended, modified, supplemented or replaced from time to time, including any successor statute.

"Incipient Event of Termination" means an event that but for notice or lapse of time or both would constitute an Event of Termination.

"Indemnified Amounts" has the meaning specified in Section 8.01.

"Insurance Policy" means that certain Accounts Receivable Policy (Shipments) General Terms and Conditions, plus the Coverage Certificate effective September 1, 2006 (together with all schedules and endorsements and other documents issued by the Insurer in connection therewith), together with any replacement Coverage Certificates, issued by the Insurer to ACI, a copy of which, as it exists as of the date hereof, is attached hereto as Annex A.

"Insurance Policy Event" means the occurrence of any of the following: (i) the Insurance Policy shall, for any reason, be terminated or otherwise no longer be in full force and effect, (ii) an event of the type described in Section 7.01(g) shall occur with respect to either entity comprising the Insurer, (iii) (A) either entity comprising the Insurer fails to make a payment under the Insurance Policy, (B) either entity comprising the Insurer rejects or denies claims submitted under the Insurance Policy or (C) there is a claim payment return pursuant to Section 25 of the Insurance Policy in a cumulative aggregate amount with respect to (A), (B) and (C) of this clause (iii) in excess of $1,000,000 (if any such claim is subsequently paid by the Insurers then the cumulative aggregate amount referred to above shall be reduced by the amount of any such payment), (iv) the terms of any Coverage Certificate issued in replacement of the Coverage Certificate comprising part of the Insurance Policy on November 24, 2006 are deemed unfavorable to the Purchaser or the Agent (in each such party's reasonable discretion) when compared with the Coverage Certificate current as of November 24, 2006, or (v) the aggregate claims made under the Insurance Policy in any Policy Period (as defined in the Insurance Policy) with respect to receivables that are not Receivables and the Obligors of which are not located in Canada shall exceed an amount equal to 7.50% of EDC's Maximum Liability Amount (as defined in the Coverage Certificate included in the Insurance Policy).

"Insurance Proceeds" means any amounts paid by the Insurer under the Insurance Policy with respect to claims relating to Receivables.

"Insurer" means, collectively, Export Development Canada and Compagnie Française d'Assurance pour le Commerce Extérieur — Canada Branch.

"Intercompany Agreement (Undertaking Agreements)" means an Intercompany Agreement (Undertaking Agreements) between ACSC and ACI, dated as of December 21, 2007, as the same may be amended, modified or restated from time to time pursuant to its terms.

"International Receivable" means a Receivable the Obligor of which has a billing address in an Approved Country other than the United States or Canada.

"Lock-Box" means a post office box administered by a Deposit Bank for the purpose of receiving Collections.

"Material Adverse Effect" means (A) a material adverse effect on (i) the financial condition, business, operations, assets or liabilities of the Parent and its subsidiaries taken as a whole, (ii) the ability of any Seller to perform any of its respective obligations under this Agreement or under any of the other Transaction Documents to which it is a party, (iii) the legality, validity or enforceability of the Transaction Documents (including, without limitation, the validity, enforceability or priority of the ownership or security interests granted thereunder) or (iv) the collectibility of the Receivables or (B) a material impairment of the rights or remedies of the Purchaser or any of its assignees under this Agreement or any of the other Transaction Documents.

"Notice of Amalgamation" has the meaning specified in Section 9.01(d).

"Notice of Change of Address" has the meaning specified in Section 9.01(e).

"Notice of Continuance and Change of Address" has the meaning specified in Section 9.01(c).

"Obligor" means a Person obligated to make payments to a Seller pursuant to a Contract.

"Original PCA" has the meaning specified in the Preliminary Statements.

"Original RPA" means that certain Receivables Purchase Agreement, dated as October 27, 2005, among the Purchaser, as seller, Eureka Securitisation, Plc, as purchaser, Citibank, N.A., Citibank, N.A., London Branch, as agent, the Sellers, as originators, the U.S. Seller, as servicer, and ACI, as subservicer, as amended prior to the date hereof.

"Outstanding Balance" of any Receivable at any time means the then outstanding principal balance thereof; provided, that to the extent that the amount of any Receivable is, under the terms of the applicable Contract, expressed in Canadian Dollars, such amount for the purposes of this definition shall be the Dollar Equivalent thereof at the relevant time. Sales or use tax, PST and any other taxes (other than GST) and Finance Charges which may be billed in connection with a Receivable are not included in the Outstanding Balance. For purposes of this Agreement (but without affecting the rights of the applicable Seller against the relevant Obligor), the Outstanding Balance of a Receivable shall be reduced by the amount of any Insurance Proceeds received by the Purchaser or the Agent with respect thereto.

"Parent" means AbitibiBowater Inc., a Delaware corporation.

"Person" means an individual, partnership, corporation, limited liability company, joint stock company, trust (including a business or statutory trust), unincorporated association, joint venture or other entity, or a government or any political subdivision or agency thereof.

"PPSA" means, with respect to any jurisdiction in Canada, the personal property security or similar legislation applicable in such jurisdiction, including with respect to the jurisdictions of Canada other than Quebec, the Personal Property Security Act applicable in such jurisdictions, and, with respect to Quebec, the Civil Code of Quebec, in each case as from time to time in effect.

"PST" means all taxes payable under the Retail Sales Tax Act (Ontario) or any similar statute of another jurisdiction of Canada, other than GST.

"Purchase" means (i) a purchase by the Purchaser of Receivables from the U.S. Seller pursuant to Section 2.02 and (ii) the purchase by the Purchaser of Receivables from the Canadian Seller pursuant to Section 2.01(b) and the subsequent transfer of title to the Purchaser of Receivables from the Canadian Seller pursuant to Section 2.02(c).

"Purchase Date" means each day on which a Purchase is made pursuant to Article II.

"Purchase Price" for any Purchase means an amount equal to the Outstanding Balance of the Receivables that are the subject of such Purchase as set forth in the relevant Seller's General Trial Balance, minus the Discount for such Purchase.

"Purchased Receivable" means any Receivable which is purchased by or title of which is transferred to the Purchaser pursuant to Section 2.01(b) or 2.02; provided that "Purchased Receivables" shall not include any Receivable that has been repurchased by a Seller, whether pursuant to Section 2.04(b), 2.08, or otherwise.

"QST" means the tax payable under the Act Respecting the Quebec Sales Tax, R.S.Q. c.T-01, as amended.

"Receivable" means the indebtedness of any Obligor (whether present or future and whether a claim, book debt or a receivable) resulting from the provision or sale of merchandise, insurance or services by any Seller under a Contract (whether constituting an account, instrument, chattel paper or general intangible), and which, (i) includes the right to payment of any Finance Charges and other obligations of such Obligor with respect thereto and, (ii) in respect of any such indebtedness, the Obligor of which has a billing address in Canada, includes GST; provided, however, that the term "Receivable" shall not include (x) any such indebtedness originated by the U.S. Originator, the Obligor of which has a billing address that is not in Canada or the United States or any such indebtedness originated by the Canadian Seller, the Obligor of which has a billing address that is not in any Approved Country, or (y) any portion of any such indebtedness, the Obligor of which has a billing address in Canada, that constitutes PST.

"Related Security" means with respect to any Receivable:

(i) all security interests or liens or other Adverse Claims and property subject thereto from time to time purporting to secure payment of such Receivable, whether pursuant to the Contract related to such Receivable or otherwise, together with all financing statements or registration applications filed against an Obligor describing any collateral securing such Receivable;

(ii) all guaranties, insurance (including the Insurance Policy) and other agreements or arrangements of whatever character from time to time supporting or securing payment of such Receivable whether pursuant to the Contract related to such Receivable or otherwise; and

(iii) the Contract and all other books, records and other information (including, without limitation, computer programs, tapes, discs, punch cards, data processing software and related property and rights) relating to such Receivable and the related Obligor.

"Replacement Bank Agreement" has the meaning specified in Section 9.01(b).

"Required Ratings" means, for any Person, Debt Ratings of either (i) BB+ or above by S&P and Baa3 or above by Moody's, or (ii) BBB- or above by S&P and Bal or above by Moody's.

"RPA" means that certain Amended and Restated Receivables Purchase Agreement, dated as of the date hereof, among the Purchaser, as seller, Eureka Securitisation, plc, as an investor, Citibank, N.A., as a bank, Citibank, N.A., London Branch, as agent, the Sellers, as originators, the U.S. Seller, as servicer, and ACI, as subservicer, as amended or restated from time to time.

"RPA Final Payment Date" means the later of the "Facility Termination Date" (as such term is defined in the RPA) and the date on which all Capital, Yield, fees and other obligations under the RPA are paid in full.

"Seller Report" means a report in form and substance satisfactory to the Purchaser, furnished by the Servicer to the Purchaser pursuant to Section 6.02(b).

"Servicer" means at any time the Person then authorized pursuant to Section 6.01 to service, administer and collect Transferred Receivables.

"Servicer Default" means (i) an Event of Termination described in Section 7.01(a), or (ii) the occurrence of any event of the type described in Section 7.01(g) with respect to the Servicer.

"Servicer Fee" has the meaning specified in Section 6.03.

"Settlement Date" means the third Business Day of each calendar month; provided, however, that at any time that the Servicer is required to deliver Seller Reports on a weekly basis in accordance with Section 6.02(b)(i), "Settlement Date" shall mean the Business Day immediately following the due date of the second Seller Report for each calendar month; provided, however, that following the occurrence of an Event of Termination, Settlement Dates shall occur on such days as are selected from time to time by the Purchaser or its assignee in a written notice to the Servicer, or in the absence of any such selection, the third Business Day of each calendar month.

"Subservicer" has the meaning specified in Section 6.01.

"Tangible Net Worth" means at any time the excess of (i) the sum of (a) the product of (x) 100% minus the Discount multiplied by (y) the Outstanding Balance of all Transferred Receivables other than Defaulted Receivables plus (b) cash and cash equivalents of the Purchaser, minus (ii) the sum of (a) Capital (as such term is defined in the RPA) plus (b) the Deferred Purchase Price. To the extent any amounts referenced in the preceding sentence are not denominated in Dollars, the Dollar Equivalent thereof shall be utilized.

"Taxes" has the meaning specified in Section 2.07.

"Transaction Document" means any of this Agreement, the RPA, the Undertaking, the Deposit Account Agreements, the Intercompany Agreement (Undertaking Agreements), the Insurance Policy, all amendments to any of the foregoing, and any other agreements and documents delivered and/or related hereto or thereto.

"Transferred Receivable" means a Purchased Receivable or a Contributed Receivable.

"UCC" means the Uniform Commercial Code as from time to time in effect in the specified jurisdiction.

"Undertaking" means the Undertaking Agreement (Originator) dated as of October 27, 2005 made by ACI in favor of the Purchaser and relating to obligations of the U.S. Seller, in form and substance satisfactory to the Purchaser, as the same may be amended, modified or restated from time to time.

"U.S. Seller" means ACSC.

SECTION 1.02. Other Terms. All accounting terms not specifically defined herein shall be construed in accordance with Canadian generally accepted accounting principles. All terms used in Article 9 of the UCC in the State of New York, and not specifically defined herein, are used herein as defined in such Article 9.

ARTICLE II

AMOUNTS AND TERMS OF PURCHASES AND CONTRIBUTIONS

SECTION 2.01. Facility. (a) U.S. Seller. On the terms and conditions hereinafter set forth and without recourse to the U.S. Seller (except to the extent specifically provided herein), the U.S. Seller shall at its option sell or contribute to the Purchaser all Receivables originated by it from time to time and the Purchaser shall purchase or accept as a contribution from the U.S. Seller all such Receivables from time to time, during the period from the date hereof to the Facility Termination Date.

(b) Canadian Seller. On the terms and conditions hereinafter set forth and without recourse to the Canadian Seller (except to the extent specifically provided herein) and other than the Receivables and Related Security (as such terms were defined in the Original PCA) that were sold, transferred and assigned by the Canadian Seller to the Purchaser prior to the date hereof pursuant to the Original PCA, the Canadian Seller hereby sells, transfers and assigns on the date hereof, to the Purchaser all Receivables originated by it, which exist on such date or which arise at any time thereafter up to the Facility Termination Date, and the Purchaser hereby purchases from the Canadian Seller all such Receivables, provided, that title to such Receivables not in existence on the date hereof shall transfer to the Purchaser in accordance with the terms of Section 2.02(c).

SECTION 2.02. Making Purchases. (a) [Intentionally Omitted].

(b) Purchases — U.S. Seller. On each Business Day beginning on the date hereof, unless either the U.S. Seller or the Purchaser shall notify the other party to the contrary, the U.S. Seller shall sell to the Purchaser and the Purchaser shall purchase from the U.S. Seller, upon satisfaction of the applicable conditions set forth in Article III, all Receivables originated by the U.S. Seller which have not previously been sold or contributed to the Purchaser pursuant to

this Agreement or the Original PCA; provided, however, that the U.S. Seller may, at its option on any Purchase Date, contribute all or any of such Receivables to the Purchaser pursuant to Section 2.06, instead of selling such Receivables to the Purchaser pursuant to this Section 2.02(b). On or within five Business Days after the date of each such Purchase, the Purchaser shall pay to the U.S. Seller the Purchase Price for such Purchase in the manner provided in Section 2.02(d).

(c) Transfer of Title — Canadian Seller. On each Business Day beginning on the date hereof, title to all Receivables originated by the Canadian Seller and not already transferred pursuant to this Agreement or the Original PCA shall, ipso facto, and without any further action on the part of the Canadian Seller or the Purchaser but subject to satisfaction of the applicable conditions set forth in Article 3.02, transfer to the Purchaser. On or within five Business Days after the date of each such Purchase, the Purchaser shall pay to the Canadian Seller the Purchase Price for such Purchase in the manner provided in Section 2.02(d).

(d) Payment of Purchase Price. The Purchase Price for each Purchase shall be paid on or within five Business Days after the Purchase Date therefor, in each case by means of any one or a combination of the following: (i) a deposit in same day funds to the relevant Seller's account designated by the applicable Seller or (ii) in the case of a purchase from the U.S. Seller, a contribution by the U.S. Seller to the Purchaser's capital or an increase in the Deferred Purchase Price. In the case of each Seller, the allocation of the Purchase Price as among such methods of payment shall be subject in each instance to the approval of the Purchaser and such Seller; provided, however, that the Deferred Purchase Price payable to the U.S. Seller may not be increased to the extent that, (x) after giving effect to such increase, the Tangible Net Worth would be less than 8.0% of the Outstanding Balance of the Transferred Receivables at such time or (y) the Deferred Purchase Price would exceed the lesser of (A) 10.0% of the Outstanding Balance of the Transferred Receivables at such time and (B) $35,000,000.

(e) Ownership of Receivables and Related Security. On each Purchase Date, after giving effect to the Purchase (and any contribution of Receivables) on such date, the Purchaser shall own all Receivables originated by the Sellers as of such date (including Receivables which have been previously sold, transferred, assigned or contributed to the Purchaser hereunder). The Purchase or contribution of any Receivable shall include all Related Security with respect to such Receivable.

(f) GOVERNING LAW FOR PURCHASES FROM CANADIAN SELLER. SOLELY WITH RESPECT TO PURCHASES FROM THE CANADIAN SELLER (INCLUDING PAYMENT OF THE PURCHASE PRICE WITH RESPECT THERETO), SECTION 2.01(b) AND THIS SECTION 2.02 SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE PROVINCE OF QUEBEC AND THE LAWS OF CANADA APPLICABLE THEREIN WITHOUT REGARD TO ANY CONFLICT OF LAWS PRINCIPLES THEREOF THAT WOULD CALL FOR THE APPLICATION OF THE LAWS OF ANY OTHER JURISDICTION.

SECTION 2.03. Collections. (a) Unless otherwise agreed, the Servicer shall, on each Settlement Date, deposit into an account of the Purchaser or the Purchaser's assignee all Collections of Transferred Receivables then held by the Servicer.

(b) In the event that a Seller believes that Collections which are not Collections of Transferred Receivables have been deposited into an account of the Purchaser or the Purchaser's assignee, such Seller shall so advise the Purchaser and, on the Business Day following such identification, the Purchaser shall remit, or shall cause to be remitted, all Collections so deposited which are identified, to the Purchaser's satisfaction, to be Collections of Receivables which are not Transferred Receivables to such Seller.

(c) On each Settlement Date, the Purchaser shall pay to the U.S. Seller accrued interest on the Deferred Purchase Price and the Purchaser may, at its option, prepay in whole or in part the principal amount of the Deferred Purchase Price; provided that each such payment shall be made solely from (i) Collections of Transferred Receivables after all other amounts then due from the Purchaser under the RPA have been paid in full and all amounts then required to be set aside by the Purchaser or the Servicer under the RPA have been so set aside or (ii) excess cash flow from operations of the Purchaser which is not required to be applied to the payment of other obligations of the Purchaser; and provided further, that no such payment shall be made at any time when an Event of Termination shall have occurred and be continuing. Following the RPA Final Payment Date, the Purchaser shall apply, on each Settlement Date, all Collections of Transferred Receivables received by the Purchaser pursuant to Section 2.03(a) (and not previously distributed) first to the payment of accrued interest on the Deferred Purchase Price, and then to the reduction of the principal amount of the Deferred Purchase Price. If at any time more than one Deferred Purchase Price note is outstanding, such payments of interest and principal shall be made ratably, based on the outstanding accrued interest and principal amounts of such notes, respectively.

SECTION 2.04. Settlement Procedures. (a) If on any day any Transferred Receivable becomes (in whole or in part) a Diluted Receivable, the Seller which originated such Receivable shall be deemed to have received on such day a Collection of such Transferred Receivable in the amount of such Diluted Receivable. If such Seller is not the Servicer, such Seller shall pay to the Servicer on or prior to the next Settlement Date all amounts deemed to have been received pursuant to this subsection. If any payment of Purchase Price is due to such Seller on such Settlement Date, such Seller may pay such deemed Collection by crediting the cash portion of such Purchase Price in an amount equal to such deemed Collection.

(b) Upon discovery by a Seller or the Purchaser of a breach of any of the representations and warranties made by such Seller in Section 4.01(j) with respect to any Transferred Receivable, such party shall give prompt written notice thereof to the Purchaser or the relevant Seller, as the case may be, as soon as practicable and in any event within three Business Days following such discovery. Such Seller shall, upon not less than two Business Days' notice from the Purchaser or its assignee or designee, repurchase such Transferred Receivable on the next succeeding Settlement Date for a repurchase price equal to the Outstanding Balance of such Transferred Receivable. Each repurchase of a Transferred Receivable shall include the Related Security with respect to such Transferred Receivable. The proceeds of any such repurchase

shall be deemed to be a Collection in respect of such Transferred Receivable. If such Seller is not the Servicer, such Seller shall pay to the Servicer on or prior to the next Settlement Date the repurchase price required to be paid pursuant to this subsection. If any payment of Purchase Price is due to such Seller on such Settlement Date, such Seller may pay such repurchase price by crediting the cash portion of such Purchase Price in an amount equal to such repurchase price.

(c) Except as stated in subsection (a) or (b) of this Section 2.04 or as otherwise required by law or the underlying Contract, all Collections from an Obligor of any Transferred Receivable shall be applied to the Receivables of such Obligor in the order of the age of such Receivables, starting with the oldest such Receivable, unless such Obligor designates its payment for application to specific Receivables.

(d) Deemed Collections with respect to any Transferred Receivable payable by any Seller under this Section 2.04 shall be paid in Dollars, if such Transferred Receivable is denominated in Dollars, and shall be paid in Canadian Dollars, if such Transferred Receivable is denominated in Canadian Dollars.

SECTION 2.05. Payments and Computations, Etc. (a) All amounts to be paid or deposited by the Sellers or the Servicer hereunder shall be paid or deposited no later than 11:00 A.M. (New York City time) on the day when due in same day funds to an account or accounts designated by the Purchaser from time to time, which accounts, prior to the RPA Final Payment Date, shall be those set forth in the RPA.

(b) Each Seller shall, to the extent permitted by law, pay to the Purchaser interest on any amount not paid or deposited by such Seller (whether as Servicer or otherwise) when due hereunder at an interest rate per annum equal to 2% per annum above the Alternate Base Rate, payable on demand.

(c) Other than as set forth in Section 2.05(d), all computations of interest and all computations of fees hereunder shall be made on the basis of a year of 360 days for the actual number of days (including the first but excluding the last day) elapsed. Whenever any payment or deposit to be made hereunder shall be due on a day other than a Business Day, such payment or deposit shall be made on the next succeeding Business Day and such extension of time shall be included in the computation of such payment or deposit.

(d) For purposes of the Interest Act (Canada), where in this Agreement a rate of interest is to be calculated on the basis of a period of less than one year, the yearly rate of interest to which the said rate is equivalent is the said rate divided by the actual number of days in the period for which such calculation is made and multiplied by 365 days (or 366 days in the case of a leap year).

SECTION 2.06. Contributions. The U.S. Seller may from time to time at its option, by notice to the Purchaser on or prior to the date of the proposed contribution, identify Receivables which it proposes to contribute to the Purchaser as a capital contribution. On the date of each such contribution and after giving effect thereto, the Purchaser shall own the Receivables

so identified and contributed (collectively, the "Contributed Receivables") and all Related Security with respect thereto.

SECTION 2.07. Payments Free and Clear of Taxes, Etc. (a) Except as otherwise required by law, any and all payments required to be made by the Servicer, the U.S. Seller or the Canadian Seller hereunder shall be made free and clear of and without deduction or withholding for or on account of any and all present or future income, stamp or, without limitation, other taxes, levies, imposts, deductions, duties, fees, charges or withholdings, and all liabilities with respect thereto, excluding (A) net income taxes and franchise taxes (imposed in lieu of net income taxes) and backup withholding taxes that are imposed on the Purchaser or its assigns (the Purchaser and such assigns, each an "Affected Person") by the United States, a state thereof or a foreign jurisdiction under the laws of which such Affected Person is organized or any political subdivision thereof and net income taxes and capital taxes imposed by Canada or any political subdivision thereof other than Canadian withholding taxes and other than Canadian taxes based on or measured by income or capital in connection with the Receivables or the transactions contemplated by the Transaction Documents resulting from any Affected Person (but only directly and exclusively as a result of any breach by the Sellers or the Servicer (or any delegatee thereof, including the Subservicer) of their respective obligations under the Transaction Documents) having a permanent establishment in Canada solely as a result of such transactions, or (B) any branch profits taxes imposed by the United States or any similar tax imposed by any other jurisdiction described in clause (A) above (all such non-excluded taxes, levies, imposts, deductions, charges, withholdings and liabilities being hereinafter referred to as "Taxes"). If the Servicer, the U.S. Seller or the Canadian Seller or any Obligor shall be required by law to deduct any Taxes from or in respect of any sum payable or deposited hereunder to (or for the benefit of) the Purchaser or its assigns, (i) the sum payable shall be increased as may be necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section) the Purchaser or its assigns (as the case may be) receives an amount equal to the sum it would have received had no such deductions been made, (ii) the Servicer or the Canadian Seller, as applicable, shall make such deductions and (iii) the Servicer or the Canadian Seller, as applicable, shall pay the full amount deducted to the relevant taxation authority or other authority in accordance with applicable law. Within 30 days after the date of any payment of Taxes, the Servicer or the Canadian Seller, as applicable, will furnish to the Purchaser, at its address referred to in Section 9.02, the original or a certified copy of a receipt evidencing payment thereof.

(b) In addition, the Canadian Seller agrees to pay any present or future stamp or other documentary taxes or any other excise or property taxes, charges or similar levies which arise from any payment made hereunder or from the execution, delivery or registration of, or otherwise with respect to, this Agreement, other than U.S. federal taxes except for withholding taxes on interest (hereinafter referred to as "Other Taxes").

(c) The Servicer or the Canadian Seller will indemnify the Purchaser or its assigns for the full amount of Taxes or Other Taxes (including, without limitation, any Taxes or Other Taxes imposed by any jurisdiction on amounts payable under this Section, and excluding Taxes or Other Taxes resulting from the gross negligence or willful misconduct of the Purchaser

or its assigns) paid by the Purchaser or its assigns (as the case may be) or deducted or withheld from any Collections (including any Taxes or amounts on account of Taxes deducted by any Obligor) and any liability (including penalties, interest and expenses) arising therefrom or with respect thereto, whether or not such Taxes or Other Taxes were correctly or legally asserted. This indemnification shall be made within 30 days from the date the Purchaser or its assigns (as the case may be) makes written demand therefor. A certificate as to the amount of such indemnification submitted to the Servicer or the Canadian Seller, as applicable, by the Purchaser or its assigns (as the case may be) setting forth, in reasonable detail, the basis for and the calculation thereof, shall be conclusive and binding for all purposes absent manifest error.

(d) Without prejudice to the survival of any other agreement of the Servicer or the Canadian Seller hereunder, the agreements and obligations of the Servicer and the Canadian Seller contained in this Section 2.07 shall survive any termination of this Agreement.

SECTION 2.08. Repurchase Option. So long as no Event of Termination or Incipient Event of Termination would occur or be continuing after giving effect thereto, each Seller shall have the right (but not any obligation) to repurchase Transferred Receivables originated by it (including, with respect to the Canadian Seller, such Transferred Receivables as are identified for repurchase by such Seller in order to conform with, or not to breach, any provision of or order under, the Foreign Extraterritorial Measures Act (Canada) or regulations thereunder) upon not less than three Business Days' prior written notice to the Purchaser; provided, however, that the aggregate Outstanding Balance of Transferred Receivables repurchased pursuant to this Section may not exceed the lesser of (i) 10% of the highest aggregate Outstanding Balance of Transferred Receivables at any time or (ii) $35,000,000. Such notice shall specify the date that the applicable Seller desires that such repurchase occur (such date, the "Repurchase Date") and shall identify the Receivables to be included in such repurchase. Each Seller agrees that it will not utilize any selection procedure in selecting the Receivables to be so repurchased which is adverse to the interests of the Purchaser or its assigns or would reasonably be expected to result in the repurchased Receivables containing a lower percentage of Defaulted Receivables or Delinquent Receivables than the percentage of Defaulted Receivables or Delinquent Receivables, as applicable, in the Receivables retained by the Purchaser. On the Repurchase Date, the applicable Seller shall remit to the Purchaser in immediately available funds an amount equal to the aggregate Outstanding Balance of the Receivables included in such repurchase (provided that if any payment of Purchase Price is due to such Seller on such Repurchase Date, such Seller may pay all or a portion of such amount by crediting the cash portion of such Purchase Price therewith), and upon receipt thereof, the Purchaser shall be deemed to assign and release, without recourse, representation or warranty, its right, title and interest in and to the Receivables included in such repurchase. In connection with any such repurchase, the Purchaser shall execute and deliver, at the request and expense of such Seller, any assignment or release that such Seller may reasonably request to evidence the repurchase of the applicable Receivables. At such time, if any, that the aggregate Outstanding Balance of all Receivables repurchased pursuant to this Section exceeds 2% of the aggregate Outstanding Balance of all Receivables, the applicable Seller will (or will cause the Servicer to) instruct all Obligors of Receivables being repurchased on such Repurchase Date to remit all their payments in respect of

such repurchased Receivables to post office boxes or deposit accounts other than the Lock Boxes or Deposit Accounts.

ARTICLE III

CONDITIONS OF PURCHASES

SECTION 3.01.[Intentionally Omitted].

SECTION 3.02. Conditions Precedent to All Purchases. Each Purchase hereunder shall be subject to the conditions precedent that:

(a) with respect to any such Purchase, on or prior to the date of such Purchase, the relevant Seller shall have delivered to the Purchaser, (i) if requested by the Purchaser, such Seller's General Trial Balance (which if in magnetic tape or diskette format shall be compatible with the Purchaser's computer equipment) as of a date not more than 31 days prior to the date of such Purchase, and (ii) a written report identifying, among other things, the Receivables to be included in such Purchase and such additional information concerning such Receivables as may reasonably be requested by the Purchaser;

(b) with respect to any such Purchase, on or prior to the date of such Purchase, the Servicer shall have delivered to the Purchaser, in form and substance satisfactory to the Purchaser, a completed Seller Report for the most recently ended reporting period for which information is required pursuant to Section 6.02(b);

(d) as of the date of such Purchase the Purchaser shall not have determined, acting reasonably, and notified the Sellers and the Agent that the Purchaser has or is deemed to have a permanent establishment within Canada solely as a result of the transactions contemplated hereby (but only directly and exclusively as a result of any breach by the Sellers or the Servicer of any of their obligations under this Agreement);

(e) on the date of such Purchase the following statements shall be true (and the relevant Seller, by accepting the Purchase Price for such Purchase, shall be deemed to have certified that):

(i) The representations and warranties contained in Section 4.01 are correct on and as of the date of such Purchase as though made on and as of such date (except insofar as such representations and warranties relate expressly to an earlier date certain, in which case such representations and warranties shall be correct as of such earlier date),

(ii) No event has occurred and is continuing, or would result from such Purchase, that constitutes an Event of Termination or an Incipient Event of Termination, and

(iii) The Purchaser shall not have delivered to the Sellers a notice that the Purchaser shall not make any further Purchases hereunder; and

(f) the Purchaser shall have received such other approvals, opinions or documents as the Purchaser may reasonably request.

SECTION 3.03. Conditions Precedent to the Effectiveness of Amendment and Restatement. The effectiveness of this amendment and restatement of the Original PCA is subject to the conditions precedent that the Purchaser shall have received on or before the date hereof the following, each (unless otherwise indicated) dated such date, in form and substance satisfactory to the Purchaser:

(a) Certified copies of the resolutions of the Board of Directors of each Seller approving this Agreement and the other documents to be delivered by such Seller hereunder and certified copies of all documents evidencing other necessary corporate action and governmental approvals, if any, with respect to this Agreement.

(b) A certificate of the Secretary or Assistant Secretary of each Seller certifying the names and true signatures of the officers of each Seller authorized to sign this Agreement and the other documents to be delivered by it hereunder.

(c) Acknowledgment copies or time stamped receipt copies (or other satisfactory evidence of filing) of proper financing statement amendments, duly filed on or before the date hereof under the UCC and PPSA of all jurisdictions that the Purchaser may deem necessary or desirable in order to add the International Receivables and effect such other revisions as the Purchaser may deem necessary or desirable to reflect the amendments to the Original PCA and the other Transaction Documents contemplated by this Agreement.

(d) Acknowledgment copies or time stamped receipt copies (or other satisfactory evidence of filing), or copies accompanied by filing authorization signed by the applicable secured party, of proper financing statement amendments and terminations, if any, necessary to release all security interests and other rights of any Person in the Transferred Receivables, Contracts or Related Security previously granted by the Sellers.

(e) Completed requests for information and search reports, dated on or before the date of this Agreement, listing all effective financing statements and other registrations filed in the jurisdictions referred to in subsection (c) above and

that name either Seller as debtor, together with copies of such other financing statements and other registrations (none of which shall cover any Transferred Receivables, Contracts or Related Security unless they are in favor of the Purchaser).

(f) Favorable opinions (or letters of confirmation and reliance, to the extent satisfactory to the Purchaser) of (i) Paul, Weiss, Rifkind, Wharton & Garrison LLP, U.S. counsel for the Sellers and (ii) Stikeman Elliott LLP, Canadian counsel for ACI, in each case in form and substance satisfactory to the Purchaser.

(g) An executed copy of the Four Party Agreement.

(h) An executed copy of an amendment and reaffirmation of the Undertaking.

(i) An executed copy of the Deposit Account Agreement relating to the Deposit Account maintained with Citibank, N. A., as depositary bank, and described in more detail in Exhibit B hereto.

(j) A pro forma Seller Report for the period ending January 25, 2008, certified by an authorized financial officer of the Servicer with responsibility for such Seller Report and reflecting the inclusion of the International Receivables.

(k) Representative samples of invoices with respect to the International Receivables.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

SECTION 4.01. Representations and Warranties of the Sellers. Each Seller represents and warrants as to itself as follows:

(a) Such Seller is a corporation duly incorporated, validly existing and in good standing under the laws of the jurisdiction set forth in Exhibit F hereto (as modified in accordance herewith), and is duly qualified to do business, and is in good standing, in every jurisdiction where the nature of its business requires it to be so qualified, unless the failure to so qualify would not have a Material Adverse Effect.

(b) The execution, delivery and performance by such Seller of this Agreement and the other documents to be delivered by it hereunder, including such Seller's sale and contribution of Receivables hereunder and such Seller's use of the proceeds of Purchases, (i) are within such Seller's corporate powers, (ii) have been duly authorized by all necessary corporate action, (iii) do not contravene (1) such

Seller's charter or by-laws, (2) any law, rule or regulation applicable to such Seller, (3) any material contractual restriction binding on or affecting such Seller or its property or (4) any order, writ, judgment, award, injunction or decree binding on or affecting such Seller or its property, and (iv) do not result in or require the creation of any lien, security interest or other Adverse Claim, charge or encumbrance upon or with respect to any of its properties (except for the transfer of such Seller's interest in the Transferred Receivables pursuant to this Agreement). This Agreement has been duly executed and delivered by such Seller.

(c) No authorization or approval or other action by, and no notice to or filing with, any governmental authority or regulatory body is required for the due execution, delivery and performance by such Seller of this Agreement or any other document to be delivered by it hereunder.

(d) This Agreement constitutes the legal, valid and binding obligation of such Seller enforceable against such Seller in accordance with its terms, subject to applicable bankruptcy, insolvency, moratorium or other similar laws affecting the rights of creditors generally and general equitable principles (whether considered in a proceeding at law or in equity).

(e) Sales and contributions made pursuant to this Agreement will constitute a valid sale, transfer, and assignment of the Transferred Receivables to the Purchaser, enforceable against creditors of, and purchasers from, such Seller. Such Seller shall have no remaining property interest in any Transferred Receivable.

(f) Any inventory or goods acquired by such Seller from ACCC are acquired free and clear of any Adverse Claim created by or arising through ACCC. Such acquisitions of inventory or goods from ACCC do not contravene any law, rule or regulation applicable to ACCC, any contractual restriction binding on or affecting ACCC or its property or any order, writ, judgment, award, injunction or decree binding on or affecting ACCC or its property.

(g) There is no pending or, to such Seller's knowledge, threatened action, investigation or proceeding affecting such Seller or any of its subsidiaries before any court, governmental agency or arbitrator which may have a Material Adverse Effect.

(h) No proceeds of any Purchase will be used to acquire any equity security of a class which is registered pursuant to Section 12 of the Securities Exchange Act of 1934.

(i) No transaction contemplated hereby requires compliance with any bulk sales act or similar law (other than the Bulk Sales Act (Newfoundland and Labrador)).

(j) Each Receivable characterized in any Seller Report as an Eligible Receivable is, as of the date of such Seller Report, an Eligible Receivable. Each Transferred Receivable, together with the Related Security, is owned (immediately prior to its sale or contribution hereunder) by such Seller free and clear of any Adverse Claim (other than any Adverse Claim arising solely as the result of any action taken by the Purchaser). When the Purchaser makes a Purchase it shall acquire valid and perfected first priority ownership of each Purchased Receivable and the Related Security and Collections with respect thereto free and clear of any Adverse Claim (other than any Adverse Claim arising solely as the result of any action taken by the Purchaser), and no effective financing statement or other instrument similar in effect covering any Transferred Receivable, any interest therein, the Related Security or Collections with respect thereto is on file in any recording office except such as may be filed in favor of Purchaser in accordance with this Agreement or in connection with any Adverse Claim arising solely as the result of any action taken by the Purchaser.

(k) Each Seller Report (if prepared by such Seller, or to the extent that information contained therein is supplied by such Seller), including the calculations therein, and all information, exhibits, financial statements, documents, books, records or reports furnished or to be furnished at any time by such Seller to the Purchaser in connection with this Agreement is or will be accurate in all material respects as of its date or (except as otherwise disclosed to the Purchaser at such time) as of the date so furnished, and no such document contains or will contain any untrue statement of a material fact or omits or will omit to state a material fact necessary in order to make the statements contained therein, in the light of the circumstances under which they were made, not misleading.

(l) The U.S. Seller is located in the jurisdiction of incorporation set forth for such Seller in Exhibit F hereto for the purposes of Section 9-307 of the UCC as in effect in the State of New York; and the office in the jurisdiction of incorporation of such Seller in which a UCC financing statement is required to be filed in order to perfect the security interest granted by such Seller hereunder is set forth in Exhibit F hereto (as modified in accordance herewith). The Canadian Seller is located in the jurisdiction of its chief executive and registered office set forth in Exhibit F hereto (as modified in accordance herewith) for purposes of Section 9-307 of the UCC as in effect in the State of New York; and the offices in which PPSA financing statements or other applicable registrations are required to be filed in order to perfect the security interest granted by the Canadian Seller hereunder are set forth in Exhibit F hereto, in each case as such Exhibit F may be modified in accordance herewith. The office where each Seller keeps its records concerning the Transferred Receivables is located (and has been located for the five years prior to the date of this Agreement, except as set forth on Exhibit F hereto) at the address or addresses referred to in Section 5.01(b). The principal place of business and chief executive office of the U.S. Seller, the principal place

of business and chief executive and registered office of the Canadian Seller and the office where each Seller keeps its records concerning the Receivables are located (and have been located for the five years prior to the date of this Agreement) at the address or addresses set forth in Exhibit F hereto. Neither Seller has changed its name, or, in the case of the Canadian Seller, had any other name (including French names) during the five years prior to the date of this Agreement, except as set forth in Exhibit F hereto, as modified in accordance herewith.

(m) The names and addresses of all the Deposit Banks, together with the post office boxes and account numbers of the Lock-Boxes and Deposit Accounts at such Deposit Banks, are specified in Exhibit B (as the same may be amended from time to time pursuant to Section 5.01(g)). The Lock-Boxes and Deposit Accounts are the only post office boxes and accounts into which Collections of Receivables are deposited or remitted.

(n) Such Seller is not known by and does not use any tradename or doing-business-as name.

(o) With respect to any programs used by such Seller in the servicing of the Receivables, no sublicensing agreements are necessary in connection with the designation of a new Servicer pursuant to Section 6.01 so that such new Servicer shall have the benefit of such programs (it being understood that, however, the Servicer, if other than such Seller, shall be required to be bound by a confidentiality agreement reasonably acceptable to such Seller).

(p) The transfers of Transferred Receivables by such Seller to the Purchaser pursuant to this Agreement, and all other transactions between such Seller and the Purchaser, have been and will be made in good faith and without intent to hinder, delay or defraud creditors of such Seller.

(q) Such Seller has (i) timely filed all Canadian or U.S. federal tax returns required to be filed, (ii) timely filed all other material state, provincial and local tax returns and (iii) paid or made adequate provision for the payment of all taxes, assessments and other governmental charges (other than any tax, assessment or governmental charge which is being contested in good faith and by proper proceedings, and with respect to which the obligation to pay such amount is adequately reserved against in accordance with Canadian generally accepted accounting principles).

(r) No Receivable originated by the Canadian Seller, the Obligor of which has a billing address in Canada, was issued for an amount in excess of the fair market value of the merchandise, insurance or services provided by the Canadian Seller to which such Receivable relates.

(s) No Contract or any other books, records or other information relating to any Receivable originated by the Canadian Seller, the Obligor of which has a billing address in Canada, contain any "personal information" as defined in, or any other information regulated under (i) the Personal Information Protection and Electronic Documents Act (Canada), or (ii) any other similar statutes of Canada or any province in force from time to time which restrict, control, regulate or otherwise govern the collection holding, use or communication of information.

(t) The Insurance Policy has been validly issued by the Insurer to ACI and is, on the date hereof, in full force and effect. All statements made by ACI in the application for the Insurance Policy were true, correct and complete in all material respects when made. As of the date hereof, all the premiums due on December 10, 2007 under the Insurance Policy for the policy period ended August 31, 2007 have been paid. ACI has performed all of its duties under the Insurance Policy and has timely filed all claims payable thereunder in such form as is required by the Insurer. The Insurance Policy has not been amended, supplemented or otherwise modified except as permitted by Section 6.02(a), and ACI has not waived any of its rights thereunder.

(u) The Canadian Seller is a resident of Canada for purposes of the Income Tax Act (Canada).

(v) Such Seller has marked its master data processing records, including master data processing records evidencing Receivables arising out of the sale of lumber, evidencing Receivables with a legend evidencing that the Transferred Receivables have been sold or contributed in accordance with this Agreement.

ARTICLE V

COVENANTS

SECTION 5.01. Covenants of the Sellers. Each Seller covenants with respect to itself from the date hereof until the first day following the Facility Termination Date on which all of the Transferred Receivables are either collected in full or become Defaulted Receivables:

(a) Compliance with Laws, Etc. Such Seller will comply in all material respects with all applicable laws, rules, regulations and orders and preserve and maintain its corporate existence, rights, franchises, qualifications and privileges except to the extent that the failure so to comply with such laws, rules and regulations or the failure so to preserve and maintain such rights, franchises, qualifications, and privileges would not have a Material Adverse Effect. In particular, but without limiting the generality of the foregoing, the Canadian Seller shall file all tax returns required by law to be filed by it with respect to the

Transferred Receivables and shall promptly pay, remit or account for, as applicable, all sales taxes (including, without limitation, PST, QST and GST) paid or owing in connection with any Transferred Receivables, except any such taxes which are not yet delinquent or are being diligently contested in good faith by appropriate proceedings and for which adequate reserves in accordance with applicable generally accepted accounting principles shall have been set aside on its books.

(b) Offices, Records, Name and Organization. Subject to Section 9.01(e), such Seller will keep its principal place of business and chief executive office and the office where it keeps its records concerning the Transferred Receivables at the address of such Seller set forth on Exhibit E hereto or, (subject to Section 9.01(f)) upon 30 days' prior written notice to the Purchaser, at any other locations within the United States or (in the case of the Canadian Seller) Canada. Subject to Section 9.01(f), such Seller will not change its name or (in the case of the U.S. Seller) its jurisdiction of organization or (in the case of the Canadian Seller) its chief executive office and shall not consummate any amalgamation, consolidation or merger, unless (i) such Seller shall have provided the Purchaser with at least 30 days' prior written notice thereof, together with an updated Exhibit F, and (ii) no later than the effective date of such change, all actions required by Section 5.01(j) shall have been taken and completed. Upon confirmation by the Agent (prior to the RPA Final Payment Date) or the Purchaser (following the RPA Final Payment Date) of receipt of any such notice (together with an updated Exhibit F) and the completion, as aforesaid, of all actions required by Section 5.01(j), Exhibit F to this Agreement shall, without further action by any party, be deemed to be amended and replaced by the updated Exhibit F accompanying such notice. Such Seller also will maintain and implement administrative and operating procedures (including, without limitation, an ability to recreate records evidencing Transferred Receivables and related Contracts in the event of the destruction of the originals thereof), and keep and maintain all documents, books, records and other information reasonably necessary or advisable for the collection of all Transferred Receivables (including, without limitation, records adequate to permit the daily identification of each new Transferred Receivable and all Collections of and adjustments to each existing Transferred Receivable). Such Seller shall make a notation in its books and records, including its computer files, to indicate which Receivables have been sold or contributed to the Purchaser hereunder.

(c) Performance and Compliance with Contracts and Credit and Collection Policy. Such Seller will, at its expense, timely and fully perform and comply with all material provisions, covenants and other promises required to be observed by it under the Contracts related to the Transferred Receivables, and timely and fully comply in all material respects with the Credit and Collection Policy in regard to each Transferred Receivable and the related Contract.

(d) Sales, Liens, Etc. Except for the sales and contributions of Receivables contemplated herein, such Seller will not sell, assign (by operation of law or otherwise) or otherwise dispose of, or create or suffer to exist any Adverse Claim upon or with respect to, any Transferred Receivable, Related Security, related Contract or Collections, or upon or with respect to any account to which any Collections of any Transferred Receivable are sent, or assign any right to receive income in respect thereof.

(e) Extension or Amendment of Transferred Receivables. Except as provided in Section 6.02(c), such Seller will not (and will not permit the Servicer to) extend, amend or otherwise modify the terms of any Transferred Receivable, or amend, modify or waive any term or condition of any Contract related thereto.

(f) Change in Business or Credit and Collection Policy. Such Seller will not make any change in the character of its business or in the Credit and Collection Policy that would, in either case, have a Material Adverse Effect.

(g) Change in Payment Instructions to Obligors. Such Seller will not add or terminate any post office box, bank, or bank account as a Lock-Box, Deposit Bank or Deposit Account from those listed in Exhibit B hereto, or make any change in its instructions to Obligors regarding payments to be made to any Lock-Box or Deposit Account, unless the Purchaser shall have received prior notice of such addition, termination or change (including an updated Exhibit B) and a fully executed Deposit Account Agreement with each new Deposit Bank or with respect to each new Lock-Box or Deposit Account. Upon confirmation by the Agent (prior to the RPA Final Payment Date) or the Purchaser (following the RPA Final Payment Date) of receipt of any such notice and the related documents, Exhibit B hereto shall, without further action by any party, be deemed to be amended and replaced by the updated Exhibit B accompanying such notice.

(h) Deposits to Lock-Boxes and Deposit Accounts. Such Seller will (or will cause the Servicer to) instruct all Obligors to remit all their payments in respect of Transferred Receivables to Lock Boxes or Deposit Accounts (provided that Obligors with respect to International Receivables and Receivables originated by the U.S. Seller shall be instructed to remit such payments to Lock-Boxes or Deposit Accounts located in the United States). If such Seller or the Servicer shall receive any Collections directly, such Seller shall (or, if applicable, shall cause the Servicer to) immediately (and in any event within two Business Days) deposit the same to a Lock Box or a Deposit Account (provided that Collections related to an International Receivable or a Receivable originated by the U.S. Seller shall be deposited to a Lock-Box or a Deposit Account in the United States) and until it does so, shall hold the same in trust for the Purchaser and its assignees. Such Seller will not deposit or otherwise credit, or cause or permit to be so deposited or credited, to any Lock Box or Deposit Account, cash or cash proceeds other than Collections of Transferred Receivables, provided, that if any PST are deposited or

credited to any Lock Box or Deposit Account, such Seller will (or will cause the Servicer to), within two Business Days of such deposit or credit, separate such deposits and credits from the Collections held in any applicable Lock Box or Deposit Account and withdraw such deposited or credited amount from such Lock Box or Deposit Account.

(i) Examinations and Visits. Such Seller will, from time to time during regular business hours as requested by the Purchaser, permit the Purchaser, or its agents or representatives, (i) to examine and make copies of and abstracts from all books, records and documents (including, without limitation, computer tapes and disks) in the possession or under the control of such Seller relating to Transferred Receivables and the Related Security, including, without limitation, the related Contracts, and (ii) to visit the offices and properties of such Seller for the purpose of examining such materials described in clause (i) above, and to discuss matters relating to Transferred Receivables and the Related Security or such Seller's performance hereunder or under the Contracts with any of the officers or employees of such Seller having knowledge of such matters.

(j) Further Assurances. (i) Such Seller agrees from time to time, at its expense, promptly to execute and deliver all further instruments and documents, and to take all further actions, that may be necessary or desirable, or that the Purchaser or its assignee may reasonably request, to perfect, protect or more fully evidence the sale and contribution of Receivables under this Agreement, or to enable the Purchaser or its assignee to exercise and enforce its respective rights and remedies under this Agreement. Without limiting the foregoing, such Seller will, upon the request of the Purchaser or its assignee, (A) execute and file such financing or continuation statements, or amendments thereto, and such other instruments and documents, that may be necessary or desirable to perfect, protect, make opposable or evidence such Transferred Receivables and any security interest in other assets of such Seller granted hereunder; and (B) deliver to the Purchaser copies of all Contracts relating to the Transferred Receivables and all records relating to such Contracts and the Transferred Receivables, whether in hard copy or in magnetic tape or diskette format (which if in magnetic tape or diskette format shall be compatible with the Purchaser's computer equipment).

(ii) Such Seller authorizes the Purchaser or its assignee to file financing or continuation statements, and amendments thereto and assignments thereof, relating to the Transferred Receivables and the Related Security, the related Contracts and the Collections with respect thereto, and any other assets of such Seller in which a security interest is granted hereunder.

(iii) Such Seller shall perform its obligations under the Contracts related to the Transferred Receivables to the same extent as if the Transferred Receivables had not been sold or transferred.

(k) Reporting Requirements. Such Seller will provide to the Purchaser the following:

(i) as soon as possible and in any event within five days after the occurrence of each Event of Termination or Incipient Event of Termination with respect to such Seller or an Insurance Policy Event, a statement of the chief financial officer of such Seller setting forth details of such Event of Termination, Incipient Event of Termination or Insurance Policy Event and the action that such Seller or the Sellers, as applicable, has taken and proposes to take with respect thereto;

(ii) subject to Section 9.01(f), at least 30 days prior to any change in such Seller's name, jurisdiction of incorporation, chief executive or registered office, or any amalgamation, consolidation or merger involving such Seller, a notice setting forth the new name, jurisdiction of incorporation, chief executive or registered office or the details of any such amalgamation, consolidation or merger involving such Seller and the effective date thereof;

(iii) promptly following receipt thereof, copies of all schedules, endorsements and notices received from the Insurer with respect to the Insurance Policy (including any notice that any additional premium is due in accordance with Section 4 of the "Declarations and Payment of Premium" endorsement to the Insurance Policy);

(iv) immediately upon obtaining knowledge thereof, and in any event on the day such event occurs, notice that all indebtedness under the Bank Agreement has become due and payable (whether by declaration or automatically);

(v) concurrently with the sending thereof to the Insurer, any notice by ACI terminating the Insurance Policy; and

(vi) such other information respecting the Transferred Receivables or the condition or operations, financial or otherwise, of such Seller as the Purchaser may from time to time reasonably request.

(1) Separate Conduct of Business. Such Seller will: (i) maintain separate corporate records and books of account from those of the Purchaser; (ii) conduct its business from an office separate from that of the Purchaser (but which may be located in the same facility as the Purchaser); (iii) ensure that all oral and written communications, including without limitation, letters, invoices, purchase orders, contracts, statements and applications, will be made solely in its own name; (iv) have stationery and other business forms and a mailing address and a telephone number separate from those of the Purchaser; (v) not hold itself out as having agreed to pay, or as being liable for, the obligations of the Purchaser; (vi) not engage in any transaction with the Purchaser except as contemplated by

this Agreement or as permitted by the RPA; (vii) continuously maintain as official records the resolutions, agreements and other instruments underlying the transactions contemplated by this Agreement; and (viii) disclose on its annual financial statements (A) the effects of the transactions contemplated by this Agreement in accordance with generally accepted accounting principles and (B) that the assets of the Purchaser are not available to pay its creditors.

(m) Insurance Policy Exclusions. Such Seller will not take or omit to take any actions which give rise to an exclusion from coverage under the Insurance Policy.

(n) Marking of Records. At its expense, such Seller will mark its master data processing records evidencing Receivables with a legend evidencing that the Transferred Receivables have been sold or contributed in accordance with this Agreement.

(o) ACCC. Such Seller will not, and will not permit any Subsidiary to, enter into agreement that restricts the sale of inventory or goods from ACCC to such Seller.

SECTION 5.02. Covenant of the Sellers and the Purchaser. Each Seller and the Purchaser have structured this Agreement with the intention that each Purchase of Receivables hereunder be treated as a sale of all of such Seller's right, title and interest in, to and under such Receivables by such Seller to the Purchaser for all purposes and each contribution of Receivables by the U.S. Seller hereunder shall be treated as an absolute transfer of all of the U.S. Seller's right, title and interest in, to and under such Receivables by the U.S. Seller to the Purchaser for all purposes. Each Seller and the Purchaser shall record each Purchase and contribution as a sale or purchase or capital contribution, as the case may be, on its books and records, and reflect each Purchase and contribution in its financial statements and tax returns as a sale or purchase or capital contribution, as the case may be. In the event that, contrary to the mutual intent of the Sellers and the Purchaser, any Purchase or contribution of Receivables hereunder is not characterized as a sale or absolute transfer, each Seller shall, effective as of the date hereof, be deemed to have granted (and each Seller hereby does grant) to the Purchaser a first priority security interest in and to any and all Receivables, the Related Security and the Collections and other proceeds thereof to secure the repayment of all amounts advanced to such Seller hereunder with accrued interest thereon, and this Agreement shall be deemed to be a security agreement.

ARTICLE VI

ADMINISTRATION AND COLLECTION

SECTION 6.01. Designation of Servicer. The servicing, administration and collection of the Transferred Receivables shall be conducted by such Person (the "Servicer") so designated hereunder from time to time. Until the RPA Final Payment Date, the U.S. Seller (or

such other Person as may be designated from time to time under the RPA) is hereby designated as, and hereby agrees to perform the duties and obligations of, the Servicer pursuant to the terms hereof. Following the RPA Final Payment Date, the Purchaser, by notice to the U.S. Seller, may at any time designate as Servicer any Person (including itself) to succeed the U.S. Seller or any successor Servicer, if such Person shall consent and agree to the terms hereof. Upon the U.S. Seller's receipt of such notice, the U.S. Seller agrees that it will terminate its activities as Servicer hereunder in a manner which the Purchaser (or its designee) believes will facilitate the transition of the performance of such activities to the new Servicer, and the U.S. Seller shall use its best efforts to assist the Purchaser (or its designee) to take over the servicing, administration and collection of the Transferred Receivables, including, without limitation, providing access to and copies of all computer tapes or disks and other documents or instruments that evidence or relate to Transferred Receivables maintained in its capacity as Servicer and access to all employees and officers of the U.S. Seller responsible with respect thereto. The Servicer may, with the prior consent of the Purchaser, subcontract with any other Person for the servicing, administration or collection of Transferred Receivables. Any such subcontract shall not affect the Servicer's liability for performance of its duties and obligations pursuant to the terms hereof, and any such subcontract shall terminate upon designation of a successor Servicer. The Servicer hereby appoints ACI as subservicer (ACI, in such capacity, the "Subservicer") to perform the servicing, administration and collections functions of the Servicer hereunder; provided that the foregoing designation of ACI as subservicer does not (i) extend to the amendment or modification of a Receivable in accordance with Section 6.02(c) or (ii) contravene or otherwise exceed or violate Section 6.07. In no instance will the servicing and subservicing hereunder be inconsistent with, or in violation of, the terms and conditions of the Insurance Policy (and ACI shall continue its servicing and administration of the Insurance Policy). The Purchaser hereby consents to the designation of ACI as subservicer hereunder.

SECTION 6.02. Duties of Servicer. (a) The Servicer shall take or cause to be taken all such actions as may be necessary or advisable to collect each Transferred Receivable from time to time, all in accordance with applicable laws, rules and regulations, with reasonable care and diligence, and in accordance with the Credit and Collection Policy. The Purchaser hereby appoints the Servicer, from time to time designated pursuant to Section 6.01, as agent to enforce its ownership and other rights in the Transferred Receivables, the Related Security and the Collections with respect thereto. In performing its duties as Servicer, the Servicer shall exercise the same care and apply the same policies as it would exercise and apply if it owned the Transferred Receivables and shall act in the best interests of the Purchaser and its assignees. The Servicer's and the Subservicer's duties hereunder shall include paying, on behalf of the Sellers, all premiums due under the Insurance Policy when the same are due (and the Servicer and the Subservicer shall provide the Purchaser with evidence of such payment by no later than the Business Day following the date such payment is due) and performing all obligations of ACI under the Insurance Policy in accordance with the terms of the Insurance Policy. Without limiting the foregoing, the Servicer or the Subservicer will (i) (x) immediately, upon obtaining knowledge of the relevant Obligor's insolvency and (y) in all other cases, no later than four months after the relevant Receivable becomes due, file a claim under the Insurance Policy in such form as is required by the Insurer and with properly completed supporting documentation; (ii) not take any action to amend, supplement or otherwise modify the Insurance Policy (including, without

limitation, consenting to any changes to the Insurance Policy proposed by the Insurer as part of the annual review process) or waive any of its rights thereunder, without the Purchaser's prior consent in each case (other than any replacement of a Coverage Certificate that would not result in an Insurance Policy Event); (iii) not change the directions given to the Insurer regarding the remittance of Insurance Proceeds; (iv) service the Receivables as required by the Insurer pursuant to the Insurance Policy; (v) deliver to the Insurer in a timely fashion any document or report required by the Insurer; and (vi) not take, or omit to take, any action which gives rise to an exclusion from coverage under the Insurance Policy. The Servicer and the Subservicer will ensure that all records relating to the Receivables are consistent with the requirements of the Insurance Policy and that such records are in such form as will not result in rejection of otherwise proper claims under the Insurance Policy. In the event the Servicer or the Subservicer fails to file a claim with respect to any Receivable, the Purchaser may (but shall not be required to) file such claim under the Insurance Policy.

(b) (i) At any time when the Debt Ratings of ACI are not equal to the Required Ratings, prior to 10:00 A.M. (New York City Time) on the second Business Day of each calendar week, the Servicer shall prepare and forward to the Purchaser a Seller Report which shall contain information related to the Transferred Receivables as of the close of business on the last Business Day of the preceding calendar week.

(ii) At all other times, the Servicer shall prepare and forward to the Purchaser Seller Reports prior to 10:00 A.M. (New York City Time) on the 17th calendar day of each month (or, if such day is not a Business Day, the next succeeding Business Day), relating to all Transferred Receivables, and the Related Security and Collections with respect thereto on the last day of the immediately preceding month.

(c) If no Event of Termination or Incipient Event of Termination shall have occurred and be continuing, the Seller (other than ACI), while it is the Servicer (subject to the provisions of Section 6.07), may, in accordance with the Credit and Collection Policy, extend the maturity or adjust the Outstanding Balance of any Transferred Receivable as the Servicer deems appropriate to maximize Collections thereof, or otherwise amend or modify other terms of any Transferred Receivable, provided that, in each case, any necessary approval of the Insurer shall have been obtained.

(d) Each Seller shall deliver to the Servicer, and the Servicer shall hold in trust for such Seller and the Purchaser in accordance with their respective interests, all documents, instruments and records (including, without limitation, computer tapes or disks) which evidence or relate to Transferred Receivables.

(e) The Servicer shall as soon as practicable (and, in any event, within two Business Days) following receipt turn over to the relevant Seller any cash collections or other cash proceeds received with respect to Receivables not constituting Transferred Receivables.

(f) [Intentionally Omitted].

(g) The Servicer also shall perform the other obligations of the "Servicer" set forth in this Agreement with respect to the Transferred Receivables.

SECTION 6.03. Servicer Fee. The Purchaser shall pay to the Servicer (and the Subservicer, to the extent required by the second sentence of this Section 6.03), so long as it is acting as the Servicer hereunder, an aggregate periodic collection fee (the "Servicer Fee") of 0.50% per annum on the average daily aggregate Outstanding Balance of the Transferred Receivables, payable on each Settlement Date, or such other day during each calendar month as the Purchaser and the Servicer shall agree. So long as U.S. Seller is the Servicer and ACI is the Subservicer, the Servicer hereby directs the Purchaser to pay 80% of the Servicer Fee to the Subservicer and 20% of the Servicer Fee to the Servicer. So long as the U.S. Seller is acting as the Servicer hereunder and the Canadian Seller is acting as the Subservicer, amounts payable as the Servicer Fee pursuant to this Section 6.03 shall be reduced, on a dollar for dollar basis, by any amounts paid to the U.S. Seller and the Canadian Seller as a "Servicer Fee" and subservicing fee pursuant to Section 2.05(a) of the RPA, provided that such obligation of the Purchaser shall in no event be reduced below zero.

SECTION 6.04. Certain Rights of the Purchaser. (a) After a Control Event, the Purchaser may, at any time, give notice of ownership and/or direct the Obligors of Transferred Receivables and any Person obligated on any Related Security, or any of them, that payment of all amounts payable under any Transferred Receivable shall be made directly to the Purchaser or its designee. Each Seller hereby transfers to the Purchaser (and its assigns and designees) the exclusive ownership and control of the Lock-Boxes and Deposit Accounts maintained by such Seller for the purpose of receiving Collections.

(b) After a Control Event, each Seller shall, at any time upon the Purchaser's request and at such Seller's expense, give notice of the Purchaser's ownership to each Obligor of Transferred Receivables and direct that payments of all amounts payable under the Transferred
Receivables be made directly to the Purchaser or its designee.

(c) At any time after a Control Event, at the Purchaser's request and at the relevant Seller's expense, such Seller and the Servicer shall (A) assemble all of the documents, instruments and other records (including, without limitation, computer tapes and disks) that evidence or relate to the Transferred Receivables, and the related Contracts and Related Security, or that are otherwise necessary or desirable to collect the Transferred Receivables (including, without limitation, the Insurance Policy), and shall make the same available to the Purchaser at a place selected by the Purchaser or its designee, and (B) segregate all cash, checks and other instruments received by it from time to time constituting Collections of Transferred Receivables in a manner acceptable to the Purchaser and, promptly upon receipt, remit all such cash, checks and instruments, duly indorsed or with duly executed instruments of transfer, to the Purchaser or its designee. The Purchaser shall also have the right to make copies of all such documents, instruments and other records at any time.

(d) At any time after a Control Event, each Seller authorizes the Purchaser to take any and all steps in such Seller's name and on behalf of such Seller that are necessary or

desirable, in the determination of the Purchaser, to collect amounts due under the Transferred Receivables, including, without limitation, (i) endorsing such Seller's name on checks and other instruments representing Collections of Transferred Receivables, (ii) giving notice of the Purchaser's ownership to each Obligor of Transferred Receivables and direct that payments of all amounts payable under the Transferred Receivables be made directly to the Purchaser or its designee and (iii) enforcing the Transferred Receivables and the Related Security and related Contracts and the Insurance Policy.

SECTION 6.05. Rights and Remedies. (a) If either Seller or the Servicer fails to perform any of its obligations under this Agreement, the Purchaser may (but shall not be required to) itself perform, or cause performance of, such obligation, and, if such Seller (as Servicer or otherwise) fails to so perform, the costs and expenses of the Purchaser incurred in connection therewith shall be payable by such Seller as provided in Section 8.01 or Section 9.04 as applicable.

(b) Each Seller shall perform all of its obligations under the Contracts related to the Transferred Receivables to the same extent as if such Seller had not sold or contributed Receivables hereunder and the exercise by the Purchaser of its rights hereunder shall not relieve such Seller from such obligations or its obligations with respect to the Transferred Receivables. The Purchaser shall not have any obligation or liability with respect to any Transferred Receivables or related Contracts or the Insurance Policy, nor shall the Purchaser be obligated to perform any of the obligations of the Sellers thereunder.

(c) Each Seller shall cooperate with the Servicer in collecting amounts due from Obligors in respect of the Transferred Receivables.

(d) Each Seller hereby grants to Servicer an irrevocable power of attorney, with full power of substitution, coupled with an interest, to take in the name of such Seller all steps necessary or advisable to endorse, negotiate or otherwise realize on any writing or other right of any kind held or transmitted by such Seller or transmitted or received by Purchaser (whether or not from such Seller) in connection with any Transferred Receivable.

SECTION 6.06. Transfer of Records to Purchaser. Each Purchase and contribution of Receivables hereunder shall include the transfer to the Purchaser of all of the relevant Seller's right and title to and interest in the records relating to such Receivables and shall include an irrevocable non-exclusive license to the use of such Seller's computer software system to access and create such records. Such license shall be without royalty or payment of any kind, is coupled with an interest, and shall be irrevocable until all of the Transferred Receivables are either collected in full or become Defaulted Receivables.

Each Seller shall take such action requested by the Purchaser, from time to time hereafter, that may be necessary or appropriate to ensure that the Purchaser has an enforceable ownership interest in the records relating to the Transferred Receivables and rights (whether by ownership, license or sublicense) to the use of such Seller's computer software system to access and create such records.

In recognition of each Seller's need to have access to the records transferred to the Purchaser hereunder, the Purchaser hereby grants to such Seller an irrevocable license to access such records in connection with any activity arising in the ordinary course of such Seller's business or in performance of its duties as Servicer, provided that (i) such Seller shall not disrupt or otherwise interfere with the Purchaser's use of and access to such records during such license period and (ii) such Seller consents to the assignment and delivery of the records (including any information contained therein relating to such Seller or its operations) to any assignees or transferees of the Purchaser provided they agree to hold such records confidential.

SECTION 6.07. Limitation on Activities of Servicer in Canada. (a) Notwithstanding anything contained herein or anything contained in any other document delivered in connection herewith, the Servicer, as Servicer (and each Person to whom the Servicer delegates any of its responsibilities, including, without limitation, the Subservicer) shall not while acting in Canada, and shall not (and has no authority to) delegate to any Person acting in Canada the authority to, or permit any such Person to, enter into contracts or other agreements in the name of or on behalf of the Servicer or the Purchaser; and the Servicer (or any such delegate) is not permitted to (nor has authority to) establish an office or other place of business of the Servicer or the Purchaser in Canada. To the extent any responsibilities of any Person acting in Canada (including for greater certainty a Servicer employee or servant or ACI as Subservicer) to whom the Servicer has delegated responsibilities in respect of Transferred Receivables, the Related Security and the Collections hereunder or under any other Transaction Document involve or require such Person to enter a contract or other agreement in the name of or on behalf of the Sellers or the Purchaser, such servicing responsibility shall be fulfilled solely by, or upon specific approval of, the Servicer, and such Person is authorized to take such action or give such approval, but only from a place of business outside Canada, and such Person may not delegate such responsibility except upon the consent or the direction of the Agent (and then only subject to these same restrictions).

(b) Notwithstanding anything contained herein or anything contained in any other document delivered in connection herewith, the U.S. Seller (and each Person to whom the U.S. Seller delegates any of its responsibilities (including, without limitation, the Subservicer)) shall not, while acting in Canada, and shall not (and has no authority to) delegate to any Person acting in Canada the authority to, or permit any such Person to, enter into contracts or other agreements in the name of or on behalf of the U.S. Seller. The U.S. Seller is not permitted to (nor has authority to) establish an office or other place of business in Canada.

ARTICLE VII

EVENTS OF TERMINATION

SECTION 7.01. Events of Termination. If any of the following events ("Events of Termination") shall occur and be continuing:

(a) The Servicer or the Subservicer (i) shall fail to perform or observe any term, covenant or agreement under this Agreement (other than as referred to in clause (ii) or (iii) of this subsection (a)) and such failure shall remain unremedied for three Business Days or (ii) shall fail to make when due any payment or deposit to be made by it under this Agreement or (iii) shall fail to deliver any Seller Report when required and such failure shall remain unremedied for two Business Days; or

(b) Either Seller shall fail to make any payment required under Section 2.04(a) or 2.04(b); or

(c) Any representation or warranty (unless (x) such representation or warranty relates solely to one or more specific Receivables incorrectly characterized as Eligible Receivables and the applicable Seller shall have made any required deemed Collection payment pursuant to Section 2.04 with respect to such Receivables or (y) in the case of the representations and warranties contained in Sections 4.01 (a), (1) (the fourth sentence only) or (q), the breach of such representation or warranty is capable of being cured and is in fact cured (without any adverse impact on the Purchaser or its assigns or the collectibility of the Transferred Receivables) within five Business Days after the first date on which either Seller obtains knowledge or receives written notice of such breach from the Purchaser or its assigns) made or deemed made by either Seller (or any of its officers) under or in connection with this Agreement or any information or report delivered by either Seller, the Servicer or the Subservicer pursuant to this Agreement shall prove to have been incorrect or untrue in any material respect as of the date when made or deemed made or delivered; or

(d) Either Seller shall fail to perform or observe (i) any term, covenant or agreement contained in this Agreement (other than as referred to in Section 7.01(b) or clause (ii) of this Section 7.01(d)) on its part to be performed or observed and any such failure shall remain unremedied for 10 days after written notice thereof shall have been given to such Seller by the Purchaser or its assignees, or (ii) any covenant applicable to it contained in Sections 5.01(d), 5.01(g) or 5.01(h);or

(e) Either Seller shall fail to pay any principal of or premium or interest on any of its Debt which either arises under the Bank Agreement is outstanding in a principal amount of at least CAD 65,000,000 or the Dollar Equivalent thereof (or the equivalent in any other currency) in the aggregate when the same becomes due and payable (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise), and such failure shall continue after the applicable grace period, if any, specified in the agreement or instrument relating to such Debt; or any other event shall occur or condition shall exist under any agreement or instrument relating to any such Debt and shall continue after the applicable grace period, if any, specified in such agreement or instrument, if the effect of such event or condition is to accelerate, or to permit the acceleration of, the maturity of such

Debt; or any other event shall occur or condition shall exist under any agreement or instrument relating to such Debt, and shall continue after the applicable grace period, if any, specified in such agreement or instrument, the effect of which default or other event or condition is to cause, or to permit the holder or beneficiary of such Debt to cause, with the giving of notice if required, such Debt to become due prior to its stated maturity or to become subject to a mandatory offer to purchase by the obligor thereunder; or

(f) Any Purchase or contribution of Receivables hereunder, the Related Security and the Collections with respect thereto shall for any reason cease to constitute valid and perfected ownership of such Receivables, Related Security and Collections free and clear of any Adverse Claim; or

(g) (i) Either Seller, the Servicer or the Subservicer shall generally not pay its debts as such debts become due, or shall admit in writing its inability to pay its debts generally, or shall make a general assignment for the benefit of creditors; or (ii) any proceeding shall be instituted by or against such Seller, the Servicer or the Subservicer seeking to adjudicate it a bankrupt or insolvent, or seeking liquidation, winding up, reorganization, arrangement, adjustment, protection, relief, or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors or arrangement of debt, or seeking the entry of an order for relief or the appointment of a receiver, trustee, custodian or other similar official for it or for any substantial part of its property and, in the case of any such proceeding instituted against it (but not instituted by it), either such proceeding shall remain undismissed or unstayed for a period of 60 days, or any of the actions sought in such proceeding (including, without limitation, the entry of an order for relief against, or the appointment of a receiver, trustee, custodian or other similar official for, it or for any substantial part of its property) shall occur; or (iii) any receiver, trustee, custodian or similar official shall be appointed for either Seller, the Servicer or the Subservicer under any private right; or (iv) either Seller, the Servicer or the Subservicer shall take any corporate action to authorize any of the actions set forth above in this subsection (g); or

(h) An Event of Termination shall have occurred under the RPA;

then, and in any such event, the Purchaser may, by notice to the Sellers, take either or both of the following actions: (x) declare the Facility Termination Date to have occurred (in which case the Facility Termination Date shall be deemed to have occurred) and (y) without limiting any right under this Agreement to replace the Servicer (but subject, prior to the RPA Final Payment Date, to the designation made under the RPA), designate another Person to succeed the U.S. Seller as Servicer; provided, that, automatically upon the occurrence of any event (without any requirement for the passage of time or the giving of notice) described in clause (g)(ii) or (g)(iii) of this Section 7.01, the Facility Termination Date shall occur. Upon any such declaration or designation or upon such automatic termination, the Purchaser shall have, in addition to the rights and remedies under this Agreement, all other rights and remedies with respect to the Receivables provided after default under the UCC, the PPSA and under other applicable law, which rights and remedies shall be cumulative.

ARTICLE VIII

INDEMNIFICATION

SECTION 8.01. Indemnities by the Sellers. Without limiting any other rights which the Purchaser may have hereunder or under applicable law, each Seller hereby agrees to indemnify the Purchaser and its assigns and transferees (each, an "Indemnified Party") from and against any and all damages, claims, losses, liabilities and related costs and expenses, including reasonable attorneys' fees and disbursements (all of the foregoing being collectively referred to as "Indemnified Amounts"), awarded against or incurred by any Indemnified Party arising out of or as a result of this Agreement or the purchase or contribution of any Transferred Receivables or in respect of any Transferred Receivable originated by such Seller or any related Contract, including, without limitation, arising out of or as a result of:

(i) the characterization in any Seller Report or other statement made by or on behalf of such Seller of any Transferred Receivable as an Eligible Receivable which is not an Eligible Receivable as of the date of such Seller Report or statement;

(ii) any representation or warranty or statement made or deemed made by such Seller (or any of its officers) under or in connection with this Agreement, which shall have been incorrect in any material respect as of the date when made;

(iii) the failure by such Seller to comply with any applicable law, rule or regulation with respect to any Transferred Receivable or the related Contract or the transfer of such Receivable hereunder (including, without limitation, the Bulk Sales Act (Newfoundland and Labrador)); or the failure of any Transferred Receivable or the related Contract to conform to any such applicable law, rule or regulation; or the failure by such Seller to pay, remit, or account for any taxes related to or included in a Receivable when due;

(iv) the failure to vest in the Purchaser absolute ownership of the Receivables that are, or that purport to be, the subject of a Purchase or contribution under this Agreement and the Related Security and Collections in respect thereof, free and clear of any Adverse Claim (other than created pursuant to the Transaction Documents);

(v) the failure of such Seller to have filed or sent, or any delay in filing or sending, financing statements, notices or other similar instruments or documents under the UCC or the PPSA of any applicable jurisdiction or other applicable laws with respect to any Receivables that are, or that purport to be, the subject of a

Purchase or contribution under this Agreement and the Related Security and Collections in respect thereof, whether at the time of any Purchase or contribution or at any subsequent time or the failure to take any other steps required to perfect any such Purchase or contribution; or the failure to have properly notified any Obligor of the transfer, sale or assignment of any Receivable pursuant to this Agreement, to the extent such notice is required to perfect the same under Quebec law for purposes of this clause (v), "perfect" under Quebec law means to render opposable, publish and allow the setting up of the purchaser's interest in, and right to collect payment under, the assets which are the subject of such transfer, sale and assignment, and to make opposable, publish and allow the setting up of such transfer, sale and assignment as against Obligors and other third parties, including any trustee in bankruptcy;

(vi) any dispute, claim, offset or defense (other than discharge in bankruptcy of the Obligor) of the Obligor to the payment of any Receivable that is, or that purports to be, the subject of a Purchase or contribution under this Agreement (including, without limitation, a defense based on such Receivable or the related Contract not being a legal, valid and binding obligation of such Obligor enforceable against it in accordance with its terms), or any other claim resulting from the sale of the merchandise or services related to such Receivable or the furnishing or failure to furnish such merchandise or services or relating to collection activities with respect to such Receivable (if such collection activities were performed by the U.S. Seller acting as Servicer);

(vii) any failure of such Seller, as Servicer or otherwise, to perform its duties or obligations in accordance with the provisions hereof or to perform its duties or obligations under any Contract related to a Transferred Receivable, including, without limitation, any failure of such Seller to file (or cause the Servicer to file) claims under the Insurance Policy in a timely fashion and with properly completed supporting documentation, any action or omission by such Seller which gives rise to an exclusion from coverage under the Insurance Policy, any failure by such Seller to cause the Servicer to service the Receivables in the manner required by the Insurer or any failure by such Seller to deliver (or cause the Servicer to deliver) to the Insurer any document or report required by the Insurer to be delivered in a timely manner;

(viii) any products liability or other claim arising out of or in connection with merchandise, insurance or services which are the subject of any Contract relating to a Transferred Receivable originated by such Seller;

(ix) the commingling of Collections of Transferred Receivables by such Seller or a designee of such Seller, as Servicer or otherwise, at any time with other funds of such Seller or an Affiliate of such Seller;

(x) any investigation, litigation or proceeding related to this Agreement or the use of proceeds of Purchases or the ownership of Receivables, the Related Security, or Collections with respect thereto or in respect of any Receivable, Related Security or Contract (including, without limitation, in connection with the preparation of a defense or appearing as a third party witness in connection therewith and regardless of whether such investigation, litigation or proceeding is brought by either Seller, an Indemnified Party or any other Person or an Indemnified Party is otherwise a party thereto);

(xi) any failure of such Seller to comply with its covenants contained in this Agreement (including in its capacity as Servicer or Subservicer);

(xii) any claim brought by any Person other than an Indemnified Party arising from any activity by a Seller or any Affiliate of such Seller in servicing, administering or collecting any Transferred Receivable;

(xiii) any claim arising out of any failure by such Seller to obtain a consent (if required) from the relevant Obligor to the transfer, sale or assignment of any Receivable pursuant to this Agreement; or

(xiv) after the date hereof, any Indemnified Party shall be subject to Canadian taxes on income or capital in connection with the Receivables or the transactions contemplated by this Agreement and resulting from such Indemnified Party having a permanent establishment in Canada solely as a result of the transactions contemplated hereby (but only directly and exclusively as a result of any breach by such Seller or the Servicer (or any delegatee thereof including ACI as Subservicer) of its obligations hereunder).

It is expressly agreed and understood by the parties hereto (i) that the foregoing indemnification is not intended to, and shall not, constitute a guarantee of the collectibility or payment of the Transferred Receivables and (ii) that nothing in this Section 8.01 shall require either Seller to indemnify any Person (A) for Receivables which are not collected, not paid or uncollectible on account of the insolvency, bankruptcy, or financial inability to pay of the applicable Obligor, (B) for damages, losses, claims or liabilities or related costs or expenses to the extent found in a final non-appealable judgment of a court of competent jurisdiction to have resulted from such Person's gross negligence or willful misconduct, or (C) for any income taxes or franchise taxes incurred by such Person arising out of or as a result of this Agreement or in respect of any Transferred Receivable or any Contract, other than (x) Taxes (to the extent provided in Section 2.07) and (y) Canadian taxes strictly on income or capital in connection with the Receivables or the transactions contemplated by this Agreement and resulting from any Indemnified Party having a permanent establishment in Canada solely as a result of the transactions contemplated hereby (but only directly and exclusively as a result of any breach by such Seller or the Servicer (or any delegatee thereof) of its obligations hereunder).

ARTICLE IX

MISCELLANEOUS

SECTION 9.01. Amendments, Etc. (a) Amendments Generally. No amendment or waiver of any provision of this Agreement or consent to any departure by either Seller therefrom shall be effective unless in a writing signed by the Purchaser and, in the case of any amendment, also signed by the Sellers, and then such amendment, waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. No failure on the part of the Purchaser to exercise, and no delay in exercising, any right hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right hereunder preclude any other or further exercise thereof or the exercise of any other right. Notwithstanding any other provision of this Section 9.01 (a), Exhibits B and F hereto may be amended in accordance with the procedures set forth in Sections 5.01(g) and 5.01(b), respectively, and (ii) the amendments described in clauses (c)-(e) of this Section 9.01 shall become effective upon the satisfaction of the applicable conditions precedent set forth in this Section 9.01.

(b) Replacement Bank Agreement. In the event that any financing is provided to the Parent, or any of its subsidiaries, pursuant to which the Parent is a borrower or guarantor or the lenders otherwise rely upon the credit or the financial position of the Parent, including by incorporation of representations and warranties, covenants or events of default relating to the Parent (such financing, the "Replacement Bank Agreement"), the Sellers and the Purchaser agree to enter into good faith negotiations for a period of 30 days after the effectiveness of such Replacement Bank Agreement, or such longer period as may be agreed to, in writing, by the Sellers, the Purchaser and the Purchaser's assigns, in order to amend this Agreement so as to reflect, as applicable, the terms and conditions of analogous clauses in the Replacement Bank Agreement to the reasonable satisfaction of the Purchaser and its assigns, but in each case in a manner which is consistent with the provisions of Section 4.0 l(e) and the first sentence of Section 5.02.

(c) Continuance Amendments. Effective as of the effective date (the "Continuance Effective Date") of the Continuance as set forth in the Notice of Continuance and Change of Address to be delivered by ACI to the Purchaser in the form attached hereto as Exhibit G (the "Notice of Continuance and Change of Address"), which Notice of Continuance and Change of Address shall be delivered to the Purchaser by no later than five (5) calendar days prior to the Continuance Effective Date, and subject to the satisfaction of the conditions precedent set forth in this Section 9.01(c):

(i) The introductory paragraph to this Agreement is amended by deleting the phrase "ABITIBI-CONSOLIDATED INC., a Canadian corporation" and replacing it with the name and description of the Continued Entity, as indicated in the Notice of Continuance and Change of Address.

(ii) Exhibit F to this Agreement is deleted in its entirety and replaced with Exhibit F attached to the Notice of Continuance and Change of Address.

(iii) Each reference to "Abitibi-Consolidated Inc.," "ACI", the "Canadian Seller" and the "Subservicer" (to the extent ACI continues to be so designated and to act in such capacity) in this Agreement shall mean and be a reference to the Continued Entity, as indicated in the Notice of Continuance and Change of Address.

The amendments described in this Section 9.01(c) shall become effective on the Continuance Effective Date, subject to the receipt by the Purchaser (subject to the terms of clause (B) below) of each of the following, each in form and substance satisfactory to the Purchaser and its assigns:

(A) acknowledgment copies or time stamped receipt copies (or other satisfactory evidence of filing) of proper financing statements, financing change statements and financing statement amendments, duly filed against ACI and the Continued Entity, as applicable, on or before the Continuance Effective Date under the UCC and PPSA of all jurisdictions that the Purchaser may deem necessary or desirable in order to continue the Purchaser's ownership of the Transferred Receivables and Related Security and Collections with respect thereto;

(B) favourable opinions of (x) Stikeman Elliott LLP, Canadian counsel for the Continued Entity and (y) Stewart McKelvey LLP, Nova Scotia counsel for the Continued Entity, each of which opinions may be combined with and incorporated in the relevant opinion to be delivered pursuant to Section 9.01(d)(B) (the "Amalgamation Opinion") provided that the Amalgamation Opinion is delivered to the Purchaser within thirty (30) days of the Continuance Effective Date; for greater certainty, the delivery of the opinions required pursuant to this clause (B) shall not delay the coming into effect of the amendments described in this Section 9.01(c);

(C) a copy of the constating documents of the Continued Entity, giving effect to the Continuance, certified by the Secretary or Assistant Secretary of the Continued Entity;

(D) a copy of the organizational documents of the Continued Entity, giving effect to the Continuance, certified by or on behalf of the Registrar of Joint Stock Companies of Nova Scotia, dated as of a recent date; and

(E) a certificate as to the good standing or qualification to do business, as applicable, of the Continued Entity from an appropriate official of each of Nova Scotia and Quebec, dated as of a recent date.

(d) Amalgamation Amendments. Effective as of the effective date (the "Amalgamation Effective Date") of the Amalgamation as set forth in the Notice of Amalgamation to be delivered by ACI to the Purchaser in the form attached hereto as Exhibit H (the "Notice of Amalgamation"), which Notice of Amalgamation shall be delivered to the Purchaser by no later

than five (5) calendar days prior to the Amalgamation Effective Date, and subject to the satisfaction of the conditions precedent set forth in this Section 9.01(d):

(i) The introductory paragraph to this Agreement is amended by deleting the name and description of the Continued Entity and replacing it with the name and description of the Amalgamated Entity, as indicated in the Notice of Amalgamation.

(ii) Exhibit E to this Agreement is deleted in its entirety and replaced with Exhibit E attached to the Notice of Amalgamation.

(iii) Exhibit F to this Agreement is deleted in its entirety and replaced with Exhibit F attached to the Notice of Amalgamation.

(iv) Each reference to the Continued Entity, "Abitibi-Consolidated Inc.," "ACI", the "Canadian Seller" and the "Subservicer" (to the extent ACI continues to be so designated and to act in such capacity) in this Agreement shall mean and be a reference to the Amalgamated Entity, as indicated in the Notice of Amalgamation.

The amendments described in this Section 9.01(d) shall become effective on the Amalgamation Effective Date, subject to the receipt by the Purchaser of each of the following, each in form and substance satisfactory to the Purchaser and its assigns:

(A) acknowledgment copies or time stamped receipt copies (or other satisfactory evidence of filing) of proper financing statements, financing change statements and financing statement amendments, duly filed against the Continued Entity and the Amalgamated Entity, as applicable, on or before the Amalgamation Effective Date under the UCC and PPSA of all jurisdictions that the Purchaser may deem necessary or desirable in order to continue the Purchaser's ownership of the Transferred Receivables and Related Security and Collections with respect thereto;

(B) favourable opinions of (i) Stikeman Elliott LLP, Canadian counsel for the Amalgamated Entity and (ii) Stewart McKelvey LLP, Nova Scotia counsel for the Amalgamated Entity;

(C) a copy of the constating documents of the Amalgamated Entity, giving effect to the Amalgamation, certified by the Secretary or Assistant Secretary of the Amalgamated Entity;

(D) a copy of the organizational documents of the Amalgamated Entity, giving effect to the Amalgamation, certified by or on behalf of the Registrar of Joint Stock Companies of Nova Scotia, dated as of a recent date;

(E) a certificate as to the good standing or qualification to do business, as applicable, of the Amalgamated Entity from an appropriate official of each of Nova Scotia and Quebec, dated as of a recent date;

(F) completed requests for information and search reports, dated on or before the Amalgamation Effective Date, listing all effective financing statements and other registrations filed in the jurisdictions referred to in subsection (A) above and in any other jurisdictions reasonably requested by the Purchaser that name 3224112 Nova Scotia Limited as debtor, together with copies of such financing statements and other registrations; and

(G) acknowledgment copies of proper financing statements and registrations, if any, necessary to release all security interests and other rights of any Person in the Transferred Receivables, Contracts or Related Security.

(e) Change of Address Amendments. Effective as of the effective date (the "Change of Address Effective Date") of the Change of Address as set forth in the Notice of Change of Address to be delivered by ACSC to the Purchaser in the form attached hereto as
Exhibit I (the "Notice of Change of Address"), which Notice of Change of Address shall be delivered to the Purchaser by no later than five (5) Business Days prior to the Change of Address Effective Date, and subject to the satisfaction of the conditions precedent set forth below, Exhibits E and F to this Agreement are deleted in their entirety and replaced with Exhibits E and F attached to the Notice of Change of Address, respectively.

The amendments described in this Section 9.01(e) shall become effective on the Change of Address Effective Date, subject to the receipt by the Purchaser, on or prior to the Change of Address Effective Date, of acknowledgment copies or time stamped receipt copies (or other satisfactory evidence of filing) of proper financing statements and financing statement amendments, duly filed against ACSC on or before the Change of Address Effective Date under the UCC of all jurisdictions that the Purchaser may deem necessary or desirable in order to continue the Purchaser's ownership of the Transferred Receivables and Related Security and Collections with respect thereto.

(f) Waivers. The Purchaser hereby waives the requirement to provide thirty (30) days' written notices set forth in Sections 5.01(b) and 5.01(k)(ii), solely to the extent relating to the Continuance, the Amalgamation and the Change of Address; provided that ACI or ACSC, as applicable, timely complies with the requirements to provide such notices in each case pursuant to its agreements set forth in clauses (c), (d) and (e) of this Section 9.01, as applicable.

SECTION 9.02. Notices, Etc. All notices and other communications hereunder shall, unless otherwise stated herein, be in writing (which shall include facsimile communication) and be faxed or delivered, to each party hereto, at its address set forth on Exhibit E hereto or at such other address as shall be designated by such party in a written notice to the other parties hereto. Notices and communications by facsimile shall be effective when sent (and shall be

followed by hard copy sent by regular mail), and notices and communications sent by other means shall be effective when received.

SECTION 9.03. Binding Effect; Assignability. (a) This Agreement shall be binding upon and inure to the benefit of the Sellers, the Purchaser and their respective successors and assigns; provided, however, that neither Seller may assign its rights or obligations hereunder or any interest herein without the prior written consent of the Purchaser, hi connection with any sale or assignment by the Purchaser of all or a portion of the Transferred Receivables, the buyer or assignee, as the case may be, shall, to the extent of its purchase or assignment, have all rights of the Purchaser under this Agreement (as if such buyer or assignee, as the case may be, were the Purchaser hereunder) except (i) such assignee or buyer shall not be entitled to the Purchaser's rights under Section 5.01(i) (but nothing contained herein shall limit any similar rights which the Sellers may separately grant to such assignee or buyer) and (ii) to the extent specifically provided in the agreement between the Purchaser and such buyer or assignee, as the case may be.

(b) This Agreement shall create and constitute the continuing obligations of the parties hereto in accordance with its terms, and shall remain in full force and effect until such time, after the Facility Termination Date, when all of the Transferred Receivables are either collected in full or become Defaulted Receivables; provided, however, that rights and remedies with respect to any breach of any representation and warranty made by either Seller pursuant to Article IV and the provisions of Article VII and Sections 9.04, 9.05 and 9.06 shall be continuing and shall survive any termination of this Agreement.

SECTION 9.04. Costs, Expenses and Taxes. (a) In addition to the rights of indemnification granted to the Purchaser pursuant to Article VIII hereof, the Sellers jointly and severally agree to pay on demand all reasonable costs and expenses in connection with the preparation, execution and delivery of this Agreement and the other documents and agreements to be delivered hereunder, including, without limitation, the reasonable fees and reasonable out-of-pocket expenses of counsel for the Purchaser with respect thereto and with respect to advising the Purchaser as to its rights and remedies under this Agreement, and the Sellers jointly and severally agree to pay all costs and expenses, if any (including reasonable counsel fees and expenses), in connection with the enforcement of this Agreement and the other documents to be delivered hereunder excluding, however, any costs of enforcement or collection of Transferred Receivables which are not paid on account of the insolvency, bankruptcy or financial inability to pay of the applicable Obligor.

(b) In addition, the Sellers jointly and severally agree to pay any and all stamp and other taxes and fees payable in connection with the execution, delivery, filing and recording of this Agreement or the other documents or agreements to be delivered hereunder, and the Sellers jointly and severally agree to save each Indemnified Party harmless from and against any liabilities with respect to or resulting from any delay in paying or omission to pay such taxes and fees.

SECTION 9.05. No Proceedings. Each Seller hereby agrees that it will not institute against, or join any other Person in instituting against, the Purchaser any proceeding of

the type referred to in Section 7.01(g) so long as there shall not have elapsed one year plus one day since the later of (i) the Facility Termination Date and (ii) the date on which all of the Transferred Receivables are either collected in full or become Defaulted Receivables.

SECTION 9.06. [Intentionally Omitted].

SECTION 9.07. GOVERNING LAW. THIS AGREEMENT SHALL, IN ACCORDANCE WITH SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK, BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO ANY CONFLICT OF LAWS PRINCIPLES THEREOF THAT WOULD CALL FOR THE APPLICATION OF THE LAWS OF ANY OTHER JURISDICTION, EXCEPT (A) AS OTHERWISE PROVIDED IN SECTION 2.02(f) AND (B) TO THE EXTENT THAT, PURSUANT TO THE UCC OF THE STATE OF NEW YORK, THE PERFECTION AND THE EFFECT OF PERFECTION OR NON-PERFECTION OF THE PURCHASER'S OWNERSHIP OF OR SECURITY INTEREST IN THE RECEIVABLES ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK.

SECTION 9.08. Third Party Beneficiary. Each of the parties hereto hereby acknowledges that the Purchaser may assign all or any portion of its rights under this Agreement and that such assignees may (except as otherwise agreed to by such assignees) further assign their rights under this Agreement, and each Seller hereby consents to any such assignments. All such assignees, including parties to the RPA in the case of assignment to such parties, are intended by the parties hereto to be and shall be third party beneficiaries of, and shall be entitled to enforce the Purchaser's rights and remedies under, this Agreement to the same extent as if they were parties thereto, except to the extent specifically limited under the terms of their assignment.

SECTION 9.09. Execution in Counterparts. This Agreement may be executed in any number of counterparts, each of which when so executed shall be deemed to be an original and all of which when taken together shall constitute one and the same agreement.

SECTION 9.10. Consent to Jurisdiction. (a) Each party hereto hereby irrevocably submits to the non-exclusive jurisdiction of any New York State or Federal court sitting in New York City in any action or proceeding arising out of or relating to this Agreement or the other Transaction Documents, and each party hereto hereby irrevocably agrees that all claims in respect of such action or proceeding may be heard and determined in such New York State court or, to the extent permitted by law, in such Federal court. The parties hereto hereby irrevocably waive, to the fullest extent they may effectively do so, the defense of an inconvenient forum to the maintenance of such action or proceeding. The parties hereto agree that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.

(b) The U.S. Seller consents to the service of any and all process in any such action or proceeding by the mailing of copies of such process to it at its address specified in

Section 9.02. The Canadian Seller consents to the service of any and all process in any such action or proceeding by the mailing of copies of such process to the attention of the U.S. Seller at its address specified in Section 9.02, or in any other manner permitted by applicable law. Nothing in this Section 9.10 shall affect the right of the Purchaser or its assigns to serve legal process in any other manner permitted by law.

(c) To the extent that the Canadian Seller has or hereafter may acquire any immunity from jurisdiction of any court or from any legal process (whether through service or notice, attachment prior to judgment, attachment in aid of execution, execution or otherwise) with respect to itself or its property, the Canadian Seller hereby irrevocably waives such immunity in respect of its obligations under this Agreement.

SECTION 9.11. Judgment. (a) If for the purposes of obtaining judgment in any court it is necessary to convert a sum due hereunder in Dollars into another currency, the parties hereto agree, to the fullest extent that they may effectively do so, that the rate of exchange used shall be that at which in accordance with normal banking procedures the Purchaser or its assigns could purchase Dollars with such other currency at New York, New York on the Business Day preceding that on which final judgment is given.

(b) The obligations of each Seller and the Servicer (each, a "Payor") in respect of any sum due from such Payor to the Purchaser or its assigns (each, a "Recipient") hereunder shall, notwithstanding any judgment in a currency other than Dollars, be discharged only to the extent that on the Business Day following such Recipient's receipt of any sum adjudged to be so due in such other currency, such Recipient may, in accordance with normal banking procedures purchase (and remit in New York) Dollars with such other currency; if the Dollars so purchased and remitted are less than the sum originally due to such Recipient in Dollars, the relevant Payor agrees, as a separate obligation and notwithstanding any such judgment, to indemnify the relevant Recipient against such loss, and if the Dollars so purchased exceed the sum originally due to the relevant Recipient in Dollars, the relevant Recipient agrees to remit to the relevant Payor such excess.

SECTION 9.12. Execution by ACI. This Agreement shall be considered to be executed and delivered by ACI at White Plains, New York and once an authorized director or officer of ACI resident in the United Sates of America has executed the same.

SECTION 9.13. Language. This Agreement and all related documents have been written in the English language at the express request of the parties. Le présent contrat ainsique tousles documents s'y rattachant ont été rédigés en anglais à la demande expresse des parties.

SECTION 9.14. Acknowledgment. Each of the parties hereto acknowledges that the amendment and restatement of the Original PCA on the terms and conditions set forth herein shall not in any way affect any sales, transfers, assignments or security interest grants effected pursuant to the Original PCA or any representations, warranties or covenants made by the Sellers or the Servicer with respect to such sales, transfers, assignments or security interest grants, any indemnities made by the Sellers or by the Servicer, or any rights or remedies of the Purchaser or

its assigns with respect thereto. Each of the relevant parties hereto confirms all sales, transfers, assignments and security interests effected pursuant to the Original PCA.

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written.


SELLERS:	ABITIBI-CONSOLIDATED INC.

	By:	/s/ [UNREADABLE]

		Title:
		Name:



	By:	/s/ [UNREADABLE]
		Title:
		Name:


	ABITIBI CONSOLIDATED SALES CORPORATION
	By:	/s/ Breen H Blaine
		Title: Vice President
		Name: BREEN H BLAINE



	By:	/s/ Colin Keeler
		Title: Vice President
		Name: Colin Keeler


PURCHASER:	ABITIBI-CONSOLIDATED U.S. FUNDING CORP.

	By:	/s/ Breen H Blaine

		Title: President Name: BREEN H BLAINE



	By:	/s/ Colin Keeler
		Title: Vice President
		Name: Colin Keeler

[Purchase and Contribution Agreement)

Pursuant to Section 5.01(m) of the Original RPA, Citibank, N.A., London Branch, as Agent, consents to the foregoing Agreement:

CITIBANK, N.A., London Branch, as Agent


By:		/s/ Nigel Kilvington

		Title: Vice President
		Name: Nigel Kilvington

[Purchase and Contribution Agreement]

EXHIBIT A

CREDIT AND COLLECTION POLICY

[INSERTED BELOW]

A-1

EXHIBIT B

Deposit Accounts

Complete

Name of

Name and

Deposit

Lock box

Address of

Lock Box

Account

Deposit

Originator

Owner

Deposit Bank

Nos.

Location

Owner

Account Bank

Abitibi- Consolidated Inc.

Royal Bank of Canada

•972C

Toronto

Abitibi- Consolidated Inc.

Royal Bank of Canada

1 Place Ville
Marie
Montreal

•10C and •33C

Vancouver
Montreal

•10U and •33U

Vancouver
Montreal

Abitibi
Consolidated
Sales
Corporation

Abitibi- Consolidated U.S. Funding Corp.

LaSalle Bank
National
Association
135 South

•1070

Chicago

Abitibi- Consolidated U.S. Funding Corp.

LaSalle Bank National
Association

LaSalle Street
Chicago
IL 60603

Chicago

Abitibi- Consolidated Inc.

N/A

Citibank, N.A. 390 Greenwich St., 8th Floor New York
NY 10013

N/A

Abitibi- Consolidated U.S. Funding Corp.

Citibank, N.A.

B-1

EXHIBIT C

FORM OF
DEFERRED PURCHASE PRICE NOTE

New York, New York
, 200

FOR VALUE RECEIVED, ABITIBI-CONSOLIDATED U.S. FUNDING CORP., a Delaware corporation (the "Purchaser"), hereby promises to pay to [NAME OF SELLER] (the "Seller") the principal amount of this Note, determined as described below, together with interest thereon at a rate per annum equal at all times to the sum of the Adjusted Eurodollar Rate (as defined in the RPA) for periods of one month plus the Applicable Margin (as defined in the RPA) plus 0.25%, in each case in lawful money of the United States of America. Capitalized terms used herein but not defined herein shall have the meanings assigned to such terms in the Purchase and Contribution Agreement dated as of October 27, 2005 among Abitibi-Consolidated Inc., Abitibi Consolidated Sales Corporation and the Purchaser (such agreement, as it may from time to time be amended, restated or otherwise modified in accordance with its terms, the "Purchase and Contribution Agreement"). This Note is one of the notes referred to in the definition of "Deferred Purchase Price" in the Purchase and Contribution Agreement.

The aggregate principal amount of this Note at any time shall be equal to the difference between (a) the sum of the aggregate principal amount of this Note on the date of the issuance hereof and each addition to the principal amount of this Note pursuant to the terms of Section 2.02 of the Purchase and Contribution Agreement minus (b) the aggregate amount of all payments made in respect of the principal amount of this Note, in each case, as recorded on the schedule annexed to and constituting a part of this Note, but failure to so record shall not affect the obligations of the Purchaser to the Seller.

The entire principal amount of this Note shall be due and payable one year and one day after the Facility Termination Date or such later date as may be agreed in writing by the Seller and the Purchaser. The principal amount of this Note may, at the option of the Purchaser, be prepaid in whole at any time or in part from time to time. Interest on this Note shall be paid in arrears on each Settlement Date, at maturity and thereafter on demand. All payments hereunder shall be made by wire transfer of immediately available funds to such account of the Seller as the Seller may designate in writing.

Notwithstanding any other provisions contained in this Note, in no event shall the rate of interest payable by the Purchaser under this Note exceed the highest rate of interest permissible under applicable law.

The obligations of the Purchaser under this Deferred Purchase Price Note are subordinated in right of payment, to the extent set forth in Section 2.03(c) of the Purchase and

C-1

Contribution Agreement, to the prior payment in full of all Capital, Yield, Fees and other obligations of the Purchaser under the RPA.

Notwithstanding any provision to the contrary in this Deferred Purchase Price Note or elsewhere, other than with respect to payments specifically permitted by Section 2.03(c) of the Purchase and Contribution Agreement, no demand for any payment may be made hereunder, no payment shall be due with respect hereto and the Seller shall have no claim for any payment hereunder prior to the occurrence of the Facility Termination Date and then only on the date, if ever, when all Capital, Yield, Fees and other obligations owing under the RPA shall have been paid in full.

In the event that, notwithstanding the foregoing provision limiting such payment, the Seller shall receive any payment or distribution on this Deferred Purchase Price Note which is not specifically permitted by Section 2.03(c) of the Purchase and Contribution Agreement, such payment shall be received and held in trust by the Seller for the benefit of the entities to whom the obligations are owed under the RPA and shall be promptly paid over to such entities.

The Purchaser hereby waives diligence, presentment, demand, protest and notice of any kind whatsoever.

Neither this Note, nor any right of the Seller to receive payments hereunder, shall, without the prior written consent of the Purchaser and (prior to the RPA Final Payment Date) the Agent under the RPA, be assigned, transferred, exchanged, pledged, hypothecated, participated or otherwise conveyed.

THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

ABITIBl-CONSOLIDATED U.S. FUNDING CORP.


		By:

				Title:


		By:

				Title:

C-2

SCHEDULE TO DEFERRED PURCHASE PRICE NOTE


		Amount of
	Addition to	Principal paid	Unpaid Principal	Notation
Date	Principal Amount	or Prepaid	Balance	Made By

C-3

EXHIBIT E

ADDRESSES


Purchaser:		Abitibi-Consolidated U.S. Funding Corp.
		4 Gannett Drive, ACUSFC Room
		White Plains, N.Y. 10604-3400
		Attention: Breen Blaine
		Facsimile No.: 914-640-8920

Canadian Seller:		ABITIBI-CONSOLIDATED INC
		1155 METCALFE STREET
		SUITE 800
		MONTREAL QC H3B 542
		CANADA
		ATTENTION: TREASURY DEPARTMENT
		Facsimile No.: 514-3942267

U.S. Seller:		Abitibi Consolidated Sales Corporation
		4 Gannett Drive
		White Plains, N.Y. 10604-3400
		Attention: Breen Blaine
		Facsimile No.: 914-640-8917

		With Copy To:
		Attention: Montréal Legal Department
		Facsimile No.: 514-394-3644

E-1

SELLER UCC AND PPSA INFORMATION

U.S. Seller:


Name:		Abitibi Consolidated Sales Corporation

Current Address (and location of chief executive office and Receivables records):		4 Gannett Drive White Plains, NY 10604-3400

Prior Address:		None

Jurisdiction of Organization:		Delaware

UCC Filing Office:		Delaware Secretary of State

Prior Name:		Abitibi-Price Sales Corporation

Canadian Seller:


Name:		Abitibi-Consolidated Inc.

Chief Executive and Registered Office (and location of Receivables records):		1155 Metcalfe Street, Suite 800 Montreal, QC H3B 5H2 Canada

Jurisdiction of Organization:		Canada

PPSA Filing Offices:		Quebec, Ontario, British Columbia and Alberta

Prior Name:		None

F-1

FORM OF NOTICE OF CONTINUANCE AND CHANGE OF ADDRESS

TO: ABITIBI-CONSOLIDATED U.S. FUNDING CORP. (the "Purchaser")

4 Gannett Drive, ACUSFC Room

White Plains, N.Y. 10604-3400

Attention: Breen Blaine

Facsimile No.: 914-640-8920

RE: Amended and Restated Purchase and Contribution Agreement dated as of January 29, 2008 between, inter alia, the undersigned, as seller, and the Purchaser, as purchaser (as amended, the "PCA")

Pursuant to the requirements of Section 9.01(c) of the PCA, the undersigned hereby gives you notice that it will, on [insert Continuance Effective Date], continue itself under the laws of Nova Scotia and such continued entity ( " Continued ACI" ) will be a limited liability company and its name, jurisdiction of organisation, chief executive and registered office and location of Receivables (as defined in the PCA) records will be as disclosed in Exhibit F attached hereto, which Exhibit F shall replace the current Exhibit F to the PCA on the effective date of such continuance.

signature page follows

DATED this day of , .

ABITIBI-CONSOLIDATED INC.
Per:
	Name:
	Title:

Per:
	Name:
	Title:

SELLER UCC AND PPSA INFORMATION

U.S. Seller :

Name:

Abitibi Consolidated Sales Corporation

Current Address (and location of chief executive office and Receivables records):

4 Gannett Drive
White Plains, N.Y. 10604-3400

Prior Address:

None

Jurisdiction of Organization:

Delaware

UCC Filing Office:

Delaware Secretary of State

Prior Name:

Abitibi-Price Sales Corporation

Canadian Seller :

Name:

Abitibi-Consolidated Inc.

Chief Executive Office (and location of Receivables records):

1155 Metcalfe Street, Suite 800
Montreal, QC H3B 5H2
Canada

Registered Office:

1959 Upper Water Street, Suite 900
Halifax, N.S. B3J 3N2
Canada

Jurisdiction of Organization:

Nova Scotia

PPSA Filing Offices:

Quebec, Ontario, British Columbia, Alberta and Nova Scotia

Prior Names:

None.

G-1

FORM OF NOTICE OF AMALGAMATION

TO: ABITIBI-CONSOLIDATED U.S. FUNDING CORP. (the "Purchaser")

4 Gannett Drive, ACUSFC Room

White Plains, N.Y. 10604-3400

Attention: Breen Blaine

Facsimile No.: 914-640-8920

Pursuant to the requirements of Section 9.01(d) of the PCA, the undersigned hereby gives you notice that, further to its continuance under the laws of Nova Scotia as a limited liability company, such continued entity ( "Continued ACI " ) will, on [insert Amalgamation Effective Date], amalgamate with a newly incorporated Nova Scotia limited liability company which, prior to such amalgamation, will be an affiliate of Continued ACI. The entity resulting from the foregoing amalgamation (the "Amalgamated Entity") will be an unlimited liability company and its name, jurisdiction of organisation, chief executive and registered office and location of Receivables (as defined in the PCA) records will be as disclosed in Exhibits E and F attached hereto, which Exhibits E and F shall replace the current Exhibits E and F to the PCA on the effective date of such amalgamation.

signature page follows

DATED this _______ day of _______________________, _________

ABITIBI-CONSOLIDATED INC.
Per:
	Name:
	Title:

Per:
	Name:
	Title:

ADDRESSES

Purchaser:	Abitibi-Consolidated U.S. Funding Corp. 4 Gannett Drive, ACUSFC Room White Plains, N.Y. 10604-3400 Attention: Breen Baine Facsimile No.: 914-640-8920

Canadian Seller:	[NTD: insert name of Amalgamated Entity] 1155 Metcalfe Street, Suite 800 Montreal, QC H3B 5H2 Canada Attention: Treasury Department Facsimile No.: 514-394-2267

U.S. Seller:	Abitibi Consolidated Sales Corporation 4 Gannett Drive White Plains, N.Y. 10604-3400 Attention: Breen Blaine Facsimile No.: 914-640-8917

	With Copy To: Attention: Montréal Legal Department Facsimile No.: 514-394-3644

SELLER UCC AND PPSA INFORMATION

U.S. Seller :

Name:

Abitibi Consolidated Sales Corporation

Current Address (and location of chief executive office and Receivables records):

4 Gannett Drive
White Plains, N.Y. 10604-3400

Prior Address:

None

Jurisdiction of Organization:

Delaware

UCC Filing Office:

Delaware Secretary of State

Prior Name:

Abitibi-Price Sales Corporation

Canadian Seller :

Name:

[NTD: insert name of Amalgamated Entity]

Chief Executive Office (and location of Receivables records):

1155 Metcalfe Street, Suite 800
Montreal, QC H3B 5H2
Canada

Registered Office:

1959 Upper Water Street, Suite 900
Halifax, N.S. B3J 3N2
Canada

Jurisdiction of Organization:

Nova Scotia

PPSA Filing Offices:

Quebec, Ontario, British Columbia, Alberta and Nova Scotia

Prior Names:

3224112 Nova Scotia Limited and Abitibi-Consolidated Inc.

H-1

EXHIBIT I

FORM OF NOTICE OF CHANGE OF ADDRESS

TO: ABITIBI-CONSOLIDATED U.S. FUNDING CORP. (the "Purchaser")

4 Gannett Drive, ACUSFC Room

White Plains, N.Y. 10604-3400

Attention: Breen Blaine

Facsimile No.: 914-640-8920

Pursuant to the requirements of Section 9.01(e) of the PCA, the undersigned hereby gives you notice that, on [insert Change of Address Effective Date], it will change the address of its principal place of business, chief executive office and location of Receivables (as defined in the PCA) records as disclosed in Exhibits E and F attached hereto, which Exhibits E and F shall replace the current Exhibits E and F to the PCA on the effective date of such change of address.

signature page follows

DATED this day of , .

ABITIBI CONSOLIDATED SALES CORPORATION
Per:
	Name:
	Title:

Per:
	Name:
	Title:

ADDRESSES

Purchaser:	Abitibi-Consolidated U.S. Funding Corp. [NTD: insert new address]

Canadian Seller:	[NTD: insert name of Amalgamated Entity] 1155 Metcalfe Street, Suite 800 Montreal, QC H3B 5H2 Canada Attention: Treasury Department Facsimile No.: 514-394-2267

U.S. Seller:	Abitibi Consolidated Sales Corporation [NTD: insert new address]

SELLER UCC AND PPSA INFORMATION

U.S. Seller :

Name:

Abitibi Consolidated Sales Corporation

Current Address (and location of chief executive office and Receivables records):

[NTD: insert new address]

Prior Address:

4 Gannett Drive

White Plains, N.Y. 10604-3400

Jurisdiction of Organization:

Delaware

UCC Filing Office:

Delaware Secretary of State [NTD: determine if additional filing office required]

Prior Name:

Abitibi-Price Sales Corporation

Canadian Seller :

Name:

[NTD: insert name of Amalgamated Entity]

Chief Executive Office (and location of Receivables records):

1155 Metcalfe Street, Suite 800
Montreal, QC H3B 5H2
Canada

Registered Office:

1959 Upper Water Street, Suite 900
Halifax, N.S. B3J 3N2
Canada

Jurisdiction of Organization:

Nova Scotia

PPSA Filing Offices:

Quebec, Ontario, British Columbia, Alberta and Nova Scotia

Prior Names:

3224112 Nova Scotia Limited and Abitibi-Consolidated Inc.

I-1

EXHIBIT A: CREDIT AND COLLECTION POLICY

*Section:*	*Finance*	*Policy No.*

*Title:*	*Credit policies and procedures*	*Page 1 of 18*

	*Issue date: August 1^st 2001*

*Table Of Contents:*

*Executive Summary:*		2

*Credit Investigation/Review:*		3

*Terms of Sales:*		9

*Collection Procedures:*		10

*Accounts Receivable/Cash Application Process:*		15

*Payable Rebate Process:*		16

*Bad Debt Losses:*		18

*Reporting:*		20

Executive Summary:

The Credit Group has as its dual role the protection of the Company's investment in accounts receivable, and the promotion of profitable sales.

A close working relationship is maintained between the Credit Group, and the other groups with a direct impact on results and deliverables.

The Credit Group works closely with Sales personnel in the collection of overdue accounts, recognizing special circumstances that might require the intervention of Sales.

This Credit Group, hereinafter CG, manual of credit procedures has been developed to set the practices of Abitibi-Consolidated Inc Worldwide and for all product groups, Newsprint, Commercial Paper Products, Lumber and International (including Latin America, ROW, Europe) and Recycling.

The procedures outlined herein will be a guideline for Abitibi-Consolidated Worldwide Credit Group, Sales Group and all its supports to further clarify the working relationship between their services and those of CG.

This is an evolving manual and will be updated and improved to support new Abitibi-Consolidated Inc programs.

Madeleine Féquière

Director Credit, Credit & Collections

Treasury Services

Credit Risk and Accounts Receivable Management

Mission Statement:

Worldwide Credit Group shall function in the Treasurer Group, and its activities shall be coordinated with overall corporate policy and the activities of worldwide sales.

To assist in the increase of WW revenue and market share, it shall be the responsibility of WWCG to:

1. Assess risk of current and prospective customers

2. Set credit limits and maintain their integrity

3. Provide and maintain positive and constructive attitude towards our customers and strategic partners

4. Maximize revenue and protect ACI assets

5. Manage the costs associated with bad debt and slow payments

6. Maintain the financial integrity and control ACI assets

7. Manage risk of our new business opportunities.

Organization Overview:

The Credit and Collections organization is currently centralized in Montreal (see organization chart attached).

Credit Investigation/Review:

New Customer Policies:

Credit Investigation

The following documents and information should be obtained by Sales or its supports during contract negotiations and submitted to their designated Credit Group Representatives.

1. Completed credit application signed by an officer or officers of the company.

2. Forecast of the annual requirements to be generated by the customer.

3. Bank references, a written formal authorization from customers agreeing to the release of such information, may be requested. Customer is obligated to provide the authorization.

4. Obtain W-9 or equivalent form prior to credit limit set-up in address book

5. Trade references, names of customer vendors, will be requested from customer. (at least, 1 reference in the Paper Industry).

6. Financial statements, preferably audited (Analysis to be conducted by Credit Group may include, but not be limited to balance sheet, income statement, and cash flow and change in working capital statements.

7. In addition to the info provided by sales, Credit Group will order credit reports from the various agencies such as Dun and Bradstreet to obtain additional credit information, if required.

Exchange of Credit Information

The Credit group will release credit information related to customer payment experience only to suppliers with a membership at one of the following NACM & FCIB organizations: National Fine Paper Manufacturers (VAP), Newsprint & Allied Products, National Forest Products, & Forest Products Export . The Credit Group will also release information to all of our customers upon receiving a written request. Credit information will be given on customers with special arrangements with ACI only upon written customer's authorization to avoid any non-disclosure issues. Credit information on customers will not be given by phone under any circumstances in order to mitigate potential problems. Minimum 3 days to process a request.

Credit Authorization Turn Around Time

The turn around time for making a credit recommendation on new accounts is five (5) business days when information is readily available.

For out of country customers, it typically takes two (2) weeks after receipt of the completed credit application from the customer. This time frame could be longer if the credit references do not respond or the application is incomplete.

Note: If required, upon approval, a letter will be forwarded to customer to confirm credit limit and terms of payment to the exception of Lumber. Sales and Customer Service will be advised through e-mail. A signed centralized contract must be made available to Credit when needed.

Credit Limit Categories

After investigations, customers will be placed in one of three risk categories for the credit department use only. Based on the decision criteria, Credit will make a determination about the customer's credit worthiness. A customer deemed credit worthy is approved for standard terms; a customer who is not deemed creditworthy will only be approved with security.

Risk categories:

1. Low Risk or A Rating in system – credit hold exempted customers, select credit worthy customers

2. Medium Risk or C Rating in system – No credit hold exemption, no security required

3. High Risk or E Rating in system - Surety required, security deposit, letter of credit, pre-payment, etc. (ongoing monitoring), $1.00 credit limit assigned.

If there are major issues or disagreements, Sales and Credit will discuss other alternatives that would be in ACI's best interest.

In addition, credit limit should be assigned to customers during peak buying period during the month as opposed to assigning credit limit based on month end balance after payment is received.

Domestic & Export - including Bridgewater – Internal Approval guidelines on New & Existing Accounts

Delegation of Authority is applicable regardless of risk categories and regardless of Export Development Corporation's approval)

$10,000.000 + President and CEO

Up to $10,000.000 or less - Sr. V-P, Corp. Dev. & CFO
Up to $5.000.000 or less – V-P & Treasurer
Up to $3.000.000 or less – Director Credit /Credit & Collections

Domestic / Export – EDC required guidelines on New Accounts & existing Accounts, regardless of risk categories .

Discretionary Credit Limit (DCL) of $1,000,000 or $500,000 may apply to all buyers (except those excluded in writing by EDC) in all markets. EXCEPT Venezuela where the coverage is conditional upon obtaining confirmation that the buyer has been granted authorization from Venezuela's foreign exchange administration commission (CADIVI) to acquire foreign currency for the subject shipments and accordingly, the corresponding registration number (AAD number) for that shipment. A further condition is that it will apply only to existing buyers who have been able to obtain funds through the CADIVI process during the 12 months prior to September 1, 2004. Any new buyers, or existing buyers with no tract record of having accessed funds through CADIVI, would need to be approved by EDC.

Method 1 - Abitibi to justify $500,000 DCL coverage (without having to refer to EDC) based on:

Abitibi's own experience with buyer during the past 12 months.

Method 2 - Abitibi to justify $500,000 DCL coverage (without having to refer to EDC) based on:

Written Credit Information – Favorable, provided by a recognized credit information agency or a bank, which supports the extension of credit for the amount of the sale. The information must not be dated more than 12 months.

Method 3 – Abitibi to justify $1,000.000 DCL coverage (without having to refer to EDC) based on:

Financial Statements and written credit information – Favorable financial statements in combination with favorable written credit information of the buyer, which support the extension of credit for the amount of the sale. The fiscal year end of the statements cannot be more than eighteen months. EDC understands and agrees that in most cases, it will be difficult to obtain financial statements, in such cases, Abitibi is required to obtain a detailed bank report from customer to satisfy EDC requirements.

Credit Evaluation of Existing Customers and Review

Evaluation of Existing customers:

The evaluation of existing customers is initiated by the submission of a request by sales for incremental shipments. The major difference in the evaluation of an existing customer and a new customer is that there is an established relationship and therefore Credit can make a more informed decision. Utilizing the customer's history with ACI, Credit can review the customer's usage/billing and payment habits for prior ACI services. In addition to affording Credit access to additional information in the decision making process, there is also an opportunity to leverage the request for additional services to collect on past due amounts. The following is a brief synopsis of the evaluation process for existing customers:

Sales submits request for incremental shipments.
Credit performs the credit review, including researching the customers A/R balance and past payment trends.
Should the A/R balance be current, past payment trends acceptable, and all other components of the credit review acceptable, the customer's credit limit will be increased and the request approved.
In the event that there are past dues and all other components are satisfactory, the request will be held up until the past dues are settled before releasing pending orders.
In the event that there is a history of late payments and all other credit review components are satisfactory, Credit will consult Sales for feedback on customer to assist in the credit decision.
In the event the internal information is satisfactory and the other components are not, a decision to require surety or not will be made.

Periodic or Annual Reviews:

The objective of the periodic or annual credit evaluation is to assess an existing customer's ability to meet the terms and conditions of existing service that is to be renewed or amended including changes to commitment levels, estimated run rates, and changes in products and services consumed.

Customers with credit limit < $500k are reviewed on a 12 month basis (ACI own experience or written credit information)

Customers with credit limit >$500k and up to $1.0M are reviewed on a 12 month basis (Financial statements dated less than 18 months & written experience dated 12 months or less)

Customers with credit limit >$1.0M whereas EDC had issued a cover letter for continuing coverage are reviewed by EDC according to their own review date guidelines and coverage will remain in place until otherwise advise.

Historic evidence proves that a customer's credit worthiness constantly changes due to dynamic elements present in business cycle. Evaluating a customer's ability to pay ACI, therefore, cannot be based on a single transaction but must be regularly and consistently reevaluated. The following is a listing of occurrences that will trigger a review:

Credit can initiate a review of a customer based on information obtained from Dun & Bradstreet's Portfolio Manager, based on public information obtained from newspapers, magazines, etc...
Credit can initiate a review of a customer anytime if judged necessary.
Sales Team can initiate a review of a customer by submitting a request to Credit.
Credit Coordinators are requested to show in Abiserve Last Credit Review date as well as Next Credit Review date. An exception report will be ordered to monitor customers up for credit review and ensure timeliness of the process on a daily basis.

Contractual Agreements (Verbal or Written)

Contractual agreements are those reviewed by Legal and/or negotiated by Sales with new (after credit investigations) and existing customers. Credit should be notified of any amendments to the contractual agreement related to payment terms and conditions.

Credit Coordinator may obtain copies of such agreements upon request from Sales Accounting.

Creation of Customer Identification Number (ID#)

System administration from Sales Service Department is responsible for proper customer set up in the address book. Credit Coordinator is responsible for proper set up of the following fields: legal name, credit limit, credit rating, terms of payment and Federal Tax ID #.

Customer Credit Files

Credit will create and maintain complete and current credit and collection files on all customers. These credit files may include the following information when available:

1. Credit application

2. Signed customer contract, if required

3. Bank and trade references

4. Financial statements, if required

5. Credit agency reports

6. Copies of security agreements, if required

7. Any additional relevant information

Terms of Sales:

Standard or Regular Terms:

Newsprint – Net 30 days and some approved extended 60+ day term.
Commercial Paper Products – Industry term may vary from 45 days to 60 + days.
Lumber – .9% 10 days.
International – country specific or market specific in agreement with EDC

Special/Extended Terms:

Terms may vary by country, special products requirements and international regulations

Domestic Accounts - Special or extended terms have to be approved by a U.S Vice-President

International Accounts - Special or extended terms have to be approved by a Vice-President.

Collection Procedures:

The following summary identifies the collection activity that can be applied to all levels of business segment accounts.

Credit Group representatives work to convert accounts receivable into cash. Group optimizes productivity by managing day-to-day duties including customer contact and interaction with various ACI groups: Accounts Receivable, Finance, Sales, Customer Accounting, Sales Service, Agents and Legal & Regulatory Affairs.

Additionally, Credit Coordinators are knowledgeable of various products, Accounts Receivable Systems etc. ACI customers are expected to pay their invoices as per obligated terms. Credit Group representatives are responsible for identifying the cause of any delinquency. Delinquent receivable issues result from customer non-payment as well as internal Company problems such as billing, sales "rate" misquotes. Credit Group representatives are most effective working directly with customers to resolve issues impacting the customer's ability to remit payment. Our collection approach is to do everything possible to assist the Sales Team and the customer in correcting problems that impede their ability to pay.

Aging
1 day beyond terms of payment, collection process begins - if required
15 days beyond – a minimum of 3 calls – if required
20 days beyond - 1 written notice to customer - if required, Director Credit and Sales must be notified.
60 days beyond terms, negotiate payment plans or surety - if required
70 days beyond terms – No payment agreement, No surety - Issuance of NOI (notice of intent to terminate service or release to legal or collection agencies) if required.

Note: This timeline is to be used as a guideline. Timeline may be longer when there is manual posting of invoices or if invoices are delivered late or other related billing issues. Collections notes must be recorded in Abiserve.

Hold Orders Procedures

Customer Service Representative enters an order

Abiserve is ONLY credit limit driven . If customer is over the credit limit, the system will automatically hold all orders.
The Hold order is then referred to the Credit Agent for release. Before the order is released, the Credit Agent must do the following:
If the Customer is over the credit limit, initiate a credit review. It takes us 48 hours to investigate and increase the limit. If for financial reasons, we feel that the credit limit should not be increased Sales & SSR are advised of the situation asap. Credit and Sales will arrive at a decision to release the order or not
If the customer has past due invoices to be cured and has already mailed its payment, the order is released asap and a credit review is initiated immediately afterwards to provide customer with more capacity if necessary.
If the Customer is unable to pay and we are negotiating payments, Sales and SSR are advised of the situation asap. Credit and Sales arrived at a decision to release the order or not.
Only Credit Coordinator is to advise the customer that the order is on hold with the agreement of Sales and Sales Agents.
The Director Credit is required to approve all amounts in excess of the credit limit.

SX order release

Stock paper delivered from a warehouse to a customer is released with an "SX" order. A held SX order has to be released by the Credit coordinators in order to reach the billing process.

Since SX orders are not listed on "WDP " Warehouse Daily Planning report sent electronically by Abiserve to the warehouses, SSRs have to manually forward all SX order documentation. However, no credit check is performed before the documentation is sent.

As a result, SX orders are delivered to customers before the Credit department releases the order in the system. To be in compliance with the credit policy, as a rule SSRs are instructed not to release any SX orders until they have been released off credit hold by Credit Coordinators.

Exception "Blanket Release"

A short list of Top customers have been designated as "blanket release" meaning they are allowed to pick up their own paper from the warehouse.

To be designated as "blanket release", a customer has to be flagged in the system as "credit exempt" meaning credit coordinators intervention is needed only, once maximum credit limit allowed has been reached.

Blanket releases are purely a manual system, totally non transparent to credit coordinators.

In order to better control this process, the following controls have been put in place:

1. SSRs Managers will provide a monthly list of designated customers to the Director Credit for approval.

2. Director Credit will only approve customers that are credit exempted (meaning orders go through without credit intervention until credit limit is surpassed)

3. Credit Coordinators will monitor the exposure of all customers on the list periodically.

4. Sales Accounting will monitor all releases from warehouse and ensure proper billing.

Coverage for National Holidays

Day before a national holiday, the credit department is required to do the following:
Take a picture of all orders on hold
Send a HOT list of critical accounts to Sales Service Managers (SSM) not to be released from hold
SSM's to sign a release form allowing them to perform such function.
Send the release password to the SSM's granting them access to release the following types of orders ONLY:

A) Top Accounts (credit hold exempted) where SSR's had made changes to an order and the amount of the order has changed. B) Emergency shipments or last minute orders for our Top Accounts (credit hold exempted) Anything else should remain on hold until Credit Department is back to work.

Following day, SSM's will provide the respective Credit Agents, a listing of all orders that have been released off credit hold.

Following day, Credit Department will change the password for order release.

Payment Plans and Note Receivable Arrangements

Payment Plans:

Customers who are past due or beyond normal terms may be considered for a payment plan to enable them to continue the business relationship by reducing and eliminating the past due debt. The payment plans will be limited to short term (90 days) solutions in order to assist customers to return to the original terms of their contract.

Domestic Accounts – Payment Plans have to be approved by a U.S Vice-President

International Accounts – Payment Plans have to be approved by a Vice-President.

Note Receivable Arrangements :

Note receivable should be drafted and reviewed by Legal. In order to approve a note, the account exposure should be $1.0M or more. Terms are not to exceed 1 year. The rate is to be discussed with the V-P and Treasurer. Before acceptance, all notes arrangements should be approved by EDC.

Domestic Accounts – Notes Receivable have to be approved by a U.S Vice-President

International Accounts – Note receivable have to be approved by a Vice-President.

Standard Escalation Policy:
From time to time the Credit Coordinators may need to escalate an account to the Director Credit in order to gain resolution. In compliance with the above mentioned collections procedures, the Credit Coordinators will escalate the files accordingly to Director Credit by providing detailed information and documentation for final disposition.

Statement of Accounts:
Customers are to receive a statement showing the status of their accounts with ACI, if not otherwise stated. It is the Sales Accounting Group's priority at month end to ensure that the statements are sorted and mailed to customers by the 5^th business day after the completion of the billing cycle.

Customer Visits

The Director Credit will conduct visits in concert with Sales representatives and the Credit Coordinators when appropriate to achieve the following objectives:
To develop a relationship with the customer
To enhance relationship with Sales
To observe facilities (plant, location, equipment, inventory)
Discuss specific requests (terms, extension of credit limit, etc)
Discuss and review confidential financial data
Resolve disputed items
Resolve collections issues

Paper Industry Group Meeting:

Director Credit, Credit Coordinators will participate in specific paper industry group meetings quarterly, to open up communications line for the exchange of credit information with direct impact on reduction of outstanding delinquent receivables and write-offs. Members obtain performance information but also have the chance to network and build relationships with credit professionals in the same industry. Currently ACI's registered in the following groups:

Lumber – NACM National Forest Products Group
International – FCIB Forest Product Export Group (Domestic and Europe)
Newsprint – NACM National Newsprint & Allied Products Group
Commercial Paper Products – Fine Paper Group

NOI (Notice of Intent to stop shipment):
If all efforts for resolution have failed and accounts remain past due or in default beyond the determined cure period, the Credit Coordinator will escalate the file to Director Credit for resolution.

Before sending NOI, Credit will notify appropriate individuals. Director Credit is directly responsible to seek further approval if necessary.

Stop Shipment Procedure:

Once all collection efforts have been exhausted and failed. The last step in the collections process is to ensure that service is stopped and appropriate actions must be taken to recover the debt. Sales must be notified of such actions.

Accounts Receivable/Cash Application Process:

The Accounts Receivable/Cash Application group is directly responsible for the timely and accurate distribution of payments received by ACI. They are also responsible for directly communicating the cash application status (Unapplied, on account, and Unidentified) to Credit and Collections, and Customer Accounting Representative.

Customer Deductions/Discrepancies

Cash Applications will submit all discrepancies on a daily basis to Credit
Credit will contact their respective customers to source out the reasons for the discrepancies on a daily basis and sign their names on the check stubs.
Cash Applications will submit all check stubs or other documents to Sales Accounting with reasons for discrepancies on a daily basis.
Sales Accounting will conduct analysis within same month and forward their analysis to Salesrep for appropriate actions with a deadline and copy to Credit. Copy also to Sales V.P. only if required.
Sales will decide of the outcome of the analysis within the allowed deadline and reply to: A) Sales Accounting if decision is in favor of the customer in order to issue credit note. B) Credit if decision is in favor of Abitibi in order to collect the amount due.
Monthly, Sales Accounting will issue a report to Sales and Credit listing all accounts analyzed within the month for follow-up.

If no resolution within 60 days, Sales Accounting should escalate the case to the respective V.P. or Senior V.P. Sales only if Required.
Credit Coordinators are responsible for all open items on their respective Aging and are responsible to follow-up with Sales Accounting for quick resolution not to penalize the securitization program.

Unapplied Cash
Cash applications Specialists will advise Credit and Sales Accounting of unapplied cash promptly.
Cash Applications will cure the cash as per Sales accounting's instructions.
Once special arrangements are deducted, a monthly listing of unapplied cash will be forwarded to Sales Accounting.

Returned Item Procedures
Cash application will forward all returned drafts to Credit Group on a daily basis with the following information:
Customer
Check number
Amount of remittance
Date item was returned
Reasons for return if available: (customer dispute, insufficient funds, bank error, etc)

The Credit and Collections group will contact customer to notify them of the returned check. Certified funds may be required in order to cure the default.

Payable Rebate Process:

As a rule, no rebate payment should be forwarded to a customer with a past due amount with ACI. Sales Accounting will first advise Sales of the situation. A listing of all rebate payments for review before release should be forwarded to Credit.

Note: Please reference terms of contract prior to initiating a hold on a rebate payment to our customers.

Bad Debt Losses:

Actions following Cancellation
Provide customer final opportunity to settle debt.
Send customer notification that debt will be pursued through use of outside sources (included in NOI).
Collection agency
Internal legal department through suit or arbitration
External legal firms through suit or arbitration
Legal Write-offs
Prepare legal package and forward to Legal department for pursuit of debt (internal or external).
Criteria for Legal – Balances greater than $50,000.
Agency Write-offs – Balances less than $50,000
Accounts submitted manually to an Outside Collection agency.

Collection Agencies

From time to time when all collections efforts have been tried and failed, accounts will be released to OCA (outside collection agency). An OCA must be bonded and a member of the National Law League. Credit Coordinators are responsible for selecting or recommending accounts to be placed with a collection agency and inform the Director Credit/Credit prior to releasing an account to a collection agency

Before releasing an account to an OCA, the Director Credit/Credit will notify Sales and EDC.

Bankruptcy Proceedings

The Director Credit will handle all legal and regulatory Affairs and determine the best course of action for the recovery of outstanding debts. In cases of customer bankruptcy or pre-bankruptcy formation of creditors committees, Credit will actively serve on such committees.

Reserves/Bad debt allowances

Director Credit to identify and set aside specific reserve for bad debt items and notify General Accounting quarterly. General Accounting is responsible for establishing total reserve balances. The Treasurer must approve any adjustments to the reserves.

ACI has adopted the customer specific method and the process is as follow:

1. Quarterly the credit department will download directly from Abiserve the Aging Report that reconciles with G/L including all House Accounts;

2. All accounts credit-insured over 90 days past due will be analyzed and assigned a certain percentage of risk if required;

3. All accounts self-insured over 60 days past due will be analyzed and assigned a certain percentage of risk if required

4. All accounts co-insured with EDC will be analyzed and assigned a certain percentage of risk if required

5. All accounts assigned a certain percentage of risk will be well documented and back up provided to accounting.

Write-off Procedure

Once customer's account is canceled due to non-payment, write-off procedures should be initiated.

Approval Levels: Bad Debts Write-off:

(Gross loss amount)

$1.000 + President and CEO
Up to $1.000 Sr. V-P, Corp. Dev. & CFO
Up to $500 or less – V-P & Treasurer

Documentation supporting Write-off

Business case supporting write-off
Copies of customer D&B or other credit agency report if available
Current statement of account, customer aging
EDC's claim copy showing receipt
Other supporting documentation, returned checks, bankruptcy notices, etc.

Proposed journal entry to recognize actual bad debt write-off by Cash application coordinator

Debit Bad Debt Reserve, Account, General Ledger
Credit Trade A/R, Account, Subsidiary Ledger

Frequency and owners of process

Actual bad debt losses incurred should be recognized as they are identified throughout the quarter.
Director Credit/Credit should initiate the processing of the write-off.
General Accounting will prepare entries to be recorded in G/L and S/L.

Reporting:

The Credit group will produce and distribute the following report, if required:

1. Monthly Aging by Sales Representatives

2. Monthly 30+ aging in absolute dollars and as a percentage of the total A/R balance

3. Monthly Top 25 in dollars owing in each product group

4. Monthly Days Sales Outstanding by product group

5. Monthly Collection Effectiveness Index

6. Monthly Over the credit limit report if required (see AFDA )

7. Monthly Critical List Report (Notes, Payment Plans, Letters of Credit Report) if required

8. Quarterly AFDA (allowance for bad debt report)

9. Monthly 90+ days Report to EDC

10. Monthly 60 days over 10% to EDC

11. Monthly inactivation of accounts over 6 months - And change credit limit to $1.0)

12. New customer report

13. Customer due for Credit Review

14. Daily program to run CX customers with an order

15. All other reports required to manage our business

Security Matrix Review:

Security access will be performed quarterly or immediately following a change/movement in treasury Department personnel.

ANNEX A: INSURANCE POLICY

ANNEX H: INSURANCE POLICY

LOGO

May 24th, 2006

Madeleine Féquière

Director of Credit

Abitibi-Consolidated Inc.

1155 Metcalfe Ste 800

Montreal, PQ, H3B 5H2

Dear Ms. Féquière:

Re: Policy No. CG 1 22818

We acknowledge receipt of your acceptance and thank you for continuing to Insure with us.

Enclosed is a copy of your policy documentation as follows:

•

General Terms and Conditions;

•

Coverage Certificate, which contains the specific Policy parameters applicable to you;

•

Country Schedule, which specifies the countries covered, the maximum payment terms and the applicable premium rates;

•

Credit Management Schedule, which sets out the methods you may use to establish a Credit Limit for each of your buyers and your obligations regarding overdue accounts;

•

Endorsements which modify the Policy as specified: Declarations and Payment of Premium; Continuous Coverage Between Two Policies - Credit Limits; Sales by Foreign Affiliate - Goods Manufactured in Canada or Offshore; Sales Out of Consignment Inventory or Exhibition Stock; Boycott; Credit Limit for ILC Sales (Confirmed and Unconfirmed ILC) and Coverage to Canadian Buyers Involving Foreign Countries.

We have also enclosed six Additional Canadian Insured endorsements. Please send us a signed copy of each at your earliest convenience.

Should you have any questions, please do not hesitate to contact me.

Yours truly,

LOGO

Marlène Bouchard

Underwriter

Forestry

Telephone: 1-888-332-4089

Fax: 613-597-8830

mbouchard@edc.ca

C.C.: Daniel Galvao, Marsh Canada Limited

151 O’Connor Ottawa ON Canada K1A 1K3

613—598—2500 Fax: 613—237—2690 www.edc.ca

LOGO

ACCOUNTS RECEIVABLE POLICY (SHIPMENTS)

GENERAL TERMS AND CONDITIONS

This insurance policy is issued to the Insured identified in the Coverage Certificate by Export Development Canada (“EDC”) and Compagnie Francaise d’Assurance pour le Commerce Extérieur – Canada Branch (“Coface”), who are together referred to in this Policy as the “Insurers”. The Insurers have separate liability to the Insured.

EDC is the Administrator of this Policy for the Insurers. All communications and correspondence between the Insured and the Insurers are to be with EDC, and all requests, claims, declarations and other submissions and notices required by the Policy to be made to the Insurers are to be made to EDC. All premium is to be paid to EDC.

Capitalized terms not defined in this document shall have the meanings given to them in the Coverage Certificate.

COVERAGE



	1.	The Insurers hereby provide insurance for goods Shipped on or after the Coverage Effective Date, subject to the provisions of this Policy and in consideration of the Insured’s payment of the Acceptance Fee and undertaking to pay all required premium.

EDC Coverage		EDC insures the Insured against and agrees to pay the Insurance Percentage of any loss covered by the Policy that is sustained by the Insured under Eligible Contracts with buyers in countries listed in the Country Schedule (excluding Canada), as a direct result of the occurrence of any Risk described in Section 2. Such a loss is referred to as an “Export Loss”. The amount of any Export Loss will be determined pursuant to Section 19.

Coface Coverage		Coface insures the Insured against and agrees to pay the Insurance Percentage of any loss covered by the Policy that is sustained by the Insured under Eligible Contracts with buyers located in Canada (if Canada is listed in the Country Schedule), as a direct result of the occurrence of a Risk described in Subsection 2(1), 2(2) or 2(3) only. Such a loss is referred to as a “Domestic Loss”. The amount of any Domestic Loss will be determined pursuant to Section 19.

Loss		The term “Loss”, when used in this Policy, means either an Export Loss or a Domestic Loss, or both, as the context requires. A Loss is covered under this Policy only if it is an amount that was payable by the buyer which was not paid as a direct result of the occurrence of a covered Risk or which would have become payable under the Eligible Contract if the Risk had not occurred.

Risks	2.	The risks that are covered under this Policy (the “Risks”) are the following:

Insolvency		(1)	failure of the buyer to pay when the financial situation of the buyer has resulted in:

			(a)	proceedings being commenced under the bankruptcy or insolvency laws of the buyer’s country for the reorganization of the financial affairs of the buyer or the winding up of the buyer; or

			(b)	the conclusion of a composition arrangement which is legally binding on all the creditors of the buyer;


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			Limit or Credit Approval, exclude a buyer, or change the provisions of the Country Schedule, including, without limitation, by removing a country from the Country Schedule. However, any such change, cancellation or withdrawal shall apply only to goods to be Shipped after receipt of the notice by the Insured (the date of such receipt to be determined in accordance with Section 35). Any Loss with respect to goods Shipped after receipt of the notice, other than goods Shipped in accordance with a change set out in any such notice, shall be conclusively deemed to be a Loss that was due to a cause avoidable by the Insured and therefore excluded from coverage pursuant to Section 8 of the Policy.

Changes – annually		(2)	The Insurers shall have the right to change the premium rates and any term or condition of the Policy as of any Anniversary Date, provided that the Insured is sent an initial notice, at least 60 days prior to the Anniversary Date, that changes may or will be made to the Policy, but the changes need not be specified as part of such initial notice. The Insured will be notified of the specific changes at a later date and the changes will become effective on the first Anniversary Date following the Insurers’ initial notice if the Insured notifies the Insurers that the changes are acceptable. If the Insured does not agree with the changes, the Policy will terminate 60 days after such Anniversary Date and during that 60 day period the existing rates and terms and conditions will continue to apply.

Application	5.	The statements made by the Insured in the Application are the basis upon which this Policy has been issued. If any such statements are untrue, incomplete or incorrect in any material respect, this Policy shall be void as of the Coverage Effective Date and the Insurers may retain any premium and fees that have been paid.

Documentation Risk	6.	Even though the Insurers may have received from the Insured, or provided comments on, any contract of sale, agreement or other documentation, the Insured remains responsible for ensuring the effectiveness of all documentation, including ensuring that an agreement creates a binding payment obligation by the relevant party.

Disputes	7.	If there is a dispute between the Insured and the buyer with regard to any matter which brings into question the amount owing (or whether there is any amount owing) by the buyer to the Insured (a “Dispute”), the Insurer shall have no liability with respect to the claim until the Dispute is finally settled, by negotiation or otherwise, and the Loss amount is clearly established.

EXCLUSIONS

	8.	The Insurers shall not be liable for the payment of a claim for Loss if:

Misrepresentation		(1)	the Insured has at any time made any misrepresentation to an Insurer or has failed to disclose to the Insurers any information that is material to the rights, liabilities or obligations of either Insurer under this Policy;

Changing Terms of Payment		(2)	the Insured has agreed with the buyer to change the payment terms under the Eligible Contract, unless:

			(a)	the Insurer has given its prior written approval;

			(b)	such agreement constitutes a composition arrangement that is legally binding on all creditors of the buyer; or

			(c)	the agreement was made in the circumstances described in Section 9;

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DUTIES OF THE INSURED



Notification of Other Contracts	10.	The Insured shall promptly notify the Insurers each time a shipment of goods is to be made by the Insured under a contract of sale (other than an Excluded Contract) that is on terms not provided for in the Country Schedule or with a buyer located in a country not listed in the Country Schedule, and on being so notified, the Insurers shall either:

		(1)	extend the insurance coverage to include the contract of sale as an Eligible Contract by adding the buyer’s country and/or the new payment terms to the Country Schedule, and advise the Insured of the terms of such coverage; or

		(2)	designate the contract of sale as an Excluded Contract.

	11.	On or before the 20th day of the month following the end of each Declaration Period, the Insured shall:

Declarations		(1)	complete and return to the Insurers the declaration worksheet provided by the Insurers, specifying by country (or, in the case of Canada, by province or territory) where the buyer is located, the Gross Invoice Value of all goods Shipped during that Declaration Period under contracts of sale other than Excluded Contracts, and if no such goods have been Shipped during that Declaration Period, the Insured shall submit a nil declaration; and

Payment of Premium		(2)	pay premium, computed on the Gross Invoice Value of all goods Shipped during that Declaration Period under contracts of sale other than Excluded Contracts, at the rates applicable on the date the goods were Shipped, as set out in the Country Schedule, and any applicable taxes.

Payment of Other Fees	12.	Upon receipt of a statement of account, the Insured shall promptly pay all fees owing for any services provided by the Insurers or obtained by the Insurers for the Insured for purposes of the coverage.

Overdues and Events that Could Cause a Loss	13.	The Insured shall immediately notify the Insurers of any event or circumstance of which the Insured is aware that could cause a Loss, including, without limitation, any deterioration in the financial condition of a buyer, and, on or before the 20th day of each calendar month, the Insured shall provide the Insurers with full particulars as to all amounts payable by buyers under Eligible Contracts that have been in default for more than 90 days.

Prevent and Minimize Loss	14.	The Insured shall use all reasonable and usual care, skill and forethought in respect of all matters affecting this Policy, and shall take all practicable measures, including any measures requested by the Insurers, to prevent the occurrence of any Loss or minimize the amount of any Loss that may occur or that has occurred. The obligation to prevent and minimize Loss applies both prior to and after the filing of a claim application and it includes, without limitation, the obligation to:

		(1)	monitor overdue accounts by following the procedures for the collection of overdue accounts that are set out in the Credit Management Schedule or, if no such procedures are set out in the Credit Management Schedule, by following the Insured’s own procedures;

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CURRENCY CONVERSIONS



Declarations and premiums	18.	(1)	All declarations of goods Shipped and all premium shall be expressed and paid in a Declaration Currency. For purposes of determining the amount to be declared and the premium to be paid when the Contract Currency is not a Declaration Currency, the Gross Invoice Value shall be converted to its equivalent value in a Declaration Currency, at the rate applicable at the Insured’s bank for buying Declaration Currency with Contract Currency on the last business day of the Declaration Period in which the goods were Shipped.

Claim payment		(2)	Claim payments shall be made in the Contract Currency if the Contract Currency is USD or CAD. If the Contract Currency is not USD or CAD, the claim payment shall be made in the Policy Currency and, to determine the amount of the claim payment, the Loss amount shall be converted to the Policy Currency at the lesser of the daily noon mid-market rate for such conversions applicable at EDC’s bank on:

			(a)	the last business day of the calendar month in which the goods were Shipped; and

			(b)	the date on which the Insured became entitled to receive a claim payment, as set out in Section 21.

Insurers’ Liability		(3)	For purposes of calculating each Insurer’s remaining exposure under any maximum liability amounts under the Policy, any claim payment made in a currency other than the Policy Currency shall be converted to the Policy Currency at the daily noon mid-market rate for such conversions applicable at EDC’s bank on the last business day of the calendar month prior to the date of the claim payment.

LOSSES



Computation of Loss	19.	The amount of a Loss that is covered by the Policy will be computed in the Contract Currency, and is the Gross Invoice Value of the goods Shipped together with any additional Insurance, freight or other handling costs (exclusive of demurrage) that were incurred as a result of any interruption or diversion of delivery due to the occurrence of the Risk which resulted in the Loss, less:

		(1)	any amount which the Insured agrees the buyer is entitled to take into account by way of payment, credit, set-off or counterclaim;

		(2)	all amounts received, recovered or realized by or on behalf of the Insured on account of amounts payable by the buyer to the Insured in respect of such goods, including any amount realized through sale or disposal of the goods; and

		(3)	all costs that would normally have been incurred by the Insured in respect of such goods but which have not been incurred as a result of the occurrence of the Risk.

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			Insurer will pay interest on the amount payable by the Insurer at the rate per annum quoted by EDC’s bank as its prime rate for the currency of the claim payment, as of the day following the date the claim should have been paid, and such interest shall be calculated annually in arrears from, but excluding, 30 days after the later of: (i) the date the Insured is entitled to receive a claim payment, (ii) the date when the Insurer received the claim application, and (iii) the date when the insurer received any requested additional information, to, and including, the date the claim is paid to the Insured and such interest is payable on the date the claim is paid.

Claim payment return	25.	If an Insurer has paid a claim to the insured and:

		(1)	the insurer becomes aware of information that would have entitled the Insurer not to pay the claim, including, without limitation, the fact that any of the exclusions of the insurer’s liability set out in Section 8 or elsewhere in the Policy applied to the claim, or

		(2)	the Insured fails to comply with its obligations under the Policy following a claim payment, the Insured shall, forthwith upon the Insurer’s demand, repay the claim amount to the Insurer, with interest thereon at the rate per annum quoted by EDC’s bank as its prime rate for the currency of the claim payment, as of the date the claim was paid, and such interest shall be calculated annually in arrears from, but excluding, the date the claim was paid, to, and including, the date the claim is repaid to the Insurer and such interest is payable on the date the claim is repaid.

Reservation of Rights	26.	The Insurers hereby expressly reserve all rights under the Policy. No action or failure to act by or on behalf of an insurer in connection with investigating a claim or seeking to prevent or minimize a Loss, including, without limitation, the undertaking of investigations, discussions or negotiations with a buyer or any third parties, shall constitute a waiver by the insurer of any of its rights under the Policy or prevent or estop the insurer from thereafter exercising any of its rights under the Policy including, without limitation, its right to deny liability or terminate the Policy.

RECOVERIES

Subrogation	27.	(1)	Subject to Subsection 27(2), upon the payment of a claim, the Insurer is subrogated to all the Insured’s rights against any person responsible for the Loss up to the amount of the claim payment. The Insurer is entitled to take legal action against any person in order to exercise those subrogated rights.

		(2)	The Insurer waives all rights of subrogation if the claim payment was made to a third party pursuant to the provisions of a Tripartite Agreement or a Direction to Pay in circumstances in which the claim payment would not have been made directly to the Insured as a result of the application of Subsection 8(7).

Rights and Obligations of the Insured	28.	(1)	Where an Insurer pays a claim, the Insured may exercise its rights for the balance of its claim against the buyer for which the Insured has not been indemnified by the Insurer, in preference to the Insurer.

Page 9 of 14

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Insurers’ Access to Information	33.	The Insured shall provide the Insurers with all information relating to any matter under this Policy that is in the possession of the Insured or an Affiliate. The Insurers may, at any time, examine and make copies of all letters, communications, accounts or other documents that relate to the Policy, that are in the possession or control of the Insured or an Affiliate. The Insured shall take all reasonable steps to allow the Insurers to obtain any information or to review any document that relates to the Policy and that is in the possession of any other person.

Contract of Insurance	34.	These General Terms and Conditions and all endorsements hereto, the Coverage Certificate, the Credit Management Schedule, the Country Schedule, the Credit Approvals (all such documents collectively constituting the “Policy”), and the Application on which the Policy is based, constitute the entire contract of insurance between the Insurers and the Insured. Except as expressly provided for in the Policy, any statements, undertakings or agreements between the parties other than what is contained in this Policy, the Application, or a written agreement entered into between the Insurers and the Insured after the issuance and acceptance of the Policy, shall not form part of, or be deemed to be part of, this contract of insurance.

Notice	35.	Every notice, demand, request, consent, approval, waiver or agreement to be given or made hereunder shall be in writing and shall be delivered to the other party by hand, sent by mail, or transmitted by fax or e-mail, and shall be deemed to have been given and received, if delivered by hand, upon delivery, if sent by mail, the earlier of actual receipt and seven days after posting, and if transmitted by fax or e-mail, the date of transmission, in each case excluding Saturday, Sunday and any national or statutory holiday when the offices of the receiving party are closed for business. The mailing address, fax number and e-mail address of the Insurers and the Insured for purposes of the Policy are those specified in the Coverage Certificate or such other addresses or fax numbers as to which the Insurers or the Insured may from time to time notify the other.

Observance of Policy Conditions	36.	The due performance of the Insured’s duties and obligations under the Policy, at the time stipulated for such performance, shall be a condition precedent to any liability of the Insurers for the payment of a claim. No failure on the part of an Insurer to exercise and no delay in exercising any right under this Policy shall operate as a waiver thereof. Any waiver by an Insurer of the strict compliance by the Insured with its duties and obligations under the Policy shall not be deemed to be a waiver of any subsequent failure by the Insured to comply with such duties and obligations.

Termination	37.	(1)	Each party shall have the right to terminate this Policy upon giving the other party 60 days’ prior written notice to that effect.

		(2)	An Insurer shall have the right to terminate this Policy on 15 days’ notice to the Insured if the Insured defaults in the due performance of its duties or obligations under the Policy, unless such default is cured or remedied by the Insured within such 15 day notice period.

		(3)	An Insurer shall have the right to terminate this Policy immediately on notice to the Insured if the Insured, an agent of the Insured, an Affiliate or an agent of an Affiliate has engaged in or knowingly been party to any action, in relation to any contract of sale insured under the Policy, that is prohibited by Canada’s Corruption of Foreign Public Officials Act or by the criminal laws dealing with the bribery of public officials that are applicable in a country in which any such agent or Affiliate is located.

Page 11 of 14

30-028-Globex-Quebec (0705)


(3)	“Contract Currency” means the currency in which the Gross Invoice Value of the goods is contractually required to be paid by the buyer;

(4)	“Coverage Certificate” means the document issued by the Insurers that sets out the specific terms of the insurance coverage applicable to the Insured and stipulates any conditions of coverage which may amend or add to those established by these General Terms and Conditions;

(5)	“Credit Approval” means a notice given by the Insurers to the Insured stating the amount of the Credit Limit for a buyer or group of buyers and stipulating any specific conditions or changes to the insurance coverage applicable to goods Shipped to that buyer or group of buyers;

(6)	“Credit Limit” means the maximum amount of Loss that the Insured may sustain in respect of any individual buyer and still obtain the maximum Insurance Percentage under the Policy;

(7)	“Due Date” means the date on which payment under an Eligible Contract is due;

(8)	“Eligible Contract” means a contract of sale that is not an Excluded Contract and that:

	(a)	complies with any special conditions set out in the Country Schedule for the country in which the buyer is located;

	(b)	provides that all amounts payable by the buyer to the Insured shall be paid on terms which are within the maximum terms of payment set out in the Country Schedule for the country in which the buyer is located; and

	(c)	complies with the provisions of any Credit Approval issued for the buyer;

(9)	“Excluded Contract” means a contract of sale:

	(a)	with a federal, provincial, state, territorial, municipal or other government buyer, unless otherwise approved by the Insurers in writing;

	(b)	to be entirely paid by an irrevocable letter of credit or secured by an irrevocable standby letter of credit, which was in the possession of the Insured at the time the goods were Shipped;

	(c)	to be entirely paid to the Insured by a Canadian or US buyer with cash before the goods are delivered (‘cash’ means hard currency, or money order, bank draft, credit card or certified cheque);

	(d)	that the Insured is prohibited by law from performing; or

	(e)	which the Insurers have advised the Insured in writing is not insured under this Policy;

(10)	“Gross Invoice Value” means the invoice value of goods and any insurance, freight or other handling costs that were incurred by the Insured on behalf of the buyer at the time the goods were Shipped, and excluding:

	(a)	any tax payable by the Insured to a taxing authority that would be reimbursed by the taxation authority if not paid by the buyer;

	(b)	any amount to be paid by an irrevocable letter of credit or secured by an irrevocable standby letter of credit, which was in the possession of the Insured at the time the goods were Shipped;

Page 13 of 14

30-028-Globex-Quebec (0705)

LOGO

May 9th, 2006

Madeleine Féquière

Director of Credit

Abitibi-Consolidated Inc.

1155 Metcalfe, Ste 800

Montreal, PQ, H3B 5H2

Dear Ms. Féquière:

Re: Policy No. GG 1 22818

Further to your recent request, enclosed is a new Country Schedule reflecting the addition of the following countries:


COUNTRIES		PAYMENT TERMS
People’s Republic of China		ILC Sight – 30 days
Republic of Korea		ILC Sight – 30 days

Also, please find enclosed is the following endorsements: Additional Canadian Insured (Bois d’ingénierie Abitibi-LP II Inc. and Abitibi-Consolidated Company of Canada), and Sales by Foreign Affiliate-Goods Mfg in Canada or Offshore (Abitibi-Consolidated Corporation), which form part of your Policy effective September Ist, 2004.

Should you have any questions, please do not hesitate to contact me.

Yours truly,

LOGO

Nathalie Drouin

Senior Underwriter

Forestry

Telephone: 1-866-996-9974

Fax: 613-597-8830

ndrouin@edc.ca

C.C.: Daniel Galvao, Marsh Canada Limited

151 O’Connor, Ottawa, ON Canada K1A 1K3

613—598—2500 Fax 613—237—2690 www.edc.ca

LOGO


COUNTRY SCHEDULE

	Insured:	Abitibi-Consolidated Inc.

	Policy Number:	GG 1 22818

	Issued:	May 9th, 2006

	Effective:	May 1st, 2006

	Reference Number:	5

This Schedule lists the countries and the maximum payments terms in respect of which insurance coverage is provided and sets out the premium rates applicable to sales made by the Insured to buyers located in such countries and payable on such maximum payment terms. This Schedule forms part of the Policy and, as of its effective date, it replaces any previous Country Schedule.


Countries	Maximum Payment Terms	Note	Rate %
Arab Republic of Egypt	ILC 91-180 days

Argentina	Up to 180 days Cash Against Documents/Documents on Payment of a Sight Draft

Aruba	Cash Against Documents/Documents on Payment of a Sight Draft

Australia	Up to 90 days

Austria	Up to 90 days ILC- Sight 30 days

Barbados	Up to 90 days

Belgium	Up to 90 days

Bermuda	Up to 90 days

Brazil	Up to 180 days ILC 91-180 days Cash Against Documents/Documents on Payment of a Sight Draft

Canada Domestic	Up to 90 days

Canada Export	Up to 180 days

Chile	Up to 180 days

Colombia	Up to 180 days

Costa Rica	Up to 180 days

Dominican Republic	Up to 180 days

Page 1 of 3

151 O’Connor, Ottawa, ON K1A 1K3

613—598—2500 Fax 613—237—2690 www.edc.ca


Ecuador		Up to 180 days Cash Against Documents/Documents on Payment of a Sight Draft ILC 91-180 days
EL Salvador		Up to 180 days
France		Up to 180 days
Germany		Up to 90 days
Greece		Up to 180 days
Guadeloupe		Up to 180 days
Guatemala		Up to 120 days
Honduras		Up to 180 days
Hong Kong		Up to 90 days
Hungary		Up to 90 days
Iceland		Up to 90 days
India		Up to 90 days
Ireland		Up to 90 days
Israel		Up to 90 days
Italy		Up to 180 days
Jamaica		Up to 90 days
Kuwait		Up to 90 days
Luxembourg		Up to 90 days
Macedonia		Up to 90 days
Malta		Up to 90 days
Martinique		Up to 180 days
Mexico		Up to 180 days
Morocco		Up to 90 days
Netherlands		Up to 90 days
Netherlands Antilles		Up to 90 days
Nicaragua		Up to 180 days
Norway		Up to 90 days
Panama		Up to 180 days
Paraguay		Up to 180 days
People’s Republic of China		Up to 90 days ILC Sight - 30 days
Peru		Up to 180 days
Portugal		Up to 90 days
Puerto Rico		Up to 90 days
Republic of Korea		ILC Sight - 30 days
Saudi Arabia		Up to 90 days
Singapore		Up to 180 days
Slovak Republic		Up to 90 days

Page 2 of 3


Slovenia	Up to 90 days
Spain	Up to 90 days
Sweden	Up to 180 days
Switzerland	Up to 180 days ILC 31-90 days
Trinidad and Tobago	Up to 90 days
Turkey	Up to 180 days
Ukraine	Up to 90 days
United Kingdom	Up to 90 days
United States of America	Up to 180 days
Uruguay	Up to 180 days
Venezuela see RESTRICTION NOTE*	Up to 180 days	1
Virgin Island (BR)	Up to 180 days

*	RESTRICTION NOTE: There are further restrictions that apply to this market, please see the Credit Management Schedule.

Note 1 While the Discretionary Credit Limit (DCL) will now apply to Venezuela, please note that coverage is conditional upon your having obtained confirmation that the buyer has been granted authorization from Venezuela’s foreign exchange administration commission (CADIVI) to acquire foreign currency for the subject shipment(s) and accordingly, the corresponding registration number (AAD number) for that shipment. A further condition is that it will apply only to existing buyers who have been able to obtain funds through the CADIVI process during the 12 months prior to September 1st, 2004. Any new buyers, or existing buyers with no track record of having accessed funds through CADIVI, would need to be approved by EDC.

EXPORT DEVELOPMENT CANADA,

for the Insurers

LOGO


				Issued: May 9th, 2006

				Effective Date: September 1st, 2004

				Insured: Abitibi-Consolidated Inc.

				Policy Number: GG 1 22818

ENDORSEMENT

ACCOUNTS RECEIVABLE POLICY (SHIPMENTS)

ADDITIONAL CANADIAN INSURED

This Endorsement forms part of the Policy.

Coverage is provided in accordance with the provisions of the Policy to the Related Canadian Company identified below (referred to in this Endorsement as the Additional Insured) against losses that it sustains.

“1.

The conditions and limitations of cover that apply to the Insured shall also apply to the Additional Insured. The Insurers shall not be liable for the payment of any claim for Loss sustained by the Insured or any Additional Insured referred to in this Endorsement or in any Additional Canadian Insured Endorsement issued under the Policy (the “Additional Insureds”), unless all the sales contracts of the Insured and the Additional Insureds are declared in accordance with the terms of the Policy.

The undersigned Additional Insured hereby appoints the Insured as its true and lawful attorney to deal with the Insurers on its behalf in all matters relating to this Policy and any claim for Loss hereunder, including to receive from the Insurers any claim payment to be made to the Additional Insured, and the Insured hereby accepts such appointment.

151 O’Connor, Ottawa, ON K1A 1K3

613—598—2500 Fax 613—237—2690 www.edc.ca

When submitting a claim application, the Insured must provide the Insurer with a signed copy of a declaration form provided by the Insurer in which the Additional Insured has made the declaration required by the Insurer to the effect that the Additional Insured has not engaged in activities prohibited by criminal laws dealing with corruption or the bribery of public officials.

All communications with the Insurers with respect to such coverage shall be with the Insured, not the Additional Insured.”

Related Canadian Companies

Bois d’ingenierie Abitibi-LP II Inc

Larouche, PQ

EXPORT DEVELOPMENT CANADA,

for the Insurers

LOGO

Abitibi-Consolidated Inc.

Bois d’ingenierie Abitibi-LP II Inc

LOGO


				Issued: May 9th, 2006

				Effective Date: September 1st, 2004

				Insured: Abitibi-Consolidated Inc.

				Policy Number: GG 1 22818

ENDORSEMENT

ACCOUNTS RECEIVABLE POLICY (SHIPMENTS)

ADDITIONAL CANADIAN INSURED

This Endorsement forms part of the Policy.

Coverage is provided in accordance with the provisions of the PoIicy to the Related Canadian Company identified below (referred to in this Endorsement as the Additional Insured) against losses that it sustains.

“1.

151 O’Connor, Ottawa, ON K1A 1K3

613—598—2500 Fax 613—237—2690 www.edc.ca

All communications with the Insurers with respect to such coverage shall be with the Insured, not the Additional Insured.”

Related Canadian Companies

Abitibi-Consolidated Company of Canada

1155 Metcalfe St Ste 800

Montreal, PQ

EXPORT DEVELOPMENT CANADA,

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LOGO

Abitibi-Consolidated Inc.

Abitibi-Consolidated Company of Canada

LOGO


				Issued: May 9th, 2006

				Effective Date: September 1st, 2004

				Insured: Abitibi-Consolidated Inc.

				Policy Number: GG 1 22818

ENDORSEMENT

ACCOUNTS RECEIVABLE POLICY (SHIPMENTS)

SALES BY FOREIGN AFFILIATE -

GOODS MANUFACTURED IN CANADA OR OFFSHORE

This Endorsement forms part of the Policy.

Coverage is provided to the Insured in respect of the Insured’s interest in the sales made by its wholly-owned Foreign Subsidiary, as defined below.

The Insured’s insurance coverage and the conditions and limitations of such cover that apply in respect of the sales made by the Insured shall also apply in respect of the sales made by the Foreign Subsidiary as though, for purposes of the Policy, the Foreign Subsidiary were the Insured. The Insured shall make declarations and pay premium in respect of the sales of the Foreign Subsidiary on the basis set out in the Policy. All communications with the Insurers with respect to such coverage must be by the Insured, not the Foreign Subsidiary. For greater certainty, the Foreign Subsidiary is not insured under the Policy and has no rights under the Policy.

In the event of a claim, the Insured shall cause the Foreign Subsidiary to take all steps necessary or expedient to recover the amount of the Loss, including, without limitation, at the request of the Insurer: (i) to institute legal proceedings against any person to recover any amounts owed to the Foreign Subsidiary in respect of the Loss, or (ii) to transfer and assign to the Insured the Foreign Subsidiary’s rights under its contract of sale, thus permitting the Insured to take, if requested by the Insurer, all steps necessary or expedient to recover the

151 O’Connor, Ottawa, ON K1A 1K3

613—598—2500 Fax 613—237—2690 www.edc.ca

amount of the Loss, including:

to institute legal proceedings against any person to recover any amounts owed in respect of such Loss;

to provide the Insurer with any authorizations and documentation necessary to permit the Insurer to give instructions on behalf of the Insured, or to institute legal proceedings in the name of the Insured in respect of the exercise of any legal rights or remedies available to the Insured with respect to the recovery of the Loss, including, without limitation, the granting of a power of attorney in favour of the Insurer; and

to transfer and assign to the Insurer all right, title and interest (or any part thereof) in all amounts owed in respect of such Loss, or any security in respect thereof, without giving notice of any such assignment except as may be directed in writing by the Insurer.

The Insurer shall not be liable for the payment of a claim for a Loss in respect of such contract of sale if the Insured fails to cause the Foreign Subsidiary to take the steps requested by the Insurer, as set out above.

If an Insurer has paid a claim and the Insured subsequently fails to cause the Foreign Subsidiary to take all steps necessary or expedient to recover the amount of the Loss, or fails to take the steps requested by the Insurer to be taken by the Insured to effect recovery, as set out above or if the Insured fails to take, at the Insurer’s request, the steps described above, the Insured shall forthwith upon the Insurer’s demand repay the claim payment to the Insurer.

If the Foreign Subsidiary or the Insured, or any third party on behalf of either of them, recovers any amount in respect of the Loss, the Insured shall pay to the Insurer an amount equivalent to that proportion of such recovered amount which is equal to the proportion of the Loss that was paid by the Insurer.

Coverage of the sales of the Foreign Subsidiary is provided on condition that the Foreign Subsidiary is at all times a wholly owned subsidiary of the Insured.

The Insured shall advise the Insurers if, after the date of issuance of this Endorsement, there is any change to the information provided to the Insurers by the Insured relating to coverage of the sales of the Foreign Subsidiary such as a change in the ownership or location of the Foreign Subsidiary, or a material decrease in the percentage of goods sold by the Foreign Subsidiary which are manufactured in Canada by the Insured.

Contracts for the sale of goods to a Canadian buyer which provide for the goods to be placed in transit from a location outside Canada for delivery in Canada shall be Excluded Contracts.

The definition of Shipped is deleted in its entirety and replaced with the following:

““Shipped” means that goods being sold by the Foreign Subsidiary to a buyer have been placed in transit for delivery to a destination specified by the buyer.”

“Foreign Subsidiary” means the Insured’s wholly-owned subsidiary listed below:

Foreign Subsidiary

Abitibi-Consolidated Corporation

340 N Sam Houston Parkway E Ste 105

Houston, TX

United States of America

77060

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LOGO

Abitibi-Consolidated Inc.

COVERAGE CERTIFICATE

Accounts Receivable Policy

(Shipments)


		Insured: Abitibi-Consolidated Inc.

		Policy Number: CG 1 22818

		Issued: May 24th, 2006

		Effective September 1st, 2006

		Reference Number: 1

This Policy is issued in Ottawa, Ontario by Export Development Canada (“EDC”) and by Compagnie Française d’Assurance pour le commerce Extérieur – Canada Branch (Coface) (together referred to as the “Insurers”), to Abitibi-Consolidated Inc. (the “Insured”). This Certificate forms part of the Policy and, as of its effective date, it replaces any previous Coverage Certificate.


SPECIFIC TERMS OF COVERAGE PROVIDED UNDER THE POLICY ARE SET BELOW

Coverage Effective Date:		September 1st, 2006

Policy Period:		September 1st to August 31st of each year.

		If the Policy is terminated on a date other than August 31st the last Policy Period will end on such termination date.

Anniversary Date:		September 1st of each year

Acceptance Fee:		CAD 0

Policy Currency:		USD



EDC’s Maximum Liability Amount:		USD 160,000,000

Coface Maximum Liability Amount:		USD 32,000,000



Declaration Period:		N/A

Declaration Curreny:		N/A



Insurance Percentage:		90% (subject to section 16 of the Policy General Terms and Conditions)

151 O’Connor, Ottawa, ON K1A 1K3

613—598—2500 Fax 613—237—2690 www.edc.ca

ADDRESS FOR NOTICES


to the Insurance at:		to the Insurers at:

Abitibi-Consolidated Inc.		Export Development Canada
800 - 1155 Metcalfe		151 O’Connor Street
Montreal, PQ, Canada		Ottawa, Ontario, Canada
H3B 5H2		K1A 1K3

Attention:	Ms. Madeleine Féquière	Attention:	Marlène Bouchard

Tel. Number:	514-394-3638	Tel. Number:	1-888-332-4089
Fax Number:	514-394-2267	Fax Number:	613-597-8830

e-mail address:	madeleine_fequiere@abitibiconsolidated.com	e-mail address:	mbouchard@edc.ca

EXPORT DEVELOPMENT CANADA,

For the Insurers

COUNTRY SCHEDULE


		Insured: Abitibi-Consolidated Inc.

		Policy Number: CG 1 22818

		Issued: May 24th, 2006

		Effective: September 1st, 2006

		Reference Number: 1


Countries	Maximum Payment Terms	Note	Rate %
Arab Republic of Egypt	ILC 91-180 days
Argentina	Up to 180 days Cash Against Documents/Documents on Payment of a Sight Draft
Aruba	Cash Against Documents/Documents on Payment of a Sight Draft
Australia	Up to 90 days
Austria	ILC - Sight 30 days Up to 90 days
Barbados	Up to 90 days
Belgium	Up to 90 days
Bermuda	Up to 90 days
Brazil	Up to 180 days ILC 91-180 days Cash Against Documents/Documents on Payment of a Sight Draft
Canada Domestic	Up to 90 days
Canada Export	Up to 180 days
Chile	Up to 180 days
Colombia	Up to 180 days
Costa Rica	Up to 180 days
Dominican Republic	Up to 180 days

Page 1 of 3

151 O’Connor, Ottawa, ON K1A 1K3

613—598—2500 Fax 613—237—2690 www.edc.ca


Ecuador		Up to 180 days Cash Against Documents/Documents on Payment of a Sight Draft ILC 91-180 days
EI Salvador		Up to 180 days
France		Up to 180 days
Germany		Up to 90 days
Greece		Up to 180 days
Guadeloupe		Up to 180 days
Guatemala		Up to 120 days
Honduras		Up to 180 days
Hong Kong		Up to 90 days
Hungary		Up to 90 days
Iceland		Up to 90 days
India		Up to 90 days
Ireland		Up to 90 days
Israel		Up to 90 days
Italy		Up to 180 days
Jamaica		Up to 90 days
Kuwait		Up to 90 days
Luxembourg		Up to 90 days
Macedonia		Up to 90 days
Malta		Up to 90 days
Martinique		Up to 180 days
Mexico		Up to 180 days
Morocco		Up to 90 days
Netherlands		Up to 90 days
Netherlands Antilles		Up to 90 days
Nicaragua		Up to 180 days
Norway		Up to 90 days
Panama		Up to 180 days
Paraguay		Up to 180 days
People’s Republic of China		Up to 90 days ILC Sight - 30 days
Peru		Up to 180 days
Portugal		Up to 90 days
Puerto Rico		Up to 90 days
Republic of Korea		ILC Sight - 30 days
Saudi Arabia		Up to 90 days
Singapore		Up to 180 days
Slovak Republic		Up to 90 days
Slovenia		Up to 90 days

Page 2 of 3


Spain	Up to 90 days
Sweden	Up to 180 days
Switzerland	Up to 180 days ILC 31-90 days
Trinidad and Tobago	Up to 90 days
Turkey	Up to 180 days
Ukraine	Up to 90 days
United Kingdom	Up to 90 days
United States of America	Up to 180 days
Uruguay	Up to 180 days
Venezuela see RESTRICTON NOTE *	Up to 180 days	1
Virgin Island (BR)	Up to 180 days

*	RESTRICTION NOTE: There are further restrictions that apply to the market, please see the Credit Management Schedule.

Note 1 While the Discretionary Credit Limit (DCL) will now apply to Venezuela, please note that coverage is conditional upon your having obtained confirmation that the buyer has been granted authorization from Venezuela’s foreign exchange administration commission (CADIVI) to acquire foreign currency for the subject shipment(s) and accordingly, the corresponding registration number (AAD number) for that shipment. A further condition is that it will apply only to existing buyers who have been able to obtain funds through the CADIVI process during 12 months prior to September 1^st, 2004. Any new buyers, or existing buyers with no track record of having accessed funds through CADIVI, would need to be approved by EDC.

EXPORT DEVELOPMENT CANADA,

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Page 3 of 3

CREDIT MANAGEMENT SCHEDULE

Insured: Abitibi-Consolidated Inc.

Policy Number: CG 1 22818

Issued: May 24th, 2006

Effective: September 1st, 2006

Reference Number: 1

This Schedule sets out the procedures that the Insured must follow to establish Credit Limits for buyers, and describes the insured’s obligation as to how to follow up on overdue accounts. This Schedule forms part of the Policy and, as of its effective date, it replaces any previous Credit Management Schedule.

KEY DEFINITIONS


Credit Limit		means the maximum amount of Loss that the Insured may sustain in respect of any individual buyer and still obtain the maximum Insurance Percentage under the Policy.

Credit Approval		means a notice given by the Insurers to the Insured stating the amount of the Credit Limit for a buyer or group of buyers and stipulating any specific conditions or changes to the insurance coverage applicable to sales to that buyer or group of buyers.

Discretionary Credit Limit		means the maximum Credit Limit that the Insured may establish, without contacting the Insurers, by using one of the methods for establishing such a Credit Limit set out in this Credit Management Schedule.

OBLIGATIONS OF THE INSURED

•

The Insured must establish and maintain a Credit Limit for all buyers by using one of the methods set out in Section 1 below or by requesting a Credit Approval from the Insurers (See Section 2, below).

•

The Credit Limit should be equal to or greater than the amount owed by the buyer to the Insured.

•

The Insured must take appropriate action to follow up on overdue accounts, including those set out in Section 3, below.

Section 1 DISCRETIONARY CREDIT LIMITS

Depending on the size of the Credit Limit required, there are various methods that the insured can use to establish a Credit Limit for a buyer without contacting the Insures. The Insured may use only one method for each buyer.

However, the Discretionary Credit Limits for the buyers located in some countries are limited to the amount indicated in the adjacent table no matter what amount is obtained by using the methods set out below.

COUNTRIES FOR WHICH THE DISCRETIONARY CREDIT LIMIT IS RESTRICTED


Country		Maximum Credit Limit
Venezuela		See Note 1 in the Country Schedule

Page 1 of 2

151 O’Connor, Ottawa, ON K1A 1K3

613—598—2500 Fax 613—237—2690 www.edc.ca

THE METHODS FOR ESTABLISHING A CREDIT LIMIT ARE AS FOLLOWS:


Method 1	The Insured’s own experience – Up to 125% of the highest amount of credit that the Insured has extended to the buyer on similar terms that was promptly paid during the twelve month period before the date coverage for the transaction with the buyer begins.

	Maximum Credit Limit using Method 1:	USD 500,000

Method 2	Written Credit Information – Favourable written information provided by a recognized credit information agency or a bank which supports the extension of credit for the amount of the sale. The information cannot be dated more than twelve months before the date coverage for the transaction with the buyer begins.

	Maximum Credit Limit using Method 2	USD 500,000

Method 3	Financial Statements & Written Credit information – favourable Financial Statements in combination with favourable written credit information of the buyer which support the extension of credit for the amount of the sale. The fiscal year end of the statements cannot be more than eighteen months before the date coverage for the transaction with the buyer begins. The written credit information cannot be dated more than twelve months before the date coverage for the transaction with the buyer begins.

	Maximum Credit Limit using Method 3:	USD 1,000,000

Section 2	CREDIT APPROVALS


When the Insured requires a Credit Limit higher than can be established by using the methods provided in Section 1, the Insured must contact the Insurers to obtain a Credit Approval.

Section 3	OVERDUE ACCOUNTS


The longer an account remains overdue, the greater the likelihood of a loss. One of your responsibilities under the Policy is to attempt to collect overdue accounts.

EXPORT DEVELOPMENT CANADA

For the Insurers

Page 2 of 2

LOGO


				Issued: May 24th, 2006

				Effective Date: September 1st, 2006

				Insured: Abitibi-Consolidated Inc.

				Policy Number: CG 1 22818

ENDORSEMENT

ACCOUNTS RECEIVABLE POLICY (SHIPMENTS)

ADDITIONAL CANADIAN INSURED

This Endorsement forms part of the Policy.

“1.

The conditions and limitations of cover that apply to the Insured shall also apply to the Additional Insured. The Insurers shall not be liable for the payment of any claim for Loss sustained by the Insured or any Additional Insured referred to in this Endorsement or in any Additional Canadian Insured Endorsement issued under the Policy (the “Additional Insureds”), unless all the sales contracts of the Insured and the Additional Insureds are declared in accordance with the terms of the Policy.

151 O’Connor, Ottawa, ON K1A 1K3

613—598—2500 Fax 613—237—2690 www.edc.ca

All communications with the Insurers with respect to such coverage shall be with the Insured, not the Additional Insured.”

Related Canadian Companies

Produits Forestiers La Tuque Inc.

240 Site Vallières

C.P. 426

La Tuque, PQ

G9X 3P3

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for the Insurers

LOGO

Abitibi-Consolidated Inc.

Produits Forestiers La Tuque Inc.

LOGO

Issued: May 24th, 2006

Effective Date: September 1st, 2006

Insured: Abitibi-Consolidated Inc.

Policy Number: CG 1 22818

ENDORSEMENT

ACCOUNTS RECEIVABLE POLICY (SHIPMENTS)

ADDITIONAL CANADIAN INSURED

This Endorsement forms part of the Policy.

“1.

The conditions and limitations of cover that apply to the Insured shall also apply to the Additional Insured. The Insurers shall not be liable for the payment of any claim for Loss sustained by the Insured or any Additional Insured referred to in this Endorsement or in any Additional Canadian Insured Endorsement issued under the Policy (the “Additional lnsureds”), unless all the sales contracts of the Insured and the Additional Insureds are declared in accordance with the terms of the Policy.

151 O’Connor, Ottawa, ON K1A 1K3

613—598—2500 Fax 613—237—2690 www.edc.ca

All communications with the Insurers with respect to such coverage shall be with the Insured, not the Additional Insured.”

Related Canadian Companies

Produits Forestiers Saguenay Inc.

4910, boulevard Talbot

Laterriere, PQ

G7N 1A3

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Abitibi-Consolidated Inc.

Produits Forestiers Saguenay Inc.

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Issued: May 24th, 2006

Effective Date: September 1st, 2006

Insured: Abitibi-Consolidated Inc.

Policy Number: CG 1 22818

ENDORSEMENT

ACCOUNTS RECEIVABLE POLICY (SHIPMENTS)

ADDITIONAL CANADIAN INSURED

This Endorsement forms part of the Policy.

“1.

151 O’Connor, Ottawa, ON K1A 1K3

613—598—2500 Fax 613—237—2690 www.edc.ca

All communications with the Insurers with respect to such coverage shall be with the Insured, not the Additional Insured.”

Related Canadian Companies

Produits Forestiers Petit Paris Inc.

75 Chemin Chute des Passes

Saint-Ludger-de-Milot, PQ

G0W 2B0

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Abitibi-Consolidated Inc.

Produits Forestiers Petit Paris Inc.

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				Issued: May 24th, 2006

				Effective Date: September 1st, 2006

				Insured: Abitibi-Consolidated Inc.

				Policy Number: CG 1 22818

ENDORSEMENT

ACCOUNTS RECEIVABLE POLICY (SHIPMENTS)

ADDITIONAL CANADIAN INSURED

This Endorsement forms part of the Policy.

“1.

151 O’Connor, Ottawa, ON K1A 1K3

613—598—2500 Fax 613—237—2690 www.edc.ca

All communications with the Insurers with respect to such coverage shall be with the Insured, not the Additional Insured.”

Related Canadian Companies

Bois d’Ingénierie Abitibi-LP Inc.

900 ch du Lac Hippolyte

Larouche, PQ

G0W 1Z0

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Abitibi-Consolidated Inc.

Bois d’Ingénierie Abitibi-LP Inc.

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				Issued: May 24th, 2006

				Effective Date: September 1st, 2006

				Insured: Abitibi-Consolidated Inc.

				Policy Number: CG 1 22818

ENDORSEMENT

ACCOUNTS RECEIVABLE POLICY (SHIPMENTS)

ADDITIONAL CANADIAN INSURED

This Endorsement forms part of the Policy.

“1.

151 O’Connor, Ottawa, ON K1A 1K3

613—598—2500 Fax 613—237—2690 www.edc.ca

3. When submitting a claim application, the Insured must provide the Insurer with a signed copy of a declaration form provided by the Insurer in which the Additional Insured has made the declaration required by the Insurer to the effect that the Additional Insured has not engaged in activities prohibited by criminal laws dealing with corruption or the bribery of public officials.

4. All communications with the Insurers with respect to such coverage shall be with the Insured, not the Additional Insured.”

Related Canadian Companies

Bois d’ingénierie Abitibi-LP II Inc

Larouche, PQ

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Abitibi-Consolidated Inc.

Bois d’ingénierie Abitibi-LP II Inc

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				Issued: May 24th, 2006

				Effective Date: September 1st, 2006

				Insured: Abitibi-Consolidated Inc.

				Policy Number: CG 1 22818

ENDORSEMENT

ACCOUNTS RECEIVABLE POLICY (SHIPMENTS)

ADDITIONAL CANADIAN INSURED

This Endorsement forms part of the Policy.

“1.

151 O’Connor, Ottawa, ON K1A 1K3

613—598—2500 Fax 613—237—2690 www.edc.ca

All communications with the Insurers with respect to such coverage shall be with the Insured, not the Additional Insured.”

Related Canadian Companies

Abitibi-Consolidated Company of Canada

1155 Metcalfe St Ste 800

Montreal, PQ

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Abitibi-Consolidated Inc.

Abitibi-Consolidated Company of Canada

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				Issued: May 24th, 2006

				Effective Date: September 1st, 2006

				Insured: Abitibi-Consolidated

				Policy Number: CG 1 22818

ENDORSEMENT

ACCOUNTS RECEIVABLE POLICY (SHIPMENTS)

CONTINUOUS COVERAGE BETWEEN TWO POLICIES – CREDIT LIMITS

This Endorsement forms part of the Policy.

Whereas the Insured was previously insured under Policy No. GG 1 22818 issued by EDC and St. Paul Guarantee Insurance Company (the “Old Policy”) which terminated as of the day before the Coverage Effective Date of this Policy;

And whereas the Insurers wish to clarify the application of Credit Limits and to confirm, for greater certainty, that a Credit Limit for a buyer shall not be the aggregate of: (i) the Credit Limit for the buyer under the Old Policy (as the term Credit Limit is defined in the Old Policy), and (ii) the Credit Limit for the buyer under this Policy;

And whereas any claim with respect to receivables insured under the Old Policy shall be determined by reference to the Credit Limit for the buyer under the Old Policy;

Therefore, without in any way restricting the application of the terms and conditions of the Policy except as hereinafter expressly provided and solely for purposes of determining the Credit Limit for a buyer, the Policy is amended to provide that the Credit Limit for a buyer under this Policy shall be reduced by an amount equal to: (i) any claims paid in respect of the buyer for receivables insured under the Old Policy, and (ii) any amount owing by such buyer to the Insured in respect of receivables insured under the Old Policy.

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151 O’Connor, Ottawa, ON K1A 1K3

613—598—2500 Fax 613—237—2690 www.edc.ca

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				Issued: May 24th, 2006

				Effective Date: September 1st, 2006

				Insured: Abitibi-Consolidated Inc.

				Policy Number: CG 1 22818

ENDORSEMENT

ACCOUNTS RECEIVABLE POLICY (SHIPMENTS)

DECLARATIONS AND PAYMENT OF PREMIUM

This Endorsement forms part of the Policy. It cancels and replaces any DECLARATIONS AND PAYMENT OF PREMIUM Endorsement which may have been previously issued.

The Insured and the Insurers have agreed to amend the Policy to provide for: (i) an annual premium payable in quarterly installments, and (ii) premium adjustments based on liability incurred by the Insurers for a Policy Period.

Therefore, without in any way restricting the application of the terms and conditions of the Policy except as hereinafter expressly provided, the Policy is amended as follows:

“1.

In respect of each Policy Period, the Insured shall pay an annual premium of USD 2,023,000 (USD 96,295 of which shall be allocated for risks in Ontario and USD 67,973 of which shall be allocated for risks in Quebec), plus USD 7,704 as Ontario provincial sales tax on the portion of the premium allocated for risks in Ontario and USD 6,118 as Quebec provincial sales tax on the portion of the premium allocated for risks in Quebec, for a total of USD 2,036,822.

For each Policy Period, the total amount set out in section 1 of this Endorsement shall be payable in four equal installments on or before the 20 ^th day of the month following the end of each Declaration Period.

The premium set out in section 1 of this Endorsement, above, is based on the Insurers not becoming liable to pay claims in respect of goods Shipped during each Policy Period in an aggregate amount exceeding USD 400,000. If the Insurers become liable to pay claims for Loss in respect of goods Shipped during a Policy Period for an aggregate amount:

(a)

greater than USD 400,000 and not exceeding USD 800,000, the Insured shall pay an additional premium of USD 144,500;

151 O’Connor, Ottawa, ON K1A 1K3

613—598—2500 Fax 613—237—2690 www.edc.ca

(b)

greater than USD 800,000 and not exceeding USD 1,600,000, the Insured shall pay an additional premium of USD 442,000;

(c)

greater than USD 1,600,000 and not exceeding USD 2,400,000, the Insured shall pay an additional premium of USD 722,500;

(d)

greater than USD 2,400,000 and not exceeding USD 3,200,000, the Insured shall pay an additional premium of USD 867,000;

(e)

greater than USD 3,200,000 and not exceeding USD 4,000,000, the Insured shall pay an additional premium of USD 1,011,500; and

(f)

greater than USD 4,000,000, the Insured shall pay an additional premium of USD 1,292,000.

Such additional premium is payable upon demand as soon as the threshold set out above is met or exceeded. The payment of the additional premium is a condition precedent to any liability of the Insurers for the payment of a claim or the allocation of an amount to any Deductible. The Insurers reserve the right to deduct any such additional premium from any claim payment made in respect of the Policy.

No later than June 30 of each Policy Period, the Insured shall provide the Insurers with its total actual sales figures for that Policy Period, in writing, by country and by province.

In the event the Policy is terminated pursuant to Section 37, the Insured shall pay a pro-rata premium equal to the applicable annual premium amount payable in accordance with section 1 or 3 of this Endorsement divided by 365 days, multiplied by the number of days from the date following the end of the last Declaration Period for which premium was paid, up to and including the date of termination of the Policy, (the “Pro-Rata Premium”). The Pro-Rata Premium and all applicable taxes, will be payable no later than the 20th day of the month following the date of termination of the Policy.”

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				Issued: May 24th, 2006

				Effective Date: September 1st, 2006

				Insured: Abitibi-Consolidated Inc.

				Policy Number: CG 1 22818

ENDORSEMENT

ACCOUNTS RECEIVABLE POLICY (SHIPMENTS)

SALES BY FOREIGN AFFILIATE -

GOODS MANUFACTURED IN CANADA OR OFFSHORE

This Endorsement forms part of the Policy.

Coverage is provided to the Insured in respect of the Insured’s interest in the sales made by its wholly-owned Foreign Subsidiary, as defined below.

In the event of a claim, the Insured shall cause the Foreign Subsidiary to take all steps necessary or expedient to recover the amount of the Loss, including, without limitation, at the request of the Insurer: (i) to institute legal proceedings against any person to recover any amounts owed to the Foreign Subsidiary in respect of the Loss, or (ii) to transfer and assign to the Insured the Foreign Subsidiary’s rights under its contract of sale, thus permitting the Insured to take, if requested by the Insurer, all steps necessary or expedient to recover the

151 O’Connor, Ottawa, ON K1A 1K3

613—598—2500 Fax 613—237—2690 www.edc.ca

amount of the Loss, including:

to institute legal proceedings against any person to recover any amounts owed in respect of such Loss;

to transfer and assign to the Insurer all right, title and interest (or any part thereof) in all amounts owed in respect of such Loss, or any security in respect thereof, without giving notice of any such assignment except as may be directed in writing by the Insurer.

Coverage of the sales of the Foreign Subsidiary is provided on condition that the Foreign Subsidiary is at all times a wholly owned subsidiary of the Insured.

Contracts for the sale of goods to a Canadian buyer which provide for the goods to be placed in transit from a location outside Canada for delivery in Canada shall be Excluded Contracts.

The definition of Shipped is deleted in its entirety and replaced with the following:

““Shipped” means that goods being sold by the Foreign Subsidiary to a buyer have been placed in transit for delivery to a destination specified by the buyer.”

“Foreign Subsidiary” means the Insured’s wholly-owned subsidiary listed below:

Foreign Subsidiary

Abitibi-Consolidated Corporation

340 N Sam Houston Parkway E Ste 105

Houston, TX

United States of America

77060

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				Issued: May 24th, 2006

				Effective Date: September 1st, 2006

				Insured: Abitibi-Consolidated Inc.

				Policy Number: CG 1 22818

ENDORSEMENT

ACCOUNTS RECEIVABLE POLICY (SHIPMENTS)

SALES BY FOREIGN AFFILIATE -

GOODS MANUFACTURED IN CANADA OR OFFSHORE

This Endorsement forms part of the Policy.

Coverage is provided to the Insured in respect of the Insured’s interest in the sales made by its wholly-owned Foreign Subsidiary, as defined below.

In the event of a claim, the Insured shall cause the Foreign Subsidiary to take all steps necessary or expedient to recover the amount of the Loss, including, without limitation, at the request of the Insurer: (i) to institute legal proceedings against any person to recover any amounts owed to the Foreign Subsidiary in respect of the Loss, or (ii) to transfer and assign to the Insured the Foreign Subsidiary’s rights under its contract of sale, thus permitting the Insured to take, if requested by the Insurer, all steps necessary or expedient to recover the

151 O’Connor, Ottawa, ON K1A 1K3

613—598—2500 Fax 613—237—2690 www.edc.ca

amount of the Loss, including:

to institute legal proceedings against any person to recover any amounts owed in respect of such Loss;

Coverage of the sales of the Foreign Subsidiary is provided on condition that the Foreign Subsidiary is at all times a wholly owned subsidiary of the Insured.

Contracts for the sale of goods to a Canadian buyer which provide for the goods to be placed in transit from a location outside Canada for delivery in Canada shall be Excluded Contracts.

The definition of Shipped is deleted in its entirety and replaced with the following:

““Shipped” means that goods being sold by the Foreign Subsidiary to a buyer have been placed in transit for delivery to a destination specified by the buyer.”

“Foreign Subsidiary” means the Insured’s wholly-owned subsidiary listed below:

Foreign Subsidiary

Bridgewater Paper Co Ltd

North Road

Ellesmere Port

United Kingdom

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				Issued: May 24th, 2006

				Effective Date: September 1st, 2006

				Insured: Abitibi-Consolidated Inc.

				Policy Number: CG 1 22818

ENDORSEMENT

ACCOUNTS RECEIVABLE POLICY (SHIPMENTS)

SALES BY FOREIGN AFFILIATE -

GOODS MANUFACTURED IN CANADA OR OFFSHORE

This Endorsement forms part of the Policy.

Coverage is provided to the Insured in respect of the Insured’s interest in the sales made by its wholly-owned Foreign Subsidiary, as defined below.

The Insured’s insurance coverage and the conditions and limitations of such cover that apply in respect of the sales made by the Insured shall also apply in respect of the sales made by the Foreign Subsidiary as though, for purposes of the Policy, the Foreign Subsidiary were the Insured. The Insured shall make declarations and pay premium in respect of the sales of the Foreign Subsidiary on the basis set out in the Policy. All communications with the Insurers with respect to such coverage must be by the Insured, not the Foreign Subsidiary. For greater certainty, the Foreign Subsidiary is not insured under the Policy and has no rights under the Policy.

In the event of a claim, the Insured shall cause the Foreign Subsidiary to take all steps necessary or expedient to recover the amount of the Loss, including, without limitation, at the request of the Insurer: (i) to institute legal proceedings against any person to recover any amounts owed to the Foreign Subsidiary in respect of the Loss, or (ii) to transfer and assign to the Insured the Foreign Subsidiary’s rights under its contract of sale, thus permitting the Insured to take, if requested by the Insurer, all steps necessary or expedient to recover the

151 O’Connor, Ottawa, ON K1A 1K3

613—598—2500 Fax 613—237—2690 www.edc.ca

amount of the Loss, including:

to institute legal proceedings against any person to recover any amounts owed in respect of such Loss;

Coverage of the sales of the Foreign Subsidiary is provided on condition that the Foreign Subsidiary is at all times a wholly owned subsidiary of the Insured.

Contracts for the sale of goods to a Canadian buyer which provide for the goods to be placed in transit from a location outside Canada for delivery in Canada shall be Excluded Contracts.

The definition of Shipped is deleted in its entirety and replaced with the following:

““Shipped” means that goods being sold by the Foreign Subsidiary to a buyer have been placed in transit for delivery to a destination specified by the buyer.”

“Foreign Subsidiary” means the Insured’s wholly-owned subsidiary listed below:

Foreign Subsidiary

Abitibi Consolidated Sales Corporation

4 Gannett Drive

White Plains, NY

United States of America

10604

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				Issued: May 24th, 2006

				Effective Date: September 1st, 2006

				Insured: Abitibi-Consolidated Inc.

				Policy Number: CG 1 22818

ENDORSEMENT

ACCOUNTS RECEIVABLE POLICY (SHIPMENTS)

SALES OUT OF CONSIGNMENT INVENTORY OR EXHIBITION STOCK

This Endorsement forms part of the Policy.

Coverage is provided in respect of goods sold to a buyer after having been delivered to a consignee to be exhibited, held on a consignment basis or held in inventory until sold.

If goods were previously delivered by the Insured to a Consignee, the eventual sale of those goods by the Insured to a buyer (which may be the Consignee) will be covered by the Policy if the sale occurs between the Coverage Effective Date and the date of termination of the Policy. In such circumstances, goods will be considered to have been Shipped, for purposes of the Policy, when they are sold.

The Insured shall declare and pay premium on goods that are delivered to a Consignee on the 20^th day of the month following the end of the Declaration Period in which the sale of the goods occurs.

“Consignee” means a person to whom the Insured has delivered goods to which the Insured has retained title, to be exhibited, held on a consignment basis or held in inventory, until the goods are sold to the Insured’s buyer.

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151 O’Connor, Ottawa, ON K1A 1K3

613—598—2500 Fax 613—237—2690 www.edc.ca

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				Issued: May 24th, 2006

				Effective Date: September 1st, 2006

				Insured: Abitibi-Consolidated Inc.

				Policy Number: CG 1 22818

ENDORSEMENT

ACCOUNTS RECEIVABLE POLICY (SHIPMENTS)

BOYCOTT

This Endorsement forms part of the Policy.

The Government of Canada finds unacceptable certain activities which would, in connection with the provisions of any international economic boycott, require Canadian firms or individuals to engage in certain actions that may have a discriminatory effect, and it will deny its support and assistance to transactions entered into by those firms and individuals who accept boycott provisions in contravention of government policy.

Export Development Canada follows the Government’s policy on boycotts for the transactions that it supports.

Coverage is therefore not provided under the Policy for any sales contract that, in connection with the provisions of any international economic boycott:

(1)

requires the Insured to:

(a)

engage in discrimination based on the race, national or ethnic origin or religion of any Canadian firm or individual;

(b)

refuse to purchase from or sell to any Canadian firm or individual;

(c)

restrict its commercial investments or other economic activities in any country;

(d)

produce any document (sometimes called a ‘negative certificate of origin’) which says that particular goods or services have not originated from specific firms or places; or

(e)

refuse to sell any Canadian goods and services to, or buy any goods or services from any country, except that a buyer may specify that goods

151 O’Connor, Ottawa, ON K1A 1K3

613—598—2500 Fax 613—237—2690 www.edc.ca

and services of non-Canadian origin that are being provided by the Insured must originate from a particular country;

(2)

contains a statement made by the Insured, or requires the Insured to make a statement saying that the Insured does not deal with a named country, unless it is clear that there is no intention to restrict the Insured’s right to deal with the named country.

All other terms and conditions of the Policy remain unchanged.

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				Issued: May 24th, 2006

				Effective Date: September 1st, 2006

				Insured: Abitibi-Consolidated Inc.

				Policy Number: CG 1 22818

ENDORSEMENT

ACCOUNTS RECEIVABLE POLICY (SHIPMENTS)

CREDIT LIMIT FOR ILC SALES (CONFIRMED & UNCONFIRMED ILC)

This Endorsement forms part of the Policy.

The parties have agreed to amend the Policy to provide insurance coverage for sales contracts requiring payment to be made by irrevocable letters of credit (“ILCs”) issued or confirmed by a bank approved by the Insurers.

“1.

“Bank” means a bank which has issued or confirmed an ILC issued to the Insured as the payment mechanism for the Insured’s sales;

“Bank Approval” means a notice given by the Insurers to the Insured with respect to a Bank stipulating specific terms and the amount of the Credit Limit for the Bank and any specific conditions or changes to the insurance coverage applicable to Eligible Contracts that require payment by an ILC issued or confirmed by such Bank; and

“Credit Limit” means the maximum amount of Loss that the Insured may sustain to obtain maximum coverage under the Policy in respect of a Bank for all the Eligible Contracts that require payment by an ILC issued or confirmed by the Bank.

The definition of Gross Invoice Value is hereby amended by deleting the reference to amounts to be paid by irrevocable letters of credit.

A contract of sale to be entirely paid by an ILC which was in the possession of the Insured at the time the goods were Shipped is an Excluded Contract if no Bank Approval was issued by the Insurers in respect of the Bank that issued or confirmed the ILC.

The provision of the Policy providing for a declining Insurance Percentage applicable in certain circumstances is hereby amended by replacing the references to “buyer” and “Credit Approval” with references to “Bank” and “Bank Approval”, respectively.

The following risk is added to the Policy as a Risk covered by both EDC

151 O’Connor, Ottawa, ON K1A 1K3

613—598—2500 Fax 613—237—2690 www.edc.ca

and Coface:

“failure of the Bank to pay any amount that the Bank is legally obligated to pay to the Insured under the ILC issued as the payment mechanism for the Eligible Contract,”.

In order for this Policy to apply to a sale that requires payment by an ILC, the Country Schedule must provide that such coverage applies in the country where the buyer is located and the Insured must establish a Credit Limit for the Bank by obtaining a Bank Approval.

The Insurers shall not be liable for the payment of a claim for Loss if:

(a)

any right, title or interest of the Insured under the Eligible Contract or the ILC has been assigned by the Insured to any person other than the Insurer, unless the assignment was by way of security only and the assignee has executed and delivered to the Insured a reassignment and release in respect thereof in form and substance satisfactory to the Insurer; or

(b)

the Insured has not strictly complied with all the terms and conditions of the ILC.”

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				Issued: May 24th, 2006

				Effective Date: September 1st, 2006

				Insured: Abitibi-Consolidated Inc.

				Policy Number: CG 1 22818

ENDORSEMENT

ACCOUNTS RECEIVABLE POLICY (SHIPMENTS)

COVERAGE TO CANADIAN BUYERS INVOLVING FOREIGN COUNTRIES

This Endorsement forms part of the Policy.

Insurance coverage for sales to buyers located in Canada shall be provided by EDC instead of Coface if the goods are Shipped or to be Shipped by the Insured directly to a third party located outside Canada, although invoiced to the Canadian buyer.

“1.

Notwithstanding the definition of “Domestic Loss”, a loss sustained by the Insured under an Eligible Contract with a buyer located in Canada shall be considered to be an Export Loss and will be covered by EDC instead of Coface if the goods are Shipped by the Insured directly to a third party outside Canada.

The third party must not be located in any country with which Canadian companies are prohibited by law from dealing.

151 O’Connor, Ottawa, ON K1A 1K3

613—598—2500 Fax 613—237—2690 www.edc.ca

Declarations for sales described herein shall be made under the “Canada Export” heading of the declaration form, by province or territory where the buyer is located.”

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Executive Summary:

Credit Investigation/Review:

Terms of Sales:

Collection Procedures:

Accounts Receivable/Cash Application Process:

Payable Rebate Process:

Bad Debt Losses:

Reporting:

Security Matrix Review: