EXHIBIT 10.44

EXECUTION VERSION

AMENDMENT NO. 6 TO CREDIT AGREEMENT AND CONSENT AND AUTHORIZATION RELATING TO
SECURITY DOCUMENTS

AMENDMENT NO. 6 dated as of February 25, 2014 to the ABL Credit Agreement dated
as of December 9, 2010 (as amended by Amendment No. 1 dated as of April 28,
2011, Amendment No. 2 dated as of October 28, 2011, Amendment No. 3 dated as of
March 21, 2012, Amendment No. 4 dated as of April 12, 2013 and Amendment No. 5
dated as of May 8, 2013, and as otherwise modified from time to time, the
“Credit Agreement”) among Resolute Forest Products Inc. (f/k/a AbitibiBowater
Inc.), a Delaware corporation (“Resolute”), the Subsidiaries of Resolute party
thereto (together with Resolute, collectively, the “Borrowers”), the Lenders
party thereto from time to time and Citibank, N.A., as Administrative Agent (the
“Administrative Agent”) and Collateral Agent, and CONSENT AND AUTHORIZATION
RELATING TO SECURITY DOCUMENTS dated as of February 25, 2014, among Resolute,
the Subsidiaries of Resolute party hereto, the Lenders party hereto and the
Administrative Agent (this “Amendment”).
The parties hereto agree as follows:
Section 1. Defined Terms; References. Unless otherwise specifically defined
herein, each term used herein that is defined in the Credit Agreement has the
meaning assigned to such term in the Credit Agreement, as amended by this
Amendment. Each reference to “hereof”, “hereunder”, “herein” and “hereby” and
each other similar reference and each reference to “this Agreement” and each
other similar reference contained in the Credit Agreement shall, as of the Sixth
Amendment Effective Date (as defined below), refer to the Credit Agreement as
amended hereby.
Section 2. Amendments to Credit Agreement. Each of the parties hereto agrees
that, effective on the Sixth Amendment Effective Date, the Credit Agreement
shall be amended to delete the stricken text (indicated textually in the same
manner as the following example: stricken text) and to add the double-underlined
text (indicated textually in the same manner as the following example:
double-underlined text) as set forth in the Credit Agreement attached as Exhibit
A hereto (the “Amended Credit Agreement”).
Section 3. Authorization Relating to Security Documents. Each Lender party
hereto hereby authorizes the Administrative Agent and/or the Collateral Agent,
on or after the Sixth Amendment Effective Date: (i) to amend the Guarantee and
Collateral Agreement in the form attached as Exhibit B hereto, the Canadian
Guarantee and Collateral Agreement in the form attached as Exhibit C hereto and
the deeds of hypothec included in the Canadian Security Documents in the form
attached as Exhibit D hereto, (ii) to (x) amend the English Security Agreement
(as defined in the Amended Credit Agreement), the Northern Irish Security
Agreement and the Dutch Security Agreement and (y) enter into any additional
European Security Documents, in each case for the purpose of joining any Person
that becomes an English Subsidiary Guarantor (as defined in the Amended Credit
Agreement) after the Sixth Amendment Effective Date and (iii) to enter into the
English Subsidiary Guarantee Agreement (as defined in the Amended Credit
Agreement).

    

--------------------------------------------------------------------------------

Section 4. Authorization Relating to Insurance Policy. Each Lender party hereto
hereby (i) authorizes the Administrative Agent and/or the Collateral Agent, on
or after the Sixth Amendment Effective Date, to amend the Insurance Policy so
that, other than during a Compliance Period, the Insurer shall send all payments
thereunder directly to Resolute and (ii) agrees that the Insurance Policy, as
modified by clause (i) above, shall constitute the Insurance Policy under the
Credit Agreement.
Section 5. Consent to Release of Certain Collateral. Each Lender party hereto
hereby consents to the release, on or after the Sixth Amendment Effective Date,
of (x) all Liens granted under the Security Documents on assets of the Loan
Parties that do not constitute Collateral under the Security Documents (after
giving effect to the amendments thereto contemplated by the forms attached
hereto as Exhibits B, C and D) and (y) all Mortgages in effect as of the date
hereof.
Section 6. Counterparts. This Amendment may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. Delivery of an executed
counterpart hereof by facsimile or electronic transmission shall be as effective
as delivery of an original executed counterpart hereof.
Section 7. Effectiveness. This Amendment shall become effective on the date when
the following conditions are met (the “Sixth Amendment Effective Date”):
(a)The Administrative Agent shall have received from each of the Loan Parties
and the Super-Majority Facility Lenders, (i) a counterpart of this Amendment
signed on behalf of such party or (ii) evidence satisfactory to the
Administrative Agent (which may include a facsimile or other electronic
transmission) that such party has signed a counterpart of this Amendment.
(b)The Administrative Agent shall have received a favorable written opinion of
each of Troutman Sanders LLP, U.S. counsel for the Loan Parties, and McCarthy
Tétreault, Canadian counsel for the Loan Parties, in each case (A) dated the
Sixth Amendment Effective Date, (B) addressed to the Administrative Agent, the
Collateral Agent and the Lenders, and (C) covering the validity and perfection
of the security interests granted under the Guarantee and Collateral Agreement,
the Canadian Guarantee and Collateral Agreement and the hypothecs granted under
the deeds of hypothec included in the Canadian Security Documents, in each case
in form and substance reasonably satisfactory to the Administrative Agent.
Resolute and the other Loan Parties hereby instruct their counsel to deliver
such opinions.
(c)The conditions precedent set forth in Section 7.01 of the Credit Agreement
shall be satisfied as of the Sixth Amendment Effective Date (with the occurrence
of the Sixth Amendment Effective Date being deemed to be a Credit Event for
purposes of this condition), and the Administrative Agent shall have received a
certificate, dated the Sixth Amendment Effective Date and signed by a Financial
Officer of and on behalf of Resolute, confirming compliance with the foregoing.
(d)The Borrowers shall have paid all expenses of the Agents payable pursuant to
Section 13.01(a) of the Credit Agreement to the extent invoiced on or prior the
Sixth Amendment Effective Date (including, without limitation, the reasonable
fees and disbursements of counsel to the Agents).

2

--------------------------------------------------------------------------------

(e)The Administrative Agent shall have received (i) for the account of each
Lender party hereto, a consent fee in an aggregate amount equal to .075% of the
sum of the U.S. Facility Commitment and the Canadian Facility Commitment (prior
to giving effect to the Amendment) of such Lender on the Sixth Amendment
Effective Date and (ii) all fees that the Borrowers shall have agreed in writing
to pay to Citigroup Global Capital Markets Inc. (“CGMI”) on or prior to the
Sixth Amendment Effective Date, pursuant to the Engagement Letter dated as of
February 12, 2014, between Resolute and CGMI.
Section 8. Reference To and Effect Upon the Loan Documents.
(a)    Except as expressly set forth herein, all terms, conditions, covenants,
representations and warranties contained in each of the Loan Documents and all
rights of the Agents, the Issuing Lenders, the Swingline Lenders and the Lenders
and all obligations of the Loan Parties, shall remain in full force and effect.
The Loan Parties hereby confirm that the Loan Documents are in full force and
effect and are hereby ratified and confirmed in all respects. Without limiting
the foregoing, each Loan Party hereby confirms that the Security Documents to
which such Loan Party is a party and all of the Collateral described therein do,
and shall continue to, guarantee and secure the payment of all of the
Obligations and the Secured Obligations (as applicable and, in each case, as
defined and subject to the limitations set forth therein).
(b)    The parties hereto acknowledge and agree that (i) this Amendment and the
other agreements, documents and instruments executed and delivered in connection
herewith do not constitute a novation, payment and reborrowing, or termination
of the obligations and liabilities of the Loan Parties under the Credit
Agreement or any of the Security Documents, and (ii) such obligations and
liabilities are in all respects continuing (as amended hereby) with only the
terms thereof being modified as provided in or contemplated by this Amendment.
(c)    This Amendment shall constitute a Loan Document for all purposes of the
Loan Documents.
Section 9. Governing Law. This Amendment shall be governed by and construed in
accordance with the laws of the State of New York.

[Signature Pages Follow]

3

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed as of the date first above written.
LOAN PARTIES:
RESOLUTE FOREST PRODUCTS INC. (f/k/a AbitibiBowater Inc.)
By:
/s/ Jo-Ann Longworth
 
Name:
Jo-Ann Longworth
 
Title:
Senior Vice President and Chief Financial Officer

RESOLUTE FP US INC. (f/k/a AbiBow US Inc.), as a U.S. Borrower
By:
/s/ Jo-Ann Longworth
 
Name:
Jo-Ann Longworth
 
Title:
Senior Vice President and Chief Financial Officer

ABIBOW RECYCLING LLC, as a U.S. Borrower
By:
/s/ Jo-Ann Longworth
 
Name:
Jo-Ann Longworth
 
Title:
Senior Vice President and Chief Financial Officer

RESOLUTE FP CANADA INC. / PF RESOLU CANADA INC. (f/k/a AbiBow Canada Inc.), as a
Canadian Borrower
By:
/s/ Jo-Ann Longworth
 
Name:
Jo-Ann Longworth
 
Title:
Senior Vice President and Chief Financial Officer

    

--------------------------------------------------------------------------------

BOWATER NUWAY MID-STATES INC.
LAKE SUPERIOR FOREST PRODUCTS INC.
DONOHUE CORP.
FIBREK U.S. INC.
FIBREK RECYCLING U.S. INC.
CALHOUN NEWSPRINT COMPANY
ABITIBIBOWATER CANADA INC.
BOWATER LAHAVE CORPORATION
BOWATER CANADIAN LIMITED
FIBREK HOLDING INC.
FIBREK INTERNATIONAL INC.

By:
/s/ Jo-Ann Longworth
 
Name:
Jo-Ann Longworth
 
Title:
Vice President and Chief Financial Officer

ABITIBI CONSOLIDATED SALES LLC

By: Resolute Forest Products Inc., its Sole Member

By:
/s/ Jo-Ann Longworth
 
Name:
Jo-Ann Longworth
 
Title:
Senior Vice President and Chief Financial Officer

RESOLUTE FP AUGUSTA LLC

By: Abitibi Consolidated Sales LLC, its Manager

By: Resolute Forest Products Inc., its Sole Member

By:
/s/ Jo-Ann Longworth
 
Name:
Jo-Ann Longworth
 
Title:
Senior Vice President and Chief Financial Officer

    

--------------------------------------------------------------------------------

AUGUSTA NEWSPRINT HOLDING LLC

By: Abitibi Consolidated Sales LLC, its Member

By: Resolute Forest Products Inc., its Sole Member

By:
/s/ Jo-Ann Longworth
 
Name:
Jo-Ann Longworth
 
Title:
Senior Vice President and Chief Financial Officer

BOWATER NEWSPRINT SOUTH LLC FD POWERCO LLC

By:
/s/ Jo-Ann Longworth
 
Name:
Jo-Ann Longworth
 
Title:
Manager

GLPC RESIDUAL MANAGEMENT, LLC

By: Fibrek Recycling U.S. Inc., its Sole Member

By:
/s/ Jo-Ann Longworth
 
Name:
Jo-Ann Longworth
 
Title:
Vice President and Chief Financial Officer

FIBREK GENERAL PARTNERSHIP

By: Fibrek Holding Inc., its Managing Partner

By:
/s/ Jo-Ann Longworth
 
Name:
Jo-Ann Longworth
 
Title:
Vice President and Chief Financial Officer

6

--------------------------------------------------------------------------------

ADMINISTRATIVE AGENT AND LENDERS:
CITIBANK, N.A., as Administrative Agent
By:
/s/ K. Kelly Gunness
 
Name:
K. Kelly Gunness
 
Title:
Vice President

    

--------------------------------------------------------------------------------

CITIBANK, N.A., as Lender
By:
/s/ K. Kelly Gunness
 
Name:
K. Kelly Gunness
 
Title:
Vice President

    

--------------------------------------------------------------------------------

CITIBANK, N.A., Canadian Branch, as Lender
By:
/s/ Azita Taravati
 
Name:
Azita Taravati
 
Title:
Authorized Signatory

--------------------------------------------------------------------------------

BANK OF AMERICA, N.A., Canadian Branch, as Lender
By:
/s/ Medina Sales de Andrade
 
Name:
Medina Sales de Andrade
 
Title:
Vice President

--------------------------------------------------------------------------------

BANK OF MONTREAL, as Lender
By:
/s/ William J. Kennedy
 
Name:
William J. Kennedy
 
Title:
Vice President

--------------------------------------------------------------------------------

THE BANK OF NOVA SCOTIA, as Lender
By:
/s/ Denis Lapalme
 
Name:
Denis Lapalme
 
Title:
Director
 
By:
/s/ David Loewen
 
Name:
David Loewen
 
Title:
Director

    

--------------------------------------------------------------------------------

BARCLAYS BANK PLC, as Lender
By:
/s/ Christopher R. Lee
 
Name:
Christopher R. Lee
 
Title:
Assistant Vice President

--------------------------------------------------------------------------------

CANADIAN IMPERIAL BANK OF COMMERCE, as Lender
By:
/s/ Kazim Mehdi
 
Name:
Kazim Mehdi
 
Title:
Director

By:
/s/ Peter Rawlins
 
Name:
Peter Rawlins
 
Title:
Executive Director

--------------------------------------------------------------------------------

CIBC INC., as Lender
By:
/s/ Andrew Campbell
 
Name:
Andrew Campbell
 
Title:
Authorized Signatory

By:
/s/ Robert Robin
 
Name:
Robert Robin
 
Title:
Authorized Signatory

--------------------------------------------------------------------------------

CIT BANK, as Lender
By:
/s/ Renee M. Singer
 
Name:
Renee M. Singer
 
Title:
Managing Director

    

--------------------------------------------------------------------------------

EXPORT DEVELOPMENT CANADA, as Lender
By:
/s/ Hivda Morissette
 
Name:
Hivda Morissette
 
Title:
Asset Manager

By:
/s/ Roman Chomyn
 
Name:
Roman Chomyn
 
Title:
Portfolio Manager

--------------------------------------------------------------------------------

JPMORGAN CHASE BANK, N.A., as Lender
By:
/s/ Gitanjali Pundir
 
Name:
Gitanjali Pundir
 
Title:
Vice President

--------------------------------------------------------------------------------

ROYAL BANK OF CANADA., as Lender
By:
/s/ Robert S. Kizell
 
Name:
Robert S. Kizell
 
Title:
Attorney-in-fact

By:
/s/ J. Patchell
 
Name:
J. Patchell
 
Title:
Attorney-in-fact

    

--------------------------------------------------------------------------------

SIEMENS FINANCIAL SERVICES, INC., as Lender
By:
/s/ James Tregillies
 
Name:
James Tregillies
 
Title:
Vice President

By:
/s/ Paul Ramseur
 
Name:
Paul Ramseur
 
Title:
Vice-President / Head of Risk Management

--------------------------------------------------------------------------------

TD BANK, N.A., as Lender
By:
/s/ Eustachio Bruno
 
Name:
Eustachio Bruno
 
Title:
Vice President

--------------------------------------------------------------------------------

THE TORONTO-DOMINION BANK, as Lender
By:
/s/ Francois Bienvenue
 
Name:
Francois Bienvenue
 
Title:
Vice President

By:
/s/ Darcy Mack
 
Name:
Darcy Mack
 
Title:
Vice President

--------------------------------------------------------------------------------

WELLS FARGO CAPITAL FINANCE, LLC, as Lender
By:
/s/ Peter Aziz
 
Name:
Peter Aziz
 
Title:
Vice President

--------------------------------------------------------------------------------

WELLS FARGO CAPITAL FINANCE CORPORATION CANADA, as Lender
By:
/s/ David G. Phillips
 
Name:
David G. Phillips
 
Title:
Senior Vice President
Credit Officer, Canada
Wells Fargo Capital Finance
Corporation Canada

--------------------------------------------------------------------------------

EXHIBIT A

CREDIT AGREEMENT

    

--------------------------------------------------------------------------------

 

Composite Conformed Copy
as Amended by
Amendment No. 1 dated April 28, 2011
Amendment No. 2 dated October 28, 2011
Amendment No. 3 dated March 21. 2012
Amendment No. 4 dated April 12, 2013
Amendment No. 5 dated May 8, 2013
Amendment No. 6 dated February 25, 2014

--------------------------------------------------------------------------------

THIS CONFORMED COPY, INCLUDING LANGUAGE FROM AMENDMENT NO. 1, AMENDMENT NO. 2,
AMENDMENT NO. 3 AND, AMENDMENT NO. 4, AMENDMENT NO. 5 AND AMENDMENT NO. 6 TO THE
ABL CREDIT AGREEMENT, HAS BEEN PREPARED SOLELY AS A CONVENIENCE AND IS NOT A
LEGAL DOCUMENT. THE ABL CREDIT AGREEMENT, DATED AS OF DECEMBER 9, 2010 (AS
AMENDED), REMAINS THE OPERATIVE LEGAL DOCUMENTS FOR ALL PURPOSES.
ABL CREDIT AGREEMENT
among
RESOLUTE FOREST PRODUCTS INC. (F/K/A/ ABITIBIBOWATER INC.),
CERTAIN OF ITS SUBSIDIARIES FROM TIME TO TIME PARTY HERETO,
THE LENDERS PARTY HERETO,
and
CITIBANK, N.A.,
as ADMINISTRATIVE AGENT and COLLATERAL AGENT
________________________________
Dated as of December 9, 2010
________________________________
CITIGROUP GLOBAL MARKETS INC.,
BARCLAYS CAPITAL, THE INVESTMENT BANKING DIVISION OF BARCLAYS BANK PLC,
J.P. MORGAN SECURITIES LLC
and
WELLS FARGO CAPITAL FINANCE, LLC,
Joint Lead Arrangers and Joint Bookrunners
BARCLAYS CAPITAL and THE BANK OF NOVA SCOTIA,
Syndication Agents
JPMORGAN CHASE BANK, N.A. and WELLS FARGO CAPITAL FINANCE, LLC,
Documentation Agents
BMO CAPITAL MARKETS and CANADIAN IMPERIAL BANK OF COMMERCE,
Senior Managing Agents

--------------------------------------------------------------------------------

Table of Contents

SECTION 1. Definitions and Accounting Terms    2
1.01.
Defined Terms    2

1.02.
References to “UCC”    7578

1.03.
Terms Generally    7578

1.04.
Pro Forma Calculations    7579

1.05.
Accounting Terms; GAAP    7679

1.06.
Interpretation-Québec    7679

SECTION 2. Amount and Terms of Credit    7780
2.01.
The Commitments    7780

2.02.
Minimum Amount of Each Borrowing    8185

2.03.
Notice of Borrowing    8285

2.04.
Disbursement of Funds    8387

2.05.
Notes    8589

2.06.
Conversions    8691

2.07.
Pro Rata Borrowings    8792

2.08.
Interest    8792

2.09.
Interest Periods    8993

2.10.
Increased Costs, Illegality, etc    8994

2.11.
Compensation    9297

2.12.
Lending Offices and Affiliate Lenders for Loans in Available Currency    9397

2.13.
Replacement of Lenders    9398

2.14.
Incremental Commitments    9599

2.15.
Interest Act (Canada); Criminal Rate of Interest; Nominal Rate of
Interest    97101

2.16.
Provisions Regarding Bankers’ Acceptances, Drafts, etc.    98103

2.17.
AbitibiBowaterResolute as Agent for Borrowers    98103

2.18.
Defaulting Lenders    99103

SECTION 3. Letters of Credit    101106
3.01.
Letters of Credit    101106

3.02.
Maximum Letter of Credit Outstandings; Currencies; Tenor    103108

3.03.
Letter of Credit Requests; Minimum Stated Amount    104108

3.04.
Letter of Credit Participations    104109

3.05.
Agreement to Repay Letter of Credit Drawings    107111

3.06.
Increased Costs    108112

SECTION 4. Commitment Fees; Reductions of Commitment    109114
4.01.
Fees    109114

4.02.
Voluntary Termination of Unutilized Commitments    110115

4.03.
Mandatory Reduction of Commitments    110115

SECTION 5. Prepayments; Payments; Taxes    111115
5.01.
Voluntary Prepayments    111115

--------------------------------------------------------------------------------

Table of Contents
(continued)

5.02.
Mandatory Repayments; Cash Collateralization    111116

5.03.
Method and Place of Payment; Deposits and Accounts    114118

5.04.
Designated Blocked Accounts; Borrowing Base Reporting.    124

5.045.05.
Net Payments; Taxes    119126

SECTION 6. Conditions Precedent to the Effective Date    123130
SECTION 7. Conditions Precedent to All Credit Events    127134
7.01.
No Default; Representations and Warranties    127134

7.02.
Notice of Borrowing; Letter of Credit Request    127134

7.03.
Borrowing Base and Commitment Limitations    127135

SECTION 8. Representations and Warranties    128135
8.01.
Organization; Powers    128135

8.02.
Authorization; Absence of Conflicts    128136

8.03.
Enforceability    129136

8.04.
Governmental Approvals    129136

8.05.
Financial Statements    129137

8.06.
No Material Adverse Effect    130137

8.07.
Title to Properties; Possession Under Leases    130137

8.08.
Subsidiaries    130137

8.09.
Litigation; Compliance with Laws    130137

8.10.
Federal Reserve Regulations    131138

8.11.
Investment Company Act    131138

8.12.
Tax Returns    131138

8.13.
No Material Misstatements    131138

8.14.
Employee Benefit Plans    132139

8.15.
Environmental and Safety Matters    133140

8.16.
Solvency    134141

8.17.
Security Documents    135142

8.18.
Labor Matters    136143

8.19.
Location of Real Property    136143

8.20.
Patents, Trademarks, etc.    137143

8.21.
Borrowing Base Calculation    137144

8.22.
Accounts    137144

8.23.
Inventory    137144

8.24.
Anti-Terrorism Law    137144

8.25.
Own Enquiries    138145

SECTION 9. Affirmative Covenants    138145
9.01.
Existence; Businesses and Properties    138145

9.02.
Insurance    139145

9.03.
Payment of Taxes    139146

-ii-

--------------------------------------------------------------------------------

Table of Contents
(continued)

9.04.
Financial Statements, Reports, etc.    139146

9.05.
Litigation and Other Notices    142149

9.06.
Maintaining Records; Access to Properties and Inspections    142149

9.07.
Use of Proceeds    143150

9.08.
Compliance with Law    143150

9.09.
Further Assurances    143150

9.10.
Information Regarding Collateral; Deposit Accounts    144151

9.11.
Environmental Matters    145152

9.12.
Certain Post-Effective Date Obligations    146153

9.13.
Canadian Pension and Benefit Plans    146153

SECTION 10. Negative Covenants    147154
10.01.
Indebtedness    147154

10.02.
Liens    149157

10.03.
Investments, Loans and Advances    152160

10.04.
Mergers, Consolidations, Sales of Assets and Acquisitions    154162

10.05.
Restricted Payments    155163

10.06.
Transactions with Stockholders and Affiliates    155164

10.07.
Business    156164

10.08.
Limitations on Debt Prepayments    156164

10.09.
Amendment of Certain Documents    156165

10.10.
Limitation on Dispositions of Stock of Subsidiaries    156165

10.11.
Restrictions on Ability of Subsidiaries to Pay Dividends    157165

10.12.
Disposition of Collateral and Other Assets    157166

10.13.
Accounting Changes; Fiscal Year    158167

10.14.
Material Subsidiaries    158167

10.15.
Consolidated Fixed Charge Coverage Ratio    159167

10.16.
No Additional Deposit Accounts; etc.    159167

10.17.
Canadian Pension Plans and Canadian Benefit Plans    159168

10.18.
ERISA    160169

SECTION 11. Events of Default    160169
11.01.
Events of Default    160169

11.02.
Application of Proceeds    164172

SECTION 12. The Agents.    167176
12.01.
Appointment    167176

12.02.
Nature of Duties    168177

12.03.
Lack of Reliance on the Agents    169178

12.04.
Certain Rights of the Administrative Agent    169178

12.05.
Reliance    170179

12.06.
Indemnification    170179

12.07.
Agents in their Individual Capacities    170179

12.08.
Holders    171179

-iii-

--------------------------------------------------------------------------------

Table of Contents
(continued)

12.09.
Resignation and Removal of Agents    171180

12.10.
Collateral and Other Matters    172181

12.11.
Delivery of Information    174183

12.12.
Quebec Security    174183

SECTION 13. Miscellaneous    175184
13.01.
Payment of Expenses, etc    175184

13.02.
Right of Setoff    177186

13.03.
Notices    177187

13.04.
Benefit of Agreement; Assignments; Participations    178187

13.05.
No Waiver; Remedies Cumulative    181190

13.06.
Payments Pro Rata    181190

13.07.
Computations    182191

13.08.
GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY TRIAL    182191

13.09.
Counterparts    184193

13.10.
Effectiveness    184193

13.11.
Headings Descriptive    185194

13.12.
Amendment or Waiver; etc    185194

13.13.
Survival; Continuing Obligation    187196

13.14.
Domicile of Loans    187196

13.15.
Register    187196

13.16.
Confidentiality    188197

13.17.
Patriot Act    189198

13.18.
OTHER LIENS ON COLLATERAL; TERMS OF INTERCREDITOR AGREEMENT;
ETC    189[Reserved]    198

13.19.
Waiver of Sovereign Immunity    190198

13.20.
Judgment Currency    190199

13.21.
Qualified Secured Hedging Agreements and Qualified Secured Cash Management
Agreements    191199

13.22.
Interest Rate Limitation    193201

13.23.
Integration    193201

13.24.
Severability    193201

13.25.
Power of Attorney and Other Matters in Respect of B/A Instruments.    193202

13.26.
Additional Borrowers.    202

SECTION 14. Nature of Obligations    194203
14.01.
Nature of Obligations    194203

14.02.
Independent Obligation    195204

14.03.
Authorization    195204

14.04.
Reliance    196205

14.05.
Contribution; Subrogation    196205

14.06.
Waiver    196205

-iv-

--------------------------------------------------------------------------------

Table of Contents
(continued)

14.07.
Limitation on CanadianCertain Borrower Obligations    197206

14.08.
Rights and Obligations    197206

SECTION 15. Lender Loss Sharing Agreement    197206
15.01.
Definitions    197206

15.02.
CAM Exchange    198207

15.03.
Miscellaneous    199208

SCHEDULES

Schedule 1.01(a)    Commitments
Schedule 1.01(b)    Provisions Relating to Bankers’ Acceptances, Bankers’
Acceptance Loans             and B/A Equivalent Notes
Schedule 1.01(c)    Material Subsidiaries
Schedule 1.01(d)    Mortgaged Properties
Schedule 1.01(e)    Specified Collection Accounts
Schedule 3.01        Letters of Credit
Schedule 5.03(d)    Certain Collection Accounts
Schedule 8.07        Title to Properties
Schedule 8.08        Subsidiaries
Schedule 8.09        Litigation
Schedule 8.14        Canadian Pension Plans
Schedule 8.15        Environmental Safety Matters
Schedule 8.17        Filing Offices
Schedule 8.18        Labor Matters
Schedule 8.19        Real Properties in the United States
Schedule 9.09        Exempt Properties
Schedule 10.02    Existing Liens
Schedule 10.03    Investment, Loans & Advances
Schedule 10.16    Deposit Accounts, Etc.
Schedule 13.03    Notices

EXHIBITS

Exhibit A-1        Form of Notice of Borrowing
Exhibit A-2        Form of Notice of Conversion/Continuation
Exhibit B-1        Form of U.S. Facility Revolving Note
Exhibit B-2        Form of U.S. Facility Swingline Note
Exhibit C        Form of Letter of Credit Request
Exhibit D-1        Form of U.S. Perfection Certificate
Exhibit D-2        Form of Canadian Perfection Certificate
Exhibit E        Form of Intercreditor Agreement[Reserved].
Exhibit F        Form of Solvency Certificate
Exhibit G        Form of Compliance Certificate

-v-

--------------------------------------------------------------------------------

Table of Contents
(continued)

Exhibit H        Form of Assignment and Assumption Agreement
Exhibit I        Form of Borrowing Base Certificate
Exhibit J        Form of Incremental Commitment Agreement
Exhibit K        Form of Section 5.045.05(b)(ii) Certificate
Exhibit L        Form of Guarantee and Collateral Agreement
Exhibit M        Form of Canadian Guarantee and Collateral Agreement
Exhibit N        Form of Mortgage
Exhibit O        Insurance Policy
Exhibit P        Form of Borrower Joinder Agreement

-vi-

--------------------------------------------------------------------------------

 

ABL CREDIT AGREEMENT, dated as of December 9, 2010, among AbitibiBowaterResolute
Forest Products Inc., a Delaware corporation (“f/k/a AbitibiBowater Inc.)
(“Resolute”), each Domestic Subsidiary of AbitibiBowaterResolute set forth on
the signature pages hereto (together with AbitibiBowaterResolute, collectively,
the “U.S. Borrowers”), each Canadian Subsidiary of AbitibiBowaterResolute set
forth on the signature pages hereto (the “Canadian Borrowers”, and the Canadian
Borrowers together with the U.S. Borrowers and each Other Borrower who becomes
Borrower hereunder in accordance with the terms of this Agreement, collectively,
the “Borrowers”), the Lenders party hereto from time to time and Citibank, N.A.,
as Administrative Agent and Collateral Agent. All capitalized terms used herein
and defined in Section 1 are used herein as therein defined.
W I T N E S S E T H :
WHEREAS, AbitibiBowater (n/k/a/ Resolute) and certain of its Subsidiaries are
currently debtors in reorganization proceedings (the “U.S. Proceedings”) under
Chapter 11 of the United States Bankruptcy Code (the “Bankruptcy Code”), in the
United States Bankruptcy Court for the District of Delaware (the “U.S.
Bankruptcy Court”) (AbitibiBowater (n/k/a/ Resolute) and such Subsidiaries, the
“U.S. Debtor Entities”), and certain of the U.S. Debtor Entities and certain
non-U.S. Debtor Entities (such Persons, the “Canadian Debtor Entities” and,
together with the U.S. Debtor Entities, the “Debtors”) are currently debtors
subject to reorganization proceedings in Canada (the “Canadian Proceedings” and,
together with the U.S. Proceedings, the “Bankruptcy Proceedings”) under the
Companies’ Creditors Arrangement Act (“CCAA”) in the Quebec Superior Court,
Commercial Division, for the Judicial District of Montreal (the “Canadian
Bankruptcy Court” and, together with the U.S. Bankruptcy Court, the “Bankruptcy
Court”);
WHEREAS, the U.S. Debtor Entities are continuing to operate their businesses and
manage their properties as debtors and debtors in possession under Sections 1107
and 1108 of the Bankruptcy Code;
WHEREAS, the U.S. Debtor Entities have filed a Second Amended Joint Chapter 11
Plan of Reorganization with the U.S. Bankruptcy Court on August 2, 2010, as the
same may be amended, supplemented or otherwise modified from time to time (the
“Plan of Reorganization”), pursuant to which certain U.S. Debtor Entities expect
to be reorganized and emerge from the Bankruptcy Proceedings. The Canadian
Debtor Entities plan to reorganize pursuant to the second amended and restated
plan of reorganization and compromise of the Canadian Debtor Entities dated
November 1, 2010 which has been filed with the Canadian Bankruptcy Court and as
may be further amended, supplemented or otherwise modified from time to time
(the “CCAA Plan,” and together with the Plan of Reorganization, the “Plans”)
(collectively, such reorganizations hereinafter referred to as the
“Reorganization”). The Plan of Reorganization is described in, and included as
an exhibit to, the U.S. Debtor Entities’ Disclosure Statement (the “Disclosure
Statement”) approved by the U.S. Bankruptcy Court on August 3, 2010 and is
expected to be confirmed by the U.S. Bankruptcy Court and the CCAA Plan has been
sanctioned by the Canadian Bankruptcy Court pursuant to an order of the Canadian
Bankruptcy Court dated September 23, 2010 (the “Sanction Order”);
WHEREAS, AbitibiBowater (n/k/a Resolute) and the other Borrowers have requested
(i) the U.S. Facility Lenders to make to AbitibiBowater (n/k/a Resolute) and the
other

 

--------------------------------------------------------------------------------

 

U.S. Borrowers from time to time U.S. Facility Revolving Loans in U.S. Dollars
in an initial aggregate principal amount not in excess of U.S. $200,000,000
under a revolving credit facility, and (ii) the Canadian Facility Lenders to
make to the U.S. Borrowers and the Canadian Borrowers from time to time Canadian
Facility Revolving Loans in either U.S. Dollars or Canadian Dollars in an
initial aggregate principal amount not in excess of U.S. $400,000,000 under a
revolving credit facility;
WHEREAS, AbitibiBowater (n/k/a Resolute) and the Borrowers have also requested
the Issuing Lenders to issue U.S. Facility Letters of Credit denominated in U.S.
Dollars and Canadian Facility Letters of Credit denominated in either U.S.
Dollars or Canadian Dollars in an aggregate face amount at any time outstanding
not in excess of U.S. $200,000,000; and
WHEREAS, ABI Escrow Corporation has issued the Senior Secured Notes, which will
be secured by a perfected first priority security interest in the Notes Priority
Collateral and a perfected second priority security interest in the ABL Priority
Collateral of the U.S. Loan Parties. The Obligations hereunder will be secured
by, among other items, a perfected first priority security interest in the ABL
Priority Collateral and a perfected second priority security interest in the
Notes Priority Collateral; and
WHEREAS, subject to and upon the terms and conditions set forth herein, the
Lenders are willing to make available to the Borrowers the senior secured
revolving credit facilities provided for herein;
NOW, THEREFORE, IT IS AGREED:
SECTION 1. Definitions and Accounting Terms.
“AbitibiAbitibiBowater” shall mean AbiBow CanadaAbitibiBowater Inc., a limited
liability company amalgamated under the Business Corporations Act (British
Columbia) and the successor to Abitibi-ConsolidatedDeleware Corporation (n/k/a
Resolute Forest Products Inc., a Canadian corporationDelaware Corporation).
“AbitibiBowater” shall have the meaning provided in the preamble of this
Agreement.
“ABL Priority Collateral” shall mean, collectively, (ix) all Collateral of the
U.S. Loan Parties which constitutes “ABL Priority Collateral” as defined in (x)
prior to the Effective Date, the form of Intercreditor Agreement attached as
Exhibit E hereto, and (y) from and after the Effective Date, the Intercreditor
Agreement, and (ii, (y) all Collateral of the Canadian Loan Parties and (z) all
Collateral of the English Loan Parties.
“Account” shall mean any “account” as such term is defined in Article 9 of the
UCC or the PPSA, as applicable.
“Account Debtor” shall mean, with respect to any Account, any obligor with
respect to such Account.

-2-

--------------------------------------------------------------------------------

 

“Acquired Entity” shall have the meaning provided in Section 10.04(e).
“Acquisition” shall have the meaning provided in Section 10.04.
“Acquisition Indebtedness” shall have the meaning provided in Section 10.01(i).
“Additional Commitment Fee” shall have the meaning provided in Section 2.14(a).
“Additional Margin” shall have the meaning provided in Section 2.14(a).
“Adjustable Applicable Commitment Fee Percentage” shall have the meaning
provided in the definition of Applicable Commitment Fee Percentage.
“Adjustable Applicable Margins” shall have the meaning provided in the
definition of Applicable Margin.
“Administrative Agent” shall mean Citibank in its capacity as Administrative
Agent for the Lenders hereunder and under the other Loan Documents, and shall
include any successor to or replacement of the Administrative Agent appointed
pursuant to Section 12.09.
“Affiliate” shall mean, when used with respect to a specified Person, another
Person that directly, or indirectly through one or more intermediaries, Controls
or is Controlled by or is under common Control with the Person specified.
“After-Acquired Mortgage Property” shall mean a parcel (or adjoining parcels) of
real property (including any improvements thereon) acquired in fee ownership by
any U.S. Loan Party after the Effective Date that is required to be pledged as
security for the Senior Secured Notes.
“Agent Advance” shall have the meaning provided in Section 2.01(e).
“Agent Advance Amount” shall have the meaning provided in Section 2.01(e).
“Agent Advance Period” shall have the meaning provided in Section 2.01(e).
“Agents” shall mean, collectively, the Administrative Agent and the Collateral
Agent, and individually shall mean any one of the Administrative Agent or the
Collateral Agent.
“Aggregate Canadian Borrower Exposure” shall mean, at any time, the sum of
(a) the aggregate principal amount of all Canadian Borrower Revolving Loans
(including the Face Amount of all Bankers’ Acceptance Loans incurred by a
Canadian Borrower) outstanding at such time, (b) the aggregate amount of all
Letter of Credit Outstandings at such time in respect of Letters of Credit
issued for the account of any Canadian Borrower and (c) the aggregate principal
amount of all Canadian Borrower Swingline Loans outstanding at such time. For
purposes of this definition, calculations shall be based on the U.S. Dollar
Equivalent of amounts denominated in Canadian Dollars, Euros or Pounds Sterling.

-3-

--------------------------------------------------------------------------------

 

“Aggregate Canadian Facility Exposure” shall mean, at any time, the sum of
(a) the aggregate principal amount of all Canadian Facility Revolving Loans
(including the Face Amount of all Bankers’ Acceptance Loans) outstanding at such
time, (b) the aggregate amount of all Canadian Facility Letter of Credit
Outstandings at such time in respect of Canadian Facility Letters of Credit
issued for the account of any Borrower and (c) the aggregate principal amount of
all Canadian Facility Swingline Loans outstanding at such time. For purposes of
this definition, calculations shall be based on the U.S. Dollar Equivalent of
amounts denominated in Canadian Dollars, Euros or Pounds Sterling.
“Aggregate Exposure” shall mean, at any time, the sum of (a) the aggregate
principal amount of all Revolving Loans (including the Face Amount of all
Bankers’ Acceptance Loans) then outstanding, (b) the aggregate amount of all
Letter of Credit Outstandings and (c) the aggregate principal amount of all
Swingline Loans then outstanding. For purposes of this definition, calculations
shall be based on the U.S. Dollar Equivalent of amounts denominated in Canadian
Dollars, Euros or Pounds Sterling.
“Aggregate U.S. Borrower Exposure” shall mean, at any time, the sum of (a) the
aggregate principal amount of all U.S. Borrower Revolving Loans outstanding at
such time, (b) the aggregate amount of all Letter of Credit Outstandings at such
time in respect of Letters of Credit issued for the account of any U.S. Borrower
and (c) the aggregate principal amount of all U.S. Borrower Swingline Loans
outstanding at such time. For purposes of this definition, calculations shall be
based on the U.S. Dollar Equivalent of amounts denominated in Euros or Pounds
Sterling.
“Aggregate U.S. Facility Exposure” shall mean, at any time, the sum of (a) the
aggregate principal amount of all U.S. Facility Revolving Loans outstanding at
such time, (b) the aggregate amount of all U.S. Facility Letter of Credit
Outstandings at such time in respect of U.S. Facility Letters of Credit and (c)
the aggregate principal amount of all U.S. Facility Swingline Loans outstanding
at such time. For purposes of this definition, calculations shall be based on
the U.S. Dollar Equivalent of amounts denominated in Euros or Pounds Sterling.
“Agreement” shall mean this ABL Credit Agreement.
“Amendment No. 4” shall mean Consent, Waiver and Amendment No. 4, dated as of
April 12, 2013, to and under this Agreement.
“Amendment No. 6” shall mean Amendment No. 6, dated as of February 25, 2014, to
and under this Agreement.
“Anti-Terrorism Laws” shall have the meaning provided in Section 8.24(a).
“Applicable Commitment Fee Percentage” initially shall mean a percentage per
annum equal to 0.50%. From and after each Start Date to and including the
applicable End Date, the Applicable Commitment Fee Percentage (hereinafter, the
“Adjustable Applicable Commitment Fee Percentage”) shall be that commitment
percentage set forth below opposite the Historical Unutilized Commitment
Percentage for such Start Date, as determined by the Administrative Agent:

-4-

--------------------------------------------------------------------------------

 

Level
Historical Unutilized Commitment Percentage
Commitment Fee Percentage
 
 
 
I
Greater than or equal to 50%
0.50%
 
 
 
II
Less than 50%
0.375%
 
 
 

Notwithstanding the foregoing, from and after the most recent Incremental
Commitment Date for any Incremental Commitment Agreement pursuant to which the
Applicable Commitment Fee Percentages and Adjustable Applicable Commitment Fee
Percentages have been increased above the Applicable Commitment Fee Percentages
and the Adjustable Applicable Commitment Fee Percentages in effect immediately
prior to such Incremental Commitment Date, each of the Applicable Commitment Fee
Percentages and the Adjustable Applicable Commitment Fee Percentages shall be
increased to those respective percentages per annum set forth in the applicable
Incremental Commitment Agreement.
“Applicable Margin” initially shall mean a percentage per annum equal to (i) in
the case of Revolving Loans maintained as (A) Base Rate Loans or Canadian Prime
Rate Loans, 0.75% and (B) Eurodollar Loans or Bankers’ Acceptance Loans, 1.75%;
and (ii) in the case of Swingline Loans, 0.75%. From and after each Start Date
to and including the applicable End Date, the Applicable Margins for such Loans
(the “Adjustable Applicable Margins”) shall be those set forth below opposite
the Historical Excess Availability for such Start Date, as determined by the
Administrative Agent:

-5-

--------------------------------------------------------------------------------

 

Level
Historical Excess Availability
Revolving
Loans Maintained as Eurodollar Loans or Bankers’ Acceptance Loans
Revolving Loans and
Swingline Loans
Maintained as
Base Rate Loans or
Canadian Prime Rate Loans
 
 
 
 
I
Greater than or equal to 66.7% of Total Commitment as then in effect
1.75%
0.75%
 
 
 
 
II
Less than 66.7% of Total Commitment but greater than or equal to 33.3% of Total
Commitment as then in effect
2.00%
1.00%
 
 
 
 
III
Less than 33.3% of Total Commitment as then in effect
2.25%
1.25%
 
 
 
 

The Historical Excess Availability used in a determination of Adjustable
Applicable Margins shall be determined upon receipt by the Administrative Agent
of a Borrowing Base Certificate pursuant to Section 9.04(h). The Adjustable
Applicable Margins so determined shall apply, except as set forth in the
immediately succeeding sentence, from the relevant Start Date to the applicable
End Date, at which time, if no Borrowing Base Certificate has been delivered to
the Administrative Agent, the Adjustable Applicable Margins shall be those that
correspond to a Historical Excess Availability at Level III (such Adjustable
Applicable Margins as so determined, the “Highest Adjustable Applicable
Margins”) until such time when a Borrowing Base Certificate is delivered, at
which time the Adjusted Applicable Margins shall be re-determined as set forth
above. Notwithstanding the foregoing, (i) subject to clause (ii) below, to but
not including the initial Start Date, the Adjustable Applicable Margins shall be
maintained at Level II above, (ii) at all times during which there shall exist
any Event of Default the Adjustable Applicable Margins shall be maintained at
the Highest Adjustable Applicable Margins, (iii) from and after the most recent
Incremental Commitment Date for any Incremental Commitment Agreement pursuant to
which the Applicable Margins and Adjustable Applicable Margins have been
increased above the Applicable Margins and the Adjustable Applicable Margins in
effect immediately prior to such Incremental Commitment Date, each of the
Applicable Margins and the Adjustable Applicable Margins shall be increased to
those respective percentages per annum set forth in the applicable Incremental
Commitment Agreement and (iv) if an Event of Default shall have occurred and be
continuing and the Required Lenders shall have so elected by notice to the
Borrowers, then the Applicable Margin determined pursuant to the foregoing
provisions of this definition shall be increased by 2.00% per annum (provided
that in the case of an Event of Default under Section 11.01(b), (c), (g) or (h),
such

-6-

--------------------------------------------------------------------------------

 

increase shall occur automatically upon the occurrence of such Event of Default
without requirement of notice).
“Approved Country” shall mean the United States, Canada, any country within the
European Area, and any other country other than those:
(i)    whose government or central bank (x) shall have prohibited the sale of
the currency of such country in exchange for U.S. Dollars or Canadian Dollars or
shall have admitted in writing its inability to pay its debts as the same become
due or (y) shall have declared a moratorium on the payment of its debts or the
debts of any national governmental authority of such country; or
(ii)    with respect to which the United States shall have imposed economic
sanctions.
“Approved DIP Account” shall mean an Account (i) in respect of which the Account
Debtor is debtor in a case under Chapter 11 of the Bankruptcy Code, (ii) which
arises after the commencement of the case described in (i) and is therefore
entitled to priority as an administrative expense in such case and (iii) has
been approved for purposes of this Agreement by the Collateral Agent in its
Discretion.
“Asset Exchange” shall mean any transfer of operating properties or assets by
AbitibiBowaterResolute or any of its Subsidiaries (other than Excluded
Subsidiaries) to any Person in which at least 75% of the consideration received
by the transferor consists of operating properties or assets to be used by
AbitibiBowaterResolute or any of its Subsidiaries (other than Excluded
Subsidiaries) in its business; provided, that a transfer of ABL Priority
Collateral the consideration for which consists of assets that are not ABL
Priority Collateral shall not constitute an Asset Exchange.
“Asset Sale” shall mean the sale, transfer or other disposition (including any
casualty or condemnation) by AbitibiBowaterResolute or any Subsidiary of
AbitibiBowaterResolute (other than an Excluded Subsidiary) to any Person other
than a Loan Party or, other than for the purposes of the definition of
Significant Asset Sale, a Wholly-Owned Subsidiary of AbitibiBowaterResolute of
(a) any capital stock in any Person, (b) substantially all the assets of any
geographic or other division or line of business of AbitibiBowaterResolute or
any of its Subsidiaries or (c) any real property or a portion of any real
property or any other asset or assets (excluding any assets manufactured,
constructed or otherwise produced or purchased for sale to others in the
ordinary course of business and any Permitted Investments) of
AbitibiBowaterResolute or any Subsidiary of AbitibiBowaterResolute; provided
that none of the following shall constitute an “Asset Sale” for purposes of this
Agreement: (i) the sale of inventory in the ordinary course of business;
(ii) any sale, transfer or other disposition having a value not in excess of
$10,000,000; (iii) the sale of assets (other than ABL Priority Collateral)
securing any Indebtedness permitted hereunder (other than the Loans), if and to
the extent such Indebtedness shall be repaid, redeemed or repurchased with the
proceeds of such asset sale (or any other payment made contemporaneously
therewith); (iv) disposals of obsolete, worn-out or surplus equipment in the
ordinary course of business or the sale of closed mills; (v) any transfer
arising out of the granting or creation of any Lien permitted hereunder; (vi)

-7-

--------------------------------------------------------------------------------

 

any issuance of capital stock by AbitibiBowaterResolute; (vii) any Investment
permitted by Section 10.03; (viii) sales, transfers or dispositions of Permitted
Investments and cash equivalents in the ordinary course of business; (ix) the
licensing of intellectual property and other general intangibles to third
parties in the ordinary course of business; (x) the sale of the assets or Equity
Interests of Abitibi-Consolidated Hydro, Inc., ACH Limited Partnership and/or
Bowater-Korea, Ltd., and (xi) the disposition of leasehold improvements or
leased assets in connection with the termination of the lease.
“Assignment and Assumption Agreement” shall mean an Assignment and Assumption
Agreement substantially in the form of Exhibit H.
“Attributable Indebtedness” shall mean, with respect to any Sale/Leaseback
Transaction that does not result in a Capital Lease, at any date of
determination, the product of (a) the net proceeds from such Sale/Leaseback
Transaction and (b) a fraction, the numerator of which is the number of full
years of the term of the lease relating to the property involved in such
Sale/Leaseback Transaction (without regard to any options to renew or extend
such term) remaining at the date of the making of such computation and the
denominator of which is the number of full years of the term of such lease
(without regard to any options to renew or extend such term) measured from the
first day of such term.
“Augusta Newsprint” shall mean, collectively, Augusta Newsprint Company, a
Georgia general partnership, and Augusta Newsprint, Inc., a Delaware
corporation.
“Available Currency” shall mean (i) for U.S. Borrowers, U.S. Dollars and (ii)
for Canadian Borrowers, U.S. Dollars and Canadian Dollars.
“B/A Discount Proceeds” shall mean, in respect of any Bankers’ Acceptance or
Draft to be purchased by a Canadian Facility Lender on any date pursuant to
Section 2.01(a) and Schedule 1.01(b), the difference between (i) the result
(rounded to the nearest whole Canadian cent, and with one‑half of one Canadian
cent being rounded up) calculated on such day by dividing the aggregate Face
Amount of such Bankers’ Acceptance or Draft by the sum of one plus the product
of (x) the Reference Discount Rate (expressed as a decimal) applicable to such
Bankers’ Acceptance or Draft multiplied by (y) a fraction, the numerator of
which is the number of days in the term of such Bankers’ Acceptance or Draft and
the denominator of which is 365 (with such product being rounded up or down to
the fifth decimal place and with .000005 being rounded up), and (ii) the
applicable Drawing Fee.
“B/A Equivalent Note” shall have the meaning provided in Schedule 1.01(b).
“B/A Instruments” shall mean, collectively, Bankers’ Acceptances, Drafts and B/A
Equivalent Notes, and, in the singular, any one of them.
“B/A Lender” shall mean any Canadian Facility Lender that is a bank listed in
Schedule I or II to the Bank Act (Canada) as amended and that is not a Non-B/A
Lender.

-8-

--------------------------------------------------------------------------------

 

“Bankers’ Acceptance” shall mean a Draft drawn by a Borrower and accepted by a
Canadian Facility Lender pursuant to Section 2.01(a) and Schedule 1.01(b).
“Bankers’ Acceptance Loans” shall mean (i) the creation of Bankers’ Acceptances
or (ii) the creation and purchase of completed Drafts and, if requested by a
Non‑B/A Lender, the exchange of such Drafts for B/A Equivalent Notes, in each
case as contemplated in Section 2.01(a) and Schedule 1.01(b).
“Bankruptcy Code” shall have the meaning provided in the recitals to this
Agreement.
“Bankruptcy Court” shall have the meaning provided in the recitals to this
Agreement.
“Bankruptcy Proceedings” shall have the meaning provided in the recitals to this
Agreement.
“Barclays” shall mean Barclays Bank PLC, and its successors.
“Base Rate” shall mean, for any day, a rate per annum equal to the greatest of
(a) the rate of interest announced publicly by Citibank in New York, New York,
from time to time, as Citibank’s base rate (or an equivalent rate otherwise
named) (the “Citi Rate”), (b) the Federal Funds Rate in effect on such day plus
0.5%, (c) the rate of interest announced publicly by Citibank in New York, New
York, from time to time, as the rate being offered by Citibank for certificates
of deposit having a term of 3 months (the “CD Rate”) plus 0.5% and (d) the
Eurodollar Rate for a one month Interest Period on such day (or if such day is
not a Business Day, the immediately preceding Business Day) plus 1.0%. If for
any reason the Administrative Agent shall have determined (which determination
shall be conclusive absent manifest error) that it is unable to ascertain the
Federal Funds Rate, including the failure of the Federal Reserve Bank of New
York to publish rates or the inability of the Administrative Agent to obtain
quotations in accordance with the terms thereof, the Alternate Base Rate shall
be determined without regard to clause (b) of the preceding sentence until the
circumstances giving rise to such inability no longer exist. Any change in the
Alternate Base Rate due to a change in the Citi Rate, the CD Rate or the Federal
Funds Rate shall be effective on the effective date of such change in the Citi
Rate, the CD Rate or the Federal Funds Rate, respectively.
“Base Rate Loan” shall mean (a) each U.S. Dollar Denominated Swingline Loan and
(b) each U.S. Dollar Denominated Revolving Loan designated or deemed designated
as such by the relevant Borrower of such U.S. Dollar Denominated Revolving Loan
at the time of the incurrence thereof or conversion thereto.
“Benefit Plan” shall mean any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or
Section 412 of the Code or Section 302 of ERISA that within the preceding five
years is maintained, sponsored or contributed to by (or to which there is or may
be an obligation to contribute to by) any Loan Party or an ERISA Affiliate, or
any Person which was an ERISA Affiliate during that time.
“Blocked Control Agreement” shall have the meaning provided in Section 5.04(a).

-9-

--------------------------------------------------------------------------------

 

“Board” shall mean the Board of Governors of the Federal Reserve System of the
United States.
“Borrower” and “Borrowers” shall have the meaning provided in the preamble of
this Agreement.
“Borrower Joinder Agreement” shall mean a Borrower Joinder Agreement
substantially in the form of Exhibit P hereto.
“Borrower Obligations” shall mean (i) all U.S. Facility Obligations owing by any
U.S. Borrower, (ii) all Canadian Facility Obligations owing by any U.S.
Borrower, and/or (iii) all Canadian Facility Obligations owing by any Canadian
Borrower, as applicable.
“Borrowing” shall mean the borrowing of one Type of Loan of a single Facility
denominated in a single Available Currency by a Borrower from all the Lenders
having Commitments of the respective Facility (or from thea Swingline Lender in
the case of Swingline Loans) on a given date (or resulting from a conversion or
conversions on such date) having in the case of Eurodollar Loans the same
Interest Period, provided that Base Rate Loans incurred pursuant to Section
2.10(b) shall be considered part of the related Borrowing of Eurodollar Loans.
“Borrowing Base” shall mean the Canadian Borrowing Base, the U.S. Borrowing Base
and/or the Total Borrowing Base, as applicable.
“Borrowing Base Certificate” shall mean a certificate substantially in the form
of Exhibit I hereto (with supporting calculations in reasonable detail) executed
and certified as accurate and complete by a Financial Officer of
AbitibiBowaterResolute on behalf of AbitibiBowaterResolute.
“Bowater” shall mean Bowater Incorporated, a Delaware corporation.
“Business Day” shall mean (a) for all purposes other than as covered by clauses
(b) and (c) below, any day except Saturday, Sunday and any day which shall be in
New York, New York, a legal holiday or a day on which banking institutions are
authorized or required by law or other government action to close, (b) with
respect to all notices and determinations in connection with, and payments of
principal and interest on, Eurodollar Loans, any day which is a Business Day
described in clause (a) above and which is also a day for trading by and between
banks in U.S. dollar deposits in the London interbank eurodollar market and (c)
with respect to all notices and determinations in connection with, and payments
of principal (or, Face Amount, as applicable) and interest on, Loans made by
Canadian Facility Lenders, any day which is a Business Day described in clause
(a) above and which is also a day which is not a legal holiday or a day on which
banking institutions are authorized or required by law or other government
action to close in Toronto, Ontario or, Montreal, Quebec and London, England.
“CAM” shall have the meaning provided in Section 15.01(a).
“CAM Exchange” shall have the meaning provided in Section 15.01(b).

-10-

--------------------------------------------------------------------------------

 

“CAM Exchange Date” shall have the meaning provided in Section 15.01(c).
“CAM Percentage” shall have the meaning provided in Section 15.01(d).
“Canadian Bankruptcy Court” shall have the meaning provided in the recitals to
this Agreement.
“Canadian Benefit Plans” shall mean any plan, fund, program, commitment,
arrangement, agreement, practices, undertakings or policy, whether oral or
written, formal or informal, funded or unfunded, insured or uninsured, providing
material employee benefits, including medical, hospital care, dental, sickness,
accident, disability, life insurance, profit sharing or savings benefits, under
which any Canadian Subsidiary of AbitibiBowaterResolute has, or will have, any
liability or contingent liability, or pursuant to which payments are made, or
benefits are provided to, or an entitlement to payments or benefits may arise,
with respect to its or any of its current or previous Affiliates’ employees or
former employees, but excluding any Canadian Pension Plans.
“Canadian Borrower” and “Canadian Borrowers” shall have the meaning provided in
the preamble of this Agreement and shall include any Other Borrower that is a
Canadian Subsidiary.
“Canadian Borrower Canadian Facility Revolving Note” shall have the meaning
provided in Section 2.05(a).
“Canadian Borrower Canadian Facility Swingline Note” shall have the meaning
provided in Section 2.05(a).
“Canadian Borrower Letter of Credit” shall have the meaning provided in Section
3.01(a).
“Canadian Borrower Loans” shall mean each Canadian Borrower Revolving Loan and
each Canadian Borrower Swingline Loan.
“Canadian Borrower Obligations” shall mean all Obligations owing to the
Administrative Agent, the Collateral Agent, any Issuing Lender or any Lender by
any Canadian Borrower.
“Canadian Borrower Revolving Loan” shall have the meaning provided in Section
2.01(a).
Canadian Borrower Revolving Note” shall have the meaning provided in Section
2.05.
“Canadian Borrower Swingline Loan” shall have the meaning provided in Section
2.01(b).
“Canadian Borrowing Base” shall mean, at the time of any determination, an
amount equal to the sum of the U.S. Dollar amount (for this purpose, using the
U.S. Dollar Equivalent of

-11-

--------------------------------------------------------------------------------

 

amounts not denominated in U.S. Dollars), without duplication, of (a) (I) 85% of
the aggregate Outstanding Balance of Eligible Canadian/English Accounts (other
than Eligible International Accounts) at such time plus (II) 90% of the
aggregate Outstanding Balance of Eligible International Accounts owned by
Canadian Loan Parties and English Loan Parties at such time plus (b) the lesser
of (i) 65% of Eligible Canadian/English Inventory at such time and (ii) 85% of
the Net Orderly Liquidation Value of Eligible Canadian/English Inventory at such
time (in each case with respect to clauses (i) and (ii) with any Eligible
Canadian/English Inventory to be valued at the lower of cost or market value
thereof (net of any intercompany profit)) plus (c)(i) 100% of all amounts on
deposit in Canadian Designated Blocked Accounts and English Designated Blocked
Accounts (in each case to the extent such amounts constitute cash held in
Deposit Accounts) and (ii) 95% of all other amounts on deposit in Canadian
Designated Blocked Accounts and English Designated Blocked Accounts (in each
case to the extent such amounts constitute Permitted Investments of the type
described in clause (a) of the definition thereof held in securities accounts),
minus (cd) the sum (without duplication) of (i) the aggregate amount of Canadian
Qualified Secured Hedging Agreement Reserves for all Canadian Qualified Secured
Hedging Agreements, (ii) the aggregate amount of Canadian Qualified Secured Cash
Management Agreement Reserves for all Canadian Qualified Secured Cash Management
Agreements, (iii) the Canadian Priority Payables Reserve (iv) the Insurance
Deductible Reserve with respect to the Canadian Borrowing Base, (v) the Foreign
Currency Adjustment with respect to the Canadian Borrowing Base and (vi) the
amount of any other Reserves in such amounts and with respect to such matters,
as the Collateral Agent in its Discretion may establish from time to time;
provided, however, that the aggregate amount arising under preceding clause (c),
together with the aggregate amount arising under clause (c) of the first
sentence of the definition of “U.S. Borowing Base”, shall not exceed
$100,000,000. The Canadian Borrowing Base at any time shall be determined by
reference to the most recent Borrowing Base Certificate delivered to the
Administrative Agent pursuant to Section 5.04(d), 5.04(e) or 9.04(h) of this
Agreement, as applicable, adjusted on a pro forma basis as necessary in the
Discretion of the Collateral Agent (pending the delivery of a new Borrowing Base
Certificate) to reflect the impact of any Significant Asset Sale or any other
event or circumstance which by the express terms of this Agreement alters the
eligibility for inclusion in the Canadian Borrowing Base of Eligible Accounts or
Eligible Inventory reflected in such Borrowing Base Certificate. The Collateral
Agent shall have the right (but no obligation) to review the computations in any
Borrowing Base Certificate and if, in its Discretion, such computations have not
been calculated in accordance with the terms of this Agreement, the Collateral
Agent shall have the right, in consultation with AbitibiBowaterResolute, to
correct any such errors in such manner as it shall determine in its Discretion
and the Collateral Agent will notify AbitibiBowaterResolute promptly after
making any such correction.
“Canadian Collection Account” shall mean each account established at a Canadian
Collection Bank subject to a Control Agreement into which funds shall be
transferred as provided in Section 5.03(c).
“Canadian Collection Banks” shall have the meaning provided in Section 5.03(c).
“Canadian Debtor Entities” shall have the meaning provided in the recitals to
this Agreement.

-12-

--------------------------------------------------------------------------------

 

“Canadian Designated Blocked Account” shall have the meaning assigned to such
term in Section 5.04(b).
“Canadian Dilution Reserve” shall mean, at any date, (i) the amount by which the
Dilution Ratio of Eligible Canadian/English Accounts exceeds five percent (5%)
multiplied by (ii) the Eligible Canadian/English Accounts on such date.
“Canadian Dollar Denominated Loans” shall mean each Loan denominated in Canadian
Dollars at the time of the incurrence thereof.
“Canadian Dollar Denominated Revolving Loans” shall mean each Revolving Loan
denominated in Canadian Dollars at the time of the incurrence thereof.
“Canadian Dollar Denominated Swingline Loans” shall mean each Swingline Loan
denominated in Canadian Dollars at the time of the incurrence thereof.
“Canadian Dollars” and “Cdn.$” shall mean freely transferable lawful money of
Canada (expressed in Canadian dollars).
“Canadian Facility” shall mean the credit facility established hereunder for the
U.S. Borrowers and the Canadian Borrowers under Sections 2.01(a)(B), 2.01(b)(B)
and 3.01(a)(A)(ii) and (iii).
“Canadian Facility Commitment” shall mean, for each Lender, the amount set forth
opposite such Lender’s name in Schedule 1.01(a) directly below the column
entitled “Canadian Facility Revolving Commitment”, as same may be (x) reduced
from time to time or terminated pursuant to Sections 4.02, 4.03 and/or 11, as
applicable, (y) adjusted from time to time as a result of assignments to or from
such Lender pursuant to Section 2.13 or 13.04(b), or (z) increased from time to
time pursuant to Section 2.14. As of the ClosingSixth Amendment Effective Date,
the aggregate amount of Canadian Facility Commitments of the Canadian Facility
Lenders is U.S. $400,000,000465,000,000.
“Canadian Facility Lenders” shall mean the Lenders having Canadian Facility
Commitments (or, after the termination of all Canadian Facility Commitments,
outstanding Individual Canadian Facility Exposure).
“Canadian Facility Letter of Credit” shall have the meaning provided in
Section 3.01(a).
“Canadian Facility Letter of Credit Exposure” shall mean, at any time, the
aggregate amount of all Canadian Facility Letter of Credit Outstandings at such
time in respect of Canadian Facility Letters of Credit issued for the account of
any Borrower. The Canadian Facility Letter of Credit Exposure of any Lender at
any time shall be its Canadian Facility RL Percentage of the total Canadian
Facility Letter of Credit Exposure at such time.
“Canadian Facility Letter of Credit Outstandings” shall mean, at any time, the
sum of (a) the Stated Amount of all outstanding Canadian Facility Letters of
Credit at such time and (b)

-13-

--------------------------------------------------------------------------------

 

the aggregate amount of all Unpaid Drawings in respect of all Canadian Facility
Letters of Credit at such time.
“Canadian Facility Obligations” shall mean all Loan Document Obligations owing
to any Lender Creditor to repay principal of, interest on, and all other amounts
with respect to, all Canadian Facility Revolving Loans, Canadian Facility
Swingline Loans, Canadian Facility Letters of Credit, and all other Loan
Document Obligations (including, without limitation, all fees, indemnities,
taxes and other obligations) pursuant to this Agreement and each other Loan
Document in connection with the Canadian Facility Commitments.
“Canadian Facility Revolving Loan” shall have the meaning provided in
Section 2.01(a).
“Canadian Facility Revolving Note” shall have the meaning provided in
Section 2.05(a).
“Canadian Facility RL Percentage” of any Canadian Facility Lender at any time
shall mean a fraction (expressed as a percentage) the numerator of which is the
Canadian Facility Commitment of such Canadian Facility Lender at such time and
the denominator of which is the Total Canadian Facility Commitment at such time,
provided that if the Canadian Facility RL Percentage of any Canadian Facility
Lender is to be determined after the Total Canadian Facility Commitment has been
terminated, then the Canadian Facility RL Percentages of such Canadian Facility
Lender shall mean a fraction (expressed as a percentage) the numerator of which
is such Lender’s Individual Canadian Facility Exposure at such time and the
denominator of which is the Aggregate Canadian Facility Exposure at such time,
provided that in the case of Section 2.18 when a Defaulting Lender shall exist,
“Canadian Facility RL Percentage” shall mean the percentage of the Total
Canadian Facility Commitments (disregarding any Defaulting Lender’s Canadian
Facility Commitment) represented by such Lender’s Canadian Facility Commitment.
“Canadian Facility Swingline Exposure” shall mean, at any time, the aggregate
principal amount of all Canadian Facility Swingline Loans (for this purpose,
using the U.S. Dollar Equivalent of amounts not denominated in U.S. Dollars)
outstanding at such time. The Canadian Facility Swingline Exposure of any Lender
at any time shall be its Canadian Facility RL Percentage of the total Canadian
Facility Swingline Exposure at such time.
“Canadian Facility Swingline Loan” shall have the meaning provided in
Section 2.01(b).
“Canadian Facility Swingline Note” shall have the meaning provided in
Section 2.05(a).
“Canadian Guarantee and Collateral Agreement” shall mean the Canadian Guarantee
and Collateral Agreement, among the Canadian Borrowers, the Canadian
Subsidiaries of AbitibiBowaterResolute party thereto and the Collateral Agent,
for the benefit of the Secured Parties, substantially in the form of Exhibit M
hereto with such modifications thereto as the Collateral Agent may agree.

-14-

--------------------------------------------------------------------------------

 

“Canadian Guarantors” shall mean and include each Canadian Borrower (in its
capacity as a guarantor under the Canadian Guarantee and Collateral Agreement)
and each Canadian Subsidiary Guarantor.
“Canadian Loan Parties” shall mean each Canadian Borrower and each Canadian
Subsidiary Guarantor.
“Canadian Loan Party Obligations” shall mean (i) all Canadian Borrower
Obligations, (ii) all Hedging Obligations owing to Hedging Creditors by any
Canadian Loan Party, (iii) all Cash Management Services Obligations owing to
Cash Management Creditors by any Canadian Loan Party, and (iv) any guarantees of
the obligations described in clause (i), (ii) or (iii) hereof by the Loan
Parties (including the U.S. Loan Parties and the English Loan Parties) pursuant
to the Guarantee and Collateral Agreement or, the Canadian Guarantee and
Collateral Agreement or the English Subsidiary Guarantee Agreement or pursuant
to any other Loan Document.
“Canadian Pension Plans” shall mean each pension, supplementary pension,
retirement savings or other retirement income plan or arrangement of any kind,
registered or non-registered, established, maintained or contributed to by a
Canadian Subsidiary of AbitibiBowaterResolute for its or any of its current or
previous Affiliates’ employees or former employees but does not include the
Canada Pension Plan as maintained by the Government of Canada or the Québec
Pension Plan as maintained by the Government of Québec.
“Canadian Pension Regulations” shall mean, collectively, the Ontario Pension
Regulations and the Quebec Pension Regulations.
“Canadian Perfection Certificate” shall mean the Canadian Perfection Certificate
in the form thereof included in Exhibit D-2 or any other form approved by the
Administrative Agent, as the same may be supplemented from time to time pursuant
to Section 9.10(c) or otherwise.
“Canadian Prime Rate” shall mean, for any day, the rate of interest per annum
expressed on the basis of a 365-day year equal to the greater of (i) the per
annum rate of interest quoted or established as the “prime rate” of Citibank
Canada (or similar entity of a successor Administrative Agent hereunder) which
it quotes or establishes for such day as its reference rate of interest in order
to determine interest rates for commercial loans made in Canadian Dollars in
Canada and (ii) the annual rate of interest equal to the sum of the one-month
CDOR Rate in effect on such day plus 1%, adjusted automatically with each quoted
or established change in such rate, all without the necessity of any notice to
any Borrower or any other Person. Any change in the Canadian Prime Rate due to a
change in the “prime rate” or the CDOR Rate shall be effective as of the opening
of business on the effective day of such change in the “prime rate” or the CDOR
Rate, respectively.
“Canadian Prime Rate Loans” shall mean (a) each Canadian Dollar Denominated
Swingline Loan and (b) each Canadian Dollar Denominated Revolving Loan during
the period which it bears interest at a rate determined by reference to the
Canadian Prime Rate, in each case made to a Canadian Borrower.

-15-

--------------------------------------------------------------------------------

 

“Canadian Priority Payables” shall mean, at any time, with respect to the
Canadian Borrowing Base:
(a)    the amount due on or prior to the date as of which the Canadian Borrowing
Base is to be determined and remaining unpaid at the time of determination by
any Canadian Loan Party (or any other Person for which any Canadian Loan Party
has joint and several liability), for which each Canadian Loan Party has an
obligation whether to remit to a Governmental Authority or other Person pursuant
to any applicable law, rule or regulation, in respect of (i) pension fund
obligations including employee and employer pension plan contributions
(including “normal cost”, “special payments” and any other payments in respect
of any funding deficiency or shortfall), (ii) employment insurance, (iii) goods
and services taxes, sales taxes, employee income taxes, excise tax and other
taxes payable or to be remitted or withheld, (iv) workers’ compensation, (v)
wages, salaries, commission or compensation, including vacation pay, and (vi)
other like charges and demands; in each case in respect of which any
Governmental Authority or other Person may claim a security interest,
hypothecation, prior claim, trust or other claim or Lien ranking or capable of
ranking in priority to or pari passu with one or more of the Liens granted
pursuant to the Security Documents (a “Priority Lien”); and
(b)    the aggregate amount due on or prior to the date as of which the Canadian
Borrowing Base is to be determined and remaining unpaid at the time of
determination of any other liabilities of the Canadian Loan Parties (or any
other Person for which the Canadian Loan Parties have joint and several
liability) (i) in respect of which a trust has been or may be imposed on
Collateral of any Canadian Loan Party to provide for payment or (ii) which are
secured by a security interest, hypothecation, prior claim, pledge, charge,
right, or claim or other Lien on any Collateral of any Canadian Loan Party, in
each case pursuant to any applicable law, rule or regulation and which trust,
security interest, hypothecation, prior claim, pledge, charge, right, claim or
other Lien ranks or is capable of ranking in priority to or pari passu with one
or more of the Liens granted in the Security Documents.
“Canadian Priority Payables Reserve” shall mean, on any date of determination
for the Canadian Borrowing Base, a reserve established from time to time by the
Collateral Agent in its Discretion in such amount as the Collateral Agent may
reasonably determine in respect of Canadian Priority Payables of the Canadian
Loan Parties; provided, that without otherwise limiting the Collateral Agent’s
Discretion, the Canadian Priority Payables Reserve shall at all times include a
reserve for Canadian Priority Payables in an amount not less than the amount of
Canadian Priority Payables set forth on the most recent Borrowing Base
Certificate delivered to the Administrative Agent pursuant to Section 5.04(d),
5.04(e), 6(t) or Section9.04(h), as applicable.
“Canadian Proceedings” shall have the meaning provided in the recitals to this
Agreement.
“Canadian Qualified Secured Cash Management Agreement” shall mean any Qualified
Secured Cash Management Agreement between a Cash Management Creditor (as
determined at the time such Secured Cash Management Agreement is designated as a
Qualified Secured Cash Management Agreement without regard to whether such
Person is currently a Lender or an affiliate thereof) and a Canadian Loan Party.

-16-

--------------------------------------------------------------------------------

 

“Canadian Qualified Secured Cash Management Agreement Reserve” shall mean a
reserve established by the Collateral Agent from time to time in respect of a
Canadian Qualified Secured Cash Management Agreement, which reserve shall be in
an amount equal to the reserve agreed upon from time to time by the applicable
Cash Management Creditor and AbitibiBowaterResolute and notified to, and if
Excess Availability (after giving effect to such reserve) is less than 35% of
the Total Commitment then in effect at the time such reserve is created or
increased, consented to in writing by the Collateral Agent in its Discretion (it
being understood and agreed that a reserve with respect to a Canadian Qualified
Secured Cash Management Agreement (i) may only be decreased with the consent of
the Cash Management Creditor party to such Canadian Qualified Secured Cash
Management Agreement and (ii) may only be created or increased if, after giving
effect thereto, the Aggregate Canadian Borrower Exposure would not exceed 100%
of the Canadian Borrowing Base at such time.)
“Canadian Qualified Secured Hedging Agreement” shall mean any Qualified Secured
Hedging Agreement between a Hedging Creditor (as determined at the time such
Secured Hedging Agreement is designated as a Qualified Secured Hedging Agreement
without regard to whether such Person is currently a Lender or an affiliate
thereof) and a Canadian Loan Party.
“Canadian Qualified Secured Hedging Agreement Reserve” shall mean a reserve
established by the Collateral Agent from time to time in respect of a Canadian
Qualified Secured Hedging Agreement, which reserve shall be in the amount of the
aggregate U.S. Dollar Equivalent marked to market exposure thereunder as
calculated from time to time by the Hedging Creditor party to such Canadian
Qualified Secured Hedging Agreement in accordance with GAAP (based on the
valuation methodology agreed between AbitibiBowaterResolute and the Hedging
Creditor party to such Canadian Qualified Secured Hedging Agreement) and
notified to the Collateral Agent (and acknowledged by the Administrative Agent)
(A) at the time such Secured Hedging Agreement is designated as a Qualified
Secured Hedging Agreement and (B) from time to time thereafter, in each case, in
accordance with Section 13.21 (it being understood and agreed that a reserve
with respect to a Canadian Qualified Secured Hedging Agreement (i) may only be
decreased below the marked to market exposure thereunder with the consent of the
Hedging Creditor party to such Canadian Qualified Secured Hedging Agreement and
(ii) may only be created or increased (x) if after giving effect thereto the
Aggregate Canadian Borrower Exposure would not exceed 100% of the Canadian
Borrowing Base at such time and (y) if at such time an Event of Default exists
or if after giving effect to such reserve the aggregate amount of all Qualified
Secured Hedging Agreement Reserves would exceed $100,000,000, with the written
consent of the Collateral Agent in its Discretion).
“Canadian Secured Obligations” shall mean and include (a) all Loan Document
Obligations owing by any Canadian Loan Party, (b) all Hedging Obligations owing
by any Canadian Loan Party, (c) all Cash Management Services Obligations owing
by any Canadian Loan Party, and (d) all amounts paid (or incurred) by any
Indemnified Person as to which such Indemnified Person has the right to
reimbursement by a Canadian Loan Party under Section 13.01 or any indemnity
contained in any Canadian Security Document; it being acknowledged and agreed
that the “Canadian Secured Obligations” shall include extensions of credit to
any Canadian Loan Party of the types described above, whether outstanding on the
date of this Agreement or any Security Document or

-17-

--------------------------------------------------------------------------------

 

extended from time to time after the date of this Agreement or any Security
Document, in each case excluding the Excluded Swap Obligations.
“Canadian Security Documents” shall mean the Canadian Guarantee and Collateral
Agreement, the Quebec Security Documents and the other similar security
agreements, instruments and documents executed and delivered pursuant to Section
9.09 governed by Canadian law (or the laws of any province or territory of
Canada).
“Canadian Subsidiary” of any Person shall mean any Subsidiary of such Person
incorporated or organized in Canada or any province or territory thereof.
“Canadian Subsidiary Guarantors” shall mean (a) each Canadian Subsidiary of
AbitibiBowaterResolute that is a Material Wholly-Owned Subsidiary (other than
Excluded Subsidiaries and any Canadian Borrowers), whether existing on the
Closing Date or established, created or acquired after the Closing Date and (b)
each other Canadian Subsidiary of AbitibiBowaterResolute that becomes party to
the Canadian Guarantee and Collateral Agreement as a “Guarantor” and “Grantor”,
in each case unless and until such time as the respective Canadian Subsidiary is
released from all of its obligations under the Security Documents to which it is
a party in accordance with the terms and provisions thereof.
“Canadian Swingline Lender” shall have the meaning provided in the definition of
“Swingline Lender”.
“Capital Expenditures” shall mean, with respect to any Person, all expenditures
by such Person which should be capitalized in accordance with GAAP and, without
duplication, the amount of the principal portion of all Capitalized Lease
Obligations incurred by such Person.
“Capital Lease” shall have the meaning provided in the definition of the term
“Capital Lease Obligations”.
“Capital Lease Obligations” of any Person shall mean the obligations of such
Person to pay rent or other amounts under any lease of (or other arrangement
conveying the right to use) real or personal property, or a combination thereof
(each, a “Capital Lease”), which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP.
For the purposes of this Agreement, the amount of such obligations at any time
shall be the capitalized amount thereof at such time, determined in accordance
with GAAP.
“Cash Management Agreement” shall mean any arrangement for the provision of Cash
Management Services.
“Cash Management Creditors” shall mean, collectively, each Lender and/or any
affiliate thereof that has entered into one or more Secured Cash Management
Agreements, even if such Lender subsequently ceases to be a Lender under this
Agreement for any reason, and such Lender’s or such affiliate’s successors and
assigns, if any.

-18-

--------------------------------------------------------------------------------

 

“Cash Management Services” shall mean (i) cash management services, including
treasury, depository, overdraft, electronic funds transfer and other cash
management arrangements and (ii) commercial credit card and merchant card
services.
“Cash Management Services Obligations” shall mean and include, any and all
obligations of the Loan Parties to the Cash Management Creditors, whether
absolute or contingent and howsoever and whensoever created, arising, evidenced
or acquired (including all renewals, extensions and modifications thereof and
substitutions therefor) in connection with any Secured Cash Management
Agreements, whether such Secured Cash Management Agreement is now in existence
or hereinafter arising (including, without limitation, all obligations,
liabilities and indebtedness of each Loan Party in its capacity as a Guarantor
under the Guarantee and Collateral Agreement or, the Canadian Guarantee and
Collateral Agreement or the English Subsidiary Guarantee Agreement, to which it
is a party, in respect of the Secured Cash Management Agreements).
“Cash Proceeds” shall mean, with respect to any Asset Sale, cash, cash
equivalents or marketable securities received from such Asset Sale, including
any insurance or condemnation proceeds and, when received, proceeds received by
way of deferred payment pursuant to a note receivable or otherwise.
“CCAA” shall have the meaning provided in the recitals to this Agreement.
“CCAA Plan” shall have the meaning provided in the recitals to this Agreement.
“CDOR Rate” shall mean on any day and for any period, an annual rate of interest
equal to the average rate applicable to Canadian Dollar bankers’ acceptances for
the applicable period appearing on the display referred to as the “CDOR Page”
(or any display substituted therefor) of Reuter Monitor Money Rates Service,
rounded to the nearest 1/100th of 1% (with .005% being rounded up), at
approximately 10:00 A.M. (Toronto time) on such day, or if such day is not a
Business Day, then on the immediately preceding Business Day, provided that if
such rate does not appear on the on the display referred to as the “CDOR Page”
(or any display substituted therefor) of Reuter Monitor Money Rates Service on
such day as contemplated, then the CDOR Rate on such day shall be calculated as
the average of the rates for such period applicable to Canadian dollar bankers’
acceptances quoted by the banks listed in Schedule I of the Bank Act (Canada)
which are also Lenders as of 10:00 A.M. (Toronto time) on such day or, if such
day is not a Business Day, then on the immediately preceding Business Day.
“CERCLA” shall have the meaning provided in Section 8.15(a)(iv).
“Change in Control” shall mean, and be deemed to have occurred, if (a) after the
Effective Date, a majority of the seats (other than vacant seats) on the board
of directors of AbitibiBowaterResolute shall at any time be occupied by persons
who were not (i) members of the board of directors of AbitibiBowaterResolute on
the Effective Date (or appointed shortly thereafter as specifically contemplated
by the Plan of Reorganization), (ii) nominated by the board of directors of
AbitibiBowaterResolute after the Effective Date or (iii) appointed by the
directors referred to in clause (ya)(i) or (ii) after the Effective Date, (b) on
or at any time after the Effective Date, any

-19-

--------------------------------------------------------------------------------

 

person or group (within the meaning of Rule 13d-5 of the Securities and Exchange
Act of 1934, as in effect on the date hereof) other than a Permitted Parent
shall own, directly or indirectly, beneficially or of record, shares
representing more than 35% (or, in the case of any person or group that includes
Fairfax, 50%) of the aggregate ordinary voting power represented by the issued
and outstanding capital stock of AbitibiBowaterResolute; (c) at any time prior
to the Effective Date, AbitibiBowater shall cease to own, directly or
indirectly, beneficially and of record, 100% of the issued and outstanding
capital stock of each of Abitibi and Bowater[reserved]; or (d) any event
constituting a “change in control” under instruments governing any other
Material Indebtedness. Notwithstanding the foregoing: (A) a “person” or “group”
shall not be deemed to have beneficial ownership of securities subject to a
stock purchase agreement, merger or amalgamation agreement or similar agreement
(or voting or option agreement related thereto) until the consummation of the
transactions contemplated by such agreement; and (B) neither the “Investors”
under, and as such term is defined in, the Backstop Commitment Agreement dated
May 24, 2010, by and among AbitibiBowaterResolute and the investors party
thereto, as amended, nor their Affiliates shall be deemed to be “group” for
purposes hereof solely by reason of the transactions contemplated by the Plans.
“CIBC Cash Collateral Account” shall mean, collectively, each deposit account of
a Canadian Subsidiary that is used exclusively for the purpose of holding cash
collateral described in Section 10.02(a)(xx).
“CIBC Letter of Credit Facilities” shall mean, collectively, the 2007 CIBC
Letter of Credit Facility and the 2008 CIBC Letter of Credit Facility.
“Citibank” shall mean Citibank, N.A., and its successors.
“Citibank Canada” shall mean Citibank, N.A., Canada Branch, in its individual
capacity, and any successor corporation thereto by merger, amalgamation,
consolidation or otherwise acting in respect of its Canadian banking business.
“Citibank England” shall mean Citibank, N.A., London, in its individual
capacity, and any successor corporation thereto by merger, amalgamation,
consolidation or otherwise acting in respect of its English banking business.
“Citibank Canadian Account” shall have the meaning provided in Section 5.03(fg).
“Citibank English Account” shall have the meaning provided in Section 5.03(h).
“Citibank U.S. Account” shall have the meaning provided in Section 5.03(ef).
“Closing Date” shall mean the date of effectiveness of this Agreement pursuant
to Section 13.10(a). The “Closing Date” occurred on December 9, 2010.
“Code” shall mean the United States Internal Revenue Code of 1986, as amended
from time to time, and any final or temporary regulations promulgated and in
effect thereunder.

-20-

--------------------------------------------------------------------------------

 

Section references to the Code are to the Code, as in effect at the date of this
Agreement and any subsequent provisions of the Code, amendatory thereof,
supplemental thereto or substituted therefor.
“Collateral” shall mean any and all assets and properties of the Loan Parties
that are (or purport to be) subject to Liens (whether Notes Priority Collateral
or ABL Priority Collateral) securing any of the Obligations, including all
“Collateral” (as defined in (a) prior to the Effective Date, the form of
Guarantee and Collateral Agreement attached hereto as Exhibit L and the form of
Canadian Guarantee and Collateral Agreement attached hereto as Exhibit M and (b)
on and after the Effective Date, the Guarantee and Collateral Agreement and the
Canadian Guarantee and Collateral Agreement), and the Mortgaged Propertiesany
corresponding term in the European Security Documents.
“Collateral Access Agreement” shall mean any landlord waiver or other agreement,
in form and substance reasonably satisfactory to the Collateral Agent, between
the Collateral Agent and any third party (including any bailee, consignee,
customs broker or other similar Person) in possession of any Collateral or any
landlord mortgagee of any Loan Party for any real property where any Collateral
is located, as such landlord waiver or other agreement may be amended, restated
or otherwise modified from time to time.
“Collateral Agent” shall mean Citibank in its capacity as security agent for the
Secured Parties pursuant to the Security Documents, and shall include any
successor to the Collateral Agent as provided in Section 12.09.
“Collateral and Guarantee Requirement” shall mean, at any time, the requirement
that:
(a) the Administrative Agent shall have received from each U.S. Borrower and
each U.S. Subsidiary Guarantor either (i) counterparts of each of the Guarantee
and Collateral Agreement, the Intercreditor Agreement and the other Security
Documents (other than the Canadian Security Documents and the European Security
Documents), duly executed and delivered on behalf of such parties or (ii) in the
case of any Person that is required to become a U.S. Subsidiary Guarantor after
the Effective Date, joinder instruments in the form or forms specified in the
Guarantee and Collateral Agreement, the Intercreditor Agreement or the other
Security Documents (other than the Canadian Security Documents and the European
Security Documents), as applicable, under which such Loan Party becomes a party
to the applicable Guarantee and Collateral Agreement, the Intercreditor
Agreement or the other Security Documents (other than the Canadian Security
Documents and the European Security Documents), as applicable, duly executed and
delivered on behalf of such Loan Party;
(b) the Administrative Agent shall have received from each Canadian Borrower and
each Canadian Subsidiary Guarantor either (i) counterparts of each of the
Canadian Guarantee and Collateral Agreement and the other Canadian Security
Documents, duly executed and delivered on behalf of such parties or (ii) in the
case of any Person that is required to become a Canadian Subsidiary Guarantor
after the Effective Date, joinder instruments in the form or forms specified in
the Canadian Guarantee and Collateral Agreement or the other Canadian Security
Documents, as applicable, under which such Canadian Loan Party becomes a party
to the applicable Canadian Guarantee and

-21-

--------------------------------------------------------------------------------

 

Collateral Agreement or the other Canadian Security Documents, as applicable,
duly executed and delivered on behalf of such Canadian Loan Party;
(c) the Administrative Agent shall have received from each English Guarantor (x)
either (i) counterparts of each of the English Subsidiary Guarantee Agreement
and the other applicable U.K. Security Documents, duly executed and delivered on
behalf of such parties or (ii) in the case of any Person that becomes an English
Subsidiary Guarantor after the initial execution and delivery of the English
Subsidiary Guarantee Agreement, joinder instruments in the form or forms
specified in the English Subsidiary Guarantee Agreement or the other U.K.
Security Documents, as applicable, under which such English Loan Party becomes a
party to the applicable English Subsidiary Guarantee Agreement or the other U.K.
Security Documents, as applicable, duly executed and delivered on behalf of such
English Loan Party and (y) such customary lien searches and legal opinions
(including of local counsel) as the Administrative Agent shall have reasonably
requested in connection with the execution and delivery of the foregoing;
(d) the Administrative Agent shall have received from each English Guarantor:
(i) a copy of its constitutional documents; (ii) a copy of a resolution of its
board of directors (A) approving the terms of the Loan Documents to which it is
a party; (B) authorizing a specified person or persons to execute the Loan
Documents to which it is a party on its behalf; and (C) authorizing a specified
person or persons to sign and/or dispatch all other documents and notices to be
signed and/or despacted by it under or in connection with the Loan Documents;
(iii) a specimen of the signature of each person authorized by the resolution
referred to in clause (ii) above; (iv) a copy of a resolution signed by all the
holders of its issued shares approving the terms of the Loan Documents to which
it is a party; (v) a certificate signed by one of its directors confirming that
guaranteeing or securing, as appropriate, under the Loan Documents would not
cause any guarantee, security or similar limit binding on it to be exceeded;
(vi) a certificate of an authorized signatory of the English Guarantor
certifying that each copy document listed in this clause (d) is correct,
complete and in full force and effect and has not been amended or superseded as
at a date no earlier than the date of the most recent Loan Document to which it
is a party; and (vii) evidence that it has done all that is necessary
(including, without limitation, be re-registering as a private company) to
comply with sections 677 to 683 of the Companies Act 2006 in order to enable it
to enter into the Loan Documents and performs its obligations thereunder;
(c) (i) all Equity Interests in (x) each Domestic Subsidiary of AbitibiBowater
that is a Material Subsidiary and, except to the extent pledged as security for
the Senior Secured Notes, is not a Joint Venture Subsidiary and (y) each Foreign
Subsidiary of AbitibiBowater that is a Material Subsidiary and, except to the
extent pledged as security for the Senior Secured Notes, is not a Joint Venture
Subsidiary and, in the case of each of clause (x) and clause (y), that are owned
directly by one or more U.S. Loan Parties shall have been pledged pursuant to,
and to the extent required by, the Guarantee and Collateral Agreement and, if
requested by the Administrative Agent in the case of any such Subsidiary that is
a Foreign Subsidiary, a Foreign Pledge Agreement; provided that the U.S. Loan
Parties shall not be required to pledge more than 65% of the issued and
outstanding voting Equity Interests of any Domestic Subsidiary that is treated
as a disregarded entity for United States federal income tax purposes and that
holds voting Equity Interests of a Foreign Subsidiary or of any Foreign
Subsidiary of AbitibiBowater that is a first-tier controlled foreign corporation
(as

-22-

--------------------------------------------------------------------------------

 

defined in Section 957(a) of the Code) and shall not be required to pledge any
Equity Interests in a subsidiary of a controlled foreign corporation (as defined
in Section 957(a) of the Code) and (ii) the Collateral Agent shall have received
certificates or other instruments (to the extent issued in certificate form)
representing all such Equity Interests, together with undated stock powers or
other instruments of transfer with respect thereto endorsed in blank; provided,
that the requirement set forth in this clause (ii) shall be deemed met to the
extent that such certificates of other instruments shall have been delivered to
the Notes Agent;
(d) [reserved];
(e) (i) solely to the extent required to be pledged pursuant to the Guarantee
and Collateral Agreement, all Indebtedness of any other Person that is owing to
any U.S. Loan Party and is evidenced by a promissory note (other than
Indebtedness in a principal amount of less than $5,000,00020,000,000, so long as
the aggregate principal amount of Indebtedness not pledged under this exclusion
does not exceed $10,000,00040,000,000) shall have been pledged pursuant to the
Guarantee and Collateral Agreement and (ii) the Collateral Agent shall have
received all such promissory notes, together with undated instruments of
transfer with respect thereto endorsed in blank; provided, that the requirement
set forth in this clause (ii) shall be deemed met to the extent that such
certificates of other instruments shall have been delivered to the Notes Agent;
(f) the Administrative Agent shall have received a lender’s title insurance
policy insuring that each Mortgage relating to any Mortgaged Property
constitutes a first lien on such Mortgaged Property (subject to any Lien
expressly permitted by Section 10.02 or otherwise agreed to by the
Administrative Agent and other than as provided in the Intercreditor Agreement),
and the Administrative Agent shall have received such other documents relating
to Mortgaged Properties as reasonably requested in writing by the Administrative
Agent (including adequate flood insurance coverage); provided that on and after
the Sixth Amendment Effective Date, the requirements set forth in this paragraph
(f) shall no longer be required to be satisfied;
(g) all documents and instruments, including UCC and PPSA financing statements
or similar registration forms, required by applicable law or reasonably
requested by the Administrative Agent to be filed, registered or recorded to
create the Liens intended to be created by the Security Documents and perfect
such Liens to the extent required by, and with the priority required by, the
Security Documents, shall have been filed, registered or recorded or delivered
to the Administrative Agent for filing, registering or recording and all filing,
registration, stamping or recording duty or other fee shall have been paid (at
the expense of the Borrowers);
(h) with respect to each deposit account of any Loan Party and each securities
account, futures account and commodities account maintained by any Loan Party
with any depositary bank, securities intermediary, futures intermediary or
commodity intermediary (other than Excluded Accounts, the NoteCIBC Cash
Collateral Account, the CIBC Cashany Specified Secured Indebtedness Collateral
Account and the Specified Collection Accounts), the Administrative Agent shall
have received a counterpart, duly executed and delivered by the applicable Loan
Party and such depositary bank, securities intermediary, futures intermediary or
commodity intermediary, as the case may be, of a Control Agreement (which
Control Agreements may also be for the benefit of the Notes Agent); and

-23-

--------------------------------------------------------------------------------

 

(i) (x) the Collateral Agent shall have received counterparts of each European
Security Document duly executed by each Loan Party party thereto, along with
customary legal opinions from counsel with respect thereto in form and substance
reasonably satisfactory to the Collateral Agent and (y) each such Loan Party
shall have taken all actions (including making all filings and registrations) as
may be reasonably necessary for the purpose of the creation, perfection,
protection or maintenance of any security interests conferred or intended to be
conferred on the Collateral Agent by or pursuant to each European Security
Document, including with respect to the Dutch Security Agreement, providing the
Collateral Agent with evidence of the registration of the Dutch Security
Agreement with the Dutch tax authority (Belastingdienst ondernemingen).
Notwithstanding the foregoing provisions of this definition, (x) the delivery of
the Control Agreements set forth in paragraph (h) shall not be a condition
precedent to the Effective Date, but such Control Agreements shall be required
to be delivered not later than the date that is 60 days following the Effective
Date (subject to extension in the reasonable discretion of the Administrative
Agent); (y) the delivery of the items set forth in clause (ii) of paragraph (c)
and in clause (ii) of paragraph (e) shall not be a condition precedent to the
Effective Date, but such items shall be required to be delivered not later than
the date that is 45 days following the Effective Date; and (z) if the
Administrative Agent reasonably determines that AbitibiBowater shall have used
commercially reasonable efforts to procure and deliver, but shall nevertheless
be unable to deliver, (A) any Mortgage (or any mortgage-related documents) or
(B) any other Security Document or other document required pursuant to paragraph
(i) above, in each case that is required in order to satisfy the foregoing
requirements, such delivery shall not be a condition precedent to the Effective
Date, but shall be required to be accomplished by such later date as the
Administrative Agent shall reasonably determine; provided that this clause (z)
shall be inapplicable with respect to (i) any real property as to which a
Mortgage has been delivered to secure the Senior Secured Notes on or prior to
the Effective Date and (ii) any Inventory located in the United Kingdom,
Northern Ireland or the Netherlands that is included in the Borrowing Base on
the Effective Date.
“Collection Accounts” shall mean, collectively, the U.S. Collection Accounts
and, the Canadian Collection Accounts and the English Collection Accounts.
“Commingled Inventory” shall mean Inventory of any Loan Party that is commingled
(whether pursuant to a consignment (as defined in Section 9-102 of the UCC), a
toll manufacturing agreement or otherwise) with Inventory of another Person
(other than another Loan Party) at a location owned or leased by a Loan Party to
the extent that such Inventory of such Loan Party is not readily identifiable.
“Commitment” shall mean a U.S. Facility Commitment or a Canadian Facility
Commitment.
“Commitment Fees” shall have the meaning provided in Section 4.01(a).
“Commodity Exchange Act” means the Commodity Exchange Act (7 U.S.C. § 1 et
seq.), as amended from time to time, and any successor statute.

-24-

--------------------------------------------------------------------------------

 

“Compliance Amount” shall mean an amount, at any time, equal to the greater of
(i) $60,000,00050,000,000 and (ii) the lesser of (x) 12.510.0% of the Total
Commitment at such time and (y) 12.510.0% of the Total Borrowing Base at such
time.
“Compliance Period” shall mean any period (x) commencing on the date on which
the Excess Availability ishas been less than the Compliance Amount for two
consecutive Business Days and (y) ending on the first date thereafter on which
(i) the Excess Availability has been equal to or greater than the Compliance
Amount for 4030 consecutive days and (ii) no Event of Default exists or is
continuing.
“Concentration Limit” for any Account Debtor shall mean at any time an amount
equal to (a) the aggregate Outstanding Balance of Eligible Accounts included in
the Total Borrowing Base, after giving effect to the limits on concentration
specified in the definition of Eligible Accounts (on an iterative basis),
multiplied by (b) the applicable percentage set forth below:
(i)    if and so long as such Account Debtor has Debt Ratings of at least BBB-
by S&P and Baa3 by Moody’s, 15.0%;
(ii)    if and so long as such Account Debtor has Debt Ratings from S&P or
Moody’s and the preceding clause (i) is not applicable, 10.0%; or
(iii)    if neither of the preceding clauses is applicable, 5.0%; provided that
unless and until the Collateral Agent determines that the circumstances
warranting such treatment no longer exist, the Concentration Limit for Infoglobo
Comunicacoes SA., a Brazilian entity, shall be 10.0%.
If the Debt Rating of any Account Debtor is downgraded such that the
Concentration Limit for such Account Debtor would be reduced, such reduction in
such Concentration Limit shall not occur until three Business Days after
AbitibiBowaterResolute becomes aware of such downgrade.
“Confidential Information” shall mean all information and data, including,
without limitation, technical, business, marketing and financial information,
disclosed to the Agents (or any of them), any Issuing Lender or any Lender by
AbitibiBowaterResolute or any of its Subsidiaries in connection with this
Agreement, any other Loan Document or any of the Transactions, whether tangible,
intangible, electronic, verbal or written form or by observation and all
memoranda, summaries, samples, notes, analyses, compilations, studies, or other
documents prepared by the Agents (or any of them), any Issuing Lender or any
Lender which contain, reflect or are derived from such information and/or data;
provided however, the term “Confidential Information” shall not include
information or data which (a) is, or becomes, generally available other than as
a result of a disclosure by the respective Agent, Issuing Lender or Lender in
violation of any Loan Document, (b) is, or becomes, available to an Agent, any
Issuing Lender or Lender on a non-confidential basis from a source other than
AbitibiBowaterResolute or any of its Subsidiaries or its representatives,
provided that such source is not, and was not, actually known by such Agent,
Issuing Lender or Lender, as the case may be, to be prohibited from transmitting
such information or data by any contractual, fiduciary or other legal obligation
of confidentiality to AbitibiBowaterResolute or any

-25-

--------------------------------------------------------------------------------

 

of its Subsidiaries, or (c) was available to an Agent, an Issuing Lender or a
Lender on a non-confidential basis prior to disclosure by AbitibiBowaterResolute
or any of its Subsidiaries or their respective representatives.
“Confidential Information Memorandum” shall mean the Confidential Information
Memorandum of AbitibiBowaterResolute dated September 2010.
“Confirmation Order” shall have the meaning provided in Section 6(l).
“Consolidated EBITDA” shall mean, for any period, Consolidated Net Income for
such period, plus:
(a) without duplication and to the extent deducted in determining such
Consolidated Net Income, the sum of:
(i) Consolidated Interest Expense for such period;
(ii) provision for taxes based on income, profits or losses (determined on a
consolidated basis) during such period;
(iii) all amounts attributable to depreciation, depletion and amortization for
such period;
(iv) any extraordinary losses for such period;
(v) any Non-Cash Charges for such period;
(vi) restructuring charges for such period relating to current or anticipated
future cash expenditures, including restructuring costs related to closure or
consolidation of facilities, in an aggregate amount not to exceed in any fiscal
year $25,000,000Test Period the greater of (x) $50,000,000 and (y) 15% of
Consolidated EBITDA for such Test Period (prior to giving effect to this clause
(vi));
(vii) to the extent deducted from Consolidated Net Income for such period, cash
fees, costs, expenses, commissions or other cash charges paid on or before
December 31, 2010 in connection with this Agreement, the Senior Secured Notes
Documents, the Bankruptcy Proceedings, the Plan of Reorganization and the
transactions contemplated by the foregoing, including in connection with the
termination or settlement of executory contracts, professional and accounting
fees, costs and expenses, management incentive, employee retention or similar
plans (in each case to the extent such plan is approved by the U.S. Bankruptcy
Court), and litigation and settlements (but excluding interest and fees accruing
after the Effective Date hereunder or under the Senior Secured Notes), in an
aggregate amount for all such periods not in excess of $220,000,000;
(viii)    other non-recurring charges for such period in an aggregate amount not
to exceed $25,000,000 in any fiscal year $5,000,000Test Period; and

-26-

--------------------------------------------------------------------------------

 

(ix) deferred financing fees (and any write-offs thereof);
provided that, to the extent not reflected in Consolidated Net Income for the
period in which such cash payment is made, any cash payment made with respect to
any Non-Cash Charges added back in computing Consolidated EBITDA for any prior
period pursuant to clause (v) above (or that would have been added back had this
Agreement been in effect during such prior period) shall be subtracted in
computing Consolidated EBITDA for the period in which such cash payment is made;
and minus
(b) without duplication and to the extent included in determining such
Consolidated Net Income:
(i) any extraordinary gains for such period; and
(ii) any non-cash gains for such period (excluding any non-cash gain to the
extent it represents the reversal of an accrual or reserve for a potential cash
item that reduced Consolidated EBITDA in any prior period);
in each case of clauses (a) and (b), determined on a consolidated basis in
accordance with GAAP; provided further, that Consolidated EBITDA for any period
shall be calculated so as to exclude (without duplication of any adjustment
referred to above) the effect of:
(A) the cumulative effect of any changes in GAAP or accounting principles
applied by management;
(B) any gain or loss for such period that represents after-tax gains or losses
attributable to any sale, transfer or other disposition or abandonment of assets
by AbitibiBowaterResolute, the Borrower or any of the Subsidiaries, other than
dispositions or sales of inventory and other dispositions in the ordinary course
of business;
(C) any income or loss for such period attributable to the early extinguishment
of Indebtedness or accounts payable;
(D) any non-cash gains or losses on foreign currency derivatives and any foreign
currency transaction non-cash gains or losses and any foreign currency exchange
translation gains or losses that arise on consolidation of integrated
operations;
(E) any re-evaluation of any assets or any liabilities due to “fresh‑start”
accounting adjustments resulting from the Borrower’s emergence from the
Bankruptcy Proceedings; and
(F) mark-to-market adjustments in the valuation of derivative obligations
resulting from the application of Statement of Financial Accounting Standards
No. 133, Accounting for Derivative Instruments and Hedging Activities.
“Consolidated Fixed Charge Coverage Ratio” shall mean, for any period, the ratio
of (a) Consolidated EBITDA for such period minus the sum of (A) the aggregate
amount of all Capital Expenditures made by AbitibiBowaterResolute and its
Subsidiaries (other than Excluded

-27-

--------------------------------------------------------------------------------

 

Subsidiaries) during such period (other than Capital Expenditures to the extent
financed with equity net cash proceeds, asset sale net cash proceeds,
condemnation net cash proceeds, insurance net cash proceeds or Indebtedness but
including Capital Expenditures to the extent financed with proceeds of Loans)
plus (B) the amount of all cash payments during such period made by
AbitibiBowaterResolute and its Subsidiaries (other than Excluded Subsidiaries)
in respect of income taxes (net of cash income tax refunds during such period)
(excluding such cash payments related to asset sales not in the ordinary course
of business) to (b) Consolidated Fixed Charges for such period. The Consolidated
Fixed Charge Coverage Ratio shall be determined on a pro forma basis as and to
the extent provided in Section 1.04 and otherwise in accordance with GAAP.
“Consolidated Fixed Charges” shall mean, for any period, the sum of (a) cash
Consolidated Interest Expense of AbitibiBowaterResolute and its Subsidiaries
(other than Excluded Subsidiaries) for such period plus (b) the scheduled
principal payments made during such period on all Indebtedness for borrowed
money and Capital Leases of AbitibiBowaterResolute and its Subsidiaries (other
than Excluded Subsidiaries) for such period plus (c) the aggregate amount of all
cash Restricted Payments paid by AbitibiBowaterResolute during such period (with
respect to repurchases of Equity Interests of Resolute, in excess of $10,000,000
per fiscal quarter), plus (d) (i) actual cash pension funding payments made by
AbitibiBowaterResolute and its Subsidiaries (other than Excluded Subsidiaries)
with respect to pension funding obligations for such period, minus (ii) the
profit and loss statement charge (or benefit) with respect to such pension
funding obligations for such period.
“Consolidated Interest Expense” shall mean, for any period, the interest expense
(other than for the purposes of Consolidated Fixed Charges, net of interest
income on Permitted Investments) of AbitibiBowaterResolute and its Subsidiaries
for such period determined on a consolidated basis in accordance with GAAP. For
purposes of the foregoing, interest expense shall be determined after giving
effect to any net payments made or received by AbitibiBowaterResolute and its
Subsidiaries with respect to Hedging Agreements, but excluding any gain or loss
recognized under GAAP that results from the mark-to-market valuation of any
Hedging Agreement.
“Consolidated Net Income” shall mean, for any period, the net income (or loss)
of AbitibiBowaterResolute and its Subsidiaries on a consolidated basis for such
period taken as a single accounting period determined in conformity with GAAP,
provided that there shall be excluded from such calculation (a) the income (or
loss) of any Subsidiary of AbitibiBowaterResolute that is not wholly owned by
AbitibiBowaterResolute to the extent such income (or loss) is attributable to
the noncontrolling interest in such Subsidiary, (b) any gain or loss recognized
from the settlement after the effective date of the Plans of claims under the
Bankruptcy Proceedings, provided that any payment in respect thereof is made in
accordance with the Plans, (c) the income (or loss) of any Person accrued prior
to the date it becomes (or, for pro forma purposes, is deemed to have become) a
Subsidiary of AbitibiBowaterResolute or is merged into or consolidated with
AbitibiBowaterResolute or any of its Subsidiaries or the date that Person’s
assets are acquired by AbitibiBowaterResolute or any of its Subsidiaries and (d)
the income (or loss) of any Excluded Subsidiary, except, in the case of Augusta
Newsprint only, to the extent of any cash dividends paid by Augusta Newsprint to
any Loan Party during such period.

-28-

--------------------------------------------------------------------------------

 

“Contract” shall mean an agreement between a Borrower and an Account Debtor
(including, in the case of any open account agreement, an invoice), pursuant to
or under which such Account Debtor shall be obligated to pay for merchandise,
insurance or services from time to time.
“Control” of a Person shall mean the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of such
Person, whether through the ownership of voting securities, by contract or
otherwise. “Controlling” and “Controlled” shall have meanings correlative
thereto.
“Control Agreement” shall mean, with respect to any deposit account, securities
account, futures account or commodities account maintained by any Loan Party, a
control agreement in form and substance reasonably satisfactory to the
Collateral Agent, duly executed and delivered by such Loan Party and the
depositary bank, the securities intermediary, futures intermediary or commodity
intermediary, as the case may be, with which such account is maintained. or, in
the case of any deposit account, securities account, futures account or
commodities account which is the subject of security created under any European
Security Document, a notice sent pursuant to the terms of the relevant European
Security Document by the Loan Party in whose name such account is held to the
depositary bank, the securities intermediary, future intermediary or commodity
intermediary, as the case may be, with which such account is maintained and duly
acknowledged by the addressee of such notice.
“Core Canadian Concentration Account” shall have the meaning provided in
Section 5.03(d).
“Core Concentration Accounts” shall mean, collectively, the Core U.S.
Concentration Accounts and the Core Canadian Concentration Accounts.
“Core U.S. Concentration Account” shall have the meaning provided in
Section 5.03(d).
“Country Concentration Limit” shall mean at any time, for any Approved Country
other than the United States or Canada, an amount equal to (a) the aggregate
Outstanding Balance of Eligible Accounts included in the Total Borrowing Base,
after giving effect to the limits on concentration specified in the definition
of Eligible Accounts (on an iterative basis), multiplied by (b) the applicable
percentage set forth below:
(i) if such Approved Country has Foreign Currency Long Term Debt Ratings of BBB-
or better from S&P and Ba1 or better from Moody’s, 15%; or
(ii) otherwise, 10%;
provided that the Collateral Agent may, in its Discretion and at any time, on
account of bona fide credit reasons, reduce (to a lesser amount or to zero) any
Country Concentration Limit, but such reduction shall not become effective until
three Business Days after written notice of such reduction is received by
AbitibiBowaterResolute.

-29-

--------------------------------------------------------------------------------

 

“Core Concentration Accounts” shall mean, collectively, the Core U.S.
Concentration Accounts and the Core Canadian Concentration Accounts.
“Core U.S. Concentration Account” shall have the meaning provided in Section
5.03(d).
“Credit Account” shall have the meaning provided in Section 5.03(gi).
“Credit Event” shall mean the making of any Loan or the issuance, amendment,
extension or renewal of any Letter of Credit.
“Debtors” shall have the meaning provided in the recitals to this Agreement.
“Debt Rating” for any Person, shall mean 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.
“Default” shall mean any event, act or condition which with notice or lapse of
time, or both, would constitute an Event of Default.
“Defaulted Account” shall mean an Account:
(i)    as to which any payment, or part thereof, remains unpaid for more than 90
days (60 days in the case of an International Account and 45 days in the case of
an Approved DIP Account) from the original due date for such payment;
(ii)    except in the case of an Approved DIP Account , as to which the Account
Debtor thereof or any other Person obligated thereon has taken any action, or
suffered any event to occur, of the type described in Section 11.01(g) or (h);
(iii)    which, consistent with AbitibiBowaterResolute’s customary receivables
credit and collection policies, would be written off AbitibiBowaterResolute’s or
the applicable Loan Party’s books as uncollectible; or
(iv)    for which AbitibiBowaterResolute or the applicable Loan Party has
established an Account Debtor specific reserve for non-payment.
“Defaulting Lender” shall mean, at any time of determination thereof, any Lender
that (i) has failed to fund within three Business Days any portion of the
Revolving Loans, participations in Letter of Credit Outstandings or
participations in Swingline Loans required to be funded by it hereunder
(including its obligations under Section 2.01(a) or (c), Section 2.04 or Section
3), (ii) has otherwise failed to pay over to the Administrative Agent or any
other Lender within three Business Days any other amount required to be paid by
it hereunder unless the subject of a good faith dispute, (iii) has become the
subject of a bankruptcy or insolvency proceeding or a takeover (in receivership
or similar proceeding) by a Governmental Authority or (iv) has notified
AbitibiBowaterResolute, any Issuing Lender, theany Swingline Lender and/or the
Administrative Agent of any of the foregoing (including any notification of its
intent not to comply with its funding

-30-

--------------------------------------------------------------------------------

 

obligations described in preceding clause (i)); provided that for purposes of
Section 2.01 with respect to Swingline Loans, Section 3 and any documentation
entered into pursuant to the Letter of Credit Back‑Stop Arrangements only, the
term “Defaulting Lender” shall also include (a) any Lender with an affiliate
that (x) either (A) Controls such Lender or (B) is under common Control with
such Lender and (y) has become the subject of a bankruptcy or insolvency
proceeding or a takeover by a Governmental Authority or does not meet a capital
adequacy or liquidity requirement applicable to such affiliate as determined by
the relevant Governmental Authority, and (b) any Lender that previously
constituted a “Defaulting Lender” under this Agreement, unless such Lender has
ceased to constitute a “Defaulting Lender” for a period of at least 90
consecutive days.
“Deposit Account” shall mean a demand, time, savings, passbook or like account
with a bank, savings and loan association, credit union or like organization.
“Designated Blocked Accounts” shall mean, collectively, the Canadian Designated
Blocked Accounts, the U.S. Designated Blocked Accounts and the English
Designated Blocked Accounts.
“Designated Obligations” shall have the meaning provided in Section 15.01(e).
“Dilution Factors” shall mean, without duplication, with respect to any period,
the aggregate amount of all bad debt write-downs, discounts, credits, returns,
rebates, and other dilutive items.
“Dilution Ratio” shall mean, at any date, as to the Accounts owned by any
Person, the amount (expressed as a percentage) that is the result of dividing
the U.S. Dollar aggregate amount (for this purpose, using the U.S. Dollar
Equivalent of amounts not denominated in U.S. Dollars) of (a) the applicable
Dilution Factors for the twelve most recently ended fiscal months with respect
to such Person’s Accounts, by (b) such Person’s total gross sales with respect
to their Accounts for the twelve most recently ended fiscal months.
“Dilution Reserve” shall mean, in the case of the Canadian Borrowing Base, the
Canadian Dilution Reserve, and in the case of the U.S. Borrowing Base, the U.S.
Dilution Reserve.
“DIP Facilities” shall mean (i) the Second Amended and Restated Receivables
Purchase Agreement dated as of June 16, 2009 among Abitibi-Consolidated U.S.
Funding Corp. (n/k/a/ Abitibi Consolidated Sales LLC), Citibank, as agent, and
the other parties thereto and (ii) the Senior Secured Superpriority Debtor in
Possession Credit Agreement dated as of April 21, 2009 as amended, supplemented
or otherwise modified from time to time among AbitibiBowater (n/k/a/ Resolute),
Bowater Incorporated (n/k/a/ Resolute US), Bowater Canadian Forest Products Inc.
(n/k/a/ Resolute Canada) and the other parties thereto; and (iii) the loan
agreement dated as of November 16, 2009 as amended, supplemented or otherwise
modified from time to time among AbitibiAbiBow Canada Inc. (n/k/a/ Resolute
Canada) and 3239432 Nova Scotia Company.
“Discharge of ABL Obligations” shall, prior to the Effective Date, have the
meaning assigned to such term in the form of Intercreditor Agreement attached as
Exhibit E hereto, and after the Effective Date, have the meaning assigned to
such term in the Intercreditor Agreement.

-31-

--------------------------------------------------------------------------------

 

“Disclosure Statement” shall have the meaning provided in the recitals to this
Agreement.
“Discretion” shall mean the Collateral Agent’s good faith exercise of its
reasonable (from the perspective of a secured asset-based lender) discretion in
a manner consistent with its customary credit policies and practices for
asset-based credit facilities.  It is understood and agreed that the foregoing
shall not limit the Collateral Agent’s reasonable discretion (from the
perspective of an asset-based lender) to establish Reserves in good faith to
reflect the status of, and ongoing developments with respect to, any Ontario
Pension Plan in an amount not to exceed the lesser of (i) the amount of the
funding deficiency of such Ontario Pension Plan and (ii) the amount of the
Canadian Borrowing Base attributable to Inventory located in the Province of
Ontario which is owned by any Canadian Loan Party participating in any such
Ontario Pension Plan (provided, that in the event that any such Canadian Loan
Party is “located” in the Province of Ontario for purposes of the PPSA, clause
(ii) shall also include the amount of the Canadian Borrowing Base attributable
to Accounts of  such Canadian Loan Party).
“Disqualified Equity Interests” shall mean that portion of any Equity Interest
which, by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable), or upon the happening of any
event, matures or is mandatorily redeemable (other than redeemable only for
Equity Interests of such Person that are not Disqualified Equity Interests),
pursuant to a sinking fund obligation or otherwise, or is redeemable at the
option of the holder thereof, on or prior to the date that is six months after
the Revolving Loan Maturity Date, provided, however, that any Equity Interest
that would not constitute a Disqualified Equity Interest but for provisions
thereof giving holders thereof the right to require such Person to purchase or
redeem such Equity Interest upon the occurrence of a “change of control” shall
not constitute a Disqualified Equity Interest if:
(1)    the “change of control” provisions applicable to such Equity Interest are
not more favorable to the holders of such Equity Interest than the terms
applicable to the Loans; and
(2)    any such requirement only becomes operative after compliance with such
terms applicable to the Loans.
“Documentation Agent” shall mean each of JPMCB and Wells Fargo Capital Finance,
LLC, each in its capacity as Documentation Agent in respect of the credit
facilities hereunder, and any successors thereto.
“Domestic” when used in reference to any item, shall mean that such item is
within the United States or any State or other political subdivision thereof
(including the District of Columbia).
“Domestic Subsidiary” of any Person shall mean any Subsidiary of such Person
organized under the laws of the United States or any State thereof (including
the District of Columbia).

-32-

--------------------------------------------------------------------------------

 

“Dominion Period” shall mean any period (i) commencing on the date after the
date on which (x) an Event of Default has occurred and is continuing and (except
in the case of an Event of Default under Section 11.01(g) or (h)) notice of
commencement of a Dominion Period has been delivered by the Administrative Agent
to the Loan Parties or (y) the Excess Availability is less than the Compliance
Amount for two consecutive Business Days and (ii) ending on the first date
thereafter on which (x) no Event of Default exists and (y) the Excess
Availability has been equal to or greater than the Compliance Amount for
forty-fivethirty consecutive days. The Administrative Agent may, if it so
elects, and shall, if so instructed by the Required Lenders, deliver the notice
contemplated by clause (i) above promptly upon becoming aware of the existence
of an Event of Default.
“Draft” shall mean, at any time, either a depository bill within the meaning of
the Depository Bills and Notes Act (Canada) as amended, or a bill of exchange,
within the meaning of the Bills of Exchange Act (Canada) as amended, drawn by a
Borrower in Canadian Dollars on a Canadian Facility Lender and bearing such
distinguishing letters and numbers as such Canadian Facility Lender may
determine, but which at such time has not been completed or accepted by such
Canadian Facility Lender.
“Drawing” shall have the meaning provided in Section 3.05(b).
“Drawing Date” shall mean the date on which a Draft is drawn.
“Drawing Fee” shall mean, in respect of a Draft drawn by a Borrower hereunder
and accepted by a B/A Lender or a Draft (or B/A Equivalent Note exchanged
therefor) purchased by a Non-B/A Lender, a fee calculated on the Face Amount of
such Draft (or B/A Equivalent Note exchanged therefor) at a rate per annum equal
to the Applicable Margin for Bankers’ Acceptance Loans on the Drawing Date of
such Draft (or B/A Equivalent Note exchanged therefor). Drawing Fees shall be
calculated on the basis of the term to maturity of the Draft (or B/A Equivalent
Note exchanged therefor) and a year of 365 days.
“Dutch Security Agreement” shall mean a Dutch law deed of non-possessory pledge
among the Loan Parties party thereto and the Collateral Agent, for the benefit
of the Secured Parties, in form and substance reasonably satisfactory to the
Collateral Agent.
“Effective Date” shall have the meaning provided in Section 13.10(b). The
“Effective Date” occurred on December 9, 2010.
“Effective Date Borrowing Base Certificate” shall have the meaning provided in
Section 6(t).
“Eligible Account” shall mean, at any time, an Account created by a Loan Party
in the ordinary course of its business, that arise out of its sale of goods
(other than promotional products not held for sale) or rendition of services:
(a)    which is subject to a first priority perfected Lien in favor of the
Collateral Agent for the benefit of the Secured Parties pursuant to the relevant
Security Documents;

-33-

--------------------------------------------------------------------------------

 

(b)    which is not subject to any Lien other than (i) a Lien in favor of the
Collateral Agent for the benefit of the Secured Parties pursuant to the relevant
Security Documents, (ii) a Lien (if any) permitted by Section 10.02 which is
junior in priority to the Lien in favor of the Collateral Agent for the benefit
of the Secured Parties pursuant to the relevant Security Documents, and (iii) an
unregistered Lien in respect of Canadian Priority Payables that are not yet due
and payable;
(c)    which (i) arises from the sale of goods or performance of services in the
ordinary course of business, (ii) is evidenced by an invoice or other
documentation reasonably satisfactory to the Collateral Agent which has been
sent to the Account Debtor (which may include electronic transmission) and (iii)
does not represent a progress billing, a sale on a bill-and-hold, guaranteed
sale, sale-and-return, sale on approval, consignment, cash-on-delivery or any
other repurchase or return basis;
(d)    in the case of any International Account, which is either (i) fully
insured (to the extent provided for therein) by the Insurance Policy; provided
that no International Account shall be an Eligible Account under this sub-clause
(i) following the occurrence of an Insurance Policy Event or (ii) secured by a
letter of credit acceptable to the Collateral Agent which has been assigned to
the Collateral Agent in a manner satisfactory to the Collateral Agent;
(e)    the Account Debtor of which is an Eligible Account Debtor and is not an
Affiliate of any Loan Party;
(f)    that is not owing from an Account Debtor that is an agency, department or
instrumentality of the United States, any state thereof, of the federal
government of Canada, or any province, territory or subdivision thereof or that
is an agency, department or instrumentality of any country other than the United
States or Canada or any state, territory, province or other political
subdivision of a country other than the United States or Canada unless the
applicable Loan Party shall have satisfied the requirements of the Assignment of
Claims Act of 1940 in the case of Accounts owing from any agency, department or
instrumentality of the United States, the Financial Administration Act (Canada)
in the case of Accounts owing from an agency, department or instrumentality of
the federal government of Canada or any province, territory or subdivision
thereof, and any similar state, federal or provincial legislation or any similar
foreign legislation and the Administrative Agent is satisfied as to the absence
of setoffs, counterclaims and other defenses on the part of such Account Debtor;
(g)    which is not a Defaulted Account; provided, that any International
Account that is a Defaulted Account but that is not otherwise ineligible for
inclusion as an “Eligible Account” as a result of the operation of any other
clause of the definition of “Eligible Account” shall be deemed to not be a
Defaulted Account for purposes of this clause (g) if and to the extent that such
International Account is fully insured by the Insurance Policy (for the
avoidance of doubt, after giving effect to any customer, country or other
limitations set forth in the Insurance Policy);
(h)    the Account Debtor of which is not the Account Debtor of any Defaulted
Accounts which in the aggregate constitute 50% or more of the aggregate
Outstanding Balance of all Accounts of such Account Debtor;

-34-

--------------------------------------------------------------------------------

 

(i)    which has been billed and, according to the Contract related thereto, is
required to be paid in full within (1) 90 days (or, solely in the case of
Accounts that are not International Accounts and are not subject to or included
or to be included as part of an accounts receivable factoring program (it being
understood that any Account that has been factored shall in no event constitute
an Eligible Account), if so agreed by the Collateral Agent in its Discretion,
120 days (such Accounts, “Long Dated Accounts”) of the original billing date
therefor or (2) if such Account is an International Account, 180 days of the
original billing date, provided that, in each case, the “maximum payment terms”
with respect to such Account set forth in the Insurance Policy permits such
payment terms; provided further, that (A) Long Dated Accounts that are Eligible
Canadian/English Accounts shall not account for more than 25% of the aggregate
Outstanding Balance of all Eligible Canadian/English Accounts and (B) Long Dated
Accounts that are Eligible U.S. Accounts shall not account for more than 25% of
the aggregate Outstanding Balance of all Eligible U.S. Accounts;
(j)    which is not subject to any deduction, offset, counterclaim, defense or
dispute (other than (i) sales discounts given in the ordinary course of the
applicable Loan Party’s business and reflected in the amount of such Account as
set forth in the invoice or other supporting material therefor or (ii) an offset
or counterclaim of a nature specifically addressed in the determination of the
applicable Borrowing Base); provided, however, that if an Account satisfies all
of the requirements of an Eligible Account other than this clause (j), such
Account shall be an Eligible Account, but only to the extent the amount of such
Account exceeds such deduction, offset, counterclaim, defense or dispute or
other conditions;
(k)    which is denominated and payable only in Dollars, Canadian Dollars, Euros
or Pounds Sterling;
(l)    which represents a bona fide, legal, valid and binding obligation of the
Account Debtor of such Account to pay the stated amount, as to which the
applicable Loan Party has satisfied and fully performed all obligations with
respect to such Account required to be fulfilled by it as a condition to payment
thereon by the applicable Account Debtor;
(m)    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)
in a manner that would affect the enforceability of such Account and with
respect to which none of the Loan Parties or the Account Debtor is in violation
of any such law, rule or regulation in any material respect in a manner that
would affect the enforceability of such Account;
(n)    which arises under a Contract which does not contain a legally
enforceable provision requiring the Account Debtor thereunder to consent to the
creation of a lien thereon (unless a written consent of such Account Debtor has
been obtained) or that otherwise restricts in a legally enforceable manner the
ability of the Agents or the Banks to exercise their rights under the Loan
Documents, including, without limitation, their right to review the related
invoice or the payment terms of such Contract;

-35-

--------------------------------------------------------------------------------

 

(o)    in the case of an Account originated by a Canadian Loan Party, the
Account Debtor of which has a billing address in Canada, (i) which was not
issued for an amount in excess of the fair market value of the merchandise,
insurance or services provided by the Canadian Loan Party to which the Account
relates and (ii) as to which no Contract or any other books, records or other
information relating to such Account contain any “personal information” as
defined in, or any other information regulated under (x) the Personal
Information Protection and Electronic Documents Act (Canada), or (y) any other
similar statutes of Canada or any province or territory thereof in force from
time to time which restrict, control, regulate or otherwise govern the
collection, holding, use or communication of information;
(p)    which, when aggregated with all other Accounts of the same Account
Debtor, is not in excess of such Account Debtor’s Concentration Limit (but the
portion of the Accounts not in excess of such Concentration Limit shall not be
deemed ineligible due to this clause (p));
(q)    which, when aggregated with all other Accounts of Account Debtors with a
billing address in any Approved Country other than Canada or the United States,
is not in excess of the Country Concentration Limit for such Approved Country
(but the portion of the Accounts not in excess of such Country Concentration
Limit shall not be deemed ineligible due to this clause (q)); and
(s)    in relation to which, if the security interest in such Account has been
granted pursuant to the U.K. Security Documents, the relevant Guarantor has
informed the relevant Account Debtor in writing that it has assigned by way of
security to the Collateral Agent certain rights in respect of its assets,
including those represented by the Eligible Accounts, and has requested such
Account Debtor to acknowledge receipt of such notice; and
(rt)    which is not otherwise unacceptable to the Collateral Agent in its
Discretion.
“Eligible Account Debtor” shall mean an Account Debtor which:
(i)    has a billing address in an Approved Country;
(ii)    is not a Person with respect to which the United States, Canada or any
other Approved Country shall have imposed sanctions;
(iii)    is not in violation of any Anti-Terrorism Laws;
(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 a
Lender or a Loan Party 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

-36-

--------------------------------------------------------------------------------

 

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 Canadian Accounts” shall mean the Eligible Accounts owned by the
Canadian Loan Parties.
“Eligible Canadian/English Accounts” shall mean Eligible Canadian Accounts and
Eligbile English Accounts.
“Eligible Canadian Inventory” shall mean the Eligible Inventory owned by the
Canadian Loan Parties.
“Eligible Canadian/English Inventory” shall mean Eligible Canadian Inventory and
Eligible English Inventory.
“Eligible International Accounts” shall mean any Eligible Account that is an
International Account.
“Eligible Inventory” means, at any time, the Inventory of the Loan Parties, but
excluding any Inventory:
(a)    which is not subject to a first priority perfected Lien in favor of the
Collateral Agent for the benefit of the Secured Parties pursuant to the relevant
Security Documents;
(b)    which is subject to any Lien other than (i) a Lien in favor of the
Collateral Agent for the benefit of the Secured Parties pursuant to the relevant
Security Documents, (ii) a Lien (if any) permitted by Section 10.02 which is
junior in priority to the Lien in favor of the Collateral Agent for the benefit
of the Secured Parties pursuant to the relevant Security Documents (unless as to
any particular Lien, the Collateral Agent has established a Reserve in lieu of
obtaining an agreement subordinating such Lien of the Collateral Agent), and
(iii) an unregistered Lien in respect of Canadian Priority Payables that are not
yet due and payable;
(c)    which is determined, based on the Loan Parties’ historical practices and
procedures, in each case, which are reasonably acceptable to the Collateral
Agent, slow moving, obsolete, unmerchantable, defective, used, unfit for sale,
or unacceptable due to age, type, category or quantity;
(d)    with respect to which any covenant, representation, or warranty contained
in this Agreement or the Security Documents has been breached or is not true in
any material respect and which does not conform in any material respect to all
applicable standards imposed by any Governmental Authority that would affect the
ability of the Loan Parties to sell such Inventory;

-37-

--------------------------------------------------------------------------------

 

(e)    in which any Person other than such Loan Party or any other Loan Party
shall (i) have any direct or indirect ownership, interest or title to such
Inventory, other than in respect of the interest of any carrier of Inventory in
transit or (ii) be indicated on any purchase order or invoice with respect to
such Inventory as having or purporting to have an interest therein;
(f)    which is not located in the United States, Canada, the United
KingdomU.K., the Netherlands, Northern Ireland or such other jurisdiction as may
be acceptable to the Collateral Agent in its Discretion, or is in transit (other
than between locations in the United States, Canada, the U.K. or such other
jurisdiction as may be acceptable to the Collateral Agent in its Discretion,
controlled by Loan Parties, to the extent included in current perpetual
inventory reports of any Loan Party);
(g)    which (i) is located in any location leased by a Loan Party unless (A)
the lessor has delivered to the Collateral Agent a Collateral Access Agreement
or (B) a Rent Reserve with respect to such facility has been established by the
Collateral Agent in its Discretion; (ii) is located at an owned location subject
to a mortgage or other security interest in favor of a creditor other than the
Collateral Agent or, to the Notes Agentextent permitted by Section
10.02(a)(iii)(y), the holders of Specified Secured Indebtedness (or the
representative thereof) or is located in any third party warehouse or other
storage facility or is in the possession of a bailee unless (A) such mortgagee,
warehouseman or bailee has delivered to the Collateral Agent a Collateral Access
Agreement and such other documentation as the Collateral Agent may require in
its Discretion or (B) a Rent Reserve or other Reserve has been established by
the Collateral Agent in its Discretion; or (iii) is located in any location
where the aggregate Eligible Inventory is less than $100,000, but only to the
extent that the Eligible Inventory at such locations in the aggregate exceeds
$1,000,000;
(h)    which is being processed offsite at a third party location or outside
processor, or is in-transit to said third party location or outside processor,
unless an appropriate Reserve has been established with respect to such
Inventory;
(i)    which is a discontinued product;
(j)    which is the subject of a consignment by such Loan Party as consignor;
(k)    which contains or bears any intellectual property rights licensed to such
Loan Party unless the Collateral Agent is satisfied that it may sell or
otherwise dispose of such Inventory without (i) infringing the rights of such
licensor, (ii) violating any contract with such licensor, or (iii) incurring any
liability with respect to payment of royalties other than royalties incurred
pursuant to sale of such Inventory under the current licensing agreement;
(l)    which is not reflected in a current inventory report of such Loan Party
(unless such Inventory is reflected in a report to the Collateral Agent as “in
transit” Inventory);
(m)    for which reclamation or revendication rights have been asserted by the
seller;
(n)    which consists of goods that are not in salable condition;
(o)    which is Commingled Inventory;

-38-

--------------------------------------------------------------------------------

 

(p)    which is not covered by casualty insurance as and to the extent required
by the terms of this Agreement;
(q)    which consists of Hazardous Materials or goods (other than fuels) that
can be transported or sold only with licenses that are not readily available;
(r)    in which any portion of the cost of such Inventory is attributable to
intercompany profit between any Loan Party and any of its Affiliates (but only
to the extent of such portion);
(s)    which could be subject to repossession pursuant to Section 81.1 or
Section 81.2 of the Bankruptcy and Insolvency Act (Canada) or similar provisions
of applicable law except to the extent the applicable vendor has entered into an
agreement with the Collateral Agent, in form and substance reasonably
satisfactory to the Collateral Agent, waiving its right to repossession; or
(t)    which is otherwise unacceptable to the Collateral Agent in its
Discretion.

“Eligible Transferee” shall mean and include a commercial bank, an insurance
company, a finance company, a financial institution, any fund that invests in
loans or any other “accredited investor” (as defined in Regulation D of the
Securities Act); provided that an Eligible Transferee shall exclude individuals
and AbitibiBowaterResolute and its Subsidiaries and Affiliates.
“Eligible English Accounts” shall mean the Eligible Accounts owned by the
English Loan Parties.
“Eligible English Inventory” shall mean the Eligible Inventory owned by the
English Loan Parties.
“Eligible U.S. Accounts” shall mean the Eligible Accounts owned by the U.S. Loan
Parties.
“Eligible U.S. Inventory” shall mean the Eligible Inventory owned by the U.S.
Loan Parties.
“End Date” shall mean, in respect of any Start Date, the last day of the
calendar month in which such Start Date occurred.
“English Collection Account” shall mean each account established at an English
Collection Bank subject to a Control Agreement into which funds shall be
transferred as provided in Section 5.03(d).
“English Collection Banks” shall have the meaning provided in Section 5.03(d).]
“English Designated Blocked Account” shall have the meaning provided in Section
5.04(c).

-39-

--------------------------------------------------------------------------------

 

“English Guarantor” shall mean each English Subsidiary of Resolute that becomes
a party to the English Subsidiary Guarantee Agreement, unless and until such
time as such English Guarantor is released from all of its obligations under the
English Subsidiary Guaranteee Agreement and the Security Documents to which it
is a party in accordance with the terms and provisions thereof.
“English Loan Parties” shall mean the English Guarantors.
“English Secured Obligations” shall mean and include (a) all Loan Document
Obligations owing by any English Loan Party, and (b) all amounts paid (or
incurred) by any Indemnified Person as to which such Indemnified Person has the
right to reimbursement by an English Loan Party under Section 13.01 or any
indemnity contained in any U.K. Security Document, in each case excluding the
Excluded Swap Obligations.
“English Security Agreement” shall mean the English law security agreement dated
27 July 2012 among the Loan Parties party thereto and the Collateral Agent, for
the benefit of the Secured Parties.
“English Subsidiary” of any Person shall mean any Subsidiary of such Person
incorporated or organized under the laws of England and Wales.
“English SecuritySubsidiary Guarantee Agreement” shall mean anthe English
Subsidiary Guarantee Agreement, governed by New York law deed of charge, among
the Loan PartiesEnglish Subsidiaries of Resolute party thereto and the
Collateral Agent, guaranteeing the Canadian Loan Party Obligations for the
benefit of the Secured Parties, in form and substanceas may be entered into
following the Sixth Amendment Effective Date, in such form reasonably
satisfactory to the Collateral Agent.
“Environmental Laws” shall mean all current and future federal, state,
provincial, local, supranational and foreign laws, rules or regulations, codes,
ordinances, orders, decrees, judgments or injunctions issued, promulgated,
approved or entered thereunder or other requirements of Governmental Authorities
or the common law, relating to health, safety (including, but not limited to,
the health and safety of workers), or pollution or protection of the
environment, natural resources, the climate or threatened or endangered species,
including laws relating to emissions, discharges, Releases or threatened
releases of, or exposure to, pollutants, contaminants, chemicals or industrial,
toxic or hazardous substances, or wastes into the environment (including ambient
air, surface water, groundwater, land surface or subsurface strata) or otherwise
relating to the manufacture, processing, distribution, use, generation,
treatment, storage, disposal, transport or handling of pollutants, contaminants,
chemicals, or industrial, toxic or hazardous substances, or wastes, or
underground storage tanks and emissions or releases therefrom.
“Equity Interests” shall mean the shares of capital stock, partnership
interests, membership interests, beneficial interests or other ownership
interests, whether voting or nonvoting, in, or interests in the income or
profits of, a Person, and any warrants, options or other rights entitling the
holder thereof to purchase or acquire any of the foregoing.

-40-

--------------------------------------------------------------------------------

 

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, or any
successor statute, as the same may be amended from time to time, and the
regulations promulgated and rulings issued thereunder.
“ERISA Affiliate” shall mean any trade or business (whether or not incorporated)
that, together with any Borrower, is treated as a single employer under
Section 414(b) or 414(c) of the Code or, solely for purposes of Section 302 of
ERISA and Section 412 of the Code, is treated as a single employer under Section
414(m) and (o) of the Code.
“ERISA Event” shall mean (a) any “reportable event”, as defined in Section 4043
of ERISA with respect to a Benefit Plan (other than an event for which the
30‑day notice period is waived); (b) a failure by any Benefit Plan to satisfy
the minimum funding standard within the meaning of Section 412 or Section 413 of
the Code or Section 302 or Section 303 of ERISA, applicable to such Benefit
Plan, in each case whether or not waived; (c) the filing pursuant to
Section 412(c) of the Code or Section 302(c) of ERISA, of an application for a
waiver of the minimum funding standard with respect to any Benefit Plan, (d) a
determination that any Benefit Plan is, or is expected to be, in “at-risk”
status (as defined in Section 303(i)(4) of ERISA or Section 430(i)(4) of the
Code); (e) the incurrence by any Loan Party or any of their respective ERISA
Affiliates of any liability under Title IV of ERISA with respect to the
termination of any Benefit Plan; (f) the receipt by any Loan Party or any of
their respective ERISA Affiliates from the PBGC or a plan administrator of any
notice relating to an intention to terminate any Benefit Plan or Benefit Plans
or to appoint a trustee to administer any Benefit Plan; (g) the incurrence by
any Loan Party or any of their respective ERISA Affiliates of any liability with
respect to the withdrawal or partial withdrawal from any Benefit Plan or
Multiemployer Plan; (h) the receipt by any Loan Party or any of their respective
ERISA Affiliates of any notice, or the receipt by any Multiemployer Plan from
any Loan Party or any their respective ERISA Affiliates of any notice,
concerning the imposition of Withdrawal Liability or any notice that a
Multiemployer Plan is, or is expected to be, insolvent or in reorganization,
within the meaning of Title IV of ERISA or in endangered or critical status,
within the meaning of Section 432 of the Code or Section 305 of ERISA; (i) the
occurrence of a non-exempt “prohibited transaction” (as defined in Section 4975
of the Code or Section 406 of ERISA) in connection with a Benefit Plan with
respect to which any Loan Party or any of their respective ERISA Affiliates is a
“disqualified person” (as defined in Section 4975 of the Code) or a “party in
interest” (as defined in Section 406 of ERISA) or could otherwise be liable; (j)
the failure to make by its due date a required installment under Section 430(j)
of the Code or Section 303(j) of ERISA with respect to any Benefit Plan or the
failure to make a required contribution to a Multiemployer Plan or (k) any other
event or condition with respect to a Plan or Multiemployer Plan that could
result in liability of any Loan Party or any of their respective ERISA
Affiliates (other than liabilities for funding obligations and claims for
benefits in the ordinary course and pursuant to the terms of the Benefit Plan or
Multiemployer Plan).
“Escrow Securities” shall have the meaning specified in Amendment No. 4.
“Escrow Indebtedness” shall mean any Indebtedness permitted pursuant to Section
10.01, the proceeds of which are deposited in an Escrow Indebtedness Escrow
Account.

-41-

--------------------------------------------------------------------------------

 

“Escrow SecuritiesIndebtedness Escrow Account” shall have the meaning specified
in Amendment No. 4.mean an escrow account subject to a customary escrow
agreement providing for the release of the proceeds of the applicable Escrow
Indebtedness upon the occurrence of a specified contingency and that does not
hold any ABL Priority Collateral (such escrow agreement, the “Escrow
Indebtedness Escrow Agreement”).
“Escrow SecuritiesIndebtedness Escrow Agreement” shall have the meaning
specified in Amendment No. 4provided in the definition of “Escrow Indebtedness
Escrow Account”.
“Euro” means the single currency of the Participating Member States.
“Eurodollar Loan” shall mean each U.S. Dollar Denominated Loan designated as
such by the Borrower of such U.S. Dollar Denominated Loan at the time of the
incurrence thereof or conversion thereto bearing interest at a rate determined
by reference to the Eurodollar Rate.
“Eurodollar Rate” shall mean (a) the rate appearing on Reuters Screen Libor 01
(or on any successor or substitute page of such screen, or any successor to or
substitute for such screen, providing rate quotations comparable to those
currently provided on such page of such screen, as determined by the
Administrative Agent from time to time for purposes of providing quotations of
interest rates applicable to dollar deposits in the London interbank market) at
approximately 11:00 a.m., London time, two Business Days prior to the applicable
Interest Determination Date, as the rate for dollar deposits with a maturity
comparable to such Interest Period, divided by (b) a percentage equal to 100%
minus the then stated maximum rate of all reserve requirements (including,
without limitation, any marginal, emergency, supplemental, special or other
reserves required by applicable law) applicable to any member bank of the
Federal Reserve System in respect of Eurocurrency funding or liabilities as
defined in Regulation D of the Board (or any successor category of liabilities
under Regulation D).
“European Area” shall mean the United KingdomU.K., Belgium, Ireland and Germany.
“European Security Documents” shall mean the Dutch Security Agreement, the
English Security Agreement and the Northern IrishU.K. Security
AgreementDocuments.
“Event of Default” shall have the meaning provided in Section 11.01.
“Excess Availability” shall mean, as of any date of determination, an amount
equal to (a) the lesser of (i) the Total Commitment at such time and (ii) the
Total Borrowing Base at such time minus (b) the Aggregate Exposure at such time.
“Excluded Accounts” shall mean (i) any disbursement deposit account the funds in
which are used solely (other than to a de minimis extent) for the payment of
salaries and wages, employee benefits, workers’ compensation and similar
expenses or that has an ending daily balance of zero; (ii) trust accounts for
the benefit of directors, officers or employees; (iii) the escrow account
established under the Senior Secured Notes Documents and the Escrow
Securitiesany Escrow Indebtedness Escrow Account to the extent that such account
(x) is subject to thean Escrow

-42-

--------------------------------------------------------------------------------

 

SecuritiesIndebtedness Escrow Agreement and (y) holds only (A) the net proceeds
of the Escrow SecuritiesIndebtedness, (B) funds in an amount sufficient to pay
accrued interest on thesuch Escrow SecuritiesIndebtedness and any redemption
premium required to be paid thereon in connection with a mandatory redemption
thereof and any fees and expenses required to be paid in accordance with thesuch
Escrow SecuritiesIndebtedness Escrow Agreement and the applicable documentation
relating to thesuch Escrow SecuritiesIndebtedness and (C) any earnings on the
amounts described in the preceding clauses (A) and (B) and this clause (C), in
each case in accordance with the applicable Escrow SecuritiesIndebtedness Escrow
Agreement and the applicable documentation relating to thesuch Escrow
SecuritiesIndebtedness; (iv) any account held by a Subsidiary that is not a Loan
Party; and (v) any Specified Secured Indebtedness Collateral Account; and (vi)
deposit accounts, securities accounts and commodities accounts, the aggregate
average daily balance in which, together with the aggregate average daily
balance in all Specified Collection Accounts (in each case determined for the
most recently completed calendar month) does not at any time exceed (x)
$20,000,00050,000,000 in the aggregate for all such accounts if Excess
Availability is greater than $150,000,000 or (y) $10,000,00020,000,000 in the
aggregate for all such accounts if Excess Availability is less than or equal to
$150,000,0000, provided, however, that, notwithstanding the above, an account
shall not be an Excluded Account if (x) a Control Agreement over such account is
entered into for the benefit of the Notes Agent or (y) such account is a Core
Concentration Account or, a Collection Account or a Designated Blocked Account.
“Excluded Subsidiaries” shall mean each QSPE.
“Excluded Swap Obligation” means, with respect to any Guarantor, any Swap
Obligation if, and to the extent that, all or a portion of the Guarantee of such
Guarantor of, or the grant by such Guarantor of a security interest to secure,
such Swap Obligation (or any Guarantee thereof) (after giving effect to any
keepwell, support or other agreement provided by Resolute or any of its
Subsidiaries with respect to the obligations of such Guarantor) is or becomes
illegal under the Commodity Exchange Act or any rule, regulation or order of the
Commodity Futures Trading Commission (or the application or official
interpretation of any thereof) by virtue of such Guarantor’s failure for any
reason to constitute an “eligible contract participant” as defined in the
Commodity Exchange Act and the regulations thereunder at the time the Guarantee
of such Guarantor or the grant of such security interest becomes effective with
respect to such Swap Obligation. If a Swap Obligation arises under a master
agreement governing more than one swap, such exclusion shall apply only to the
portion of such Swap Obligation that is attributable to swaps for which such
guaranty or security interest is or becomes illegal.

“Executive Order” shall have the meaning provided in Section 8.24(a).
“Existing Letters of Credit” shall have the meaning provided in
Section 3.01(a)(B).
“Expenses” shall mean all present and future reasonable and documented
out-of-pocket expenses incurred by or on behalf of the Administrative Agent or
the Collateral Agent in connection with this Agreement, any other Loan Document
or otherwise in its capacity as the Administrative Agent under this Agreement or
the Collateral Agent under any Security Document under this Agreement, whether
incurred heretofore or hereafter, which expenses shall include, without
limitation, the expenses set forth in Section 13.01.

-43-

--------------------------------------------------------------------------------

 

“Face Amount” shall mean, in respect of a Draft, Bankers’ Acceptance or B/A
Equivalent Note, as the case may be, the amount payable to the holder thereof on
its maturity. The Face Amount of any Bankers’ Acceptance Loan shall be equal to
the aggregate Face Amounts of the underlying Bankers’ Acceptances, B/A
Equivalent Notes or Drafts, as the case may be.
“Facility” shall mean the Canadian Facility or the U.S. Facility.
“Facing Fee” shall have the meaning provided in Section 4.01(c).
“Fairfax” shall mean Fairfax Financial Holdings Limited, its Subsidiaries and
Affiliates, and funds or partnerships managed by it, its Subsidiaries or its
Affiliates.
“FATCA” shall mean Sections 1471 through 1474 of the Code, as in effect on the
date hereof, and any applicable Treasury regulation promulgated thereunder or
published administrative guidance implementing such Sections.
“Federal Funds Rate” shall mean, for any period, a fluctuating interest rate
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 the Administrative Agent from three Federal Funds brokers of
recognized standing selected by the Administrative Agent.
“Fees” shall mean all amounts payable pursuant to or referred to in Section
4.01.
“Finance Charge” shall mean, with respect to any Account, any interest, finance
charges or other similar charges payable at any time by an Account Debtor in
connection with such Account not having been paid on the due date thereof.
“Financial Officer” of any Person shall mean the chief executive officer, the
chief operating officer, the chief financial officer, principal accounting
officer, vice president-finance, treasurer, controller or assistant treasurer of
such Person.
“Foreign” when used in reference to any item, shall mean that such item is not
Domestic.
“Foreign Currency Adjustment” shall mean, as of any date of determination, (i)
with respect to the Canadian Borrowing Base or the U.S. Borrowing Base, as the
case may be, an amount equal to the product of (A) the eligible amount of the
Eligible Accounts (following the application of the advance ratios thereto)
included therein that are denominated in Euros or Pounds Sterling as of such
date multiplied by (B) the product of (x) the average monthly decline (in
percentage terms) of the Euro or Pound Sterling, as the case may be, versus the
Dollar during the most recent twelve months multiplied by (y) a stress factor of
1.25; and (ii) solely with respect to the Canadian Borrowing Base, an amount
equal to the product of (A) the Net Canadian Dollar Exposure as of such date

-44-

--------------------------------------------------------------------------------

 

multiplied by (B) the product of (x) the average monthly decline (in percentage
terms), if any, of the Canadian Dollar versus the Dollar during the most recent
twelve months multiplied by (y) a stress factor of 1.25. For purposes of the
foregoing, the “Net Canadian Dollar Exposure” at any date is the excess of (i)
the sum of (A) the eligible amount of the Eligible Canadian Accounts (following
the application of the advance ratios thereto) that are denominated in Canadian
Dollars at such date plus (B) the eligible amount of the Eligible Canadian
Inventory (following the application of the advance ratios thereto) at such date
over (ii) the Aggregate Canadian Facility Exposure which is denominated in
Canadian Dollars at such date.
“Foreign Currency Long-Term Debt Rating” for any Approved Country means the
rating by S&P or Moody’s of such Approved Country’s public, long-term foreign
currency debt.
“Foreign Lender” shall mean any Lender that is organized under the laws of a
jurisdiction other than in which the applicable Borrower is resident for tax
purposes.
“Foreign Pledge Agreement” shall mean a pledge or charge agreement granting a
Lien on Equity Interests in a Foreign Subsidiary of AbitibiBowaterResolute to
secure any Secured Obligations, governed by the law of the jurisdiction of
organization of such Foreign Subsidiary and in form and substance reasonably
satisfactory to the Administrative Agent.
“Foreign Subsidiary” shall mean, as to any Person, any Subsidiary of such Person
that is not a Domestic Subsidiary of such Person.
“Fronting Sublimit” shall mean, (i) with respect to Citibank, as Issuing Lender,
$50,000,000 (or such greater amount as Citibank may approve in its sole
discretion), (ii) with respect to Barclays, as Issuing Lender, $50,000,000 (or
such greater amount as Barclays may approve in its sole discretion), (iii) with
respect to JPMCB, as Issuing Lender, $50,000,000 (or such greater amount as
JPMCB may approve in its sole discretion), (iv) with respect to Wells Fargo, as
Issuing Lender, $50,000,000 (or such greater amount as Wells Fargo may approve
in its sole discretion) and (v) with respect to any other Issuing Lender, such
amount as agreed between such Issuing Lender and AbitibiBowaterResolute.
“GAAP” shall mean, subject to Section 1.05, generally accepted accounting
principles in the United States, applied on a consistent basis.
“Government Pension Agreements” shall mean, collectively, the Ontario Pension
Agreement and the Quebec Pension Agreement.
“Governmental Authority” shall mean any federal, state, provincial, municipal,
regional, local or foreign court or governmental agency, authority,
instrumentality or regulatory body.
“GST” shall mean all goods and services tax and all harmonized sales tax payable
under Part IX of the Excise Tax Act (Canada), as amended, and all QST.

-45-

--------------------------------------------------------------------------------

 

“Guarantee” of or by any Person shall mean any obligation, contingent or
otherwise (whether or not denominated as a guarantee), of such Person
guaranteeing any Indebtedness of any other Person (the “primary obligor”) in any
manner, whether directly or indirectly, and including any obligation of such
Person, direct or indirect, (a) to purchase or pay (or advance or supply funds
for the purchase or payment of) such Indebtedness or to purchase (or to advance
or supply funds for the purchase of) any security for the payment of such
Indebtedness, (b) to purchase property, securities or services for the purpose
of assuring the owner of such Indebtedness of the payment of such Indebtedness
or (c) to maintain working capital, equity capital or other financial statement
condition or liquidity of the primary obligor so as to enable the primary
obligor to pay such Indebtedness; provided, however, that the term “Guarantee”
shall not include endorsements for collection or deposit in the ordinary course
of business. The amount of any Guarantee at any time shall be deemed to be an
amount equal to the lesser at such time of (x) the stated or determinable amount
of the primary obligation in respect of which such Guarantee is made or (y) the
maximum amount for which such Person may be liable pursuant to the terms of the
instrument embodying such Guarantee (or, if not stated or determinable, the
maximum reasonably anticipated liability in respect thereof). “Guaranteed” shall
have a meaning correlative thereto.
“Guarantee and Collateral Agreement” shall mean the Guarantee and Collateral
Agreement, among AbitibiBowaterResolute, the U.S. Borrowers, the Domestic
Subsidiaries of AbitibiBowaterResolute party thereto and the Collateral Agent,
for the benefit of the Secured Parties, substantially in the form of Exhibit L
hereto with such modifications thereto as the Collateral Agent may agree.
“Guarantors” shall mean and include each U.S. Guarantor and, each Canadian
Guarantor and each English Guarantor.
“Hazardous Materials” shall have the meaning provided in Section 8.15(a)(iv).
“Hedging Agreement” shall mean any agreement with respect to any swap, forward,
future or derivative transaction or option or similar agreement involving, or
settled by reference to, one or more rates, currencies, commodities, equity or
debt instruments or securities, or economic, financial or pricing indices or
measures of economic, financial or pricing risk or value or any similar
transaction or any combination of these transactions; provided that no phantom
stock or similar plan providing for payments only on account of services
provided by current or former directors, officers, employees or consultants of
AbitibiBowaterResolute or its Subsidiaries shall be a Hedging Agreement.
“Hedging Creditors” shall mean, collectively, each Lender and/or any affiliate
thereof that has entered into one or more Secured Hedging Agreements, even if
the respective Lender subsequently ceases to be a Lender under this Agreement
for any reason, together with such Lender’s or such affiliate’s successors and
assigns, if any.
“Hedging Obligations” shall mean and include, as to any Loan Party, all
obligations, liabilities and indebtedness owing by such Loan Party to the
Hedging Creditors, whether now existing or hereafter incurred under, arising out
of or in connection with any Secured Hedging Agreement, whether such Secured
Hedging Agreement is now in existence or hereinafter arising

-46-

--------------------------------------------------------------------------------

 

(including, without limitation, all obligations, liabilities and indebtedness of
each Loan Party in its capacity as a Guarantor under the Guarantee and
Collateral Agreement or, the Canadian Guarantee and Collateral Agreement or the
English Subsidiary Guarantee Agreement, as the case may be, to which it is a
party, in respect of the Secured Hedging Agreements).
“Highest Adjustable Applicable Margins” shall have the meaning provided in the
definition of Applicable Margin.
“Historical Excess Availability” shall mean (a) for the purposes of the
definition of Applicable Margin, an amount equal to (x) the sum of each day’s
Excess Availability during the most recently ended calendar month divided by (y)
the number of days in such month and (b) in the case of the definition of
Payment Conditions, with respect to any action or proposed action, an amount
equal to (i) the sum of each day’s Excess Availability during the 18090
consecutive day period immediately preceding such action or proposed action
divided by (ii) 18090. In the case of clause (b) only, Excess Availability shall
be determined on a pro forma basis as if such action or proposed action and any
Loans incurred (or to be incurred), Letters of Credit issued (or to be issued)
or Indebtedness repaid (or to be repaid) in connection with such action or
proposed action had occurred or been incurred, issued or repaid, as the case may
be (and, if the Ontario Pension Regulations Condition or the Quebec Pension
Regulations Condition has been satisfied, as if such condition had been
satisfied), on the first day of the 18090-day period immediately preceding such
action or proposed action.
“Historical Unutilized Commitment Percentage” shall mean, on any date of
determination, a percentage equal to (i) the sum of each day’s Total Unutilized
Commitment during the most recently ended calendar month divided by (ii) the sum
of each day’s Total Commitment in such calendar month.
“Incremental Commitment” shall mean, for any Lender, any Commitment provided by
such Lender after the Effective Date in an Incremental Commitment Agreement
delivered pursuant to Section 2.14; it being understood, however, that on each
date upon which an Incremental Commitment of any Lender becomes effective, such
Incremental Commitment of such Lender shall be added to (and thereafter become a
part of) the applicable Commitment of such Lender for all purposes of this
Agreement as contemplated by Section 2.14. Incremental Commitments may be either
U.S. Facility Commitments (“U.S. Facility Incremental Commitments”) or Canadian
Facility Commitments (“Canadian Facility Incremental Commitments”).
“Incremental Commitment Agreement” shall mean each Incremental Commitment
Agreement in substantially the form of Exhibit J (appropriately completed, and
with such modifications as may be reasonably satisfactory to the Administrative
Agent) executed and delivered in accordance with Section 2.14.
“Incremental Commitment Date” shall mean each date upon which an Incremental
Commitment under an Incremental Commitment Agreement becomes effective as
provided in Section 2.14(b).

-47-

--------------------------------------------------------------------------------

 

“Incremental Commitment Requirements” shall mean, with respect to any provision
of an Incremental Commitment on a given Incremental Commitment Date, the
satisfaction of each of the following conditions on the Incremental Commitment
Date of the respective Incremental Commitment Agreement: (i) no Default or Event
of Default exists or would exist after giving effect thereto; (ii) all of the
representations and warranties contained in the Loan Documents shall be true and
correct in all material respects at such time (unless stated to relate to a
specific earlier date, in which case such representations and warranties shall
have been true and correct in all material respects as of such earlier date);
(iii) the delivery by AbitibiBowaterResolute to the Administrative Agent of an
acknowledgment, in form and substance reasonably satisfactory to the
Administrative Agent and executed by each Loan Party, acknowledging that such
Incremental Commitment and all Revolving Loans subsequently incurred, and
Letters of Credit issued, as applicable, pursuant to such Incremental Commitment
shall constitute Obligations under the Loan Documents and secured on a pari
passu basis with the Obligations under the Security Documents; (iv) the delivery
by AbitibiBowaterResolute to the Administrative Agent of an opinion, in form and
substance reasonably satisfactory to the Administrative Agent, from counsel to
AbitibiBowaterResolute reasonably satisfactory to the Administrative Agent and
dated such date, covering such customary matters incident to the transactions
contemplated thereby as the Administrative Agent may reasonably request; (v) the
delivery by each Loan Party to the Administrative Agent of such other officers’
certificates, board of director (or equivalent governing body) resolutions and
evidence of good standing (to the extent available under applicable law) as the
Administrative Agent shall reasonably request; (vi) the incurrence of Revolving
Loans in an aggregate principal amount equal to the Total Commitment (including
such Incremental Commitment then being obtained) shall be permitted at such time
under the Intercreditor Agreement, the Senior Secured Notes Documents and any
other indenture, loan agreement or other agreement with respect to Material
Indebtedness; and (vii) AbitibiBowaterResolute shall have delivered a
certificate executed by a Responsible Officer of AbitibiBowaterResolute,
certifying to the best of such officer’s knowledge, compliance with the
requirements of preceding clauses (i), (ii) and (vi) and containing the
calculations, if any, (in reasonable detail) required by preceding clause (vi).
“Incremental Lender” shall have the meaning provided in Section 2.14(b).
“Incremental Security Documents” shall have the meaning provided in
Section 2.14(b).
“Incurrence Test” shall have the meaning provided in Section 10.01.
“Indebtedness” of any Person shall mean, without duplication, (a) all
obligations of such Person for borrowed money, (b) all obligations of such
Person evidenced by bonds, debentures, notes or similar instruments, (c) all
obligations of such Person under conditional sale or other title retention
agreements relating to assets purchased by such Person, (d) all obligations of
such Person issued or assumed as the deferred purchase price of property or
services (excluding (i) trade accounts payable and accrued expenses arising in
the ordinary course of business and (ii) any contingent earnout or other
contingent payment obligation incurred in connection with an acquisition
permitted hereunder (but only to the extent that such obligation has not become
fixed)), (e) all Indebtedness of others secured by (or for which the holder of
such Indebtedness has an existing right, contingent

-48-

--------------------------------------------------------------------------------

 

or otherwise, to be secured by) any Lien on property owned or acquired by such
Person, whether or not the obligations secured thereby have been assumed by such
Person (and in the event such Person has not assumed or otherwise become liable
for payment of such obligation, the amount of Indebtedness under this clause (e)
shall be the lesser of the amount of such obligation and the fair market value
of such property), (f) all Guarantees by such Person, (g) all Capital Lease
Obligations of such Person, (h) all net obligations of such Person in respect of
Hedging Agreements (such net obligations to be equal at any time to the
termination value of such Hedging Agreements or other arrangements that would be
payable by or to such Person at such time), (i) all obligations of such Person
as an account party to reimburse any bank or any other Person in respect of
letters of credit and (j) all Disqualified Equity Interests issued by such
Person or preferred stock issued by Subsidiary of such Person with the amount of
Indebtedness represented by such Disqualified Equity Interests or preferred
stock being equal to the greater of its voluntary or involuntary liquidation
preference and its maximum fixed repurchase price, but excluding accrued
dividends, if any. For purposes hereof, the “maximum fixed repurchase price” of
any Disqualified Equity Interest or preferred stock which does not have a fixed
repurchase price shall be calculated in accordance with the terms of such
Disqualified Equity Interest or preferred stock as if such Disqualified Equity
Interest or preferred stock were purchased on any date on which Indebtedness
shall be required to be determined pursuant to the this Agreement, and if such
price is based upon, or measured by, the fair market value of such Disqualified
Equity Interest or preferred stock, such fair market value shall be determined
reasonably and in good faith by the board of directors or comparable body of the
issuer of such Disqualified Equity Interest or preferred stock. The Indebtedness
of any Person shall include the Indebtedness of any partnership in which such
Person is a general partner, except to the extent such Indebtedness is expressly
non-recourse to such Person. Notwithstanding clause (e) above, Indebtedness of
Augusta Newsprint or a Joint Venture Subsidiary secured by a pledge of Equity
Interests in Augusta Newsprint or such Joint Venture Subsidiary and otherwise
without recourse to the pledgor shall not be deemed Indebtedness of the pledgor.
“Indemnified Costs” shall have the meaning provided in Section 13.01(a).
“Indemnified Person” shall have the meaning provided in Section 13.01(a).
“Individual Canadian Facility Exposure” of any Lender shall mean, at any time,
the sum of (a) the aggregate principal amount of all Canadian Facility Revolving
Loans made by such Lender, (b) such Lender’s Canadian Facility Swingline
Exposure and (c) such Lender’s Canadian Facility Letter of Credit Exposure at
such time. For purposes of this definition, calculations shall be based on the
U.S. Dollar Equivalent of amounts denominated in Canadian Dollars, Euros or
Pounds Sterling.
“Individual Exposure” of any Lender shall mean, at any time, the sum of (a) such
Lender’s Individual U.S. Facility Exposure at such time and (b) such Lender’s
Individual Canadian Facility Exposure at such time.
“Individual U.S. Facility Exposure” of any Lender shall mean, at any time, the
sum of (a) the aggregate principal amount of all U.S. Facility Revolving Loans
made by such Lender, (b) such Lender’s U.S. Facility RL Percentage of the
aggregate principal amount of all U.S. Facility Swingline Loans then outstanding
and (c) such Lender’s U.S. Facility RL Percentage of the aggregate

-49-

--------------------------------------------------------------------------------

 

amount of all U.S. Facility Letter of Credit Outstandings at such time. For
purposes of this definition, calculations shall be based on the U.S. Dollar
Equivalent of amounts denominated in Euros or Pounds Sterling.
“Insolvency Law” shall mean, to the extent applicable, (a) Title 11 of the
United States Code, (b) the Bankruptcy and Insolvency Act (Canada), (c) the
Companies’ Creditors Arrangement Act (Canada), (d) the Civil Code of Québec and
(e) all other liquidation, conservatorship, bankruptcy, assignment for the
benefit of creditors, moratorium, arrangement, receivership, insolvency,
reorganization, or similar laws of the United States, Canada or other applicable
jurisdictions from time to time in effect and affecting the rights of creditors
generally, including any applicable Canadian corporate legislation, as now or
hereafter in effect.
“Insurance Deductible Reserve” means at any time an amount equal to 8.5% (or, if
there shall be any increase in the applicable deductible under the Insurance
Policy such greater percentage as the Collateral Agent may determine in its
Discretion) of the portion of the Canadian Borrowing Base or the U.S. Borrowing
Base, as the case may be (determined for this purpose without reference to the
Insurance Deductible Reserve or the Foreign Currency Adjustment), allocable to
International Accounts covered by the Insurance Policy.
“Insurance Policy” means (i) that certain Accounts Receivable Policy (Shipments)
General Terms and Conditions, plus the Coverage Certificate effective September
1, 2008 (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 is annexed hereto as
Exhibit O (the “Existing Insurance Policy”) or (ii) a replacement insurance
policy providing substantially identical coverage and otherwise satisfactory to
the Collateral Agent issued by an insurer reasonably satisfactory to the
Collateral Agent (a “Replacement Insurance Policy”).

“Insurance Policy Event” means the occurrence of any of the following: (i) the
Existing Insurance Policy shall, for any reason, be terminated or otherwise no
longer be in full force and effect, unless a Replacement Insurance Policy shall
have been substituted therefor; (ii) an event of the type described in Section
11.01(g) or (h) shall occur with respect to the Insurer or (iii) the Insurer
fails to make a payment or payments, which are due and payable under the
Insurance Policy in excess of $10,000,000, either individually or in the
aggregate (if any such claim is subsequently paid by the Insurer then the
cumulative aggregate amount referred to above shall be reduced by the amount of
any such payment).
“Insurer” shall mean, collectively, Export Development Canada or any other
insurer satisfactory to the Collateral Agent which is at the time the insurer
under the Insurance Policy.
“Intercreditor Agreement” shall mean an Intercreditor Agreement among
AbitibiBowater, the other U.S. Loan Parties, the Administrative Agent and the
Notes Agent, substantially in the form of Exhibit E hereto with such
modifications thereto that are not materially adverse to the Lenders as the
Administrative Agent may agree.

-50-

--------------------------------------------------------------------------------

 

“Interest Coverage Ratio” shall mean, on the date of any incurrence of
Indebtedness or any other event, including any change in interest rates
applicable to existing Indebtedness resulting from a modification or amendment
to the documents governing such Indebtedness, in respect of which the Incurrence
Test is to be satisfied (the “Test Date”), the ratio of (a) aggregate amount of
Consolidated EBITDA for the then most recent four fiscal quarters for which
financial statements have been delivered immediately prior to such date (the
“Four Quarter Period”) to (b) the aggregate Consolidated Interest Expense for
such Four Quarter Period. In making the foregoing calculation, (A) pro forma
effect shall be given to any Indebtedness incurred or repaid (including any
Indebtedness irrevocably called for redemption) during the period (the
“Reference Period”) commencing on the first day of the Four Quarter Period and
ending on the Test Date (other than Indebtedness incurred or repaid hereunder or
under any similar arrangement except to the extent commitments hereunder or
thereunder, as the case may be, (or under any predecessor or successor revolving
credit or similar arrangement in effect on the last day of such Four Quarter
Period) are permanently reduced), in each case as if such Indebtedness had been
incurred or repaid on the first day of such Reference Period; (B) Consolidated
Interest Expense attributable to interest on any Indebtedness (whether existing
or being incurred) computed on a pro forma basis and bearing a floating interest
rate shall be computed as if the rate in effect on the Test Date (taking into
account any Hedging Agreement applicable to such Indebtedness if such Hedging
Agreement has a remaining term in excess of 12 months or, if shorter, at least
equal to the remaining term of such Indebtedness) had been the applicable rate
for the entire period; (C) pro forma effect shall be given to Asset Sales and
Acquisitions (including giving pro forma effect to the application of proceeds
of any Asset Sale) that occur during such Reference Period as if they had
occurred and such proceeds had been applied on the first day of such Reference
Period; and (D) pro forma effect shall be given to asset sales and acquisitions
(including giving pro forma effect to the application of proceeds of any asset
sale) that have been made by any Person that has become a Loan Party or has been
merged or amalgamated with or into AbitibiBowaterResolute or any Loan Party
during such Reference Period and that would have constituted Asset Sales or
Acquisitions had such transactions occurred when such Person was a Loan Party as
if such asset sales or acquisitions were Asset Sales or Acquisitions that
occurred on the first day of such Reference Period; provided that to the extent
that clause (C) or (D) of this sentence requires that pro forma effect be given
to an Asset Sale or Acquisition, such pro forma calculation shall be based upon
the four full fiscal quarters immediately preceding the Test Date of the Person,
or division or line of business of the Person, that is acquired or disposed for
which financial information is available.
“Interest Determination Date” shall mean, with respect to any Eurodollar Loan,
the second Business Day prior to the commencement of any Interest Period
relating to such Eurodollar Loan.
“Interest Period” shall have the meaning provided in Section 2.09.
“International Account” shall mean an Account the Account Debtor of which has a
billing address in an Approved Country other than the United States or Canada.
“Inventory” shall mean “inventory” as such term is defined in Article 9 of the
UCC or the PPSA, as applicable.

-51-

--------------------------------------------------------------------------------

 

“Inventory Reserves” shall mean reserves against Inventory equal to the sum of
the following:
(a)    a reserve for shrink, or discrepancies that arise pertaining to inventory
quantities on hand between the Loan Parties’ perpetual accounting system and
physical counts of the inventory in accordance with the Loan Parties’ historical
accounting procedures and is acceptable to the Collateral Agent in its
Discretion;
(b)    a revaluation reserve whereby capitalized favorable variances shall be
deducted from Eligible Inventory and unfavorable variances shall not be added to
Eligible Inventory;
(c)    a lower of the cost or market reserve for the amount by which a Loan
Party’s actual cost to produce any Inventory exceeds the selling price of such
Inventory to third parties, determined on a product line basis; and
(d)    any other reserve established by the Collateral Agent in its Discretion
from time to time.
Each Inventory Reserve shall become effective not earlier than three Business
Days following notice thereof being given to AbitibiBowaterResolute by the
Collateral Agent.
“Investment” shall mean, as applied to any Person (the “investor”), any direct
or indirect purchase or other acquisition by the investor of, or a beneficial
interest in, stock or other securities of any other Person, including any
exchange of equity securities for Indebtedness, or any direct or indirect loan,
advance (other than advances to employees for moving and travel expenses,
drawing accounts and similar expenditures in the ordinary course of business) or
capital contribution by the investor to any other Person, including all
Indebtedness and accounts receivable owing to the investor from such other
Person other than Indebtedness arising from sales or services rendered to such
other Person in the ordinary course of the investor’s business. The amount of
any Investment shall be the original cost of such Investment plus the cost of
all additions thereto, without any adjustments for increases or decreases in
value, or write-ups, write-downs or write-offs with respect to such Investment
minus any amounts (a) realized upon the disposition of assets comprising an
Investment (including the value of any liabilities assumed by any Person other
than AbitibiBowaterResolute, any Borrower or any Subsidiary of
AbitibiBowaterResolute in connection with such disposition), (b) constituting
repayments of Investments that are loans or advances or (c) constituting cash
returns of principal or capital thereon (including any dividend, redemption or
repurchase of equity that is accounted for, in accordance with GAAP, as a return
of principal or capital). For purposes of this Agreement, (x) the redemption,
purchase or other acquisition for value by any Subsidiary of
AbitibiBowaterResolute of any shares of its capital stock from a Person other
than AbitibiBowaterResolute, any Borrower or any other Subsidiary of
AbitibiBowaterResolute shall be deemed to be an “Investment” by such Subsidiary
in its shares of capital stock and (y) a disposition of less thenthan all Equity
Interests held directly or indirectly by AbitibiBowaterResolute in any
Wholly-Owned Subsidiary shall also be deemed to be the making of an Investment
in the retained Equity Interests in such Subsidiary.

-52-

--------------------------------------------------------------------------------

 

“IP Security Agreements” shall have the meaning set forth in (a) prior to the
Effective Date, the form of Guarantee and Collateral Agreement attached hereto
as Exhibit L and (b) on and after the Effective Date, the Guarantee and
Collateral Agreement.mean any “short form” intellectual property security
agreement delivered or required to be delivered hereunder on pursuant to any
other Loan Document. For the avoidance of doubt, except as otherwise required by
Section 10.02(a)(iii), no IP Security Agreements shall be required to be
delivered.
“Issuing Lender” shall mean (i) each of Citibank (except as otherwise provided
in Section 12.09), Barclays, JPMCB, Wells Fargo and any other Lender reasonably
acceptable to the Administrative Agent and AbitibiBowaterResolute which agrees
to issue Letters of Credit hereunder and (ii) solely with respect to each
Existing Letter of Credit, the issuing lender thereof as set forth on Schedule
3.01. Any Issuing Lender may, in its discretion, arrange for one or more Letters
of Credit to be issued by one or more Affiliates of such Issuing Lender (and
such Affiliate shall be deemed to be an “Issuing Lender” for all purposes of the
Loan Documents).
“ITA” shall mean the Income Tax Act (Canada), as amended, and any successor
thereto, and any regulations promulgated thereunder.
“Joint Venture Subsidiary” shall mean any Non-Wholly-Owned Subsidiary which
constitutes a bona fide joint venture with a third party, in each case for so
long as such Subsidiary remains a Non-Wholly-Owned Subsidiary.
“JPMCB” shall mean JPMorgan Chase Bank, N.A.
“Judgment Currency” shall have the meaning provided in Section 13.20.
“Judgment Currency Conversion Date” shall have the meaning provided in Section
13.20.
“L/C Supportable Obligations” shall mean (i) obligations of
AbitibiBowaterResolute or any of its Subsidiaries with respect to workers
compensation, surety bonds and other similar statutory obligations and (ii) such
other obligations of AbitibiBowaterResolute or any of its Subsidiaries as are
permitted to exist pursuant to the terms of this Agreement (other than
obligations in respect of (x) the Senior Secured Notes, (y) any Indebtedness
that is subordinated in right of payment to the Obligations or (z) any Equity
Interests issued by AbitibiBowaterResolute).
“Lead Arrangers” shall mean Citigroup Global Markets, Inc., Barclays Capital,
the investment banking division of Barclays, J.P. Morgan Securities LLC, Wells
Fargo Capital Finance, LLC and Merrill Lynch, Pierce, Fenner & Smith
Incorporated, in their capacities as Joint Lead Arrangers in respect of the
credit facilities hereunder, and any successors thereto.
“Lender” shall mean each financial institution listed on Schedule 1.01(a), as
well as any Person that becomes a “Lender” hereunder pursuant to Section 2.13,
Section 2.14 or Section 13.04(b), including (unless the context otherwise
requires) each Issuing Lender and theeach Swingline Lender, in each case for so
long as any such financial institution or other Person remains a Lender
hereunder.

-53-

--------------------------------------------------------------------------------

 

“Lender Creditors” shall mean, collectively, the Lenders, each Issuing Lender,
theeach Swingline Lender, the Administrative Agent and the Collateral Agent.
“Letter of Credit” shall mean each U.S. Facility Letter of Credit and each
Canadian Facility Letter of Credit.
“Letter of Credit Back-Stop Arrangements” shall have the meaning provided in
Section 2.18.
“Letter of Credit Exposure” shall mean the sum of (i) the U.S. Facility Letter
of Credit Exposure plus (ii) the Canadian Facility Letter of Credit Exposure.
“Letter of Credit Fee” shall have the meaning provided in Section 4.01(b).
“Letter of Credit Outstandings” shall mean, at any time, the sum of all U.S.
Facility Letter of Credit Outstandings and Canadian Facility Letter of Credit
Outstandings.
“Letter of Credit Request” shall have the meaning provided in Section 3.03(a).
“Lien” shall mean, with respect to any asset, (a) any mortgage, deed of trust,
lien, pledge, assignment for security, hypothecation, prior claim (within the
meaning of the Civil Code of Québec) encumbrance, charge or security interest
in, on or of such asset and (b) the interest of a vendor or a lessor under any
conditional sale agreement, Capital Lease or title retention right or agreement
relating to such asset.
“Loan” shall mean each Revolving Loan and each Swingline Loan.
“Loan Document Obligations” shall mean and include, as to any Loan Party, all
Obligations of such Loan Party to the Lender Creditors, whether now existing or
hereafter incurred under, arising out of, or in connection with, each Loan
Document to which such Loan Party is a party (including, without limitation, in
the event such Loan Party is a Guarantor, all such obligations, liabilities and
indebtedness of such Loan Party in its capacity as a Guarantor under the
Guarantee and Collateral Agreement or, the Canadian Guarantee and Collateral
Agreement or the English Subsidiary Guarantee Agreement to which it is a party)
(except to the extent consisting of Hedging Obligations or Cash Management
Services Obligations).
“Loan Documents” shall mean this Agreement, the Guarantee and Collateral
Agreement, each Canadian Security Document, each Foreign Pledge Agreement, each
Mortgage, the Intercreditor AgreementEuropean Security Document, the English
Subsidiary Guarantee Agreement, any intercreditor agreement or collateral
cooperation agreement contemplated by Section 10.02(a)(iii), and, after the
execution and delivery thereof pursuant to the terms of this Agreement, each
Incremental Commitment Agreement, each Note and each other Security Document,
but shall not include any Secured Cash Management Agreement or Secured Hedging
Agreement.
“Loan Party” shall mean each U.S. Loan Party, each English Loan Party and each
Canadian Loan Party.

-54-

--------------------------------------------------------------------------------

 

“Majority Facility Lenders” of any Facility shall mean those Non-Defaulting
Lenders which would constitute the Required Lenders under, and as defined in,
this Agreement if all outstanding Obligations of the other Facility under this
Agreement were repaid in full and all Commitments with respect thereto were
terminated.
“Mandatory Borrowing” shall have the meaning provided in Section 2.01(c).
“Margin Stock” shall have the meaning given such term under Regulation U.
“Material Adverse Effect” shall mean (a) a material adverse effect on the
business, operations, prospects (taking into account the cyclical nature of the
pulp and paper industry) or assets of the Loan Parties and their Subsidiaries
(taken as a whole), (b) a material adverse effect on the ability of the Loan
Parties and their Subsidiaries (taken as a whole) to perform their respective
obligations under the Loan Documents or (c) a material adverse effect on the
legality, validity or enforceability of the Loan Documents (including the
validity, enforceability or priority of the Liens granted thereunder).
“Material Indebtedness” shall mean Indebtedness (other than the Loan Document
Obligations), or obligations in respect of one or more Hedging Agreements, of
any one or more of AbitibiBowaterResolute, any other Borrower and their
respective Subsidiaries in an aggregate principal amount exceeding $35,000,000.
“Material Subsidiary” shall mean each Subsidiary of AbitibiBowaterResolute now
existing or hereafter acquired or formed and each successor thereto that (a) for
the most recent period of four consecutive fiscal quarters of
AbitibiBowaterResolute accounted (on a consolidated basis with its Subsidiaries)
for more than 5% of the consolidated revenues of AbitibiBowaterResolute, (b) as
at the end of such fiscal quarter, was (on a consolidated basis with its
Subsidiaries) the owner of more than 5% of the consolidated assets of
AbitibiBowaterResolute, as shown on the consolidated financial statements of
AbitibiBowaterResolute for such fiscal quarter or (c) is irrevocably designated
as a Material Subsidiary in a writing by AbitibiBowaterResolute to the
Administrative Agent. Schedule 1.01(c) sets forth each Subsidiary that is a
Material Subsidiary on and as of the Closing Date. AbitibiBowaterResolute may
designate any Material Subsidiary which does not constitute a Material
Subsidiary under the foregoing clauses (a) and (b) as no longer constituting a
Material Subsidiary.
“Material Wholly-Owned Subsidiary” shall mean each Subsidiary of
AbitibiBowaterResolute that is both a Material Subsidiary and a Wholly-Owned
Subsidiary.
“Maturity Date” shall mean the Revolving Loan Maturity Date or the Swingline
Expiry Date, as the case may be.
“Maximum Letter of Credit Amount” shall mean $200,000,000.
“Maximum Rate” shall have the meaning provided in Section 13.22.
“Maximum Swingline Amount” shall mean $60,000,000.

-55-

--------------------------------------------------------------------------------

 

“Minimum Borrowing Amount” shall mean U.S.$1,000,000 for Revolving Loans
provided that during a Dominion Period there shall be no Minimum Borrowing
Amount.
“Moody’s” shall mean Moody’s Investors Service, Inc.
“Mortgaged Properties” shall mean (i) each parcel (or adjoining parcels) of real
property (including any real property fixtures thereon) owned by a U.S. Loan
Party on the Closing Date and specified on Schedule 1.01(d), and (ii) each
After-Acquired Mortgage Property with respectthat is subject to which a Mortgage
is granted pursuant to Section 9.09, if any.
“Mortgages” shall mean the mortgages, deeds of trust, assignments of leases and
rents, modifications and other security documents with respect to Mortgaged
Properties or delivered pursuant to Section 9.09. Each Mortgage shall be
substantially in the form of Exhibit N, or otherwise in form and substance
reasonably satisfactory to the Administrative Agent. For the avoidance of doubt,
except as otherwise required by Section 10.02(a)(iii), no Mortgages shall be
required to be delivered.
“Multiemployer Plan” shall mean a multiemployer plan as defined in
Section 4001(a)(3) of ERISA that within the preceding five years has been
contributed to by (or to which there is or may be an obligation to contribute to
by) any Borrower, any ERISA Affiliate or any Person which was an ERISA Affiliate
during that time.
“NAIC” shall mean the National Association of Insurance Commissioners.
“Net Cash Proceeds” shall mean (a) with respect to any Asset Sale or any
casualty or condemnation event, the Cash Proceeds therefrom, net of (i) costs of
sale (including payment of the outstanding principal amount of, premium or
penalty, if any, and interest on any Indebtedness (other than Loans and other
than any Indebtedness secured by a Lien junior in priority to the Lien securing
the Loans) which is secured by a Lien permitted by Section 7.02 on the related
assets and is required to be repaid under the terms thereof as a result
thereof), (ii) taxes paid or reasonably estimated to be payable in the year such
Asset Sale occurs or in the following year as a result thereof and (iii) amounts
provided as a reserve, in accordance with GAAP, against any liabilities under
any indemnification obligations and any purchase price adjustments associated
with any such Asset Sale (provided that, to the extent and at the time any such
amounts are released from such reserve, such amounts shall constitute Net Cash
Proceeds); and (b) with respect to any issuance of debt or equity securities,
the cash proceeds thereof, net of underwriting commissions or placement fees and
expenses directly incurred in connection therewith.
“Net Orderly Liquidation Value” shall mean the “net orderly liquidation value”
determined by an unaffiliated valuation company reasonably acceptable to the
Collateral Agent after performance of an inventory valuation to be done at the
Collateral Agent’s request and the Borrowers’ expense, less the amount estimated
by such valuation company for marshallingmarshaling, reconditioning, carrying,
and sales expenses designated to maximize the resale value of such Inventory and
assuming that the time required to dispose of such Inventory is customary with
respect to such Inventory and expressed as a percentage of the net book value of
such Inventory.

-56-

--------------------------------------------------------------------------------

 

“Non-B/A Lender” shall mean any Lender which is unwilling or unable to create
Bankers’ Acceptances by accepting Drafts and which has identified itself as a
“Non-B/A Lender” by written notice to the Administrative Agent and
AbitibiBowaterResolute.
“Non-Cash Charges” shall mean any non-cash charges or losses, including (a) any
impairment charge or asset write-off or write-down related to intangible assets
(including goodwill), long-lived assets and investments in debt and equity
securities pursuant to GAAP, (b) long-term incentive plan accruals and any
non-cash expenses resulting from the grant of stock options or other
equity-based incentives to any director, officer or employee of
AbitibiBowaterResolute, any other Borrower or any Subsidiary of
AbitibiBowaterResolute and (c) any non-cash charges or losses resulting from the
application of purchase accounting; provided that Non-Cash Charges shall not
include additions to bad debt reserves or bad debt expense.
“Non-Defaulting Lender” shall mean each Lender other than a Defaulting Lender;
provided, however, solely for purposes of Section 4.01(a), a Lender that is a
Defaulting Lender solely under clause (iii), or (iv) (but, in the case of such
clause (iv), only to the extent relating to clause (iii)) of the definition
thereof shall be treated as a Non‑Defaulting Lender and not as a Defaulting
Lender.
“Non-Wholly-Owned Subsidiary” shall mean, as to any Person, each Subsidiary of
such Person which is not a Wholly-Owned Subsidiary of such Person.
“Northern Irish Security Agreement” shall mean athe Northern Irish law deed of
charge dated 27 July 2012 among the Loan Parties party thereto and the
Collateral Agent, for the benefit of the Secured Parties, in form and substance
reasonably satisfactory to the Collateral Agent.
“Note” shall mean each U.S. Facility Revolving Note, each U.S. Borrower Canadian
Facility Revolving Note, each Canadian Borrower Canadian Facility Revolving
Note, each U.S. Facility Swingline Note, each U.S. Borrower Canadian Facility
Swingline Note and each Canadian Borrower Canadian Facility Swingline Note, it
being understood that such Notes shall not constitute titles of indebtedness
within the meaning of the Article 2692 of the Civil Code of Québec.
“Note Collateral Account” means each deposit account or securities account
established pursuant to the Senior Secured Notes Documents for purposes of
holding Notes Priority Collateral (and no other amounts).
“Note Obligations” shall, prior to the Effective Date, have the meaning assigned
to such term in the form of Intercreditor Agreement attached as Exhibit E
hereto, and after the Effective Date, have the meaning assigned to such term in
the Intercreditor Agreement.
“Notes AgentPriority Assets” shall mean Wells Fargo Bank, National Association,
and any successor collateral agent under the indenture governing the Senior
Secured Notes.all assets of the U.S. Loan Parties and the Canadian Loan Parties
not constituting ABL Priority Collateral.
“Notes Priority Collateral” shall, prior to the Effective Date, have the meaning
assigned to the term “Notes Priority Collateral” in the form of Intercreditor
Agreement attached as

-57-

--------------------------------------------------------------------------------

 

Exhibit E hereto, and after the Effective Date, have the meaning assigned to the
term “Notes Priority Collateral” in the Intercreditor Agreement.
“Notice of Borrowing” shall have the meaning provided in Section 2.03(a).
“Notice of Conversion/Continuation” shall have the meaning provided in
Section 2.06.
“Notice Office” shall mean Citibank, N.A., Global Loans OPS III, 1615 Brett
Road, New Castle, DE 19720; or such other office or person as the Administrative
Agent may hereafter designate in writing as such to the other parties hereto.
“Obligation Currency” shall have the meaning provided in Section 13.20.
“Obligations” shall mean all amounts owing to the Administrative Agent, the
Collateral Agent, any Issuing Lender, theany Swingline Lender or any Lender
pursuant to the terms of this Agreement or any other Loan Document (other than
the Intercreditor Agreement), including, without limitation, all amounts in
respect of any principal (or Face Amount, as applicable), premium (if any),
interest (including any interest accruing subsequent to the filing of a petition
in bankruptcy, reorganization or similar proceeding at the rate provided for in
this Agreement, whether or not such interest is an allowed claim under any such
proceeding or under applicable state, federal, provincial or foreign law),
penalties, fees, expenses (including Expenses), indemnifications, reimbursements
(including Unpaid Drawings with respect to Letters of Credit), damages and other
liabilities, and guarantees in each case of the foregoing amounts.
“Ontario Pension Agreement” shall mean the letter from the Ontario Minister of
Finance to David Paterson, Chief Executive Officer of AbitibiBowater, dated
November 15, 2010, together with the attached form of agreement entitled
“AbitibiBowater/Ontario Pension Funding Relief Agreement”.
“Ontario Pension Plan” shall mean a “registered pension plan”, as defined in
subsection 248(1) of the ITA, which contains a “defined benefit provision”, as
defined in subsection 147.1(1) of the ITA, and which is registered under the
Pension Benefits Act (Ontario) but excluding any plan that provides only a
“target benefit” or any “multi-employer pension plan”, both as defined in the
Pension Benefits Act (Ontario), where employer contributions to such target
benefit or multi-employer pension plan are determined solely by reference to a
participation agreement, collective agreement, or other agreement negotiated
with the bargaining agent or other representative of the employees participating
in such plan and the employer has no liability for or obligation to fund any
funding deficiency under such plan upon termination of the plan in whole or in
part or upon the withdrawal of an employer from such plan.
“Ontario Pension Regulations” shall mean the special funding relief regulations
under the Pension Benefits Act (Ontario) adopted in accordance with the CCAA
Plan and the Ontario Pension Agreement.

-58-

--------------------------------------------------------------------------------

 

“Ontario Pension Regulations Condition” shall mean the adoption and
effectiveness of the Ontario Pension Regulations implementing the Ontario
Pension Agreement, which condition was satisfied on or about June 3, 2011.
“Other Borrower” shall mean each Subsidiary who shall from time to time, in
accordance with Section 13.26 hereof, become a “Borrower” hereunder pursuant to
a Borrower Joinder Agreement or other form satisfactory to the Administrative
Agent.
“Outstanding Balance” of any Account at any time shall mean the then outstanding
principal balance thereof; provided, that to the extent that the amount of any
Account 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 an Account are not included in the Outstanding Balance.
“Overseas Subsidiary” shall mean any Subsidiary other than a Domestic Subsidiary
or, a Canadian Subsidiary or a English Guarantor.
“Participant” shall have the meaning provided in Section 3.04(a).
“Participant Register” shall have the meaning provided in Section 13.04(a).
“Participating Member States” means those members of the European Union from
time to time which adopt a single, shared currency.
“Patriot Act” shall have the meaning provided in Section 13.17.
“Payment Conditions” shall mean that at the time of each action or proposed
action and after giving effect thereto, each of the following conditions is
satisfied: (a) no Default or an Event of Default shall have occurred and be
continuing, (b) Excess Availability (on the date of such action or proposed
action after giving effect to any Loans incurred (or to be incurred) or Letters
of Credit issued (or to be issued) on such date in connection with such action
or proposed action) and Historical Excess Availability, calculated on a pro
forma basis in accordance with the definition thereof, shall equal or exceed (1)
the greater of (x) 25$110,000,000 and (y) the lesser of (A) 22.5% of the Total
Commitment as then in effect orand (B) 22.5% of the Total Borrowing Base as then
in effect or (2) the greater of (x) $90,000,000 and (y) the lesser of (A) 17.5%
of the Total Commitment as then in effect and (B) 17.5% of the Total Borrowing
Base as then in effect so long as, with respect to this clause (y2),
AbitibiBowaterResolute shall have a Consolidated Fixed Charge Coverage Ratio of
not less than 1.11.00:1.00 for the Test Period then most recently ended for
which financial statements are available calculated on a pro forma basis in
accordance with Section 1.04 as if such action or proposed action had occurred
on the first day of such Test Period, and (c) AbitibiBowaterResolute shall have
delivered to the Administrative Agent a certificate of a Financial Officer of
AbitibiBowaterResolute certifying as to compliance with preceding clauses (a)
and (b) and demonstrating (in reasonable detail) the calculations required by
preceding clause (b); provided that no such certificate shall be required with
respect to transactions effected in reliance on the “Payment Conditions” not
exceeding $25,000,000 in the aggregate per month.

-59-

--------------------------------------------------------------------------------

 

“Payment Office” shall mean Citibank, N.A., Global Loans OPS III, 1615 Brett
Road, New Castle, DE 19720 or such other office as the Administrative Agent may
hereafter designate in writing as such to the other parties hereto.
“PBGC” shall mean the Pension Benefit Guaranty Corporation referred to and
defined in ERISA or any successor thereto.
“Perfection Certificate” shall mean each of the U.S. Perfection Certificate and
the Canadian Perfection Certificate.
“Permitted Acquisition” shall have the meaning provided in Section 10.04(e).
“Permitted Acquisition Payment Conditions” shall mean that at the time of each
action or proposed action and after giving effect thereto, each of the following
conditions is satisfied: (a) no Default or an Event of Default shall have
occurred and be continuing, (b) Excess Availability (on the date of such action
or proposed action after giving effect to any Loans incurred (or to be incurred)
or Letters of Credit issued (or to be issued) on such date in connection with
such action or proposed action) and Historical Excess Availability, calculated
on a pro forma basis in accordance with the definition thereof, shall equal or
exceed (1) the greater of (x) 20$90,000,000 and (y) the lesser of (A) 17.5% of
the Total Commitment as then in effect orand (B) 17.5% of the Total Borrowing
Base as then in effect or (2) the greater of (x) $75,000,000 and (y) the lesser
of (A) 15% of the Total Commitment as then in effect and (B) is 15% of the Total
Borrowing Base as then in effect so long as, with respect to this clause (y2),
AbitibiBowaterResolute shall have a Consolidated Fixed Charge Coverage Ratio of
not less than 1.11.00:1.00 for the Test Period then most recently ended for
which financial statements are available calculated on a pro forma basis in
accordance with Section 1.04 as if such action or proposed action had occurred
on the first day of such Test Period, and (c) AbitibiBowaterResolute shall have
delivered to the Administrative Agent a certificate of a Financial Officer of
AbitibiBowaterResolute certifying as to compliance with preceding clauses (a)
and (b) and demonstrating (in reasonable detail) the calculations required by
preceding clause (b).
“Permitted Investments” shall mean any of the following:
(a)    any evidence of Indebtedness, maturing not more than one year after the
acquisition thereof, issued by the United States of America or Canada, or any
instrumentality or agency thereof and guaranteed fully as to principal, interest
and premium, if any, by the United States of America or Canada;
(b)    any certificate of deposit, banker’s acceptance or time deposit
(including Eurodollar time deposits), maturing not more than one year after the
date of purchase, issued or guaranteed by or placed with (i) the Administrative
Agent or any bank providing Cash Management Services to AbitibiBowaterResolute
or any of its Subsidiaries or (ii) a commercial banking institution that has
long-term debt rated “A2” or higher by Moody’s or “A” or higher by S&P and which
has a combined capital and surplus of not less than $500,000,000;
(c)    commercial paper (i) maturing not more than 270 days after the date of
purchase and (ii) issued by a corporation (other than a Loan Party or any
Affiliate of a Loan Party) with a rating,

-60-

--------------------------------------------------------------------------------

 

at the time as of which any determination thereof is to be made, of “P‑1” or
higher by Moody’s or “A‑1” or higher by S&P (or equivalent rating in the case of
a Permitted Investment made by a Foreign Subsidiary of AbitibiBowaterResolute);
(d)    investments in fully collateralized repurchase agreements with a term of
not more than 90 days for underlying securities of the types described in clause
(a) above entered into with any bank or trust company meeting the qualifications
specified in clause (b) above;
(e)    demand deposits with any bank or trust company;
(f)    money market funds substantially all the assets of which are comprised of
securities of the types described in clauses (a) through (e) above; and
(g)    in the case of the Foreign Subsidiaries of AbitibiBowaterResolute,
short-term investments comparable to the foregoing.
“Permitted Liens” shall mean, with respect to any Person, any of the following:
(a) Liens for taxes, assessments or other governmental charges or levies not yet
due and payable or as to which the period of grace, if any, related thereto has
not expired or which are being contested in good faith by appropriate
proceedings diligently pursued, provided that full provision for the payment of
all such taxes known to such Person has been made on the books of such Person if
and to the extent required by GAAP;
(b) builder’s, architects’, engineer’s, laborer’s, supplier of materials’,
mechanics’, materialmen’s, carriers’, warehousemen’s, processor’s, landlord’s
and similar Liens arising in the ordinary course of business and securing
obligations of such Person that are either (i) not overdue for a period of more
than 3060 days, or, (ii) if more than 60 days overdue, (A) as to which no action
has been taken to enforce such Lien or (B) that are being contested in good
faith by appropriate proceedingsaction diligently pursued, provided that in
theeach case of any such contest (i) any proceedings commenced for the
enforcement of such Liens shall have been duly suspended and (ii) full provision
for the payment of such Liens has been made on the books of such Person if and
to the extent required by GAAP;
(c) Liens arising in connection with workers’ compensation, unemployment
insurance, pensions and social security benefits and similar programs;
(d) (i) Liens incurred or deposits made in the ordinary course of business to
secure the performance of bids, tenders, statutory obligations, fee and expense
arrangements with trustees and fiscal agents, leases, governmental contracts,
permits, licenses, trade contracts, performance and return-of-money bonds and
other similar obligations (exclusive of obligations incurred in connection with
the borrowing of money or the payment of the deferred purchase price of
property) and (ii) Liens securing surety, indemnity, performance, appeal and
release bonds, provided that full provision for the payment of all such
obligations has been made on the books of such Person if and to the extent
required by GAAP;

-61-

--------------------------------------------------------------------------------

 

(e) imperfections of title, statutory exceptions to title, restrictive
covenants, rights of way, easements, servitudes, mineral interest reservations,
reservations made in the grant from the Crown, municipal and zoning by-laws and
ordinances or similar laws or rights reserved to or vested in any governmental
office or agency to control or regulate the use of any real property, general
real estate taxes and assessments not yet delinquent and other encumbrances on
real property that (i) do not arise out of the incurrence of any Indebtedness
for money borrowed and (ii) do not interfere with or impair in any material
respect the operation, in the ordinary course of business, of the real property
on which such Lien is imposed;
(f) bankers’ Liens, rights of setoff and other similar Liens existing solely
with respect to cash and cash equivalents on deposit in one or more accounts
maintained by any Loan Party or Subsidiary, in each case granted in the ordinary
course of business in favor of the bank or banks with which such accounts are
maintained, securing amounts owing to such bank with respect to cash management
and operating account arrangements, including those involving pooled accounts
and netting arrangements;
(g) leases or subleases granted to others not interfering in any material
respect with the business of AbitibiBowaterResolute or any Subsidiary of
AbitibiBowaterResolute and any interest or title of a lessor under any lease
(whether a Capital Lease or an operating lease) permitted by this Agreement or
the Security Documents;
(h) Liens arising from the granting of a lease or license to enter into or use
any asset of AbitibiBowaterResolute or any Subsidiary of AbitibiBowaterResolute
to any Person in the ordinary course of business of AbitibiBowaterResolute or
any Subsidiary of AbitibiBowaterResolute that does not interfere in any material
respect with the use or application by AbitibiBowaterResolute or any Subsidiary
of AbitibiBowaterResolute of the asset subject to such license in the business
of AbitibiBowaterResolute or such Subsidiary;
(i) Liens attaching solely to cash earnest money deposits made by
AbitibiBowaterResolute or any Subsidiary of AbitibiBowaterResolute in connection
with any letter of intent or purchase agreement entered into it in connection
with an acquisition permitted hereunder;
(j) Liens arising from precautionary UCC or PPSA financing statements (or
analogous personal property security filings or registrations in other
jurisdictions) regarding operating leases;
(k) Liens on insurance policies (other than the Insurance Policy) and proceeds
thereof to secure premiums thereunder;
(l) Liens arising out of judgments or awards in respect of which an appeal or
proceeding for review is being diligently prosecuted, provided that (i) a stay
of execution pending such appeal or proceeding for review has been obtained and
(ii) full provision for the payment of such Liens has been made on the books of
such Person if and to the extent required by GAAP; and
(m) Liens relating solely to employee contributions withheld from pay by a
Canadian Subsidiary of AbitibiBowaterResolute but not yet due to be remitted to
a Canadian Pension Plan

-62-

--------------------------------------------------------------------------------

 

pursuant to the Pension Benefits Act (Ontario) or pension standards legislation
of any other applicable jurisdiction in Canada.
For the purposes of the Security Documents and Section 8.17, “Permitted Liens”
shall also be deemed to include the Liens permitted by Section 10.02(a). Any
reference in any of the Loan Documents (other than the Intercreditor Agreement)
to a Permitted Lien is not intended to and shall not be interpreted as
subordinating or postponing, or as any agreement to subordinate or postpone, any
Lien created by any of the Loan Documents to any Permitted Lien.
“Permitted Parent” shall mean a holding company holding the Equity Interests of
AbitibiBowaterResolute or any of its Wholly-Owned Subsidiaries through which
such Equity Interests are held, provided that (i) no person or group (within the
meaning of Rule 13d-5 of the Securities and Exchange Act of 1934, as in effect
of the date hereof) shall own, directly or indirectly, beneficially or of
record, shares representing more than 35% of the aggregate ordinary voting power
represented by the issued and outstanding stock of such holding company and (ii)
if at the time such holding company acquires Equity Interests of
AbitibiBowaterResolute it holds or proposes to acquire any other significant
asset, then after giving effect to each such acquisition, the holders of Equity
Interests in AbitibiBowaterResolute immediately prior to such transactions shall
hold a majority of the Equity Interests in such holding company after giving
effect thereto. The term “Permitted Parent” shall include any Wholly-Owned
Subsidiary of such holding company through which it holds Equity Interests of
AbitibiBowaterResolute.
“Permitted Refinancing Indebtedness” shall mean, with respect to
AbitibiBowaterResolute, any Borrower or any Subsidiary of
AbitibiBowaterResolute, any modification, refinancing, refunding, renewal or
extension of any Indebtedness, in whole or in part, of such Person from time to
time; provided that (a) the principal amount (or accreted value, if applicable)
or, in the case of any revolving facility, the commitments thereunder, thereof
does not exceed the principal amount (or accreted value, if applicable) or in
the case of any revolving facility, the commitments thereunder, (except as
otherwise permitted under Section 10.01(f)) of the Indebtedness so modified,
refinanced, refunded, renewed or extended (the “Refinanced Debt”) except by an
amount equal to unpaid accrued interest and premium thereon plus other
reasonable amounts paid, and fees and expenses reasonably incurred, in
connection with such modification, refinancing, refunding, renewal or extension
and by an amount equal to any existing commitments unutilized thereunder, (b)
the Indebtedness resulting from such modification, refinancing, refunding,
renewal or extension (the “Refinancing Debt”) has a final maturity date the same
as or later than the final maturity date of, and, other than in the case of a
revolving facility, has a Weighted Average Life to Maturity equal to or greater
than the Weighted Average Life to Maturity of, the Refinanced Debt, (c) at the
time thereof, no Event of Default shall have occurred and be continuing, (d) to
the extent such Refinanced Debt is subordinated in right of payment to the
Obligations, such Refinancing Debt is subordinated in right of payment to the
Obligations on terms, when taken as a whole, at least as favorable to the
Lenders as those contained in the documentation governing the Refinanced Debt,
(e) if the Refinanced Debt is secured, the Refinancing Debt shall be unsecured
or secured only by some or all of the assets (including after acquired assets of
the applicable type) that secured such Refinanced Debt; provided that if the
Refinanced Debt is the Senior Secured Notes, such Refinancing Debt may be
secured by any assets or properties of AbitibiBowater or any Domestic

-63-

--------------------------------------------------------------------------------

 

Subsidiary or Canadian Subsidiary of AbitibiBowater which also secures the
Obligations, (f) the terms and conditions (including, if applicable, as to
collateral but excluding as to subordination, interest rate, redemption premium
and other pricing provisions) of any such Refinancing Debt, taken as a whole,
are not materially less favorable to the Loan Parties or the Lenders than the
terms and conditions of the Refinanced Debt; provided that, in connection with
the incurrence of Refinancing Debt in an aggregate principal amount of
$25,000,000 or more, a certificate of a Responsible Officer of
AbitibiBowaterResolute shall be delivered to the Administrative Agent at least
five Business Days prior to the incurrence of such Refinancing Debt, together
with a reasonably detailed description of the material terms and conditions of
such Refinancing Debt or drafts of the documentation relating thereto, stating
that AbitibiBowaterResolute or the Subsidiary of AbitibiBowaterResolute
incurring such Indebtedness has determined in good faith that such terms and
conditions satisfy the foregoing requirement of this clause (f) shall be
conclusive evidence that such terms and conditions satisfy the foregoing
requirement unless the Administrative Agent notifies AbitibiBowaterResolute
within such five Business Day period that it disagrees with such determination
(including a reasonable description of the basis upon which it disagrees) and
(g) unless each Domestic Subsidiary and Canadian Subsidiary of
AbitibiBowaterResolute that is a primary obligor or guarantor in respect of such
Refinancing Debt was also a primary obligor or guarantor in respect of the
Refinanced Debt, all the Domestic Subsidiaries and Canadian Subsidiaries of
AbitibiBowaterResolute that are primary obligors or guarantors of such
Refinancing Debt shall be Loan Parties. Notwithstanding anything to the contrary
in clause (f) above, with respect to Refinanced Debt that is the Senior Secured
Notes, the terms and conditions as to collateral of the Refinancing Debt shall
be deemed to be not materially less favorable to the Loan Parties or the Lenders
than the terms as to collateral of the Refinanced Debt if the Refinancing Debt
(i) is secured by collateral meeting the requirements of clause (e) above and
(ii) is subject to substantially the same intercreditor arrangements as set
forth in and contemplated by the Intercreditor Agreement.
“Person” shall mean an individual, partnership, corporation (including a
business trust), joint stock company, estate, trust, limited liability company,
unlimited liability company, unincorporated association, joint venture or other
entity or Governmental Authority.
“Plan of Reorganization” shall have the meaning provided in the recitals to this
Agreement.
“Plans” shall have the meaning provided in the recitals to this Agreement.
“Pound Sterling” means the lawful currency of the United KingdomU.K.
“PPSA” shall mean the Personal Property Security Act (Ontario); provided that,
if perfection or the effect of perfection or non-perfection or the priority of
any security interest in any Collateral is governed by a Personal Property
Security Act as in effect in a Canadian jurisdiction other than Ontario, or the
Civil Code of Québec, “PPSA” means the Personal Property Security Act as in
effect from time to time in such other jurisdiction or the Civil Code of Québec,
as applicable, for purposes of the provisions hereof relating to such
perfection, effect of perfection or non-perfection or priority in such
Collateral.

-64-

--------------------------------------------------------------------------------

 

“Prepetition Secured Facilities” shall mean (i) that certain Credit Agreement
dated as of May 31, 2006 among Bowater Incorporated (n/k/a/ Resolute US),
Bowater Newsprint South LLC, Bowater Alabama LLC (n/k/a/ Resolute US), and
Bowater Newsprint South Operations LLC (n/k/a/ Resolute US), as borrowers, the
lenders from time to time party thereto and Wells Fargo Bank, National
Association (as successor to Wachovia Bank, N.A.), as agent; (ii) that certain
Credit Agreement dated as of May 31, 2006 among Bowater Canadian Forest Products
Inc. (n/k/a/ Resolute Canada), as borrower, Bowater Incorporated (n/k/a/
Resolute US), Bowater Newsprint South LLC, Bowater Alabama LLC (n/k/a/ Resolute
US), and Bowater Newsprint South Operations LLC (n/k/a/ Resolute US) and certain
direct and indirect subsidiaries of AbitibiBowater (n/k/a/ Resolute), as
guarantors, the lenders from time to time party thereto and Bank of Nova Scotia,
as agent; (iii) that certain credit agreement dated as of April 1, 2008 among
Abitibi-Consolidated Company of Canada (n/k/a/ Resolute Canada), as borrower,
AbitibiAbiBow Canada Inc. (n/k/a/ Resolute Canada), certain affiliates and
subsidiaries of AbitibiAbiBow Canada Inc. (n/k/a/ Resolute Canada), as
guarantors, the lenders from time to time party thereto and Wells Fargo Bank,
N.A. (as successor to Goldman Sachs Credit Partners L.P.), as agent; and (iv)
the 13.75% Senior Secured Notes issued pursuant to that certain Indenture dated
as of April 1, 2008, as supplemented, among Abitibi-Consolidated Company of
Canada (n/k/a/ Resolute Canada), as issuer, certain subsidiaries and affiliates
of Abitibi-Consolidated Company of Canada (n/k/a/ Resolute Canada), as
guarantors, and U.S. Bank, National Association, as successor indenture trustee.
“Previous Intercreditor Agreement” shall mean that certain Intercreditor
Agreement dated as of December 9, 2010, among Resolute, the other U.S. Loan
Parties, the Administrative Agent and Wells Fargo Bank, National Association.
The parties hereto acknowledge and agree that the Previous Intercreditor
Agreement has terminated in accordance with its terms.
“Primary Obligations” shall have the meaning specified in Section 11.02(a).
“Primary U.S. Loan Party Obligations” shall have the meaning specified in
Section 11.02(a).
“Priority Lien” shall have the meaning specified in the definition of Canadian
Priority Payables.
“Pro Rata Share” shall have the meaning specified in Section 11.02(a).
“Projections” shall mean the projections that were prepared by or on behalf of
AbitibiBowaterResolute in connection with this Agreement and provided to the
Administrative Agent on September 6, 2010 (and delivered by the Administrative
Agent to the Lenders).
“PST” shall mean all provincial sales taxes payable in any provincial
jurisdiction of Canada, other than GST and QST.
“QSPE” means each of the following: (a) Calhoun Note Holdings AT LLC, (b)
Calhoun Note Holdings TI LLC, (c) Abitibi-Consolidated U.S. Funding Corp., (d)
Timber Note HoldingHoldings LLC and (e) any other qualified special purpose
entity created to facilitate the

-65-

--------------------------------------------------------------------------------

 

sale and/or the monetization of receivables from the sale of timberlands or
Accounts in a transaction permitted hereunder.
“QST” shall mean the tax payable under the Act Respecting the Quebec Sales Tax,
R.S.Q. c.T-0.1, as amended.
“Qualified Secured Cash Management Agreement Reserve” shall mean, with respect
to a Secured Cash Management Agreement that is a Qualified Secured Cash
Management Agreement, the Canadian Qualified Secured Cash Management Agreement
Reserve and the U.S. Qualified Secured Cash Management Agreement Reserve in
respect of such Secured Cash Management Agreement.
“Qualified Secured Cash Management Agreements” shall have the meaning provided
in Section 13.21.
“Qualified Secured Cash Management Services Obligations” shall mean, with
respect to a Secured Cash Management Agreement that is a Qualified Secured Cash
Management Agreement, Cash Management Services Obligations under such Secured
Cash Management Agreement; provided that, at any time, the aggregate amount of
the Qualified Secured Cash Management Services Obligations under such Secured
Cash Management Agreement shall not exceed the aggregate amount of the Qualified
Secured Cash Management Agreement Reserve in respect of such Secured Cash
Management Agreement at such time (as such amount is reduced by the aggregate
amount of payments in respect of such Qualified Secured Cash Management Services
Obligations pursuant to Section 11.02); provided further that if the aggregate
amount of Qualified Secured Cash Management Services Obligations under such
Secured Cash Management Agreement (determined without giving effect to the
immediately preceding proviso) at any time exceeds the aggregate amount of the
Qualified Secured Cash Management Agreement Reserve in respect of such Secured
Cash Management Agreement at such time (as such amount is reduced by the
aggregate amount of payments in respect of such Qualified Secured Cash
Management Services Obligations pursuant to Section 11.02), then such excess
amount shall constitute other Cash Management Services Obligations (and,
accordingly, Tertiary Obligations) hereunder.
“Qualified Secured Hedging Agreement Reserve” shall mean, with respect to a
Secured Hedging Agreement that is a Qualified Secured Hedging Agreement, the
Canadian Qualified Secured Hedging Agreement Reserve and the U.S. Qualified
Secured Hedging Agreement Reserve in respect of such Secured Hedging Agreement.
“Qualified Secured Hedging Agreements” shall have the meaning provided in
Section 13.21.
“Qualified Secured Hedging Obligations” shall mean, with respect to a Secured
Hedging Agreement that is a Qualified Secured Hedging Agreement, Hedging
Obligations under such Secured Hedging Agreement; provided that, at any time,
the aggregate amount of the Qualified Secured Hedging Obligations with respect
to such Secured Hedging Agreement shall not exceed the aggregate Qualified
Secured Hedging Agreement Reserve in respect of such Secured Hedging Agreement
at such time (as such amount is reduced by the aggregate amount of payments in
respect

-66-

--------------------------------------------------------------------------------

 

of such Qualified Secured Hedging Obligations pursuant to Section 11.02);
provided further that if the aggregate amount of Qualified Secured Hedging
Obligations with respect to such Secured Hedging Agreement (determined without
giving effect to the immediately preceding proviso) at any time exceeds the
aggregate Qualified Secured Hedging Agreement Reserve in respect of such Secured
Hedging Agreement at such time (as such amount is reduced by the aggregate
amount of payments in respect of such Qualified Secured Hedging Obligations
pursuant to Section 11.02), then such excess amount shall constitute other
Hedging Obligations (and, accordingly, Tertiary Obligations) hereunder.
“Quarterly Payment Date” shall mean the last Business Day of each March, June,
September and December occurring after the Effective Date.
“Quebec Pension Agreement” shall mean the letter from Julie Boulet of the
Government of Quebec to David Paterson, Chief Executive Officer of
AbitibiBowater, dated September 16, 2010, together with the attached “Overview
of Measures for a Draft Regulation regarding Certain AbitibiBowater Pension
Plans”.
“Quebec Pension Regulations” shall mean the special funding relief regulations
under the Supplemental Pension Plans Act (Quebec) adopted in accordance with the
CCAA Plan and the Quebec Pension Agreement.
“Quebec Pension Regulations Condition” shall mean the adoption and effectiveness
of the Quebec Pension Regulations implementing the Quebec Pension Agreement,
which condition was satisfied on or about August 17, 2011.
“Quebec Secured Obligations” shall have the meaning provided in Section 12.12.
“Quebec Security Documents” shall mean each hypothecation, bond, pledge of bond
and other security document executed and delivered by any of the Canadian Loan
Parties, in form and substance reasonably acceptable to the Collateral Agent, as
may be necessary for the purpose of creating and preserving in the Province of
Quebec the Liens on ABL Priority Collateral located in or otherwise subject to
the laws of the Province of Quebec.
“Real Properties” shall mean each parcel of real property identified on
Schedule 8.19, together with all fixtures thereon, and each other parcel of real
property acquired and owned in fee simple by AbitibiBowaterResolute or any
Domestic Subsidiary of AbitibiBowaterResolute (other than an Excluded
Subsidiary) after the Closing Date, together with all fixtures thereon.
“Reference Discount Rate” shall mean, in respect of any Bankers’ Acceptances or
completed Drafts to be purchased by a Canadian Facility Lender pursuant to
Section 2.01(a) and Schedule 1.01(b), (i) by a chartered bank listed on Schedule
I to the Bank Act (Canada), the CDOR Rate and (ii) by any other Canadian
Facility Lender, the lesser of (A) the rate specified in (i) plus 0.10% and (B)
the discount rate (calculated on an annual basis and rounded to the nearest
one-hundredth of 1%, with five-thousandths of 1% being rounded up) quoted by
Citibank Canada at 10:00 A.M. (Toronto time) as the discount rate at which
Citibank Canada would purchase, on the relevant Drawing Date, its own bankers’
acceptances or Drafts having an aggregate Face Amount

-67-

--------------------------------------------------------------------------------

 

equal to, and with a term to maturity the same as, the Bankers’ Acceptances or
Drafts, as the case may be, to be acquired by such Canadian Facility Lender on
such Drawing Date.
“Register” shall have the meaning provided in Section 13.15.
“Regulation H” shall mean Regulation H of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.
“Regulation T” shall mean Regulation T of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.
“Regulation U” shall mean Regulation U of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.
“Regulation X” shall mean Regulation X of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.
“Release” shall mean any actual or threatened release, spill, emission, leaking,
dumping, injection, pouring, deposit, disposal, discharge, dispersal, leaching
or migration into or through the environment or within any building, structure,
facility or fixture.
“Rent Reserve” shall mean with respect to any facility, warehouse, distribution
center or depot where any Inventory subject to Liens arising by operation of law
is located and with respect to which no Collateral Access Agreement is in
effect, a reserve equal to (a) in the case of any leased location, one month’s
(or such longer period as the Collateral Agent determine in its Discretion as it
will take to liquidate ABL Priority Collateral at such location) gross rent at
such facility, warehouse, distribution center or depot, but in no event shall
such reserve be less than $1,300,000, and (b) in the case of any other such
location, an amount determined by the Collateral Agent in its Discretion in
respect of the liabilities owed to the applicable bailee or warehouseman.
“Reorganization” shall have the meaning provided in the recitals to this
Agreement.
“Replaced Lender” shall have the meaning provided in Section 2.13.
“Replacement Lender” shall have the meaning provided in Section 2.13.
“Representative” shall have the meaning provided in Section 11.02(d).
“Required Lenders” shall mean, at any time, Non-Defaulting Lenders the sum of
whose Commitments (or, after the termination of all Commitments, outstanding
Individual Exposures) at such time represents at least a majority of the Total
Commitment in effect at such time less the Commitments of all Defaulting Lenders
(or, after the termination of all Commitments, the sum of then total outstanding
Individual Exposures of all Non-Defaulting Lenders, at such time).
“Reserves” shall mean Dilution Reserves, Inventory Reserves, Rent Reserves and
any other reserves established by the Collateral Agent in its Discretion, in all
cases without duplication and reserving for such items that have not already
been taken into account in the

-68-

--------------------------------------------------------------------------------

 

calculation of the applicable Borrowing Base (including through the categories
of ineligible items set forth in the definitions of “Eligible Accounts” and
“Eligible Inventory”) (including, without limitation, reserves for accrued and
unpaid interest on the Secured Obligations, reserves for contingent liabilities
of any Loan Party, reserves for uninsured losses of any Loan Party, reserves for
uninsured, underinsured, un-indemnified or under-indemnified liabilities or
potential liabilities with respect to any litigation, reserves for freight costs
related to Eligible Inventory in transit, and reserves for taxes, fees,
assessments, and other governmental charges) with respect to the Collateral or
any Loan Party (other than any Qualified Secured Cash Management Agreement
Reserve and any Qualified Secured Hedging Agreement Reserve).
“Resolute” shall have the meaning provided in the preamble of this Agreement.
For the avoidance of doubt, references herein to “Resolute” shall also be deemed
to be references to AbitibiBowater.
“Resolute Canada” shall mean Resolute FP Canada Inc. / PF Resolu Canada Inc., a
Canadian corporation.
“Resolute US” shall mean Resolute FP US Inc., a Delaware corporation.
“Responsible Officer” of any Person shall mean the chief executive officer,
chief operating officer, president or any Financial Officer of such Person and
any other officer or similar official thereof responsible for the administration
of the obligations of such Person in respect of this Agreement.
“Restricted Payment” shall mean (a) any dividend or other distribution, direct
or indirect, on account of any Equity Interests of AbitibiBowaterResolute or any
of its Subsidiaries, now or hereafter outstanding, except (i) any dividend
payable solely in shares or other Equity Interests of such class of Equity
Interests to the holders of such Equity Interests, (ii) any dividend or
distribution made by any Subsidiary of AbitibiBowaterResolute ratably to the
holders of the capital stock of such Subsidiary and (iii) any dividend or
distribution made or paid to AbitibiBowaterResolute or any Subsidiary of
AbitibiBowaterResolute, and (b) any redemption, retirement, sinking fund or
similar payment, purchase, exchange or other acquisition for value, direct or
indirect, of any Equity Interests of AbitibiBowaterResolute or any of its
Subsidiaries, now or hereafter outstanding, except for any such redemption,
retirement, sinking fund or similar payment, purchase, exchange or other
acquisition for value (i) payable only to a Loan Party or payable from a Foreign
Subsidiary of AbitibiBowaterResolute to another Foreign Subsidiary of
AbitibiBowaterResolute or (ii) of any minority Equity Interests of a Subsidiary
of AbitibiBowaterResolute that is not wholly owned which are held by Persons
that are not Affiliates of AbitibiBowaterResolute.
“Restructuring Transactions” shall mean the steps and transactions required to
give effect to the transactions contemplated in the CCAA Plan and the
restructuring transaction notice(s) posted and delivered in accordance with the
CCAA Plan.
“Returns” shall have the meaning provided in Section 8.12.

-69-

--------------------------------------------------------------------------------

 

“Revolver Facilities” shall have the meaning provided in Section 15.01(f).
“Revolving Credit Obligations” shall, prior to the Effective Date, have the
meaning assigned to such term in the form of Intercreditor Agreement attached as
Exhibit E hereto, and after the Effective Date, have the meaning assigned to
such term in the Intercreditor Agreement.
“Revolving Loan” shall have the meaning provided in Section 2.01(a).
“Revolving Loan Maturity Date” shall mean October 28, 2016 (or if such day is
not a Business Day, the immediately preceding Business Day).
“Revolving Note” shall have the meaning provided in Section 2.05(a).
“RL Percentage” of any Lender at any time shall mean a fraction (expressed as a
percentage) the numerator of which is the Commitment of such Lender at such time
and the denominator of which is the Total Commitment at such time, provided that
if the RL Percentage of any Lender is to be determined after the Total
Commitment has been terminated, then the RL Percentage of such Lender shall mean
a fraction (expressed as a percentage) the numerator of which is such Lender’s
Individual Exposure at such time and the denominator of which is the Aggregate
Exposure at such time; provided that in the case of Section 2.18 when a
Defaulting Lender shall exist, “RL Percentage” shall mean the percentage of the
total Commitments (disregarding any Defaulting Lender’s Commitment) represented
by such Lender’s Commitment.
“S&P” shall mean Standard & Poor’s Ratings Services, a division of McGraw‑Hill,
Inc.
“Sale/Leaseback Transaction” shall mean an arrangement, direct or indirect,
whereby AbitibiBowaterResolute or any of its Subsidiaries shall sell or transfer
any property, real or personal, used or useful in its business, whether now
owned or hereafter acquired, and thereafter rent or lease such property or other
property that it intends to use for substantially the same purpose or purposes
as the property sold or transferred.
“Sanction Order” shall have the meaning provided in the recitals to this
Agreement.
“Second Amendment Effective Date” means October 28, 2011.
“Secondary Obligations” shall have the meaning specified in Section 11.02(a).
“Secondary U.S. Loan Party Obligations” shall have the meaning specified in
Section 11.02(a).
“Section 5.045.05(b)(ii) Certificate” shall have the meaning provided in
Section 5.045.05(b)(ii).
“Secured Cash Management Agreements” shall mean each Cash Management Agreement
entered into by a Loan Party with any Lender or any affiliate thereof (even if
such Lender subsequently ceases to be a Lender under this Agreement for any
reason) the obligations of which

-70-

--------------------------------------------------------------------------------

 

have been designated pursuant to Section 13.21 as being treated as “Cash
Management Services Obligations” so long as such Lender or such affiliate
participates in such Secured Cash Management Agreement.
“Secured Hedging Agreements” shall mean each Hedging Agreement entered into by a
Loan Party with any Lender or any affiliate thereof (even if such Lender
subsequently ceases to be a Lender under this Agreement for any reason) the
obligations of which have been designated pursuant to Section 13.21 as being
treated as “Hedging Obligations” so long as such Lender or such affiliate
participates in such Hedging Agreement.
“Secured Obligations” shall mean the Canadian Secured Obligations, the English
Secured Obligations and/or the U.S. Secured Obligations or both, as the context
requires, but shall in any case exclude the Excluded Swap Obligations.
“Secured Parties” shall mean, collectively, (i) the Lender Creditors, (ii) the
Hedging Creditors, (iii) the Cash Management Creditors, (iv) the beneficiaries
of each indemnification obligation undertaken by any Loan Party under any Loan
Document and (v) the successors and assigns of each of the foregoing.
“Securities Act” shall mean the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
“Security Documents” shall mean the Mortgages, the Guarantee and Collateral
Agreement, the Canadian Security Documents, the European Security Documents, the
IP Security Agreements, the Collateral Access Agreements and each of the
security agreements and other instruments and documents executed and delivered
pursuant to Section 9.09 or the Letter of Credit Back-Stop Arrangements;
provided, that any cash collateral or other agreements entered into pursuant to
the Letter of Credit Back-Stop Arrangements shall constitute “Security
Documents” solely for purposes of (x) Sections 8.02 and (y) the term “Loan
Documents” as used in Sections 10.01(a), 10.02(a)(ii), 10.11 and 13.01.
“Senior Managing Agents” shall mean each of BMO Capital Markets and Canadian
Imperial Bank of Commerce, each in its capacity as Senior Managing Agent in
respect of the credit facilities hereunder, and any successors thereto.
“Senior Secured Notes” shall mean (a) the 10.255.875% Senior Secured Notes due
20182023 issued by ABI Escrow Corporationon May 8, 2013 by Resolute in the
aggregate principal amount of $850,000,000600,000,000 or (b) any Permitted
Refinancing Indebtedness of the Indebtedness described in clause (a).
“Senior Notes Documents” shall mean all agreements and other documents
evidencing or governing the Senior Notes or providing for any guarantee or other
right in respect thereof.

-71-

--------------------------------------------------------------------------------

 

“Senior Secured Notes” shall mean the 10.25% Senior Secured Notes due 2018
issued by ABI Escrow Corporation in the aggregate principal amount of
$850,000,000 which were fully redeemed in 2013.
“Senior Secured Notes Documents” shall mean all agreements and other documents
evidencing or governing the Senior Secured Notes (other than, for the avoidance
of doubt, this Agreement or the Previous Intercreditor Agreement) or providing
for any guarantee, security interests or other right in respect thereof.
“Settlement Date” shall have the meaning provided in Section 2.04(b)(i).
“Significant Asset Sale” shall mean each Asset Sale (without giving effect to
clauses (ii), (iii) and (iv) of the proviso to such definition) (and any
casualty or condemnation event) with respect to ABL Priority Collateral
resulting in Net Cash Proceeds in excess of $10,000,000.
“Sixth Amendment Effective Date” shall mean the date on which Amendment No. 6
becomes effective in accordance with its terms.
“Specified Acquisition” shall have the meaning specified in Amendment No. 4.
“Specified Collection Accounts” shall mean, at all times prior to the date that
is 90 days following the Second Amendment Effective Date (or such later date as
is agreed by the Administrative Agent in its reasonable discretion) (the “Cutoff
Date”), the deposit accounts listed on Schedule 1.01(e) hereto; provided, that
the average daily balance (determined for the most recently completed calendar
month) held in all Specified Collection Accounts shall not at any time exceed
(x) $20,000,000 in the aggregate for all such accounts if Excess Availability is
greater than $150,000,000 or (y) $10,000,000 in the aggregate for all such
accounts if Excess Availability is less than or equal to $150,000,0000 (and, if
the foregoing condition would not be satisfied at any time,
AbitibiBowaterResolute shall re-designate one or more such accounts as not
constituting Specified Collection Accounts to the extent necessary (and absent
any such designation, the Administrative Agent may make such designation in its
discretion)). It is understood and agreed that on and after the Cutoff Date,
none of the deposit accounts set forth on Schedule 1.01(e) (and no other deposit
accounts) shall constitute Specified Collection Accounts.
“Specified Secured Indebtedness” shall have the meaning given to such term in
Section 10.02(a)(iii).
“Specified Secured Indebtedness Collateral Account” means each deposit account
or securities account established pursuant to the Specified Secured Indebtedness
Documents for purposes of holding Notes Priority Collateral (and no other
amounts).
“Specified Secured Indebtedness Documents” shall mean all agreements and other
documents evidencing or governing the Specified Secured Indebtedness (other
than, for the avoidance of doubt, any of the Loan Documents or any intercreditor
agreement) or providing for any guarantee, security interests or other right in
respect thereof.

-72-

--------------------------------------------------------------------------------

 

“Start Date” shall mean the first day of each calendar month commencing after
the Two-Quarter Date.
“Stated Amount” of each Letter of Credit shall mean, at any time, the maximum
amount available to be drawn thereunder (in each case determined without regard
to whether any conditions to drawing could then be met); provided that the
“Stated Amount” of each Letter of Credit denominated in Canadian Dollars shall
be, on any date of calculation, the U.S. Dollar Equivalent of the maximum amount
available to be drawn in the respective currency thereunder (determined without
regard to whether any conditions to drawing could then be met).
“Subsidiary” shall mean, with respect to any Person, any corporation,
partnership, association or other business entity of which securities or other
ownership interests representing more than 50% of the equity or more than 50% of
the ordinary voting power or more than 50% of the general partnership or
membership interests are, at the time any determination is being made, owned,
controlled or held by, or otherwise Controlled by, such Person or one or more
Subsidiaries of such Person or by such Person and one or more Subsidiaries of
such Person. Unless otherwise qualified, all references to a “Subsidiary” or to
“Subsidiaries” in this Agreement shall refer to a Subsidiary or Subsidiaries of
AbitibiBowaterResolute.
“Subsidiary Guarantor” shall mean each U.S. Subsidiary Guarantor and, each
Canadian Subsidiary Guarantor and each English Guarantor.
“Super-Majority Facility Lenders” shall mean those Non-Defaulting Lenders which
would constitute the Required Lenders under, and as defined in, this Agreement,
if the reference to “a majority” contained therein were changed to “66⅔%”.
“Swap Obligation” means, with respect to any Guarantor, any obligation to pay or
perform under any agreement, contract or transaction that constitutes a “swap”
within the meaning of section 1a(47) of the Commodity Exchange Act.

“Swingline Expiry Date” shall mean that date which is five Business Days prior
to the Revolving Loan Maturity Date.
“Swingline Exposure” shall mean the sum of (i) the U.S. Facility Swingline
Exposure plus (ii) the Canadian Facility Swingline Exposure.
“Swingline Lender” shall mean (a) the Administrative Agent, in its capacity as a
Swingline Lender hereunder. and (b) a Canadian Lender designated after the Sixth
Amendment Effective Date by Resolute to act as a provider of Swingline Loans to
the Canadian Borrowers hereunder (and that has agreed to act in such capacity)
and that has executed a counterpart or joinder hereto or other written agreement
evidencing such agreement (the “Canadian Swingline Lender”).
“Swingline Loan” shall have the meaning provided in Section 2.01(b).
“Swingline Note” shall have the meaning provided in Section 2.05(a).

-73-

--------------------------------------------------------------------------------

 

“Syndication Agent” shall mean each of Barclays Capital, the investment banking
division of Barclays, and The Bank of Nova Scotia, each in its capacity as
Syndication Agent in respect of the credit facilities hereunder, and any
successors thereto.
“Taxes” shall have the meaning provided in Section 5.045.05(a).
“Tax Incentive Transaction” means any development or revenue bond financing
arrangement between any Subsidiary of AbitibiBowaterResolute and a development
authority or other similar governmental authority or entity for the purpose of
providing property tax incentives to such Subsidiary whereby the development
authority (i) purchases property from or on behalf of such
AbitibiBowaterResolute Subsidiary, (ii) leases such property back to such
AbitibiBowaterResolute Subsidiary, (iii) the development authority issues the
bonds to finance such acquisition and 100% of such bonds are purchased and held
by AbitibiBowaterResolute or a Wholly-Owned Subsidiary of
AbitibiBowaterResolute, (iv) the rental payments on the lease and the debt
service payments on the bonds are substantially equal and (v) such
AbitibiBowaterResolute or such Subsidiary has the option to prepay the bonds,
terminate its lease and reacquire the property for nominal consideration at any
time; provided that if at any time any of the foregoing conditions shall cease
to be satisfied, such transaction shall cease to be a Tax Incentive Transaction.
“Tertiary Obligations” shall have the meaning specified in Section 11.02(a).
“Test Period” shall mean, on any date of determination, (i) other than during a
Compliance Period, the period of four consecutive fiscal quarters of
AbitibiBowaterResolute then last ended and (ii) during a Compliance Period, each
period of 12 consecutive fiscal months of AbitibiBowaterResolute then last
ended, in each case taken as one accounting period.
“Total Borrowing Base” shall mean, as of any date of determination, the sum of
the Canadian Borrowing Base and the U.S. Borrowing Base, in each case, at such
date.
“Total Canadian Facility Commitment” shall mean, at any time, the sum of the
Canadian Facility Commitments of each of the Lenders at such time.
“Total Commitment” shall mean, at any time, the sum of the Commitments of each
of the Lenders at such time.
“Total Unutilized Canadian Facility Commitment” shall mean, at any time, an
amount equal to (a) the Total Canadian Facility Commitment in effect at such
time minus (b) the Aggregate Canadian Facility Exposure at such time.
“Total Unutilized Commitment” shall mean, at any time, an amount equal to (a)
the Total Commitment in effect at such time minus (b) the Aggregate Exposure at
such time.
“Total Unutilized U.S. Facility Commitment” shall mean, at any time, an amount
equal to (a) the Total U.S. Facility Commitment in effect at such time minus
(b) the Aggregate U.S. Facility Exposure at such time.

-74-

--------------------------------------------------------------------------------

 

“Total U.S. Facility Commitment” shall mean, at any time, the sum of the U.S.
Facility Commitments of each of the Lenders at such time.
“Transactions” shall have the meaning provided in Section 8.02.
“Two-Quarter Date” shall mean the date on which the second fiscal quarter of
AbitibiBowaterResolute which commences on or after the Effective Date shall end.
“2007 CIBC Letter of Credit Facility” shall mean the letter of credit facility
made available to Abitibi-Consolidated Inc. (n/k/a/ Resolute Canada) (including
in its capacity as successor to Abitibi-Consolidated Company of Canada) pursuant
to that certain Credit Agreement, dated as of March 21, 2007, by and among
Abitibi-Consolidated Inc. (n/k/a/ Resolute Canada), as borrower, Canadian
Imperial Bank of Commerce, as administrative agent, and the financial
institutions party thereto.
“2008 CIBC Letter of Credit Facility” shall mean the letter of credit facility
made available to Abitibi-Consolidated Inc. (n/k/a/ Resolute Canada) (successor
to Abitibi-Consolidated Company of Canada) pursuant to that certain Facility
Agreement, dated as of April 1, 2008, by and among Abitibi-Consolidated Inc.
(n/k/a/ Resolute Canada) (successor to Abitibi-Consolidated Company of Canada),
as borrower, Canadian Imperial Bank of Commerce, as administrative agent, and
the financial institutions party thereto.
“2008 CIBC Letter of Credit Facility Intercreditor Agreement” shall mean an
intercreditor agreement in respect of the cash collateral securing the 2008 CIBC
Letter of Credit Facility in form and substance reasonably satisfactory to the
Collateral Agent.
“Type” shall mean the type of Loan determined with regard to the interest option
applicable thereto, i.e., whether a Base Rate Loan, a Eurodollar Loan, a
Canadian Prime Rate Loan or a Bankers’ Acceptance Loan.
“UCC” shall mean the Uniform Commercial Code as from time to time in effect in
the relevant jurisdiction.
“United States” and “U.S.” shall each mean the United States of America.
“Unpaid Drawing” shall have the meaning provided in Section 3.05(a).
“Unutilized Commitment” shall mean, with respect to any Lender at any time, the
sum of (i) to the extent such Lender is a U.S. Facility Lender, such Lender’s
U.S. Facility Commitment at such time minus the sum of (a) the aggregate
outstanding principal amount of all U.S. Facility Revolving Loans made by such
Lender at such time plus (b) such Lender’s U.S. Facility RL Percentage of the
U.S. Facility Letter of Credit Outstandings at such time and (ii) to the extent
such Lender is a Canadian Facility Lender, such Lender’s Canadian Facility
Commitment at such time minus the sum of (a) the aggregate outstanding principal
amount of all Canadian Facility Revolving Loans made by such Lender at such time
plus (b) such Lender’s Canadian Facility Letter

-75-

--------------------------------------------------------------------------------

 

of Credit Exposure at such time. For purposes of this definition, calculations
shall be based on the U.S. Dollar Equivalent of amounts denominated in Canadian
Dollars.
“U.K.” shall mean the United Kingdom.
“U.K. Security Documents” shall mean the English Security Agreement, the
Northern Irish Security Agreement and the other similar security agreements,
instruments and documents executed and delivered pursuant to Section 9.09
governed by the laws of England and Wales.
“U.S. Bankruptcy Court” shall have the meaning provided in the recitals to this
Agreement.
“U.S. Borrower” and “U.S. Borrowers” shall have the meaning provided in the
preamble of this Agreement and shall include any Other Borrower that is a
Domestic Subsidiary.
“U.S. Borrower Canadian Facility Letter of Credit” shall have the meaning
provided in Section 3.01(a).
“U.S. Borrower Canadian Facility Revolving Loan” shall have the meaning provided
in Section 2.01(a).
“U.S. Borrower Canadian Facility Revolving Note” shall have the meaning provided
in Section 2.05(a).
“U.S. Borrower Canadian Facility Swingline Loan” shall have the meaning provided
in Section 2.01(b).
“U.S. Borrower Canadian Facility Swingline Note” shall have the meaning provided
in Section 2.05(a).
“U.S. Borrower Loans” shall mean each U.S. Borrower Revolving Loan and each U.S.
Borrower Swingline Loan.
“U.S. Borrower Obligations” shall mean all Obligations owing to the
Administrative Agent, the Collateral Agent, any Issuing Lender or any Lender by
any U.S. Borrower.
“U.S. Borrower Revolving Loan” shall mean each Revolving Loan borrowed by a U.S.
Borrower.
“U.S. Borrower Swingline Loan” shall mean each Swingline Loan borrowed by a U.S.
Borrower.
“U.S. Borrowing Base” shall mean, at the time of any determination, an amount
equal to the sum of the U.S. Dollar amount (for this purpose, using the U.S.
Dollar Equivalent of amounts not denominated in U.S. Dollars), without
duplication, of (a) (I) 85% of the aggregate Outstanding Balance of Eligible
U.S. Accounts (other than Eligible International Accounts) at such

-76-

--------------------------------------------------------------------------------

 

time plus (II) 90% of the aggregate Outstanding Balance of Eligible
International Accounts owned by U.S. Loan Parties plus (b) the lesser of (i) 65%
of Eligible U.S. Inventory at such time and (ii) 85% of the Net Orderly
Liquidation Value of Eligible U.S. Inventory at such time (in each case with
respect to clauses (i) and (ii) with any Eligible U.S. Inventory to be valued at
the lower of cost or market value thereof (net of any intercompany profit)),
minusplus (c)(i) 100% of all amounts on deposit in U.S. Designated Blocked
Accounts (to the extent such amounts constitute cash held in Deposit Accounts)
and (ii) 95% of all other amounts on deposit in U.S. Designated Blocked Accounts
(to the extent such amounts constitute Permitted Investments of the type
described in clause (a) of the definition thereof held in securities accounts),
minus (d) the sum (without duplication) of (i) the aggregate amount of U.S.
Qualified Secured Hedging Agreement Reserves for all U.S. Qualified Secured
Hedging Agreements, (ii) the aggregate amount of U.S. Qualified Secured Cash
Management Agreement Reserves for all U.S. Qualified Secured Cash Management
Agreements, (iii) the Insurance Deductible Reserve with respect to the U.S.
Borrowing Base; and (iv) the amount of any other Reserves, in such amounts and
with respect to such matters, as the Collateral Agent in its Discretion may
establish from time to time with respect to the U.S. Borrowing Base; provided,
however, that the aggregate amount arising under preceding clause (c), together
with the aggregate amount arising under clause (c) of the first sentence of the
definition of “Canadian Borowing Base”, shall not exceed $100,000,000. The U.S.
Borrowing Base at any time shall be determined by reference to the most recent
Borrowing Base Certificate delivered to the Administrative Agent pursuant to
Section 5.04(d), 5.04(e) or 9.04(h) of this Agreement, adjusted on a pro forma
basis as necessary (pending the delivery of a new Borrowing Base Certificate) to
reflect the impact of any Significant Asset Sale or any other event or
circumstance which by the express terms of this Agreement alters the eligibility
for inclusion in the U.S. Borrowing Base of Eligible Accounts or Eligible
Inventory reflected in such Borrowing Base Certificate. The Collateral Agent
shall have the right (but no obligation) to review the computations in any
Borrowing Base Certificate and if, in its Discretion, such computations have not
been calculated in accordance with the terms of this Agreement, the Collateral
Agent shall have the right, in consultation with AbitibiBowaterResolute, to
correct any such errors in such manner as it shall determine in its Discretion
and the Collateral Agent will notify AbitibiBowaterResolute promptly after
making any such correction.
“U.S. Collection Account” shall mean each account established at a U.S.
Collection Bank subject to a Control Agreement into which funds shall be
transferred as provided in Section 5.03(b).
“U.S. Collection Banks” shall have the meaning provided in Section 5.03(b).
“U.S. Debtor Entities” shall have the meaning provided in the recitals to this
Agreement.
“U.S. Designated Blocked Account” shall have the meaning assigned to such term
in Section 5.04(a).
“U.S. Dilution Reserve” shall mean, at any date, (i) the amount by which the
Dilution Ratio of U.S. Eligible Accounts exceeds five percent (5%) multiplied by
(ii) the Eligible U.S. Accounts on such date.

-77-

--------------------------------------------------------------------------------

 

“U.S. Dollar Denominated Loans” shall mean each Loan denominated in U.S. Dollars
at the time of the incurrence thereof.
“U.S. Dollar Denominated Revolving Loans” shall mean each Revolving Loan
denominated in U.S. Dollars at the time of the incurrence thereof.
“U.S. Dollar Denominated Swingline Loans” shall mean each Swingline Loan
denominated in U.S. Dollars at the time of the incurrence thereof.
“U.S. Dollar Equivalent” of an amount denominated in a currency other than U.S.
Dollars shall mean, at any time for the determination thereof, the amount of
U.S. Dollars which could be purchased with the amount of such currency involved
in such computation at the spot exchange rate therefor as quoted by the
Administrative Agent as of 11:00 A.M. (New York time) on the date two Business
Days prior to the date of any determination thereof, for purchase on such date;
provided that for purposes of (x) determining compliance with Sections 2.01(c),
2.01(d), 3.02, 5.02(a), 7.01 and 7.03 and (y) calculating Fees pursuant to
Section 4.01 (except Fees which are expressly required to be paid in a currency
other than U.S. Dollars pursuant to Section 4.01), the U.S. Dollar Equivalent of
any amounts denominated in a currency other than U.S. Dollars shall be revalued
on each Credit Event or loan repricing date using the spot exchange rates
therefor as quoted on Bloomberg (or, if same does not provide such exchange
rates, on such other basis as is reasonably satisfactory to the Administrative
Agent) on the immediately preceding Business Day, provided, however, that at any
time, if the Aggregate Exposure (for the purposes of the determination thereof,
using the U.S. Dollar Equivalent as recalculated based on the spot exchange rate
therefor as quoted on Bloomberg (or, if same does not provide such exchange
rates, on such other basis as is reasonably satisfactory to the Administrative
Agent) on the respective date of determination pursuant to this exception) would
exceed 85% of the Total Commitment or the Total Borrowing Base, then in the sole
discretion of the Administrative Agent or at the request of the Required
Lenders, the U.S. Dollar Equivalent shall be reset based upon the spot exchange
rates on such date as quoted on Bloomberg (or, if same does not provide such
exchange rates, on such other basis as is reasonably satisfactory to the
Administrative Agent), which rates shall remain in effect until the date of a
Credit Event or loan repricing or such earlier date, if any, as the rate is
reset pursuant to this proviso. Notwithstanding anything to the contrary
contained in this definition, at any time that a Default or an Event of Default
then exists, the Administrative Agent may revalue the U.S. Dollar Equivalent of
any amounts outstanding under the Loan Documents in a currency other than U.S.
Dollars on any date in its sole discretion in accordance with the foregoing
methodology.
“U.S. Dollars” or “$” shall mean lawful currency of the United States.
“U.S. Facility” shall mean the credit facility established hereunder for the
U.S. Borrowers under Sections 2.01(a)(A), 2.01(b)(A) and 3.01(a)(A)(i).
“U.S. Facility Commitment” shall mean, for each Lender, the amount set forth
opposite such Lender’s name in Schedule 1.01(a) directly below the column
entitled “U.S. Facility Revolving Commitment”, as same may be (x) reduced from
time to time or terminated pursuant to Sections 4.02, 4.03 and/or 11, as
applicable, (y) adjusted from time to time as a result of assignments to or from
such Lender pursuant to Section 2.13 or 13.04(b), or (z) increased from time to
time

-78-

--------------------------------------------------------------------------------

 

pursuant to Section 2.14. As of the Closing Date, the aggregate amount of U.S.
Facility Commitments of the U.S. Facility Lenders is U.S. $200,000,000.
“U.S. Facility Lenders” shall mean the Lenders having U.S. Facility Commitments
(or, after the termination of all U.S. Facility Commitments, outstanding
Individual U.S. Facility Exposure).
“U.S. Facility Letter of Credit” shall have the meaning provided in
Section 3.01(a).
“U.S. Facility Letter of Credit Exposure” shall mean, at any time, the aggregate
amount of all U.S. Facility Letter of Credit Outstandings at such time in
respect of U.S. Facility Letters of Credit issued for the account of any U.S.
Borrower. The U.S. Facility Letter of Credit Exposure of any Lender at any time
shall be its U.S. Facility RL Percentage of the total U.S. Facility Letter of
Credit Exposure at such time.
“U.S. Facility Letter of Credit Outstandings” shall mean, at any time, the sum
of (a) the Stated Amount of all outstanding U.S. Facility Letters of Credit at
such time and (b) the aggregate amount of all Unpaid Drawings in respect of all
U.S. Facility Letters of Credit at such time.
“U.S. Facility Obligations” shall mean all Loan Document Obligations owing to
any Lender Creditor to repay principal of, interest on, and all other amounts
with respect to, all U.S. Facility Revolving Loans, U.S. Facility Swingline
Loans, U.S. Facility Letters of Credit, and all other Loan Document Obligations
(including, without limitation, all fees, indemnities, taxes and other
obligations) pursuant to this Agreement and each other Loan Document in
connection with the U.S. Facility Commitments.
“U.S. Facility Revolving Loan” shall have the meaning provided in
Section 2.01(a).
“U.S. Facility Revolving Note” shall have the meaning provided in
Section 2.05(a).
“U.S. Facility RL Percentage” of any U.S. Facility Lender at any time shall mean
a fraction (expressed as a percentage) the numerator of which is the U.S.
Facility Commitment of such Lender at such time and the denominator of which is
the Total U.S. Facility Commitment at such time, provided that if the U.S.
Facility RL Percentage of any U.S. Facility Lender is to be determined after the
Total U.S. Facility Commitment has been terminated, then the U.S. Facility RL
Percentages of such U.S. Facility Lender shall mean a fraction (expressed as a
percentage) the numerator of which is such U.S. Facility Lender’s Individual
U.S. Facility Exposure at such time and the denominator of which is the
Aggregate U.S. Facility Exposure at such time, provided that in the case of
Section 2.18 when a Defaulting Lender shall exist, “U.S. Facility RL Percentage”
shall mean the percentage of the Total U.S. Facility Commitments (disregarding
any Defaulting Lender’s U.S. Facility Commitment) represented by such Lender’s
U.S. Facility Commitment.
“U.S. Facility Swingline Exposure” shall mean, at any time, the aggregate
principal amount of all U.S. Facility Swingline Loans outstanding at such time.
The U.S. Facility Swingline Exposure of any Lender at any time shall be its U.S.
Facility RL Percentage of the total U.S. Facility Swingline Exposure at such
time.

-79-

--------------------------------------------------------------------------------

 

“U.S. Facility Swingline Loan” shall have the meaning provided in
Section 2.01(b).
“U.S. Facility Swingline Note” shall have the meaning provided in
Section 2.05(a).
“U.S. Guarantors” shall mean and include each U.S. Borrower (in its capacity as
a guarantor under the Guarantee and Collateral Agreement) and each U.S.
Subsidiary Guarantor.
“U.S. Loan Parties” shall mean AbitibiBowaterResolute, each other U.S. Borrower
and each U.S. Guarantor.
“U.S. Loan Party Obligations” shall mean (i) all U.S. Borrower Obligations,
(ii) all Hedging Obligations owing to Hedging Creditors by any U.S. Loan Party,
(iii) all Cash Management Services Obligations owing to Cash Management
Creditors by any U.S. Loan Party, and (iv) any guarantees of the obligations
described in clause (i), (ii) or (iii) hereof by the U.S. Loan Parties pursuant
to the Guarantee and Collateral Agreement or pursuant to any other Loan
Document.
“U.S. Perfection Certificate” shall mean the U.S. Perfection Certificate in the
form thereof included in Exhibit D-1 or any other form approved by the
Administrative Agent, as the same may be supplemented from time to time pursuant
to Section 9.10(c) or otherwise.
“U.S. Proceedings” shall have the meaning provided in the recitals to this
Agreement.
“U.S. Qualified Secured Cash Management Agreement” shall mean any Qualified
Secured Cash Management Agreement between a Cash Management Creditor (as
determined at the time such Secured Cash Management Agreement is designated by
AbitibiBowaterResolute as a Qualified Secured Cash Management Agreement without
regard to whether such Person is currently a Lender or an affiliate thereof) and
any Loan Party.
“U.S. Qualified Secured Cash Management Agreement Reserve” shall mean a reserve
established by the Collateral Agent from time to time in respect of a U.S.
Qualified Secured Cash Management Agreement, which reserve shall be in an amount
equal to the reserve agreed upon from time to time by the applicable Cash
Management Creditor, AbitibiBowaterResolute and notified to, and if Excess
Availability (after giving effect to such reserve) is less than 35% of the Total
Commitment then in effect at the time such reserve is created or increased,
consented to in writing by the Collateral Agent in its Discretion (it being
understood and agreed that a reserve with respect to a U.S. Qualified Secured
Cash Management Agreement (i) may be only be decreased with the consent of the
Cash Management Creditor party to such U.S. Qualified Secured Cash Management
Agreement and (ii) may be only be created or increased if, after giving effect
thereto, the Aggregate U.S. Borrower Exposure would not exceed 100% of the U.S.
Borrowing Base at such time.)
“U.S. Qualified Secured Hedging Agreement” shall mean any Qualified Secured
Hedging Agreement between a Hedging Creditor (as determined at the time such
Hedging Agreement is designated by AbitibiBowaterResolute as a Qualified Secured
Hedging Agreement without regard to whether such Person is currently a Hedging
Creditor) and any Loan Party.

-80-

--------------------------------------------------------------------------------

 

“U.S. Qualified Secured Hedging Agreement Reserve” shall mean a reserve
established by the Collateral Agent from time to time in respect of a U.S.
Qualified Secured Hedging Agreement, which reserve shall be in the amount of the
aggregate U.S. Dollar Equivalent marked to market exposure thereunder as
calculated from time to time by the Hedging Creditor party to such U.S.
Qualified Secured Hedging Agreement in accordance with GAAP (based on the
valuation methodology agreed between AbitibiBowaterResolute and the Hedging
Creditor party to such U.S. Qualified Secured Hedging Agreement) and notified to
the Collateral Agent (and acknowledged by the Administrative Agent) (A) at the
time such Secured Hedging Agreement is designated as a Qualified Secured Hedging
Agreement and (B) from time to time thereafter, in each case, in accordance with
Section 13.21 (it being understood and agreed that a reserve with respect to a
U.S. Qualified Secured Hedging Agreement (i) may only be decreased below the
marked to market exposure thereunder with the consent of the Hedging Creditor
party to such U.S. Qualified Secured Hedging Agreement and (ii) may only be
created or increased (x) if after giving effect thereto the Aggregate U.S.
Borrower Exposure would not exceed 100% of the U.S. Borrowing Base at such time
and (y) if at such time an Event of Default exists or if after giving effect to
such reserve the aggregate amount of all Qualified Secured Hedging Agreement
Reserves would exceed $100,000,000, with the written consent of the Collateral
Agent in its Discretion.
“U.S. Secured Obligations” shall mean and include (a) all Loan Document
Obligations owing by any U.S. Loan Party, (b) all Hedging Obligations owing by
any U.S. Loan Party, (c) all Cash Management Services Obligations owing by any
U.S. Loan Party, and (d) all amounts paid (or incurred) by any Indemnified Party
as to which such Indemnified Party has the right to reimbursement under
Section 13.01 or any indemnity contained in any Security Document; it being
acknowledged and agreed that the “U.S. Secured Obligations” shall include
extensions of credit of the types described above, whether outstanding on the
date of this Agreement or any Security Document or extended from time to time
after the date of this Agreement or any Security Document.
“U.S. Subsidiary Guarantors” shall mean (a) each Domestic Subsidiary (other than
a Domestic Subsidiary that is a Subsidiary of a Foreign Subsidiary) of
AbitibiBowaterResolute that is a Material Wholly-Owned Subsidiary (other than
Excluded Subsidiaries and any U.S. Borrowers), whether existing on the Closing
Date or established, created or acquired after the Closing Date, (b) each
Subsidiary of AbitibiBowaterResolute (other than Excluded Subsidiaries and any
U.S. Borrowers), which guarantees obligations under the Senior Secured Notes
Documents, whether existing on the Closing Date or established, created or
acquired after the Closing Date and (c) each other Domestic Subsidiary of
AbitibiBowaterResolute that becomes party to the Guarantee and Collateral
Agreement as a “Guarantor” and “Grantor”, in each case unless and until such
time as the respective Subsidiary is released from all of its obligations under
the Security Documents to which it is a party in accordance with the terms and
provisions thereof.
“Weekly Borrowing Base Period” shall mean (a) any period (i) during the
occurrence and continuance of an Event of Default or (ii) (x) commencing on the
date on which the Excess Availability is less than an amount (the “Weekly
Reporting Amount”) at any time equal to the greater of (A) $75,000,00060,000,000
and (B) the lesser of (1) 1510% of the Total Commitment as then in effect or (2)
1510% of the Total Borrowing Base as then in effect, and (y) ending on the first
date

-81-

--------------------------------------------------------------------------------

 

thereafter on which the Excess Availability has been equal to or greater than
the Weekly Reporting Amount for 45 consecutive days and (b) any other period
which the Borrowers elect to treat as a Weekly Borrowing Base Period by notice
to the Collateral Agent, which period (in the case of this clause (b)) shall
terminate upon notice thereof by the Borrowers to the Collateral Agent.
“Weighted Average Life to Maturity” shall mean, when applied to any Indebtedness
at any date, the number of years obtained by dividing: (i) the sum of the
products obtained by multiplying (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (b) the
number of years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment; by (ii) the then outstanding principal
amount of such Indebtedness.
“Wells Fargo” shall mean Wells Fargo Bank, National Association, and its
successors.
“Wholly-Owned” shall mean, as to any Person not an individual, that 100% of all
Equity Interests of such Person (other than directors’ qualifying shares and/or
other nominal amounts of shares required to be held by Persons other than
AbitibiBowaterResolute and its Subsidiaries under applicable law) are held
directly or indirectly by AbitibiBowaterResolute.
“Withdrawal Liability” shall mean liability to a Multiemployer Plan as a result
of a complete or partial withdrawal from such Multiemployer Plan, as such terms
are defined in Part I of Subtitle E of Title IV of ERISA.
1.02.    References to “UCC”. Where the context so requires, (i) any term
defined herein by reference to the “UCC” shall also have any extended,
alternative or analogous meaning given to such term in applicable Canadian
personal property security and other laws (including, without limitation, the
Personal Property Security Act of each province or territory of Canada, the
Securities Transfer Act or equivalent of each province or territory of Canada,
the Civil Code of Québec, the Bills of Exchange Act (Canada) and the Depository
Bills and Notes Act (Canada)), in all cases for the extension, preservation or
betterment of the security and rights of the Administrative Agent, and (ii) all
references herein to a financing statement, continuation statement, amendment or
termination statement shall be deemed to refer also to the analogous documents
used under applicable Canadian personal property security laws.
1.03.    Terms Generally. The definitions in Section 1.01 shall apply equally to
both the singular and plural forms of the terms defined. Whenever the context
may require, any pronoun shall include the corresponding masculine, feminine and
neuter forms. The words “include”, “includes” and “including” shall be deemed to
be followed by the phrase “without limitation”. The word “will” shall be
construed to have the same meaning and effect as the word “shall”. Unless the
context shall otherwise require, all references herein to Sections, Exhibits and
Schedules shall be deemed to be references to Sections of, and Exhibits and
Schedules to, this Agreement , and the words “herein”, “hereof” and “hereunder”,
and words of similar import, shall be construed to refer to this Agreement in
its entirety and not to any particular provision hereof. Other than as
specifically set forth in this Agreement, each reference to any Loan Document or
any other document or agreement shall be deemed to be a reference to such Loan
Document, document or agreement as

-82-

--------------------------------------------------------------------------------

 

amended, restated (including any amendment and restatement thereof), waived,
supplemented, modified, extended or renewed from time to time in accordance with
the provisions hereof and thereof. All references to any Person shall be deemed
to include the successors and permitted assigns of such Person.
1.04.    Pro Forma Calculations. For the purposes of (i) the Interest Coverage
Ratio and the Consolidated Fixed Charge Coverage Ratio, upon and after the
occurrence of any Permitted Acquisition, and (ii) the Consolidated Fixed Charge
Coverage Ratio, upon and after the occurrence of any Asset Sale or any action or
proposed action pursuant to Payment Conditions, in each case, the applicable
calculation shall be made with respect to the applicable period (and, to the
extent applicable, subsequent periods) on a pro forma basis after giving effect
to such Permitted Acquisition, Asset Sale or action or proposed action pursuant
to Payment Conditions, as the case may be (including, without duplication, in
respect of any Permitted Acquisition (a) all pro forma adjustments permitted or
required by Article 11 of Regulation S-X under the Securities Act and (b) pro
forma adjustments for cost savings (net of continuing associated expense) to the
extent such cost savings are factually supportable and have been realized or are
reasonably expected to be realized within 12 months following the Permitted
Acquisition, provided that such cost savings shall be set forth in a reasonably
detailed certificate of a Financial Officer of AbitibiBowaterResolute, using,
for purposes of making such calculations, the historical financial statements of
all entities or assets so acquired or to be acquired and the consolidated
financial statements of AbitibiBowaterResolute and its Subsidiaries, which shall
be reformulated as if such Permitted Acquisition or Asset Sale, and any other
Permitted Acquisitions or Asset Sales that have been consummated during the
period, had been consummated at the beginning of such period. In addition,
solely for purposes of determining the Consolidated Fixed Charge Coverage Ratio,
any Indebtedness incurred or repaid in connection with any Permitted Acquisition
or Asset Sale and any other Permitted Acquisitions or Asset Sales that have been
consummated during the period shall be assumed to have been incurred or repaid
at the beginning of such period.
1.05.    Accounting Terms; GAAP. Except as otherwise expressly provided herein,
all terms of an accounting or financial nature shall be construed in accordance
with GAAP, as in effect from time to time; provided that, if
AbitibiBowaterResolute notifies the Administrative Agent that it requests an
amendment to any provision hereof to eliminate the effect of any change
occurring in GAAP or in the application thereof on the operation of such
provision (or if the Administrative Agent notifies AbitibiBowaterResolute that
the Required Lenders request an amendment to any provision hereof for such
purpose), regardless of whether any such notice is given before or after such
change in GAAP or in the application thereof, then such provision shall be
interpreted on the basis of GAAP as in effect and applied immediately before
such change shall have become effective until such notice shall have been
withdrawn or such provision amended in accordance herewith. Notwithstanding any
other provision contained herein, all terms of an accounting or financial nature
used herein shall be construed, and all computations of amounts and ratios
referred to herein shall be made, without giving effect to any election under
Statement of Financial Accounting Standards 159 (or any other Financial
Accounting Standard having a similar result or effect) to value any Indebtedness
or other liabilities of AbitibiBowaterResolute, the Borrowers or any of their
respective Subsidiaries at “fair value”, as defined therein.

-83-

--------------------------------------------------------------------------------

 

1.06.    Interpretation-Québec. For purposes of any assets, liabilities or
entities located in the Province of Québec or charged by any deed of hypothec
(or any other Loan Document) and for all other purposes pursuant to which the
interpretation or construction of this Agreement may be subject to the laws of
the Province of Québec or a court or tribunal exercising jurisdiction in the
Province of Québec, (a) “personal property” shall include “movable property”,
(b) “real property” or “real estate” shall include “immovable property”,
(c) “tangible property” shall include “corporeal property”, (d) “intangible
property” shall include “incorporeal property”, (e) “security interest”,
“mortgage” and “lien” shall include a “hypothec”, “right of retention”, “prior
claim” and a “resolutory clause”, (f) all references to filing, perfection,
priority, remedies, registering or recording under the UCC, PPSA or Code shall
include publication under the Civil Code of Québec, (g) all references to
“perfection” of or “perfected” liens or security interest shall include a
reference to an “opposable” or “set up” lien or security interest as against
third parties, (h) any “right of offset”, "right of setoff" or similar
expression shall include a “right of compensation”, (i) “common law” shall
include “civil law”, (j) “tort” shall include “delict”; (k) “bailor” shall
include “depositor” and “bailee” shall include depositary”; (l) “goods” shall
include “corporeal movable property” other than chattel paper, documents of
title, instruments, money and securities, (m) an “agent” shall include a
“mandatary”, (n) “construction liens” shall include “legal hypothecs”;
(o) “joint and several” shall include “solidary”; (p) “gross negligence or
willful misconduct” shall be deemed to be “intentional or gross fault”;
(q) “beneficial ownership” shall include “ownership on behalf of another as
mandatary”; (r) “easement” shall include “servitude”; (s) “priority” shall
include “prior claim”; (t) “survey” shall include “certificate of location and
plan”; (u) “state” shall include “province”; (v) “fee simple title” shall
include “absolute ownership”; (w) “accounts” shall include “claims”;
(x) “conditional sale” shall include “instalment sale”; (y) “purchase money
financing” or “purchase money lien” shall include “instalment sales, contracts
of lease, leasing contracts and vendor’s hypothecs”. The parties hereto confirm
that it is their wish that this Agreement and any other document executed in
connection with the transactions contemplated herein be drawn up in the English
language only and that all other documents contemplated thereunder or relating
thereto, including notices, may also be drawn up in the English language only.
Les parties aux présentes confirment que c'est leur volonté que cette convention
et les autres documents de crédit soient rédigés en langue anglaise seulement et
que tous les documents, y compris tous avis, envisagés par cette convention et
les autres documents peuvent être rédigés en langue anglaise seulement.
SECTION 2. Amount and Terms of Credit
2.01.    The Commitments. (a) Subject to and upon the terms and conditions set
forth herein (including, without limitation, the conditions set forth in
Sections 6 and 7), (A) each U.S. Facility Lender with a U.S. Facility Commitment
severally agrees to make, at any time and from time to time on or after the
Effective Date and prior to the Revolving Loan Maturity Date, a revolving loan
or revolving loans to any U.S. Borrower (on a joint and several basis with the
other U.S. Borrowers) (each, a “U.S. Facility Revolving Loan” and, collectively,
the “U.S. Facility Revolving Loans”) and (B) each Canadian Facility Lender with
a Canadian Facility Commitment severally agrees to make, at any time and from
time to time on or after the Effective Date and prior to the Revolving Loan
Maturity Date, (x) a revolving loan or revolving loans to any U.S. Borrower (on
a joint and several basis with the other U.S. Borrowers) (each, a “U.S. Borrower
Canadian Facility Revolving Loan” and, collectively, the “U.S. Borrower Canadian
Facility Revolving Loans”) and

-84-

--------------------------------------------------------------------------------

 

(y) a revolving loan or revolving loans to any Canadian Borrower (on a joint and
several basis with the other Canadian Borrowers) (each, a “Canadian Borrower
Revolving Loan” and, collectively, the “Canadian Borrower Revolving Loans” and,
together with the U.S. Borrower Canadian Facility Revolving Loans, each, a
“Canadian Facility Revolving Loan” and, collectively, the “Canadian Facility
Revolving Loans” and, together with the U.S. Facility Revolving Loans, each, a
“Revolving Loan” and, collectively, the “Revolving Loans”), which Revolving
Loans:
(i)    shall be made and maintained in an Available Currency;
(ii)    except as hereafter provided, shall, at the option of the applicable
Borrowers, be incurred and maintained as, and/or converted into, one or more
Borrowings of (x) Base Rate Loans, Canadian Prime Rate Loans or Eurodollar
Loans, or (y) (A) in the case of a B/A Lender, Bankers’ Acceptances in Canadian
Dollars by acceptance and purchase thereof on the terms and conditions provided
for herein and in Schedule 1.01(b) or (B) in the case of a Non-B/A Lender,
completed Drafts in Canadian Dollars purchased and, at the request of the
Non-B/A Lender, exchanged for B/A Equivalent Notes, in each case on the terms
and conditions provided for herein and in Schedule 1.01(b); provided that,
except as otherwise specifically provided in Section 2.10(b), all Revolving
Loans made as part of the same Borrowing shall at all times consist of Revolving
Loans of the same Type;
(iii)    may be repaid and reborrowed in accordance with the provisions hereof;
and
(iv)    shall not be made (and shall not be required to be made) by any such
Lender in any instance where the incurrence thereof (after giving effect to the
use of the proceeds thereof on the date of the incurrence thereof to repay any
amounts theretofore outstanding pursuant to this Agreement) would cause (x) in
the case of U.S. Facility Revolving Loans, (A) the Individual U.S. Facility
Exposure of such U.S. Facility Lender to exceed the amount of its U.S. Facility
Commitment at such time or (B) the Aggregate U.S. Facility Exposure to exceed
the Total U.S. Facility Commitment at such time or (y) in the case of Canadian
Facility Revolving Loans, (A) the Individual Canadian Facility Exposure of such
Canadian Facility Lender to exceed the amount of its Canadian Facility
Commitment at such time or (B) the Aggregate Canadian Facility Exposure to
exceed the Total Canadian Facility Commitment at such time.
(b)    Subject to and upon the terms and conditions set forth herein (including,
without limitation, the conditions set forth in Sections 6 and 7), upon the
request of the Borrowers, thea Swingline Lender may in its sole discretion make,
at any time and from time to time on or after the Effective Date and prior to
the Swingline Expiry Date (A) in respect of the U.S. Facility Commitments, a
revolving loan or revolving loans to any U.S. Borrower (on a joint and several
basis with the other U.S. Borrowers) (each, a “U.S. Facility Swingline Loan”
and, collectively, the “U.S. Facility Swingline Loans”) and (B) in respect of
the Canadian Facility Commitments, (x) a revolving loan or revolving loans to
any U.S. Borrower (on a joint and several basis with the other U.S. Borrowers)
(each, a “U.S. Borrower Canadian Facility Swingline Loan” and, collectively, the
“U.S. Borrower Canadian Facility Swingline Loans”) and (y) a revolving loan or
revolving loans to any Canadian Borrower (on a joint and several basis with the
other Canadian Borrowers) (each, a “Canadian Borrower Swingline Loan” and,
collectively, the “Canadian Borrower Swingline Loans” and,

-85-

--------------------------------------------------------------------------------

 

together with the U.S. Borrower Canadian Facility Swingline Loans, each, a
“Canadian Facility Swingline Loan” and, collectively, the “Canadian Facility
Swingline Loans” and, together with the U.S. Facility Swingline Loans, each, a
“Swingline Loan” and, collectively, the “Swingline Loans”), which Swingline
Loans:
(i)    shall be made and maintained in an Available Currency;
(ii)    shall be made and maintained as Base Rate Loans or Canadian Prime Rate
Loans;
(iii)    may be repaid and reborrowed in accordance with the provisions hereof;
(iv)    shall not be made by thea Swingline Lender in any instance where the
incurrence thereof (after giving effect to the use of the proceeds thereof on
the date of the incurrence thereof to repay any amounts theretofore outstanding
pursuant to this Agreement) would cause (x) in the case of U.S. Facility
Swingline Loans, the Aggregate U.S. Facility Exposure to exceed the Total U.S.
Facility Commitment at such time or (y) in the case of Canadian Facility
Swingline Loans, the Aggregate Canadian Facility Exposure to exceed the Total
Canadian Facility Commitment at such time; and
(v)    shall not exceed in aggregate principal amount at any time outstanding
the Maximum Swingline Amount.;
provided, however, that (x) the Canadian Swingline Lender shall only be
permitted to make Canadian Borrower Swingline Loans and (y) the aggregate
principal amount of all Canadian Borrower Swingline Loans made by the Canadian
Swingline Lender shall not exceed $20,000,000 at any time outstanding. Not later
than 9:00 a.m. (New York City Time) on the Business Day following each day on
which the Canadian Swingline Lender makes any Swingline Loan, the Canadian
Swingline Lender shall provide written notice to the Administrative Agent of the
aggregate principal amount of all Swingline Loans made by the Canadian Swingline
Lender that are then outstanding.
(c)    TheA Swingline Lender (x) may, in its sole discretion, on any Business
Day, and (y) shall, on the penultimate Business Day of each week and (z) in the
case of the Canadian Swingline Lender, shall, upon request made by (i) the
Administrative Agent at any time that Excess Availability is less than
$125,000,000 or (ii) Resolute (at any time), give notice to the Administrative
Agent and the Lenders under a Facility that thesuch Swingline Lender’s
outstanding Swingline Loans under such Facility shall be funded with one or more
Borrowings of Revolving Loans under such Facility to be made to, and maintained
by, the Borrower of the outstanding Swingline Loan under such Facility being
funded by such Revolving Loan (or any other Borrower jointly and severally
liable with such Borrower under such Facility) in the same currency as the
outstanding Swingline Loan under such Facility being funded by such Revolving
Loan (provided that such notice shall be deemed to have been automatically given
upon the occurrence of a Default or an Event of Default under Section 11.01(g)
or (h) or upon the exercise of any of the remedies provided in the last
paragraph of Section 11.01), in which case one or more Borrowings of Revolving
Loans under a Facility constituting Base Rate Loans (in the case of Swingline
Loans under such Facility denominated in U.S. Dollars) or Revolving Loans under
a Facility constituting

-86-

--------------------------------------------------------------------------------

 

Canadian Prime Rate Loans (in the case of Swingline Loans under such Facility
denominated in Canadian Dollars), in each case, to be made to, and maintained
by, the Borrower of the outstanding Swingline Loan under such Facility being
funded by such Revolving Loan (or any other Borrower jointly and severally
liable with such Borrower under such Facility) in the same currency as the
outstanding Swingline Loan under such Facility being funded by such Revolving
Loan (each such Borrowing, a “Mandatory Borrowing”), shall be made on the
immediately succeeding Business Day by all Lenders under such Facility pro rata
based on each such Lender’s U.S. Facility RL Percentage or Canadian Facility RL
Percentage, as the case may be (determined before giving effect to any
termination of the Commitments under such Facility pursuant to the last
paragraph of Section 11.01) and the proceeds thereof shall be applied directly
by the applicable Swingline Lender to repay thesuch Swingline Lender for such
outstanding Swingline Loans under such Facility. Each Lender under a Facility
hereby irrevocably agrees to make Revolving Loans under such Facility to the
applicable Borrower upon one Business Day’s notice pursuant to each Mandatory
Borrowing in the amount and currency and in the manner specified in the
preceding sentence and on the date specified in writing by the applicable
Swingline Lender notwithstanding (i) the amount of the Mandatory Borrowing may
not comply with the Minimum Borrowing Amount otherwise required hereunder, (ii)
whether any conditions specified in Section 7 are then satisfied, (iii) whether
a Default or an Event of Default then exists, (iv) the date of such Mandatory
Borrowing, and (v) the amount of any Borrowing Base or the Total U.S. Facility
Commitment or Total Canadian Facility Commitment, as applicable, at such time.
In the event that any Mandatory Borrowing cannot for any reason be made on the
date otherwise required above (including, without limitation, as a result of the
commencement of a proceeding, corporate action or other step taken under any
Insolvency Law with respect to any Borrower), then each Lender under a Facility
hereby agrees that it shall forthwith purchase (as of the date the Mandatory
Borrowing would otherwise have occurred, but adjusted for any payments received
from any Borrower under such Facility on or after such date and prior to such
purchase) from the applicable Swingline Lender such participations in the
outstanding Swingline Loans of such Swingline Lender under such Facility as
shall be necessary to cause such Lenders to share in such Swingline Loans
ratably based upon their respective U.S. Facility RL Percentages or Canadian
Facility RL Percentages, as the case may be (determined before giving effect to
any termination of the Commitments under such Facility pursuant to the last
paragraph of Section 11.01), provided that (x) all interest payable on the
Swingline Loans under such Facility shall be for the account of the applicable
Swingline Lender until the date as of which the respective participation is
required to be purchased and, to the extent attributable to the purchased
participation, shall be payable to the participant from and after such date and
(y) at the time any purchase of participations pursuant to this sentence is
actually made, the purchasing Lender shall be required to pay the applicable
Swingline Lender interest on the principal amount of the participation purchased
for each day from and including the day upon which the Mandatory Borrowing would
otherwise have occurred to but excluding the date of payment for such
participation, (A) in the case of a Mandatory Borrowing constituting Revolving
Loans denominated in U.S. Dollars, at the overnight Federal Funds Rate for the
first three days and at the interest rate otherwise applicable to such Revolving
Loans denominated in U.S. Dollars, in each case maintained as Base Rate Loans
hereunder for each day thereafter, and (B) in the case of a Mandatory Borrowing
constituting Revolving Loans denominated in Canadian Dollars, at the cost to the
Administrative Agent of acquiring the overnight funds in Canadian Dollars for
the first three days and at the interest rate otherwise applicable to such
Revolving Loans denominated in

-87-

--------------------------------------------------------------------------------

 

Canadian Dollars, in each case maintained as Canadian Prime Rate Loans hereunder
for each day thereafter.
(d)    Notwithstanding anything to the contrary in Section 2.01(a) or (b),
Section 7.03 or elsewhere in this Agreement, the Collateral Agent shall have the
right to establish Reserves in such amounts, and with respect to such matters,
as the Collateral Agent in its Discretion shall deem necessary or appropriate,
against any Borrowing Base (with any establishment of or increase in Reserves to
reduce such then existing Borrowing Base, as applicable, in an amount equal to
such Reserves and any elimination of or reduction in any Reserves to increase
such then existing Borrowing Base, as applicable, in an amount equal to such
Reserves). The Collateral Agent shall promptly notify AbitibiBowaterResolute of
the establishment of any new Reserve or any increase or decrease to an existing
Reserve; provided that no increase in any Reserve shall be effective until three
Business Days following notice thereof to AbitibiBowaterResolute.
(e)    In the event that the Borrowers are unable to comply with the conditions
precedent to the making of Revolving Loans set forth in Section 7 (including,
without limitation, the Borrowing Base limitations set forth in Section 7.03),
the Lenders under any Facility, subject to the immediately succeeding proviso,
hereby authorize the Administrative Agent, for the account of the Lenders under
a Facility, to make U.S. Facility Revolving Loans to any U.S. Borrower (on a
joint and several basis with the other U.S. Borrowers), U.S. Borrower Canadian
Facility Revolving Loans to any U.S. Borrower (on a joint and several basis with
the other U.S. Borrowers) and/or Canadian Borrower Revolving Loans to any
Canadian Borrower (on a joint and several basis with the other Canadian
Borrowers) solely in the event that the Administrative Agent in its Discretion
deems necessary or desirable (A) to preserve or protect the Collateral, or any
portion thereof, (B) to enhance the likelihood of repayment of the Obligations,
or (C) to pay any other amount chargeable to the Borrowers pursuant to the terms
of this Agreement, including, without limitation, documented Expenses and Fees
which are invoiced in reasonable detail; provided that such Revolving Loans may
only be made as Base Rate Loans or Canadian Prime Rate Loans, respectively, as
determined by the Administrative Agent (each, an “Agent Advance”), for a period
commencing on the date the Administrative Agent receives a Notice of Borrowing
requesting an Agent Advance (so long as the Administrative Agent shall have
determined in its Discretion that the circumstances described in the preceding
clauses (A), (B) or (C) exist) until the earliest of (x) the twentieth Business
Day after such date, (y) the date the respective Borrowers are again able to
comply with the applicable Borrowing Base limitations and the conditions
precedent to the making of Revolving Loans, or obtain an amendment or waiver
with respect thereto and (z) the date the Required Lenders instruct the
Administrative Agent to cease making Agent Advances (in each case, the “Agent
Advance Period”; provided, that an Agent Advance Period may not commence (i) on
any date occurring during the continuance of another Agent Advance Period or
(ii) earlier than the second Business Day following the termination of any
previous Agent Advance Period); provided further that the Administrative Agent
shall not make any Agent Advance to the extent that at the time of the making of
such Agent Advance, (I) the amount of such Agent Advance when added to the
aggregate outstanding amount of all other Agent Advances (w) made to, if such
Agent Advance is a U.S. Borrower Revolving Loan, the U.S. Borrowers at such time
(for this purpose, using the U.S. Dollar Equivalent of amounts not denominated
in U.S. Dollars), would exceed 5% of the U.S. Borrowing Base at such time, (x)
made to, if such Agent Advance is a

-88-

--------------------------------------------------------------------------------

 

Canadian Borrower Revolving Loan, the Canadian Borrowers at such time (for this
purpose, using the U.S. Dollar Equivalent of amounts not denominated in U.S.
Dollars), would exceed 5% of the Canadian Borrowing Base at such time, (y) if
such Agent Advance is a U.S. Facility Revolving Loan, that are U.S. Facility
Revolving Loans (for this purpose, using the U.S. Dollar Equivalent of amounts
not denominated in U.S. Dollars), would exceed 5% of the Total U.S. Facility
Commitment at such time or (z) if such Agent Advance is a Canadian Facility
Revolving Loan, that are Canadian Facility Revolving Loans (for this purpose,
using the U.S. Dollar Equivalent of amounts not denominated in U.S. Dollars),
would exceed 5% of the Total Canadian Facility Commitment at such time (each, an
“Agent Advance Amount”) or (II) the amount of such Agent Advance (after giving
effect thereto) would cause (x) if such Agent Advance is a U.S. Facility
Revolving Loan, (A) the Individual U.S. Facility Exposure of any U.S. Facility
Lender to exceed the amount of such U.S. Facility Lender’s U.S. Facility
Commitment at such time or (B) the Aggregate U.S. Facility Exposure to exceed
the Total U.S. Facility Commitment at such time or (y) if such Agent Advance is
a Canadian Facility Revolving Loan, (A) the Individual Canadian Facility
Exposure of any Canadian Facility Lender to exceed the amount of such Canadian
Facility Lender’s Canadian Facility Commitment at such time or (B) the Aggregate
Canadian Facility Exposure to exceed the Total Canadian Facility Commitment at
such time. Agent Advances may be made by the Administrative Agent in its sole
discretion and no Borrower shall have any right whatsoever to require that any
Agent Advances be made, provided that the Administrative Agent shall promptly
notify AbitibiBowaterResolute following the occurrence of an Agent Advance.
Agent Advances will be subject to periodic settlement with the applicable
Lenders pursuant to Section 2.04(b).
2.02.    Minimum Amount of Each Borrowing. The aggregate principal amount of
each Borrowing of Revolving Loans of a specific Type shall not be less than the
Minimum Borrowing Amount applicable to such Type of Loans. More than one
Borrowing may occur on the same date, but at no time shall there be outstanding
more than (x) 10 Borrowings of Eurodollar Loans (or such greater number of
Borrowings of Eurodollar Loans as may be agreed to from time to time by the
Administrative Agent) in the aggregate for all Loans or (y) 10 different
maturity dates in the aggregate for all outstanding Bankers’ Acceptance Loans
(or such greater number of maturity dates as may be agreed to from time to time
by the Administrative Agent).
2.03.    Notice of Borrowing. (a) Whenever a Borrower desires to incur
(i) Eurodollar Loans or Bankers’ Acceptance Loans hereunder, such Borrower shall
give the Administrative Agent at the Notice Office at least three Business Days’
prior notice of each Eurodollar Loan or Bankers’ Acceptance Loan to be incurred
hereunder and (ii) Base Rate Loans (including Agent Advances, but excluding
Swingline Loans and Revolving Loans made pursuant to a Mandatory Borrowing) or
Canadian Prime Rate Loans (including Agent Advances, but excluding Swingline
Loans and Revolving Loans made pursuant to a Mandatory Borrowing or to the
extent resulting from automatic conversions of Bankers’ Acceptance Loans as
provided in Schedule 1.01(b)) hereunder, such Borrower shall give the
Administrative Agent at the Notice Office prior notice not later than on the
Business Day of the proposed Borrowing (or such shorter period as agreed to by
the Administrative Agent in its sole discretion) of each Base Rate Loan or
Canadian Prime Rate Loan to be incurred hereunder; provided that any such notice
shall be deemed to have been given on a certain day only if given before 12:00
Noon (New York City time) on such day, in the case of

-89-

--------------------------------------------------------------------------------

 

Revolving Loans. Each such notice (each, a “Notice of Borrowing”), except as
otherwise expressly provided in Section 2.10, shall be irrevocable and shall be
in writing, or by telephone promptly confirmed in writing, in the form of
Exhibit A-1, appropriately completed to specify: (i) the aggregate principal
amount or Face Amount, as the case may be, of the Loans to be incurred pursuant
to such Borrowing (stated in the Available Currency), (ii) the date of such
Borrowing (which shall be a Business Day), (iii) in the case of a Borrowing of
Revolving Loans, whether the Revolving Loans made pursuant to such Borrowing
constitute Agent Advances (it being understood that the Administrative Agent
shall be under no obligation to make such Agent Advance), (iv) in the case of
U.S. Dollar Denominated Revolving Loans, whether the Revolving Loans being
incurred pursuant to such Borrowing are to be initially maintained as Base Rate
Loans or, to the extent permitted hereunder, Eurodollar Loans, (v) in the case
of Canadian Dollar Denominated Revolving Loans, whether the Revolving Loans
being incurred pursuant to such Borrowing shall consist of Canadian Prime Rate
Loans or Bankers’ Acceptance Loans and, if Bankers’ Acceptance Loans, the term
thereof (which shall comply with the requirements of Schedule 1.01(b)) and (vi)
whether the Loans being incurred pursuant to such Borrowing shall constitute
U.S. Facility Revolving Loans or Canadian Facility Revolving Loans. Except in
the case of Agent Advances, the Administrative Agent shall promptly give each
Lender under a Facility notice of such proposed Borrowing under such Facility,
of such Lender’s proportionate share thereof and of the other matters required
by the immediately preceding sentence to be specified in the Notice of
Borrowing.
(b)    Whenever a Borrower desires to incur Swingline Loans hereunder, such
Borrower shall give the Administrative Agent and the applicable Swingline Lender
no later than (x) in the case of U.S. Dollar Denominated Swingline Loans, 1:00
P.Mp.m. (New York City time) or (y) in the case of Canadian Dollar Denominated
Swingline Loans, 12:00 noon (New York City time), on the date that a Swingline
Loan is to be incurred, written notice or telephonic notice promptly confirmed
in writing of each Swingline Loan to be incurred hereunder. Each such notice
shall be irrevocable and specify in each case (Ai) the date of Borrowing (which
shall be a Business Day), (Bii) the principal amount of the Swingline Loan to be
incurred pursuant to such Borrowing (stated in the Available Currency) and
(Ciii) whether the Swingline Loan being incurred pursuant to such Borrowing
shall constitute a U.S. Facility Swingline Loan or a Canadian Facility Swingline
Loan. Promptly after receipt by the applicable Swingline Lender of any such
notice, such Swingline Lender will confirm with the Administrative Agent (by
telephone or in writing) that the Administrative Agent has also received such
notice and, if not, such Swingline Lender will notify the Administrative Agent
(by telephone or in writing) of the contents thereof. If the provisions of the
preceding two sentences shall have been complied with, unless such Swingline
Lender has received notice (by telephone or in writing) from the Administrative
Agent (including at the request of any Lender) prior to (x) in the case of U.S.
Dollar Denominated Swingline Loans, 2:00 p.m. (New York City time) or (y) in the
case of Canadian Dollar Denominated Swingline Loans, 1:00 p.m. (New York City
time) on the date of the proposed date of Borrowing directing such Swingline
Lender not to make such Swingline Loan as a result of the limitations set forth
in clauses (i) through (v) of Section 2.01(b) and in the proviso to Section
2.01(b) that one or more of the applicable conditions precedent specified in
Section 7 (including, without limitation, the Borrowing Base limitations set
forth in Section 7.03) is not then satisfied, then, subject to the terms and
conditions hereof, such Swingline Lender may, in its sole discretion, on the
borrowing date specified in such notice, make the amount of the requested
Swingline Loan available to the relevant Borrower;

-90-

--------------------------------------------------------------------------------

 

provided however, that such Swingline Lender shall not make any Swingline Loan
unless the Administrative Agent shall have confirmed to it that the Borrowing
Base limitations set forth in Section 7.03 are then satisfied.
(c)    Mandatory Borrowings shall be made upon the notice specified in
Section 2.01(c), with each Borrower irrevocably agreeing, by its incurrence of
any Swingline Loan, to the making of the Mandatory Borrowings as set forth in
Section 2.01(a).
(d)    Without in any way limiting the obligation of any Borrower to confirm in
writing any telephonic notice of any Borrowing or prepayment of Loans, the
Administrative Agent or theany Swingline Lender, as the case may be, may act
without liability upon the basis of telephonic notice of such Borrowing or
prepayment, as the case may be, believed by the Administrative Agent or thesuch
Swingline Lender, as the case may be, in good faith to be from a Responsible
Officer of such Borrower, prior to receipt of written confirmation. In each such
case, the Administrative Agent’s or the applicable Swingline Lender’s record of
the terms of such telephonic notice of such Borrowing or prepayment of Loans, as
the case may be, shall be conclusive absent manifest error.
2.04.    Disbursement of Funds. (a) No later than 1:00 P.M. (New York City time)
on the date specified in each Notice of Borrowing (or (x) in the case of U.S.
Dollar Denominated Swingline Loans, no later than 4:00 P.M. (New York City time)
on the date specified pursuant to Section 2.03(b), (y) in the case of Canadian
Dollar Denominated Swingline Loans, no later than 2:00 P.M. (New York City time)
on the date specified pursuant to Section 2.03(b) or (z) in the case of
Mandatory Borrowings, no later than 1:00 P.M. (New York City time) on the date
specified in Section 2.01(a)), each Lender under the respective Facility, will
make available its pro rata portion (determined in accordance with Section 2.07)
of each such Borrowing under such Facility requested to be made on such date.
All such amounts will be made available in U.S. Dollars (in the case of U.S.
Dollar Denominated Loans) or in Canadian Dollars (in the case of Canadian Dollar
Denominated Loans), as the case may be, and in immediately available funds at
the Payment Office, and the Administrative Agent will make available to the
relevant Borrower or Borrowers at the Payment Office the aggregate of the
amounts so made available by the Lenders under the respective Facility (or in
the case of Swingline Loans, the applicable Swingline Lender will make available
the full amount thereof). Unless the Administrative Agent shall have been
notified by any Lender under the respective Facility prior to the date of
Borrowing under such Facility that such Lender does not intend to make available
to the Administrative Agent such Lender’s portion of any Borrowing under such
Facility to be made on such date, the Administrative Agent may assume that such
Lender has made such amount available to the Administrative Agent on such date
of Borrowing and the Administrative Agent may (but shall not be obligated to),
in reliance upon such assumption, make available to the relevant Borrower or
Borrowers a corresponding amount. If such corresponding amount is not in fact
made available to the Administrative Agent by such Lender, the Administrative
Agent shall be entitled to recover such corresponding amount on demand from such
Lender. If such Lender does not pay such corresponding amount forthwith upon the
Administrative Agent’s demand therefor, the Administrative Agent shall promptly
notify the relevant Borrower or Borrowers, and the relevant Borrower or
Borrowers shall promptly (but no later than one Business Day following such
notice) pay such corresponding amount to the Administrative Agent. The
Administrative Agent also shall be entitled to recover on demand from

-91-

--------------------------------------------------------------------------------

 

such Lender or the relevant Borrower or Borrowers, as the case may be, interest
on such corresponding amount in respect of each day from the date such
corresponding amount was made available by the Administrative Agent to the
relevant Borrower or Borrowers until the date such corresponding amount is
recovered by the Administrative Agent, at a rate per annum equal to (i) if
recovered from such Lender, the overnight Federal Funds Rate (or, in the case of
Canadian Dollar Denominated Loans, the cost to the Administrative Agent of
acquiring overnight funds in Canadian Dollars) for the first three days and at
the interest rate otherwise applicable to such Loans for each day thereafter and
(ii) if recovered from the relevant Borrower or Borrowers, the rate of interest
applicable to the respective Borrowing, as determined pursuant to Section 2.08.
Nothing in this Section 2.04(a) shall be deemed to relieve any Lender under a
Facility from its obligation to make Loans hereunder under such Facility or to
prejudice any rights which any Borrower may have against any Lender under a
Facility as a result of any failure by such Lender to make Loans hereunder under
such Facility.
(b)    Agent Advances made pursuant to Section 2.01(e) shall be subject to
periodic settlement as follows:
(i)    The amount of each Lender’s U.S. Facility RL Percentage or Canadian
Facility RL Percentage, as the case may be, of Revolving Loans shall be computed
weekly (or more frequently in the Administrative Agent’s sole discretion) and
shall be adjusted upward or downward on the basis of the amount of outstanding
Revolving Loans under such Facility as of 5:00 P.M. (New York City time) on the
last Business Day of each week, or such other period specified by the
Administrative Agent (each such date, a “Settlement Date”). The applicable
Lenders under a Facility shall transfer to the Administrative Agent, or the
Administrative Agent shall transfer to the applicable Lenders under a Facility,
such amounts as are necessary so that (after giving effect to all such
transfers) the amount of Revolving Loans under a Facility made by each Lender
under such Facility shall be equal to such Lender’s U.S. Facility RL Percentage
or Canadian Facility RL Percentage, as the case may be, of the aggregate amount
of Revolving Loans under such Facility outstanding as of such Settlement Date.
If a notice from the Administrative Agent of any such necessary transfer is
received by a Lender on or prior to 12:00 Noon (New York City time) on any
Business Day, then such Lender shall make transfers described above in
immediately available funds no later than 3:00 P.M. (New York City time) on the
day such notice was received; and if such notice is received by a Lender after
12:00 Noon (New York City time) on any Business Day, such Lender shall make such
transfers no later than 1:00 P.M. (New York City time) on the next succeeding
Business Day. The obligation of each of the Lenders to transfer such funds shall
be irrevocable and unconditional and without recourse to, or without
representation or warranty by, the Administrative Agent. Each of the
Administrative Agent and each Lender agrees and the Lenders agree to mark their
respective books and records on each Settlement Date to show at all times the
dollar amount of their respective U.S. Facility RL Percentage or Canadian
Facility RL Percentage, as the case may be, of the outstanding Revolving Loans
under such Facility on such date.
(ii)    To the extent that the settlement described in preceding clause (i)
shall not yet have occurred with respect to any particular Settlement Date, upon
any repayment of Revolving

-92-

--------------------------------------------------------------------------------

 

Loans under a Facility by any Borrower prior to such settlement, the
Administrative Agent may apply such amounts repaid directly to the amounts that
would otherwise be made available by the Administrative Agent pursuant to this
Section 2.04(b) under such Facility.
(iii)    Because the Administrative Agent on behalf of the Lenders under a
Facility may be advancing and/or may be repaid Revolving Loans under such
Facility prior to the time when such Lenders will actually advance and/or be
repaid such Revolving Loans, interest with respect to such Revolving Loans shall
be allocated by the Administrative Agent to each such Lender and the
Administrative Agent in accordance with the amount of such Revolving Loans
actually advanced by and repaid to each such Lender and the Administrative Agent
and shall accrue from and including the date such Revolving Loans are so
advanced to but excluding the date such Revolving Loans are either repaid by the
U.S. Borrowers or the Canadian Borrowers, as the case may be, in accordance with
the terms of this Agreement or actually settled by the Administrative Agent or
the applicable Lender as described in this Section 2.04(b).
2.05.    Notes. (a) Each U.S. Borrower’s joint and several obligation under a
Facility and each Canadian Borrower’s joint and several obligation under a
Facility, as the case may be, to pay the principal of, and interest on, the
Loans under such Facility made by each Lender under such Facility shall be
evidenced in the Register maintained by the Administrative Agent pursuant to
Section 13.15 and shall, if requested by such Lender, also be evidenced (i) in
the case of U.S. Facility Revolving Loans, by a promissory note duly executed
and delivered by each U.S. Borrower substantially in the form of Exhibit B-1,
with blanks appropriately completed in conformity herewith (each, a “U.S.
Facility Revolving Note” and, collectively, the “U.S. Facility Revolving
Notes”), (ii) in the case of U.S. Borrower Canadian Facility Revolving Loans, by
a promissory note duly executed and delivered by each U.S. Borrower
substantially in the form of Exhibit B-1, with blanks appropriately completed in
conformity herewith (each, a “U.S. Borrower Canadian Facility Revolving Note”
and, collectively, the “U.S. Borrower Canadian Facility Revolving Notes”), (iii)
in the case of Canadian Borrower Revolving Loans, by a promissory note duly
executed and delivered by each Canadian Borrower substantially in the form of
Exhibit B-1, with blanks appropriately completed in conformity herewith (each, a
“Canadian Borrower Revolving Note” and, collectively, the “Canadian Borrower
Revolving Notes” and, together with the U.S. Borrower Canadian Facility
Revolving Notes, the “Canadian Facility Revolving Notes” and, together with the
U.S. Facility Revolving Notes, the “Revolving Notes”), (iv) in the case of U.S.
Facility Swingline Loans, by a promissory note duly executed and delivered by
each U.S. Borrower substantially in the form of Exhibit B-2, with blanks
appropriately completed in conformity herewith (each, a “U.S. Facility Swingline
Note” and, collectively, the “U.S. Facility Swingline Notes”), (v) in the case
of U.S. Borrower Canadian Facility Swingline Loans, by a promissory note duly
executed and delivered by each U.S. Borrower substantially in the form of
Exhibit B-2, with blanks appropriately completed in conformity herewith (each, a
“U.S. Borrower Canadian Facility Swingline Note” and, collectively, the “U.S.
Borrower Canadian Facility Swingline Notes”), and (vi) in the case of Canadian
Borrower Swingline Loans, by a promissory note duly executed and delivered by
each Canadian Borrower substantially in the form of Exhibit B-2, with blanks
appropriately completed in conformity herewith (each, a “Canadian Borrower
Canadian Facility Swingline Note” and, collectively, the “Canadian Borrower
Canadian Facility Swingline

-93-

--------------------------------------------------------------------------------

 

Notes” and, together with the U.S. Borrower Canadian Facility Swingline Notes,
the “Canadian Facility Swingline Notes” and, together with the U.S. Facility
Swingline Notes, the “Swingline Notes”).
(b)    Each Lender under a Facility will note on its internal records the amount
of each Loan under such Facility made by it and each payment in respect thereof
and prior to any transfer of any of its Notes under such Facility will endorse
on the reverse side thereof the outstanding principal amount of Loans under such
Facility evidenced thereby. Failure to make any such notation or any error in
such notation shall not affect any Borrower’s obligations in respect of such
Loans.
(c)    Notwithstanding anything to the contrary contained above in this
Section 2.05 or elsewhere in this Agreement, Notes in respect of a Facility
shall only be delivered to Lenders under such Facility which at any time
specifically request the delivery of such Notes. No failure of any Lender to
request, obtain, maintain or produce a Note evidencing its Loans to any Borrower
shall affect, or in any manner impair, the obligations of any Borrower to pay
the Loans (and all related Obligations) incurred by such Borrower which would
otherwise be evidenced thereby in accordance with the requirements of this
Agreement, and shall not in any way affect the security or guaranties therefor
provided pursuant to any Loan Document. Any Lender which does not have a Note
evidencing its outstanding Loans shall in no event be required to make the
notations otherwise described in preceding clause (b). At any time when any
Lender under a Facility requests the delivery of a Note under such Facility to
evidence any of its Loans under such Facility, each of the respective Borrowers
shall promptly execute and deliver to the respective Lender, at such Borrowers’
expense, the requested Note in the appropriate amount or amounts to evidence
such Loans.
2.06.    Conversions. (a) Each Borrower shall have the option to convert, on any
Business Day, all or a portion equal to at least the Minimum Borrowing Amount of
the outstanding principal amount of U.S. Dollar Denominated Loans made to it
pursuant to one or more Borrowings (so long as of the same Facility) of one or
more Types of U.S. Dollar Denominated Revolving Loans into a Borrowing (of the
same Facility) of another Type of U.S. Dollar Denominated Revolving Loan;
provided that, (i) no such partial conversion of Eurodollar Loans shall reduce
the outstanding principal amount of such Eurodollar Loans made pursuant to a
single Borrowing to less than the Minimum Borrowing Amount applicable thereto,
(ii) following notice by the Administrative Agent or the Required Lenders to
AbitibiBowaterResolute during the continuation of any Default or Event of
Default (although no such notice shall be required following an Event of Default
under Section 11.01(g) or (h)), Base Rate Loans may not be converted into
Eurodollar Loans, and (iii) no conversion pursuant to this Section 2.06 shall
result in a greater number of Borrowings of Eurodollar Loans than is permitted
under Section 2.02. Each such conversion shall be effected by the relevant
Borrower (of U.S. Dollar Denominated Revolving Loan being converted) by giving
the Administrative Agent at the Notice Office prior to 12:00 Noon (New York City
time) at least three Business Days’ prior notice (each, a “Notice of
Conversion/Continuation”), in each case in the form of Exhibit A-2,
appropriately completed to specify the U.S. Dollar Denominated Revolving Loans
to be so converted, and the Borrowing or Borrowings pursuant to which such U.S.
Dollar Denominated Loans were incurred. The Administrative Agent shall give each
Lender

-94-

--------------------------------------------------------------------------------

 

prompt notice of any such proposed conversion affecting any of its U.S. Dollar
Denominated Revolving Loans.
(b)    Conversions of Bankers’ Acceptance Loans into Canadian Prime Rate Loans
shall be made in the circumstances, and to the extent, provided in Schedule
1.01(b). Except as provided in Schedule 1.01(b), Bankers’ Acceptance Loans shall
not be permitted to be converted into Canadian Prime Rate Loans prior to the
maturity date of the respective Bankers’ Acceptance or B/A Equivalent Note, as
the case may be.
(c)    Each Borrower shall have the option to convert on any Business Day
occurring on or after the Effective Date, all or a portion at least equal to the
Minimum Borrowing Amount of the outstanding principal amount of Canadian Prime
Rate Loans made to such Borrower pursuant to one or more Borrowings (so long as
of the same Facility) of Canadian Dollar Denominated Revolving Loans into a
Borrowing or Borrowings (of the same Facility) of Bankers’ Acceptance Loans;
provided that (i) following notice by the Administrative Agent or the Required
Lenders to AbitibiBowaterResolute during the continuation of any Default or
Event of Default (although no such notice shall be required following an Event
of Default under Section 11.01(g) or (h)), Canadian Prime Rate Loans may not be
converted into Bankers’ Acceptance Loans and (ii) Borrowings of Bankers’
Acceptance Loans resulting from this Section 2.06 shall be limited as provided
in Section 2.02. Each such conversion shall be effected by the relevant Borrower
(of Canadian Dollar Denominated Revolving Loan being converted), by giving the
Administrative Agent at the Notice Office, prior to 12:00 Noon (New York City
time), at least three Business Days prior to the date of the proposed
conversion, a Notice of Conversion/Continuation specifying the Canadian Dollar
Denominated Revolving Loans maintained as Canadian Prime Rate Loans to be so
converted into Bankers’ Acceptance Loans, the Borrowing or Borrowings pursuant
to which such Canadian Dollar Denominated Revolving Loans were made and the term
of the proposed Borrowing of Bankers’ Acceptance Loans (which, in each case,
shall comply with the requirements of Schedule 1.01(b)). The Administrative
Agent shall give each Lender prompt notice of any such proposed conversion
affecting any of its Canadian Dollar Denominated Revolving Loans maintained as
Canadian Prime Rate Loans.
2.07.    Pro Rata Borrowings. All Borrowings of U.S. Facility Revolving Loans
and Canadian Facility Revolving Loans (including U.S. Borrower Revolving Loans
and Canadian Borrower Revolving Loans) under this Agreement shall be incurred
from the Lenders under such Facility pro rata on the basis of their U.S.
Facility Commitments and Canadian Facility Commitments, as the case may be,
provided that all Mandatory Borrowings under a Facility shall be incurred from
the Lenders under such Facility pro rata on the basis of their U.S. Facility RL
Percentages or Canadian Facility RL Percentages, as the case may be. It is
understood that no Lender shall be responsible for any default by any other
Lender of its obligation to make Loans hereunder and that each Lender under such
Facility shall be obligated to make the Loans under such Facility provided to be
made by it hereunder, regardless of the failure of any other Lender to make its
Loans hereunder.
2.08.    Interest. (a) (x) The U.S. Borrowers jointly and severally agree to pay
interest in respect of the unpaid principal amount of each U.S. Facility Loan,
(y) the U.S. Borrowers jointly and

-95-

--------------------------------------------------------------------------------

 

severally agree to pay interest in respect of the unpaid principal amount of
each U.S. Borrower Canadian Facility Revolving Loan and U.S. Borrower Canadian
Facility Swingline Loan and (y) the Canadian Borrowers jointly and severally
agree to pay interest in respect of the unpaid principal amount of each Canadian
Borrower Revolving Loan and Canadian Borrower Swingline Loan, in each case:
(A)    Maintained as a Base Rate Loan, in each case, accruing from the date of
Borrowing thereof until but excluding the earlier of (i) the maturity thereof
(whether by acceleration or otherwise) and (ii) the conversion of such Base Rate
Loan to a Eurodollar Loan pursuant to Section 2.06 or 2.09, as applicable, at a
rate per annum which shall be equal to the sum of the relevant Applicable Margin
plus the Base Rate, each as in effect from time to time.
(B)    Maintained as a Eurodollar Loan, in each case, accruing from the date of
Borrowing thereof until but excluding the earlier of (i) the maturity thereof
(whether by acceleration or otherwise) and (ii) the conversion of such
Eurodollar Loan to a Base Rate Loan pursuant to Section 2.06, 2.09 or 2.10, as
applicable, at a rate per annum which shall, during each Interest Period
applicable thereto, be equal to the sum of the relevant Applicable Margin as in
effect from time to time during such Interest Period plus the Eurodollar Rate
for such Interest Period.
(C)    Maintained as a Canadian Prime Rate Loan (including with respect to any
Bankers’ Acceptance Loan converted into a Canadian Prime Rate Loan pursuant to
Schedule 1.01(b)), in each case, accruing from the date of Borrowing thereof
(or, in the circumstances described in the immediately preceding parenthetical,
from the date of conversion of such respective Bankers’ Acceptance Loan into a
Canadian Prime Rate Loan) until but excluding the earlier of (i) the maturity
thereof (whether by acceleration or otherwise) and (ii) the conversion of such
Canadian Prime Rate Loan to a Bankers’ Acceptance Loan pursuant to Schedule
1.01(b), at a rate per annum which shall be equal to the sum of the relevant
Applicable Margin plus the Canadian Prime Rate, each as in effect from time to
time.
(b)    Overdue principal and, to the extent permitted by law, overdue interest
in respect of each Loan and any other overdue amount payable hereunder and under
any other Loan Document, by acceleration or otherwise, shall, in each case, bear
interest at a rate per annum equal to the rate which is two percent (2.0%) in
excess of the otherwise applicable rate of interest then borne by the applicable
borrowing (or, if any such amount does not relate to a borrowing under this
Agreement, the rate which is 2% in excess of the rate otherwise applicable to
Base Rate Loans from time to time). Interest that accrues under this
Section 2.08(b) shall be payable on demand.
(c)    Accrued (and theretofore unpaid) interest shall be payable (i) in respect
of each Base Rate Loan, quarterly in arrears on each Quarterly Payment Date,
(ii) in respect of each Canadian Prime Rate Loan, quarterly in arrears on each
Quarterly Payment Date, (iii) in respect of each Eurodollar Rate Loan, on the
last day of each Interest Period applicable thereto and (iv) in respect of each
Loan (other than Bankers’ Acceptance Loans), (x) on the date of any repayment or
prepayment thereof (on the amount prepaid or repaid) (except that repayments and
prepayments of Base Rate Loans or Canadian Prime Rate Loans, in each case, under
a Facility shall not be required to be accompanied by a payment of accrued, and
theretofore unpaid, interest thereon, unless either all outstanding Loans of
such Type under such Facility are being repaid or prepaid or the Total

-96-

--------------------------------------------------------------------------------

 

Commitment under such Facility has terminated or will be terminated concurrently
with such repayment or prepayment), (y) at maturity (whether by acceleration or
otherwise) and (z) after such maturity, on demand.
(d)    Upon each Interest Determination Date, the Administrative Agent shall
determine the Eurodollar Rate for each Interest Period applicable to the
respective Eurodollar Loans and shall promptly notify the respective Borrowers
and the Lenders thereof. Each such determination shall, absent manifest error,
be final and conclusive and binding on all parties hereto.
2.09.    Interest Periods. Subject to the provisions of Sections 2.06 and 2.10,
each Eurodollar Loan shall have successive interest periods (each, an “Interest
Period”) each of a one-month duration; provided that:
(a)    all Eurodollar Loans comprising a Borrowing shall at all times have the
same Interest Period;
(b)    the initial Interest Period for any Eurodollar Loan shall commence on the
date of Borrowing of such Eurodollar Loan (including, the date of any conversion
thereto from a Base Rate Loan) and each Interest Period occurring thereafter in
respect of such Eurodollar Loan shall commence on the day on which the next
preceding Interest Period applicable thereto expires;
(c)    if any Interest Period for a Eurodollar Loan begins on a day for which
there is no numerically corresponding day in the calendar month at the end of
such Interest Period, such Interest Period shall end on the last Business Day of
such calendar month;
(d)    if any Interest Period for a Eurodollar Loan would otherwise expire on a
day which is not a Business Day, such Interest Period shall expire on the next
succeeding Business Day; provided, however, that if any Interest Period for a
Eurodollar Loan would otherwise expire on a day which is not a Business Day but
is a day of the month after which no further Business Day occurs in such month,
such Interest Period shall expire on the next preceding Business Day;
(e)    if the Required Lenders so elect, no Interest Period may commence at any
time when a Default or an Event of Default is then in existence; and
(f)    no Interest Period in respect of any Borrowing of Revolving Loans shall
be selected which extends beyond the Revolving Loan Maturity Date.
2.10.    Increased Costs, Illegality, etc. (a) In the event that any Lender
shall have determined (which determination shall, absent manifest error, be
final and conclusive and binding upon all parties hereto but, with respect to
clauses (i) and (iv) below, may be made only by the Administrative Agent):
(i)    on any Interest Determination Date that, by reason of any changes arising
after the date of this Agreement affecting the applicable interbank market,
adequate and fair means

-97-

--------------------------------------------------------------------------------

 

do not exist for ascertaining the applicable interest rate on the basis provided
for in the definition of the Eurodollar Rate; or
(ii)    at any time, that such Lender shall incur increased costs or reductions
in the amounts received or receivable hereunder (and deemed by such Lender to be
material) with respect to any Eurodollar Loan because of (x) any change since
the Closing Date in any applicable law or governmental rule, regulation, order,
guideline or request (whether or not having the force of law) or any change
since the Closing Date in the interpretation or administration thereof and
including the introduction after the Closing Date of any new law or governmental
rule, regulation, order, guideline or request (other than with respect to any
Tax, which shall be governed solely by Section 5.04), such as, but not limited
to, a change in official reserve requirements, but, in all events, excluding
reserves required under Regulation D of the Board to the extent included in the
computation of the Eurodollar Rate, and/or (y) other circumstances arising since
the Closing Date affecting such Lender, the interbank eurodollar market or the
position of such Lender in such market; or
(iii)    at any time, that the making or continuance of any Eurodollar Loan has
been made unlawful by any law or governmental rule, regulation or order adopted
or changed after the Closing Date; or
(iv)    at any time, that there is no market for Bankers’ Acceptances by reason
of circumstances affecting the Canadian money market generally or that Canadian
Dollars are not available in sufficient amounts, in either case as determined in
good faith by the Administrative Agent, acting reasonably;
then, and in any such event, such Lender (or the Administrative Agent, in the
case of clauses (i) and (iv) above) shall promptly give notice (by telephone
promptly confirmed in writing) to the affected Borrowers and, except in the case
of clauses (i) and (iv) above, to the Administrative Agent, of such
determination (which notice the Administrative Agent shall promptly transmit to
each of the other Lenders or in the case of clauses (ii) and (iii) each other
affected Lender). Thereafter (w) in the case of clause (i) above, Eurodollar
Loans shall no longer be available until such time as the Administrative Agent
notifies AbitibiBowaterResolute and the Lenders that the circumstances giving
rise to such notice by the Administrative Agent no longer exist, and any Notice
of Borrowing or Notice of Conversion/Continuation given by any Borrower with
respect to Eurodollar Loans which have not yet been incurred (including by way
of conversion) shall be deemed rescinded by such Borrower, (x) in the case of
clause (ii) above, the U.S. Borrowers (jointly and severally) and/or the
Canadian Borrowers (jointly and severally) agree to pay to such Lender, within
15 days following such Lender’s written request therefor, such additional
amounts (in the form of an increased rate of, or a different method of
calculating, interest or otherwise as such Lender in its reasonable discretion
shall determine) as shall be required to compensate such Lender for such
increased costs or reductions in amounts received or receivable hereunder (a
written notice as to the additional amounts owed to such Lender, showing in
reasonable detail the basis for the calculation thereof, submitted to the
respective Borrowers by such Lender shall, absent manifest error, be final and
conclusive and binding on all the parties hereto), (y) in the case of
clause (iii) above, the respective Borrower or Borrowers shall take one of the
actions specified in Section 2.10(b) as

-98-

--------------------------------------------------------------------------------

 

promptly as possible and, in any event, within the time period required by law
and (z) in the case of clause (iv) above, and as provided in Schedule 1.01(b),
Bankers’ Acceptance Loans or other Revolving Loans in Canadian Dollars
(exclusive of any such Revolving Loans which have theretofore been funded) shall
no longer be available until such time as the Administrative Agent notifies the
affected Borrowers and the Lenders that the circumstances giving rise to such
notice by the Administrative Agent no longer exist, and any Notice of Borrowing
or Notice of Conversion/Continuation with respect to Bankers’ Acceptance Loans
or such other Revolving Loans in Canadian Dollars given by the respective
Borrowers which have not been incurred (including by way of conversion) shall be
deemed rescinded by such Borrowers.
Without limiting the foregoing, if any Lender determines, acting reasonably,
that any applicable law has made it unlawful, or that any Governmental Authority
has asserted that it is unlawful, for such Lender or its applicable lending
office to make or maintain any Loan (or to maintain its obligation to make any
Loan), or to participate in, issue or maintain any Letter of Credit (or to
maintain its obligation to participate in or to issue any Letter of Credit),
then, on notice thereof by such Lender to AbitibiResolute Canada through the
Administrative Agent, any obligation of such Lender with respect to the activity
that is unlawful shall be suspended until such Lender notifies the
Administrative Agent and AbitibiResolute Canada that the circumstances giving
rise to such determination no longer exist. Upon receipt of such notice, each
Borrower shall, upon demand from such Lender (with a copy to the Administrative
Agent), prepay or, if conversion would avoid the activity that is unlawful,
convert any Loans, or take any necessary steps with respect to any Letter of
Credit in order to avoid the activity that is unlawful. Upon any such prepayment
or conversion, the applicable Borrower shall also pay accrued interest on the
amount so prepaid or converted. Each Lender agrees to designate a different
lending office if such designation will avoid the need for such notice and will
not, in the good faith judgment of such Lender, otherwise be materially
disadvantageous to such Lender.
If any Lender determines, acting reasonably, that any applicable law has made it
unlawful, or that any Governmental Authority has asserted that it is unlawful,
for such Lender to hold or benefit from a Lien over real property pursuant to
any law of the United States or any State thereof, such Lender may notify the
Administrative Agent and disclaim any benefit of such security interest to the
extent of such illegality; provided, that such determination or disclaimer shall
not invalidate or render unenforceable such Lien for the benefit of any other
Lender.
(b)    At any time that any Eurodollar Loan is affected by the circumstances
described in Section 2.10(a)(ii), the affected Borrower may, and in the case of
a Eurodollar Loan affected by the circumstances described in
Section 2.10(a)(iii), the affected Borrower shall, either (i) if the affected
Eurodollar Loan is then being made initially or pursuant to a conversion, cancel
such Borrowing by giving the Administrative Agent telephonic notice (confirmed
in writing) on the same date that such Borrower was notified by the affected
Lender or the Administrative Agent pursuant to Section 2.10(a)(ii) or (iii), or
(ii) if the affected Eurodollar Loan is then outstanding, upon at least three
Business Days’ written notice to the Administrative Agent, require the affected
Borrower to convert such Eurodollar Loan into a Base Rate Loan (which
conversion, in the case of the circumstance described in Section 2.10(a)(iii),
shall occur no later than the last day of the Interest Period then applicable to
such Eurodollar Loan or such earlier day as shall be required by

-99-

--------------------------------------------------------------------------------

 

applicable law); provided that if more than one Lender is affected at any time,
then all affected Lenders must be treated the same pursuant to this
Section 2.10(b).
(c)    If any Lender determines that after the Closing Date the introduction of
or any change in any applicable law or governmental rule, regulation, order,
guideline, directive or request (whether or not having the force of law)
concerning capital adequacy, or any change in interpretation or administration
thereof by the NAIC or any Governmental Authority, central bank or comparable
agency, will have the effect of increasing the amount of capital required or
expected to be maintained by such Lender or any corporation controlling such
Lender based on the existence of such Lender’s Commitment hereunder or its
obligations hereunder, by an amount deemed by such Lender to be material, then
AbitibiBowaterResolute agrees to pay to such Lender, within 15 days following
its written demand therefor, such additional amounts as shall be required to
compensate such Lender or such other corporation on an after-tax basis for the
increased cost to such Lender or such other corporation or the reduction in the
rate of return to such Lender or such other corporation as a result of such
increase of capital. In determining such additional amounts, each Lender will
act reasonably and in good faith and will use averaging and attribution methods
which are reasonable; provided that such Lender’s determination of compensation
owing under this Section 2.10(c) shall, absent manifest error, be final and
conclusive and binding on all the parties hereto. Each Lender, upon determining
that any additional amounts will be payable pursuant to this Section 2.10(c),
will give prompt written notice thereof to AbitibiBowaterResolute, which notice
shall show in reasonable detail the basis for calculation of such additional
amounts, although the failure to give any such notice shall not release or
diminish AbitibiBowaterResolute’ obligations to pay additional amounts pursuant
to this Section 2.10(c) upon the subsequent receipt of such notice.
(d)    Failure or delay on the part of any Lender or Issuing Lender to demand
compensation pursuant to this Section shall not constitute a waiver of such
Lender’s or such Issuing Lender’s right to demand such compensation, as the case
may be; provided that the Borrowers shall not be required to compensate a Lender
or Issuing Lender pursuant to this Section 2.10 for any increased costs or
reductions incurred more than 120 days prior to the date that such Lender,
Issuing Lender or the Administrative Agent, as the case may be, notifies
AbitibiBowaterResolute of such Lender’s or such Issuing Lender’s intention to
claim compensation therefor; provided, further, that if the introduction or
change referred to in Section 2.10(a)(ii) and 2.10(c) above giving rise to such
increased costs, reductions or additional amounts is retroactive, then the
120-day period referred to above shall be extended to include the period of
retroactive effect thereof.
(e)    Notwithstanding anything herein to the contrary, the Dodd Frank Wall
Street Reform and Consumer Protection Act, and all requests, rules, guidelines
and directives promulgated thereunder, shall be deemed to have been adopted
after the date hereof, regardless of the date enacted or adopted.
2.11.    Compensation. The applicable Loan Parties (grouped by Borrowing Base),
jointly and severally agree to compensate each Lender, upon its written request
(which request shall set forth in reasonable detail the basis for requesting
such compensation and shall, absent manifest error, be conclusive and binding on
all the parties hereto), for all losses, expenses and liabilities (including,
without limitation, any loss, expense or liability incurred by reason of the
liquidation

-100-

--------------------------------------------------------------------------------

 

or reemployment of deposits or other funds required by such Lender to fund its
Eurodollar Loans or Bankers’ Acceptance Loans but excluding loss of anticipated
profits) which such Lender may sustain: (a) if for any reason (other than a
default by such Lender or the Administrative Agent) a Borrowing of, or
conversion from or into, Eurodollar Loans or Bankers’ Acceptance Loans does not
occur on a date specified therefor in a Notice of Borrowing or Notice of
Conversion/Continuation (whether or not withdrawn by the respective Borrower or
Borrowers or deemed withdrawn pursuant to Section 2.10(a)); (b) if any
prepayment or repayment (including any prepayment or repayment made pursuant to
Section 5.01, Section 5.02 or as a result of an acceleration of the Loans
pursuant to Section 11.01) or conversion of any of its Eurodollar Loans or
Bankers’ Acceptance Loans occurs on a date which is not the last day of an
Interest Period or maturity date, as applicable, with respect thereto; (c) if
any prepayment of any of its Eurodollar Loans is not made on any date specified
in a notice of prepayment given by the respective Borrowers; or (d) as a
consequence of (i) any other default by the respective Borrowers to repay
Eurodollar Loans or Bankers’ Acceptance Loans when required by the terms of this
Agreement or any Note held by such Lender or (ii) any election made pursuant to
Section 2.10(b).
2.12.    Lending Offices and Affiliate Lenders for Loans in Available Currency.
(a) Each Lender may at any time or from time to time designate, by written
notice to the Administrative Agent to the extent not already reflected on
Schedule 13.03, one or more lending offices (which, for this purpose, may
include Affiliates of the respective Lender) for the various Loans in the
Available Currency made, and Letters of Credit participated in, by such Lender
(including, without limitation, by designating a separate lending office (or
Affiliate) to act as such with respect to such Loans and Letter of Credit
Outstandings); provided that, for designations made after the Closing Date, to
the extent such designation shall result in increased costs under Section 2.10,
3.06 or 5.04 in excess of those which would be charged in the absence of the
designation of a different lending office (including a different Affiliate of
the respective Lender), then the Borrowers shall not be obligated to pay such
excess increased costs (although if such designation results in increased costs,
the Borrowers shall be obligated to pay the costs which would have applied in
the absence of such designation and any subsequent increased costs of the type
described above resulting from changes after the date of the respective
designation). Except as provided in the immediately preceding sentence, each
lending office and Affiliate of any Lender designated as provided above shall,
for all purposes of this Agreement and the other Loan Documents, be treated in
the same manner as the respective designating Lender (and shall be entitled to
all indemnities and similar provisions in respect of its acting as such
hereunder).
(b)    Each Lender agrees that on the occurrence of any event giving rise to the
operation of Section 2.10(a)(ii) or (iii), Section 2.10(c), Section 3.06 or
Section 5.04 with respect to such Lender, it will, if requested by
AbitibiBowaterResolute, use reasonable efforts (subject to overall policy
considerations of such Lender) to designate another lending office for any Loans
or Letters of Credit affected by such event; provided that such designation is
made on such terms that such Lender and its lending office suffer no economic,
legal or regulatory disadvantage, with the object of avoiding the consequence of
the event giving rise to the operation of such Section. Nothing in this
Section 2.12(b) shall affect or postpone any of the obligations of any Borrower
or the right of any Lender provided in Sections 2.10, 3.06 and 5.04.

-101-

--------------------------------------------------------------------------------

 

2.13.    Replacement of Lenders. (a) If any Lender becomes a Defaulting Lender,
(b) upon the occurrence of any event giving rise to the operation of Section
2.10(a) (other than clause (i) or (iv)), Section 2.10(c), Section 3.06 or
Section 5.04 with respect to any Lender which results in such Lender charging to
any Borrower increased costs in excess of those being generally charged by the
other Lenders, or (c) in the case of a refusal by a Lender to consent to a
proposed change, waiver, discharge or termination with respect to this Agreement
which has been approved by the Required Lenders as (and to the extent) provided
in Section 13.12(b), AbitibiBowaterResolute shall have the right, in accordance
with Section 13.04(b), if no Default or Event of Default then exists or would
exist after giving effect to such replacement, to replace such Lender (the
“Replaced Lender”) with one or more other Eligible Transferees, none of whom
shall constitute a Defaulting Lender at the time of such replacement
(collectively, the “Replacement Lender”) and each of which shall be reasonably
acceptable to the Administrative Agent, any Swingline Lender and any Issuing
Lender; provided that:
(i)    at the time of any replacement pursuant to this Section 2.13, the
Replacement Lender shall enter into one or more Assignment and Assumption
Agreements pursuant to Section 13.04(b) (and with all fees payable pursuant to
said Section 13.04(b) to be paid by the Borrowers or, if otherwise agreed, the
Replacement Lender) pursuant to which the Replacement Lender shall acquire the
entire Commitment of and all outstanding Revolving Loans (other than Bankers’
Acceptance Loans) and all participations in Letters of Credit by, the Replaced
Lender and, in connection therewith, shall pay to (i) the Replaced Lender in
respect thereof an amount equal to the sum of (A) an amount equal to the
principal of, and all accrued interest on, all outstanding Loans (other than
Bankers’ Acceptance Loans) of the respective Replaced Lender with respect to
which such Replaced Lender is being replaced, (B) an amount equal to the Face
Amount of any outstanding B/A Instrument of the respective Replaced Lender in
satisfaction of the obligations of the Borrower to repay the B/A Instrument on
the maturity thereof, (C) an amount equal to all Unpaid Drawings (if any) that
have been funded by (and not reimbursed to) such Replaced Lender, together with
all then unpaid interest with respect thereto at such time and (D) an amount
equal to all accrued, but theretofore unpaid, Fees owing to the Replaced Lender
pursuant to Section 4.01, (ii) each Issuing Lender an amount equal to such
Replaced Lender’s U.S. Facility RL Percentage or Canadian Facility RL
Percentage, as the case may be, of any Unpaid Drawing relating to Letters of
Credit issued by such Issuing Lender under such Facility (which at such time
remains an Unpaid Drawing) to the extent such amount was not theretofore funded
by such Replaced Lender and (iii) theeach Swingline Lender an amount equal to
such Replaced Lender’s U.S. Facility RL Percentage or Canadian Facility RL
Percentage, as the case may be, of any Mandatory Borrowing relating to such
Swingline Lender’s Swingline Loans under such Facility to the extent such amount
was not theretofore funded by such Replaced Lender to thesuch Swingline Lender;
and
(ii)    all obligations of the Borrowers then owing to the Replaced Lender
(other than those specifically described in clause (i) above in respect of which
the assignment purchase price has been, or is concurrently being, paid, but
including all amounts, if any, owing under Section 2.11 which shall be paid in
full to such Replaced Lender concurrently with such

-102-

--------------------------------------------------------------------------------

 

replacement) shall be paid in full to such Replaced Lender concurrently with
such replacement.
(b)    Upon receipt by the Replaced Lender of all amounts required to be paid to
it pursuant to this Section 2.13, the Administrative Agent shall be entitled
(but not obligated) and authorized to execute an Assignment and Assumption
Agreement on behalf of such Replaced Lender, and any such Assignment and
Assumption Agreement so executed by the Administrative Agent and the Replacement
Lender shall be effective for purposes of this Section 2.13 and Section 13.04.
Upon the execution of the respective Assignment and Assumption Agreement, the
payment of amounts referred to in clauses (i) and (ii) above, recordation of the
assignment on the Register by the Administrative Agent pursuant to Section 13.15
and, if so requested by the Replacement Lender, delivery to the Replacement
Lender of the appropriate Note or Notes executed by the relevant Borrowers, the
Replacement Lender shall become a Lender hereunder and the Replaced Lender shall
cease to constitute a Lender hereunder, except with respect to indemnification
provisions under this Agreement (including, without limitation, Sections 2.10,
2.11, 3.06, 5.04, 12.06, 13.01 and 13.06), which shall survive as to such
Replaced Lender.
2.14.    Incremental Commitments. (a) AbitibiBowaterResolute shall have the
right, in consultation and coordination with the Administrative Agent as to all
of the matters set forth below in this Section 2.14, but without requiring the
consent of the Administrative Agent (except as otherwise provided in this
Section 2.14) or the Lenders, to request at any time and from time to time after
the Effective Date and prior to the Revolving Loan Maturity Date that one or
more Lenders (and/or one or more other Persons which are Eligible Transferees
and which will become Lenders) provide U.S. Facility Incremental Commitments or
Canadian Facility Incremental Commitments (as specified by
AbitibiBowaterResolute) and, subject to the applicable terms and conditions
contained in this Agreement and the relevant Incremental Commitment Agreement,
make Revolving Loans and participate in Letters of Credit and Swingline Loans
pursuant thereto; provided that (i) no Lender shall be obligated to provide an
Incremental Commitment, and until such time, if any, as such Lender has agreed
in its sole discretion to provide an Incremental Commitment and executed and
delivered to the Administrative Agent, AbitibiBowaterResolute and the other
Borrowers an Incremental Commitment Agreement as provided in clause (b) of this
Section 2.14, such Lender shall not be obligated to fund any Revolving Loans in
excess of its U.S. Facility Commitment or Canadian Facility Commitment, as
applicable, (if any) or participate in any Letters of Credit or Swingline Loans
in excess of its U.S. Facility RL Percentage or Canadian Facility RL Percentage,
as applicable, in each case, as in effect prior to giving effect to such
Incremental Commitment provided pursuant to this Section 2.14, (ii) any Lender
(including any Person which is an Eligible Transferee who will become a Lender)
may so provide an Incremental Commitment without the consent of the
Administrative Agent or any other Lender; provided that any Person that is not a
Lender prior to the effectiveness of its Incremental Commitment shall require
the consent of the Administrative Agent, each Issuing Lender and theeach
Swingline Lender (which consents shall not be unreasonably withheld or delayed)
to provide an Incremental Commitment pursuant to this Section 2.14, (iii) the
aggregate amount of each request (and provision therefor) for U.S. Facility
Incremental Commitments or Canadian Facility Incremental Commitments, or any
combination thereof, shall be in a minimum aggregate amount for all Lenders
which provide such Incremental Commitments pursuant to a given Incremental
Commitment

-103-

--------------------------------------------------------------------------------

 

Agreement pursuant to this Section 2.14 (including Persons who are Eligible
Transferees and will become Lenders) of at least $25,000,000 (or such lesser
amount that is acceptable to the Administrative Agent), (iv) the aggregate
amount of all Incremental Commitments permitted to be provided pursuant to this
Section 2.14 following the Sixth Amendment Effective Date shall not exceed in
the aggregate $200,000,000, (v) if the Applicable Commitment Fee Percentage
and/or Applicable Margins with respect to Commitments to be provided or Loans to
be incurred pursuant to an Incremental Commitment shall be higher in any respect
than those applicable to any other Commitments or Loans, the Applicable
Commitment Fee Percentage and/or Applicable Margins, as the case may be, for the
other Commitments and Loans shall be automatically increased as and to the
extent needed to eliminate any deficiencies in accordance with the definition of
“Applicable Commitment Fee Percentage” or “Applicable Margin” contained herein
(such increase, the “Additional Commitment Fee” or “Additional Margin”, as the
case may be), (vi) each Incremental Commitment Agreement shall specifically
designate whether such Incremental Commitments are U.S. Facility Incremental
Commitments or Canadian Facility Incremental Commitments, (vii) all Revolving
Loans of a Borrower incurred pursuant to an Incremental Commitment (and all
interest, fees and other amounts payable thereon) shall be Obligations under
this Agreement and the other applicable Loan Documents and shall be secured by
the relevant Security Documents, and guaranteed under the Guarantee and
Collateral Agreement and/or, the Canadian Guarantee and Collateral Agreement
and/or English Subsidiary Guarantee Agreement, on a pari passu basis with all
other Loans of such Borrower secured by each relevant Security Document and
guaranteed under the Guarantee and Collateral Agreement and/or, the Canadian
Guarantee and Collateral Agreement and/or English Subsidiary Guarantee
Agreement, and (ix) each Lender (including any Person which is an Eligible
Transferee who will become a Lender) agreeing to provide an Incremental
Commitment pursuant to an Incremental Commitment Agreement shall, subject to the
satisfaction of the relevant conditions set forth in this Agreement, participate
in Swingline Loans and Letters of Credit pursuant to Sections 2.01(b) and 3.04,
respectively, and make Revolving Loans as provided in Section 2.01(a), in each
case, under the U.S. Facility Commitment or Canadian Facility Commitment, as
applicable, and such Revolving Loans shall constitute U.S. Facility Revolving
Loans or Canadian Facility Revolving Loans, as the case may be, for all purposes
of this Agreement and the other applicable Loan Documents.
(b)    At the time of the provision of Incremental Commitments pursuant to this
Section 2.14, (I) AbitibiBowaterResolute, each other Borrower, each Guarantor,
the Administrative Agent and each such Lender or other Eligible Transferee which
agrees to provide an Incremental Commitment (each, an “Incremental Lender”)
shall execute and deliver to AbitibiBowaterResolute and the Administrative Agent
an Incremental Commitment Agreement, appropriately completed (with the
effectiveness of the Incremental Commitment provided therein to occur on the
date set forth in such Incremental Commitment Agreement, which date in any event
shall be no earlier than the date on which (i) all fees required to be paid in
connection therewith at the time of such effectiveness shall have been paid,
(ii) all Incremental Commitment Requirements have been satisfied, (iii) all
conditions set forth in this Section 2.14 shall have been satisfied and (iv) all
other conditions precedent that may be set forth in such Incremental Commitment
Agreement shall have been satisfied) and (II) AbitibiBowaterResolute, each other
Borrower, each Guarantor, the Collateral Agent and each Incremental Lender (as
applicable) shall execute and deliver to the Administrative Agent and the
Collateral Agent such additional Security Documents and/or amendments to the

-104-

--------------------------------------------------------------------------------

 

Security Documents as the Administrative Agent may reasonably request which are
necessary to ensure that all Loans incurred pursuant to the Incremental
Commitments and any Additional Commitment Fee and/or Additional Margin are
secured by each relevant Security Document (the “Incremental Security
Documents”). The Administrative Agent shall promptly notify each Lender as to
the effectiveness of each Incremental Commitment Agreement and, at such time,
Schedule 1.01(a) shall be deemed modified to reflect the Incremental Commitments
of such Incremental Lenders.
(c)    It is understood and agreed that the Incremental Commitments provided by
an Incremental Lender or Incremental Lenders, as the case may be, pursuant to
each Incremental Commitment Agreement shall constitute part of, and be added to,
the U.S. Facility Commitment and/or the Canadian Facility Commitment, as the
case may be, and each Incremental Lender shall constitute a U.S. Facility Lender
and/or Canadian Facility Lender, as applicable, for all purposes of this
Agreement and each other applicable Loan Document.
(d)    At the time of any provision of Incremental Commitments pursuant to this
Section 2.14, each Borrower shall, in coordination with the Administrative
Agent, repay outstanding Revolving Loans of certain of the Lenders, and incur
additional Revolving Loans from certain other Lenders (including the Incremental
Lenders), in each case to the extent necessary so that all of the U.S. Facility
Lenders and/or Canadian Lenders, as applicable, participate in each outstanding
Borrowing of each Facility of Revolving Loans pro rata on the basis of their
respective Commitments (after giving effect to any increase in the Total
Commitment pursuant to this Section 2.14) and with the Borrowers being obligated
to pay to the respective Lenders any costs of the type referred to in
Section 2.11 in connection with any such repayment and/or Borrowing.
2.15.    Interest Act (Canada); Criminal Rate of Interest; Nominal Rate of
Interest. (a) Notwithstanding anything to the contrary contained in this
Agreement or in any other Loan Document, solely to the extent that a court of
competent jurisdiction finally determines that the calculation or determination
of interest or any fee payable by the Canadian Borrowers in respect of the
Canadian Borrower Obligations pursuant to this Agreement and the other Loan
Documents shall be governed by or subject to the laws of any jurisdiction of
Canada or the federal laws of Canada, in no event shall the aggregate “interest”
(as defined in Section 347 of the Criminal Code, R.S.C. 1985, c. C-46, as the
same shall be amended, replaced or re-enacted from time to time) payable by the
Canadian Borrowers to the Administrative Agent or any Lender Creditor under this
Agreement or any other Loan Document exceed the effective annual rate of
interest on the “credit advanced” (as defined in that section) under this
Agreement or such other Loan Document lawfully permitted under that section and,
if any payment, collection or demand pursuant to this Agreement or any other
Loan Document in respect of “interest” (as defined in that section) is
determined to be contrary to the provisions of that section, such payment,
collection or demand shall be deemed to have been made by mutual mistake of the
Administrative Agent, the applicable Lenders and the Canadian Borrowers and the
amount of such payment or collection shall be refunded by the Administrative
Agent and such Lenders to the Canadian Borrowers. For the purposes of this
Agreement and each other Loan Document to which any Canadian Borrowers are a
party, the effective annual rate of interest payable by the Canadian Borrowers
shall be determined in accordance with generally accepted actuarial practices
and principles over the term of the Loans

-105-

--------------------------------------------------------------------------------

 

on the basis of annual compounding for the lawfully permitted rate of interest
and, in the event of dispute, a certificate of a Fellow of the Canadian
Institute of Actuaries appointed by and for the account of the Canadian
Borrowers will be conclusive for the purpose of such determination in the
absence of evidence to the contrary.
(b)    For the purposes of the Interest Act (Canada) and with respect to
Canadian Borrowers only:
(i)    whenever any interest or fee payable by the Canadian Borrowers is
calculated using a rate based on a year of 360 days or 365 days, as the case may
be, the rate determined pursuant to such calculation, when expressed as an
annual rate, is equivalent to (x) the applicable rate based on a year of 360
days or 365 days, as the case may be, (y) multiplied by the actual number of
days in the calendar year in which such rate is to be ascertained and (z)
divided by 360 or 365, as the case may be; and
(ii)    all calculations of interest payable by the Canadian Borrowers under
this Agreement or any other Loan Document are to be made on the basis of the
nominal interest rate described herein and therein and not on the basis of
effective yearly rates or on any other basis which gives effect to the principle
of deemed reinvestment of interest. The parties hereto acknowledge that there is
a material difference between the stated nominal interest rates and the
effective yearly rates of interest and that they are capable of making the
calculations required to determine such effective yearly rates of interest.
(c)    The parties hereto acknowledge and agree that clauses (a) and (b) of this
Section 2.15 only apply to the Canadian Borrowers and shall not otherwise reduce
or effect the obligations of the U.S. Borrowers under this Agreement to pay the
full amount of the Obligations of such U.S. Borrowers in accordance with the
terms of this Agreement (including to reimburse the Administrative Agent and the
applicable Lenders for any amounts refunded by the Administrative Agent or any
Lender to the Canadian Borrowers pursuant to clause (a) of this Section 2.15).
2.16.    Provisions Regarding Bankers’ Acceptances, Drafts, etc. The parties
hereto agree that the provisions of Schedule 1.01(b) shall apply to all Bankers’
Acceptances, Bankers’ Acceptance Loans, Drafts and B/A Equivalent Notes created
hereunder, and that the provisions of Schedule 1.01(b) shall be deemed
incorporated by reference into this Agreement as if such provisions were set
forth in their entirety herein.
2.17.    AbitibiBowaterResolute as Agent for Borrowers. Each Borrower hereby
irrevocably appoints AbitibiBowaterResolute as its agent and attorney-in-fact
for all purposes under this Agreement and each other Loan Document, which
appointment shall remain in full force and effect unless and until the
Administrative Agent shall have received prior written notice signed by the
respective appointing Borrower that such appointment has been revoked. Each
Borrower hereby irrevocably appoints and authorizes AbitibiBowaterResolute (i)
to provide the Administrative Agent with all notices with respect to Loans and
Letters of Credit obtained for the benefit of any Borrower and all other notices
and instructions under this Agreement or any other Loan Document and (ii) to
take such action as AbitibiBowaterResolute deems appropriate on its behalf to
exercise such other powers as are reasonably incidental thereto to carry out the
purposes of this Agreement and the other Loan Documents. It is understood that
the handling of the Credit Account and the

-106-

--------------------------------------------------------------------------------

 

Collateral of the respective Borrowers in a combined fashion (i.e., the U.S.
Borrowers in a combined fashion and the Canadian Borrowers in a combined
fashion), as more fully set forth herein, is done solely as an accommodation to
the Borrowers in order to utilize the collective borrowing powers of the
Borrowers in the most efficient and economical manner and at their request, and
that the Lenders shall not incur liability to any Borrower as a result thereof.
Each Borrower expects to derive benefit, directly or indirectly, from the
handling of the Credit Account and the Collateral in a combined fashion since
the successful operation of each Borrower is dependent on the continued
successful performance of the consolidated group. To induce the Agents and the
Lenders to do so, and in consideration thereof, each Borrower hereby jointly and
severally agrees to indemnify each Agent and each Lender and hold each Agent and
each Lender harmless against any and all liability, expense, loss or claim of
damage or injury, made against any Agent or any Lender by any Borrower or by any
third party whosoever, arising from or incurred by reason of (a) the handling of
the Credit Account and Collateral of the Borrowers as provided in this Agreement
or (b) the Agents’ and the Lenders’ relying on any instructions of
AbitibiBowaterResolute, or (c) any other action taken by the Agents or the
Lenders hereunder or under the other Loan Documents, except that the Borrowers
will have no liability to any Lender or any Agent with respect to any such
liability, expense, loss or claim of damage or injury to the extent the same has
been finally determined by a court of competent jurisdiction to have resulted
from the gross negligence or willful misconduct of such Lender or such Agent, as
the case may be.
2.18.    Defaulting Lenders. If any Lender becomes a Defaulting Lender, then the
following provisions shall apply for so long as such Lender is a Defaulting
Lender:
(a)    if any U.S. Facility Swingline Exposure or U.S. Facility Letter of Credit
Exposure exists at the time a Lender becomes a Defaulting Lender then:
(i)     all or any part of such U.S. Facility Swingline Exposure and U.S.
Facility Letter of Credit Exposure shall be reallocated among the U.S. Facility
Lenders that are Non-Defaulting Lenders in accordance with their respective U.S.
Facility RL Percentages but only to the extent (x) the sum of all U.S. Facility
Lenders’ that are Non-Defaulting Lenders Individual U.S. Facility Exposures plus
such Defaulting Lender’s U.S. Facility Swingline Exposure and U.S. Facility
Letter of Credit Exposure does not exceed the total of all Non-Defaulting
Lenders’ U.S. Facility Commitments, (y) immediately following the reallocation
to a U.S. Facility Lender that is a Non-Defaulting Lender, the Individual U.S.
Facility Exposure of such U.S. Facility Lender does not exceed its U.S. Facility
Commitment at such time and (z) the conditions set forth in Section 7 are
satisfied at such time;
(ii) if the reallocation described in clause (i) above cannot, or can only
partially, be effected, the applicable Borrowers shall within one (1) Business
Day following notice by the Administrative Agent (x) first, prepay such U.S.
Facility Swingline Exposure and (y) second, cash collateralize in a manner
reasonably satisfactory to the applicable Issuing Lender such Defaulting
Lender’s U.S. Facility Letter of Credit Exposure (after giving effect to any
partial reallocation pursuant to clause (i) above) in aggregate amount equal to
100% of such Defaulting Lender’s

-107-

--------------------------------------------------------------------------------

 

U.S. Facility Letter of Credit Exposure for so long as such U.S. Facility Letter
of Credit Exposure is outstanding (such arrangements, together with the
arrangements set forth in Section 2.18(b)(ii) (the “Letter of Credit Back-Stop
Arrangements”);
(iii) the applicable Borrowers shall not be required to pay any fees to such
Defaulting Lender pursuant to Section 4.01(b) with respect to such Defaulting
Lender’s U.S. Facility Letter of Credit Exposure during the period that such
Lender is a Defaulting Lender;
(iv)     if the U.S. Facility Letter of Credit Exposure of the Non-Defaulting
Lenders is reallocated pursuant to this Section 2.18(a), then the fees payable
to the Lenders pursuant to Section 4.01(b) shall be adjusted in accordance with
such Non-Defaulting Lenders’ U.S. Facility RL Percentages during the period that
such Lender is a Defaulting Lender; and
(v)    if any Defaulting Lender’s U.S. Facility Letter of Credit Exposure is
neither cash collateralized nor reallocated pursuant to this Section 2.18(a),
then, without prejudice to any rights or remedies of any Issuing Lender or any
Lender hereunder, all letter of credit fees payable under Section 4.01(b) with
respect to such Defaulting Lender’s U.S. Facility Letter of Credit Exposure
shall be payable to each Issuing Lender until such U.S. Facility Letter of
Credit Exposure is cash collateralized and/or reallocated;
(b)    if any Canadian Facility Swingline Exposure or Canadian Facility Letter
of Credit Exposure exists at the time a Lender becomes a Defaulting Lender then:
(i)     all or any part of such Canadian Facility Swingline Exposure and
Canadian Facility Letter of Credit Exposure shall be reallocated among the
Canadian Facility Lenders that are Non-Defaulting Lenders in accordance with
their respective Canadian Facility RL Percentages but only to the extent (x) the
sum of all Canadian Facility Lenders’ that are Non-Defaulting Lenders Individual
Canadian Facility Exposures plus such Defaulting Lender’s Canadian Facility
Swingline Exposure and Canadian Facility Letter of Credit Exposure does not
exceed the total of all Non-Defaulting Lenders’ Canadian Facility Commitments,
(y) immediately following the reallocation to a Canadian Facility Lender that is
a Non-Defaulting Lender, the Individual Canadian Facility Exposure of such
Canadian Facility Lender does not exceed its Canadian Facility Commitment at
such time and (z) the conditions set forth in Section 7 are satisfied at such
time;
(ii) if the reallocation described in clause (i) above cannot, or can only
partially, be effected, the applicable Borrowers shall within one (1) Business
Day following notice by the Administrative Agent (x) first, prepay such Canadian
Facility Swingline Exposure and (y) second, cash collateralize in a manner
reasonably satisfactory to the applicable Issuing Lender such Defaulting
Lender’s Canadian Facility Letter of Credit Exposure (after giving effect to any
partial reallocation pursuant to clause (i) above) in aggregate amount equal to
100% of such Defaulting

-108-

--------------------------------------------------------------------------------

 

Lender’s Canadian Facility Letter of Credit Exposure for so long as such
Canadian Facility Letter of Credit Exposure is outstanding;
(iii) the applicable Borrowers shall not be required to pay any fees to such
Defaulting Lender pursuant to Section 4.01(b) with respect to such Defaulting
Lender’s Canadian Facility Letter of Credit Exposure during the period that such
Lender is a Defaulting Lender;
(iv)     if the Canadian Facility Letter of Credit Exposure of the
Non-Defaulting Lenders is reallocated pursuant to this Section 2.18(b), then the
fees payable to the Lenders pursuant to Section 4.01(b) shall be adjusted in
accordance with such Non-Defaulting Lenders’ Canadian Facility RL Percentages
during the period that such Lender is a Defaulting Lender; and
(v)    if any Defaulting Lender’s Canadian Facility Letter of Credit Exposure is
neither cash collateralized nor reallocated pursuant to this Section 2.18(b),
then, without prejudice to any rights or remedies of any Issuing Lender or any
Lender hereunder, all letter of credit fees payable under Section 4.01(b) with
respect to such Defaulting Lender’s Canadian Facility Letter of Credit Exposure
shall be payable to each Issuing Lender until such Canadian Facility Letter of
Credit Exposure is cash collateralized and/or reallocated;
(c)    so long as any U.S. Facility Lender is a Defaulting Lender, theno
Swingline Lender shall not be required to fund any U.S. Facility Swingline Loan
and no Issuing Lender shall be required to issue, amend or increase any U.S.
Facility Letter of Credit, unless it is reasonably satisfied that the related
exposure will be 100% covered by the U.S. Facility Commitments of the
Non-Defaulting Lenders and/or cash collateral will be provided by the applicable
Borrowers in accordance with Section 2.18(a), and participating interests in any
such newly issued or increased U.S. Facility Letter of Credit or newly made U.S.
Facility Swingline Loan shall be allocated among U.S. Facility Lenders that are
Non-Defaulting Lenders in a manner consistent with Section 2.18(a)(i) (and
Defaulting Lenders shall not participate therein); and
(d)    so long as any Canadian Facility Lender is a Defaulting Lender, theno
Swingline Lender shall not be required to fund any Canadian Facility Swingline
Loan and no Issuing Lender shall be required to issue, amend or increase any
Canadian Facility Letter of Credit, unless it is reasonably satisfied that the
related exposure will be 100% covered by the Canadian Facility Commitments of
the Non-Defaulting Lenders and/or cash collateral will be provided by the
applicable Borrowers in accordance with Section 2.18(b), and participating
interests in any such newly issued or increased Canadian Facility Letter of
Credit or newly made Canadian Facility Swingline Loan shall be allocated among
Canadian Facility Lenders that are Non-Defaulting Lenders in a manner consistent
with Section 2.18(b)(i) (and Defaulting Lenders shall not participate therein).
In the event that the Administrative Agent, each Issuing Lender and theeach
Swingline Lender, and, provided that no Event of Default has occurred or is
continuing, each Borrower agrees that a Defaulting Lender has adequately
remedied all matters that caused such Lender to be a Defaulting Lender, then the
Swingline Exposure and Letter of Credit Exposure of

-109-

--------------------------------------------------------------------------------

 

the Lenders shall be readjusted to reflect the inclusion of such Lender’s
Commitments and on such date such Lender shall purchase at par such of the Loans
of the other Lenders (other than Swingline Loans) as the Administrative Agent
shall determine may be necessary in order for such Lender to hold such Loans in
accordance with its U.S. Facility RL Percentage or Canadian Facility RL
Percentage, as the case may be.
SECTION 3. Letters of Credit.
3.01.    Letters of Credit. (a) (A) Subject to and upon the terms and conditions
set forth herein (including, without limitation, the conditions set forth in
Section 7), a Borrower may request that an Issuing Lender issue, at any time and
from time to time on and after the Effective Date and prior to the 30th day
prior to the Revolving Loan Maturity Date, (i) in the case of a request for a
Letter of Credit in respect of the U.S. Facility Commitments, for the joint and
several account of the U.S. Borrowers (each such letter of credit, a “U.S.
Facility Letter of Credit” and, collectively, the “U.S. Facility Letters of
Credit”), (ii) in the case of a request for a Letter of Credit by a U.S.
Borrower in respect of the Canadian Facility Commitments, for the joint and
several account of the U.S. Borrowers (each such letter of credit, a “U.S.
Borrower Canadian Facility Letter of Credit” and, collectively, the “U.S.
Borrower Canadian Facility Letters of Credit”) and (iii) in the case of a
request for a Letter of Credit by a Canadian Borrower in respect of the Canadian
Facility Commitments, for the joint and several account of the Canadian
Borrowers (each such letter of credit, a “Canadian Borrower Letter of Credit”
and, collectively, the “Canadian Borrower Letters of Credit” and, together with
the U.S. Borrower Canadian Facility Letters of Credit, the “Canadian Facility
Letters of Credit” and, together with the U.S. Facility Letters of Credit, the
“Letters of Credit”), and, in each case, for the benefit of (x) any holder (or
any trustee, agent or other similar representative for any such holders) of L/C
Supportable Obligations, an irrevocable standby letter of credit, in a form
customarily used by such Issuing Lender or in such other form as is reasonably
acceptable to such Issuing Lender, and (y) sellers of goods to
AbitibiBowaterResolute or any of its Subsidiaries, an irrevocable trade letter
of credit, in a form customarily used by such Issuing Lender or in such other
form as has been approved by such Issuing Lender (although without limiting the
joint and several nature of the U.S. Borrowers’ or the Canadian Borrowers’
obligations, as the case may be, in respect of the Letters of Credit, any
particular Letter of Credit may name only one or more of the U.S. Borrowers or
the Canadian Borrowers, as the case may be, as the applicant or obligor therein
and, at the direction of such respective Borrower(s), may be issued for the
benefit of one or more Subsidiaries of AbitibiBowaterResolute). Unless agreed to
by an Issuing Lender in respect of a Letter of Credit issued by such Issuing
Lender, each Letters of Credit shall only provide for payment at sight.
(B)    Schedule 3.01 contains a description of letters of credit that were
originally issued for the account of AbitibiBowaterResolute or any of its
Subsidiaries prior to the Closing Date and which remain outstanding on the
Closing Date (and setting forth, with respect to each such letter of credit, (i)
the name of the issuing lender, (ii) the letter of credit number, (iii) the
name(s) of the account party or account parties, (iv) the stated amount, (v) the
currency in which the letter of credit is denominated, (vi) the name of the
beneficiary, (vii) the expiry date and (viii) whether such letter of credit
constitutes a standby letter of credit or a trade letter of credit). Each such
letter of credit which remains outstanding on the Effective Date, including any
extension or renewal thereof in

-110-

--------------------------------------------------------------------------------

 

accordance with the terms thereof and hereof (each, as amended from time to time
in accordance with the terms thereof and hereof, an “Existing Letter of Credit”)
shall constitute a “U.S. Facility Letter of Credit” or “Canadian Facility Letter
of Credit” as specified on Schedule 3.01 for all purposes of this Agreement and
shall be deemed issued on the Effective Date. Each Existing Letter of Credit
shall be deemed to have been issued for the account of the respective Borrowers
as specified on Schedule 3.01.
(b)    Subject to and upon the terms and conditions set forth herein (including,
without limitation, the conditions set forth in Section 7), each Issuing Lender
agrees that it will, at any time and from time to time on and after the
Effective Date and prior to the 30th day prior to the Revolving Loan Maturity
Date, following its receipt of the respective Letter of Credit Request, issue
for (i) in the case of a request for a U.S. Facility Letter of Credit, for the
joint and several account of the U.S. Borrowers, (ii) in the case of a request
for a Canadian Facility Letter of Credit by a U.S. Borrower, for the joint and
several account of the U.S. Borrowers and (iii) in the case of a request for a
Canadian Facility Letter of Credit by a Canadian Borrower, for the joint and
several account of the Canadian Borrowers, and one or more Letters of Credit, in
each case as are permitted to remain outstanding hereunder without giving rise
to a Default or an Event of Default; provided that no Issuing Lender shall be
under any obligation to issue any Letter of Credit of the types described above
if at the time of such issuance:
(i)    any order, judgment or decree of any Governmental Authority or arbitrator
shall purport by its terms to enjoin or restrain such Issuing Lender from
issuing such Letter of Credit or any requirement of law applicable to such
Issuing Lender or any request or directive (whether or not having the force of
law) from any Governmental Authority with jurisdiction over such Issuing Lender
shall prohibit, or request that such Issuing Lender refrain from, the issuance
of letters of credit generally or such Letter of Credit in particular or shall
impose upon such Issuing Lender with respect to such Letter of Credit any
restriction or reserve or capital requirement (for which such Issuing Lender is
not otherwise compensated hereunder) not in effect with respect to such Issuing
Lender on the date hereof, or any unreimbursed loss, cost or expense which was
not applicable or in effect with respect to such Issuing Lender as of the date
hereof and which such Issuing Lender reasonably and in good faith deems material
to it and for which such Issuing Lender is not otherwise entitled to
reimbursement or indemnification hereunder and has not received assurances
satisfactory to such Issuing Lender that it will be paid; or
(ii)    such Issuing Lender shall have received from any Borrower, any other
Loan Party or the Required Lenders prior to the issuance of such Letter of
Credit notice of the type described in the second sentence of Section 3.03(b);
or
(iii)    the aggregate Letter of Credit Exposure in respect of all Letters of
Credit issued by such Issuing Lender would exceed such Issuing Lender’s Fronting
Sublimit.
3.02.    Maximum Letter of Credit Outstandings; Currencies; Tenor. (a) No Letter
of Credit shall be issued (or required to be issued) if the Stated Amount of
such Letter of Credit, when added to the Letter of Credit Outstandings
(exclusive of Unpaid Drawings which are repaid on the date of, and prior to the
issuance of, the respective Letter of Credit) at such time would exceed the
Maximum

-111-

--------------------------------------------------------------------------------

 

Letter of Credit Amount, (b) no U.S. Facility Letter of Credit shall be issued
(or required to be issued) at any time when the Aggregate U.S. Facility Exposure
exceeds (or would after giving effect to such issuance exceed) the Total U.S.
Facility Commitment at such time, (c) no Canadian Facility Letter of Credit
shall be issued (or required to be issued) at any time when the Aggregate
Canadian Facility Exposure exceeds (or would after giving effect to such
issuance exceed) the Total Canadian Facility Commitment at such time, (d) the
issuance of any Letter of Credit shall be subject to the conditions set forth in
this Agreement (including, without limitation, the conditions set forth in
Section 7), (e) each U.S. Facility Letter of Credit shall be denominated in U.S.
Dollars, Euros or Pounds Sterling and each Canadian Facility Letter of Credit
shall be denominated in U.S. Dollars, Canadian Dollars, Euros or Pounds
Sterling, (g) each standby Letter of Credit shall by its terms terminate on or
before the earlier of (1) the date which occurs 12 months after the date of the
issuance thereof (although any such standby Letter of Credit may be extendible
(if and to the extent so provided in such Letter of Credit) for successive
periods of up to 12 months, but, in each case, not beyond the fifth Business Day
prior to the Revolving Loan Maturity Date) and (2) five Business Days prior to
the Revolving Loan Maturity Date and (h) each trade Letter of Credit shall by
its terms terminate on or before the earlier of (i) the date which occurs 180
days after the date of issuance thereof and (ii) five Business Days prior to the
Revolving Loan Maturity Date.
3.03.    Letter of Credit Requests; Minimum Stated Amount. (a) Whenever a
Borrower desires that a Letter of Credit be issued (i) in the case of a request
for a U.S. Facility Letter of Credit, for the joint and several account of the
U.S. Borrowers, (ii) in the case of a request for a Canadian Facility Letter of
Credit by a U.S. Borrower, for the joint and several account of the U.S.
Borrowers and (iii) in the case of a request for a Canadian Facility Letter of
Credit by a Canadian Borrower, for the joint and several account of the Canadian
Borrowers, and shall give the Administrative Agent and the applicable Issuing
Lender at least five Business Days’ (or such shorter period as is acceptable to
such Issuing Lender) written notice thereof (including by way of facsimile).
Each notice shall be in the form of Exhibit C, appropriately completed (each, a
“Letter of Credit Request”) and shall specify whether the Letter of Credit being
issued shall constitute a U.S. Facility Letter of Credit or Canadian Facility
Letter of Credit.
(b)    The making of each Letter of Credit Request shall be deemed to be a
representation and warranty by such requesting Borrower to the Lenders of the
applicable Facility that such Letter of Credit may be issued in accordance with,
and will not violate the requirements of, Section 3.02. Unless the applicable
Issuing Lender has received notice from any Borrower, any other Loan Party or
the Required Lenders before it issues a Letter of Credit that one or more of the
conditions specified in Section 6 or 7 are not then satisfied, or that the
issuance of such Letter of Credit would violate Section 3.02, then such Issuing
Lender shall, subject to the terms and conditions of this Agreement, issue the
requested Letter of Credit for the account of such Borrower (and the U.S.
Borrowers in a combined fashion, or the Canadian Borrowers in a combined
fashion, as the case may be) in accordance with such Issuing Lender’s usual and
customary practices. Upon the issuance of or modification or amendment to any
standby Letter of Credit, each Issuing Lender shall promptly notify the Borrower
to be named as account party therein and the Administrative Agent, in writing of
such issuance, modification or amendment and such notice shall be accompanied by
a copy of such Letter of Credit or the respective modification or amendment
thereto, as the case may be. Promptly after receipt of such notice the
Administrative Agent shall

-112-

--------------------------------------------------------------------------------

 

notify the Participants, in writing, of such issuance, modification or
amendment. On the first Business Day of each week, each Issuing Lender shall
furnish the Administrative Agent with a written (including via facsimile) report
of the daily aggregate outstandings of Letters of Credit issued by such Issuing
Lender for the immediately preceding week.
(c)    The initial Stated Amount of each Letter of Credit shall not be less than
$10,000 (or, in the case of a Letter of Credit issued in a currency other than
U.S. Dollars, the U.S. Dollar Equivalent thereof) or such lesser amount as is
acceptable to the respective Issuing Lender.
3.04.    Letter of Credit Participations. (a) Immediately upon the issuance by
an Issuing Lender of any Letter of Credit under a Facility, such Issuing Lender
shall be deemed to have sold and transferred to each Lender under such Facility,
and each such Lender (in its capacity under this Section 3.04 with respect to
any Letter of Credit, a “Participant” therein) shall be deemed irrevocably and
unconditionally to have purchased and received from such Issuing Lender, without
recourse or warranty, an undivided interest and participation, to the extent of
such Participant’s U.S. Facility RL Percentage or Canadian Facility RL
Percentage, as the case may be, in such Letter of Credit, each drawing or
payment made thereunder and the obligations of the U.S. Borrowers or the
Canadian Borrowers, as the case may be, under this Agreement with respect
thereto, and any security therefor or guaranty pertaining thereto. Upon any
change in the Commitments under a Facility or U.S. Facility RL Percentages or
Canadian Facility RL Percentages of the Lenders pursuant to Section 2.13,
Section 2.14 or Section 13.04(b), it is hereby agreed that, with respect to all
outstanding Letters of Credit and Unpaid Drawings under such Facility relating
thereto, there shall be an automatic adjustment to the participations pursuant
to this Section 3.04 to reflect the new U.S. Facility RL Percentages or Canadian
Facility RL Percentages of the assignor and assignee Lender under such Facility,
as the case may be.
(b)    In determining whether to pay under any Letter of Credit under a
Facility, no Issuing Lender shall have any obligation other than to confirm that
any documents required to be delivered under such Letter of Credit appear to
have been delivered and that they appear to substantially comply on their face
with the requirements of such Letter of Credit. Any action taken or omitted to
be taken by an Issuing Lender under or in connection with any Letter of Credit
issued by it shall not create for such Issuing Lender any resulting liability to
any Borrower, any other Loan Party, any Lender or any other Person unless such
action is taken or omitted to be taken with gross negligence or willful
misconduct on the part of such Issuing Lender (as determined by a court of
competent jurisdiction in a final and non-appealable decision).
(c)    In the event that an Issuing Lender makes any payment under any Letter of
Credit issued by it and the U.S. Borrowers or the Canadian Borrowers, as
applicable, shall not have reimbursed such amount in full to such Issuing Lender
pursuant to Section 3.05(a), such Issuing Lender shall promptly notify the
Administrative Agent, which shall promptly notify each Participant of such
failure, and each such Participant shall promptly and unconditionally pay to
such Issuing Lender the amount of such Participant’s U.S. Facility RL Percentage
or Canadian Facility RL Percentage, as the case may be, of such unreimbursed
payment in the applicable Available Currency (or, in the case of any
unreimbursed payment made in a currency other than an Available Currency under
the applicable Facility, the U.S. Dollar Equivalent of such unreimbursed
payment, as determined

-113-

--------------------------------------------------------------------------------

 

by the Issuing Lender on the date on which such unreimbursed payment was made by
such Issuing Lender) in immediately available funds. If the Administrative Agent
so notifies, prior to 12:00 Noon (New York City time) on any Business Day, any
Participant required to fund a payment under a Letter of Credit, such
Participant shall make available in the applicable Available Currency (or, in
the case of any unreimbursed payment made in a currency other than an Available
Currency under the applicable Facility, the U.S. Dollar Equivalent thereof) to
the respective Issuing Lender such Participant’s U.S. Facility RL Percentage or
Canadian Facility RL Percentage, as the case may be, of the amount of such
payment on such Business Day in immediately available funds. If and to the
extent such Participant shall not have so made its U.S. Facility RL Percentage
or Canadian Facility RL Percentage, as the case may be, of the amount of such
payment available to the respective Issuing Lender, such Participant agrees to
pay to such Issuing Lender, forthwith on demand such amount, together with
interest thereon, for each day from such date until the date such amount is paid
to such Issuing Lender at the overnight Federal Funds Rate (or, in the case of
any unreimbursed payment denominated in Canadian Dollars, at a rate equivalent
to the cost to such Issuing Lender of acquiring overnight funds in Canadian
Dollars) for the first three days and thereafter at the interest rate applicable
to U.S. Dollar Denominated Revolving Loans that are maintained as Base Rate
Loans (or, in the case of any unreimbursed payment denominated in Canadian
Dollars, the interest rate applicable to Canadian Prime Rate Loans). The failure
of any Participant to make available to an Issuing Lender its U.S. Facility RL
Percentage or Canadian Facility RL Percentage, as the case may be, of any
payment under any Letter of Credit issued by such Issuing Lender shall not
relieve any other Participant of its obligation hereunder to make available to
such Issuing Lender its U.S. Facility RL Percentage or Canadian Facility RL
Percentage, as the case may be, of any payment under any Letter of Credit on the
date required, as specified above, but no Participant shall be responsible for
the failure of any other Participant to make available to such Issuing Lender
such other Participant’s U.S. Facility RL Percentage or Canadian Facility RL
Percentage, as the case may be, of any such payment.
(d)    Whenever an Issuing Lender receives a payment of a reimbursement
obligation as to which it has received any payments from the Participants
pursuant to clause (c) above, such Issuing Lender shall pay to each such
Participant which has paid its applicable U.S. Facility RL Percentage or
Canadian Facility RL Percentage thereof, in the applicable Available Currency
(or, in the case of any unreimbursed payment made in a currency other than an
Available Currency under the applicable Facility, the U.S. Dollar Equivalent
thereof) in immediately available funds, an amount equal to such Participant’s
share (based upon the proportionate aggregate amount originally funded by such
Participant to the aggregate amount funded by all Participants in respect of
such participation) of the principal amount of such reimbursement obligation and
interest thereon accruing after the purchase of the respective participations.
(e)    The obligations of the Participants to make payments to each Issuing
Lender with respect to Letters of Credit shall be irrevocable and not subject to
any qualification or exception whatsoever and shall be made in accordance with
the terms and conditions of this Agreement under all circumstances, including,
without limitation, any of the following circumstances:
(i)    any lack of validity or enforceability of this Agreement or any of the
other Loan Documents;

-114-

--------------------------------------------------------------------------------

 

(ii)    the existence of any claim, setoff, defense or other right which
AbitibiBowaterResolute or any of its Subsidiaries may have at any time against a
beneficiary named in a Letter of Credit, any transferee of any Letter of Credit
(or any Person for whom any such transferee may be acting), the Administrative
Agent, any Participant, or any other Person, whether in connection with this
Agreement, any Letter of Credit, the transactions contemplated herein or any
unrelated transactions (including any underlying transaction between
AbitibiBowaterResolute or any Subsidiary of AbitibiBowaterResolute and the
beneficiary named in any such Letter of Credit);
(iii)    any draft, certificate or any other document presented under any Letter
of Credit proving to be forged, fraudulent, invalid or insufficient in any
respect or any statement therein being untrue or inaccurate in any respect;
(iv)    the surrender or impairment of any security for the performance or
observance of any of the terms of any of the Loan Documents; or
(v)    the occurrence of any Default or Event of Default.
3.05.    Agreement to Repay Letter of Credit Drawings. (a) (i) Each U.S.
Borrower, in the case of a U.S. Facility Letter of Credit, hereby jointly and
severally agrees, (ii) each U.S. Borrower, in the case of a Canadian Facility
Letter of Credit issued for the account of a U.S. Borrower, hereby jointly and
severally agrees and (iii) each Canadian Borrower, in the case of a Canadian
Facility Letter of Credit issued for the account of a Canadian Borrower, hereby
jointly and severally agrees, in each case, to reimburse each Issuing Lender, by
making payment to the Administrative Agent in the applicable Available Currency
(or, in the case of any unreimbursed payment made in a currency other than an
Available Currency under the applicable Facility, the U.S. Dollar Equivalent of
such payment or disbursement as determined by the respective Issuing Lender on
the date of such payment or disbursement) in immediately available funds at the
Payment Office, for any payment or disbursement made by such Issuing Lender
under any Letter of Credit issued by it for the account of such U.S. Borrower or
Canadian Borrower, as applicable (each such amount (or the U.S. Dollar
Equivalent thereof, as the case may be) so paid until reimbursed by the U.S.
Borrowers or the Canadian Borrowers, as applicable, an “Unpaid Drawing”), not
later than one Business Day following receipt by any such U.S. Borrower or any
such Canadian Borrower, as the case may be, of notice of such payment or
disbursement (provided that no such notice shall be required to be given if a
Default or an Event of Default under Section 11.01(g) or (h) shall have occurred
and be continuing, in which case the Unpaid Drawing shall be due and payable
immediately without presentment, demand, protest or notice of any kind (all of
which are hereby waived by the Borrowers)), with interest on the amount so paid
or disbursed by such Issuing Lender, to the extent not reimbursed prior to 12:00
Noon (New York City time) on the date of such payment or disbursement, from and
including the date paid or disbursed to but excluding the date such Issuing
Lender was reimbursed by such U.S. Borrower or such Canadian Borrower, as
applicable, at a rate per annum equal to the Base Rate as in effect from time to
time plus the Applicable Margin as in effect from time to time for U.S. Dollar
Denominated Revolving Loans that are maintained as Base Rate Loans; (or, in the
case of any unreimbursed payment denominated in Canadian Dollars, the interest
rate applicable to Canadian Prime Rate Loans) provided, however,

-115-

--------------------------------------------------------------------------------

 

to the extent such amounts are not reimbursed prior to 12:00 Noon (New York City
time) on the third Business Day following the receipt by any such U.S. Borrower
or any such Canadian Borrower, as applicable, of notice of such payment or
disbursement or following the occurrence of a Default or an Event of Default
under Section 11.01(g) or (h), interest shall thereafter accrue on the amounts
so paid or disbursed by such Issuing Lender (until reimbursed by the U.S.
Borrowers or the Canadian Borrowers, as applicable, at the applicable rate per
annum specified above plus 2%, with such interest to be payable on demand. Each
Issuing Lender shall give the U.S. Borrowers or the Canadian Borrowers, as the
case may be, prompt written notice of each Drawing under any Letter of Credit
issued by it for the account of such Borrowers; provided that the failure to
give any such notice shall in no way affect, impair or diminish the obligations
of any such Borrower hereunder.
(b)    The joint and several obligations of the U.S. Borrowers or the Canadian
Borrowers, as the case may be, under this Section 3.05 to reimburse each Issuing
Lender with respect to drafts, demands and other presentations for payment under
Letters of Credit issued by it (each, a “Drawing”) (including, in each case,
interest thereon) shall be absolute and unconditional under any and all
circumstances and irrespective of any setoff, counterclaim or defense to payment
which AbitibiBowaterResolute, any Borrower or any other Subsidiary of
AbitibiBowaterResolute may have or have had against any Lender under the
respective Facility (including in its capacity as an Issuing Lender or as a
Participant), including, without limitation, any defense based upon the failure
of any drawing under a Letter of Credit to conform to the terms of the Letter of
Credit or any nonapplication or misapplication by the beneficiary of the
proceeds of such Drawing; provided, however, that the foregoing shall not be
construed to excuse the applicable Issuing Lender from liability to the
Borrowers to the extent of any direct damages (as opposed to consequential
damages, claims in respect of which are hereby waived by the Borrowers to the
extent permitted by applicable law) suffered by the Borrowers that are caused by
acts or omissions constituting willful misconduct or gross negligence on the
part of such Issuing Lender (as determined by a court of competent jurisdiction
in a final and non-appealable decision).
3.06.    Increased Costs. If at any time after the Closing Date, the
introduction of or any change in any applicable law, rule, regulation, order,
guideline or request or in the interpretation or administration thereof by the
NAIC or any Governmental Authority charged with the interpretation or
administration thereof, or compliance by any Issuing Lender or any Participant
with any request or directive by the NAIC or by any such Governmental Authority
(whether or not having the force of law), shall either (a) impose, modify or
make applicable any reserve, deposit, capital adequacy or similar requirement
against letters of credit issued by any Issuing Lender or participated in by any
Participant, or (b) impose on any Issuing Lender or any Participant any other
conditions relating, directly or indirectly, to this Agreement or any Letter of
Credit; and the result of any of the foregoing is to increase the cost to any
Issuing Lender or any Participant of issuing, maintaining or participating in
any Letter of Credit, or reduce the amount of any sum received or receivable by
any Issuing Lender or any Participant hereunder or reduce the rate of return on
its capital with respect to Letters of Credit (except with respect to any Tax,
which shall be governed solely by Section 5.04), then, upon the delivery of the
certificate referred to below to the Borrowers by any Issuing Lender or any
Participant (a copy of which certificate shall be sent by such Issuing Lender or
such Participant to the Administrative Agent), the applicable Loan Parties whose
Revolving

-116-

--------------------------------------------------------------------------------

 

Loans are subject to such increased costs jointly and severally agree to pay to
such Issuing Lender or such Participant such additional amount or amounts as
will compensate such Issuing Lender or such Participant for such increased cost
or reduction in the amount receivable or reduction on the rate of return on its
capital. Any Issuing Lender or any Participant, upon determining that any
additional amounts will be payable to it pursuant to this Section 3.06, will
give prompt written notice thereof to the Borrowers, which notice shall include
a certificate submitted to the Borrowers by such Issuing Lender or such
Participant (a copy of which certificate shall be sent by such Issuing Lender or
such Participant to the Administrative Agent), setting forth in reasonable
detail the basis for the calculation of such additional amount or amounts
necessary to compensate such Issuing Lender or such Participant. The certificate
required to be delivered pursuant to this Section 3.06 shall, absent manifest
error, be final and conclusive and binding on all the parties hereto. Failure or
delay on the part of any Issuing Lender or Participant to demand compensation
pursuant to this Section shall not constitute a waiver of such Issuing Lender’s
or Participant’s right to demand such compensation, as the case may be; provided
that the Borrowers shall not be required to compensate an Issuing Lender or
Participant pursuant to this Section 3.06 for any increased costs or reductions
incurred more than 120 days prior to the date that such Issuing Lender or
Participant, as the case may be, notifies AbitibiBowaterResolute of such Issuing
Lender’s or such Participant’s intention to claim compensation therefor;
provided, further, that if the change referred to above giving rise to such
increased costs is retroactive, then the 120-day period referred to above shall
be extended to include the period of retroactive effect thereof.
SECTION 4. Commitment Fees; Reductions of Commitment.
4.01.    Fees. (a) AbitibiBowaterResolute agrees to pay to the Administrative
Agent for distribution to each Non-Defaulting Lender a commitment fee (the
“Commitment Fees”) for the period from and including the Closing Date to and
including the Revolving Loan Maturity Date (or such earlier date on which the
Total Commitment has been terminated) computed at a rate per annum equal to the
Applicable Commitment Fee Percentage of the Unutilized Commitment of such
Non-Defaulting Lender as in effect from time to time. Accrued Commitment Fees
shall be due and payable quarterly in arrears on each Quarterly Payment Date and
on the date upon which the Total Commitment is terminated.
(b)    (i) Each U.S. Borrower, in the case of a U.S. Facility Letter of Credit,
hereby jointly and severally agrees, (ii) each U.S. Borrower, in the case of a
Canadian Facility Letter of Credit issued for the account of a U.S. Borrower,
hereby jointly and severally agrees and (iii) each Canadian Borrower, in the
case of a Canadian Facility Letter of Credit issued for the account of a
Canadian Borrower, hereby jointly and severally agrees, in each case, to pay to
the Administrative Agent for distribution to each Non-Defaulting Lender under
the respective Facility (based on each such Lender’s respective U.S. Facility RL
Percentage or Canadian Facility RL Percentage, as the case may be) a fee in
respect of each Letter of Credit issued for the account of such U.S. Borrower or
such Canadian Borrower, as applicable (the “Letter of Credit Fee”) for the
period from and including the date of issuance of such Letter of Credit to and
including the date of termination or expiration of such Letter of Credit,
computed at a rate per annum equal to the Applicable Margin as in effect from
time to time during such period with respect to Revolving Loans that are
maintained as Eurodollar Loans on the daily Stated Amount of each such Letter of
Credit. Accrued Letter of

-117-

--------------------------------------------------------------------------------

 

Credit Fees shall be due and payable quarterly in arrears on each Quarterly
Payment Date and on the first day on or after the termination of the Total U.S.
Facility Commitment or Total Canadian Facility Commitment, as the case may be,
upon which no Letters of Credit under the respective Facility remain
outstanding.
(c)    (i) Each U.S. Borrower, in the case of a U.S. Facility Letter of Credit,
hereby jointly and severally agrees, (ii) each U.S. Borrower, in the case of a
Canadian Facility Letter of Credit issued for the account of a U.S. Borrower,
hereby jointly and severally agrees and (iii) each Canadian Borrower, in the
case of a Canadian Facility Letter of Credit issued for the account of a
Canadian Borrower, hereby jointly and severally agrees, in each case, to pay to
each Issuing Lender, for its own account, a facing fee in respect of each Letter
of Credit issued by it for the account of such U.S. Borrower or such Canadian
Borrower, as applicable (the “Facing Fee”) as may have been, or are hereafter,
agreed to in writing from time to time by AbitibiBowaterResolute and such
Issuing Lender.
(d)    (i) Each U.S. Borrower, in the case of a U.S. Facility Letter of Credit,
hereby jointly and severally agrees, (ii) each U.S. Borrower, in the case of a
Canadian Facility Letter of Credit issued for the account of a U.S. Borrower,
hereby jointly and severally agrees and (iii) each Canadian Borrower, in the
case of a Canadian Facility Letter of Credit issued for the account of a
Canadian Borrower, hereby jointly and severally agrees, in each case, to pay to
each Issuing Lender, for its own account, upon each payment under, issuance of,
or amendment to, any Letter of Credit issued by it for the account of such U.S.
Borrower or such Canadian Borrower, as applicable, such amount as shall at the
time of such event be the administrative charge and the reasonable expenses
which such Issuing Lender is generally imposing in connection with such
occurrence with respect to letters of credit.
(e)    Each Canadian Borrower, in the case of Bankers’ Acceptance Loans made to
a Canadian Borrower, hereby jointly and severally agrees to pay Drawing Fees at
the time of the incurrence (by way of acceptance, purchase or otherwise) of each
such Bankers’ Acceptance Loan.
(f)    The applicable Borrowers agree to pay to each Agent such fees as may have
been, or are hereafter, agreed to in writing from time to time by
AbitibiBowaterResolute or any of its Subsidiaries and such Agent on the basis
and to the extent set forth therein.
4.02.    Voluntary Termination of Unutilized Commitments. Upon at least three
Business Day’s prior written notice to the Administrative Agent at the Notice
Office (which notice the Administrative Agent shall promptly transmit to each of
the Lenders under the applicable Facility), the Borrowers shall have the right,
at any time or from time to time, without premium or penalty to terminate the
Total Unutilized U.S. Facility Commitment or Total Unutilized Canadian Facility
Commitment, in each case, in whole, or reduce it in part, pursuant to this
Section 4.02, in an integral multiple of $1,000,000 in the case of partial
reductions to the Total Unutilized U.S. Facility Commitment or Total Unutilized
Canadian Facility Commitment, as the case may be, provided that each such
reduction shall apply proportionately to permanently reduce the Commitments
under the applicable Facility of each Lender under such Facility; provided
further, that a notice of termination of the Total Unutilized Commitment in
whole delivered by a Borrower may state that such notice is conditioned upon the
effectiveness of other credit facilities, in which case such

-118-

--------------------------------------------------------------------------------

 

notice may be revoked by such Borrower (by notice to the Administrative Agent on
or prior to the specified effective date).
4.03.    Mandatory Reduction of Commitments. (a) The Total Commitment (and the
Commitments of each Lender) shall terminate in its entirety on December 31,
2010, unless the Effective Date has occurred on or prior to such date.
(b)    The Total Commitment (and the Commitments of each Lender) shall terminate
in its entirety upon the Revolving Loan Maturity Date.

-119-

--------------------------------------------------------------------------------

 

SECTION 5. Prepayments; Payments; Taxes
5.01.    Voluntary Prepayments. Each Borrower shall have the right to prepay the
Loans, without premium or penalty, in whole or in part at any time and from time
to time on the following terms and conditions: (i) such Borrower shall give the
Administrative Agent prior to 12:00 Noon (New York City time) at the Notice
Office (A) at least one Business Day’s (or such shorter period as agreed to by
the Administrative Agent in its sole discretion) prior written notice (or
telephonic notice promptly confirmed in writing) of its intent to prepay Base
Rate Loans (or same day notice in the case of a prepayment of U.S. Dollar
Denominated Swingline Loans) or Canadian Prime Rate Loans (or same day notice in
the case of a prepayment of Canadian Dollar Denominated Swingline Loans) and (B)
at least three Business Days’ prior written notice (or telephonic notice
promptly confirmed in writing) of its intent to prepay Eurodollars Loans, which
notice (in each case) shall specify whether U.S. Facility Revolving Loans, U.S.
Facility Swingline Loans, Canadian Facility Revolving Loans or Canadian Facility
Swingline Loans shall be prepaid, the amount of such prepayment and the Types of
Loans to be prepaid and, in the case of Eurodollar Loans, the specific Borrowing
or Borrowings pursuant to which such Eurodollar Loans were made, and which
notice the Administrative Agent shall, except in the case of Swingline Loans,
promptly transmit to each of the Lenders under the applicable Facility, provided
that if a notice of optional prepayment is given in connection with a
conditional notice of termination of the Total Unutilized Commitment in whole as
contemplated by Section 4.02, then such notice of prepayment may be revoked if
such notice of termination is revoked in accordance with Section 4.02; (ii) each
partial prepayment of Revolving Loans pursuant to this Section 5.01 shall be in
an aggregate principal amount of at least $1,000,000 (or such lesser amount as
is acceptable to the Administrative Agent in any given case); provided that if
any partial prepayment of Eurodollar Loans made pursuant to any Borrowing shall
reduce the outstanding principal amount of Eurodollar Loans made pursuant to
such Borrowing to an amount less than the Minimum Borrowing Amount applicable
thereto, then such Borrowing may not be continued as a Borrowing of Eurodollar
Loans (and same shall automatically be converted into a Borrowing of Base Rate
Loans); (iii) each prepayment pursuant to this Section 5.01 in respect of any
Revolving Loans made pursuant to a Borrowing shall be applied pro rata among
such Revolving Loans, provided that at the applicable Borrower’s election in
connection with any prepayment of Revolving Loans pursuant to this Section 5.01,
such prepayment shall not, so long as no Default or Event of Default then
exists, be applied to any Revolving Loan of a Defaulting Lender, and (iv)
prepayments of Bankers’ Acceptance Loans may not be made prior to the maturity
date of the underlying Bankers’ Acceptances or B/A Equivalent Notes, as the case
may be.
5.02.      Mandatory Repayments; Cash Collateralization. (a) (i) On any day on
which any one or more of the following conditions shall exist, the Borrowers
shall repay the Loans (other than Bankers’ Acceptance Loans where the underlying
B/A Instrument has not matured) and/or cash collateralize outstanding Letters of
Credit and Bankers’ Acceptance Loans pursuant to clause (iii) below in such
amount as may be required to cause such conditions to cease to exist on such
day:
(v)    the Aggregate U.S. Borrower Exposure at such time exceeds 100% (or,
during an Agent Advance Period, 105%) of the U.S. Borrowing Base at such time;

-120-

--------------------------------------------------------------------------------

 

(w)    the Aggregate Canadian Borrower Exposure at such time exceeds 100% (or,
during an Agent Advance Period, 105%) of the Canadian Borrowing Base at such
time;
(x)    the Aggregate U.S. Facility Exposure at such time exceeds the Total U.S.
Facility Commitment at such time;
(y)    the Aggregate Canadian Facility Exposure at such time exceeds the Total
Canadian Facility Commitment at such time; and/or
(z)    the aggregate Letter of Credit Outstandings at such time exceed the
Maximum Letter of Credit Amount.
(ii)    In connection with any repayment and/or cash collateralization required
pursuant to Section 5.02(a)(i) on any day, the Borrowers shall prepay the Loans
in the following order:
(A)    in the case of a repayment and/or cash collateralization required
pursuant to Section 5.02(a)(i)(v) on any day, the U.S. Borrowers shall repay on
such day the principal of outstanding U.S. Borrower Swingline Loans and, after
all U.S. Borrower Swingline Loans have been repaid in full or if no U.S.
Borrower Swingline Loans are outstanding, U.S. Borrower Revolving Loans (each
such repayment shall be applied to the U.S. Facility Revolving Loans and the
U.S. Borrower Canadian Facility Revolving Loans on a pro rata basis), in each
case in such amount as may be required to cause the conditions giving rise to
such mandatory repayment requirement to cease to exist on such day,
(B)    in the case of a repayment and/or cash collateralization required
pursuant to Section 5.02(a)(i)(w) on any day, the Canadian Borrowers shall repay
on such day the principal of outstanding Canadian Borrower Swingline Loans and,
after all Canadian Borrower Swingline Loans have been repaid in full or if no
Canadian Borrower Swingline Loans are outstanding, Canadian Borrower Revolving
Loans (other than Bankers’ Acceptance Loans where the underlying B/A Instrument
has not matured), in each case in such amount as may be required to cause the
conditions giving rise to such mandatory repayment requirement to cease to exist
on such day,
(C) in the case of a repayment and/or cash collateralization required pursuant
to Section 5.02(a)(i)(x) on any day, the U.S. Borrowers shall repay on such day
the principal of outstanding U.S. Facility Swingline Loans and, after all U.S.
Facility Swingline Loans have been repaid in full or if no U.S. Facility
Swingline Loans are outstanding, U.S. Facility Revolving Loans, in each case in
such amount as may be required to cause the conditions giving rise to such
mandatory repayment requirement to cease to exist on such day, and
(D) in the case of a repayment and/or cash collateralization required pursuant
to Section 5.02(a)(i)(y) on any day, the Borrowers shall repay on such day the
principal of their respective outstanding Canadian Facility Swingline Loans and,

-121-

--------------------------------------------------------------------------------

 

after all Canadian Facility Swingline Loans have been repaid in full or if no
Canadian Facility Swingline Loans are outstanding, Canadian Facility Revolving
Loans (other than Bankers’ Acceptance Loans where the underlying B/A Instrument
has not matured), in each case in such amount as may be required to cause the
conditions giving rise to such mandatory repayment requirement to cease to exist
on such day.
(iii)    If the conditions set forth in Section 5.02(a)(i)(x) or (y) exist or,
after giving effect to the prepayment of all Loans under a Facility (other than
Bankers’ Acceptance Loans where the underlying B/A Instrument has not matured),
the conditions set forth in Section 5.02(a)(i) continue to exist, the respective
Borrowers shall pay to the Administrative Agent at the Payment Office on such
day an amount of cash and/or Permitted Investments equal to 105% of the amount
of such excess, such cash and/or Permitted Investments to be held as security
for all Obligations of the Borrowers to the Issuing Lenders and the Lenders, in
each case, under such Facility hereunder in a cash collateral account to be
established by, and under the sole dominion and control of, the Administrative
Agent (and which cash and/or Permitted Investments may, without limiting the
Borrowers’ obligations in respect thereof, be paid to and applied by such
Issuing Lenders in satisfaction of the Obligations of the Borrowers to such
Issuing Lenders and/or Lenders in respect of any Drawings made under any Letter
of Credit under such Facility issued for the account of a Borrower or such
Bankers’ Acceptance Loans under such Facility on the respective maturity dates
thereof).
(b)    In addition to any other mandatory repayments pursuant to this
Section 5.02 the U.S. Facility Revolving Loans or the Canadian Facility
Revolving Loans, as the case may be, shall be prepaid within one Business Day
following the date of receipt of any Net Cash Proceeds from any Significant
Asset Sale by an amount equal to such Net Cash Proceeds from ABL Priority
Collateral of such Significant Asset Sale; provided that (x) Net Cash Proceeds
from any Significant Asset Sale made by a Canadian Subsidiary shall only be
applied to Loans borrowed by the Canadian Borrowers and (y) Net Cash Proceeds
from any Significant Asset Sale made by a AbitibiBowaterResolute or a U.S.
Subsidiary shall only be applied to Loans borrowed by the U.S. Borrowers.
(c)    In addition to any other mandatory repayments pursuant to this
Section 5.02, on the Revolving Loan Maturity Date, (i) all then outstanding
Loans shall be repaid in full and the respective Borrowers shall pay to the
Administrative Agent at the Payment Office on such day an amount of cash and/or
Permitted Investments, or provide backup letters of credit to the Administrative
Agent in a face amount equal to 103% of the amount of such excess, such cash
and/or Permitted Investments to be held as security for all Obligations of the
applicable Borrower to the applicable Issuing Lenders and Lenders hereunder in a
cash collateral account to be established by, and under the sole dominion and
control of, the Administrative Agent (and which cash and/or Permitted
Investments may, without limiting the Borrowers’ obligations in respect thereof,
be paid to and applied by such Issuing Lenders and/or Lenders in satisfaction of
the Obligations of the Borrowers to such Issuing Lenders and/or Lenders in
respect of any Drawings made under any Letter of Credit issued for the account
of a Borrower or such Bankers’ Acceptance Loan on the respective maturity dates
thereof).

-122-

--------------------------------------------------------------------------------

 

(d)    In addition to any other mandatory repayments pursuant to this
Section 5.02, each Swingline Loan under a Facility will be repaid (for the
avoidance of doubt, such repayment may be made with proceeds from Revolving
Loans under such Facility incurred by the same Borrower), no later than the
seventh day following the incurrence thereof; provided that, if the seventh day
is not a Business Day, such repayment shall be made on the next succeeding
Business Day.
5.03.    Method and Place of Payment; Deposits and Accounts. (a) Except as
otherwise specifically provided herein, all payments under this Agreement and
under any Note shall be made to the Administrative Agent for the account of the
Lender or Lenders entitled thereto not later than 1:00 p.m. (New York City time)
on the date when due and shall be made in (x) U.S. Dollars in immediately
available funds at the Payment Office in respect of any obligation of the
Borrowers under this Agreement except as otherwise provided in the immediately
following clause (y) or (y) Canadian Dollars in immediately available funds at
the Payment Office, if such payment is made in respect of (i) principal of, or
Face Amount of, or interest on Canadian Dollar Denominated Loans or (ii) any
Unpaid Drawings denominated in Canadian Dollars or (iii) any increased costs,
indemnities or other amounts owing with respect to Canadian Dollar Denominated
Loans (including, without limitation, pursuant to Sections 2.10, 2.11, 3.06,
5.04, 12.06, 13.01 and 13.06). Whenever any payment to be made hereunder or
under any Note shall be stated to be due on a day which is not a Business Day,
the due date thereof shall be extended to the next succeeding Business Day and,
with respect to payments of principal, interest shall be payable at the
applicable rate during such extension.
(b)    Each U.S. Loan Party shall, along with the Collateral Agent, certain
financial institutions selected by AbitibiBowaterResolute and reasonably
acceptable to the Administrative Agent (the “U.S. Collection Banks”), and each
of those banks in which each Core U.S. Concentration Account, U.S. Collection
Account and other Deposit Account (other than Excluded Accounts, the Note
Collateral AccountDesignated Blocked Accounts and the Specified Collection
Accounts) are maintained by each such U.S. Loan Party, enter into, and
thereafter maintain, separate Control Agreements in respect of each such Core
U.S. Concentration Account, U.S. Collection Account and Deposit Account (other
than Excluded Accounts, the Note Collateral AccountDesignated Blocked Accounts
and the Specified Collection Accounts) in compliance with the Collateral and
Guarantee Requirements. Each U.S. Loan Party shall instruct all Account Debtors
of the U.S. Loan Parties to remit all payments to the applicable “P.O. Boxes” or
“Lockbox Addresses” of the applicable U.S. Collection Bank (or to remit such
payments to the applicable U.S. Collection Bank by electronic settlement) with
respect to all Accounts of such Account Debtor, which remittances shall be
collected by the applicable U.S. Collection Bank and deposited in the applicable
U.S. Collection Account. All amounts received by any U.S. Loan Party and any
U.S. Collection Bank in respect of any Account of an Account Debtor of any U.S.
Loan Party, in addition to all other cash received by any U.S. Loan Party from
any other source, shall upon receipt be deposited into a U.S. Collection Account
or a Core U.S. Concentration Account or, to the extent permitted hereunder in
the case of amounts not constituting payments in respect of Accounts of any U.S.
Loan Party, an Excluded Account or the Note Collateral Account.
(c)    Each Canadian Loan Party shall, along with the Collateral Agent, certain
financial institutions selected by AbitibiBowaterResolute and reasonably
acceptable to the Administrative

-123-

--------------------------------------------------------------------------------

 

Agent (the “Canadian Collection Banks”), and each of those banks in which each
Core Canadian Concentration Account, Canadian Collection Account and Deposit
Account (other than Excluded Accounts, the Note Collateral Account, the CIBC
Cash Collateral Account, the Designated Blocked Accounts and the Specified
Collection Accounts) are maintained by each such Canadian Loan Party, enter
into, and thereafter maintain, separate Control Agreements in respect of each
such Core Canadian Concentration Account, Canadian Collection Account and
Deposit Account (other than Excluded Accounts, the Note Collateral Account, the
CIBC Cash Collateral Account, the Designated Blocked Accounts and the Specified
Collection Accounts) in compliance with the Collateral and Guarantee
Requirements. Each Canadian Loan Party shall instruct all Account Debtors of the
Canadian Loan Parties to remit all payments to the applicable “P.O. Boxes” or
“Lockbox Addresses” of the applicable Canadian Collection Bank (or to remit such
payments to the applicable Canadian Collection Bank by electronic settlement)
with respect to all Accounts of such Account Debtor, which remittances shall be
collected by the applicable Canadian Collection Bank and deposited in the
applicable Canadian Collection Account. All amounts received by any Canadian
Loan Party and any Canadian Collection Bank in respect of any Account of an
Account Debtor of any Canadian Loan Party, in addition to all other cash
received by any Canadian Loan Party from any other source, shall upon receipt be
deposited into a Canadian Collection Account, a Core Canadian Concentration
Account or, to the extent permitted hereunder in the case of amounts not
constituting payments in respect of Accounts of any Canadian Loan Party, an
Excluded Account or the Note Collateral Account or the CIBC Cash Collateral
Account.
(d)    Each English Loan Party shall, along with the Collateral Agent, certain
financial institutions selected by Resolute and reasonably acceptable to the
Administrative Agent (the “English Collection Banks”), and each of those banks
in which each English Collection Account and Deposit Account (other than
Excluded Accounts and the Specified Collection Accounts) are maintained by each
such English Loan Party, enter into, and thereafter maintain, separate Control
Agreements in respect of each such English Collection Account and Deposit
Account (other than Excluded Accounts and the Specified Collection Accounts) in
compliance with the Collateral and Guarantee Requirements. Each English Loan
Party shall instruct all Account Debtors of the English Loan Parties to remit
all payments to the applicable “P.O. Boxes” or “Lockbox Addresses” of the
applicable English Collection Bank (or to remit such payments to the applicable
English Collection Bank by electronic settlement) with respect to all Accounts
of such Account Debtor, which remittances shall be collected by the applicable
English Collection Bank and deposited in the applicable English Collection
Account. All amounts received by any English Loan Party and any English
Collection Bank in respect of any Account of an Account Debtor of any English
Loan Party, in addition to all other cash received by any English Loan Party
from any other source, shall upon receipt be deposited into an English
Collection Account or, to the extent permitted hereunder in the case of amounts
not constituting payments in respect of Accounts of any English Loan Party, an
Excluded Account.
(de)    (i) All amounts deposited or held in all of the U.S. Collection Accounts
with respect to each U.S. Loan Party and available for transfer (other than
amounts which are payable to Subsidiaries or Affiliates of
AbitibiBowaterResolute that are not Loan Parties and which were sent or
deposited to the incorrect lockbox or deposit account by the account debtor)
shall be transferred not less frequently than once per Business Dayweek (it
being understood that any amounts deposited in a

-124-

--------------------------------------------------------------------------------

 

U.S. Collection Account after such dailyweekly transfer has occurred shall be
transferred on the following Business Day), or, solely in the case of amounts
held in the U.S. Collection Accounts set forth on Schedule 5.03(d), not less
frequently than weekly,week) into one or more accounts with the Administrative
Agent or a financial institution reasonably acceptable to the Administrative
Agent (each a “Core U.S. Concentration Account” and collectively, the “Core U.S.
Concentration Accounts”) unless such amounts are otherwise required or permitted
to be applied pursuant to Section 5.02; provided, however, that so long as no
Dominion Period then exists, the Borrowers shall be permitted to retain in each
U.S. Collection Account funds in an aggregate amount not to exceed at any time
the sum of (x) the amount required (as reasonably determined by
AbitibiBowaterResolute) to satisfy the payment of outstanding obligations owing
in respect of checks or similar obligations issued by any U.S. Loan Party with
respect to such U.S. Collection Account plus (y) $100,0001,000,000 (provided
that the aggregate amount of funds retained in all U.S. Collection Accounts
pursuant to this clause (y) shall not exceed $500,0005,000,000 at any time) and,
(ii) all amounts deposited or held in all of the Canadian Collection Accounts
with respect to each Canadian Loan Party and available for transfer shall be
transferred not less frequently than once per Business Dayweek (it being
understood that any amounts deposited in a Canadian Collection Account after
such dailyweekly transfer has occurred shall be transferred on the following
Business Day), or, solely in the case of amounts held in the Canadian Collection
Accounts set forth on Schedule 5.03(d), not less frequently than weekly,week)
into one or more accounts with the Administrative Agent or a financial
institution reasonably acceptable to the Administrative Agent (each a “Core
Canadian Concentration Account” and collectively, the “Core Canadian
Concentration Accounts”) unless such amounts are otherwise required or permitted
to be applied pursuant to Section 5.02; provided, however, that so long as no
Dominion Period then exists, the Borrowers shall be permitted to retain in each
Canadian Collection Account funds in an aggregate amount not to exceed at any
time the sum of (x) the amount required (as reasonably determined by
AbitibiBowaterResolute) to satisfy the payment of outstanding obligations owing
in respect of checks or similar obligations issued by any Canadian Loan Party
with respect to such Canadian Collection Account plus (y) $100,0001,000,000
(provided that the aggregate amount of funds retained in all Canadian Collection
Accounts pursuant to this clause (y) shall not exceed $700,0007,000,000 at any
time). Except as, and to the extent, permitted by this Section 5.03(de), and
Section 10 each Collection Account (other than English Collection Accounts)
shall have a zero balance immediately following the transfer of funds pursuant
to the immediately preceding sentences. So long as no Dominion Period then
exists, the Borrowers and the other Loan Parties shall be permitted to transfer
cash from the Core Concentration Accounts and from the English Collection
Accounts to other Deposit Accounts to be used for working capital and general
corporate purposes all subject to the requirements of this Agreement (including
this Section 5.03(de)). If a Dominion Period exists, all collected amounts held
in the Core Concentration Accounts shall be applied as provided in Section
5.03(ef), (g) or (fg), as applicable.
(ef)    Each Control Agreement relating to a Core U.S. Concentration Account
shall (unless otherwise agreed by the Administrative Agent in its sole
discretion) include provisions that allow, during any Dominion Period, for all
collected amounts held in such Core U.S. Concentration Account from and after
the date requested by the Administrative Agent, to be sent by ACH or wire
transfer or similar electronic transfer no less frequently than once per
Business Day to one or more accounts maintained by the Administrative Agent at
Citibank (or if Citibank is not the

-125-

--------------------------------------------------------------------------------

 

Administrative Agent, at the institution designated by such successor
Administrative Agent) or an affiliate thereof (each a “Citibank U.S. Account”).
Subject to the terms of the respective Security Document and to Section
11.02(a), all amounts received in a Citibank U.S. Account during the existence
of a Dominion Period shall be applied (and allocated) by the Administrative
Agent on a daily basis in the following order (in each case to the extent the
Administrative Agent has actual knowledge of the amounts owing or outstanding as
described below, and after giving effect to the application of any such amounts
constituting proceeds from any Collateral otherwise required to be applied
pursuant to the terms of the respective Security Document during the existence
of an Event of Default), subject to the provisions of the immediately succeeding
sentence (to the extent applicable): (1) first, to the payment (on a ratable
basis) of any outstanding Expenses actually due and payable by any U.S. Borrower
to the Administrative Agent and the Collateral Agent under any of the Loan
Documents; (2) second, to the extent all amounts referred to in preceding clause
(1) have been paid in full, to pay (on a ratable basis) all outstanding Expenses
actually due and payable by any U.S. Borrower to each Issuing Lender under any
of the Loan Documents; (3) third, to the extent all amounts referred to in
preceding clauses (1) and (2) have been paid in full, to pay (on a ratable
basis) all accrued and unpaid interest actually due and payable on the U.S.
Borrower Loans and then all accrued and unpaid Fees actually due and payable by
any U.S. Borrower to the Administrative Agent, the Issuing Lenders and the
Lenders under any of the Loan Documents; (4) fourth, to the extent all amounts
referred to in preceding clauses (1) through (3), inclusive, have been paid in
full, to pay (on a ratable basis) any and all unpaid principal of U.S. Borrower
Loans and Unpaid Drawings in respect of Letters of Credit issued for the account
of a U.S. Borrower in each case which are then actually due and payable; (5)
fifth, to the extent all amounts referred to in preceding clauses (1) through
(4), inclusive, have been paid in full, to repay or prepay outstanding U.S.
Borrower Swingline Loans and to repay or prepay all outstanding U.S. Borrower
Revolving Loans advanced by the Administrative Agent on behalf of the Lenders
pursuant to Section 2.01(e); (6) sixth, to the extent all amounts referred to in
preceding clauses (1) through (5), inclusive, have been paid in full, to repay
(on a ratable basis) the outstanding principal of U.S. Borrower Revolving Loans
(whether or not then due and payable), provided that, with respect to each
repayment of U.S. Borrower Revolving Loans required by this Section 5.03(ef)(6),
so long as no Event of Default then exists and less than all outstanding U.S.
Borrower Revolving Loans would otherwise be required to be repaid pursuant
hereto, the U.S. Borrowers may designate the Types of U.S. Borrower Revolving
Loans which are to be repaid and, in the case of Eurodollar Loans which are U.S.
Borrower Revolving Loans, the specific Borrowing or Borrowings pursuant to which
such Eurodollar Loans were made, provided that payments in respect of Eurodollar
Loans may with the consent of the Administrative Agent be held as cash
collateral until the conclusion of the applicable Interest Period, if so
requested by AbitibiBowaterResolute; (7) seventh, to the extent all amounts
referred to in preceding clauses (1) through (6), inclusive, have been paid in
full, but only if an Event of Default has occurred and is continuing and unless
otherwise elected by the Required Lenders, to cash collateralize (on a ratable
basis) all outstanding Letters of Credit issued for the account of a U.S.
Borrower (such cash collateral to be held by the Administrative Agent while an
Event of Default exists in a cash collateral account to be established by, and
under the sole dominion and control of, the Administrative Agent and applied to
the Obligations of the U.S. Borrowers to the Issuing Lenders and/or Lenders in
respect of any Drawings made under any such Letters of Credit or any such
Bankers’ Acceptance Loans); (8) eighth, to the extent all amounts referred to in
preceding clauses (1) through (7), inclusive, have been paid in full, to pay (on
a

-126-

--------------------------------------------------------------------------------

 

ratable basis) all other outstanding Obligations of any U.S. Borrower then due
and payable to the Administrative Agent, the Collateral Agent and the Lenders
under any of the Loan Documents; and (9) ninth, to the U.S. Borrowers; provided
that, with respect to any payments or cash collateralization required to be
applied (or allocated) pursuant to preceding clauses (1) through (8), in each
case, to the extent the outstanding Obligations under any such clause
constitutes outstanding Obligations under more than one Facility, any such
payments or cash collateralization shall be applied (or allocated) under such
clause to the outstanding Obligations under each Facility on a pro rata basis
based upon the outstanding Obligations with respect to such Facility under such
clause. Each U.S. Loan Party agrees that it will not cause any proceeds of any
Core Concentration Account to be otherwise redirected.
(fg)    Each Control Agreement relating to a Core Canadian Concentration Account
shall (unless otherwise agreed by the Administrative Agent in its sole
discretion) include provisions that allow, during any Dominion Period, for all
collected amounts held in such Core Canadian Concentration Account from and
after the date requested by the Administrative Agent, to be sent by ACH or wire
transfer or similar electronic transfer no less frequently than once per
Business Day to one or more accounts maintained by the Administrative Agent at
Citibank, N.A., Canadian Branch (or if Citibank is not the Administrative Agent,
at a Canadian institution designated by such successor Administrative Agent) or
an affiliate thereof (each a “Citibank Canadian Account”). Subject to the terms
of the respective Security Document and to Section 11.02(a), all amounts
received in a Citibank Canadian Account during the existence of a Dominion
Period shall be applied (and allocated) by the Administrative Agent on a daily
basis in the following order (in each case to the extent the Administrative
Agent has actual knowledge of the amounts owing or outstanding as described
below, and after giving effect to the application of any such amounts
constituting proceeds from any Collateral otherwise required to be applied
pursuant to the terms of the respective Security Document during the existence
of an Event of Default), subject to the provisions of the immediately succeeding
sentence (to the extent applicable): (1) first, to the payment (on a ratable
basis) of any outstanding Expenses actually due and payable by any Canadian
Borrower to the Administrative Agent and the Collateral Agent under any of the
Loan Documents; (2) second, to the extent all amounts referred to in preceding
clause (1) have been paid in full, to pay (on a ratable basis) all outstanding
Expenses actually due and payable by any Canadian Borrower to each Issuing
Lender under any of the Loan Documents; (3) third, to the extent all amounts
referred to in preceding clauses (1) and (2) have been paid in full, to pay (on
a ratable basis) all accrued and unpaid interest actually due and payable on the
Canadian Borrower Loans and then all accrued and unpaid Fees actually due and
payable by any Canadian Borrower to the Administrative Agent, the Issuing
Lenders and the Lenders under any of the Loan Documents; (4) fourth, to the
extent all amounts referred to in preceding clauses (1) through (3), inclusive,
have been paid in full, to pay (on a ratable basis) any and all unpaid principal
of Canadian Borrower Revolving Loans and Unpaid Drawings in respect of Letters
of Credit issued for the account of a Canadian Borrower in each case which are
then actually due and payable; (5) fifth, to the extent all amounts referred to
in preceding clauses (1) through (4), inclusive, have been paid in full, to
repay or prepay outstanding Canadian Borrower Swingline Loans and to repay or
prepay all outstanding Canadian Borrower Revolving Loans advanced by the
Administrative Agent on behalf of the Lenders pursuant to Section 2.01(e); (6)
sixth, to the extent all amounts referred to in preceding clauses (1) through
(5), inclusive, have been paid in full, to repay (on a ratable basis) the
outstanding principal of

-127-

--------------------------------------------------------------------------------

 

Canadian Borrower Revolving Loans (whether or not then due and payable, but
excluding any outstanding Bankers’ Acceptance Loans where the underlying B/A
Instrument has not matured), provided that, with respect to each repayment of
Canadian Borrower Revolving Loans required by this Section 5.03(fg)(6), so long
as no Event of Default then exists and less than all outstanding Canadian
Borrower Revolving Loans would otherwise be required to be repaid pursuant
hereto, the Canadian Borrowers may designate the Types of Canadian Borrower
Revolving Loans which are to be repaid and, in the case of Eurodollar Loans
which are Canadian Borrower Revolving Loans, the specific Borrowing or
Borrowings pursuant to which such Eurodollar Loans were made, provided that
payments in respect of Eurodollar Loans may with the consent of the
Administrative Agent be held as cash collateral until the conclusion of the
applicable Interest Period, if so requested by AbitibiBowaterResolute; (7)
seventh, to the extent all amounts referred to in preceding clauses (1) through
(6), inclusive, have been paid in full, but only if an Event of Default has
occurred and is continuing and unless otherwise elected by the Required Lenders,
to cash collateralize (on a ratable basis) all outstanding Letters of Credit
issued for the account of a Canadian Borrower and Bankers’ Acceptance Loans
which are Canadian Borrower Revolving Loans where the underlying B/A Instrument
has not matured (such cash collateral to be held by the Administrative Agent
while an Event of Default exists in a cash collateral account to be established
by, and under the sole dominion and control of, the Administrative Agent and
applied to the Obligations of the Canadian Borrowers to the Issuing Lenders
and/or Lenders in respect of any Drawings made under any such Letters of Credit
or Bankers’ Acceptance Loans); (8) eighth, to the extent all amounts referred to
in preceding clauses (1) through (7), inclusive, have been paid in full, to pay
(on a ratable basis) all other outstanding Obligations of any Canadian Borrower
then due and payable to the Administrative Agent, the Collateral Agent and the
Lenders under any of the Loan Documents; and (9) ninth, to the Canadian Loan
Parties. Each Canadian Loan Party agrees that it will not cause any proceeds of
any Core Canadian Concentration Account to be otherwise redirected.
(h)    Each Control Agreement relating to an English Collection Account shall
(unless otherwise agreed by the Administrative Agent in its sole discretion)
include provisions that allow, during any Dominion Period, for all collected
amounts held in such English Collection Account from and after the date
requested by the Administrative Agent, to be sent by ACH or wire transfer or
similar electronic transfer no less frequently than once per Business Day to one
or more accounts maintained by the Administrative Agent at Citibank N.A., London
(or if Citibank is not the Administrative Agent, at the institution designated
by such successor Administrative Agent) or an affiliate thereof (each a
“Citibank English Account”). Subject to the terms of the respective Security
Document and to Section 11.02(a), all amounts received in a Citibank English
Account during the existence of a Dominion Period shall be applied (and
allocated) by the Administrative Agent on a daily basis in the order set forth
Section 5.03(g) (in each case to the extent the Administrative Agent has actual
knowledge of the amounts owing or outstanding as described below, and after
giving effect to the application of any such amounts constituting proceeds from
any Collateral otherwise required to be applied pursuant to the terms of the
respective Security Document during the existence of an Event of Default),
subject to the provisions of the immediately succeeding sentence (to the extent
applicable).
(gi)    Without limiting the provisions set forth in Section 13.15, the
Administrative Agent shall maintain accounts on its books in the name of each
Borrower (collectively, the “Credit Account”)

-128-

--------------------------------------------------------------------------------

 

in which each Borrower will be charged with all loans and advances under each
Facility made by the Lenders to the respective Borrower for the respective
Borrower’s account, including the Loans, the Letter of Credit Outstandings, and
the Fees, Expenses and any other Obligations relating thereto. Each Borrower
will be credited, in accordance with this Section 5.03, with all amounts
received by the Lenders from such Borrower or from others for its account,
including, as set forth above, all amounts received by the Administrative Agent
and applied to the Obligations. In no event shall prior recourse to any Accounts
or other Collateral be a prerequisite to the Administrative Agent’s right to
demand payment of any Obligation upon its maturity. Further, the Administrative
Agent shall have no obligation whatsoever to perform in any respect any of the
Borrowers’ or other Loan Parties’ contracts or obligations relating to the
Accounts.

5.04.    Designated Blocked Accounts; Borrowing Base Reporting.Any Deposit
Account or securities account that is (x) owned by a U.S. Loan Party, (y)
maintained with a Lender or an Affiliate of a Lender, and (z) subject at all
times to a Control Agreement in favor of the Administrative Agent that specifies
that such Deposit Account or securities account is and shall be under the sole
control of the Administrative Agent, and that the Administrative Agent shall be
the only Person authorized to give instructions in respect of the withdrawal of
funds or other assets credited to such Deposit Account or securities account
(each such Control Agreement, a “Blocked Control Agreement”) may be designated
as a “U.S. Designated Blocked Account” by Resolute by identifying such Deposit
Account or securities account as a “U.S. Designated Blocked Account” in a
written notice signed by a Responsible Officer of Resolute and delivered to the
Administrative Agent at the time any such Blocked Control Agreement is entered
into by such Loan Party, the applicable Lender or Affiliate thereof and the
Administrative Agent (each such Deposit Account and/or securities account, a
“U.S. Designated Blocked Account”). Notwithstanding anything herein or in any
Security Document to the contrary, at no time shall (A) any U.S. Designated
Blocked Account constitute an Excluded Account or (B) any Deposit Account or
securities account constitute a U.S. Designated Blocked Account unless a Blocked
Control Agreement is in effect with respect to such Deposit Account.     
(b)    Any Deposit Account or securities account that is (x) owned by a Canadian
Loan Party, (y) maintained with a Lender or an Affiliate of a Lender, and (z)
subject at all times to a Blocked Control Agreement may be designated as a
“Canadian Designated Blocked Account” by Resolute by identifying such Deposit
Account or securities account as a “Canadian Designated Blocked Account” in a
written notice signed by a Responsible Officer of Resolute and delivered to the
Administrative Agent at the time any such Blocked Control Agreement is entered
into by such Canadian Loan Party, the applicable Lender or Affiliate thereof and
the Administrative Agent (each such Deposit Account and/or securities account, a
“Canadian Designated Blocked Account”). Notwithstanding anything herein or in
any Security Document to the contrary, at no time shall (A) any Canadian
Designated Blocked Account constitute an Excluded Account or (B) any Deposit
Account or securities account constitute a Canadian Designated Blocked Account
unless a Blocked Control Agreement is in effect with respect to such Deposit
Account.
(c)    Any Deposit Account or securities account that is (x) owned by an English
Loan Party, (y) maintained with a Lender or an Affiliate of a Lender, and (z)
subject at all times to a Blocked

-129-

--------------------------------------------------------------------------------

 

Control Agreement may be designated as an “English Designated Blocked Account”
by Resolute by identifying such Deposit Account or securities account as an
“English Designated Blocked Account” in a written notice signed by a Responsible
Officer of Resolute and delivered to the Administrative Agent at the time any
such Blocked Control Agreement is entered into by such English Loan Party, the
applicable Lender or Affiliate thereof and the Administrative Agent (each such
Deposit Account and/or securities account, an “English Designated Blocked
Account”). Notwithstanding anything herein or in any Security Document to the
contrary, at no time shall (A) any English Designated Blocked Account constitute
an Excluded Account or (B) any Deposit Account or securities account constitute
an English Designated Blocked Account unless a Blocked Control Agreement is in
effect with respect to such Deposit Account.
(d)    The Administrative Agent hereby agrees that, notwithstanding any
provision of any Blocked Control Agreement to the contrary, and in no way
effecting the Administrative Agent’s “control” thereunder as described therein,
it shall consent to (i) the investment of the funds on deposit in such
Designated Blocked Account in Permitted Investments of the type described in
clause (a) of the definition thereof, as directed from time to time by the Loan
Party owning such Designated Blocked Account and (ii) the withdrawal by any Loan
Party that owns a Designated Blocked Account of cash from such Designated
Blocked Account at any time that (x) a Financial Officer of Resolute delivers an
updated Borrowing Base Certificate to the Administrative Agent reflecting only
the adjustments for such withdrawal and calculated on a pro forma basis after
giving effect to all such withdrawals to be made at such time, and such
Borrowing Base Certificate shall be the most recently delivered Borrowing Base
Certificate for all purposes under this Agreement until the delivery of the next
Borrowing Base Certificate in accordance with the terms of this Agreement, (y) a
Responsible Officer of Resolute delivers a certificate to the Administrative
Agent certifying that no Default or Event of Default has occurred and is
continuing both immediately before and after giving effect to such withdrawal,
and (z) such Borrowing Base Certificate delivered pursuant to clause (x) above
shall demonstrate that Excess Availability would be not less than the Compliance
Amount after giving effect to such withdrawal.
(e)    The Administrative Agent hereby agrees that at any time that any Loan
Party deposits additional cash into any Designated Blocked Account during any
interim period for which a monthly Borrowing Base Certificate is not required to
be delivered a Financial Officer of Resolute may deliver an updated Borrowing
Base Certificate to the Administrative Agent, calculated on a pro forma basis
after giving effect to all such deposits, in accordance with reporting
requirements for a Weekly Borrowing Base Period, and such Borrowing Base
Certificate shall be the most recently delivered Borrowing Base Certificate for
all purposes under this Agreement until the delivery of the next Borrowing Base
Certificate in accordance with the terms of this Agreement.

5.045.05.    Net Payments; Taxes. (a) (i) All payments made by the Borrowers and
the other Loan Parties hereunder and under any other Loan Document will be made
without setoff, counterclaim or other defense.
(ii)    Except as provided in Section 5.045.05(b), all payments made by or on
account of any obligation of the Loan Parties hereunder and under any other Loan
Document will be

-130-

--------------------------------------------------------------------------------

 

made free and clear of, and without deduction or withholding for, any present or
future taxes, levies, imposts, duties, fees, assessments or other charges of
whatever nature now or hereafter imposed by any jurisdiction or by any political
subdivision or taxing authority thereof or therein with respect to such
payments, including all interest, penalties or similar liabilities with respect
thereto but excluding (u) those certain taxes described in Section 13.01(a)(ii),
which shall be governed solely by the provisions of such Section, and, except as
provided in the second succeeding sentence, with respect to any Agent, any
Lender or any other recipient of any payment to be made by or on account of any
obligation of any Borrower hereunder, (v) taxes imposed on or measured by its
net income (however denominated), taxes imposed on or measured by its capital
and franchise taxes imposed on or measured by its gross or net income or
receipts and backup withholding taxes, in each case by the jurisdiction (or any
political subdivision thereof) under the laws of which such recipient is
organized, is resident for tax purposes or is doing business (otherwise than by
reason of the transactions contemplated by this Agreement), or in which its
principal office or applicable lending office is located, (w) any branch profits
taxes imposed by the United States or any similar tax imposed by any other
jurisdiction, (x) in the case of a Foreign Lender (other than an assignee
pursuant to a request by a Borrower under Section 2.13), any withholding tax
that is imposed on amounts payable to such Foreign Lender at the time such
Lender becomes a party hereto (or designates a new lending office), except to
the extent that such Foreign Lender (or its assignor, if any) was entitled, at
the time of designation of a new lending office (or assignment), to receive
additional amounts from a Borrower with respect to such withholding pursuant to
Section 5.045.05(a), (y) any withholding tax that is attributable to a Foreign
Lender’s failure to comply with Section 5.045.05(b) or (c) or willfully
providing incorrect, false or misleading statements with respect thereto and (z)
any withholding tax imposed pursuant to FATCA, and all interest, penalties or
similar liabilities with respect thereto (all such non-excluded taxes, levies,
imposts, duties, fees, assessments or other charges being referred to
collectively as “Taxes”). If any Taxes are so levied or imposed, the respective
Borrower and any other Loan Party making the respective payment or which has
guaranteed the obligations of the relevant Borrower jointly or severally agree
to pay the full amount of such Taxes, and such additional amounts as may be
necessary so that every payment of all amounts due under this Agreement or under
any other Loan Document, after withholding or deduction for or on account of any
Taxes, will not be less than the amount provided for herein or in such other
Loan Documents. If, pursuant to the preceding sentence, any additional amounts
are payable in respect of Taxes, the respective Borrower and any other Loan
Party making the respective payment or which has guaranteed the obligations of
the relevant Borrower jointly and severally agree to reimburse each affected
Lender, upon the written request of such Lender, for any taxes imposed on such
Lender as a result of the payment of such additional amounts and which are
measured by the net income of such Lender pursuant to the laws of the
jurisdiction in which such Lender is organized or in which the principal office
or applicable lending office of such Lender is located or under the laws of any
political subdivision or taxing authority of any such jurisdiction in which such
Lender is organized or in which the principal office or applicable lending
office of such Lender is located and for any withholding of taxes as such Lender
shall determine are payable by, or withheld from, such Lender, in respect of
such amounts so paid to or on behalf of such Lender pursuant to the preceding
sentence and in respect of any amounts paid to or on behalf

-131-

--------------------------------------------------------------------------------

 

of such Lender pursuant to this sentence. The respective Borrower (or other Loan
Party) will furnish to the Administrative Agent within 45 days after the date
the payment of any Taxes is due pursuant to applicable law certified copies of
tax receipts evidencing such payment by such Borrower (or other Loan Party) or
other evidence of such payment reasonably acceptable to the Administrative
Agent. Subject to Section 14.07, (i) the U.S. Borrowers (jointly and severally)
agree (and the applicable U.S. Subsidiary Guarantors agree), to indemnify and
hold harmless each U.S. Facility Lender and (ii) the U.S. Borrowers (jointly and
severally) or the Canadian Borrowers (jointly and severally), as applicable,
agree (and the applicable Subsidiary Guarantors agree) to indemnify and hold
harmless each Canadian Facility Lender, and, in each case, reimburse such Lender
upon its written request (which written request shall show in reasonable detail
the basis for calculation of any such additional amount), for the amount of any
Taxes so levied or imposed and paid by such Lender.
(b)    Each Lender as of the date hereof that is not a United States person (as
such term is defined in Section 7701(a)(30) of the Code) for U.S. Federal income
tax purposes agrees to deliver to AbitibiBowaterResolute and the Administrative
Agent, to the extent it is legally entitled to do so, on or prior to the Closing
Date (i) two accurate and complete original signed copies of Internal Revenue
Service Form W-8IMY, Form W-8ECI or Form W-8BEN (with respect to a partial or
complete exemption under an income tax treaty) (or successor forms) certifying
to such Lender’s entitlement as of such date to a partial or complete exemption
from United States withholding tax with respect to payments to be made by the
U.S. Borrowers under this Agreement and under any Note, or (ii) if the Lender is
not a “bank” within the meaning of Section 881(c)(3)(A) of the Code and cannot
deliver either Internal Revenue Service Form W-8IMY, Form W‑8ECI or Form W-8BEN
(with respect to a complete exemption under an income tax treaty) pursuant to
clause (i) above, (x) a certificate substantially in the form of Exhibit K (any
such certificate, a “Section 5.045.05(b)(ii) Certificate”) and (y) two accurate
and complete original signed copies of Internal Revenue Service Form W-8BEN
(with respect to the portfolio interest exemption) (or successor form)
certifying to such Lender’s entitlement as of such date to a complete exemption
from United States withholding tax with respect to payments of interest to be
made by the U.S. Borrowers under this Agreement and under any Note. In addition,
each Lender agrees that from time to time after the Closing Date, when a lapse
in time or change in circumstances renders the previous certification obsolete
or inaccurate in any respect, such Lender will deliver to AbitibiBowaterResolute
and the Administrative Agent two new accurate and complete original signed
copies of Internal Revenue Service Form W-8IMY, Form W-8ECI, Form W-8BEN (with
respect to the benefits of any income tax treaty), or Form W-8BEN (with respect
to the portfolio interest exemption) and a Section 5.045.05(b)(ii) Certificate,
as the case may be, and such other forms as may be required in order to confirm
or establish the entitlement of such Lender to a continued exemption from or
reduction in United States withholding tax with respect to payments by the U.S.
Borrowers under this Agreement and any Note, or such Lender shall promptly
notify AbitibiBowaterResolute and the Administrative Agent of its inability to
deliver any such Form or Certificate, in which case such Lender shall not be
required to deliver any such Form or Certificate pursuant to this Section
5.045.05(b). Notwithstanding anything to the contrary contained in to Section
13.04(b) and the immediately succeeding sentence, (x) each U.S. Borrower and the
Administrative Agent shall be entitled, to the extent it is required to do so by
law, to deduct or

-132-

--------------------------------------------------------------------------------

 

withhold income or similar taxes imposed by the United States (or any political
subdivision or taxing authority thereof or therein) from interest, Fees or other
amounts payable hereunder for the account of any Lender which is not a United
States person (as such term is defined in Section 7701(a)(30) of the Code) for
U.S. Federal income tax purposes to the extent that such Lender has not provided
to AbitibiBowaterResolute and the Administrative Agent U.S. Internal Revenue
Service Forms that establish a complete exemption from such deduction or
withholding and (y) each U.S. Borrower shall not be obligated pursuant to
Section 5.045.05(a) to gross-up payments to be made to a Lender in respect of
income or similar taxes imposed by the United States if (I) such Lender has not
provided to AbitibiBowaterResolute and the Administrative Agent the Internal
Revenue Service Forms required to be provided to AbitibiBowaterResolute and the
Administrative Agent pursuant to this Section 5.045.05(b) or (II) in the case of
a payment, other than interest, to a Lender described in clause (ii) above, to
the extent that such forms do not establish a complete exemption from
withholding of such taxes. Notwithstanding anything to the contrary contained in
the preceding sentence or elsewhere in this Section 5.045.05 and except as set
forth in Section 13.04(b) and subject to Section 14.07, (i) the U.S. Borrowers
(jointly and severally) agree (and the applicable U.S. Subsidiary Guarantors
agree), to indemnify and hold harmless each U.S. Facility Lender and (ii) the
U.S. Borrowers (jointly and severally) or the Canadian Borrowers (jointly and
severally), as applicable, agree (and the applicable Subsidiary Guarantors
agree) to pay any additional amounts and to indemnify each Lender in the manner
set forth in Section 5.045.05(a) (without regard to the identity of the
jurisdiction requiring the deduction or withholding) in respect of any amounts
deducted or withheld by it as described in the immediately preceding sentence as
a result of any changes after the Closing Date in any applicable law, treaty,
governmental rule, regulation, guideline or order, or in the interpretation
thereof, relating to the deducting or withholding of income or similar taxes.
(c)    Each Canadian Facility Lender agrees to use reasonable efforts
(consistent with legal and regulatory restrictions and subject to overall policy
considerations of such Canadian Facility Lender) to file any certificate or
document or to furnish to the relevant Canadian Borrower any information, in
each case, as reasonably requested by such Canadian Borrower that may be
necessary to establish any available exemption from, or reduction in the amount
of, any Taxes; provided, however, that nothing in this Section 5.045.05(c) shall
require a Canadian Facility Lender to disclose any confidential information
(including, without limitation, its tax returns or its calculations).
(d)    If an Agent, Lender or Issuing Lender determines, in good faith and in
its sole discretion, that it has received a refund of any taxes in respect of or
calculated with reference to Taxes as to which it has been indemnified by a Loan
Party or with respect to which a Loan Party has paid additional amounts pursuant
to this Section 5.045.05, it shall pay over such refund to such Loan Party (but
only to the extent of indemnity payments made, or additional amounts paid, by
such Loan Party under this Section 5.045.05 with respect to the Taxes giving
rise to such refund), net of all reasonable out-of-pocket expenses of such
Agent, Lender or Issuing Lender (including any Taxes imposed with respect to
such refund) as is determined by the Agent, Lender or Issuing Lender in good
faith and in its sole discretion, and without interest (other than any interest
paid by the relevant Governmental Authority with respect to such refund);
provided that such Loan Party, upon the request of such Agent, Lender or Issuing
Lender, agrees to repay as soon as

-133-

--------------------------------------------------------------------------------

 

reasonably practicable the amount paid over to such Loan Party (plus any
penalties, interest or other charges imposed by the relevant Governmental
Authority) to such Agent, Lender or Issuing Lender in the event such Agent,
Lender or Issuing Lender is required to repay such refund to such Governmental
Authority. This Section shall not be construed to require any Agent, Lender or
Issuing Bank to make available its tax returns (or any other information
relating to its Taxes which it deems confidential) to the Loan Parties or any
other Person.
(e)    Each Agent and each Lender that is a U.S. person within the meaning of
Section 7701(a)(30) of the Code (other than any such person that is treated as a
corporation for United States federal income tax purposes) shall deliver to
AbitibiBowaterResolute and the Administrative Agent on or before the date such
Person becomes a party to this Agreement a duly completed United States Internal
Revenue Service form W-9 (or successor form) establishing that such Person is
not subject to U.S. federal backup withholding.
(f)    Any Lender that is entitled to an exemption from or reduction of
withholding Tax with respect to payments made under any Loan Document shall
deliver to AbitibiBowaterResolute and the Administrative Agent, at the time or
times reasonably requested by AbitibiBowaterResolute or the Administrative
Agent, such properly completed and executed documentation prescribed by
applicable law as will permit such payments to be made without withholding or at
a reduced rate of withholding. Notwithstanding anything to the contrary in the
preceding sentence, the completion, execution and submission of such
documentation (other than such documentation set forth in Section 5.045.05(b),
(c), (f) and (e) and (g)) shall not be required if in the Lender’s judgment such
completion, execution or submission would subject such Lender to any material
unreimbursed cost or expense or would materially prejudice the legal or
commercial position of such Lender. Each Lender agrees that if any form or
certification it previously delivered expires or becomes obsolete or inaccurate
in any respect, it shall update such form or certification or promptly notify
AbitibiBowaterResolute and the Administrative Agent in writing of its legal
inability to do so.
(g)    If a payment made to a Lender under any Loan Document would be subject to
U.S. federal withholding Tax imposed by FATCA if such Lender were to fail to
comply with the applicable reporting requirements of FATCA (including those
contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender
shall deliver to AbitibiBowaterResolute and the Administrative Agent at the time
or times prescribed by law and at such time or times reasonably requested by
AbitibiBowaterResolute or the Administrative Agent such documentation prescribed
by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the
Code) and such additional documentation reasonably requested by
AbitibiBowaterResolute or the Administrative Agent as may be necessary for
AbitibiBowaterResolute and the Administrative Agent to comply with their
obligations under FATCA and to determine that such Lender has complied with such
Lender’s obligations under FATCA or to determine the amount to deduct and
withhold from such payment.
SECTION 6. Conditions Precedent to the Effective Date. The obligations of the
Lenders hereunder to make Loans, and the obligation of each Issuing Lender to
issue Letters of Credit, on (or after) the Effective Date are subject to the
satisfaction (or waiver in accordance with Section 13.12) of the following
conditions:

-134-

--------------------------------------------------------------------------------

 

(a)    The Administrative Agent shall have received a favorable written opinion
of each of (i) Troutman Sanders LLP, U.S. counsel for the Loan Parties, and
Stikeman Elliott LLP, Canadian counsel for the Loan Parties and (ii) such local
counsel reasonably acceptable to the Administrative Agent, in each case
(A) dated the Effective Date, (B) addressed to the Administrative Agent, the
Collateral Agent and the Lenders, and (C) covering such customary legal matters
relating to the Loan Documents as the Administrative Agent shall reasonably
request and in form and substance reasonably satisfactory to the Administrative
Agent. AbitibiBowater and the other Loan Parties hereby instruct their counsel
to deliver such opinions.
(b)    The Administrative Agent shall have received (i) a copy of the
certificate or articles of incorporation (or equivalent organizational
documents), including all amendments thereto, of each Loan Party, and a
certificate as to the good standing (or the equivalent thereof) of each Loan
Party as of a recent date from such Secretary of State or other Governmental
Authority; (ii) a certificate of the Secretary or Assistant Secretary of each
Loan Party dated the Effective Date and certifying (A) that attached thereto is
a true and complete copy of the by‑laws (or equivalent organizational documents)
of such Loan Party as in effect on the Effective Date; (B) that attached thereto
is a true and complete copy of resolutions duly adopted by the board of
directors or comparable authority of such Loan Party authorizing the
Transactions, and that such resolutions have not been modified, rescinded or
amended and are in full force and effect, (C) that the certificate or articles
of incorporation (or equivalent organizational documents) of such Loan Party
have not been amended since the date of the last amendment thereto shown on the
certificate of good standing furnished pursuant to clause (i) above, and (D) as
to the incumbency and specimen signature of each officer executing any Loan
Document on behalf of such Loan Party (and each of the foregoing in sub-clauses
(i) and (ii) shall be in form and substance reasonably acceptable to the
Administrative Agent); (iii) a certificate of another officer as to the
incumbency and specimen signature of the Secretary or Assistant Secretary
executing the certificate pursuant to clause (ii) above; (iv) a certificate of a
Responsible Officer of AbitibiBowater dated the Effective Date and certifying
that attached thereto is a true and complete copy of the Senior Secured Notes
Documents, which shall contain terms that conform to the Plan of Reorganization
and are otherwise in form and substance reasonably satisfactory to the
Administrative Agent; and (v) such other documents as the Administrative Agent
may reasonably request.
(c)    The Administrative Agent shall have received a certificate, dated the
Effective Date and signed by a Financial Officer of and on behalf of
AbitibiBowater, confirming compliance with the conditions precedent set forth in
Section 7.01.
(d)    The Administrative Agent shall have received all Fees and other amounts
due and payable on or prior to the Effective Date, including, to the extent
invoiced, payment or reimbursement of all Fees and expenses (including the
reasonable fees, charges and disbursements of counsel) required to be reimbursed
or paid by any Loan Party hereunder or under any other Loan Document or in
respect of the execution and delivery of this Agreement.
(e)    The Collateral and Guarantee Requirement shall have been satisfied, and
the requirements of the covenant set forth in Section 10.14 shall have been
satisfied, in each case, based on the most recently available consolidated
financial statements of AbitibiBowater. The Administrative Agent

-135-

--------------------------------------------------------------------------------

 

shall have received a completed Perfection Certificate, dated the Effective Date
and duly executed by a Responsible Officer of AbitibiBowater, together with all
attachments contemplated thereby.
(f)    None of the Mortgaged Properties shall be subject to any Lien other than
those expressly permitted under Section 10.02 and other encumbrances permitted
by the relevant Mortgage.
(g)    The Administrative Agent shall have received copies of, or an insurance
broker’s or agent’s certificate as to coverage under, the insurance policies
required by Section 9.02 and the applicable provisions of the Security
Documents, each of which policies shall be endorsed or otherwise amended to
include a loss payable endorsement with respect to the Collateral and to name
the Collateral Agent as additional insured, in form and substance reasonably
satisfactory to the Administrative Agent.
(h)    The Administrative Agent shall have received a certificate, dated the
Effective Date and signed by a Financial Officer of AbitibiBowater, certifying
that as of the Effective Date, AbitibiBowater and its Subsidiaries have not
incurred any material liabilities not reflected in the pro forma consolidated
balance sheet included in the Disclosure Statement, other than liabilities
incurred in the ordinary course of business.
(i)    The Administrative Agent shall have received a solvency certificate from
a Financial Officer of AbitibiBowater in the form of Exhibit F hereto dated the
Effective Date.
(j)    The Disclosure Statement shall be reasonably satisfactory to each of the
Lead Arrangers (it being understood that the Disclosure Statement filed with the
U.S. Bankruptcy Court on August 2, 2010 is satisfactory to the Lead Arrangers)
and shall have been approved by the U.S. Bankruptcy Court.
(k)    The Plan of Reorganization and all other related documentation shall be
satisfactory to the Lead Arrangers with respect to any portions of the Plan of
Reorganization or any other related documents that directly relate to this
Agreement, and reasonably satisfactory to the Lead Arrangers in all other
respects (it being understood that the Plan filed with the U.S. Bankruptcy Court
on August 2, 2010 is satisfactory to the Lead Arrangers).
(l)    The U.S. Bankruptcy Court shall have entered an order confirming the Plan
of Reorganization, which order (the “Confirmation Order”) shall be in form and
substance satisfactory to the Lead Arrangers with respect to any portions of
such order that directly relate to this Agreement, and reasonably satisfactory
to the Lead Arrangers in all other respects, which order shall be in full force
and effect, unstayed, final and non-appealable (except with respect to those
appeals and other filings by Peter I. Shah), and shall not have been modified or
amended without the written consent of the Lead Arrangers, reversed or vacated.
The effective date of the Plan of Reorganization shall have occurred (and all
conditions precedent thereto as set forth therein shall have been satisfied (or
shall be concurrently satisfied) or waived pursuant to the terms of the Plan of
Reorganization (the waiver thereof (except for a waiver of the requirement in
Section 7.2(b) of the Plan of Reorganization that the Confirmation Order be a
Final Order (as defined in the Plan of Reorganization)) having been approved by
the Lead Arrangers), and the substantial

-136-

--------------------------------------------------------------------------------

 

consummation (as defined in Section 1101 of the Bankruptcy Code) of the Plan of
Reorganization in accordance with its terms shall have occurred.
(m)    The CCAA Plan and all other related documentation, including all material
documents and vesting and other orders of the Canadian Bankruptcy Court required
to implement the Restructuring Transactions, (i) shall be satisfactory to the
Lead Arrangers with respect to any portions of the CCAA Plan that directly
relate to this Agreement, and reasonably satisfactory to the Lead Arrangers in
all other respects (it being understood that the second amended and restated
CCAA Plan dated November 1, 2010 and filed with the Canadian Bankruptcy Court is
satisfactory to the Lead Arrangers), and (ii) all conditions precedent to the
effectiveness of the CCAA Plan as set forth therein shall have been satisfied or
waived (the waiver thereof having been approved by the Lead Arrangers), and the
implementation of the CCAA Plan in accordance with its terms shall have
occurred.
(n)    The Sanction Order shall be in full force and effect, unstayed, final and
non-appealable and shall not have been modified or amended without the written
consent of the Lead Arrangers (not to be unreasonably withheld with respect to
any portions of the Sanction Order that do not directly relate to this
Agreement), reversed or vacated.
(o)    Except as disclosed in the Disclosure Statement, since December 31, 2009
there shall not have been any event, occurrence, development or state of
circumstances or facts that has had or would reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.
(p)    The repayment in cash in full or satisfaction in full of all amounts
outstanding under the DIP Facilities (as expressly contemplated by the CCAA Plan
with respect to the DIP Facilities) and the termination of the DIP Facilities
and the release of all liens and security interests securing the same.
(q)    The Administrative Agent shall have received evidence satisfactory to it
of the termination and/or release of all Liens and security interests securing
the Prepetition Secured Facilities.
(r)    Consolidated EBITDA shall be not less than (i) in the event the Effective
Date occurs prior to October 20, 2010, $72,000,000 and (ii) if the Effective
Date occurs thereafter, $90,000,000, in each case for the most recent
three-month period ended not less than 20 days prior to the Effective Date.
(s)    The Administrative Agent shall have received reasonably satisfactory
evidence that the conditions to the release from escrow of the proceeds of the
Senior Secured Notes shall have been (or will be), substantially simultaneously
with the Effective Date, satisfied or waived in accordance with their terms and,
on the Effective Date, AbitibiBowater shall have received cash proceeds of (i)
not less than $600,000,000 (calculated before underwriting and original issue
discounts, commissions, fees and expenses) from the issuance of the Senior
Secured Notes and (ii) not less than $900,000,000 from the issuance of Senior
Secured Notes, term loans, asset sales, the settlement of AbitibiBowater’s NAFTA
claim against the Government of Canada, or other third party debt financing, in
each case, on terms and conditions set forth in the Plans and the Disclosure
Statement or otherwise reasonably satisfactory to the Lead Arrangers; provided
that if any amounts owing

-137-

--------------------------------------------------------------------------------

 

in respect of the settlement of AbitibiBowater’s NAFTA claim have not been paid
to AbitibiBowater, then the amount owing to AbitibiBowater in respect of such
settlement, in addition to amounts paid to AbitibiBowater in respect of such
settlement, shall be used to determine compliance with this condition.
(t)    Prior to the fifth day preceding the Effective Date (or such shorter
period as may be agreed to by the Administrative Agent in its sole discretion),
the Administrative Agent and the Collateral Agent shall have received (i) a
Borrowing Base Certificate as at a date not earlier than the date occurring on
the 55th day preceding the Effective Date (the “Effective Date Borrowing Base
Certificate”) and (ii) (x) an appraisal of the Inventory of the Borrowers from
Hilco Appraisal Services, LLC and (y) a collateral examination of the Accounts
and related assets and liabilities of the Borrowers from Protiviti Inc. and, in
each case, the results of such appraisal and collateral examination shall be in
form and substance reasonably satisfactory to the Collateral Agent.
(u)    On the Effective Date and after giving effect to the incurrence of Loans,
the issuance of Letters of Credit and occurrence of all payments and transfers
to be effected on or as of the Effective Date, including all such payments and
transfers contemplated by the Plan of Reorganization, the sum of (i) Excess
Availability and (ii) the Loan Parties’ unrestricted cash, unrestricted cash
equivalents and the unpaid amount owing to AbitibiBowater in respect of the
settlement of its NAFTA claim shall be not less than $350,000,000.
(v)    The Closing Date shall have occurred.
(w)    On or prior to the Effective Date, there shall have been delivered to the
Administrative Agent for the account of each of the Lenders that has requested
same the appropriate Revolving Notes executed by the appropriate Borrowers and
if requested by theany Swingline Lender, the appropriate Swingline Note executed
by the appropriate Borrowers, in each case, in the applicable amount, maturity
and as otherwise provided herein.
(x)    Prior to the fifth Business Day preceding the Effective Date, the Agents
shall have received from the Loan Parties, to the extent requested, all
documentation and other information required by regulatory authorities under
applicable “know your customer” and anti-money laundering rules and regulations,
including the Patriot Act.
(y)    The Insurance Policy shall be in full force and effect.
SECTION 7. Conditions Precedent to All Credit Events. The obligation of each
Lender to make Loans (including Loans made on the Effective Date), and the
obligation of each Issuing Lender to issue Letters of Credit (including Letters
of Credit issued on the Effective Date), is subject, at the time of the
Effective Date and at the time of each such Credit Event (except as hereinafter
indicated), to the satisfaction of the following conditions:
7.01.    No Default; Representations and Warranties. At the time of each such
Credit Event and also after giving effect thereto (i) there shall exist no
Default or Event of Default; (ii) all representations and warranties contained
herein and in the other Loan Documents shall be true and correct in all material
respects with the same effect as though such representations and warranties had
been

-138-

--------------------------------------------------------------------------------

 

made on the date of such Credit Event (it being understood and agreed that (x)
any representation or warranty which by its terms is made as of a specified date
shall be required to be true and correct in all material respects only as of
such specified date and (y) any representation or warranty that is qualified as
to “materiality”, “Material Adverse Effect” or similar language shall be true
and correct in all respects on such date); and (iii) such Credit Event shall not
violate any applicable law or regulation and no order, judgment or decree of any
Governmental Authority shall purport to enjoin or restrain such Credit Event.
7.02.    Notice of Borrowing; Letter of Credit Request. (a) Prior to the making
of each Loan (other than a Swingline Loan or a Revolving Loan made pursuant to a
Mandatory Borrowing), the Administrative Agent shall have received a Notice of
Borrowing meeting the requirements of Section 2.03(a). Prior to the making of
each Swingline Loan, the applicable Swingline Lender shall have received the
notice referred to in Section 2.03(b)(i) and shall have complied with its
obligation set forth in the second sentence of Section 2.03(b)(iii).
(b)    Prior to the issuance of each Letter of Credit, the Administrative Agent
and the respective Issuing Lender shall have received a Letter of Credit Request
meeting the requirements of Section 3.03(a).
7.03.    Borrowing Base and Commitment Limitations. Notwithstanding anything to
the contrary set forth herein (but subject to Section 2.01(e)), it shall be a
condition precedent to each Credit Event that after giving effect thereto (and
the use of the proceeds thereof):
(i)    the Aggregate U.S. Borrower Exposure would not exceed the U.S. Borrowing
Base at such time;
(ii)    the Aggregate Canadian Borrower Exposure would not exceed the Canadian
Borrowing Base at such time;
(iii)    the Aggregate U.S. Facility Exposure at such time would not exceed the
Total U.S. Facility Commitment at such time;
(iv)    the Aggregate Canadian Facility Exposure at such time would not exceed
the Total Canadian Facility Commitment at such time; and
(v)    the aggregate Letter of Credit Outstandings would not exceed the Maximum
Letter of Credit Amount.
The acceptance of the benefits of each Credit Event shall constitute a
representation and warranty by AbitibiBowaterResolute and the other Borrowers to
the Administrative Agent and each of the Lenders that all the conditions
specified in Section 6 (with respect to Credit Events on the Effective Date) and
in this Section 7 (with respect to Credit Events on or after the Effective Date)
and applicable to such Credit Event are satisfied as of that time.
SECTION 8. Representations and Warranties. In order to induce the Lenders to
enter into this Agreement and to make the Loans, and issue (or participate in)
the Letters of Credit as provided

-139-

--------------------------------------------------------------------------------

 

herein, each of AbitibiBowaterResolute and the other Borrowers makes the
following representations and warranties, all of which shall survive the
execution and delivery of this Agreement and the Notes and the making of the
Loans and the issuance of the Letters of Credit, with the occurrence of the
Closing Date, the Effective Date and each Credit Event on or after the Effective
Date being deemed to constitute a representation and warranty that the matters
specified in this Section 8 are true and correct in all material respects on and
as of the Closing Date, the Effective Date and on the date of each such other
Credit Event (it being understood and agreed that any representation or warranty
which by its terms is made as of a specified date shall be required to be true
and correct in all material respects only as of such specified date).
8.01.    Organization; Powers. Each of the Loan Parties (a) is duly organized,
validly existing and in good standing (or its equivalent, to the extent that
such concept is applicable in the respective jurisdiction) under the laws of the
jurisdiction of its organization, (b) has all requisite power and authority to
own its property and assets and to carry on its business as now conducted,
(c) is qualified to do business in every jurisdiction where such qualification
is required by the nature of its business, the character and location of its
property, business or customers, or the ownership or leasing of its properties,
except for such jurisdictions in which the failure so to qualify, in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect, and (d) has the requisite power and authority to execute, deliver and
perform its obligations under each of the Loan Documents and each other
agreement or instrument contemplated thereby to which it is or will be a party
and, in the case of each Borrower, to borrow hereunder.
8.02.    Authorization; Absence of Conflicts. The execution, delivery and
performance by each of the Loan Parties of each of the Loan Documents to which
it is a party, the Borrowings hereunder, the use of the proceeds of the Loans,
the creation of the security interests contemplated by the Security Documents
and the other transactions contemplated by the Loan Documents (collectively, the
“Transactions”) (a) have been duly authorized by all requisite corporate or
other organizational and, if required, stockholder action and (b) will not
(i) violate (A) any provision of applicable law, statute, rule or regulation,
other than any law, statute, rule or regulation the violation of which could not
reasonably be expected to result in a Material Adverse Effect, or of the
certificate of incorporation or other constitutive documents or by‑laws (or
equivalent organizational documents) of any Loan Party or any of its
Subsidiaries, (B) any applicable and material order of any Governmental
Authority or (C) any provision of any material indenture or other material
agreement or other material instrument to which any Loan Party or any of its
Subsidiaries is a party or by which any of them or any of their property is or
may be bound, (ii) constitute (alone or with notice or lapse of time or both) a
default under any such indenture, agreement or other instrument or give rise to
any rights thereunder to require any payment, repurchase or redemption to be
made by any Loan Party, or give rise to a right of, or result in, any
termination, cancellation, acceleration or right of renegotiation of any
obligation thereunder, or (iii) result in the creation or imposition of any Lien
(other than any Lien created hereunder or under the Security Documents) upon or
with respect to any property or assets now owned or hereafter acquired by any
Loan Party or any of its Subsidiaries.
8.03.    Enforceability. This Agreement has been duly executed and delivered by
AbitibiBowaterResolute and each other Borrower and constitutes, and each other
Loan Document

-140-

--------------------------------------------------------------------------------

 

when executed and delivered by each Loan Party that is party thereto will
constitute, a legal, valid and binding obligation of AbitibiBowaterResolute,
each other Borrower and the other Loan Parties, as applicable, enforceable
against each of them in accordance with its terms (except as the enforceability
thereof may be limited by bankruptcy, insolvency reorganization, moratorium or
similar laws affecting the enforcement of creditors’ rights generally and
subject to general principles of equity (whether enforcement is sought by
proceeding in equity or at law)).
8.04.    Governmental Approvals. No action, consent or approval of, registration
or filing with or any other action by any Governmental Authority is or will be
required in connection with (i) the Transactions or (ii) the execution, delivery
and performance of any Loan Document, except for (a) the filing of UCC and PPSA
financing statements and similar security or collateral filings and
registrations under applicable laws in other jurisdictions, (b) recordation of
the Mortgages, (c) filings with the United States Patent and Trademark Office
and the United States Copyright Office, (d) the entry by the Bankruptcy Court
and the Canadian Bankruptcy Court of the orders referred to in Section 6,
(e) periodic reports under the Securities and Exchange Act of 1934, as amended,
and (f) registration of Security Documents to which any English Guarantor is a
party at Companies House, and (g) such actions, consents, approvals,
registrations and filings as have been made or obtained and are in full force
and effect.
8.05.    Financial Statements(a) AbitibiBowaterResolute has delivered to the
Lenders its audited financial statements for the fiscal year ended December 31,
2010, together with its annual report on Form 10-K with respect to such fiscal
year and its most recent quarterly report on Form 10-Q with respect to the
fiscal quarter ended June 30, 2011, both filed with the Securities and Exchange
Commission. All financial statements set forth or referred to in the materials
specified in the preceding sentence were prepared in conformity with GAAP,
except, in the case of unaudited financial statements, for the absence of
footnote disclosure and for year-end audit adjustments. All such financial
statements fairly present in all material respects the consolidated financial
position of AbitibiBowaterResolute and its Subsidiaries as at the date thereof
and the consolidated results of operations and cash flows of such Persons for
each of the periods covered thereby. Except as disclosed in such financial
statements, neither AbitibiBowaterResolute nor any of its Subsidiaries had at
the date of such financial statements any material contingent obligation,
material contingent liability or material liability for taxes, long-term lease
or unusual forward or long-term commitment or obligations to retired employees
for medical or other employee benefits that is not reflected in the foregoing
financial statements or the notes thereto.
(b)    As of the Closing Date, the Projections delivered to the Administrative
Agent and the Lenders prior to the Closing Date have been prepared in good faith
and are based on assumptions that were reasonable as of the date such
Projections were prepared.
8.06.    No Material Adverse Effect. Since December 31, 2010 there has been no
event or condition that has had, or could reasonably be expected to have, a
Material Adverse Effect.
8.07.    Title to Properties; Possession Under Leases. Except as set forth on
Schedule 8.07 or otherwise permitted by Section 10.02, each of
AbitibiBowaterResolute and its Subsidiaries has good and marketable title to, or
valid leasehold interests in, all its material properties and assets, except for
minor defects in title that do not interfere in any material respect with its
ability to

-141-

--------------------------------------------------------------------------------

 

conduct its business as currently conducted. All such title to, or leasehold
interest in, material properties and assets are free and clear of Liens, other
than Liens expressly permitted by Section 10.02 and Liens with respect to which
the Administrative Agent will receive on or prior to the Effective Date duly
executed releases and termination statements in connection therewith.
8.08.    Subsidiaries. Schedule 8.08 sets forth as of the Closing Date a list of
all the Subsidiaries of AbitibiBowaterResolute, their jurisdiction of
organization and the percentage ownership interest in each Subsidiary held by
AbitibiBowaterResolute or any other Subsidiary of AbitibiBowaterResolute and
also identifies which Subsidiaries (i) will be U.S. Borrowers or Canadian
Borrowers on the Effective Date or (ii) are Material Subsidiaries of
AbitibiBowaterResolute as of the Closing Date.
8.09.    Litigation; Compliance with Laws. (a) Except as set forth in
Schedule 8.09, there are no actions, suits or proceedings at law or in equity or
by or before any Governmental Authority now pending or, to the knowledge of any
Responsible Officer of AbitibiBowaterResolute or any Borrower, threatened in
writing against or affecting AbitibiBowaterResolute, any Borrower or any of
their respective Subsidiaries or any business or property of any such Person
that (i) purports to affect the legality, validity or enforceability of any Loan
Document or the Transactions or (ii) could reasonably be expected, individually
or in the aggregate, to result in a Material Adverse Effect.
(b)    None of AbitibiBowaterResolute, any Borrower and any of their respective
Subsidiaries nor any of their respective properties or assets is (i) in
violation of, nor will the continued operation of their properties and assets as
currently conducted violate, any law, rule, regulation, statute (including any
zoning, building, Environmental Laws, ordinance, code or approval or any
building permits) in respect of the conduct of its business, the relationship
with its employees and the ownership of its property or any restrictions of
record or agreements affecting the Mortgaged Properties, where such violations
could reasonably be expected to have a Material Adverse Effect or (ii) in
default with respect to any judgment, writ, injunction, decree or order of, any
Governmental Authority, where such defaults, individually or in the aggregate,
could reasonably be expected to result in a Material Adverse Effect.
8.10.    Federal Reserve Regulations. (a) None of AbitibiBowaterResolute, any
Borrower and their respective Subsidiaries is engaged or will engage,
principally, or as one of its important activities, in the business of
purchasing or carrying Margin Stock or extending credit for the purpose of
purchasing or carrying Margin Stock.
(b)    No part of the proceeds of any Loan will be used, whether directly or
indirectly, and whether immediately, incidentally or ultimately, (i) to purchase
or carry Margin Stock or to extend credit to others for the purpose of
purchasing or carrying Margin Stock or to refund indebtedness originally
incurred for such purpose or (ii) for any purpose that violates the provisions
of the Regulations of the Board, including Regulations T, U or X.
(c)    All proceeds of the Loans will be used by the Borrowers to fund amounts
payable under the Plans and for working capital, capital expenditures, Permitted
Acquisitions and general corporate purposes of AbitibiBowaterResolute and its
Subsidiaries. All Letters of Credit will be used for the purposes described in
Section 3.01(a).

-142-

--------------------------------------------------------------------------------

 

8.11.    Investment Company Act. None of AbitibiBowaterResolute, any Borrower
and their respective Subsidiaries is an “investment company” as defined in, or
is subject to regulation under, the Investment Company Act of 1940, as amended.
8.12.    Tax Returns. Each of AbitibiBowaterResolute, any Borrower and their
respective Subsidiaries has filed or caused to be filed all federal, foreign,
state, provincial, regional and local income and other tax returns (the
“Returns”) required to have been filed by it or with respect to it, except where
the failure to do so could not reasonably be expected to have a Material Adverse
Effect, and has paid or caused to be paid all taxes due and payable, except
taxes that are being contested in good faith by appropriate proceedings and for
which it has set aside on its books adequate reserves in accordance with GAAP,
or except where the failure to do so could not reasonably be expected to result
in a Material Adverse Effect. The Returns accurately reflect in all respects all
liability for taxes of AbitibiBowaterResolute and its Subsidiaries, as
applicable, for the periods covered thereby, except where the failure so to
reflect could not reasonably be expected to have a Material Adverse Effect.
8.13.    No Material Misstatements. The information furnished in writing by or
on behalf of AbitibiBowaterResolute or any Borrower to any Lead Arranger, any
Agent or any Lender in connection with the transactions contemplated in this
Agreement and the other Loan Documents, when taken as a whole, as of the date
such information was so furnished, does not contain any untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein, in light of the circumstances under which they were made,
taken as a whole, not materially misleading, provided that to the extent any
such information therein was based upon or constitutes a forecast or projection
or pro forma financial information, each of AbitibiBowaterResolute and each
Borrower represents only that it acted in good faith and utilized reasonable
assumptions, due and careful consideration and the information actually known to
Responsible Officers of such Person at the time in the preparation of such
information.
8.14.    Employee Benefit Plans. (a) Each Benefit Plan is in compliance with the
applicable provisions of ERISA and the Code and all other applicable laws and
regulations, except for instances of non-compliance that could not, individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect.
No ERISA Event has occurred or could reasonably be expected to occur that, when
taken together with all the other ERISA Events that have occurred or could
reasonably be expected to occur, could reasonably be expected to have a Material
Adverse Effect. For purposes of determining whether an ERISA Event, by itself or
together with other ERISA Events, could reasonably be expected to have a
Material Adverse Effect, the amounts to be considered relating to a Plan’s or
Multiemployer Plan’s funded status or with respect to Withdrawal Liability are
changes in or resulting from the following:
(i)    a Benefit Plan’s or Multiemployer Plan’s funded status since the most
recent valuation or other statement of financial condition prior to the Closing
Date; or
(ii)    Withdrawal Liability with respect to a Multiemployer Plan that exceeds
the most recent estimate of Withdrawal Liability for such Multiemployer Plan
received before the Closing Date; provided, however, that the Borrowers will,
and will cause each of their respective ERISA Affiliates to, make a request with
respect to the Multiemployer Plan to

-143-

--------------------------------------------------------------------------------

 

which it contributes (or has an obligation to contribute) from the administrator
or sponsor of such Multiemployer Plan for the notices described in
Section 101(l)(1) of ERISA at least annually not later than the anniversary date
of the date hereon.
(b)    As of the Closing Date, Schedule 8.14 lists all Canadian Pension Plans
currently maintained or contributed to by the Canadian Subsidiaries of
AbitibiBowaterResolute. None of the Canadian Pension Plans is a “multi-employer
pension plan”, as defined in the Pension Benefits Act (Ontario) or an equivalent
plan under the pension standards legislation of any other applicable
jurisdiction in Canada. The Canadian Pension Plans which require registration
are duly registered under the ITA and all other applicable laws and no event has
occurred which is reasonably likely to cause the loss of such registered status.
Each Canadian Pension Plan and each Canadian Benefit Plan has been administered,
funded and invested, as applicable, in compliance with its terms, the terms of
any related funding agreement, any applicable collective bargaining agreement
and all laws (including the Canadian Pension Regulations). All employer and
employee payments, contributions (“normal cost”, “special payments” and any
other payments in respect of any funding deficiencies or shortfalls) or premiums
to be remitted, paid to or in respect of each Canadian Pension Plan or Canadian
Benefit Plan and all other amounts that are due to the pension fund of a
Canadian Pension Plan from the Canadian Subsidiaries of AbitibiBowaterResolute,
have been paid or remitted in a timely fashion in accordance with the terms
thereof, any funding agreement, any applicable collective bargaining agreement
and all laws (including the Canadian Pension Regulations). There have been no
improper withdrawals or applications of the assets of the Canadian Pension Plans
or the Canadian Benefit Plans. No promises of benefit improvements under the
Canadian Pension Plans or the Canadian Benefit Plans have been made except where
such improvement could not reasonably be expected to result in a material
liability of any Canadian Subsidiary of AbitibiBowaterResolute. Except as set
forth on Schedule 8.14, no events have occurred which could give rise to a
partial or full termination of any Canadian Pension Plan and there are no
outstanding disputes concerning the assets of the Canadian Pension Plans or the
Canadian Benefit Plans, in either case which could reasonably be expected to
result in a material liability of anythe Canadian Subsidiary of AbitibiBowater.
AbitibiBowaterSubsidiaries of Resolute, taken as a whole. Resolute has delivered
to the Lender copies of the most recent actuarial valuation reports and annual
certified financial statements filed with any applicable Governmental Authority
in respect of each of the registered Canadian Pension Plans, as well as the most
recent valuation reports prepared in connection with any non-registered Canadian
Pension Plans. There is no non-registered Canadian Pension Plan in respect of
which an event has occurred that could require immediate or accelerated funding
in respect of unfunded liabilities or other deficit amounts.
8.15.    Environmental and Safety Matters Except as set forth on Schedule 8.15:
(i)    Each of AbitibiBowaterResolute, any Borrower and their respective
Subsidiaries has obtained all permits, licenses and other authorizations that
are required and material with respect to the operation of the business of
AbitibiBowaterResolute and the Subsidiaries, taken as a whole, under any
applicable Environmental Law, and each such permit, license and authorization is
in full force and effect, except where the failure thereof could not reasonably
be expected to have a Material Adverse Effect.

-144-

--------------------------------------------------------------------------------

 

(ii)    Each of AbitibiBowaterResolute, any Borrower and their respective
Subsidiaries is in compliance with all material terms and conditions of the
permits, licenses and authorizations specified in paragraph (i) above, and also
is in compliance with all other limitations, restrictions, conditions,
standards, prohibitions, requirements, obligations, schedules and timetables
contained in or pursuant to any Environmental Law applicable to it and its
business, assets, operations and properties, except for any noncompliance that
could not reasonably be expected to have a Material Adverse Effect.
(iii)    There is no civil, criminal or administrative action, suit, demand,
claim, hearing, notice of violation, investigation, proceeding, notice or demand
letter or request for information pending or, to the knowledge of
AbitibiBowaterResolute or any Borrower, threatened in writing against
AbitibiBowaterResolute, any Borrower or any of their respective Subsidiaries
under any Environmental Law that could reasonably be expected to have a Material
Adverse Effect.
(iv)    None of AbitibiBowaterResolute, any Borrower and their respective
Subsidiaries has received notice (A) that it has been identified as a
potentially responsible party under the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended (“CERCLA”) or any comparable
state law or Canadian federal or provincial law that any hazardous substances,
as defined in CERCLA and its implementing regulations, or any pollutant,
contaminant, toxic substance, hazardous waste, hazardous constituents, hazardous
materials, asbestos or asbestos containing material, polychlorinated biphenyls,
petroleum, including crude oil and any fractions thereof, or other wastes,
chemicals, substances or materials regulated by any Environmental Laws
(collectively, “Hazardous Materials”) that it or any of their respective
predecessors in interest has used, generated, stored, tested, handled,
transported or disposed of, has been found at any site at which any Governmental
Authority or private party is conducting a remedial investigation or other
action pursuant to any Environmental Law or (B) otherwise alleging that it has
any liability, obligation or cost pursuant to any Environmental Law, except in
the cases of (A) and (B) for any such notices that could not reasonably be
expected to have a Material Adverse Effect.
(v)    There have been no Releases of Hazardous Materials at, in, on, under or
from any of the Real Properties or any other property or facility currently or
formerly owned, leased, used or operated by AbitibiBowaterResolute, any Borrower
or any of their respective Subsidiaries, and neither AbitibiBowaterResolute, any
Borrower nor any of their respective Subsidiaries has otherwise become subject
to any liability or obligation, whether contingent or otherwise, relating to any
Environmental Law, that could reasonably be expected to have a Material Adverse
Effect.
(vi)    To the knowledge of AbitibiBowaterResolute and any Borrower, there is no
asbestos or asbestos-containing material in, on, or at any Real Properties or
any facility or equipment of AbitibiBowaterResolute, any Borrower or any of
their respective Subsidiaries present in a condition that would result in
violation of Environmental Law; except to the extent that the presence of, or
exposure to, such material could not reasonably be expected to have a Material
Adverse Effect.

-145-

--------------------------------------------------------------------------------

 

(vii)    As of the Closing Date, to the knowledge of AbitibiBowaterResolute and
any Borrower, none of the Real Properties are (i) listed or proposed for listing
on the National Priorities List under CERCLA or (ii) listed in the Comprehensive
Environmental Response, Compensation, Liability Information System List
promulgated pursuant to CERCLA.
(viii)    To the knowledge of AbitibiBowaterResolute and any Borrower, there are
no events, conditions, circumstances, activities, practices, incidents, actions
or plans that could reasonably be anticipated to interfere with or prevent
compliance with any Environmental Law, or which may give rise to liability under
any Environmental Law, or otherwise form the basis of any claim, action, demand,
suit, proceeding, hearing or notice of violation, study or investigation, based
on or related to the manufacture, processing, distribution, use, generation,
treatment, storage, disposal, transport, shipping or handling, the emission,
discharge, release or threatened release into the environment of, or exposure
to, any Hazardous Material that could reasonably be expected to have a Material
Adverse Effect.
(b)    Since the date of this Agreement, there has been no change in the status
of the matters disclosed on Schedule 8.15 that, individually or in the
aggregate, could reasonably be expected to have, a Material Adverse Effect.
8.16.    Solvency. Immediately after giving effect to the Transactions to occur
on the Effective Date, (a) the present fair saleable value of the assets of
AbitibiBowaterResolute and its Subsidiaries, on a consolidated basis, will
exceed the amount that will be required to be paid on or in respect of the
existing debts and other liabilities (including contingent liabilities) of
AbitibiBowaterResolute and its Subsidiaries, on a consolidated basis, as they
become absolute and mature, (b) AbitibiBowaterResolute and its Subsidiaries, on
a consolidated basis, will not have unreasonably small capital to carry out
their businesses as conducted or as proposed to be conducted, and
(c) AbitibiBowaterResolute and its Subsidiaries, on a consolidated basis, do not
intend to incur debts beyond their ability to pay such debts as they become
absolute and mature (taking into account the timing and amounts of cash to be
received by them and the amounts to be payable on or in respect of their
obligations).
8.17.    Security Documents. (a) The Guarantee and Collateral Agreement, upon
execution and delivery thereof by the parties thereto, will create in favor of
the Collateral Agent, for the ratable benefit of the Secured Parties, a legal,
valid and enforceable security interest in the Collateral (as defined therein)
and proceeds thereof and (i) when the Pledged Collateral (as defined therein) is
delivered to the NotesCollateral Agent, together with instruments of transfer
duly endorsed in blank, and after giving effect to Section 5.4 of the
Intercreditor Agreement, the Guarantee and Collateral Agreement shall constitute
a fully perfected Lien on, and security interest in, all right, title and
interest of the U.S. Loan Parties in such Pledged Collateral, in each case prior
and superior in right to any other Person, other than with respect to Permitted
Liens and other than as provided in the Intercreditor Agreement with respect to
Notes Priority Collateral, and (ii) when UCC financing statements in appropriate
form have been duly filed in the offices specified on Schedule 8.17, or such
other offices as are specified by the Borrower to the Collateral Agent in
writing, the Lien created under the Guarantee and Collateral Agreement will
constitute a fully perfected Lien on, and security interest in, all right, title
and interest of the U.S. Loan Parties in such Collateral,

-146-

--------------------------------------------------------------------------------

 

and the proceeds thereof, to the extent perfection can be obtained by filing UCC
financing statements, in each case prior and superior in right to any other
Person, other than with respect to Permitted Liens and other than as provided in
the Intercreditor Agreement with respect to the Notes Priority Collateral.
(b)    When the IP Security Agreements (to the extent required hereunder) are
duly filed with the United States Patent and Trademark Office and the United
States Copyright Office, as applicable, and when financing statements in
appropriate form have been duly filed in the offices specified on Schedule 8.17,
the security interest created thereunder shall constitute a fully perfected Lien
on, and security interest in, all right, title and interest of the U.S. Loan
Parties in the registered intellectual property described therein and owned by
the applicable U.S. Loan Parties and in which a security interest may be
perfected by filing a security agreement in the United States, in each case
prior and superior in right to any other Person, other than with respect to
Permitted Liens and other than as provided in the Intercreditor
Agreementcontemplated by Section 10.02(a)(iii) (it being understood that
subsequent recordings in the United States Patent and Trademark Office or the
United States Copyright Office may be necessary to perfect a Lien on registered
trademarks, trademark applications, designs, patents, patent applications and
copyrights acquired by a Loan Party after the Effective Date).
(c)    When executed and delivered, each Canadian Security Document will be
effective to create in favor of the Collateral Agent for the ratable benefit of
the Secured Parties referred to therein a legal, valid and enforceable security
interest (or, in the case of Quebec, hypothec) in all right, title and interest
of the Canadian Loan Parties in the Collateral described in each such Canadian
Security Document and when financing statements (or, in the case of Quebec,
registration statements) in appropriate form are filed in the offices specified
in Schedule 8.17, or such other offices as are specified by the Borrower to the
Collateral Agent in writing, each such Canadian Security Document will
constitute a fully perfected (or, in the case of Quebec, opposable) security
interest (or, in the case of Quebec, hypothec) in all right, title and interest
in all of the Collateral described in such Security Document to the extent
perfection (or, in the case of Quebec, opposability) can be obtained by filing
PPSA financing statements (or, in the case of Quebec, registration statements),
prior and superior to the rights of any other Person, other than with respect to
Permitted Liens.
(d)    The Mortgages (to the extent required hereunder), upon execution and
delivery thereof by the parties thereto, will create in favor of the
Administrative Agent, for the ratable benefit of the beneficiaries named
therein, a legal, valid and enforceable Lien on all of the U.S. Loan Parties’
right, title and interest in and to the Mortgaged Properties thereunder and the
proceeds thereof, and when the Mortgages are duly filed or registered in the
appropriate recording offices where such Mortgaged Properties are located or as
otherwise reasonably requested by the Administrative Agent, the Mortgages will
constitute a fully perfected Lien on, and security interest in, all right, title
and interest of the U.S. Loan Parties in such Mortgaged Properties and the
proceeds thereof, in each case prior and superior in right to any other Person,
other than with respect to Permitted Liens or other encumbrances permitted by
the relevant Mortgage.
(e)    Each Security Document, other than any Security Document referred to in
the preceding paragraphs of this Section, upon execution and delivery thereof by
the parties thereto and the

-147-

--------------------------------------------------------------------------------

 

making of the filings and taking of the other actions provided for therein, will
be effective under applicable law to create in favor of the Collateral Agent,
for the ratable benefit of the Secured Parties referred to therein, a valid and
enforceable security interest in all rights, title and interest of the Loan
Parties in the Collateral subject thereto, prior and superior in right to any
other Person, other than with respect to Permitted Liens and other than as
provided in the Intercreditor Agreement with respect to the Notes Priority
Collateral.
8.18.    Labor Matters. As of the Closing Date, there are no strikes or other
material labor disputes against AbitibiBowaterResolute, any Borrower or any of
their respective Subsidiaries pending or, to the knowledge of any Responsible
Officer of AbitibiBowaterResolute or any Borrower, threatened, except as set
forth on Schedule 8.18. The hours worked by and payment made to employees of any
Loan Party have not been in violation of the Fair Labor Standards Act or any
other applicable federal, state, provincial, local or foreign law dealing with
minimum employment standards, where such violations could reasonably be
expected, individually or in the aggregate, to have a Material Adverse Effect.
The consummation of the Transactions will not give rise to a right of
termination or right of renegotiation on the part of any union under any
collective bargaining agreement to which AbitibiBowaterResolute, any Borrower or
any of their respective Subsidiaries is a party or by which
AbitibiBowaterResolute, any Borrower or any of their respective Subsidiaries is
bound on the Closing Date, which in any such case could reasonably be expected
to result in a Material Adverse Effect.
8.19.    Location of Real Property. Schedule 8.19 sets forth as of the Closing
Date all real property owned by AbitibiBowaterResolute, any Borrower or any of
their respective Subsidiaries in the United States and pledged as security for
the Senior Secured Notes.
8.20.    Patents, Trademarks, etc. Each of AbitibiBowaterResolute, any Borrower
or their respective Subsidiaries owns, or is licensed or otherwise authorized to
use, all patents, patent applications, designs, trademarks, trade names,
copyrights, technology, trade secrets, know-how and processes, service marks and
rights with respect to the foregoing that are used in or necessary for the
conduct of its business as currently conducted, except where the lack thereof
could not reasonably be expected to have a Material Adverse Effect. The use of
such patents, patent applications, designs, trademarks, trade names, copyrights,
technology, trade secrets, know-how, processes and rights with respect to the
foregoing by AbitibiBowaterResolute, any Borrower or their respective
Subsidiaries does not infringe on, misappropriate or otherwise violate the
rights of any Person, subject to such claims, infringements, misappropriations
and violations as do not, in the aggregate, give rise to any liability on the
part of AbitibiBowaterResolute, any Borrower or their respective Subsidiaries
that is material to AbitibiBowaterResolute, any Borrower or their respective
Subsidiaries, taken as a whole.
8.21.    Borrowing Base Calculation. The calculation of the Total Borrowing Base
and each Borrowing Base (in each case, including the valuations thereunder)
pursuant to the most recent Borrowing Base Certificate delivered pursuant to
SectionsSection 5.04(d)), 5.04(e), 6(t) or 9.04(h), as applicable, is complete
and accurate in all material respects.
8.22.    Accounts. The Administrative Agent may rely, in determining which
Accounts are Eligible Accounts, on all statements and representations made by
the Loan Parties with respect thereto.

-148-

--------------------------------------------------------------------------------

 

AbitibiBowaterResolute and each other Borrower hereby warrant, on their own
behalf and on behalf of the other Loan Parties, with respect to each Account at
the time it is shown as an Eligible Account in a Borrowing Base Certificate,
that such Account is an Eligible Account.
8.23.    Inventory. The Administrative Agent may rely, in determining which
Inventory is Eligible Inventory, on all statements and representations made by
the Loan Parties with respect thereto. AbitibiBowaterResolute and each other
Borrower hereby warrant, on their own behalf and on behalf of the other Loan
Parties, with respect to any Inventory at the time it is shown as being Eligible
Inventory in a Borrowing Base Certificate, that such Inventory is Eligible
Inventory.
8.24.    Anti-Terrorism Law. (a) Neither AbitibiBowaterResolute nor any of its
Subsidiaries is in violation in any material respect of any applicable legal
requirement relating to any laws with respect to terrorism or money laundering
(“Anti-Terrorism Laws”), including Executive Order No. 13224 on Terrorist
Financing effective September 24, 2001 (the “Executive Order”), the Patriot Act
and, the Proceeds of Crime (Money Laundering) and Terrorist Financing Act
(Canada), the Proceeds of Crime Act 2002, and the Terrorism Act 2000. Neither
AbitibiBowaterResolute nor any of its Subsidiaries and, to the knowledge of
AbitibiBowaterResolute and each Borrower, no agent of AbitibiBowaterResolute or
any of its Subsidiaries acting on behalf of AbitibiBowaterResolute or any of its
Subsidiaries, as the case may be, is any of the following:
(i)    a Person that is listed in the annex to, or it otherwise subject to the
provisions of, the Executive Order;
(ii)    a Person 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;
(iii)    a Person with which any Lender is prohibited from dealing or otherwise
engaging in any transaction by any Anti-Terrorism Law;
(iv)    a Person that commits, threatens or conspires to commit or supports
“terrorism” as defined in the Executive Order; or
(v)    a Person that is named as a “specially 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.
(b)    Neither AbitibiBowaterResolute nor any of its Subsidiaries and, to the
knowledge of AbitibiBowaterResolute and each Borrower, no agent of
AbitibiBowaterResolute or any of its Subsidiaries acting on behalf of
AbitibiBowaterResolute or any of its Subsidiaries, as the case may be, (i)
conducts any business or engages in making or receiving any contribution of
funds, goods or services to or for the benefit of a Person described in
Section 8.24(a), (ii) deals in, or otherwise engages in any transaction relating
to, any property or interests in property blocked pursuant to the Executive
Order, or (iii) engages in or conspires to engage in any transaction that evades
or avoids, or has the purpose of evading or avoiding, or attempts to violate,
any of the prohibitions set forth in any Anti-Terrorism Law.

-149-

--------------------------------------------------------------------------------

 

8.25.    Own Enquiries. The Loan Parties have relied on their own investigations
and enquiries regarding the transactions contemplated by the Loan Documents and
have not relied on any information, advice or opinion (including information,
advice or opinions regarding interest rates, hedging arrangements or exchange
rates) given or offered by or on behalf of the Administrative Agent, any other
Agent or any Lender even if in answer to any enquiry by or for it.
SECTION 9. Affirmative Covenants. Each of AbitibiBowaterResolute and each
Borrower covenants and agrees with the Administrative Agent, each other Agent
and each Lender that, from and after the Effective Date (subject to the
condition precedent to the Effective Date set forth in Section 6), and for so
long as this Agreement shall remain in effect, or the Total Commitments or
Letters of Credit remain outstanding or the principal of or interest on any
Loan, Fees or any other expenses or amounts payable under any Loan Document
shall remain unpaid, unless the Required Lenders shall otherwise consent in
writing, it will, and will cause each of their respective Subsidiaries (other
than Excluded Subsidiaries) to:
9.01.    Existence; Businesses and Properties. (a) Do or cause to be done all
things necessary to preserve, renew and keep in full force and effect its legal
existence, except as otherwise permitted under Section 10.04.
(b)    Except where the failure to do so could not be reasonably expected to
have a Material Adverse Effect, (i) do or cause to be done all things necessary
to preserve, renew and keep in full force and effect the rights, licenses,
permits, patents, trademarks, trade names, copyrights, privileges and franchises
necessary or desirable in the normal conduct of its business, and (ii) at all
times keep and maintain all property useful and necessary in its business in
good working order and condition.
9.02.    Insurance. Keep its insurable properties adequately insured at all
times by financially sound and reputable insurers; maintain such other
insurance, to such extent and against such risks, including fire and other risks
insured against by extended coverage, as is usually maintained in the same
general area by companies engaged in the same or similar businesses, including
public liability insurance against claims for personal injury or death or
property damage occurring upon, in, about or in connection with the use of any
properties owned, occupied or controlled by it or the use of any products sold
by it; and maintain such other insurance as may be required by law. Each such
policy of liability or casualty insurance maintained by or on behalf of Loan
Parties shall (i) in the case of each liability insurance policy, name the
Collateral Agent, on behalf of the Secured Parties, as an additional insured
thereunder, (ii) in the case of each casualty insurance policy relating to
Collateral, contain a loss payable clause or endorsement that names the
Collateral Agent, on behalf of the Secured Parties, as the loss payee thereunder
and (iii) provide for at least 30 days’ prior written notice to the Collateral
Agent of any cancellation of such policy (or, in the case of nonpayment of
premiums 10 days’ prior written notice to the Collateral Agent). With respect to
each Mortgaged Property that is located in an area determined by the Federal
Emergency Management Agency to have special flood hazards, the applicable Loan
Party has obtained, and will maintain, with financially sound and reputable
insurance companies, such flood insurance as is required under applicable law,
including Regulation H.

-150-

--------------------------------------------------------------------------------

 

9.03.    Payment of Taxes. Pay and discharge promptly prior to becoming
delinquent all taxes, assessments and governmental charges or levies imposed
upon it or upon or in respect of its property or asset, except where the failure
to pay the same could not reasonably be expected to result in a Material Adverse
Effect; provided, however, that such payment and discharge shall not be required
with respect to any such tax, assessment, charge or levy so long as the validity
or amount thereof shall be contested in good faith by appropriate proceedings
and it shall have set aside on its books, in accordance with GAAP, adequate
reserves with respect thereto and such contest operates to suspend enforcement
of a Lien and, in the case of a Mortgaged Property or other material property or
asset, there is no material risk of forfeiture of such property.
9.04.    Financial Statements, Reports, etc. Furnish to the Administrative Agent
and each Lender:
(a)    within 105 days (or such earlier date on which AbitibiBowaterResolute is
required (giving effect to any extensions granted by the SEC) to make any public
filing of such information) after the end of each fiscal year, its consolidated
balance sheet and related statements of operations, stockholders’ equity and
cash flows, showing the financial condition of AbitibiBowaterResolute and its
Subsidiaries on a consolidated basis as of the close of such fiscal year and
their results of operations during such fiscal year, all audited by
PricewaterhouseCoopers LLP or other independent auditors of recognized national
standing and accompanied by an opinion of such accountants (which shall not
contain any qualification or exception as to scope or going concern) to the
effect that such consolidated financial statements fairly present in all
material respects the financial condition and results of operations of
AbitibiBowaterResolute and its Subsidiaries on a consolidated basis in
accordance with GAAP;
(b)    within 60 days (or such earlier date on which AbitibiBowaterResolute is
required (giving effect to any extensions granted by the SEC) to make any public
filing of such information) after the end of each of the first three fiscal
quarters of each fiscal year, its unaudited consolidated balance sheet and
related statements of operations, stockholders’ equity and cash flows, showing
the financial condition of AbitibiBowaterResolute and its Subsidiaries on a
consolidated basis as of the close of such fiscal quarter and their results of
operations during such fiscal quarter and the then-elapsed portion of the fiscal
year (it being understood that such information shall be in reasonable detail
and certified by a Financial Officer of AbitibiBowaterResolute as fairly
presenting in all material respects the financial condition and results of
operations of AbitibiBowaterResolute and its Subsidiaries on a consolidated
basis in accordance with GAAP, subject to normal year-end audit adjustments and
the absence of notes);
(c)    within 30 days after the end of each of the first two months of each
fiscal quarter, and within 60 days (or such earlier date on which
AbitibiBowaterResolute is required (giving effect to any extensions granted by
the SEC) to make any public filing of such information) after the end of the
third month of each fiscal quarter, in each case ending during a Compliance
Period, the monthly unaudited consolidated balance sheet and related
consolidated statement of income of AbitibiBowaterResolute and its Subsidiaries
on a consolidated basis in accordance with GAAP for such period, subject to
normal year-end audit adjustments, normal quarterly adjustments and allocations
and the absence of notes, in each case, certified by a Financial Officer of

-151-

--------------------------------------------------------------------------------

 

AbitibiBowaterResolute as being prepared on a consistent basis with its monthly
accounting and bookkeeping practices;
(d)    (i) concurrently with any delivery of financial statements under
paragraph (a), (b) or (c) above, (I) a compliance certificate in the form of
Exhibit G signed by a Financial Officer of AbitibiBowaterResolute and on behalf
of AbitibiBowaterResolute (A) certifying that, after reasonable inquiry, to the
knowledge of such Financial Officer no Default or Event of Default has occurred
or, if a Default or an Event of Default has occurred, specifying the nature and
extent thereof and any corrective action taken or proposed to be taken with
respect thereto, (B) when applicable, demonstrating compliance with the covenant
contained in Section 10.15 (setting forth, for the purposes of such certificate,
calculations of the Consolidated Fixed Charge Coverage Ratio for such period
irrespective of whether a Compliance Period exists at such time) and
(C)  certifying that no Material Subsidiary exists (other than the Loan Parties)
or if a Material Subsidiary (other than a Loan Party) does exist, a description
of such Material Subsidiary, in each case at the end of such fiscal quarter or
year, as the case may be; and (II) a report on any material developments in any
negotiations with any Governmental Authority relating to any “corrective
measures” required under the Government Pension Agreements, the Ontario Pension
Regulations or the Quebec Pension Regulations;
(e)    promptly after the same become publicly available, copies of all periodic
and other reports, proxy statements and other materials (other than (i) the
exhibits to registration statements and (ii) any registration statements on Form
S‑8 or its equivalent) filed by AbitibiBowaterResolute or any of its
Subsidiaries with the Securities and Exchange Commission, or any Governmental
Authority succeeding to any of or all the functions of such Commission, or
distributed to AbitibiBowaterResolute’s shareholders (other than to
AbitibiBowaterResolute or any of its Subsidiaries), as the case may be;
(f)    in the case of AbitibiBowaterResolute, as soon as available, and in any
event no later than 60 days after the end of each fiscal year, a consolidated
annual plan, prepared in accordance with AbitibiBowaterResolute’ normal
accounting procedures applied on a consistent basis, for the next fiscal year of
AbitibiBowaterResolute containing quarterly detail, including projected
quarterly borrowing base levels for such fiscal year;
(g)    promptly after AbitibiBowaterResolute’s or any of its Subsidiaries’
receipt thereof, a copy of any “management letter” received from its certified
public accountants and management’s response thereto;
(h)    not later than 5:00 P.M. (New York time) on or before (x) during the
three-month period following the Effective Date, the 25th day and (y)
thereafter, the 20th day of each month (or no later than the third Business Day
following the end of each week during any period in which a Weekly Borrowing
Base Period is in effect), a Borrowing Base Certificate setting forth each
Borrowing Base (in each case with supporting calculations in reasonable detail),
which shall be prepared as of the last Business Day of the preceding month (or,
if any such Borrowing Base Certificate is delivered weekly, as of the last
Business Day of the week immediately preceding such delivery, in which case the
calculation therein with respect to Inventory shall be based on the information
in the then most recent monthly Borrowing Base Certificate). Each such Borrowing

-152-

--------------------------------------------------------------------------------

 

Base Certificate shall include such supporting information as may be reasonably
requested from time to time by the Collateral Agent;
(i)    at the time of delivery of any monthly Borrowing Base Certificate
delivered pursuant to clause (h) of this Section 9.04, (w) a summary aged trial
balance of Accounts by customer, (x) upon the request of the Collateral Agent, a
summary of accounts payable (including detail for the top 15 vendors) indicating
which accounts payable are more than thirty days past due and (y) a summary
inventory listing by category (in form and scope consistent with the form
reviewed by the Collateral Agent prior to the Closing Date, or otherwise
reasonably satisfactory in form and scope to the Collateral Agent);
(j)    promptly following the Administrative Agent’s request therefor, all
documentation and other information that the Administrative Agent reasonably
requests on its behalf or on behalf of any Lender in order to comply with its
on-going obligations under applicable “know your customer” and anti-money
laundering rules and regulations, including the Patriot Act; and
(k)    promptly from time to time, such other information regarding the
operations, business affairs, collateral and financial condition of
AbitibiBowaterResolute and its Subsidiaries, or compliance with the terms of any
Loan Document, as the Administrative Agent or any Lender may reasonably
request.; and
(l)    Not later than three Business Days following any date on which the
aggregate Outstanding Balance of all Eligible Accounts sold or otherwise
transferred pursuant to an accounts receivable factoring (or reverse factoring)
program (determined, with respect to each such Eligible Account, at the time of
such sale or transfer) following the date of the Borrowing Base Certificate most
recently delivered hereunder (or most recent update thereto provided under this
clause (l)) exceeds $10,000,000, a Borrowing Base Base Certificate, adjusted
solely to account for such sale or transfer; provided that no such adjusted
Borrowing Base Certificate shall be required to be delivered at any time that
the Payment Conditions are satisfied.
Information required to be delivered pursuant to this Section shall be deemed to
have been delivered if such information, or one or more annual or quarterly
reports containing such information (including, in the case of certifications
required pursuant to clause (b) above, the certifications accompanying any such
quarterly report pursuant to Section 302 of the Sarbanes-Oxley Act of 2002),
shall have been posted by the Administrative Agent on an IntraLinks or similar
site to which the Lenders have been granted access or shall be available on the
website of the Securities and Exchange Commission at http://www.sec.gov.
Information required to be delivered pursuant to this Section may also be
delivered by electronic communications pursuant to procedures approved by the
Administrative Agent (such approval not to be unreasonably withheld).
9.05.    Litigation and Other Notices. Furnish to the Administrative Agent, each
other Agent and each Lender written notice of the following promptly (and in any
event within five Business Days) upon a Responsible Officer of
AbitibiBowaterResolute or any of its Subsidiaries obtaining knowledge thereof:

-153-

--------------------------------------------------------------------------------

 

(a)    any Event of Default or Default, specifying the nature and extent thereof
and the corrective action (if any) taken or proposed to be taken with respect
thereto;
(b)    the filing or commencement of, or any notice to AbitibiBowaterResolute,
any Borrower or any of their Subsidiaries of the intention of any Person to file
or commence, any action, suit or proceeding (whether at law or in equity or by
or before any Governmental Authority or any arbitrator) against
AbitibiBowaterResolute, any Borrower or any Affiliate thereof (i)  could
reasonably be expected to result in a Material Adverse Effect or (ii) with
respect to any Loan Document;
(c)    any development that has resulted in, or could reasonably be anticipated
to result in, a Material Adverse Effect;
(d)    the occurrence of any ERISA Event that, alone or together with other
ERISA Events that have occurred, could reasonably be expected to have a Material
Adverse Effect.
(e)    any material casualty or other insured damage to any material portion of
any Collateral (including Mortgaged Property) or the commencement of any action
or proceeding for the taking or expropriation of any Collateral (including
Mortgaged Property) or any material part thereof or material interest therein
under power of eminent domain or by condemnation or similar proceeding; and
(f)    the commencement of a Dominion Period, a Compliance Period or a Weekly
Borrowing Base Period.
9.06.    Maintaining Records; Access to Properties and Inspections. (a) Maintain
all financial records in accordance with GAAP and applicable law and permit any
representatives designated by the Administrative Agent or any Lender to visit
and inspect the properties and financial records of AbitibiBowaterResolute, any
Borrower and any of their respective Subsidiaries during normal business hours
and upon reasonable notice and to make extracts from and copies of such
financial records, and permit any representatives designated by the
Administrative Agent or any Lender to discuss at such reasonable times and at
such reasonable intervals as may be reasonably requested the affairs, finances
and condition of AbitibiBowaterResolute, any Borrower or any of their respective
Subsidiaries or any properties of AbitibiBowaterResolute, any Borrower and any
of their respective Subsidiaries with any officers thereof and (in the presence
of AbitibiBowaterResolute, any Borrower or a Subsidiary of
AbitibiBowaterResolute, unless a Default or Event of Default shall have occurred
and be continuing) independent accountants therefor; provided, however, that all
such visits, inspections and inquiries shall be coordinated through the
Administrative Agent.
(b)    AbitibiBowaterResolute will, and will cause each of its Subsidiaries to,
permit a third-party appraiser and a third-party consultant selected by the
Collateral Agent (and, to the extent such third-party appraiser is not Hilco
Appraisal Services, LLC and/or such third-party consultant is not Protiviti
Inc., reasonably satisfactory to AbitibiBowaterResolute) to, upon the request of
the Collateral Agent, conduct (at the reasonable cost of the Borrowers), (x) an
appraisal of the Inventory of the Loan Parties and (y) a collateral examination
of the Accounts of the Loan Parties, in each

-154-

--------------------------------------------------------------------------------

 

case, in scope reasonably satisfactory to the Collateral Agent; provided,
however, so long as no Event of Default and no Dominion Period exists, the
Collateral Agent may only make one request in respect of each of clause (x) and
(y) above during each fiscal year (or, during any period (A) commencing on the
date on which the Excess Availability is less than 40the greater of (I) $133
million and (II) 20% of the Total Commitment as then in effect and (B) ending on
the first date thereafter on which the Excess Availability has been equal to or
greater than 40(I) $133 million and (II) 20% of the Total Commitment as then in
effect for 40 consecutive days, up to two requests in respect of each of clause
(x) and (y) above during each fiscal year), in each case at the reasonable cost
of the Borrowers.; provided further, that (1) with respect to such appraisals,
so long as there has been no Acquisition during such fiscal year, such costs
shall not exceed $45,000 per appraisal and (2) with respect to such collateral
examinations, such costs shall not exceed $2,000 per field examiner, per day.
9.07.    Use of Proceeds. The Borrowers will use the proceeds of the Loans and
the issuances of Letters of Credit only as provided in Section 8.10. No part of
the proceeds of any Loan will be used, whether directly or indirectly, for any
purpose in a violation of any of the Regulations of the Board, including
Regulations T, U and X.
9.08.    Compliance with Law. Comply with the requirements of all applicable
laws (including Environmental Laws), rules, regulations and decrees, directives
and orders of any Governmental Authority that are applicable to it or to any of
its properties, except where noncompliance could not reasonably be expected to
have a Material Adverse Effect.
9.09.    Further Assurances. (a) Execute any and all further documents,
financing statements, agreements and instruments, and take all further action
(including filing UCC, PPSA and other financing statements, registrations,
mortgages and deeds of trust), and registration of Security Documents to which
any English Guarantor is a party at Companies House) that may be required under
applicable law or which the Required Lenders or the Administrative Agent may
reasonably request, in order to effectuate the transactions contemplated by the
Loan Documents and in order to grant, preserve, protect and perfect the validity
and priority or rank of the security interests created or intended to be created
by the Security Documents except with respect to Collateral which the
Administrative Agent determines does not have sufficient value to justify the
cost and expense of perfection. AbitibiBowaterResolute will provide to the
Administrative Agent, from time to time upon its reasonable request, evidence
reasonably satisfactory to the Administrative Agent as to the perfection and
priority of the Liens created or intended to be created by the Security
Documents, except for Liens not required to be perfected and except for Liens on
Collateral which the Administrative Agent has determined does not have
sufficient value to justify the cost and expense of perfection.
(b)    Cause (i) each Domestic Subsidiary (other than a Domestic Subsidiary that
is a Subsidiary of a Foreign Subsidiary) and Canadian Subsidiary of
AbitibiBowaterResolute that is or becomes a Material Wholly-Owned Subsidiary
(other than an Excluded Subsidiary), (ii) each Domestic Subsidiary (other than a
Domestic Subsidiary that is a Subsidiary of a Foreign Subsidiary) and Canadian
Subsidiary of AbitibiBowaterResolute that is or becomes a direct parent of any
such Material Wholly-Owned Subsidiary (other than an Excluded Subsidiary) and
(iii) each other

-155-

--------------------------------------------------------------------------------

 

Domestic Subsidiary of AbitibiBowaterResolute that guarantees the obligations
under the Senior Secured Notes, to, as promptly as practicable, and in any event
within 30 days after the occurrence of such event or status, notify the
Administrative Agent thereof and cause the Collateral and Guarantee Requirements
(excluding, for the avoidance of doubt, paragraph (i) thereof) to be satisfied
with respect to such Domestic Subsidiary or Canadian Subsidiary of
AbitibiBowaterResolute, as the case may be, and direct parent thereof as,
subject to the proviso in this paragraph (b), a U.S. Subsidiary Guarantor or
Canadian Subsidiary Guarantor, as the case may be, and with respect to any
Equity Interests in or Indebtedness of such Domestic Subsidiary or Canadian
Subsidiary of AbitibiBowater, as the case may be, owned by any Loan Party.
(c)    From time to time, each Borrower will, at its cost and expense, promptly
secure the applicable Secured Obligations by pledging or creating, or causing to
be pledged or created, perfected security interests with respect to such of the
assets and properties of the Loan Parties as either the Administrative Agent or
the Required Lenders shall reasonably request (it being understood that, subject
to the limitations set forth in this paragraph (c), it is the intent of the
parties that the applicable Secured Obligations shall be secured by
substantially all of ABL Priority Collateral of the Loan Parties and all other
property of the U.S. Loan Parties securing the Senior Secured Notes; provided,
however that notwithstanding anything to the contrary set forth in this
Agreement or any other Loan Document, (i) no leasehold mortgages or deeds of
trust or fixture filings shall be required with respect to any leasehold
interest of any Loan Party and (ii) no security interests shall be required to
be pledged or created with respect to (A) properties set forth on Schedule
9.09,Notes Priority Assets (except to the extent such assets secure other
indebtedness as contemplated by Section 10.02(a)(iii)) and (B) any assets
located outside of the United States and, Canada and the U.K. other than
Inventory held in the United Kingdom, Netherlands and Ireland which is included
in the Borrowing Base. Such security interests and Liens will be created under
the Security Documents and other security agreements, mortgages, deeds of trust
and other instruments and documents in form and substance reasonably
satisfactory to the Administrative Agent, and, in the case of Notes Priority
Collateral, consistent with, and no more restrictive than, the security
agreements, mortgages, deeds of trust and other instruments and documents
securing the Senior Secured Notes and each Borrower shall deliver or cause to be
delivered to the Lenders all such instruments and documents (including customary
legal opinions, title insurance policies (which policies may be issued as part
of a “pro tanto” title package that would minimize the amount of title premiums
that Borrower is required to pay to provide title insurance in respect of the
Liens securing the Secured Obligations and the Senior Secured Notes) or title
opinions and lien searches) as the Administrative Agent shall reasonably request
to evidence compliance with this paragraph (c).
9.10.    Information Regarding Collateral; Deposit Accounts. (a) Furnish to the
Administrative Agent prompt written notice of any change in (i) the legal name
of any Loan Party, as set forth in its organizational documents, (ii) the
jurisdiction of organization or the form of organization of any Loan Party
(including as a result of any merger or consolidation), (iii) the location of
the chief executive office of any Loan Party and, in the case of Canadian Loan
Parties, the location of such Canadian Loan Party’s principal place of business,
chief executive office, registered office, any office in which it maintains
books or records relating to Collateral (other than de-minimis portions of
Collateral) owned by it or any office or facility at which Collateral (other
than de-minimis

-156-

--------------------------------------------------------------------------------

 

portions of Collateral) owned by it is located (including the establishment of
any such new office or facility) or (iv) the organizational identification
number, if any, or, with respect to any Loan Party organized under the laws of a
jurisdiction that requires such information to be set forth on the face of a UCC
financing statement, the Federal Taxpayer Identification Number of any such U.S.
Loan Party. Each Borrower agrees not to effect or permit any change referred to
in the preceding sentence unless all filings have been made under the UCC, the
PPSA or otherwise that are required in order for the Collateral Agent to
continue at all times following such change to have a valid, legal and perfected
security interest in all the Collateral owned by such Loan Party, as and to the
extent required under, and subject to the exceptions set forth in, the terms of
this Agreement and the other Loan Documents.
(b)    Furnish to the Administrative Agent prompt written notice of the
acquisition by any U.S. Loan Party of, or any real property otherwise becoming,
a property that is required to become a Mortgaged Property after the Effective
Date.
(c)    Each year, at the time of delivery of annual financial statements with
respect to the preceding fiscal year pursuant to Section 9.04(a),
AbitibiBowaterResolute shall deliver to the Administrative Agent a certificate
executed by a Responsible Officer of AbitibiBowaterResolute setting forth the
information required pursuant to the Perfection Certificate or confirming that
there has been no change in such information since the date of the Perfection
Certificate delivered on the Effective Date or the date of the most recent
certificate delivered pursuant to this paragraph 9.09(c).
(d)    Cause all cash owned by each Borrower and the other Loan Parties at any
time (other than cash held in Excluded Accounts or the Specified Collection
Accounts) to be held in deposit accounts, securities accounts or commodities
accounts maintained with a Domestic or Canadian or U.K. office of any depositary
institution, securities intermediary or commodity intermediary, as the case may
be, in the name of one or more Loan Parties and will, in each case as promptly
as practicable, notify the Administrative Agent of the existence of any deposit
account, securities account or commodities account maintained by a Loan Party in
respect of which a Control Agreement is required to be in effect pursuant to
clause (h) of the definition of the term “Collateral and Guarantee Requirement”
but is not yet in effect.

9.11.    Environmental Matters. (a) Promptly give notice to the Administrative
Agent upon becoming aware of (i) any violation of any Environmental Law,
(ii) any material claim, inquiry, proceeding, investigation or other action,
including a request for information or a notice of potential liability under any
Environmental Law, by or from any Governmental Authority or any third party
claimant or (iii) the discovery of the Release of any Hazardous Material at, on,
to, under or from any of the real properties of AbitibiBowaterResolute, any
Borrower or any of their respective Subsidiaries, or any facility or equipment
thereat in excess of reportable or allowable standards or levels under any
Environmental Law or under conditions not allowed under any applicable permit,
license, authorization or approval by a Governmental Authority, or in a manner
or amount that could reasonably be expected to result in liability under any
Environmental Law, in each case that could reasonably be expected to have a
Material Adverse Effect.

-157-

--------------------------------------------------------------------------------

 

(b)    Upon discovery of the presence on any of the Real Properties of any
Hazardous Material that is in violation of, or that could reasonably be expected
to result in liability under, any Environmental Law, in each case that could
reasonably be expected to have a Material Adverse Effect, take or cause to be
taken all necessary steps to initiate and expeditiously complete all remedial,
corrective and other responsive action to the extent required pursuant to
Environmental Law, except where the failure to take or cause to be taken such
steps could not reasonably be expected to result in a Material Adverse Effect,
and keep the Administrative Agent reasonably informed of such actions and the
results thereof.
9.12.    Certain Post-Effective Date Obligations(a) As promptly as practicable
after the Effective Date, and in any event within the applicable time period set
forth in the definition of “Collateral and Guarantee Requirement”, deliver all
Mortgages and Control Agreements that would have been required to be delivered
on the Effective Date.
(b)    Furnish to the Administrative Agent, not later than 60 days following the
Effective Date (or such later date as is agreed by the Administrative Agent in
its reasonable discretion) a supplement to Part D of Schedule 10.16 setting
forth all Excluded Accounts as of the date of delivery thereof.
9.13.    Canadian Pension and Benefit Plans. (a) For each existing, or hereafter
adopted, Canadian Pension Plan and Canadian Benefit Plan, comply in a timely
fashion with and perform in all material respects all of its obligations
(including fiduciary, funding, investment and administration obligations) under
and in respect of such Canadian Pension Plan or Canadian Benefit Plan, including
under any funding agreements, any applicable collective bargaining agreement and
all laws (including the Canadian Pension Regulations).
(b)    For each existing, or hereafter adopted, registered Canadian Pension
Plan, ensure that such plan retains its registered status under applicable laws.
(c)    Remit or pay all employer and employee payments, contributions (“normal
cost”, “special payments” and any other payments in respect of any funding
deficiencies or shortfalls) or premiums required to be remitted, paid to or in
respect of each Canadian Pension Plan or Canadian Benefit Plan and ensure all
other amounts that are due to the pension fund of a Canadian Pension Plan from
the Canadian Subsidiaries of AbitibiBowaterResolute have been paid or remitted
in a timely fashion in accordance with the terms thereof, any funding
agreements, any applicable collective bargaining agreement and all laws
(including the Canadian Pension Regulations).
(d)    Furnish to the Administrative Agent (i) copies of (x) the final plan
texts and funding agreements for the Canadian Pension Plans which are target
benefit pension plans, (y) each annual information return and actuarial report
(including applicable schedules) filed with the applicable Governmental
Authorities with respect to its Canadian Pension Plans and (z) any amendments to
the Government Pension Agreements, the Ontario Pension Regulations or the Quebec
Pension Regulations, (ii) upon request by the Administrative Agent, copies of
pension plan financial statements, status of any negotiations with any
Governmental Authority relating to compliance with the Government Pension
Agreements, the Ontario Pension Regulations or the Quebec Pension Regulations
(and any material correspondence relating thereto) and any applications for
regulatory approval of asset withdrawals or commuted value transfers with
respect to each registered Canadian

-158-

--------------------------------------------------------------------------------

 

Pension Plan or any fund maintained in respect thereof; (iii) promptly after
becoming aware of any failure to withhold, make, remit or pay any employee or
employer payments, contributions (including “normal cost”, “special payments”
and any other payments in respect of any funding deficiencies or shortfalls) or
premiums to a Canadian Pension Plan or Canadian Benefit Plan on a timely basis
or any decision or written notice of a Governmental Authority ordering,
proposing to order or indicating an intention to order the partial or full
termination of any Canadian Pension Plan or the occurrence of or forthcoming
occurrence of any event which could reasonably be expected to result in the
partial or full termination of any Canadian Pension Plan, written notice
thereof, together with an explanation of the actions taken or proposed to be
taken by the applicable Canadian Subsidiary of AbitibiBowaterResolute relating
thereto; and (iv) copies of any notifications or remittances or similar
documents prepared and delivered to the trustee or custodian of any registered
Canadian Pension Plan pursuant to section 56.1 of the Pension Benefits Act
(Ontario) or similar legislation in another applicable jurisdiction in Canada.
(e)    Comply in all material respects with all covenants, responsibilities and
other obligations imposed on AbitibiBowaterResolute and each of its Subsidiaries
under the Government Pension Agreements.

SECTION 10. Negative Covenants. Each Borrower covenants and agrees with the
Administrative Agent, each other Agent and each Lender that, from and after the
Effective Date and for so long as this Agreement shall remain in effect, or the
Total Commitments or Letters of Credit remain outstanding or the principal of or
interest on any Loan, Fees or any other expenses or amounts payable under any
Loan Document shall remain unpaid, unless the Required Lenders shall otherwise
consent in writing, it will not, and will not cause or permit any of their
respective Subsidiaries (other than Excluded Subsidiaries) to:
10.01.    Indebtedness. Create, incur, assume or permit to exist any
Indebtedness or Attributable Indebtedness; provided that AbitibiBowaterResolute
and its Subsidiaries may incur Indebtedness if, after giving effect to the
incurrence thereof and any substantially simultaneous application of proceeds
thereof, the pro forma Interest Coverage Ratio would be greater than 2:00 to
1.00 (such test, the “Incurrence Test”). Notwithstanding the foregoing,
AbitibiBowaterResolute and its Subsidiaries may, without duplication, create,
incur, assume or permit to exist:
(a)    the Indebtedness created hereunder and under the other Loan Documents;
(b)    the Indebtedness (other than Indebtedness under the Senior Secured Notes)
existing on the Effective Date after giving effect to the consummation of the
Plan of Reorganization and which is contemplated by the Plan of Reorganization
or the CCAA Plan on such date, including any Guarantees thereof and any
Permitted Refinancing Indebtedness in respect thereof;

(c)    intercompany loans and advances permitted by Section 10.03 and which, if
owed by a Loan Party, are subordinated to the Loan Document Obligations on terms
reasonably satisfactory to the Administrative Agent;

-159-

--------------------------------------------------------------------------------

 

(d)    Indebtedness of any Foreign Subsidiary of AbitibiBowaterResolute and any
Guarantees thereof, provided that such Indebtedness shall not be Guaranteed by
or otherwise be recourse to any Loan Party, except as permitted by
Section 10.03(c) or (l); provided further that the aggregate principal amount of
such Indebtedness at any time outstanding shall not exceed $50,000,000;
(e)    Indebtedness under the Senior Secured Notes, together with any Permitted
Refinancing Indebtedness with respect thereto, including Guarantees thereof;
(f)    Indebtedness (including Guarantees) in respect of (i) performance,
surety, bid, appeal or similar bonds, completion guarantees or similar
instruments, including letters of credit and bankers acceptances (not incurred
for the purpose of borrowing money), in each case provided in the ordinary
course of business, (ii) Hedging Agreements entered into in the ordinary course
of business as a risk management strategy and (iii) agreements providing for
indemnification, adjustment of purchase price or similar obligations, or from
guarantees or letters of credit, surety bonds or performance bonds securing any
obligations pursuant to such agreement, incurred in connection with the
disposition of any business, assets or Subsidiary of AbitibiBowaterResolute;
(g)    (i) Capital Lease Obligations and Attributable Indebtedness,
(ii) Indebtedness created, incurred or assumed in respect of the purchase,
improvement, repair or construction of property, and Permitted Refinancing
Indebtedness in respect thereof, provided that such Indebtedness (excluding
Permitted Refinancing Indebtedness) is created, incurred or assumed within
180 days after the earlier of (x) the placement in service of such property or
(y) the final payment on such property, and (iii) Indebtedness consisting of
industrial revenue, environmental control and other similar bonds, and
Guarantees of and letters of credit supporting such Indebtedness, provided that
the aggregate amount of the Indebtedness and Attributable Indebtedness created,
incurred or assumed pursuant to this paragraph (g) at any time outstanding shall
not exceed $125,000,000;
(h)    Indebtedness incurred to pay premiums for insurance policies maintained
by AbitibiBowaterResolute or any of its Subsidiaries in the ordinary course of
business not exceeding in aggregate the amount of such unpaid premiums;
(i)    Indebtedness of any Person acquired by AbitibiBowaterResolute or any of
its Subsidiaries in a Permitted Acquisition (“Acquisition Indebtedness”) and
assumed by AbitibiBowaterResolute or such Subsidiary pursuant to such
acquisition (including any Permitted Refinancing Indebtedness incurred in
respect thereof at the time of assumption thereof or from time to time
thereafter), provided that (i) such Indebtedness was not incurred in
contemplation of such acquisition, (ii) the aggregate principal amount of such
Indebtedness and any Permitted Refinancing Indebtedness in respect thereof at
any time outstanding shall not exceed $160,000,000[reserved], (iii) such
Indebtedness and any Permitted Refinancing Indebtedness in respect thereof shall
not be secured by any assets other than some or all of the assets securing the
acquired Indebtedness prior to such acquisition and (iv) immediately after the
incurrence thereof and giving pro forma effect thereto, the Interest Coverage
Ratio shall not be less than the Interest Coverage Ratio immediately prior to
such incurrenceResolute could incur at least $1.00 of additional Indebtedness
under the Incurrence Test;

-160-

--------------------------------------------------------------------------------

 

(j)    Guarantees with respect to bonds issued to support workers’ compensation,
unemployment or other insurance or self-insurance obligations, and similar
obligations, in each case, incurred by AbitibiBowaterResolute or any of its
Subsidiaries in the ordinary course of business;
(k)    Indebtedness in the form of any earnout or other similar contingent
payment obligation incurred in connection with an acquisition permitted
hereunder;
(l)    Indebtedness of a Joint Venture Subsidiary which is not Guaranteed by or
otherwise recourse to any Loan Party or any Wholly-Owned Subsidiary of any Loan
Party or any assets of the foregoing (other than Equity Interests in such
obligor Subsidiary) in an aggregate amount of all such Indebtedness at any time
outstanding shall not exceed $50,000,000;
(m)    Indebtedness under a Tax Incentive Transaction;
(n)    Indebtedness arising in the ordinary course of business of any Loan Party
or any of its Subsidiaries as an account party in respect of trade letters of
credit; provided that no such trade letter of credit shall be secured by any
assets of a Loan Party or any of its Subsidiaries other than the assets being
acquired or shipped pursuant to such letter of credit;
(o)    Indebtedness arising in the ordinary course of business in respect of
netting services, overdraft protections, Cash Management Services and otherwise
in connection with deposit accounts;
(p)    Guarantees in the ordinary course of business of the obligations of
suppliers, customers, franchisees and licensees of AbitibiBowaterResolute or any
of its Subsidiaries in an aggregate principal amount at any time outstanding not
in excess of $5,000,000;
(q)    so long as the Payment Conditions are satisfied both before and after
giving effect to the incurrence of such Indebtedness, other Indebtedness of
AbitibiBowaterResolute or any of its Subsidiaries in an aggregate face and/or
principal amount at any time outstanding not in excess of
$100,000,000500,000,000;
(r)    unsecured Indebtedness in respect of letters of credit issued pursuant to
the 2007 CIBC Letter of Credit Facility and reimbursement obligations with
respect to amounts drawn under such letters of credit, in an aggregate face
and/or principal amount at any time outstanding not in excess of
Cdn.$20,000,000; and
(s)    Indebtedness in respect of letters of credit issued pursuant to the 2008
CIBC Letter of Credit Facility and reimbursement obligations with respect to
amounts drawn under such letters of credit, in an aggregate principal amount at
any time outstanding not in excess of Cdn.$50,000,000100,000,000; provided, that
(A) such Indebtedness may be secured only by Liens permitted under Section
10.02(a)(xx) and (B) no such Indebtedness may be incurred during a Dominion
Period.; and
(t)    unsecured Indebtedness of Resolute or any of its Subsidiaries in an
aggregate face and/or principal amount at any time outstanding not in excess of
$500,000,000; provided that the aggregate

-161-

--------------------------------------------------------------------------------

 

face and/or principal amount of Indebtedness incurred pursuant to this Section
10.01(t) at any time that the Payment Conditions are not satisfied (both before
and after giving effect to such incurrence), shall not exceed $100,000,000.
Notwithstanding clauses (a) – (q) above, (i) Indebtedness in respect of letters
of credit issued pursuant to the 2007 CIBC Letter of Credit Facility and
reimbursement obligations with respect to amounts drawn under such letters of
credit may only be incurred pursuant to Section 10.01(r) and (ii) Indebtedness
in respect of letters of credit issued pursuant to the 2008 CIBC Letter of
Credit Facility and reimbursement obligations with respect to amounts drawn
under such letters of credit may only be incurred pursuant to Section 10.01(s).

10.02.    Liens. (a) Create, incur, assume or permit to exist any Lien on any
property or assets (including stock or other securities of any Person) now owned
or hereafter acquired by it or on any income or revenues or rights in respect of
any thereof, except:
(i)    Permitted Liens;
(ii)    Liens created under the Loan Documents;
(iii)    Liens created under or pursuant to the Senior Secured Notes
Documents(x) on Notes Priority Assets securing Indebtedness permittedincurred
(A) in reliance on the Incurrence Test or (B) under Section 10.01(e), provided
thatq) (any such Indebtedness described in clause (A) or (B) that is secured by
Liens permitted under this clause (x), “Specified Secured Indebtedness”;
provided, that the holders of such Specified Indebtedness (or the representative
thereof) shall have entered into a customary collateral cooperation agreement
with the Collateral Agent containing terms consistent with those set forth in
Section 3.3 of the Previous Intercreditor Agreement or otherwise reasonably
satisfactory to the Administrative Agent and (y) on ABL Priority Collateral
securing Specified Secured Indebtedness that is secured by Notes Priority
Assets; provided, that (x) any such Liens on theABL Priority Collateral and
rights and remedies with respect thereto are at all times subject to the
Intercreditor Agreement (or a successor securing Specified Secured Indebtedness
shall at all times be subordinated to the Liens securing the Secured Obligations
pursuant to an intercreditor agreement having the same terms as the Previous
Intercreditor Agreement or such other terms as may be reasonably acceptable to
the Administrative Agent); and (y) no such Liens on ABL Priority Collateral
securing Specified Secured Indebtedness may be incurred unless the Secured
Obligations shall have been secured by Liens on the Notes Priority Assets that
secure such Specified Secured Indebtedness, which Liens on the Notes Priority
Assets may be subordinated to the Liens on the Notes Priority Assets securing
such Specified Secured Indebtedness pursuant to an intercreditor agreement
having the same terms as the Previous Intercreditor Agreement or such other
terms as may be reasonably acceptable to the Administrative Agent (and any such
Notes Priority Assets that shall become subject to Liens securing the Secured
Obligations in accordance with this clause (y) shall continue to constitute
“Notes Priority Assets” for all purposes of this Agreement notwithstanding
anything to the contrary in the definition of “Notes Priority Assets”);

-162-

--------------------------------------------------------------------------------

 

(iv)    Liens existing as of the Closing Date that are not discharged on the
Effective Date and that are listed on Schedule 10.02, and replacement Liens on
the same assets; provided that (A) such Liens shall apply only to the property
or assets to which they apply on the Closing Date and (B) such Liens shall
secure only (x) those obligations that they secured on the Closing Date and (y)
refinancings of such secured obligations permitted hereunder so long as the
principal amount of obligations secured under this clause (iv) does not exceed
the sum of the principal amount of such secured obligations being refinanced
plus the amount of any premium required to be paid thereon as a result of, and
any interest, fees and costs incurred in, such refinancing;
(v)    Liens securing Indebtedness permitted by Section 10.01(g), provided that
any such Lien shall apply only to the property that is the subject of such
Indebtedness;
(vi)    Liens securing Indebtedness permitted by Section 10.01(h), provided that
such Liens attach only to insurance policies and proceeds thereof;
(vii)    Liens securing Indebtedness constituting mortgage or purchase money
financings, Capital Lease Obligations, industrial revenue bonds or similar
financings assumed or incurred pursuant to Section 10.01(i) in connection with
any acquisition permitted hereunder, provided that (A) such Liens attach only to
property or assets acquired in connection with such acquisition, (B) such Liens
were not created in contemplation of such acquisition and (C) such Liens shall
secure only those obligations that they secure at the time of such acquisition
and Permitted Refinancing Indebtedness in respect thereof;
(viii)    Liens on property or assets owned by Foreign Subsidiaries of
AbitibiBowaterResolute securing Indebtedness permitted under Section 10.01(d),
provided that no such Liens shall apply to any assets constituting ABL Priority
Collateral or any Equity Interests of a Canadian Loan Party directly held by a
Canadian Loan Party;
(ix)    Liens created under any agreement relating to the sale, transfer or
other disposition of assets permitted hereunder, provided that such Liens relate
solely to the assets to be sold, transferred or otherwise disposed;
(x)    any Lien consisting of a lease of personal property of such Person to
customers of such Person, if such lease constitutes an Investment permitted
under Section 10.03(i);
(xi)    extensions, renewals or replacements of any Lien referred to in
clause (viii), (vi) or (vii) above, provided that such extension, renewal or
replacement is limited to the Indebtedness and property originally secured and
encumbered thereby;
(xii)    (i) Liens on assets of or Equity Interests issued by a Joint Venture
Subsidiary of AbitibiBowaterResolute securing Indebtedness of such Joint Venture
Subsidiary permitted by Section 10.01(l); or (ii) Liens on Equity Interests
issued by Augusta Newsprint, for so long as it is an Excluded Subsidiary, or a
joint venture that is not a Subsidiary of AbitibiBowaterResolute or any
Subsidiary securing Indebtedness of Augusta Newsprint or such joint venture, as
applicable, so long as, in the case of each of clause (i) and clause (ii),

-163-

--------------------------------------------------------------------------------

 

such Indebtedness is recourse to AbitibiBowaterResolute or its Subsidiaries only
to the extent of such Equity Interest;
(xiii)    Liens in favor of customs and revenue authorities arising as a matter
of law to secure payment of customs duties in connection with the importation of
goods;
(xiv)     Liens securing obligations under a Tax Incentive Transaction on the
property subject thereto, so long as the related Indebtedness is permitted by
Section 10.01(m);
(xv)    Liens on assets other than ABL Priority Collateral securing Hedging
Obligations and other Indebtedness permitted under Section 10.01(f);
(xvi)    Liens securing judgments for the payment of money not constituting an
Event of Default under Section 11.01(i) or securing appeal or other surety bonds
relating to such judgments;
(xvii)    Movable hypothecs granted to landlords in the Province of Quebec to
secure the payment of rent and the performance of other obligations arising
under a lease of real or immovable property provided that such movable hypothec
affects only the tangible assets of the tenant situated in the premises leased
under such lease and that such movable hypothec is subordinated to, and ranks
after, the hypothec(s) created pursuant to the Canadian Security Documents
affecting such assets;
(xviii)    Any interest or title of a lessor or sublessor under any lease of
real estate permitted hereunder;
(xix)    Liens not otherwise permitted by the foregoing clauses of this
paragraph (a) or the succeeding clause of this paragraph (a) securing
obligations in an aggregate amount outstanding at any time not in excess of
$25,000,000, provided that no such Liens shall apply to any assets constituting
ABL Priority Collateral or any Equity Interests of a Canadian Loan Party
directly held by a Canadian Loan Party;
(xx)    Liens on not more than Cdn.$52,500,000105,000,000 of cash collateral of
Canadian Subsidiaries securing Indebtedness permitted under Section 10.01(s);
provided, that no such Liens may be incurred during a Dominion Period;
(xxi)    Liens in favor of a Loan Party securing Indebtedness permitted under
Section 10.01(c) and which, if on assets of a Loan Party, have been subordinated
to the Liens of the Collateral Agent on terms reasonably satisfactory to the
Collateral Agent; and
(xxii)    Liens incurred pursuant to the Escrow SecuritiesIndebtedness Escrow
Agreement on the Escrow SecuritiesIndebtedness Escrow Account and the funds on
deposit therein.
(b)    Enter into any agreement prohibiting the creation or assumption of any
Lien upon properties or assets, whether now owned or hereafter acquired, except
any such restriction that exists under (i) this Agreement and the Senior Secured
Notes Documents, (ii) agreements governing any Indebtedness of Foreign
Subsidiaries of AbitibiBowaterResolute permitted hereunder, (iii) any

-164-

--------------------------------------------------------------------------------

 

documents governing secured Indebtedness permitted hereunder, provided that such
restrictions only relate to the assets securing such Indebtedness, (iv) any
documents governing Indebtedness permitted under Section 10.01(i) or (q),
provided that such restrictions are customary market terms for similar credits
and do not restrict the granting of Liens to secure Indebtedness incurred under
this Agreement or the Senior Secured Notes, (v) restrictions by reason of
customary restrictions on assignment contained in leases, licenses, permits and
other contracts and agreements entered into in the ordinary course of business,
provided that such restrictions are limited to the property or assets subject to
such leases, licenses, contracts or agreements), (vi) any agreement with respect
to a permitted sale or disposition of any assets, provided such restrictions are
limited to the assets to be sold or disposed of, and (vii) any agreement
restricting properties or assets of an Excluded Subsidiary.
(c)    Notwithstanding clauses (i) – (xix) of Section 10.02(a), Liens securing
Indebtedness permitted under Section 10.01(s) may only be incurred pursuant to
Section 10.02(a)(xx).
10.03.    Investments, Loans and Advances. Have outstanding or make any
Investment in, any other Person or suffer to exist any Investment, or any
obligation to make such Investment, except as set forth on Schedule 10.03 and
except:
(a)    Permitted Investments;
(b)    loans, advances or other Investments made by (i) AbitibiBowaterResolute
or any Subsidiary of AbitibiBowaterResolute to or in any Loan Party or any
Wholly OwnedWholly-Owned Domestic Subsidiary or any Wholly OwnedWholly-Owned
Canadian Subsidiary of AbitibiBowaterResolute, provided that any such
Investments by a Loan Party to or in any such Subsidiary that is not a Loan
Party (x) complies with the requirements of Section 10.12 and (y) are in an
aggregate amount not to exceed $10,000,000 outstanding at any time and (ii) any
Overseas Subsidiary of AbitibiBowaterResolute to or in AbitibiBowaterResolute or
any other Subsidiary of AbitibiBowaterResolute;
(c)    (i) loans, advances or other Investments made to or in any Subsidiary of
AbitibiBowaterResolute (other than a Loan Party, a Wholly-Owned Domestic
Subsidiary or a Wholly-Owned Canadian Subsidiary of AbitibiBowaterResolute), and
Guarantees of obligations of any such Subsidiary, in an aggregate amount not to
exceed $25,000,000 outstanding at any time and (ii) additional loans and
advances made to or in such Subsidiaries as part of AbitibiBowaterResolute’s
consolidated cash management operations in the ordinary course of business in an
aggregate amount not to exceed $50,000,000 outstanding at any time, provided
that each cash management account between any Loan Party and any Joint Venture
Subsidiary shall be settled at least quarterly;
(d)    Investments by any Subsidiary that is not a Loan Party in any other
Subsidiary that is not a Loan Party;
(e)    Investments consisting of non-cash consideration received in connection
with a sale of assets permitted under Section 10.12;

-165-

--------------------------------------------------------------------------------

 

(f)    Investments in existence on the Closing Date by AbitibiBowaterResolute,
each other Borrower and their respective Subsidiaries in the Equity Interests of
their respective Subsidiaries;
(g)    Investments consisting of Equity Interests, securities or notes received
in settlement of accounts receivable incurred in the ordinary course of business
from a customer that AbitibiBowaterResolute or any Subsidiary of
AbitibiBowaterResolute has reasonably determined is unable to make cash payments
in accordance with the terms of such account receivable;
(h)    accounts receivable created or acquired, and deposits, prepayments and
other credits to suppliers made, in the ordinary course of business;
(i)    any Investments consisting of (i) any contract pursuant to which
AbitibiBowaterResolute or any Subsidiary of AbitibiBowaterResolute obtains the
right to cut, harvest or otherwise acquire timber on property owned by any other
Person, whether or not the Borrower’s or such Subsidiary’s obligations under
such contract are evidenced by a note or other instrument, or (ii) loans or
advances to customers of AbitibiBowaterResolute or any Subsidiary of
AbitibiBowaterResolute, including leases of personal property of
AbitibiBowaterResolute or such Subsidiary to such customers, provided that the
contracts, loans and advances constituting permitted Investments pursuant to
this paragraph (i) shall not exceed $20,000,000 at any time outstanding;
(j)    prepaid expenses and lease, utility, workers’ compensation, performance
and other similar deposits made in the ordinary course of business;
(k)    loans to officers, directors and employees not to exceed $10,000,000 at
any time outstanding;
(l)    so long as the Payment Conditions are satisfied both before and after
giving effect to such Investments, AbitibiBowaterResolute and its Subsidiaries
may make additional Investments not otherwise permitted under this
Section 10.03;
(m)    Investments constituting Guarantees permitted under Section 10.01 and
Investments permitted under Section 10.04(e);
(n)    Investments described on Schedule 10.03;
(o)    Investments consisting of Hedging Agreements permitted hereunder;
(p)    Investments consisting of the acquisition or redemption of Equity
Interests of Augusta Newsprint not owned on the Closing Date by
AbitibiBowaterResolute or any of its Subsidiaries; provided that the
consideration payable by any Loan Party for such acquisition shall consist
exclusively of (i) Equity Interests of AbitibiBowaterResolute, (ii) cash
generated by Augusta Newsprint and distributed to such Loan Party either (x)
prior to the payment of such consideration or (y) within two Business Days
following such acquisition of redemption (in the case of this clause (y) in an
amount not greater than the amount of cash held by Augusta at the time of such
acquisition or redemption) and/or (iii) promissory notes made by Augusta
Newsprint that are non-recourse to any Loan Party or to any Subsidiary of any
Loan Party (other than Augusta Newsprint)

-166-

--------------------------------------------------------------------------------

 

or to any of their respective assets (other than the assets or Equity Interests
of Augusta Newsprint); and
(q)    other Investments in an aggregate amount not to exceed
$25,000,00035,000,000 during the term of the Agreement.
10.04.    Mergers, Consolidations, Sales of Assets and Acquisitions. Merge into
or amalgamate or consolidate with any other Person, or permit any other Person
to merge into or amalgamate or consolidate with it, or sell, transfer, assign,
lease, sublease or otherwise dispose of (in one transaction or in a series of
transactions) all or substantially all of its assets (when taken as a whole in
combination with the other assets and properties of AbitibiBowaterResolute, each
Borrower and their respective Subsidiaries), or purchase, lease or otherwise
acquire (in one transaction or a series of transactions) all or substantially
all of the assets of any other Person or of a division or other business unit of
any other Person (an “Acquisition”), except:
(a)    (i) any Domestic Subsidiary of AbitibiBowaterResolute may merge into or
consolidate with, liquidate or dissolve into, or sell, transfer, assign, lease,
sublease or otherwise dispose of all or substantially all of its assets to,
AbitibiBowaterResolute or any other Domestic Subsidiary of
AbitibiBowaterResolute, (ii) any Canadian Subsidiary of AbitibiBowaterResolute
may merge into or consolidate or amalgamate with, liquidate or dissolve into, or
sell, transfer, assign, lease, sublease or otherwise dispose of all or
substantially all of its assets to, any other Canadian Subsidiary of
AbitibiBowater; andResolute, (iii) any OverseasEnglish Subsidiary of
AbitibiBowaterResolute may merge into or consolidate or amalgamate with,
liquidate or dissolve into, or sell, transfer, assign, lease, sublease or
otherwise dispose of all or substantially all of its assets to,
AbitibiBowaterany Canadian Subsidiary or any other English Subsidiary of
Resolute; and (iv) any Overseas Subsidiary of Resolute may merge into or
consolidate or amalgamate with, liquidate or dissolve into, or sell, transfer,
assign, lease, sublease or otherwise dispose of all or substantially all of its
assets to, Resolute or any other Subsidiary of AbitibiBowaterResolute; provided
that, in each case, (1) if such transaction is between AbitibiBowaterResolute
and a Subsidiary, then AbitibiBowaterResolute must be the Person surviving such
transaction, (2) if such transaction is between a Borrower and a Subsidiary that
is not a Borrower, then the Person surviving such transaction must be a
Borrower, (3) if such transaction is between a Guarantor and a Subsidiary that
is neither a Borrower nor a Guarantor, then the Person surviving such
transaction must be a Guarantor, (4) if AbitibiBowaterResolute is not a party to
such transaction, the Person surviving such a transaction must be a Wholly-Owned
Subsidiary of AbitibiBowaterResolute, (5) if any Person other than a
Wholly-Owned Domestic Subsidiary of AbitibiBowaterResolute or Wholly-Owned
Canadian Subsidiary of AbitibiBowaterResolute, as the case may be, receives any
consideration, such transaction is also permitted by Section 10.03 and, (6) the
Person surviving such transaction shall, at the time of such merger or
consolidation, to the extent required , be in compliance with the requirements
of Section 9.09; and (7) if such transaction involves an English Loan Party, the
Administrative Agent shall have received evidence reasonably satisfactory to it
either (x) of the continued validity and perfection of the Liens on the
Collateral of such English Loan Party or (y) that Excess Availability
(determined solely with respect to the Canadian Facility) is no less than $0.

-167-

--------------------------------------------------------------------------------

 

(b)    purchases of inventory, equipment, real property and other assets in the
ordinary course of business;
(c)    Investments permitted by Section 10.03;
(d)    Sales of assets permitted under Sections 10.10 or 10.12; and
(e)    any Loan Party may acquire all or substantially all of the assets of a
Person or line of business, unit or division of such Person, or not less than
100% of the Equity Interests of such a Person (other than directors’ qualifying
shares) (in each case referred to herein as the “Acquired Entity”), provided
that (x) the aggregate acquisition amount is less than $50,000,000 or, (y) if
the aggregate acquisition amount is $50,000,000 or more, (i) all of the assets
of the Acquired Entity, or line of business, unit or division of such Acquired
Entity shall be primarily located in the United States or Canada, (ii)  the
Acquired Entity shall be in a similar line of business as that of
AbitibiBowaterResolute and its Subsidiaries, (iii) the acquisition shall not be
preceded by, or effected pursuant to, an unsolicited tender offer or proxy
solicitation, (iv) at the time of such transaction both before and immediately
after giving effect thereto, no Event of Default or Default shall have occurred
and be continuing, (v) the Permitted Acquisition Payment Conditions are
satisfied at the time of such acquisition and after giving pro forma effect
thereto and (vi) uponwithin thirty (30) days after the consummation of such
acquisition (or such longer time as the Administrative Agent may approve), the
Acquired Entity and each Domestic Subsidiary and Canadian Subsidiary of
AbitibiBowaterResolute thereof shall become a Loan Party if such Acquired Entity
or Subsidiary would be a Material Subsidiary based on a pro forma calculation
for the most recent period of four consecutive fiscal quarters in respect of
which financial statements have been delivered; and AbitibiBowaterResolute and
each Borrower shall comply, and shall cause their respective Subsidiaries to
comply, with the other provisions of Section 9.09 applicable to such Acquired
Entity or Subsidiary, or to its Equity Interests, substantially concurrently
with the consummation of such acquisition or by such later date reasonably
agreed by the Administrative Agent with respect to specific compliance items
(any acquisition of an Acquired Entity meeting all of the criteria set forth in
this paragraph (e) being referred to herein as a “Permitted Acquisition”).
10.05.    Restricted Payments. (a) Declare or make, directly or indirectly, any
Restricted Payment or set aside any amount for any such purpose unless the
Payment Conditions are satisfied both before and after giving effect to such
Restricted Payment.
(b)    Notwithstanding the provisions of paragraph (a) above:
(i)    theThe transactions contemplated by the Plan of Reorganization and/or the
CCAA Plan to occur on or prior to the Effective Date may be consummated on or
prior to the Effective Date;
(ii)    so long as no Default or Event of Default shall have occurred and be
continuing, AbitibiBowaterResolute may make Restricted Payments for the
repurchase, retirement or other acquisition for value of Equity Interests of
AbitibiBowaterResolute held by any future, present or former employee or
director of AbitibiBowaterResolute or any of its Subsidiaries pursuant to any
employee or director equity plan, employee or director stock option plan or

-168-

--------------------------------------------------------------------------------

 

any other employee or director benefit plan of AbitibiBowaterResolute or its
Subsidiaries, provided that the aggregate price paid for all such repurchased,
redeemed, acquired or retired Equity Interests may not exceed $5,000,000 in any
twelve-month period; provided, further, that such amount in any twelve-month
period may be increased by an amount not to exceed: (a) the cash proceeds from
the sale of Equity Interests (other than Disqualified Stock) of
AbitibiBowaterResolute and, to the extent contributed to AbitibiBowaterResolute
as common equity capital, the cash proceeds from the sale of Equity Interests of
any of AbitibiBowaterResolute’s direct or indirect parent companies, in each
case to members of management, directors or consultants of
AbitibiBowaterResolute, any of its Subsidiaries or any of its direct or indirect
parent companies that occurs after the date hereof; plus (b) the cash proceeds
of key man life insurance policies received by AbitibiBowaterResolute or any
other Loan Party after the date hereof; and
(iii)    AbitibiBowaterResolute or its Subsidiaries may acquire the minority
interest of any Subsidiary of AbitibiBowaterResolute held by Persons not
Affiliates of AbitibiBowaterResolute, to the extent permitted by Section 10.03
and
(iv)    AbitibiBowaterResolute or any Subsidiary may make payments of dividends
on Disqualified Equity Interests issued in accordance with Section 10.01.
10.06.    Transactions with Stockholders and Affiliates. Except to the extent
specifically permitted by the terms of this Agreement, directly or indirectly
enter into or permit to exist any transaction (including the purchase, sale,
lease or exchange of any property or the rendering of any service) with any
holder of 10% or more of any class of the Equity Interests of such Person or
with any Affiliate of such Person or of any such holder, on terms that are less
favorable to such Person than those that could be obtained at the time from
Persons that are not such a holder or Affiliate, provided that the foregoing
restriction shall not apply to (a) any transaction between or among the Loan
Parties or any transaction between or among Overseas Subsidiaries of
AbitibiBowaterResolute or any transaction between or among Canadian Subsidiaries
(other than Loan Parties) or among English Subsidiaries (other than Loan
Parties), (b)  transactions with any Person that is an Affiliate by reason of
the ownership by AbitibiBowaterResolute or any of its Subsidiaries of Equity
Interests of such Person, (c) customary fees paid, and reimbursement of
reasonable expenses, to members of the board of directors of
AbitibiBowaterResolute or any of its Subsidiaries, (d) customary compensation
(including salaries and bonuses) paid, and reimbursement of reasonable expenses,
to officers and employees of AbitibiBowaterResolute or any Subsidiary of
AbitibiBowater,Resolute and (e) the transactions effected on the Effective Date
in connection with the effectiveness of, and pursuant to the terms of, the Plan
of Reorganization.
10.07.    Business. Engage at any time in any business other than the forest
products, paper products, energy and recycling industries (including, without
limitation, the manufacturing and production of paper, packaging products and
wood pulp) and any business or other activities that are reasonably similar,
ancillary, complementary or related to, or a reasonable extension, development
or expansion of, such businesses.
10.08.    Limitations on Debt Prepayments. Optionally prepay, repurchase or
redeem or otherwise optionally defease or segregate funds with respect to
(collectively, “prepay”) any Senior

-169-

--------------------------------------------------------------------------------

 

Secured Notes or other Indebtedness; provided, however, that the foregoing will
not prohibit (i) any refinancing of such Indebtedness pursuant to the issuance
of Permitted Refinancing Indebtedness with respect thereto that is otherwise
permitted by this Agreement, (ii) the transactions effected on the Effective
Date in connection with the effectiveness of, and pursuant to the terms of, the
Plan of Reorganization or the CCAA Plan, (iii) prepayments of Indebtedness owed
between AbitibiBowaterResolute and its Subsidiaries, (iv) prepayments,
repurchases, redemptions or defeasances of Indebtedness with shares of common
stock of AbitibiBowaterResolute or out of the Net Proceeds from the sale of
common stock of AbitibiBowaterResolute or (v) any other prepayment, repurchase,
redemption or defeasance of Indebtedness so long as the Payment Conditions are
satisfied both before and after giving effect to such prepayment, repurchase,
redemption or defeasance, as the case may be.
10.09.    Amendment of Certain Documents. (a) Amend, modify or solicit any
waiver with respect to any indenture, note or any other instrument evidencing
Indebtedness of AbitibiBowaterResolute or any Subsidiary of
AbitibiBowaterResolute in an aggregate principal amount in excess of $50,000,000
(other than any such Indebtedness owed to AbitibiBowaterResolute or any
Subsidiary of AbitibiBowaterResolute), if such amendment, modification, or
waiver has the effect of (i) increasing the amounts due in respect of any such
indenture, note or other instrument or, other than with respect to the Senior
Secured Notes, any interest rate thereunder, unless any such increase in amount
would be permitted under Section 10.01 and except that any increase in any
interest rate resulting from such amendment or modification will be permitted
if, after giving pro forma effect thereto, AbitibiBowaterResolute could incur at
least $1.00 of additional indebtedness under the Incurrence Test,
(ii) subjecting any property of AbitibiBowaterResolute or any Subsidiary of
AbitibiBowaterResolute to any Lien, other than Liens permitted under
Section 10.02, (iii) shortening the maturity or weighted average life of any
such Indebtedness or (iv) creating or changing covenants, events of default and
other terms and conditions such that the covenants, events of default and other
terms and conditions become materially more adverse, when taken as a whole, to
the Lenders.
(b)    Cause or suffer to exist any amendment, restatement, supplement or other
modification to the certificate of incorporation (including any certificate of
designation with respect to any preferred stock) or by‑laws of (or, in each case
an equivalent organizational document) AbitibiBowaterResolute or any Subsidiary
of AbitibiBowaterResolute without the prior written consent of the Required
Lenders, unless such amendment, restatement, supplement or modification is not
materially adverse to the interests of the Lenders hereunder or under the other
Loan Documents.
10.10.    Limitation on Dispositions of Stock of Subsidiaries. Directly or
indirectly sell or otherwise dispose of, or permit any Subsidiary of
AbitibiBowaterResolute to issue to any other Person (other than to any other
Loan Party or a Wholly-Owned Subsidiary of AbitibiBowaterResolute), any Equity
Interests of any Subsidiary of AbitibiBowaterResolute, except issuances to
qualified directors if and to the extent required by applicable law, provided
that nothing in this Section 10.10 shall prohibit (i) any disposition or
issuance permitted by Sections 10.04 and 10.12 if such disposition or issuance
is structured as the disposition or issuance of stock or other Equity Interests,
(ii) the issuance of Disqualified Equity Interests permitted by

-170-

--------------------------------------------------------------------------------

 

Section 10.01 or (iii) the issuance of Equity Interests on a pro rata basis to
its equity holders by any Non-Wholly-Owned Subsidiary of AbitibiBowaterResolute.
10.11.    Restrictions on Ability of Subsidiaries to Pay Dividends. Permit any
Subsidiary of AbitibiBowaterResolute to, directly or indirectly, voluntarily
create or otherwise voluntarily cause or suffer to exist or become effective any
encumbrance or restriction on the ability of any Subsidiary of
AbitibiBowaterResolute to (a) pay dividends or make any other distributions on
its capital stock or any other interest or (b) make or repay loans or advances
to any Loan Party, except for (i) encumbrances or restrictions under this
Agreement and the other Loan Documents, (ii) encumbrances or restrictions under
the Senior Secured Notes Documents as in effect on the Sixth Amendment Effective
Date (and under the Senior Secured Notes Documents as amended from time to time
or any Permitted Refinancing Indebtedness in respect thereof, in each case, so
long as the encumbrances and restrictions thereunder are no more onerous, when
taken as a whole, to any Subsidiary of AbitibiBowaterResolute than those
contained in the Senior Secured Notes Documents as in effect on the Sixth
Amendment Effective Date), (iii) customary encumbrances or restrictions in joint
venture agreements, asset sale agreements, sale-leaseback agreements, stock sale
agreements and other similar agreements, which restrictions relate solely to the
activities of such joint venture or are otherwise applicable only to the assets
that are the subject to such agreement or, (iv) customary encumbrances or
restrictions contained in sales of, or in agreements relating to the sale of
Equity Interests or assets of any Subsidiary of AbitibiBowaterResolute pending
such sale, provided that such encumbrances and restrictions apply only to the
Subsidiary of AbitibiBowaterResolute to be sold and such sale is permitted
hereunder, (v) any such agreement imposed in connection with consignment
agreements entered into in the ordinary course of business; (vi) any such
restriction contained in agreements pertaining to Indebtedness of Excluded
Subsidiaries permitted hereunder, (vii) customary anti-assignment provisions
contained in agreements entered into in the ordinary course of business; (viii)
customary subordination of subrogation, contribution and similar claims
contained in guaranties permitted hereunder; (ix) encumbrances described on
Schedule 10.12, (x) on cash deposits or other deposits imposed by customers
under contracts entered into in the ordinary course of business, (xi) on the
transfer, lease, or license of any property or asset of any Loan Party in effect
on the Closing Date that were entered into in the ordinary course of business,
and (xii) encumbrances or restrictions in documents governing Indebtedness
assumed or incurred under Section 10.01(i) or existing with respect to any
Person or the property or assets of such Person acquired by
AbitibiBowaterResolute or any Subsidiary of AbitibiBowaterResolute in an
acquisition permitted hereunder, provided that such encumbrances and
restrictions are not applicable to any Person or the property or assets of any
Person other than such acquired Person or the property or assets of such
acquired Person.
10.12.    Disposition of Collateral and Other Assets. (a) Except for any
transfer or disposition permitted by paragraph (b) below, sell, lease, assign,
transfer or otherwise dispose of any asset or assets, in a single transaction or
a series of related transactions, having a fair market value in excess of
$15,000,000, unless (i) fair market value is received for such asset (such fair
market value to be determined by the board of directors of
AbitibiBowaterResolute or any applicable Subsidiary of AbitibiBowaterResolute in
the exercise of its reasonable judgment in the case of any asset or assets with
a fair market value in excess of $20,000,000), (ii) except in the case of any
Asset Exchange, if the fair market value of such asset or assets is in excess of
$15,000,000, at least 75%

-171-

--------------------------------------------------------------------------------

 

of the consideration received by AbitibiBowaterResolute and the Subsidiaries of
AbitibiBowaterResolute for such asset or assets shall be in cash, cash
equivalents and readily marketable securities and (iii) except in the case of
any Asset Exchange, any non-cash consideration shall consist of debt obligations
of the purchaser, provided that the foregoing shall not restrict
AbitibiBowaterResolute or any Subsidiary of AbitibiBowaterResolute from
receiving debt obligations of the purchaser in an aggregate principal amount not
in excess of $10,000,000 in connection with any single transaction or series of
related transactions.
(b)    Notwithstanding anything to the contrary in this Agreement,
AbitibiBowaterResolute shall not transfer any of its assets to any Subsidiary of
AbitibiBowaterResolute and none of the Subsidiaries of AbitibiBowaterResolute
shall transfer any of its assets to any other Subsidiary of
AbitibiBowaterResolute unless (i) in the case of any asset or assets
constituting Collateral, such asset or assets is transferred to a Loan Party and
the Administrative Agent is satisfied that the Liens created under the Security
Documents on such asset or assets shall be in full force and effect, or
(ii) such transfer is permitted as an Investment under Section 10.03, is
permitted under Section 10.04 or is a sale in the ordinary course of business on
terms that are not less favorable to the seller than those that could be
obtained at the time from Persons that are not such a Subsidiary of
AbitibiBowaterResolute.
10.13.    Accounting Changes; Fiscal Year. Make any change in (i) accounting
policies or reporting practices, except as permitted or required by GAAP or (ii)
the fiscal year or fiscal quarters of AbitibiBowaterResolute.
10.14.    Material Subsidiaries. (a) Permit, as of the date on which financial
statements with respect to the fiscal quarter of AbitibiBowater most-recently
ended are delivered (or, if not delivered by such date, on the date required to
have been delivered) pursuant to Section 9.04(a) or (b) hereof, the sum of (i)
the individual revenues and assets of AbitibiBowater and each Subsidiary of
AbitibiBowater that is a Loan Party and (ii) the revenues and assets of each
Foreign Subsidiary of AbitibiBowater at least 65% of the voting stock and all of
the non-voting Equity Interests of which has been pledged by a U.S. Loan Party
as Collateral to secure the U.S. Secured Obligations and of such Foreign
Subsidiary’s Subsidiaries, calculated on a consolidated basis, in each case for
or as of the end of the most recent period of four consecutive fiscal quarters
in respect of which financial statements have been (or were required to have
been) delivered, when taken together, to account for less than 90% of
AbitibiBowater’s consolidated revenues (excluding revenues of Excluded
Subsidiaries and Joint Venture Subsidiaries) for, or less than 90% of
AbitibiBowater’s consolidated assets (excluding assets of Excluded Subsidiaries
and Joint Venture Subsidiaries) at the close of, such period of four consecutive
fiscal quarters.[Reserved].
(b)    Permit on any day in any fiscal quarter of AbitibiBowaterResolute, the
aggregate amount of cash held by U.S. and Canadian Subsidiaries of
AbitibiBowaterResolute (other than Excluded Subsidiaries) or any English
Subsidiary of Resolute that is a Guarantor hereunder in deposit accounts (other
than Excluded Accounts, the Note Collateral Account, the CIBC Cash Collateral
Account and the Specified Collection Accounts) that are not subject to Control
Agreements to exceed $10,000,000, unless, in the case of any U.S. or Canadian
Subsidiary of Resolute, during the 30-day period after the last day of such
fiscal quarter, one or more of such U.S. and Canadian

-172-

--------------------------------------------------------------------------------

 

Subsidiaries of AbitibiBowaterResolute are designated by AbitibiBowaterResolute
as a Material Subsidiary pursuant to clause (c) of the definition thereof and
enter into Control Agreements, with respect to their deposit accounts referred
to above, so that, if such Control Agreement has been in effect at all times
during such fiscal quarter, such $10,000,000 threshold would not have been
exceeded on any day.
10.15.    Consolidated Fixed Charge Coverage Ratio. During each Compliance
Period, AbitibiBowaterResolute shall not permit the Consolidated Fixed Charge
Coverage Ratio for any Test Period to be less than 1.00:1.00.
10.16.    No Additional Deposit Accounts; etc. Each of AbitibiBowaterResolute
and each other Borrower will not, and will not permit any other Loan Party to,
directly or indirectly, open, maintain or otherwise have any checking, savings,
deposit, securities or other accounts at any bank or other financial institution
where cash or Permitted Investments are or may be deposited or maintained with
any Person, other than (a) the Core Concentration Accounts set forth on Part A
of Schedule 10.16, (b) the Collection Accounts set forth on Part B of Schedule
10.16, (c) the other Deposit Accounts set forth on Part C of Schedule 10.16, (d)
the Excluded Accounts (which, in accordance with Section 9.12(b), shall be set
forth on Part D of Schedule 10.16) and the Specified Collection Accounts and,
(e) the securities accounts or commodities accounts set forth in Part E of
Schedule 10.16 and (f) the Designated Blocked Accounts; provided that any such
Loan Party may open a new Core Concentration Account, Collection Account, other
Deposit Account, securities account or commodities account not set forth in such
Schedule 10.16, so long as prior to(i) within 90 days of opening any such
account (i) AbitibiBowateror, if Excess Availability at the time such account is
opened is less than $150 million, within 30 days of opening any such account),
Resolute has delivered an updated Schedule 10.16 to the Administrative Agent
listing such new account (other than an Excluded Account) and (ii) prior to
depositing funds into any such new account (other than funds used to open such
new account), in the case of any new Core Concentration Account, Collection
Account, other Deposit Account, securities account or commodities account (other
than an Excluded Account and other than the Note Collateral Account), the
financial institution with which such account is opened, together with the
applicable Loan Party which has opened such account and the applicable Loan
Party shall have executed and delivered to the Administrative Agent a Control
Agreement reasonably acceptable to the Administrative Agent (or in the case of a
securities account, such other control agreement as may be reasonably
satisfactory to the Administrative (which agreement may also be for the benefit
of the Notes Agent); provided further that no Designated Blocked Account shall
be established other than in compliance with Section 5.04.
10.17.    Canadian Pension Plans and Canadian Benefit Plans. (a) Make any
amendment to the defined benefit provisions of a Canadian Pension Plan of any
Loan Party (including, without limitation, by changing the benefits under any
such Canadian Pension Plan) in a manner which (i)  increases the quantum of
contributions or other funding to be made thereunder, or (ii)  increases or
could result in an increase in the amount of any solvency deficiency or going
concern unfunded liability thereunder; in each case, in an aggregate amount in
excess of $50,000,000 or which, in the sole discretion of the Collateral Agent,
compromises the priority of the security granted to it, except where such
amendment is required by applicable law.

-173-

--------------------------------------------------------------------------------

 

(b)    Except as contemplated by the Plans, establish a new “registered pension
plan”, as defined in subsection 248(1) of the ITA, which contains a “defined
benefit provision”, as defined in subsection 147.1(1) of the ITA (other than a
plan that provides only a “target benefit” or a “multi-employer pension plan”,
both as defined in the Pension Benefits Act (Ontario), or an equivalent plan
under the pension standards legislation of any other applicable jurisdiction in
Canada, where employer contributions to such target benefit or multi-employer
pension plan are determined solely by reference to a participation agreement,
collective agreement, or other agreement negotiated with the bargaining agent or
other representative of the employees participating in such plan and the
employer has no liability for or obligation to fund any funding deficiency under
such plan upon termination of the plan in whole or in part or upon the
withdrawal of an employer from such plan).
(c)    Commence participation in any “multi-employer pension plan”, as defined
in the Pension Benefits Act (Ontario), or an equivalent plan under pension
standards legislation of any other applicable jurisdiction in Canada, except
where employer contributions to such multi-employer pension plan or equivalent
plan are determined solely by reference to a participation agreement, collective
agreement, or other agreement negotiated with the bargaining agent or other
representative of the employees participating in such plan and the employer has
no liability for or obligation to fund any funding deficiency under such plan
upon termination of the plan in whole or in part or upon the withdrawal of an
employer from such plan, without the prior written consent of the Administrative
Agent.
(d)    Without the prior written consent of the Administrative Agent (not to be
unreasonably withheld) (i) terminate an Ontario Pension Plan, or take any action
(or omit to take any action) which could reasonably be expected to allow a
Governmental Authority to order the termination of any Ontario Pension Plan in
whole if such Ontario Pension Plan has a solvency funding deficiency in excess
of $50,000,000 or (ii) terminate any other Canadian Pension Plan in whole or in
part, or take any action which could reasonably be expected to allow a
Governmental Authority to order the termination of any other Canadian Pension
Plan in whole or in part, if such termination could reasonably be expected to
have a Material Adverse Effect.
(e)    Fail to make full payment when due of all amounts which, under the
provisions of any Canadian Pension Plan, any funding agreement relating thereto,
any applicable collective bargaining agreement or applicable law (including the
Canadian Pension Regulations), the Canadian Subsidiaries of
AbitibiBowaterResolute are required to pay or remit thereto (whether as
contributions or otherwise).
(f)    Without the prior written consent of the Administrative Agent (not to be
unreasonably withheld), except as is required by Section 10.17(e) and except for
purposes of permitting commuted value transfers under applicable pension
standards legislation in circumstances other than a partial plan termination,
the Canadian Subsidiaries of AbitibiBowaterResolute shall not make any
contribution or other payment to the Canadian Pension Plans in excess of
$50,000,000 more than the minimum amount thereof required to be made under
applicable law (including the Canadian Pension Regulations).
(g)    Consummate any transaction that would result in any Person not already a
Subsidiary becoming a Subsidiary if (i) such Person sponsors, maintains or
contributes to an Ontario Pension

-174-

--------------------------------------------------------------------------------

 

Plan and (ii) a funding deficiency in excess of $100,000,000 (determined as of
the most recent valuation of such plan prepared prior to the date of such
transaction) exists with respect to such Ontario Pension Plan, without the prior
consent of the Administrative Agent (not to be unreasonably withheld).
10.18.    ERISA No Borrower shall, nor shall it permit any ERISA Affiliate to,
directly or indirectly, at any time permit any ERISA Event to occur which could,
individually or in the aggregate with any other ERISA Event that has occurred,
reasonably be expected to result in a Material Adverse Effect.
SECTION 11. Events of Default
11.01.    Events of Default. From and after the Effective Date (and, for the
avoidance of doubt, including for the purpose of determining the occurrence of
the Effective Date), upon the occurrence of any of the following specified
events (each, an “Event of Default”):
(a)    any representation or warranty made or deemed made in any Loan Document,
or any representation, warranty, statement or information contained in any
report, certificate, financial statement or other instrument furnished pursuant
to any Loan Document, shall prove to have been false or misleading in any
material respect, or in the case of any representation or warranty that is
qualified as to “materiality”, “Material Adverse Effect” or similar language,
shall prove to have been false or misleading in any respect, when so made,
deemed made or furnished;
(b)    default shall be made in the payment of any principal of (or Face Amount
of in the case of any B/A Instrument) any Loan, Note or Unpaid Drawing when and
as the same shall become due and payable, whether at the due date thereof or at
a date fixed for prepayment thereof or by acceleration thereof or otherwise;
(c)    default shall be made in the payment of any interest on any Loan, Note or
Unpaid Drawing or any Fee or any other amount (other than an amount referred to
in paragraph (b) above) due under any Loan Document, when and as the same shall
become due and payable, and such default shall continue unremedied for a period
of three Business Days;
(d)    default shall be made in the due observance or performance by
AbitibiBowaterResolute or any other Borrower of any covenant, condition or
agreement contained in Section 9.01 (with respect to AbitibiBowaterResolute or
any other Borrower), 9.02, 9.04(h), 9.04(i), 9.04(l), 9.05(a), 9.05(f), 9.07,
9.12, 9.13(b) or in Section 10;
(e)    default shall be made in the due observance or performance by any Loan
Party or any of their respective Subsidiaries of any covenant, condition or
agreement contained in any Loan Document (other than those defaults specified in
paragraph (b), (c) or (d) above) and such default shall continue unremedied for
a period of 30 days (or 15 days solely in the case of Section 9.04(a), 9.04(b),
9.04(c), 9.04(d) or 9.13(a), 9.13(c) or 9.13(d)) after the earlier of (i) actual
knowledge thereof on the part of a Responsible Officer of a Loan Party or (ii)
written notice thereof from the Administrative Agent at the request of any
Lender to AbitibiBowaterResolute;

-175-

--------------------------------------------------------------------------------

 

(f)    AbitibiBowaterResolute, any other Borrower or any Subsidiary of
AbitibiBowaterResolute (other than a Joint Venture Subsidiary or an Excluded
Subsidiary) shall (i) fail to pay any principal or interest, regardless of
amount, due in respect of any Material Indebtedness, when and as the same shall
become due and payable (after giving effect to any applicable grace or notice
and cure period), or (ii) fail to observe or perform any other term, covenant,
condition or agreement contained in any agreement or instrument evidencing or
governing any such Material Indebtedness (after giving effect to any applicable
grace or notice and cure period), if the effect of any failure referred to in
this clause (ii) is to cause, or to permit the holder or holders of such
Indebtedness or a trustee on its or their behalf to cause, such Material
Indebtedness to become due prior to its stated maturity, provided that this
paragraph (f) shall not apply to secured Material Indebtedness that becomes due
as a result of the voluntary sale or transfer of the property or asset securing
such Indebtedness;
(g)    at any time after the Effective Date, an involuntary proceeding shall be
commenced or an involuntary petition shall be filed in a court of competent
jurisdiction seeking (i) relief in respect of AbitibiBowaterResolute, any other
Borrower, any other Loan Party or any Material Subsidiary of
AbitibiBowaterResolute (other than a Joint Venture Subsidiary or an Excluded
Subsidiary), or of a substantial part of the property or assets of any such
Person, under any Insolvency Law, (ii) the appointment of a receiver, interim
receiver, receiver and manager, trustee, custodian, sequestrator, conservator or
similar official for any such Person or for a substantial part of the property
or assets of any such Person or (iii) the winding‑up or liquidation of any such
Person; and such proceeding or petition shall continue undismissed for 60 days
or an order or decree approving or ordering any of the foregoing shall be
entered;
(h)    AbitibiBowaterResolute, any other Borrower, any other Loan Party or any
Material Subsidiary of AbitibiBowaterResolute (other than a Joint Venture
Subsidiary or an Excluded Subsidiary) shall (i) voluntarily commence any
proceeding or file any petition seeking relief under any Insolvency Law,
(ii) consent to the institution of, or fail to contest in a timely and
appropriate manner, any proceeding or the filing of any petition described in
paragraph (g) above, (iii) apply for or consent to the appointment of a
receiver, interim receiver, receiver and manager, trustee, custodian,
sequestrator, conservator or similar official for any such Person or for a
substantial part of the property or assets of any such Person, (iv) file an
answer admitting the material allegations of a petition filed against it in any
such proceeding, (v) make a general assignment for the benefit of creditors,
(vi) become unable, admit in writing its inability or fail generally to pay its
debts as they become due or (vii) take any action for the purpose of effecting
any of the foregoing;
(i)    one or more judgments for the payment of money, individually or in the
aggregate, in an amount in excess of $25,000,000 (in each case to the extent not
adequately covered by insurance proceeds as to which the insurance company has
acknowledged coverage pursuant to a writing reasonably satisfactory to the
Administrative Agent), shall be rendered against AbitibiBowaterResolute, any
other Borrower (other than a Joint Venture Subsidiary or an Excluded Subsidiary)
or any of their respective Subsidiaries or any combination thereof and the same
shall remain undischarged for a period of 30 consecutive days during which
execution shall not be effectively stayed, vacated, discharged or satisfied;

-176-

--------------------------------------------------------------------------------

 

(j)    an ERISA Event shall have occurred that, when taken together with all
other ERISA Events that have occurred, could reasonably be expected to result in
a Material Adverse Effect;
(k)    the termination, in whole or in part, of any Canadian Pension Plan or any
other event with respect to any Canadian Pension Plan which, when taken together
with all other terminations of Canadian Pension Plans and other events with
respect to Canadian Pension Plans that have occurred, could reasonably be
expected to result in a Material Adverse Effect;
(l)    there shall have occurred a Change in Control;
(m)    any Lien purported to be created by any Security Document shall cease to
be, or shall be asserted by any Loan Party not to be, a valid, perfected first
priority (or, in the case of the Notes Priority Collateral, second priority, but
second in priority only in respect of the obligations under the Senior Secured
Notes) Lien on (i) any Collateral (except as otherwise expressly provided in
this Agreement or such Security Document) with a fair market value or book value
(whichever is greater) in excess, individually or in the aggregate, of
$10,000,000, or (ii) any ABL Priority Collateral (except as otherwise expressly
provided in this Agreement or such Security Document) with a fair market value
or book value (whichever is greater) in excess, individually or in the
aggregate, of $5,000,000, in each case, except to the extent that any such loss
of perfection, priority or rank results from the failure of the Collateral Agent
to maintain possession of certificates representing securities pledged under the
Security Documents or otherwise take any action within its control (including
the filing of UCC continuation statements or similar filings or registrations
under the applicable laws of any other jurisdiction); provided that in the case
of the failure of any such Lien to be a valid, perfected first (or second)
priority Lien, which failure is susceptible of cure, such failure shall have
continued without cure for a period of 10 days after the earlier of (x) actual
knowledge thereof on the part of a Responsible Officer of a Loan Party or (y)
written notice thereof from the Administrative Agent at the request of any
Lender to AbitibiBowaterResolute;
(n)    any Loan Document shall not be for any reason (other than by reason and
in respect of provisions thereof which are not permitted by applicable law), or
shall be asserted by the Loan Party (except as otherwise expressly provided in
this Agreement or such Loan Document) not to be, in full force and effect and
enforceable in all material respects in accordance with its terms;
(o)    the Loan Document Obligations shall cease to constitute, or shall be
asserted by any Loan Party (except as otherwise expressly provided in this
Agreement or such Loan Document) not to constitute, senior indebtedness under
the subordination provisions of any subordinated Indebtedness of any Loan Party,
or any such subordination provisions shall be invalidated or otherwise cease to
be a legal, valid and binding obligation of the parties thereto, enforceable in
accordance with its terms; or
(p)    there shall have occurred any Insurance Policy Event;
then, and in any such event, and at any time thereafter, if any Event of Default
shall then be continuing, the Administrative Agent, upon the written request of
the Required Lenders, shall by written notice to the Borrowers, take any or all
of the following actions, without prejudice to the rights of the Administrative
Agent, any Lender or the holder of any Note to enforce its claims against any
Loan

-177-

--------------------------------------------------------------------------------

 

Party (provided that, if an Event of Default specified in Section 11.01(g) or
(h) shall occur with respect to any Borrower, the result which would occur upon
the giving of written notice by the Administrative Agent as specified in clauses
(i) and (ii) below, shall occur automatically without the giving of any such
notice): (i) declare the Total Commitment terminated, whereupon all the
Commitments of each Lender shall forthwith terminate immediately and any
Commitment Fees shall forthwith become due and payable without any other notice
of any kind; (ii) declare the principal (and Face Amounts in the case of any B/A
Instrument) of and any accrued interest in respect of all Loans and the Notes
and all Obligations owing hereunder and thereunder to be, whereupon the same
shall become, forthwith due and payable without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by each Loan Party;
(iii) terminate any Letter of Credit which may be terminated in accordance with
its terms; (iv) (x) direct the U.S. Borrowers to pay (and the U.S. Borrowers
jointly and severally agree that upon receipt of such notice, or upon the
occurrence of an Event of Default specified in Section 11.01(g) or (h) with
respect to any U.S. Borrower, they will pay) to the Collateral Agent at the
Payment Office such additional amount of cash or Permitted Investments, to be
held as security by the Collateral Agent, as is equal to the aggregate stated
amounts of all Letters of Credit issued for the account of any U.S. Borrower and
then outstanding and (y) direct the Canadian Borrowers to pay (and the Canadian
Borrowers jointly and severally agree that upon receipt of such notice, or upon
the occurrence of an Event of Default specified in Section 11.01(g) or (h) with
respect to any Canadian Borrower, they will pay) to the Collateral Agent at the
Payment Office such additional amount of cash or Permitted Investments, to be
held as security by the Collateral Agent, as is equal to the aggregate stated
amounts of all Letters of Credit issued for the account of any Canadian Borrower
and then outstanding; (v) subject to the terms of the Intercreditor Agreementany
applicable intercreditor agreement, enforce, as Collateral Agent, all of the
Liens and security interests created pursuant to the Security Documents; (vi)
enforce the guarantee under the Guarantee and Collateral Agreement or, the
Canadian Guarantee and Collateral Agreement or the English Subsidiary Guarantee
Agreement; and (vii) apply any cash collateral held by the Administrative Agent
pursuant to Section 5.02 to the repayment of the Obligations.
11.02.    Application of Proceeds. (a) Subject to the terms of the Intercreditor
Agreementany applicable intercreditor agreement, upon the exercise of any of the
remedies provided in the last paragraph of Section 11.01, all moneys collected
by the Administrative Agent or the Collateral Agent (or, to the extent any
Security Document executed by a Loan Party requires proceeds of collateral
thereunder to be applied in accordance with the provisions of this Agreement,
the pledgee, assignee, mortgagee or other corresponding party under such
Security Document) upon any sale or other disposition of the Collateral,
together with all other moneys received by the Administrative Agent or the
Collateral Agent hereunder (or, to the extent any Security Document executed by
a Loan Party requires proceeds of collateral thereunder to be applied in
accordance with the provisions of this Agreement, the pledgee, assignee,
mortgagee or other corresponding party under such Security Document) upon any
exercise of remedies hereunder, shall be applied, notwithstanding anything to
the contrary in Sections 5.03(e) and5.03(f), 5.03(g) and 5.03(g), as follows:
(i)    first, to all amounts owing to the Collateral Agent pursuant to any of
the Loan Documents in its capacity as such in respect of (x) the preservation of
Collateral or its

-178-

--------------------------------------------------------------------------------

 

security interest in the Collateral or (y) the exercise of any remedies provided
in the last paragraph of Section 11.01;
(ii)    second, to the extent proceeds remain after the application pursuant to
preceding clause (i), to all amounts owing to any Agent pursuant to any of the
Loan Documents in its capacity as such;
(iii)    third, to the extent proceeds remain after the application pursuant to
preceding clauses (i) and (ii), to an amount equal to the outstanding Primary
U.S. Loan Party Obligations shall be paid to the Secured Parties as provided in
Section 11.02(e), with each Secured Party receiving an amount equal to its
outstanding Primary U.S. Loan Party Obligations or, if the proceeds are
insufficient to pay in full all such Primary U.S. Loan Party Obligations, its
Pro Rata Share of the amount remaining to be distributed;
(iv)    fourth, to the extent proceeds remain after the application pursuant to
preceding clauses (i) through (iii), inclusive, to an amount equal to the
outstanding Primary Obligations (including Primary Obligations which are also
Canadian Loan Party Obligations or English Loan Party Obligations) shall be paid
to the Secured Parties as provided in Section 11.02(e), with each Secured Party
receiving an amount equal to its outstanding Primary Obligations (including
Primary Obligations which are also Canadian Loan Party Obligations or English
Loan Party Obligations) or, if the proceeds are insufficient to pay in full all
such Primary Obligations (including Primary Obligations which are also Canadian
Loan Party Obligations or English Loan Party Obligations), its Pro Rata Share of
the amount remaining to be distributed;
(v)    fifth, to the extent proceeds remain after the application pursuant to
preceding clauses (i) through (iv), inclusive, to an amount equal to the
outstanding Secondary U.S. Loan Party Obligations shall be paid to the Secured
Parties as provided in Section 11.02(e), with each Secured Party receiving an
amount equal to its outstanding Secondary U.S. Loan Party Obligations or, if the
proceeds are insufficient to pay in full all such Secondary U.S. Loan Party
Obligations, its Pro Rata Share of the amount remaining to be distributed;
(vi)    sixth, to the extent proceeds remain after the application pursuant to
preceding clauses (i) through (v), inclusive, to an amount equal to the
outstanding Secondary Obligations (including Secondary Obligations which are
also Canadian Loan Party Obligations or English Loan Party Obligations) shall be
paid to the Secured Parties as provided in Section 11.02(e), with each Secured
Party receiving an amount equal to its outstanding Secondary Obligations
(including Secondary Obligations which are also Canadian Loan Party Obligations
or English Loan Party Obligations) or, if the proceeds are insufficient to pay
in full all such Secondary Obligations (including Secondary Obligations which
are also Canadian Loan Party Obligations or English Loan Party Obligations), its
Pro Rata Share of the amount remaining to be distributed;
(vii)    seventh, to the extent proceeds remain after the application pursuant
to preceding clauses (i) through (vi), inclusive, to an amount equal to the
outstanding Tertiary Obligations shall be paid to the Secured Parties as
provided in Section 11.02(e), with each Secured Party

-179-

--------------------------------------------------------------------------------

 

receiving an amount equal to its outstanding Tertiary Obligations or, if the
proceeds are insufficient to pay in full all such Tertiary Obligations, its Pro
Rata Share of the amount remaining to be distributed; and
(viii)    eighth, to the extent proceeds remain after the application pursuant
to preceding clauses (i) through (vii), inclusive, and following the Discharge
of ABL Obligations, to the extent that the Notes Agent shall have notified the
Administrative Agent that the Discharge of Notes Obligations (as defined in the
Intercreditor Agreement) has occurredpayment in full of all Secured Obligations,
to the relevant Loan Party, their successors or assigns, or as a court of
competent jurisdiction may otherwise direct or as otherwise required by the
Intercreditor Agreement.
For purposes of this Agreement: (i) “Pro Rata Share” shall mean, when
calculating a Secured Party’s portion of any distribution or amount, that amount
(expressed as a percentage) equal to a fraction the numerator of which is the
then unpaid amount of such Secured Party’s Primary U.S. Loan Party Obligations,
Primary Obligations (including Primary Obligations which are also Canadian Loan
Party Obligations or English Loan Party Obligations), Secondary U.S. Loan Party
Obligations, Secondary Obligations (including Secondary Obligations which are
also Canadian Loan Party Obligations or English Loan Party Obligations) or
Tertiary Obligations, as the case may be, and the denominator of which is the
then outstanding amount of all Primary U.S. Loan Party Obligations, Primary
Obligations (including Primary Obligations which are also Canadian Loan Party
Obligations or English Loan Party Obligations), Secondary U.S. Loan Party
Obligations, Secondary Obligations (including Secondary Obligations which are
also Canadian Loan Party Obligations or English Loan Party Obligations) or
Tertiary Obligations, as the case may be, (ii) “Primary Obligations” shall mean
(x) all Loan Document Obligations with respect to principal (or Face Amount, as
applicable) of, premium, fees and interest on, Loans, Unpaid Drawings, the
Stated Amount of outstanding Letters of Credit and Fees, (y) all Qualified
Secured Hedging Obligations other than obligations with respect to indemnities,
fees (including, without limitation, attorneys’ fees) and similar obligations
and liabilities, and (z) all Qualified Secured Cash Management Services
Obligations other than obligations with respect to indemnities, fees (including,
without limitation, attorneys’ fees) and similar obligations and liabilities,
(iii) “Secondary Obligations” shall mean all Loan Document Obligations, all
Qualified Secured Hedging Obligations and all Qualified Secured Cash Management
Services Obligations, in each case other than Primary Obligations, (iv)
“Tertiary Obligations” shall mean (x) all Hedging Obligations under Secured
Hedging Agreements and (y) all Cash Management Services Obligations under
Secured Cash Management Agreements, in each case other than Primary Obligations
and Secondary Obligations, (v) “Primary U.S. Loan Party Obligations” shall mean
all Primary Obligations which are also U.S. Loan Party Obligations, (vi)
“Secondary U.S. Loan Party Obligations” shall mean all Secondary Obligations
which are also U.S. Loan Party Obligations. The obligations of the Loan Parties
in respect of the Guarantees made by them pursuant to the Guarantee and
Collateral Agreement or, the Canadian Guarantee and Collateral Agreement or the
English Subsidiary Guarantee Agreement, as applicable, shall constitute Primary
Obligations, Secondary Obligations or Tertiary Obligations to the extent the
obligations so guaranteed constitute Primary Obligations, Secondary Obligations
or Tertiary Obligations, respectively; provided however, that, notwithstanding
the foregoing, the obligations of the U.S. Loan Parties in respect of such
Guarantees of Canadian Secured Obligations or English Secured

-180-

--------------------------------------------------------------------------------

 

Obligations shall in no event constitute Primary Obligations (and any such
obligations that, but for this proviso, would constitute Primary Obligations
shall instead constitute Secondary Obligations).
(b)    When payments to Secured Parties are based upon their respective Pro Rata
Shares (other than in respect of Tertiary Obligations), the amounts received by
such Secured Parties hereunder shall be applied (for purposes of making
determinations under this Section 11.02 only) (i) first, to their Primary
Obligations and (ii) second, to their Secondary Obligations. If any payment to
any Secured Party of its Pro Rata Share of any distribution would result in
overpayment to such Secured Party, such excess amount shall instead be
distributed in respect of the unpaid Primary Obligations or Secondary
Obligations, as the case may be, of the other Secured Parties, with each Secured
Party whose Primary Obligations or Secondary Obligations, as the case may be,
have not been paid in full to receive an amount equal to such excess amount
multiplied by a fraction the numerator of which is the unpaid Primary
Obligations or Secondary Obligations, as the case may be, of such Secured Party
and the denominator of which is the unpaid Primary Obligations or Secondary
Obligations, as the case may be, of all Secured Parties entitled to such
distribution.
(c)    Each of the Secured Parties, by their acceptance of the benefits hereof
and of the Security Documents executed by a Loan Party, agrees and acknowledges
that if the Secured Parties receive a distribution on account of undrawn amounts
with respect to Letters of Credit issued under this Agreement (which shall only
occur after all Unpaid Drawings have been paid in full), such amounts shall be
paid to the Administrative Agent and held by it, for the equal and ratable
benefit of the Secured Parties, as cash security for the repayment of Secured
Obligations owing by the Loan Parties to the Secured Parties as such. If any
amounts are held as cash security pursuant to the immediately preceding
sentence, then upon the termination of all outstanding Letters of Credit under
this Agreement, and after the application of all such cash security to the
repayment of all other Secured Obligations owing by the Loan Parties to the
Secured Parties after giving effect to the termination of all such Letters of
Credit, if there remains any excess cash, such excess cash shall be returned by
the Administrative Agent to the Collateral Agent for distribution in accordance
with Section 11.02(a).
(d)    Subject to the terms of the Intercreditor Agreementany applicable
intercreditor agreement, all payments required to be made hereunder shall be
made (x) if to the Lender Creditors, to the Administrative Agent for the account
of the Lender Creditors, (y) if to the Hedging Creditors, to the trustee, paying
agent or other similar representative (each, a “Representative”) for the Hedging
Creditors or, in the absence of such a Representative, directly to the Hedging
Creditors and (z) if to the Cash Management Creditors, directly to the Cash
Management Creditors.
(e)    For purposes of applying payments received in accordance with this
Section 11.02, the Collateral Agent shall be entitled to rely upon (i) the
Administrative Agent, (ii) the Representative or, in the absence of such a
Representative, upon the Hedging Creditors and (iii) the Cash Management
Creditors for a determination (which the Administrative Agent and each other
Secured Party agrees (or shall agree) to provide upon request of the Collateral
Agent) of the outstanding Secured Obligations of the Loan Parties owed to the
Secured Parties. Unless it has received written notice from a Secured Party to
the contrary, the Administrative Agent, in furnishing information pursuant to
the preceding sentence, and the Collateral Agent, in acting hereunder,

-181-

--------------------------------------------------------------------------------

 

shall be entitled to assume that no Secondary Obligations are outstanding.
Unless it has written notice from a Hedging Creditor or a Cash Management
Creditor to the contrary, the Collateral Agent, in acting hereunder, shall be
entitled to assume that no Secured Hedging Agreements or Secured Cash Management
Agreements are in existence.
(f)    Subject to the other limitations (if any) set forth herein and in the
other Loan Documents, it is understood that the Loan Parties shall remain liable
(as and to the extent set forth in the Loan Documents) to the extent of any
deficiency between the amount of the proceeds of the Collateral and the
aggregate amount of the Secured Obligations of the Loan Parties.
(g)    It is understood and agreed by each Loan Party and each Secured Party
that the Collateral Agent shall have no liability for any determinations made by
it in this Section 11.02 (including, without limitation, as to whether given
Collateral constitutes Notes Priority CollateralAssets or ABL Priority
Collateral), in each case except to the extent resulting from the gross
negligence or willful misconduct of the Collateral Agent (as determined by a
court of competent jurisdiction in a final and non-appealable decision). Each
Loan Party and each Secured Party also agrees that the Collateral Agent may (but
shall not be required to), at any time and in its sole discretion, and with no
liability resulting therefrom, petition a court of competent jurisdiction
regarding any application of Collateral in accordance with the requirements
hereof and of the Intercreditor Agreement, and the Collateral Agent shall be
entitled to wait for, and may conclusively rely on, any such determination.
(h)    Notwithstanding anything to the contrary contained in this Agreement or
any other Loan Document, the Canadian Loan Parties and the English Loan Parties
shall not be required to repay or prepay, or to guarantee, nor shall any
proceeds in respect of Collateral of the Canadian Loan Parties or the English
Loan Parties and payments by the Canadian Loan Parties or the English Loan
Parties be applied to, direct obligations (excluding obligations as guarantor of
the Canadian Loan Parties or the English Loan Parties) of the U.S. Loan Parties.
SECTION 12. The Agents.Appointment
12.02.    Nature of Duties. (a) The Agents shall not have any duties or
responsibilities except those expressly set forth in this Agreement and in the
other Loan Documents. No Agent nor any of its officers, directors, agents,
employees or affiliates shall be liable for any action taken or omitted by it or
them hereunder or under any other Loan Document or in connection herewith or
therewith, unless caused by its or their gross negligence or willful misconduct
(as determined by a court of competent jurisdiction in a final and
non-appealable decision). The duties of the Agents shall be mechanical and
administrative in nature; the Agents shall not have by reason of this Agreement
or any other Loan Document a fiduciary relationship in respect of any Lender or
the holder of any Note; and nothing in this Agreement or in any other Loan
Document, expressed or implied, is intended to or shall be so construed as to
impose upon the Agents any obligations in respect of this Agreement or any other
Loan Document except as expressly set forth herein or therein.
(b)    Notwithstanding any other provision of this Agreement or any provision of
any other Loan Document, the Syndication Agent, the Documentation Agent, the
Lead Arrangers and the Senior

-182-

--------------------------------------------------------------------------------

 

Managing Agents are named as such for recognition purposes only, and in its
capacity as such shall have no powers, duties, responsibilities, obligations or
liabilities with respect to this Agreement or the other Loan Documents or the
transactions contemplated hereby and thereby; it being understood and agreed
that the Syndication Agent, the Documentation Agent, the Lead Arrangers and the
Senior Managing Agents shall be entitled to all indemnification and
reimbursement rights in favor of the Administrative Agent as, and to the extent,
provided for under Sections 12.06 and 13.01. Without limitation of the
foregoing, the Syndication Agent, the Documentation Agent, the Lead Arrangers
and the Senior Managing Agents shall not, solely by reason of this Agreement or
any other Loan Documents, have any fiduciary relationship in respect of any
Lender or any other Person.
(c)    In connection with all aspects of each transaction contemplated hereby
(including in connection with any amendment, waiver or other modification hereof
or of any other Loan Document), each Loan Party acknowledges and agrees that:
(i)(A) the arranging and other services regarding this Agreement provided by the
Agents and the Lead Arrangers are arm’s-length commercial transactions between
AbitibiBowaterResolute and the other Borrowers and their respective Affiliates,
on the one hand, and the Administrative Agent and the Lead Arrangers, on the
other hand, (B) each Loan Party has consulted its own legal, accounting,
regulatory and tax advisors to the extent it has deemed appropriate and (C) each
Loan Party is capable of evaluating, and understands and accepts, the terms,
risks and conditions of the transactions contemplated hereby and by the other
Loan Documents; (ii)(A) each Agent and Lead Arranger is and has been acting
solely as a principal and, except as expressly agreed in writing by the relevant
parties, has not been, is not, and will not be acting as an advisor, agent or
fiduciary for AbitibiBowaterResolute and the other Borrowers or any of their
respective Affiliates, or any other Person and (B) neither the Administrative
Agent nor any Lead Arranger has any obligation to AbitibiBowaterResolute and the
other Borrowers or any of their respective Affiliates with respect to the
transactions contemplated hereby except those obligations expressly set forth
herein and in the other Loan Documents; and (iii) the Administrative Agent and
the Lead Arrangers and their respective Affiliates may be engaged in a broad
range of transactions that involve interests that differ from those of each Loan
Party and their respective Affiliates, and no Agent or Lead Arranger has any
obligation to disclose any of such interests to the Loan Parties or their
respective Affiliates. To the fullest extent permitted by law, each Loan Party
hereby waives and releases any claims that it may have against the Agents and
the Lead Arrangers with respect to any breach or alleged breach of agency or
fiduciary duty in connection with any aspect of any transaction contemplated
hereby.
12.03.    Lack of Reliance on the Agents. Independently and without reliance
upon the Agents, each Lender and the holder of each Note, to the extent it deems
appropriate, has made and shall continue to make (a) its own independent
investigation of the financial condition and affairs of AbitibiBowaterResolute
and its Subsidiaries in connection with the making and the continuance of the
Loans and the taking or not taking of any action in connection herewith and (b)
its own appraisal of the creditworthiness of AbitibiBowaterResolute and its
Subsidiaries and, except as expressly provided in this Agreement, no Agent shall
have any duty or responsibility, either initially or on a continuing basis, to
provide any Lender or the holder of any Note with any credit or other
information with respect thereto, whether coming into its possession before the
making of the Loans or at any time or times thereafter. No Agent shall be
responsible to any Lender or the holder

-183-

--------------------------------------------------------------------------------

 

of any Note for any recitals, statements, information, representations or
warranties herein or in any document, certificate or other writing delivered in
connection herewith or for the due execution, effectiveness, legality,
genuineness, validity, enforceability, perfection, collectability, priority,
sufficiency or value of this Agreement, any other Loan Document, any other
agreements or certificates, requests, notices or opinions of counsel or for any
recitals, statements, warranties or representations contained in the Loan
Documents or in any such instrument, or the financial statements of
AbitibiBowaterResolute or any of its Subsidiaries or be required to ascertain or
make any inquiry concerning either the performance or observance of any of the
terms, provisions, covenants, conditions, agreements or obligations of this
Agreement or any other Loan Document, or the creditworthiness or financial
condition of AbitibiBowaterResolute or any of its Subsidiaries, or the existence
or possible existence of any Default or Event of Default.
12.04.    Certain Rights of the Administrative Agent. If the Administrative
Agent shall request instructions from the Required Lenders with respect to any
act or action (including failure to act) in connection with this Agreement or
any other Loan Document, the Administrative Agent shall be entitled to refrain
from such act or taking such action unless and until the Administrative Agent
shall have received instructions from the Required Lenders; and the
Administrative Agent shall not incur liability to any Lender by reason of so
refraining. Without limiting the foregoing, neither any Lender nor the holder of
any Note shall have any right of action whatsoever against the Administrative
Agent as a result of the Administrative Agent acting or refraining from acting
hereunder or under any other Loan Document in accordance with the instructions
of the Required Lenders. The Administrative Agent shall not be required to take
any action which exposes the Administrative Agent to personal liability or which
is contrary to this Agreement or any other Loan Document or applicable law,
regulation or contract. The Lenders hereby acknowledge that none of the Agents
shall be under any duty to take any discretionary action permitted to be taken
by it pursuant to this Agreement unless it shall be requested in writing to do
so by the Required Lenders or, where required, all the Lenders.
12.05.    Reliance. Each Agent shall, in the absence of actual knowledge to the
contrary, be entitled to accept any certificate furnished pursuant to any Loan
Document as conclusive evidence of the facts stated therein and shall be
entitled to rely, and shall be fully protected in relying, upon any note,
writing, resolution, notice, consent, affidavit, letter, statement, certificate,
telex, teletype or telecopier message, cablegram, radiogram, order or other
document or telephone message signed, sent or made by any Person that such Agent
believed to have been signed or sent by the proper Person, and, with respect to
all legal matters pertaining to this Agreement and any other Loan Document and
its duties hereunder and thereunder, upon advice of counsel selected by such
Agent. Each Agent may consult with legal counsel selected by it in connection
with matters arising under the Loan Documents and any action taken or suffered
in good faith by it in accordance with the opinion of such counsel shall be full
justification and protection to it. Each Agent may exercise any of its powers
and rights and perform any duty under the Loan Documents through agents or
attorneys.
12.06.    Indemnification. To the extent any Agent (or any affiliate thereof) is
not reimbursed and indemnified by the Borrowers (and without limiting the
obligations of the Borrowers to do so), the Lenders will reimburse and indemnify
such Agent (and any affiliate thereof) in proportion

-184-

--------------------------------------------------------------------------------

 

to their respective “percentage” as used in determining the Required Lenders
(determined as if there were no Defaulting Lenders) for and against any and all
liabilities, obligations, losses, damages, penalties, claims, actions,
judgments, costs, expenses (including reasonable counsel fees and disbursements)
or disbursements of whatsoever kind or nature which may be imposed on, asserted
against or incurred by such Agent (or any affiliate thereof) in performing its
respective duties hereunder or under any other Loan Document or in any way
relating to or arising out of this Agreement or any other Loan Document;
provided that no Lender shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, claims, actions, judgments, suits,
costs, expenses or disbursements resulting from such Agent’s (or such
affiliates’ thereof) gross negligence or willful misconduct (as determined by a
court of competent jurisdiction in a final and non-appealable decision).
12.07.    Agents in their Individual Capacities. With respect to its obligation
to make Loans, or issue or participate in Letters of Credit, under this
Agreement, each Agent shall have the rights and powers specified herein for a
“Lender” and may exercise the same rights and powers as though it were not
performing the duties specified herein; and the term “Lender”, “Required
Lenders”, “Majority Facility Lenders”, “Super-Majority Facility Lenders”,
“holders of Notes” or any similar terms shall, unless the context clearly
indicates otherwise, include such Agent in its respective individual capacities.
Each Agent and its respective affiliates may accept deposits from, lend money
to, and generally engage in any kind of banking, investment banking, trust or
other business with, or provide debt financing, equity capital or other services
(including financial advisory services) to any Loan Party or any Affiliate of
any Loan Party (or any Person engaged in a similar business with any Loan Party
or any Affiliate thereof) as if they were not performing the duties specified
herein, and may accept fees and other consideration from any Loan Party or any
Affiliate of any Loan Party for services in connection with this Agreement and
otherwise without having to account for the same to the Lenders.
12.08.    Holders. The Administrative Agent may deem and treat the payee of any
Note as the owner thereof for all purposes hereof unless and until a written
notice of the assignment, transfer or endorsement thereof, as the case may be,
shall have been filed with the Administrative Agent. Any request, authority or
consent of any Person who, at the time of making such request or giving such
authority or consent, is the holder of any Note shall be conclusive and binding
on any subsequent holder, transferee, assignee or endorsee, as the case may be,
of such Note or of any Note or Notes issued in exchange therefor.
12.09.    Resignation and Removal of Agents. (a) The Administrative Agent (for
purposes of this Section 12.09(a) through (f), the term “Administrative Agent”
also shall include Citibank, in its capacity as Collateral Agent hereunder and
pursuant to the Security Documents) may resign from the performance of all its
respective functions and duties hereunder and/or under the other Loan Documents
at any time by giving 30 days’ prior written notice to the Lenders and, unless
an Event of Default under Section 11.01(g) or (h) then exists,
AbitibiBowaterResolute. Any such resignation by an Administrative Agent
hereunder shall also constitute its resignation as an Issuing Lender and thea
Swingline Lender, in which case the resigning Administrative Agent (x) shall not
be required to issue any further Letters of Credit or make any additional
Swingline Loans hereunder and (y) shall maintain all of its rights as Issuing
Lender or Swingline Lender, as the case may be,

-185-

--------------------------------------------------------------------------------

 

with respect to any Letters of Credit issued by it or Swingline Loans made by it
prior to the date of such resignation. Such resignation shall take effect upon
the appointment of a successor Administrative Agent pursuant to clauses (b) and
(c) below or as otherwise provided below.
(b)    Upon any such notice of resignation by the Administrative Agent, the
Required Lenders shall appoint a successor Administrative Agent hereunder and
under the other Loan Documents who shall be a commercial bank or trust company
reasonably acceptable to AbitibiBowaterResolute, which acceptance shall not be
unreasonably withheld or delayed (provided that AbitibiBowaterResolute’s
approval shall not be required if an Event of Default then exists).
(c)    If a successor Administrative Agent shall not have been so appointed
within such 30 day period, the Administrative Agent, with the consent of
AbitibiBowaterResolute (which consent shall not be unreasonably withheld or
delayed, provided that AbitibiBowaterResolute’s consent shall not be required if
an Event of Default then exists) may then appoint a successor Administrative
Agent who shall serve as Administrative Agent hereunder or thereunder until such
time, if any, as the Required Lenders appoint a successor Administrative Agent
as provided above.
(d)    In the event that (i) no successor Administrative Agent has been
appointed pursuant to clause (b) or (c) above and (ii) the Administrative Agent
elects by notice to the Lenders that the provisions of this sentence shall
apply, the Administrative Agent’s resignation shall nonetheless become effective
in accordance with the notice of resignation and (1) the retiring Administrative
Agent shall be discharged from its duties and obligations hereunder and under
the other Loan Documents (except that in the case of any collateral security
held by the Administrative Agent on behalf of the Lenders under any of the Loan
Documents, the retiring Administrative Agent shall continue to hold such
collateral security as nominee until such time as a successor Administrative
Agent is appointed), (2) the Required Lenders shall thereafter perform all the
duties of the Administrative Agent hereunder and/or under any other Loan
Document until such time, if any, as the Required Lenders appoint a successor
Administrative Agent as provided above and (3) all payments, communications and
determinations provided to be made by, to or through the Administrative Agent
shall instead be made by or to each Lender directly, until such time as the
Required Lenders appoint a successor Administrative Agent as provided above.
Upon the acceptance of a successor’s appointment as Administrative Agent
hereunder, such successor shall succeed to and become vested with all of the
rights, powers, privileges and duties of the retiring (or retired)
Administrative Agent, and the retiring Administrative Agent shall be discharged
from all of its duties and obligations hereunder or under the other Loan
Documents (if not already discharged therefrom as provided above in this
paragraph).
(e)    The Required Lenders may at any time when the Administrative Agent has
become the subject of a proceeding under Insolvency Law, or had a receiver,
conservator, trustee or custodian appointed for it, upon no less than thirty
(30) days’ prior notice, replace the Administrative Agent. The successor
Administrative Agent shall not be the subject of a proceeding under the
Insolvency Law, or had a receiver, conservator, trustee or custodian appointed
for it and shall succeed to and become vested with all of the rights, powers,
privileges and duties of the replaced Administrative Agent, and the replaced
Administrative Agent shall be discharged from all of its duties and

-186-

--------------------------------------------------------------------------------

 

obligations hereunder or under the other Loan Documents. The fees payable by the
Borrowers to a successor Administrative Agent shall be the same as those payable
to its predecessor unless otherwise agreed between the Borrowers and such
successor. The provisions of this Section 12 and Section 13.01 shall continue in
effect for the benefit of such replaced Administrative Agent, its sub-agents and
their respective Affiliates in respect of any actions taken or omitted to be
taken by any of them while the replaced Administrative Agent was acting as
Administrative Agent. Any such replacement of an Administrative Agent hereunder
shall automatically, and with no further action required on the part of the
Administrative Agent, constitute the resignation of the Administrative Agent in
its capacity as an Issuing Lender and thea Swingline Lender, in which case the
replaced Administrative Agent (x) shall not be required to issue any further
Letters of Credit or make any additional Swingline Loans hereunder and (y) shall
maintain all of its rights as Issuing Lender or Swingline Lender, as the case
may be, with respect to any Letters of Credit issued by it and Swingline Loans
made by it prior to the date of such replacement.
(f)    Upon a resignation, replacement or removal of the Administrative Agent
pursuant to this Section 12.09, the Administrative Agent shall remain
indemnified to the extent provided in this Agreement and the other Loan
Documents and the provisions of this Section 12 (and the analogous provisions of
the other Loan Documents) shall continue in effect for the benefit of the
Administrative Agent for all of its actions and inactions while serving as the
Administrative Agent hereunder and under the other Loan Documents.
12.10.    Collateral and Other Matters. (a) Each Lender (including in theirits
capacity as a Swingline Lender, Issuing Lender, Agent and/or Lead Arranger, as
the case may be) authorizes and directs the Collateral Agent to enter into (i)
the Security Documents, the Intercreditor Agreement and(ii) the 2008 CIBC Letter
of Credit Facility Intercreditor Agreement, (iii) an intercreditor agreement
having substantially the same terms as the Previous Intercreditor Agreement or
such other terms as may be reasonably satisfactory to the Administrative Agent
in connection with the incurrence of Liens on Notes Priority Assets as
contemplated Section 10.02(a)(iii) and (iv) any other security agreements for
the purpose of securing the Secured Obligations by Liens on Notes Priority
Assets as contemplated by Section 10.02(a)(iii) (and each Lender authorizes the
Administrative Agent to amend this Agreement to effect such technical and
administrative changes as may be necessary or desirable in connection
therewith), in each case for the benefit of the Lenders and the other Secured
Parties. Each Lender hereby agrees, and each holder of any Note by the
acceptance thereof will be deemed to agree, that, except as otherwise set forth
herein, any action taken by the Required Lenders in accordance with the
provisions of this Agreement or the Security Documents, and the exercise by the
Required Lenders of the powers set forth herein or therein, together with such
other powers as are reasonably incidental thereto, shall be authorized and
binding upon all of the Lenders. The Collateral Agent is hereby authorized on
behalf of all of the Lenders, without the necessity of any notice to or further
consent from any Lender, from time to time prior to an Event of Default, to take
any action with respect to any Collateral or Security Documents which may be
necessary to perfect and maintain perfected the security interest in and liens
upon the Collateral granted pursuant to the Security Documents.
(b)    The Lenders hereby authorize and direct the Collateral Agent, at its
option and in its discretion, to release or subordinate (as the case may be) any
Lien granted to or held by the Collateral

-187-

--------------------------------------------------------------------------------

 

Agent upon any Collateral and the Guarantees under the Guarantee and Collateral
Agreement and/or, the Canadian Guarantee and Collateral Agreement and/or the
English Subsidiary Guarantee Agreement (i) upon termination of the Total
Commitment (and all Letters of Credit and Bankers’ Acceptances (or the
obligations in an amount of 103% of outstanding stated amounts are cash
collateralized), and payment and satisfaction of all of the Obligations (other
than inchoate indemnification obligations and other contingent obligations not
due and payable) at any time arising under or in respect of this Agreement or
the Loan Documents or the transactions contemplated hereby or thereby, (ii)
constituting property being sold or otherwise disposed of (to Persons other than
Loan Parties) upon the sale or other disposition thereof in compliance with
Section 10.12, or consummation of any transaction permitted hereunder as a
result of which any Guarantor ceases to be a Subsidiary of
AbitibiBowaterResolute, (iii) if approved, authorized or ratified in writing by
the Required Lenders (or all of the Lenders hereunder, to the extent required by
Section 13.12) or (iv) as otherwise may be expressly provided in the relevant
Security Documents or in the Intercreditor Agreementany applicable intercreditor
agreement. Upon request by the Administrative Agent at any time, the Lenders
will confirm in writing the Collateral Agent’s authority to release particular
types or items of Collateral pursuant to this Section 12.10.
(c)    The Collateral Agent shall have no obligation whatsoever to the Lenders
or to any other Person to assure that the Collateral exists or is owned by any
Loan Party or is cared for, protected or insured or that the Liens granted to
the Collateral Agent herein or pursuant hereto have been properly or
sufficiently or lawfully created, perfected, protected or enforced or are
entitled to any particular priority, or to exercise or to continue exercising at
all or in any manner or under any duty of care, disclosure or fidelity any of
the rights, authorities and powers granted or available to the Collateral Agent
in this Section 12.10, in any of the Security Documents or in the Intercreditor
Agreementany applicable intercreditor agreement, it being understood and agreed
that in respect of the Collateral, or any act, omission or event related
thereto, the Collateral Agent may act in any manner it may deem appropriate, in
its sole discretion, given the Collateral Agent’s own interest in the Collateral
as one of the Lenders and that the Collateral Agent shall have no duty or
liability whatsoever to the Lenders, except for its gross negligence or willful
misconduct (as determined by a court of competent jurisdiction in a final and
non-appealable decision).
(d)    The Collateral Agent may perform any and all of its duties and exercise
its rights and powers hereunder or under any other Loan Document by or through,
or delegate any and all such rights and powers to, any one or more sub-agents,
trustees or third parties appointed by the Collateral Agent. The Collateral
Agent (and any such sub-agent, trustee or third party) may perform any and all
of its duties and exercise its rights and powers by or through their respective
Affiliates. The exculpatory and indemnification provisions of this Section 12
and Section 13.01 shall apply to any such sub-agent, trustee or third party and
to their respective Affiliates to the same extent that such provisions apply to
the Collateral Agent.
12.11.    Delivery of Information. The Administrative Agent shall not be
required to deliver to any Lender originals or copies of any documents,
instruments, notices, communications or other information received by the
Administrative Agent from any Loan Party, any Subsidiary thereof, the Required
Lenders, any Lender or any other Person under or in connection with this
Agreement or any other Loan Document except (a) as specifically provided in this
Agreement or any other

-188-

--------------------------------------------------------------------------------

 

Loan Document and (b) as specifically requested from time to time in writing by
any Lender with respect to a specific document, instrument, notice or other
written communication received by and in the possession of the Administrative
Agent at the time of receipt of such request and then only in accordance with
such specific request.
12.12.    Quebec Security. Without limiting the powers of the Collateral Agent
hereunder or under any of the other Loan Documents, each Secured Party hereby
acknowledges and agrees that the Collateral Agent shall, for purposes of holding
any security granted by any Loan Party or by any Affiliate or Subsidiary of any
Loan Party on property pursuant to the laws of the Province of Quebec to secure
obligations of such Loan Party or such Affiliate or Subsidiary under any bond or
debenture (the “Quebec Secured Obligations”), be the holder of an irrevocable
power of attorney (fondé de pouvoir) (within the meaning of the Civil Code of
Québec) for all present and future Secured Parties and holders of any bond or
debenture. Each of the Secured Parties, for itself and for all present and
future Affiliates that are or may become Secured Parties hereby irrevocably
constitutes, to the extent necessary, the Collateral Agent as the holder of an
irrevocable power of attorney (fondé de pouvoir) (within the meaning of Article
2692 of the Civil Code of Québec) in order to hold security granted by any of
the Loan Parties or by any of their Affiliates or Subsidiaries to secure the
Quebec Secured Obligations. Furthermore, each of the Secured Parties hereby
appoints the Collateral Agent to act in the capacity of the holder and
depositary of such bond or debenture on its own behalf as Collateral Agent and
for and on behalf and for the benefit of all present and future Secured Parties.
Each assignee (for itself and for all present and future Affiliates) of a
Secured Party shall be deemed to have confirmed and ratified the constitution of
the Collateral Agent as the holder of such irrevocable power of attorney (fondé
de pouvoir) by execution of the relevant Assignment and Assumption Agreement or
other relevant documentation relating to such assignment. Each Secured Party
that is not an assignee of a Secured Party that executes this Agreement shall be
deemed to have confirmed and ratified the constitution of the Collateral Agent
as fondé de pouvoir by the execution of the Loan Documents to which it is a
party. Notwithstanding the provisions of Section 32 of the An Act respecting the
special powers of legal persons (Quebec), the Collateral Agent may acquire and
be the holder of any bond or debenture. The Loan Parties hereby ratify and
confirm such appointment and acknowledge that such bond or debenture constitutes
a title of indebtedness, as such term is used in Article 2692 of the Civil Code
of Québec. The Secured Parties also hereby ratify any deed of hypothec executed
by the Collateral Agent as fondé de pouvoir prior to the execution of this
Agreement.

SECTION 13. Miscellaneous.
13.01.    Payment of Expenses, etc. (a) The Borrowers hereby jointly and
severally agree to: (i) whether or not the transactions herein contemplated are
consummated, pay all reasonable and documented, in the case of expenses not
related to enforcement, out-of-pocket costs and expenses (including Expenses) of
the Agents (including, without limitation, the reasonable fees and disbursements
of counsel to the Agents and any local counsel retained by the Agents, and the
reasonable and documented fees and expenses in connection with the appraisals
and collateral examinations required pursuant to Sections 6(t) and 9.06(b)) in
connection with the preparation, negotiation, execution, delivery, consummation
and administration of this Agreement and the other

-189-

--------------------------------------------------------------------------------

 

Loan Documents and the documents and instruments referred to herein and therein
and any actual or proposed amendment, waiver or consent relating hereto or
thereto, of the Agents and their respective Affiliates in connection with their
syndication efforts with respect to this Agreement and of the Agents, the
Issuing Lenders in connection with the Letter of Credit Back-Stop Arrangements
entered into by such Persons, and of each of the Agents and Lenders in
connection with the enforcement (whether through negotiations, legal proceedings
or otherwise) of any rights and remedies under this Agreement and the other Loan
Documents (including all such costs and expenses incurred during any legal
proceeding, including any proceeding under any Insolvency Law) and the documents
and instruments referred to herein and therein or in connection with any
refinancing or restructuring of the credit arrangements provided under this
Agreement in the nature of a “work-out” or pursuant to any insolvency or
bankruptcy proceedings (including, in each case without limitation, the
reasonable fees and disbursements of counsel); (ii) pay and hold the
Administrative Agent, the Collateral Agent, theeach Swingline Lender, each of
the Issuing Lenders and each of the Lenders harmless from and against any and
all present and future stamp, excise and other similar documentary taxes with
respect to the foregoing matters and save the Administrative Agent, the
Collateral Agent, theeach Swingline Lender, each of the Issuing Lenders and each
of the Lenders harmless from and against any and all liabilities with respect to
or resulting from any delay or omission (other than to the extent attributable
to the Administrative Agent, the Collateral Agent, thesuch Swingline Lender,
such Issuing Lender or such Lender) to pay such taxes; and (iii) indemnify the
Administrative Agent (including without limitation in its capacity as agent for
the Borrowers pursuant to Section 13.0513.15), the Collateral Agent, theeach
Swingline Lender, each Issuing Lender and each Lender, and each of their
respective officers, directors, employees, representatives, agents, Affiliates,
trustees, attorneys and investment advisors (each, an “Indemnified Person”) from
and hold each of them harmless against any and all liabilities, obligations,
losses, damages, penalties, claims, demands, actions (including removal or
remedial actions), judgments, suits, costs, expenses and disbursements
(including attorneys’ and consultants’ fees and disbursements) (collectively,
“Indemnified Costs”) incurred by, imposed on or assessed against any of them as
a result of, or arising out of, or in any way related to, or by reason of, (A)
the execution, delivery, enforcement, performance or administration of any Loan
Document or any other agreement, letter or instrument delivered in connection
with the transactions contemplated thereby or the consummation of the
transactions contemplated thereby, (B) any Commitment, Loan or Letter of Credit
or the use or proposed use thereof or of the proceeds therefrom, (C) the actual
or alleged presence of Hazardous Materials in the air, surface water or
groundwater or on the surface or subsurface of any real property or facility at
any time owned, leased, used or operated by AbitibiBowaterResolute or any of its
Subsidiaries, the generation, storage, transportation, handling or disposal of
Hazardous Materials by AbitibiBowaterResolute or any of its Subsidiaries at any
location, whether or not owned, leased or operated by AbitibiBowaterResolute or
any of its Subsidiaries, the non compliance by AbitibiBowaterResolute or any of
its Subsidiaries with any Environmental Law (including applicable permits
thereunder) applicable to any current or former real property, or any
environmental claim asserted against AbitibiBowaterResolute, any of its
Subsidiaries or any real property at any time owned, leased or operated by
AbitibiBowaterResolute or any of its Subsidiaries, including, in each case,
without limitation, the fees and disbursements of counsel and other consultant
incurred in connection with any such investigation, litigation or other
proceeding or (D) any actual or prospective claim, litigation, investigation or
proceeding relating to any of the foregoing, whether based on contract,

-190-

--------------------------------------------------------------------------------

 

tort or any other theory (including any investigation of, preparation for, or
defense of any pending or threatened claim, investigation, litigation or
proceeding) and regardless of whether any Indemnified Person is a party thereto,
in all cases, whether or not caused by or arising, in whole or in part, out of
the negligence of the Indemnified Person; provided that such indemnity shall
not, as to any Indemnified Person, be available to the extent that such
liabilities, obligations, losses, damages, penalties, claims, demands, actions,
judgments, suits, costs, expenses or disbursements resulted from the gross
negligence, or willful misconduct of such Indemnified Person or of any
affiliate, director, officer, partner, employee, agent or attorney-in-fact of
such Indemnified Person, as determined by the final judgment of a court of
competent jurisdiction. No Indemnified Person shall be liable for any damages
arising from the use by others of any information or other materials obtained
through IntraLinks or other similar information transmission systems in
connection with this Agreement, nor shall any Indemnified Person or the
Borrowers or any Subsidiary have any liability for any special, punitive,
indirect or consequential damages relating to this Agreement or any other Loan
Document or arising out of its activities in connection herewith or therewith
(whether before or after the Closing Date). In the case of an investigation,
litigation or other proceeding to which the indemnity in this Section 13.01
applies, such indemnity shall be effective whether or not such investigation,
litigation or proceeding is brought by any Loan Party, any Subsidiary of any
Loan Party, any Loan Party’s directors, stockholders or creditors or an
Indemnified Person or any other Person, whether or not any Indemnified Person is
otherwise a party thereto and whether or not any of the transactions
contemplated hereunder or under any of the other Loan Documents are consummated.
To the extent that the undertaking to indemnify, pay or hold harmless any
Indemnified Person set forth in this Section 13.01 may be unenforceable because
it is violative of any law or public policy, the Borrowers jointly and severally
shall make the maximum contribution to the payment and satisfaction of each of
the indemnified liabilities which is permissible under applicable law. In
addition, the Borrowers jointly and severally agree to reimburse the
Administrative Agent, the Collateral Agent and the Collateral Agent for all
reasonable third party administrative, audit and monitoring expenses incurred in
connection with the Borrowing Base and determinations thereunder.
(b)    To the full extent permitted by applicable law, each of the parties
hereto shall not assert, and hereby waives, any claim against any other party
hereto, on any theory of liability, for special, indirect, consequential or
incidental damages (as opposed to direct or actual damages) arising out of, in
connection with, or as a result of, this Agreement or any agreement or
instrument contemplated hereby, the transactions contemplated hereby or thereby,
any Loan or the use of the proceeds thereof. No Indemnified Person shall be
liable for any damages arising from the use by unintended recipients of any
information or other materials distributed by it through telecommunications,
electronic or other information transmission systems in connection with this
Agreement or the other Loan Documents or the transactions contemplated hereby or
thereby, except to the extent the liability of such Indemnified Person results
from such Indemnified Person’s (or its related parties’) gross negligence or
willful misconduct or material breach of its express contractual obligations
under the Loan Documents (as determined by a court of competent jurisdiction in
a final and non appealable decision).
(c)    The provisions of this Section 13.01 shall remain operative and in full
force and effect regardless of the expiration of the term of this Agreement, the
consummation of the transactions

-191-

--------------------------------------------------------------------------------

 

contemplated hereby, the repayment of any of the Loans, termination of any
Commitments, the resignation of any Agent, the replacement of any Lender, the
invalidity or unenforceability of any term or provision of this Agreement or any
other Loan Document, or any investigation made by or on behalf of the
Administrative Agent or any Lender. All amounts due under this Section 13.01
shall be payable promptly after written demand therefor.
13.02.    Right of Setoff. In addition to any rights now or hereafter granted
under applicable law or otherwise, and not by way of limitation of any such
rights, upon the occurrence and during the continuance of an Event of Default,
the Administrative Agent, the Collateral Agent, each Issuing Lender and each
Lender is hereby authorized at any time or from time to time, without
presentment, demand, protest or other notice of any kind to any Loan Party or to
any other Person, any such notice being hereby expressly waived, to set off and
to appropriate and apply to the fullest extent permitted by law, any and all
deposits (general or special, time or demand, provisional or final) and any
other Indebtedness at any time held or owing by the Administrative Agent,
Collateral Agent, such Issuing Lender or such Lender (including, without
limitation, by branches and agencies of the Administrative Agent, the Collateral
Agent, such Issuing Lender or such Lender wherever located) to or for the credit
or the account of AbitibiBowaterResolute or any of its Subsidiaries against and
on account of the Obligations and liabilities of the Loan Parties to the
Administrative Agent, the Collateral Agent, such Issuing Lender or such Lender
under this Agreement or under any of the other Loan Documents, including,
without limitation, all interests in Obligations purchased by such Lender
pursuant to Section 13.04(b), and all other claims of any nature or description
arising out of or connected with this Agreement or any other Loan Document,
irrespective of whether or not the Administrative Agent, such Issuing Lender or
such Lender shall have made any demand hereunder and although said Obligations,
liabilities or claims, or any of them, shall be contingent or unmatured or
denominated in a different currency from that of the applicable deposit or
Indebtedness; provided that, the provisions of this Section 13.02 shall not be
construed to apply to any payment made by the Borrowers pursuant to and in
accordance with the express terms of this Agreement. The rights of the
Administrative Agent, the Collateral Agent, each Issuing Lender and each Lender
under this Section 13.02 are in addition to other rights and remedies (including
other rights of setoff) that the Administrative Agent, the Collateral Agent,
each Issuing Lender and each Lender may have.
13.03.    Notices. Except as otherwise expressly provided herein, all notices
and other communications provided for hereunder shall be in writing (including
telecopier communication, facsimile transmission or electronic mail) and mailed,
telecopied, transmitted or delivered: if to any Lender, at its address,
facsimile number or electronic mail address specified on Schedule 13.03; if to
the Administrative Agent or the Collateral Agent, at the Notice Office; or, if
to any Loan Party, at 1155 Metcalfe Street, Suite 800, Montréal, Québec, H3B 5H2
Canada, Attention: Chief Financial Officer (Fax No. (514) 394-2241) with copies
to 1155 Metcalfe Street, Suite 800, Montréal, Québec, H3B 5H2 Canada, Attention:
General Counsel (Fax No. (514) 394-3644) and Troutman Sanders LLP, 600 Peachtree
St., N.E., Suite 5200, Atlanta, GA 30308-2216, Attention: Hazen H. Dempster (Fax
No. (404) 962-6544); or in each case (other than with respect to a Lender), at
such other address as shall be designated by such party in a written notice to
the other parties hereto and, as to each Lender, at such other address,
facsimile number or electronic mail address as shall be designated by such
Lender in a written notice to

-192-

--------------------------------------------------------------------------------

 

AbitibiBowaterResolute and the Administrative Agent. All such notices and
communications shall, when mailed, telecopied, faxed, mailed electronically or
sent by overnight courier, be effective when deposited in the mails or overnight
courier, as the case may be, or sent by telecopier or electronic mail, except
that notices and communications to the Administrative Agent, the Collateral
Agent, AbitibiBowaterResolute and the other Loan Parties shall not be effective
until received by the Administrative Agent, the Collateral Agent,
AbitibiBowaterResolute or the other Loan Parties, as the case may be.
13.04.    Benefit of Agreement; Assignments; Participations. (a) This Agreement
shall be binding upon and inure to the benefit of and be enforceable by the
respective successors and assigns of the parties hereto (including any affiliate
of any Issuing Lender that issues any Letter of Credit); provided, however, that
neither AbitibiBowaterResolute nor any Borrower may assign or transfer any of
their rights, obligations or interest hereunder without the prior written
consent of the Lenders which consent will not be given unless the assignee or
transferee is a member of the same “wholly-owned group” as each of the
Borrowers; and, provided further, that a Lender may transfer, assign or grant
participations in its rights hereunder as provided in Section 2.13 and this
Section) and, provided further, that no Lender shall transfer or grant any
participation under which the participant shall have rights to approve any
amendment to or waiver of this Agreement or any other Loan Document except to
the extent such amendment or waiver would (i) extend the final scheduled
maturity of any Loan, Note or Letter of Credit (unless such Letter of Credit is
not extended beyond the Revolving Loan Maturity Date) in which such participant
is participating, or reduce the rate or extend the time of payment of interest
or Fees thereon (except in connection with a waiver of applicability of any post
default increase in interest rates) or reduce the principal amount thereof (it
being understood that any amendment or modification to the financial definitions
in this Agreement or to Section 13.07 shall not constitute a reduction in the
rate of interest or Fees payable hereunder), or increase the amount of the
participant’s participation over the amount thereof then in effect (it being
understood that a waiver of any Default or Event of Default or of a mandatory
reduction in the Total Commitment shall not constitute a change in the terms of
such participation, and that an increase in any Commitment (or the available
portion thereof) or Loan shall be permitted without the consent of any
participant if the participant’s participation is not increased as a result
thereof), (ii) consent to the assignment or transfer by AbitibiBowaterResolute
or any other Borrower of any of its rights and obligations under this Agreement
or (iii) release all or substantially all of the Collateral under any or all of
the Security Documents (except as expressly provided in the Loan Documents)
supporting the Loans or Letters of Credit hereunder in which such participant is
participating. In the case of any such participation, the participant shall not
have any rights under this Agreement or any of the other Loan Documents (the
participant’s rights against such Lender in respect of such participation to be
those set forth in the agreement executed by such Lender in favor of the
participant relating thereto) and all amounts payable by the Borrowers hereunder
shall be determined as if such Lender had not sold such participation. Each
Lender that sells a participation shall, acting solely for this purpose as an
agent of the Borrowers, maintain a register on which it enters the name and
address of each participant and the principal amounts (and stated interest) of
each participant’s interest in the Loans or other obligations under the Loan
Documents (the “Participant Register”); provided that no Lender shall have any
obligation to disclose all or any portion of the Participant Register to any
Person (including the identity of any participant or any information relating to
a participant’s interest in any commitments, loans, letters

-193-

--------------------------------------------------------------------------------

 

of credit or its other obligations under any Loan Document) except to the extent
that such disclosure is necessary to establish that such commitment, loan,
letter of credit or other obligation is in registered form under Section
5f.103-1(c) of the United States Treasury Regulations. The Borrowers agree that
any purchaser of a participation in such Loans so acquired may exercise any and
all rights of banker’s lien, setoff, counterclaim or otherwise with respect to
any and all moneys owing by the Borrowers to such purchaser as fully as if such
purchaser were a Lender acquiring such Loans hereunder in the amount of such
participation so long as such participant complies with Section 13.16 as if it
were a Lender prior to such exercise.
(b)    Notwithstanding the foregoing, any Lender (or any Lender together with
one or more other Lenders) may (x) assign all or a portion of its Commitments
under a Facility and related outstanding Obligations (or, if the Commitments
with respect to the relevant Facility have terminated, outstanding Obligations)
hereunder to (i) (A) its parent company and/or any affiliate of such Lender
which is at least 50% owned by such Lender or its parent company or (B) one or
more other Lenders or any affiliate of any such other Lender which is at least
50% owned by such other Lender or its parent company (provided that any fund
(which fund, together with its Affiliates, has a combined capital and surplus in
excess of $500,000,000) that invests in loans and is managed or advised by the
same investment advisor of another fund which is a Lender (or by an Affiliate of
such investment advisor) shall be treated as an affiliate of such other Lender
for the purposes of this sub clause (x)(i)(B)); provided that no such assignment
may be made to any such Person that is, or would at such time constitute, a
Defaulting Lender or (ii) in the case of any Lender that is a fund that invests
in loans, any other fund (which fund, together with its Affiliates, has a
combined capital and surplus in excess of $500,000,000) that invests in loans
managed or advised by the same investment advisor of any Lender or by an
Affiliate of such investment advisor or (y) assign all, or if less than all, a
portion equal to at least $2,500,000, in each case in the aggregate for the
assigning Lender or assigning Lenders, of such Commitments and related
outstanding Obligations (or, if the Commitments with respect to the relevant
Facility have terminated, outstanding Obligations) hereunder to one or more
Eligible Transferees (treating any fund that invests in loans and any other fund
that invests in loans and is managed or advised by the same investment advisor
of such fund or by an Affiliate of such investment advisor as a single Eligible
Transferee), each of which assignees shall become a party to this Agreement as a
Lender by execution of an Assignment and Assumption Agreement, provided that (t)
at such time, Schedule 1.01(a) shall be deemed modified to reflect the
Commitments and/or outstanding Revolving Loans, as the case may be, of such new
Lender and of the existing Lenders, (u) upon the surrender of the relevant Notes
by the assigning Lender (or, upon such assigning Lender’s indemnifying the
applicable Borrowers for any lost Note pursuant to a customary indemnification
agreement) new Notes will be issued, at the Borrowers’ joint and several
expense, to such new Lender and to the assigning Lender upon the request of such
new Lender or assigning Lender, such new Notes to be in conformity with the
requirements of Section 2.05 (with appropriate modifications) to the extent
needed to reflect the revised Commitments and/or outstanding Revolving Loans, as
the case may be, (v) the consents (not to be unreasonably withheld, delayed or
conditioned) of each Issuing Lender and theeach Swingline Lender, shall be
required in connection with any such assignment, (w) the consent of the
Administrative Agent and AbitibiBowaterResolute shall be required in connection
with any such assignment pursuant to clause (y) above (such consents, in any
case, not to be unreasonably withheld, delayed or conditioned); provided that no
consent of

-194-

--------------------------------------------------------------------------------

 

AbitibiBowaterResolute shall be required (i) for an assignment in respect of the
primary syndication of the Commitments or (ii) if a Default or Event of Default
has occurred and is continuing and provided further, that AbitibiBowaterResolute
shall be deemed to have consented to any such assignment unless it shall object
thereto by written notice to the Administrative Agent within five Business Days
after having received notice thereof, (x) the Administrative Agent shall receive
at the time of each such assignment, from the assigning or assignee Lender, the
payment of a non-refundable assignment fee of $3,500 and (y) no such transfer or
assignment will be effective until recorded by the Administrative Agent on the
Register pursuant to Section 13.15. To the extent of any assignment pursuant to
this Section 13.04(b), the assigning Lender shall be relieved of its obligations
hereunder with respect to its assigned Commitments and outstanding Revolving
Loans. At the time of each assignment pursuant to this Section 13.04(b) or
Section 2.13 or 2.14 to a Person which is not already a Lender hereunder and
which is not a United States person (as such term is defined in Section
7701(a)(30) of the Code) for Federal income tax purposes, the respective
assignee Lender shall, to the extent legally entitled to do so, provide to
AbitibiBowaterResolute and the Administrative Agent the appropriate Internal
Revenue Service Forms (and, if applicable, a Section 5.045.05(b)(ii)
Certificate) described in Section 5.045.05(b). In addition, at the time of each
assignment pursuant to this Section 13.04(b) or Section 2.13 or 2.14 to a Person
which is not already a Lender hereunder, the respective assignee Lender shall,
to the extent legally entitled to do so and at the reasonable request of
AbitibiBowaterResolute, file any certificate or document or furnish to the
relevant Borrower and the Administrative Agent, such certificate or document
that may be necessary to establish any available exemption from, or reduction
of, any Taxes, as described in Section 5.045.05(c), (f) or (g). To the extent
that an assignment of all or any portion of a Lender’s Commitments and related
outstanding Obligations pursuant to Section 2.13 or this Section 13.04(b) would,
at the time of such assignment, result in increased costs under Section 2.10 or
3.06 from those being charged by the respective assigning Lender prior to such
assignment, then the Borrowers shall not be obligated to pay such increased
costs (although the Borrowers, in accordance with and pursuant to the other
provisions of this Agreement, shall be obligated to pay any other increased
costs of the type described above resulting from changes after the date of the
respective assignment). A Lender may only assign all or a portion of its
Commitments hereunder if that assignment would result in at least two Lenders
under this Agreement.
(c)    Nothing in this Agreement shall prevent or prohibit any Lender from
pledging its Loans and Notes hereunder to a Federal Reserve Bank in support of
borrowings made by such Lender from such Federal Reserve Bank and, with prior
notification to the Administrative Agent (but without the consent of the
Administrative Agent or AbitibiBowaterResolute), any Lender which is a fund may
pledge all or any portion of its Loans and Notes to its trustee or to a
collateral agent providing credit or credit support to such Lender in support of
its obligations to such trustee, such collateral agent or a holder of such
obligations, as the case may be. No pledge pursuant to this clause (c) shall
release the transferor Lender from any of its obligations hereunder.
(d)    Any Lender which assigns all of its Commitments and/or Revolving Loans
hereunder in accordance with Section 13.04(b) shall cease to constitute a
“Lender” hereunder, except with respect to indemnification provisions under this
Agreement (including, without limitation,

-195-

--------------------------------------------------------------------------------

 

Sections 2.10, 2.11, 3.06, 5.04, 12.06, 13.01 and 13.06), which shall survive as
to such assigning Lender.
13.05.    No Waiver; Remedies Cumulative. No failure or delay on the part of the
Administrative Agent, the Collateral Agent, theany Swingline Lender, any Issuing
Lender or any Lender in exercising any right, power or privilege hereunder or
under any other Loan Document and no course of dealing between
AbitibiBowaterResolute, any other Borrower or any other Loan Party and the
Administrative Agent, the Collateral Agent, theany Swingline Lender, any Issuing
Lender or any Lender shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, power or privilege hereunder or under any other
Loan Document preclude any other or further exercise thereof or the exercise of
any other right, power or privilege hereunder or thereunder. The rights, powers
and remedies herein or in any other Loan Document expressly provided are
cumulative and not exclusive of any rights, powers or remedies which the
Administrative Agent, the Collateral Agent, theany Swingline Lender, any Issuing
Lender or any Lender would otherwise have. Without limiting the generality of
the foregoing, the making of a Loan or issuance of a Letter of Credit shall not
be construed as a waiver of any Default, regardless of whether any Agent or
Lender may have had notice or knowledge of such Default at the time of such
funding or issuance. No notice to or demand on any Loan Party in any case shall
entitle any Loan Party to any other or further notice or demand in similar or
other circumstances or constitute a waiver of the rights of the Administrative
Agent, the Collateral Agent, theany Swingline Lender, any Issuing Lender or any
Lender to any other or further action in any circumstances without notice or
demand.
13.06.    Payments Pro Rata. (a) Except as otherwise provided in this Agreement,
the Administrative Agent agrees that promptly after its receipt of each payment
from or on behalf of any Borrower in respect of any Obligations hereunder, the
Administrative Agent shall distribute such payment to the Lenders entitled
thereto (other than any Lender that has consented in writing to waive its pro
rata share of any such payment) pro rata based upon their respective shares, if
any, of the Obligations with respect to which such payment was received.
(b)    Each of the Lenders agrees that, if it should receive any amount
hereunder (whether by voluntary payment, by realization upon security, by the
exercise of the right of setoff or banker’s lien, by counterclaim or cross
action, by the enforcement of any right under the Loan Documents, or pursuant to
a secured claim under Section 506 of Title 11 of the United States Code or other
security or interest arising from, or in lieu of, such secured claim, received
by such Lender under any applicable bankruptcy, insolvency or other similar law
or otherwise, or otherwise), which is applicable to the payment of the principal
of, or interest on, the Loans, Unpaid Drawings, Commitment Fees or Letter of
Credit Fees, of a sum which with respect to the related sum or sums received by
other Lenders is in a greater proportion than the total of such Obligation then
owed and due to such Lender bears to the total of such Obligation then owed and
due to all of the Lenders immediately prior to such receipt, then such Lender
receiving such excess payment shall purchase for cash without recourse or
warranty from the other Lenders an interest in the Obligations of the respective
Loan Party to such Lenders in such amount as shall result in a proportional
participation by all the Lenders in such amount; provided that if all or any
portion of such excess amount is thereafter recovered from such Lenders, such
purchase shall be rescinded and the purchase price

-196-

--------------------------------------------------------------------------------

 

restored to the extent of such recovery, but without interest; provided further,
the provisions of this Section 13.06(b) shall not be construed to apply to (x)
any payment obtained by a Lender as consideration for the assignment of or sale
of a participation in any of its Revolving Loans or participations in Letter of
Credit Outstandings or Swingline Loans to any assignee or participant other than
a Borrower or any Affiliate thereof or (y) any payment pursuant to the
penultimate paragraph of Section 2.10(a).
(c)    Notwithstanding anything to the contrary contained herein, the provisions
of the preceding Sections 13.06(a) and (b) shall be subject to the express
provisions of this Agreement which require, or permit, differing payments to be
made to Non-Defaulting Lenders as opposed to Defaulting Lenders.
13.07.    Computations. All computations of interest (except as provided in
Section 2.15), Commitment Fees and other Fees (other than Drawing Fees)
hereunder shall be made on the basis of a year of 360 days (except for interest
calculated by reference to clause (a) of the definition of Base Rate or clause
(i) of the definition of Canadian Prime Rate, which shall be based on a year of
365 or 366 days, as applicable) for the actual number of days (including the
first day but excluding the last day; except that in the case of Letter of
Credit Fees and Facing Fees, the last day shall be included) occurring in the
period for which such interest, Commitment Fees or Fees are payable.
13.08.    GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY
TRIAL. (a) THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (OTHER THAN AS EXPRESSLY
SET FORTH IN THE OTHER LOAN DOCUMENTS) SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, INCLUDING SECTIONS 5 1401
AND 5 1402 OF TITLE 14 OF THE NEW YORK GENERAL OBLIGATIONS LAW BUT EXCLUDING ALL
OTHER CHOICE OF LAW AND CONFLICTS OF LAWS RULES THEREOF. ANY LEGAL ACTION OR
PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE
BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES FOR THE
SOUTHERN DISTRICT OF NEW YORK, IN EACH CASE WHICH ARE LOCATED IN THE COUNTY OF
NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT, EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY ACCEPTS FOR
ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE
EXCLUSIVE JURISDICTION OF THE AFORESAID COURTS. EACH OF ABITIBIBOWATERRESOLUTE
AND EACH BORROWER HEREBY IRREVOCABLY DESIGNATES, APPOINTS AND EMPOWERS
ABITIBIBOWATERRESOLUTE AS ITS AUTHORIZED DESIGNEE, APPOINTEE AND AGENT TO
RECEIVE, ACCEPT AND ACKNOWLEDGE FOR AND ON ITS BEHALF, AND IN RESPECT OF ITS
PROPERTY, SERVICE OF ANY AND ALL LEGAL PROCESS, SUMMONS, NOTICES AND DOCUMENTS
WHICH MAY BE SERVED IN ANY SUCH ACTION OR PROCEEDING; PROVIDED THAT DURING THE
PERIOD PRIOR TO THE EFFECTIVE DATE OF THE PLAN OF REORGANIZATION EACH OF THE
PARTIES HERETO SUBMITS TO THE JURISDICTION OF THE U.S. BANKRUPTCY COURT WITH
RESPECT TO MATTERS RELATING HERETO. IF FOR ANY REASON SUCH AUTHORIZED DESIGNEE,
APPOINTEE AND AGENT SHALL CEASE TO BE AVAILABLE

-197-

--------------------------------------------------------------------------------

 

TO ACT AS SUCH, EACH OF ABITIBIBOWATERRESOLUTE AND EACH BORROWER AGREES TO
DESIGNATE A NEW AUTHORIZED DESIGNEE, APPOINTEE AND AGENT IN NEW YORK CITY ON THE
TERMS AND FOR THE PURPOSES OF THIS PROVISION REASONABLY SATISFACTORY TO THE
ADMINISTRATIVE AGENT UNDER THIS AGREEMENT. EACH OF ABITIBIBOWATERRESOLUTE AND
EACH BORROWER HEREBY FURTHER IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH COURTS
LACK PERSONAL JURISDICTION OVER SUCH LOAN PARTY, AND AGREES NOT TO PLEAD OR
CLAIM, IN ANY LEGAL ACTION PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT BROUGHT IN ANY OF THE AFOREMENTIONED COURTS, THAT SUCH
COURTS LACK PERSONAL JURISDICTION OVER SUCH LOAN PARTY. EACH OF THE PARTIES TO
THIS AGREEMENT FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY
OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF
COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO SUCH LOAN
PARTY AT ITS ADDRESS SET FORTH OPPOSITE ITS SIGNATURE BELOW, SUCH SERVICE TO
BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING. EACH OF THE PARTIES TO THIS
AGREEMENT HEREBY IRREVOCABLY WAIVES ANY OBJECTION TO SUCH SERVICE OF PROCESS AND
FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY ACTION OR
PROCEEDING COMMENCED HEREUNDER OR UNDER ANY OTHER LOAN DOCUMENT THAT SERVICE OF
PROCESS WAS IN ANY WAY INVALID OR INEFFECTIVE. NOTHING HEREIN SHALL AFFECT THE
RIGHT OF THE ADMINISTRATIVE AGENT, ANY LENDER OR THE HOLDER OF ANY NOTE TO SERVE
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR
OTHERWISE PROCEED AGAINST ABITIBIBOWATERRESOLUTE AND EACH BORROWER IN ANY OTHER
JURISDICTION.
(b)    EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ANY
OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF
THE AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN CLAUSE
(a) ABOVE AND HEREBY FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM
IN ANY SUCH COURT THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT
HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
(c)    EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT
TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR
RELATING TO THIS AGREEMENT, THE OTHER LOAN DOCUMENTS OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY.
13.09.    Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. A set of counterparts
executed by all the parties hereto shall be lodged with AbitibiBowaterResolute

-198-

--------------------------------------------------------------------------------

 

and the Administrative Agent. Delivery of an executed counterpart hereof by
facsimile or electronic transmission shall be as effective as delivery of an
original executed counterpart hereof.
13.10.    Effectiveness. (a) This Agreement shall become binding on the parties
hereto when:
(i)    the Administrative Agent shall have received from each party hereto
either (x) a counterpart of this Agreement signed on behalf of such party or (y)
evidence satisfactory to the Administrative Agent (which may include a facsimile
or other electronic transmission) that such party has signed a counterpart of
this Agreement;
(ii)    The U.S. Bankruptcy Court shall have entered an order in form and
substance satisfactory to the Lead Arrangers approving AbitibiBowaterResolute’s
and the other U.S. Borrowers’ execution, delivery and performance of this
Agreement, including the payment of fees, expenses, indemnities and other
amounts contemplated hereby, and approving as an administrative expense claim
against AbitibiBowaterResolute and the other U.S. Borrowers the indemnification,
cost reimbursement obligations and fee obligations accruing or payable in
respect of periods or events occurring on or prior to the Effective Date, which
order shall be in full force and effect, unstayed, final and non-appealable
(except with respect to those appeals and other filings by Peter I. Shah), and
shall not have been amended, supplemented or otherwise modified without the
written consent of the Lead Arrangers, reversed or vacated; and
(iii)    The Sanction Order shall be in full force and effect, unstayed, final
and non-appealable, and shall not have been amended, supplemented or otherwise
modified without the written consent of the Lead Arrangers, reversed or vacated.
(b)    The obligation of each Lender to make Loans, and the obligation of each
Issuing Lender to issue Letters of Credit shall arise on the date (the
“Effective Date”) which occurs after the Closing Date on which the conditions
contained in Section 6 and 7 are met to the satisfaction of the Administrative
Agent and the Required Lenders. Unless the Administrative Agent has received
actual notice from any Lender that the conditions described in the preceding
sentence have not been met to its satisfaction, upon the Administrative Agent’s
good faith determination that the conditions described in the immediately
preceding sentence have been met, then the Effective Date shall be deemed to
have occurred, regardless of any subsequent determination that one or more of
the conditions thereto had not been met (although the occurrence of the
Effective Date shall not release AbitibiBowaterResolute, any Borrower or any
other Loan Party from any liability for failure to satisfy one or more of the
applicable conditions contained in Section 6 or 7). The Administrative Agent
will give AbitibiBowaterResolute, the other Borrowers and each Lender prompt
written notice of the occurrence of the Effective Date.
13.11.    Headings Descriptive. The headings of the several sections and
subsections of this Agreement are inserted for convenience only and shall not in
any way affect the meaning or construction of any provision of this Agreement.
13.12.    Amendment or Waiver; etc. (a) Neither this Agreement nor any other
Loan Document nor any terms hereof or thereof may be changed, waived, discharged
or terminated

-199-

--------------------------------------------------------------------------------

 

unless such change, waiver, discharge or termination is in writing signed by the
respective Loan Parties party hereto or thereto and the Required Lenders
(although (x) additional parties may be added hereto or thereto (and annexes may
be modified to reflect such additions) in accordance with the terms hereof or
thereof without the consent of the Required Lenders and (y) Subsidiaries of
AbitibiBowaterResolute (other than the Borrowers) may be released from, the
guarantee under the Guarantee and Collateral Agreement or, the Canadian
Guarantee and Collateral Agreement or the English Subsidiary Guarantee
Agreement, as the case may be, and the relevant Security Documents pursuant to
the terms thereof); provided that no such change, waiver, discharge or
termination shall (i) without the consent of each Lender directly affected
thereby, extend the final scheduled maturity of any Loan or Note or extend the
stated expiration date of any Letter of Credit beyond the Revolving Loan
Maturity Date, or reduce the rate or extend the time of payment of interest or
Fees thereon (except in connection with the waiver of applicability of any
post-default increase in interest rates), or reduce (or forgive) the principal
amount thereof or (ii) without the consent of each Lender (A) release all or
substantially all of the Collateral (except in connection with the Discharge of
ABLpayment in full of all Secured Obligations as expressly provided in the Loan
Documents) under all Security Documents, all or substantially all of the Loan
Parties (except in connection with the Discharge of ABLpayment in full of all
Secured Obligations as expressly provided in the Loan Documents) under the
guarantee under the Guarantee and Collateral Agreement or, the Canadian
Guarantee and Collateral Agreement or the English Subsidiary Guarantee Agreement
or any Borrower (except (x) in connection with the Discharge of ABLpayment in
full of all Secured Obligations as expressly provided in the Loan Documents or
(y) following the payment in full in cash of the Canadian Facility Obligations
(other than unasserted contingent and indemnification obligations), termination
of all Canadian Facility Commitments and reduction of all exposure under any
Canadian Facility Letters of Credit issued and any Bankers’ Acceptances to zero
(or the making of other arrangements satisfactory to the issuers thereof), any
Canadian Borrower) from this Agreement or under the guarantee under the
Guarantee and Collateral Agreement or, the Canadian Guarantee and Collateral
Agreement or the English Subsidiary Guarantee Agreement, as the case may be, (B)
subordinate the Liens granted to or held by the Collateral Agent upon all or
substantially all of the Collateral or subordinate in right of payment all or
substantially all of the Guarantees under the Guarantee and Collateral Agreement
and, the Canadian Guarantee and Collateral Agreement (it being understood that
lien subordinations provided for in the Intercreditoror the English Subsidiary
Guarantee Agreement shall not require any consent pursuant to this clause (B)),
(C) amend, modify or waive any provision of this Section 13.12(a) or
Section 13.06 (except for technical amendments with respect to additional
extensions of credit pursuant to this Agreement which afford the protections to
such additional extensions of credit of the type provided to the Commitments on
the Effective Date), (D) reduce the “majority” voting threshold specified in the
definition of Required Lenders, (E) consent to the assignment or transfer by
AbitibiBowaterResolute or any other Borrower of any of their rights and
obligations under this Agreement or any other Loan Document to which it is a
party or (F) amend the priority of payments set forth in Section 5.03(e),5.03(f)
or, 5.03(g), 5.03(g) or 11.02 or any priority of payments in provisions in the
Security Documents setting forth the application of proceeds; provided further,
that no such change, waiver, discharge or termination shall (1) increase the
Commitments of any Lender over the amount thereof then in effect without the
consent of such Lender (it being understood that waivers or modifications of
conditions precedent, covenants, Defaults or Events of Default or of a mandatory
reduction in the Total

-200-

--------------------------------------------------------------------------------

 

Commitment shall not constitute an increase of the Commitments of any Lender,
and that an increase in the available portion of the Commitments of any Lender
shall not constitute an increase of the Commitments of such Lender), (2) without
the consent of each Issuing Lender, amend, modify or waive any provision of
Section 3 or alter its rights or obligations with respect to Letters of Credit,
(3) without the consent of theeach Swingline Lender, alter the Swingline
Lender’sits rights or obligations with respect to Swingline Loans, (4) without
the consent of the Administrative Agent, amend, modify or waive any provision of
Section 12 or any other provision of this Agreement or any other Loan Document
as same relates to the rights or obligations of the Administrative Agent, (5)
without the consent of the Collateral Agent, amend, modify or waive any
provision relating to the rights or obligations of the Collateral Agent, (6)
without the consent of the Super-Majority Facility Lenders, (x) amend or expand
any of the following definitions, in each case the effect of which would be to
increase the amounts available for borrowing hereunder: Canadian Borrowing Base,
U.S. Borrowing Base, Borrowing Base, Eligible Accounts, Eligible Inventory
(including, in each case, the defined terms used therein) (it being understood
that the establishment, modification or elimination of Reserves, in each case by
the Collateral Agent in accordance with the terms hereof, will not be deemed to
require a Super-Majority Facility Lender consent), (y) decrease the frequency of
Borrowing Base Certificate deliveries required pursuant to Section 9.04(h) or
(z) increase the percentage of any Borrowing Base for which Agent Advances may
be made pursuant to Section 2.01(e) or (7) without the consent of Non-Defaulting
Lenders the sum of whose Commitments (or, after the termination of all
Commitments, outstanding Individual Exposures) at such time represents at least
75% of the Total Commitment in effect at such time less the Commitments of all
Defaulting Lenders (or, after the termination of all Commitments, the sum of
then total outstanding Individual Exposures of all Non-Defaulting Lenders at
such time), amend the definition of Super-Majority Facility Lenders.
(b)    If, in connection with any proposed change, waiver, discharge or
termination of or to any of the provisions of this Agreement as contemplated by
the first proviso to Section 13.12(a), the consent of the Required Lenders is
obtained but the consent of one or more of such other Lenders whose consent is
required is not obtained, then the Borrowers shall have the right, so long as
all non-consenting Lenders whose individual consent is required are treated as
described below, to replace each such non-consenting Lender or Lenders with one
or more Replacement Lenders pursuant to Section 2.13 so long as at the time of
such replacement, each such Replacement Lender consents to the proposed change,
waiver, discharge or termination.
(c)    Notwithstanding anything to the contrary contained in clause (a) above of
this Section 13.12, the Borrowers, the Administrative Agent, the Collateral
Agent and each Incremental Lender may, in accordance with the provisions of
Section 2.14 enter into an Incremental Commitment Agreement, provided that after
the execution and delivery by the Borrowers, the Administrative Agent, the
Collateral Agent and each such Incremental Lender of such Incremental Commitment
Agreement, such Incremental Commitment Agreement may thereafter only be modified
in accordance with the requirements of clause (a) above of this Section 13.12.
(d)    Notwithstanding anything to the contrary contained in clause (a) above of
this Section 13.12, in accordance with Amendment No. 6, the Lenders party to
Amendment No. 6 hereby authorize the Administrative Agent and the Collateral
Agent to enter into any amendments to the Security

-201-

--------------------------------------------------------------------------------

 

Documents as are necessary or advisable to cause the Secured Obligations to
become secured by Liens on Notes Priority Assets as contemplated by Section
10.02(a)(iii).
(de)    If a fee is to be paid by any Borrower in connection with any waiver or
amendment hereunder, the agreement evidencing such amendment or waiver may (but
shall not be required to), at the discretion of Administrative Agent, provide
that only Lenders executing such agreement by a specified date may share in such
fee (and in such case may (but shall not be required to), at the discretion of
Administrative Agent, be divided among the applicable Lenders on a pro rata
basis without including the interests of any Lenders which have not timely
executed such agreement).
13.13.    Survival; Continuing Obligation. (i) All indemnities set forth herein
including, without limitation, in Sections 2.10, 2.11, 3.06, 5.04, 12.06 and
13.01, and in each other Loan Document, are a continuing obligation of each Loan
Party, separate from each of their other respective obligations, and shall
survive the execution, delivery and termination of this Agreement, any other
Loan Document and the Notes and the making and repayment of the Obligations and
(ii) any settlement or discharge of any claim under any indemnity in a Loan
Document will be conditional on no payment made under that indemnity being
avoided or set aside or ordered to be refunded by virtue of any provision of any
enactment relating to bankruptcy, insolvency or liquidation.
13.14.    Domicile of Loans. Each Lender may transfer and carry its Loans at, to
or for the account of any office, Subsidiary or Affiliate of such Lender.
Notwithstanding anything to the contrary contained herein, to the extent that a
transfer of Loans pursuant to this Section 13.14 would, at the time of such
transfer, result in increased costs under Section 2.10, 2.11, 3.06 or 5.04 from
those being charged by the respective Lender prior to such transfer, then the
Borrowers shall not be obligated to pay such increased costs (although the
Borrowers shall be jointly and severally obligated to pay any other increased
costs of the type described above resulting from changes after the date of the
respective transfer).
13.15.    Register. The Borrowers hereby designate the Administrative Agent to
serve as their non-fiduciary agent, solely for purposes of this Section 13.15,
to maintain a register (the “Register”) on which it will record the Commitments
from time to time of each of the Lenders, the Loans made by each of the Lenders
and each repayment in respect of the principal amount of the Loans of each
Lender. The entries in the Register shall be conclusive in the absence of
manifest error. Failure to make any such recordation, or any error in such
recordation, shall not affect the Borrowers’ obligations in respect of such
Loans. With respect to any Lender, the transfer of the Commitments of such
Lender and the rights to the principal of, and interest on, any Loan made
pursuant to such Commitments shall not be effective until such transfer is
recorded on the Register maintained by the Administrative Agent with respect to
ownership of such Commitments and Loans and prior to such recordation all
amounts owing to the transferor with respect to such Commitments and Loans shall
remain owing to the transferor. The registration of assignment or transfer of
all or part of any Commitments and Loans shall be recorded by the Administrative
Agent on the Register only upon the acceptance by the Administrative Agent of a
properly executed and delivered Assignment and Assumption Agreement pursuant to
Section 13.04(b) (including as contemplated by Section 2.13). Coincident with
the delivery of such an Assignment and

-202-

--------------------------------------------------------------------------------

 

Assumption Agreement to the Administrative Agent for acceptance and registration
of assignment or transfer of all or part of a Loan, or as soon thereafter as
practicable, the assigning or transferor Lender shall surrender the Note (if
any) evidencing such Loan, and thereupon one or more new Notes in the same
aggregate principal amount shall be issued to the assigning or transferor Lender
and/or the new Lender at the request of any such Lender. Any provision of
Incremental Commitments pursuant to Section 2.14 shall be recorded by the
Administrative Agent on the Register only upon the acceptance of the
Administrative Agent of a properly executed and delivered Incremental Commitment
Agreement.
13.16.    Confidentiality. (a) Subject to the provisions of clause (b) of this
Section 13.16, each Agent, each Lender and each Issuing Lender agrees that it
will not disclose any Confidential Information to any Person without the prior
consent of AbitibiBowaterResolute; provided that nothing herein shall prevent
any Agent, Issuing Lender or any Lender from disclosing any such information (a)
to the extent required pursuant to the order of any court or administrative
agency or in any pending legal or administrative proceeding, or otherwise as
required by applicable law or compulsory legal process (in which case the
respective Agent, Issuing Lender or Lender, to the extent permitted by law,
agrees to inform AbitibiBowaterResolute promptly thereof), (b) to the extent
required upon the request or demand of any regulatory authority having
jurisdiction over such Agent, Issuing Lender or Lender or any of their
respective Affiliates (in which case, the respective Agent, Issuing Lender or
Lender to the extent permitted, agrees to inform AbitibiBowaterResolute promptly
thereof; although no such notice to AbitibiBowaterResolute shall be required in
connection with ordinary course reviews by any such regulatory authority), (c)
to the extent that such information becomes publicly available other than by
reason of improper disclosure by the respective Agent, Issuing Lender or Lender
or any of its Affiliates, (d) to the extent that such information is received by
the respective Agent, Issuing Lender or Lender on a non-confidential basis from
a third party that is not to its knowledge subject to confidentiality
obligations to any Loan Party, (e) to the Agents’, any Issuing Lender’s or any
Lender’s respective Affiliates and their respective directors, officers,
employees, trustees, investment advisors and agents including legal counsel,
independent auditors and other experts or agents who need to know such
information in connection with the Transaction and are informed of the
confidential nature of such information, (f) to potential Lenders, participants
or assignees or any potential counterparty (or its advisors) to any swap or
derivative transaction relating to any Borrower or any of its Affiliates or any
of their respective obligations, in each case who are instructed that they shall
be bound by terms no less restrictive than this paragraph (or language
substantially similar to this paragraph), (g) with the prior written consent of
AbitibiBowaterResolute, (h) to any rating agency when required by it (it being
understood that, prior to any such disclosure, such rating agency shall
undertake to preserve the confidentiality of any Confidential Information
relating to Loan Parties and their Subsidiaries received by it from such
Lender), (i) in connection with the exercise of any remedies hereunder, under
any other Loan Document or any action or proceeding relating to this Agreement
or any other Loan Document or the enforcement or rights hereunder or thereunder
or (j) for purposes of establishing a “due diligence” defense, provided that the
respective Agent, Issuing Lender or Lender will, to the extent permitted,
promptly provide AbitibiBowaterResolute with the opportunity to seek a
protective order or other measure ensuring confidential treatment of the
Confidential Information used to establish such defense. In addition, each
Agent, each Lender and each Issuing Lender may disclose the existence of this
Agreement and publicly available

-203-

--------------------------------------------------------------------------------

 

information about this Agreement to market data collectors, similar service
providers to the lending industry, and service providers to the Agents and the
Lenders in connection with the administration and management of this Agreement,
the other Loan Documents, the Commitments, and the Loans and Letters of Credit.
(b)    AbitibiBowaterResolute and the other Borrowers hereby acknowledge and
agree that each Lender may share with any of its affiliates, and such affiliates
may share with such Lender, any information related to AbitibiBowaterResolute or
any of its Subsidiaries (including, without limitation, any non-public customer
information regarding the creditworthiness of AbitibiBowaterResolute and its
Subsidiaries), provided such Persons shall be subject to the provisions of this
Section 13.16 to the same extent as such Lender.
13.17.    Patriot Act. Each Lender subject to the USA PATRIOT ACT (Title 111 of
Pub. L. 107-56 (signed into law October 26, 2001)) (the “Patriot Act”) hereby
notifies AbitibiBowaterResolute and the other Borrowers that pursuant to the
requirements of the Patriot Act, they are required to obtain, verify and record
information that identifies AbitibiBowaterResolute, the other Borrowers and the
other Loan Parties and other information that will allow such Lender to identify
AbitibiBowaterResolute, the other Borrowers and the other Loan Parties in
accordance with the Patriot Act. This notice is given in accordance with the
requirements of the USA PATRIOT Act and is effective as to the Lenders and the
Administrative Agent.
13.18.    [Reserved].
13.18.    OTHER LIENS ON COLLATERAL; TERMS OF INTERCREDITOR AGREEMENT; ETC. (a)
THE LENDERS ACKNOWLEDGE THAT THE SENIOR SECURED NOTES ARE SECURED BY LIENS ON
THE NOTES PRIORITY COLLATERAL AND THE ABL PRIORITY COLLATERAL OF THE U.S. LOAN
PARTIES. IN CONNECTION WITH ABITIBIBOWATER’S ISSUANCE OF THE SENIOR SECURED
NOTES, THE ADMINISTRATIVE AGENT SHALL ENTER INTO THE INTERCREDITOR AGREEMENT,
ESTABLISHING THE RELATIVE RIGHTS OF THE SECURED PARTIES AND THE SECURED PARTIES
UNDER THE SENIOR SECURED NOTES. EACH LENDER HEREBY IRREVOCABLY (I) CONSENTS TO
THE TREATMENT OF LIENS TO BE PROVIDED FOR UNDER THE INTERCREDITOR AGREEMENT,
(II) AUTHORIZES AND DIRECTS THE ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT TO
EXECUTE AND DELIVER THE INTERCREDITOR AGREEMENT AND ANY DOCUMENTS RELATING
THERETO, IN EACH CASE, ON BEHALF OF SUCH LENDER AND WITHOUT ANY FURTHER CONSENT,
AUTHORIZATION OR OTHER ACTION BY SUCH LENDER, (III) AGREES THAT, UPON EXECUTION
AND DELIVERY THEREOF, SUCH LENDER SHALL BE BOUND BY THE TERMS OF THE
INTERCREDITOR AGREEMENT AS IF IT WERE A SIGNATORY THERETO AND WILL TAKE NO
ACTION CONTRARY TO THE PROVISIONS OF THE INTERCREDITOR AGREEMENT AND (IV) AGREES
THAT NO LENDER SHALL HAVE ANY RIGHT OF ACTION WHATSOEVER AGAINST THE
ADMINISTRATIVE AGENT OR THE COLLATERAL AGENT AS A RESULT OF ANY ACTION TAKEN BY
THE ADMINISTRATIVE AGENT OR THE COLLATERAL AGENT PURSUANT TO THIS

-204-

--------------------------------------------------------------------------------

 

SECTION OR IN ACCORDANCE WITH THE TERMS OF THE INTERCREDITOR AGREEMENT. EACH
LENDER HEREBY FURTHER IRREVOCABLY AUTHORIZES AND DIRECTS THE ADMINISTRATIVE
AGENT TO ENTER INTO SUCH AMENDMENTS, SUPPLEMENTS OR OTHER MODIFICATIONS TO THE
INTERCREDITOR AGREEMENT IN CONNECTION WITH ANY EXTENSION, RENEWAL OR REFINANCING
OF ANY SENIOR SECURED NOTES AS ARE REASONABLY ACCEPTABLE TO THE ADMINISTRATIVE
AGENT AND THE COLLATERAL AGENT TO GIVE EFFECT THERETO, IN EACH CASE ON BEHALF OF
SUCH LENDER AND WITHOUT ANY FURTHER CONSENT, AUTHORIZATION OR OTHER ACTION BY
SUCH LENDER. THE ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT SHALL HAVE THE
BENEFIT OF THE PROVISIONS OF SECTION 12 WITH RESPECT TO ALL ACTIONS TAKEN BY IT
PURSUANT TO THIS SECTION TO THE FULL EXTENT THEREOF.
(b)    THE PROVISIONS OF THIS SECTION 13.18 ARE NOT INTENDED TO SUMMARIZE ALL
RELEVANT PROVISIONS OF THE INTERCREDITOR AGREEMENT, THE FORM OF WHICH IS
ATTACHED AS AN EXHIBIT TO THIS AGREEMENT. REFERENCE MUST BE MADE TO THE
INTERCREDITOR AGREEMENT ITSELF TO UNDERSTAND ALL TERMS AND CONDITIONS THEREOF.
EACH LENDER IS RESPONSIBLE FOR MAKING ITS OWN ANALYSIS AND REVIEW OF THE
INTERCREDITOR AGREEMENT AND THE TERMS AND PROVISIONS THEREOF, AND NEITHER THE
ADMINISTRATIVE AGENT NOR ANY OF ITS AFFILIATES MAKES ANY REPRESENTATION TO ANY
LENDER AS TO THE SUFFICIENCY OR ADVISABILITY OF THE PROVISIONS CONTAINED IN THE
INTERCREDITOR AGREEMENT.
13.19.    Waiver of Sovereign Immunity. Each of the Loan Parties, in respect of
itself, its Subsidiaries, its process agents, and its properties and revenues,
hereby irrevocably agrees that, to the extent that such Loan Party, its
Subsidiaries or any of its properties has or may hereafter acquire any right of
immunity, whether characterized as sovereign immunity or otherwise, from any
legal proceedings, whether in the United States and Canada or elsewhere, to
enforce or collect upon the Loans or any Loan Document or any other liability or
obligation of such Loan Party or any of its Subsidiaries related to or arising
from the transactions contemplated by any of the Loan Documents, including,
without limitation, immunity from service of process, immunity from jurisdiction
or judgment of any court or tribunal, immunity from execution of a judgment, and
immunity of any of its property from attachment prior to any entry of judgment,
or from attachment in aid of execution upon a judgment, such Loan Party, for
itself and on behalf of its Subsidiaries, hereby expressly waives, to the
fullest extent permissible under applicable law, any such immunity, and agrees
not to assert any such right or claim in any such proceeding, whether in the
United States and Canada or elsewhere. Without limiting the generality of the
foregoing, each Loan Party further agrees that the waivers set forth in this
Section 13.19 shall have the fullest extent permitted under the Foreign
Sovereign Immunities Act of 1976 of the United States and are intended to be
irrevocable for purposes of such Act.
13.20.    Judgment Currency. (a) The Loan Parties’ obligations hereunder and
under the other Loan Documents to make payments in the respective Available
Currency (the “Obligation Currency”) shall not be discharged or satisfied by any
tender or recovery pursuant to any judgment

-205-

--------------------------------------------------------------------------------

 

expressed in or converted into any currency other than the Obligation Currency,
except to the extent that such tender or recovery results in the effective
receipt by the Administrative Agent, the Collateral Agent, the respective
Issuing Lender or the respective Lender of the full amount of the Obligation
Currency expressed to be payable to the Administrative Agent, the Collateral
Agent, such Issuing Lender or such Lender under this Agreement or the other Loan
Documents. If for the purpose of obtaining or enforcing judgment against any
Loan Party in any court or in any jurisdiction, it becomes necessary to convert
into or from any currency other than the Obligation Currency (such other
currency being hereinafter referred to as the “Judgment Currency”) an amount due
in the Obligation Currency, the conversion shall be made, at the rate of
exchange (as quoted by the Administrative Agent or if the Administrative Agent
does not quote a rate of exchange on such currency, by a known dealer in such
currency designated by the Administrative Agent) determined, in each case, as of
the day on which the judgment is given (such day being hereinafter referred to
as the “Judgment Currency Conversion Date”).
(b)    If there is a change in the rate of exchange prevailing between the
Judgment Currency Conversion Date and the date of actual payment of the amount
due, each Borrower covenants and agrees, as a separate obligation and
notwithstanding such judgment, to pay, or cause to be paid, such additional
amounts, if any (but in any event not a lesser amount), as may be necessary to
ensure that the amount paid in the Judgment Currency, when converted at the rate
of exchange prevailing on the date of payment, will produce the amount of the
Obligation Currency which could have been purchased with the amount of Judgment
Currency stipulated in the judgment or judicial award at the rate or exchange
prevailing on the Judgment Currency Conversion Date.
(c)    For purposes of determining any rate of exchange for this Section, such
amounts shall include any premium and costs payable in connection with the
purchase of the Obligation Currency.
13.21.    Qualified Secured Hedging Agreements and Qualified Secured Cash
Management Agreements. (a) At any time prior to or within 15 days after any Loan
Party enters into any Hedging Agreement or Cash Management Agreement, or in the
case of Hedging Agreements or Cash Management Agreements in effect on the
Effective Date, within 15 days of the Effective Date, if the applicable Loan
Party and counterparty desire that the monetary obligations in respect of such
Hedging Agreement or the monetary obligations in respect of such Cash Management
Agreement be treated as “Hedging Obligations” or “Cash Management Services
Obligations”, as applicable, hereunder with rights in respect of payment of
proceeds of the Collateral in accordance with the waterfall provisions set forth
in Section 11.02, AbitibiBowaterResolute may notify the Administrative Agent in
writing (which notice the Administrative Agent shall promptly provide to the
Collateral Agent) (to be acknowledged by the Administrative Agent and the
Collateral Agent) that (x) such Hedging Agreement is to be a “Secured Hedging
Agreement” and, if it wishes that the monetary obligations in respect of the
respective Secured Hedging Agreement be treated as pari passu with the Loan
Document Obligations with respect to the priority of payment of proceeds of the
Collateral in accordance with the waterfall provisions set forth in
Section 11.02, a “Qualified Secured Hedging Agreement” or (y) such Cash
Management Agreement is to be a “Secured Cash Management Agreement” and, if it
wishes that the monetary obligations in respect of the respective Secured Cash
Management Agreement be treated as pari passu with the Loan Document Obligations
with respect to the priority of payment of proceeds of the Collateral in
accordance

-206-

--------------------------------------------------------------------------------

 

with the waterfall provisions set forth in Section 11.02, a “Qualified Secured
Cash Management Agreement”, so long as the following conditions are satisfied:
(i)    in the case of a Hedging Agreement, such Hedging Agreement is either
(x) in effect on the Effective Date with a counterparty that is a Hedging
Creditor or (y) entered into after the Effective Date with any counterparty that
is a Hedging Creditor at the time such Hedging Agreement is entered into; and
(ii)    in the case of a Cash Management Agreement, such Cash Management
Agreement is either (x) in effect on the Effective Date with a Cash Management
Creditor or (y) entered into after the Effective Date with a Cash Management
Creditor at the time such Cash Management Agreement is entered into;
provided that no such Secured Hedging Agreement or Secured Cash Management
Agreement can be secured on a first lien basis by the Notes Priority
CollateralAssets (and any request under this Section 13.21 will be deemed to be
a representation by AbitibiBowaterResolute to such effect); and provided
further, that no monetary obligations in respect of any Secured Hedging
Agreement or Secured Cash Management Agreement shall be treated as “Hedging
Obligations” or “Cash Management Services Obligations”, as applicable, hereunder
or receive any benefit of the designation under this Section 13.21 after the
Discharge of ABL Obligations have been indefeasibly paid in full. If, in any
written notification by AbitibiBowaterResolute as set forth above,
AbitibiBowaterResolute shall fail to include in such written notice that a
Secured Hedging Agreement or Secured Cash Management Agreement shall constitute
a Qualified Secured Hedging Agreement or Qualified Secured Cash Management
Agreement, as the case may be, then such Secured Hedging Agreement or Secured
Cash Management Agreement shall not constitute a Qualified Secured Hedging
Agreement or Qualified Secured Cash Management Agreement, as the case may be.
(b)    Until such time as AbitibiBowaterResolute delivers (and the
Administrative Agent and Collateral Agent acknowledge) such notice as described
above, such Hedging Agreement or Cash Management Agreement shall not constitute
a Secured Hedging Agreement or Secured Cash Management Agreement, as the case
may be. The parties hereto understand and agree that the provisions of this
Section 13.21 are made for the benefit of the Lenders and their Affiliates which
become parties to Hedging Agreements or Cash Management Agreements, as
applicable, and agree that any amendments or modifications to the provisions of
this Section 13.21 shall not be effective with respect to any Secured Hedging
Agreement or Secured Cash Management Agreement, as the case may be, entered into
prior to the date of the respective amendment or modification of this
Section 13.21 (without the written consent of the relevant parties thereto).
Notwithstanding any such designation of a Hedging Agreement as a Secured Hedging
Agreement or a Cash Management Agreement as a Secured Cash Management Agreement,
no provider or holder of any such Secured Hedging Agreement or Secured Cash
Management Agreement shall have any voting or approval rights hereunder (or be
deemed a Lender) solely by virtue of its status as the provider of such
agreements or the Secured Obligations owing thereunder, nor shall their consent
be required (other than in their capacities as a Lender to the extent
applicable) for any matter hereunder or under any of the other Loan Documents,
including, without limitation, as to any matter relating to the

-207-

--------------------------------------------------------------------------------

 

Collateral or the release of Collateral or Guarantors. The Administrative Agent
and the Collateral Agent accept no responsibility and shall have no liability
for the calculation of the exposure owing by the Loan Parties under any such
Secured Hedging Agreement and/or Secured Cash Management Agreement, and shall be
entitled in all cases to rely on the applicable counterparty and the applicable
Loan Party party to such agreement for the calculation thereof. Such
counterparty and the applicable Loan Party party to any such agreement each
agrees to provide the Administrative Agent and the Collateral Agent with the
calculations of all such exposures and reserves, if any, at such times as the
Administrative Agent or the Collateral Agent shall reasonably request, and in
any event, not less than monthly (unless otherwise agreed to by the
Administrative Agent and the Collateral Agent).
13.22.    Interest Rate Limitation. Notwithstanding anything to the contrary
contained in any Loan Document, the interest paid or agreed to be paid under the
Loan Documents shall not exceed the maximum rate of non-usurious interest
permitted by applicable law (the “Maximum Rate”). If any Agent or any Lender
shall receive interest in an amount that exceeds the Maximum Rate, the excess
interest shall be applied to the principal of the Loans or, if it exceeds such
unpaid principal, refunded to the Borrowers. In determining whether the interest
contracted for, charged, or received by an Agent or a Lender exceeds the Maximum
Rate, such Person may, to the extent permitted by applicable law,
(a) characterize any payment that is not principal as an expense, fee, or
premium rather than interest, (b) exclude voluntary prepayments and the effects
thereof and (c) amortize, prorate, allocate, and spread in equal or unequal
parts the total amount of interest throughout the contemplated term of the
Obligations hereunder.
13.23.    Integration. This Agreement, together with the other Loan Documents,
comprises the complete and integrated agreement of the parties on the subject
matter hereof and thereof and supersedes all prior agreements, written or oral,
on such subject matter except for any such prior agreements which by the express
terms thereof survive the execution of this Agreement. In the event of any
conflict between the provisions of this Agreement and those of any other Loan
Document, the provisions of this Agreement shall control unless, in the case of
such other Loan Documents governed by any law other than a state of the United
States, such control would result, such other Loan Document being invalid or
unenforceable, in which case, the relevant provision of the Loan Document will
prevail; provided that the inclusion of supplemental rights or remedies in favor
of the Agents or the Lenders in any other Loan Document shall not be deemed a
conflict with this Agreement. Each Loan Document was drafted with the joint
participation of the respective parties thereto and shall be construed neither
against nor in favor of any party, but rather in accordance with the fair
meaning thereof.
13.24.    Severability. If any provision of this Agreement or any other Loan
Document is held to be illegal, invalid or unenforceable, the legality, validity
and enforceability of the remaining provisions of this Agreement and such other
Loan Document shall not be affected or impaired thereby. The invalidity of a
provision in a particular jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
13.25.    Power of Attorney and Other Matters in Respect of B/A Instruments.

-208-

--------------------------------------------------------------------------------

 

. To enable the Lenders to create Bankers’ Acceptances or complete Drafts in the
manner specified in Schedule 1.01(b) and this Agreement, each Borrower (i) shall
supply each Lender with such number of Drafts as it may reasonably request,
either in blank or duly endorsed and executed on behalf of such Borrower and
(ii) hereby appoints each Lender as its attorney to complete, sign, endorse and
issue on its behalf (in accordance with a Notice of Borrowing relating to a
Bankers’ Acceptance Loan), in handwriting or by facsimile or mechanical
signature as and when deemed necessary by such Lender, B/A Instruments in the
form reasonably requested by such Lender. Each Borrower recognizes and agrees
that all such forms signed and/or endorsed by a Lender on behalf of such
Borrower shall bind such Borrower as fully and effectually as if signed in the
handwriting of and duly issued by the proper signing officers of such Borrower.
Each Lender is hereby authorized (in accordance with a Notice of Borrowing
relating to a Bankers’ Acceptance Loan) to issue B/A Instruments endorsed in
blank in such face amounts as may be determined by such Lender; provided that
the aggregate amount thereof is equal to the aggregate amount of B/A Instruments
required to be accepted and purchased by such Lender. No Lender shall be liable
for any damage, loss or other claim arising by reason of any loss or improper
use of any such B/A Instruments except the gross negligence or wilful misconduct
of the Lender or its officers, employees, agents or representatives. Each Lender
will exercise such care in the custody and safekeeping of Drafts as it would
exercise in the custody and safekeeping of similar property owned by it and
will, upon request by any Borrower, promptly advise such Borrower of the number
and designations, if any, of uncompleted Drafts held by it for such Borrower.
The signature of any officer of any Borrower on a Draft may be mechanically
reproduced and B/A Instruments bearing facsimile or electronic signature shall
be binding upon such Borrower as if they had been manually signed. Even if the
individuals whose manual, facsimile signature appears on any B/A Instrument no
longer hold office on the date of signature, at the date of its acceptance by
the Lender or at any time after such date, any B/A Instrument so signed shall be
valid and binding upon each Borrower. On request by or on behalf of a Borrower,
a Lender shall cancel all forms of B/A Instruments which have been pre-signed or
pre-endorsed on behalf of such Borrower and which are held by such Lender and
are not required to be issued in accordance with such Borrower's irrevocable
notice.
At the request of any Lender in connection with any Bankers’ Acceptance, each
Borrower shall deliver to such lender a “depository bill” which complies with
the requirements of the Depository Bills and Notes Act (Canada), and hereby
consents to the deposit of any Bankers’ Acceptance in the form of a depository
bill in the book-based debt clearance systems maintained by the Canadian
Depository for Securities Limited or other recognized clearing house. In such
circumstances, the delivery of Bankers’ Acceptances shall be governed by the
clearance procedures established thereunder.
13.26.    Additional Borrowers.
Subject to any applicable limitations set forth in the Security Documents, upon
the request of Resolute from time to time, any direct or indirect Domestic
Subsidiary or Canadian Subsidiary formed or otherwise purchased or acquired
after the Sixth Amendment Effective Date (including pursuant to a Permitted
Acquisition), or that ceases to constitute an Excluded Subsidiary after the
Sixth Amendment Effective Date, may be added as an Other Borrower hereunder,
effective upon the execution and delivery to the Administrative Agent of (a) by
such Domestic Subsidiary

-209-

--------------------------------------------------------------------------------

 

or Canadian Subsidiary, as applicable, (i) a Borrower Joinder Agreement and
amendments or joinders to any applicable outstanding promissory notes issued
under Section 2.05(a) and (ii) any other Security Documents and other documents
that such Domestic Subsidiary or Canadian Subsidiary would be required to
deliver pursuant to the Collateral and Guarantee Requirement if it were becoming
a Guarantor, and (b) by each existing Guarantor, reaffirmations of its
respective Guarantees under the applicable Security Documents. Each Other
Borrower shall, from and after the date that it becomes an Other Borrower, be a
U.S. Borrower or a Canadian Borrower, as applicable.
SECTION 14. Nature of ObligationsNature of Obligations
(a)    all U.S. Facility Obligations to repay principal of, interest on, and all
other amounts with respect to, all U.S. Facility Revolving Loans, U.S. Facility
Swingline Loans, U.S. Facility Letters of Credit and all other U.S. Facility
Obligations pursuant to this Agreement and each other Loan Document (including,
without limitation, all fees, indemnities, taxes and other U.S. Facility
Obligations in connection therewith or in connection with the related
Commitments) shall constitute the joint and several obligations of each of the
U.S. Borrowers. In addition to the direct (and joint and several) obligations of
the U.S. Borrowers with respect to U.S. Facility Obligations as described above,
all such U.S. Facility Obligations shall be guaranteed pursuant to, and in
accordance with the terms of, the Guarantee and Collateral Agreement, provided
that the obligations of a U.S. Borrower with respect to the U.S. Facility
Obligations as described above shall not be limited by any provision of the
Guarantee and Collateral Agreement entered into by such U.S. Borrower;
(b)    all Canadian Facility Obligations owing by any U.S. Borrower to repay
principal of, interest on, and all other amounts with respect to, all Canadian
Facility Revolving Loans and Canadian Facility Swingline Loans borrowed by any
U.S. Borrower, all Canadian Facility Letters of Credit issued for the account of
any U.S. Borrower and all other Canadian Facility Obligations owing by any U.S.
Borrower pursuant to this Agreement and each other Loan Document (including,
without limitation, all fees, indemnities, taxes and other Canadian Facility
Obligations in connection therewith or in connection with the related Canadian
Facility Commitments) shall constitute the joint and several obligations of each
of the U.S. Borrowers. In addition to the direct (and joint and several)
obligations of the U.S. Borrowers with respect to Canadian Facility Obligations
as described above, all such Canadian Facility Obligations owing by any U.S.
Borrower shall be guaranteed pursuant to, and in accordance with the terms of,
the Guarantee and Collateral Agreement, provided that the obligations of a U.S.
Borrower with respect to the Canadian Facility Obligations as described above
shall not be limited by any provision of the Guarantee and Collateral Agreement
entered into by such U.S. Borrower; and
(c)    all Canadian Facility Obligations owing by any Canadian Borrower to repay
principal of, interest on, and all other amounts with respect to, all Canadian
Facility Revolving Loans and Canadian Facility Swingline Loans borrowed by any
Canadian Borrower, all Canadian Facility Letters of Credit issued for the
account of any Canadian Borrower and all other Canadian Facility Obligations
owing by any Canadian Borrower pursuant to this Agreement

-210-

--------------------------------------------------------------------------------

 

and each other Loan Document (including, without limitation, all fees,
indemnities, taxes and other Canadian Facility Obligations in connection
therewith or in connection with the related Canadian Facility Commitments) shall
constitute the joint and several obligations of each of the Canadian Borrowers.
In addition to the direct (and joint and several) obligations of the Canadian
Borrowers with respect to Canadian Facility Obligations as described above, all
such Canadian Facility Obligations owing by any Canadian Borrower shall be
guaranteed pursuant to, and in accordance with the terms of, the Guarantee and
Collateral Agreement and, the Canadian Guarantee and Collateral Agreement and
the English Subsidiary Guarantee Agreement, provided that the obligations of a
Canadian Borrower with respect to the Canadian Facility Obligations as described
above shall not be limited by any provision of the Canadian Guarantee and
Collateral Agreement entered into by such Canadian Borrower or by any provision
of the English Subsidiary Guarantee Agreement.
14.02.    Independent Obligation. The obligations of each Borrower with respect
to its Borrower Obligations are independent of the Loan Document Obligations of
each other Borrower or any Guarantor under its Guarantee of such Borrower
Obligations, and a separate action or actions may be brought and prosecuted
against each Borrower, whether or not any other Borrower or any Guarantor is
joined in any such action or actions. Each Borrower waives, to the fullest
extent permitted by law, the benefit of any statute of limitations affecting its
liability hereunder or the enforcement thereof. Any payment by any Borrower or
other circumstance which operates to toll any statute of limitations as to any
Borrower shall, to the fullest extent permitted by law, operate to toll the
statute of limitations as to each Borrower.
14.03.    Authorization. Each of the Borrowers authorizes the Administrative
Agent, the Collateral Agent, the Swingline Lender, the Collateral AgentLenders,
the Issuing Lenders and the Lenders without notice or demand (except as shall be
required by applicable statute and cannot be waived), and without affecting or
impairing its liability hereunder, from time to time to, to the maximum extent
permitted by applicable law and the Loan Documents to:
(a)    exercise or refrain from exercising any rights against any other Borrower
or any Guarantor or others or otherwise act or refrain from acting;
(b)    release or substitute any other Borrower, endorsers, Guarantors or other
obligors;
(c)    settle or compromise any of the Borrower Obligations of any other
Borrower or any other Loan Party, any security therefor or any liability
(including any of those hereunder) incurred directly or indirectly in respect
thereof or hereof, and may subordinate the payment of all or any part thereof to
the payment of any liability (whether due or not) of any Borrower to its
creditors other than the Lenders;
(d)    apply any sums paid by any other Borrower or any other Person, howsoever
realized to any liability or liabilities of such other Borrower or other Person
regardless of what liability or liabilities of such other Borrower or other
Person remain unpaid; and/or

-211-

--------------------------------------------------------------------------------

 

(e)    consent to or waive any breach of, or act, omission or default under,
this Agreement or any of the instruments or agreements referred to herein, or
otherwise, by any other Borrower or any other Person.
14.04.    Reliance. It is not necessary for the Administrative Agent, the
Collateral Agent, theany Swingline Lender, any Issuing Lender or any Lender to
inquire into the capacity or powers of any Borrower, AbitibiBowaterResolute or
any of its other Subsidiaries or the officers, directors, members, partners or
agents acting or purporting to act on its behalf, and any Borrower Obligations
made or created in reliance upon the professed exercise of such powers shall
constitute the joint and several obligations of the respective Borrowers
hereunder.
14.05.    Contribution; Subrogation. No Borrower shall exercise any rights of
contribution or subrogation with respect to any other Borrower as a result of
payments made by it hereunder, in each case unless and until (i) the Total
Commitment and all Letters of Credit have been terminated and (ii) all of the
Loan Document Obligations have been paid in full in cash. To the extent that any
Canadian Loan Party or U.S. Loan Party shall be required to pay a portion of the
Loan Document Obligations which shall exceed the amount of loans, advances or
other extensions of credit received by such Loan Party and all interest, costs,
fees and expenses attributable to such loans, advances or other extensions of
credit, then such Loan Party shall be reimbursed by the other Loan Parties
within its group (Canadian or U.S.) for the amount of such excess, subject to
the restrictions of the previous sentence. This Section 14.05 is intended only
to define the relative rights of Loan Parties, and nothing set forth in this
Section 14.05 is intended or shall impair the obligations of each Loan Party to
pay the Loan Document Obligations as and when the same shall become due and
payable in accordance with the terms hereof.
14.06.    Waiver. Each Borrower waives any right to require the Administrative
Agent, the Collateral Agent, the Swingline Lender, the Collateral AgentLenders,
the Issuing Lenders or the Lenders to (i) proceed against any other Borrower,
any Guarantor or any other party, (ii) proceed against or exhaust any security
held from any Borrower, any Guarantor or any other party or (iii) pursue any
other remedy in the Administrative Agent’s, the Collateral Agent’s, theany
Swingline Lender’s, the Fronting Lender’s, any Issuing Lender’s or Lenders’
power whatsoever. Each Borrower waives any defense based on or arising out of
suretyship or any impairment of security held from any Borrower, any Guarantor
or any other party or on or arising out of any defense of any other Borrower,
any Guarantor or any other party other than payment in full in cash of its
Borrower Obligations, including, without limitation, any defense based on or
arising out of the disability of any other Borrower, any Guarantor or any other
party, or the unenforceability of its Borrower Obligations or any part thereof
from any cause, or the cessation from any cause of the liability of any other
Borrower, in each case other than as a result of the payment in full in cash of
its Borrower Obligations.
14.07.    Limitation on CanadianCertain Borrower Obligations. Notwithstanding
anything to the contrary herein or in any other Loan Document (including
provisions that may override any other provision), in no event shall the
Canadian Borrowers or any other Canadian Loan Party or any English Loan Party
guarantee or be deemed to have guaranteed or become liable or obligated on a
joint and several basis or otherwise for, or to have pledged any of its assets
to secure, any

-212-

--------------------------------------------------------------------------------

 

Obligation owing by any U.S. Borrower or Domestic Subsidiary of
AbitibiBowaterResolute under this Agreement, any of the other Loan Documents,
any Secured Hedging Agreement or any Secured Cash Management Agreement. All
provisions contained in any Loan Document, any Secured Hedging Agreement or any
Secured Cash Management Agreement shall be interpreted consistently with this
Section 14.07 to the extent possible, and where such other provisions conflict
with the provisions of this Section 14.07, the provisions of this Section 14.07
shall govern.
14.08.    Rights and Obligations. The obligations of theeach Swingline Lender,
each Issuing Lender and each Lender under this Agreement bind each of them
severally. Failure by theany Swingline Lender, any Issuing Lender or any Lender,
as the case may be, to perform its obligations under this Agreement does not
affect the obligations of any other party under this Agreement. TheEach
Swingline Lender, each Issuing Lender or each Lender is not responsible for the
obligations of any other Swingline Lender, Fronting Lender, Issuing Lender or
Lender, as the case may be, under this Agreement. The rights, powers and
remedies of theeach Swingline Lender, each Issuing Lender and each Lender in
connection with this Agreement are separate and independent rights, powers and
remedies and any debt arising under this Agreement to or for the account of
theany Swingline Lender, any Issuing Lender or any Lender from a Loan Party is a
separate and independent debt.
SECTION 15. Lender Loss Sharing AgreementDefinitions
(a)    CAM: the mechanism for the allocation and exchange of interests in the
Loans, participations in Letters of Credit and collections thereunder
established under Section 15.02.
(b)    CAM Exchange: the exchange of the U.S. Facility Lenders’ interests and
the Canadian Facility Lenders’ interests provided for in Section 15.02.
(c)    CAM Exchange Date: the first date after the Closing Date on which there
shall occur (i) any event described in Section 11.01(g) or (h) with respect to
any Borrower, (ii) an acceleration of Loans and termination of the Total
Commitment pursuant to Section 11.01 or (iii) the failure by any Borrower to
repay any amounts due under any Facility of Loans on the Revolving Loan Maturity
Date.
(d)    CAM Percentage: as to each Lender, such Lender’s RL Percentage of the
Total Commitment immediately prior to the CAM Exchange Date and the termination
of the Total Commitment.
(e)    Designated Obligations: all Obligations of the Borrowers with respect to
(i) principal and interest under the Loans, (ii) Unpaid Drawings under Letters
of Credit and interest thereon and (iii) all Fees.
(f)    Revolver Facilities: the facilities established under the U.S. Facility
Commitments and the Canadian Facility Commitments, and “Revolver Facility” means
any one of such Revolver Facilities.

-213-

--------------------------------------------------------------------------------

 

15.02.    CAM Exchange. (a) On the CAM Exchange Date:
(i)    the U.S. Facility Commitments and the Canadian Facility Commitments shall
have terminated in accordance with Section 11.01,
(ii)    each U.S. Facility Lender shall fund its participation in any
outstanding Swingline Loans and Agent Advances in accordance with
Sections 2.01(b) and (e), and each Canadian Facility Lender shall fund its
participation in any outstanding Swingline Loans and Agent Advances in
accordance with Section 2.01(b) and Section 2.01(e), respectively,
(iii)    each U.S. Facility Lender shall fund its participation in any Unpaid
Drawings made under the applicable U.S. Facility Letters of Credit pursuant to
Section 3.04, and each Canadian Facility Lender shall fund its participation in
any Unpaid Drawings made under the applicable Canadian Facility Letters of
Credit pursuant to Section 3.04, and
(iv)    the Lenders shall purchase, at the U.S. Dollar Equivalent of par,
interests in the Designated Obligations under each Revolver Facility (and shall
make payments in U.S. Dollars to the Administrative Agent for reallocation to
other Lenders to the extent necessary to give effect to such purchases) and
shall assume the obligations to reimburse each Issuing Lender for unreimbursed
drawings under outstanding Letters of Credit under such Revolver Facility such
that, in lieu of the interests of each Lender in the Designated Obligations
under the U.S. Facility Commitments and the Canadian Facility Commitments in
which it shall participate immediately prior to the CAM Exchange Date, such
Lender shall own an interest equal to such Lender’s CAM Percentage in each
component of the Designated Obligations immediately following the CAM Exchange.
(b)    Each Lender and each Person acquiring a participation from any Lender as
contemplated by Section 13.04 hereby consents and agrees to the CAM Exchange.
Each Borrower agrees from time to time to execute and deliver to the Lenders all
such promissory notes and other instruments and documents as the Administrative
Agent shall reasonably request to evidence and confirm the respective interests
and obligations of Lenders after giving effect to the CAM Exchange, and each
Lender agrees to surrender any promissory notes originally received by it in
connection with its Loans under this Agreement to the Administrative Agent
against delivery of any promissory notes so executed and delivered; provided
that the failure of any Lender to deliver or accept any such promissory note,
instrument or document shall not affect the validity or effectiveness of the CAM
Exchange.
(c)    As a result of the CAM Exchange, from and after the CAM Exchange Date,
each payment received by the Administrative Agent pursuant to any Loan Document
in respect of any of the Designated Obligations shall be distributed to Lenders,
pro rata in accordance with their respective CAM Percentages.
(d)    In the event that on or after the CAM Exchange Date, the aggregate amount
of the Designated Obligations shall change as a result of the making of a
disbursement under a Letter of Credit by an Issuing Lender that is not
reimbursed by the applicable Borrowers, then each Lender shall promptly
reimburse such Issuing Lender for its CAM Percentage of such unreimbursed
payment.

-214-

--------------------------------------------------------------------------------

 

15.03.    Miscellaneous. Notwithstanding any other provision of this Section 15,
the Administrative Agent and each Lender agree that if the Administrative Agent
or a Lender is required under applicable law to withhold or deduct any Taxes or
other amounts from payments made by it hereunder or as a result hereof to the
Administrative Agent or any Lender, such Person shall be entitled to withhold or
deduct such amounts and pay over such Taxes or other amounts to the applicable
Governmental Authority imposing such Tax without any obligation to indemnify the
Administrative Agent or any Lender with respect to such amounts and without any
other obligation of gross up or offset with respect thereto and there shall be
no recourse whatsoever by Agent or any Lender subject to such withholding to the
Administrative Agent or any other Lender making such withholding and paying over
such amounts, but without diminution of the rights of the Administrative Agent
or such Lender subject to such withholding as against Borrowers and the other
Loan Parties to the extent (if any) provided in this Agreement and the other
Loan Documents. Any amounts so withheld or deducted shall be treated as, for the
purpose of this Section 15, having been paid to the Administrative Agent or such
Lender with respect to which such withholding or deduction was made.
* * *

-215-

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the parties hereto have caused their duly authorized
officers to execute and deliver this Agreement as of the date first above
written.
 
U.S. BORROWERS:
 
 
 
 
 
RESOLUTE FOREST PRODUCTS INC. (F/K/A ABITIBIBOWATER INCINC.)
 
 
 
 
 
 
 
 
 
 
 
By:_________________________________
 
Name:
 
Title:
 
 
   
 
 
 
 
 
 
RESOLUTE FP US INC. (F/K/A BOWATER INCORPORATED)
 
as a U.S. Borrower
 
 
 
 
 
By:_________________________________
 
Name:
 
Title:
 
 
 
 
 
ABIBOW RECYCLING LLC (F/K/A ABITIBI-CONSOLIDATED CORP.)
 
as a U.S. Borrower
 
 
 
 
 
By:_________________________________
 
Name:
 
Title:
 
 
 
 

[Signature Page to Credit Agreement]

--------------------------------------------------------------------------------

 

 
CANADIAN BORROWERS:
 
 
 
 
 
RESOLUTE FP CANADA INC (F/K/A ABITIBI-CONSOLIDATED INC.)
 
as a Canadian Borrower
 
 
 
 
 
By:_________________________________
 
Name:
 
Title:

[Signature Page to Credit Agreement]

--------------------------------------------------------------------------------

EXECUTION VERSION

CITIBANK, N.A., Individually and as Administrative Agent and Collateral Agent
By:____________________________________

Name:

Title:
By:____________________________________

Name:

Title:

--------------------------------------------------------------------------------

BARCLAYS BANK PLC, as Lender
By:____________________________________

Name:

Title:

--------------------------------------------------------------------------------

JPMORGAN CHASE BANK, N.A., as Lender
By:____________________________________

Name:

Title:
By:____________________________________

Name:

Title:

--------------------------------------------------------------------------------

EXHIBIT B

FORM OF U.S. GUARANTEE AND COLLATERAL AGREEMENT

--------------------------------------------------------------------------------

AMENDED AND RESTATED GUARANTEE AND COLLATERAL AGREEMENT
dated as of
February 25, 2014
among
RESOLUTE FOREST PRODUCTS INC. (F/K/A/ ABITIBIBOWATER INC.)
CERTAIN OF ITS SUBSIDIARIES PARTY HERETO
and
CITIBANK, N.A.,
as Collateral Agent

--------------------------------------------------------------------------------

EXECUTION VERSION

TABLE OF CONTENTS

Article 1
Definitions
1.01. Credit Agreement
2

02. Other Defined Terms
2

Article 2
Guarantee
01. Guarantee
6

02. Guarantee of Payment
6

03. No Limitations
6

04. Reinstatement
8

05. Agreement to Pay; Subrogation
8

06. Information
8

07. Keepwell
8

Article 3
Pledge of Securities
01. Pledge
9

02. Delivery of the Pledged Collateral
10

03. Representations, Warranties and Covenants
10

04. [Reserved].
11

05. Registration in Nominee Name; Denominations
11

06. Interest
11

07. [Reserved].
13

08. [Reserved].
13

Article 4
Security Interests in Personal Property
01. Security Interest
13

02. Representations and Warranties
15

03. Covenants
16

04. Other Actions
20

05. [Reserved].
23

Article 5
Remedies
01. Remedies Upon Default
23

02. Application of Proceeds
25

03. Grant of License to Use Intellectual Property
25

04. Securities Act
26

i
 

--------------------------------------------------------------------------------

Article 6
Indemnity, Subrogation and Subordination
01. Indemnity and Subrogation
27

02. Contribution and Subrogation
27

03. Subordination
28

Article 7
Miscellaneous
01. Notices
28

02. Waivers; Amendment
28

03. Collateral Agent’s Fees and Expenses; Indemnification
29

04. Successors and Assigns
29

05. Survival of Agreement
30

06. Counterparts; Effectiveness; Several Agreement
30

07. Severability
30

08. Right of Set-Off
31

09. Governing Law; Jurisdiction; Consent to Service of Process
31

10. Waiver of Jury Trial
32

11. Headings
32

12. Security Interest Absolute
32

13. Termination or Release
32

14. Additional Subsidiaries
34

15. Collateral Agent Appointed Attorney-in-Fact
34

16. Recourse
35

17. Release
35

--------------------------------------------------------------------------------

Schedules
Schedule 1    [Reserved]
Schedule 2    Pledged Debt
Schedule 3    [Reserved]
Schedule 4    Corporate Name Changes, Etc.

Exhibits
Exhibit A    Form of Guarantee and Collateral Agreement Supplement

--------------------------------------------------------------------------------

EXECUTION VERSION

AMENDED AND RESTATED GUARANTEE AND COLLATERAL AGREEMENT (this “Agreement”) dated
as of February 25, 2014, among Resolute Forest Products Inc. (f/k/a/
Abitibibowater Inc.) (“Resolute”), each Domestic Subsidiary of Resolute set
forth on the signature pages hereto, and Citibank, N.A. (“Citibank”), as
Collateral Agent.
WHEREAS, Resolute entered into (i) that certain ABL Credit Agreement dated as of
December 9, 2010 (as amended by Amendment No. 1 dated as of April 28, 2011,
Amendment No. 2 dated as of October 28, 2011, Amendment No. 3 dated as of March
21, 2012, Amendment No. 4 dated as of April 12, 2013 and Amendment No. 5 dated
as of May 8, 2013, and as otherwise modified from time to time, the “Existing
Credit Agreement”), among Resolute, certain of its Subsidiaries party thereto,
the Lenders party thereto and Citibank, as Administrative Agent and (ii) that
certain Guarantee and Collateral Agreement dated as of December 9, 2010, as
amended by Amendment No. 2 described above, among Resolute, each Domestic
Subsidiary of Resolute set forth on the signature pages thereto, and Citibank,
as Collateral Agent (the “Existing Guarantee and Collateral Agreement”);
WHEREAS, Resolute has requested that the Administrative Agent and the Lenders
amend the Existing Credit Agreement pursuant to Amendment No. 6 to the Existing
Credit Agreement dated as of February 25, 2014 (“Amendment No. 6”; the Existing
Credit Agreement, as amended by Amendment No. 6, the “Credit Agreement”), among
Resolute certain of its subsidiaries party thereto, the Lenders party thereto
and Citibank, as Administrative Agent;
WHEREAS, in connection with Amendment No. 6, Resolute and the Administrative
Agent (acting at the direction of the Required Lenders) (as defined in the
Existing Credit Agreement)) have agreed to amend the Existing Guarantee and
Collateral Agreement as set forth herein in order to, among other things,
reflect certain changes to the collateral granted hereunder; and
WHEREAS, each Grantor is a Guarantor and/or a Borrower under the Credit
Agreement and an affiliate of each of the Borrowers, will derive substantial
benefits from the extension of credit to itself and to the other Borrowers
pursuant to the Credit Agreement and is willing to execute and deliver this
Agreement in order to induce the Lenders to extend such credit.
NOW, THEREFORE, the parties hereto covenant and agree that the Existing
Guarantee and Collateral Agreement is hereby amended and restated in its
entirety, and do hereby agree as follows:

 

--------------------------------------------------------------------------------

Article 1
DEFINITIONS
Section 1.01    . Credit Agreement. (i) Capitalized terms used in this
Agreement, including the preamble and introductory paragraph hereto, and not
otherwise defined herein have the meanings specified in the Credit Agreement.
All terms defined in the New York UCC (as defined herein) and not defined in
this Agreement have the meanings specified therein.
(b)    The rules of construction specified in Section 1.03 of the Credit
Agreement also apply to this Agreement.
Section 1.02    . Other Defined Terms. As used in this Agreement, the following
terms have the meanings specified below:
“Account Debtor” means any Person who is or who may become obligated to any
Grantor under, with respect to or on account of an Account.
“Amendment No. 6” has the meaning assigned to such term in the preliminary
statements of this agreement.
“Borrowers” has the meaning assigned to such term in the Credit Agreement and
includes any successor by merger or consolidation.
“Cash Collateral Account” means a non-interest bearing cash collateral account
maintained with, and in the sole dominion and control of, the Collateral Agent
for the benefit of the Secured Parties.
“Claiming Party” has the meaning assigned to such term in Section 6.02.
“Collateral” has the meaning assigned to such term in Section 4.01. For the
avoidance of doubt, the Collateral includes the Pledged Debt Securities.
“Contract Rights” means all rights of any Grantor under each Contract,
including, without limitation, (i) any and all rights to receive and demand
payments under any or all Contracts, (ii) any and all rights to receive and
compel performance under any or all Contracts and (iii) any and all other
rights, interests and claims now existing or in the future arising in connection
with any or all Contracts.
“Contracts” means all contracts between any Grantor and one or more additional
parties (including, without limitation, any Hedging Agreements, licensing
agreements and any partnership agreements, joint venture agreements and limited
liability company agreements).
“Contributing Party” has the meaning assigned to such term in Section 6.02.
“Copyright License” means any written agreement, now or hereafter in effect,
granting any right to any third party under any Copyright now or hereafter

2
 

--------------------------------------------------------------------------------

owned by any Grantor or that such Grantor otherwise has the right to license, or
granting any right to any Grantor under any copyright now or hereafter owned by
any third party, and all rights of such Grantor under any such agreement.
“Copyrights” means all of the following now owned or hereafter acquired by any
Grantor: (a) all copyright rights in any work subject to the copyright laws of
the United States, whether as author, assignee, transferee or otherwise, and (b)
all registrations and applications for registration of any such copyright in the
United States, including registrations, recordings, supplemental registrations
and pending applications for registration in the United States Copyright Office.
“Credit Agreement” has the meaning assigned to such term in the preliminary
statements of this Agreement.
“Excluded Assets” means, subject to the following sentence, (i) [reserved], (ii)
any shares of capital stock or other Equity Interests of any Person, (iii) any
Intellectual Property, (iv), fixtures or equipment, (v) [reserved], (vi)
[reserved], (vii) any property to the extent that the grant of a security
interest therein would violate applicable law, require a consent not obtained of
any Governmental Authority, or constitute a breach of or default under, or
result in the termination of or require a consent not obtained under, any
contract, lease, license or other agreement evidencing or giving rise to such
property, or result in the invalidation thereof or provide any party thereto
with a right of termination (other than to the extent that any such term would
be rendered ineffective pursuant to Section 9-406, 9-407, 9-408 or 9-409 of the
New York UCC or any other applicable law or principles of equity), (viii)
Excluded Accounts, (ix) [reserved], (x) the assets physically located on the
date of this Agreement at the Grantors’ (x) Alabama River newsprint mill in
Purdue, Alabama and (y) facility located in Covington, Tennessee, (xi)
[reserved], and (xii) proceeds and products of any and all of the foregoing
excluded assets described in clauses (i) through (xi) above only to the extent
such proceeds and products would constitute property or assets of the type
described in clauses (i) through (xi) above; provided, however, that the
security interest granted to the Collateral Agent hereunder shall attach
immediately to any asset of any Grantor at such time as such asset ceases to
meet any of the criteria for “Excluded Assets” described in any of the foregoing
clauses (i) through (xii) above or in the following sentence. Notwithstanding
the foregoing, “Excluded Assets” shall not include any property or assets that
constitute Proceeds of property or assets described in clause (b) or (c) of
Section 3.01 or in any of clauses (i) through (viii) of Section 4.01.
“Existing Guarantee and Collateral Agreement” has the meaning assigned to such
term in the preliminary statements of this agreement.
“Existing Credit Agreement” has the meaning assigned to such term in the
preliminary statements of this agreement.
“Federal Securities Laws” has the meaning assigned to such term in Section 5.04.
“General Intangibles” means all “General Intangibles” as defined in the UCC, and
shall include any personal property, including things in action, other than
accounts, chattel paper, commercial tort claims, deposit accounts, documents,
goods, instruments, investment property, letter-of-credit rights, letters

3
 

--------------------------------------------------------------------------------

of credit, money, and oil, gas, or other minerals before extraction. The term
includes payment intangibles and software.
“Grantors” means each of Resolute, each of the Subsidiaries of Resolute set
forth on the signature pages hereto, and each Subsidiary of Resolute that
becomes a Grantor pursuant to Section 7.14 hereof by executing a supplement to
this Agreement.
“Guaranteed Party” shall mean the Borrowers, each other Guarantor and each
Subsidiary party to any Secured Hedging Agreement or any Secured Cash Management
Agreement.
“Guarantors” means each of the Grantors.
“Intellectual Property” means all intellectual and similar property of every
kind and nature now owned or hereafter acquired by any Grantor, including
inventions, designs, Patents, Copyrights, Licenses, Trademarks, trade secrets,
confidential or proprietary technical and business information, know-how,
show-how or other data or information, software and databases and all
embodiments or fixations thereof and related documentation, registrations and
franchises, and all additions, improvements and accessions to, and books and
records describing or used in connection with, any of the foregoing.
“License” means any Patent License, Trademark License, Copyright License or
other license or sublicense agreement relating to intellectual property to which
any Grantor is a party.
“New York UCC” means the Uniform Commercial Code as from time to time in effect
in the State of New York.
“Patent License” means any written agreement, now or hereafter in effect,
granting to any third party any right to make, use or sell any invention on
which a Patent, now or hereafter owned by any Grantor or that any Grantor
otherwise has the right to license, is in existence, or granting to any Grantor
any right to make, use or sell any invention on which a patent, now or hereafter
owned by any third party, is in existence, and all rights of any Grantor under
any such agreement.
“Patents” means all of the following now owned or hereafter acquired by any
Grantor: (a) all letters patent of the United States, all registrations and
recordings thereof, and all applications for letters patent of the United
States, including registrations, recordings and pending applications in the
United States Patent and Trademark Office, and (b) all reissues, continuations,
divisions, continuations-in-part, renewals or extensions thereof, and the
inventions disclosed or claimed therein, including the right to make, use and/or
sell the inventions disclosed or claimed therein.
“Pledged Collateral” has the meaning assigned to such term in Section 3.01.
“Pledged Debt Securities” has the meaning assigned to such term in Section
4.01(a)(vi).

4
 

--------------------------------------------------------------------------------

“Qualified ECP Guarantor” means, in respect of any Swap Obligation, each
Guarantor that constitutes an “eligible contract participant” under the
Commodity Exchange Act or any regulations promulgated thereunder and can cause
another person to qualify as an “eligible contract participant” at such time by
entering into a keepwell under Section 1a(18)(A)(v)(II) of the Commodity
Exchange Act.
“Secured Obligations” means, collectively, the U.S. Secured Obligations, the
Canadian Secured Obligations and the English Secured Obligations, in each case
excluding the Excluded Swap Obligations.
“Secured Parties” means (a) the Lenders, (b) the Administrative Agent, (c) the
Collateral Agent, (d) each counterparty to any Secured Hedging Agreement, (e)
each Person to whom any Cash Management Services Obligations in respect of any
Secured Cash Management Agreement are owed, (f) the beneficiaries of each
indemnification obligation undertaken by any Loan Party under any Loan Document
and (g) the successors and assigns of each of the foregoing.
“Security Interest” has the meaning assigned to such term in Section 4.01.
“Trademark License” means any written agreement, now or hereafter in effect,
granting to any third party any right to use any Trademark now or hereafter
owned by any Grantor or that any Grantor otherwise has the right to license, or
granting to any Grantor any right to use any trademark now or hereafter owned by
any third party, and all rights of any Grantor under any such agreement.
“Trademarks” means all of the following now owned or hereafter acquired by any
Grantor: (a) all trademarks, service marks, trade names, corporate names,
company names, business names, fictitious business names, trade styles, trade
dress, logos, other source or business identifiers, designs and General
Intangibles of like nature, now existing or hereafter adopted or acquired, all
registrations and recordings thereof, and all registration and recording
applications filed in connection therewith, including registrations and
registration applications in the United States Patent and Trademark Office or
any similar offices in any State of the United States, and all extensions or
renewals thereof, (b) all goodwill associated therewith or symbolized thereby
and (c) all other assets, rights and interests that uniquely reflect or embody
such goodwill.
ARTICLE 2    
GUARANTEE
Section 2.01    . Guarantee. Each Guarantor unconditionally and irrevocably
guarantees, jointly with the other Guarantors and severally, as the primary
obligation and debt of each Guarantor and not merely as a surety, the due,
prompt and complete payment and performance of the Secured Obligations. Each of
the Guarantors further agrees that the Secured Obligations may be extended or
renewed, in whole or in part, without notice to or further assent from it, and
that it will remain bound upon its guarantee notwithstanding any extension or
renewal of

5
 

--------------------------------------------------------------------------------

any Obligation. Each of the Guarantors waives presentment to, demand of payment
from and protest to any Borrower or any other Guaranteed Party of any of the
Secured Obligations, and also waives notice of acceptance of its guarantee and
notice of protest for nonpayment.
Section 2.02    . Guarantee of Payment. Each Guarantor further agrees that its
guarantee hereunder constitutes a guarantee of payment when due and not of
collection, and waives any right to require that any resort be had by the
Collateral Agent or any other Secured Party to any other Guarantor or any
Guaranteed Party to any security held for the payment of the Secured Obligations
or to any balance of any deposit account or credit on the books of the
Collateral Agent or any other Secured Party in favor of any Borrower or any
other Person.
Section 2.03    . No Limitations. (i) Except for termination or release of a
Guarantor’s obligations hereunder as expressly provided in Section 7.13, the
obligations of each Guarantor hereunder shall not be subject to any reduction,
limitation, impairment or termination for any reason, including any claim of
waiver, release, surrender, alteration or compromise, and shall not be subject
to any defense (other than defense of payment in full in cash) or set-off,
counterclaim, recoupment or termination whatsoever by reason of the invalidity,
illegality or unenforceability of the Secured Obligations or otherwise. Without
limiting the generality of the foregoing, the obligations of each Guarantor
hereunder shall not be discharged or impaired or otherwise affected by (ii) the
failure of the Collateral Agent or any other Secured Party to assert any claim
or demand or to enforce any right or remedy under the provisions of any Loan
Document, Secured Hedging Agreement, Secured Cash Management Agreement or
otherwise; (iii) any rescission, waiver, amendment or modification of, or any
release from any of the terms or provisions of, any Loan Document, Secured
Hedging Agreement, Secured Cash Management Agreement or any other agreement,
including with respect to any other Guarantor under this Agreement; (iv) the
release of any security held by the Collateral Agent or any other Secured Party
for the Secured Obligations or any of them; (v) any default, failure or delay,
wilful or otherwise, in the performance of the Secured Obligations; or (vi) any
other act or omission that may or might in any manner or to any extent vary the
risk of any Guarantor or otherwise operate as a discharge of any Guarantor as a
matter of law or equity (other than to the extent of the indefeasible payment in
cash of all the Secured Obligations). Each Guarantor expressly authorizes the
Secured Parties to take and hold security for the payment and performance of the
Secured Obligations, to exchange, waive or release any or all such security
(with or without consideration), to enforce or apply such security and direct
the order and manner of any sale thereof in their sole discretion or to release
or substitute any one or more other guarantors or obligors upon or in respect of
the Secured Obligations, all without affecting the obligations of any Guarantor
hereunder.

6
 

--------------------------------------------------------------------------------

(b)    To the fullest extent permitted by applicable law, each Guarantor waives
any defense based on or arising out of any defense of any Borrower or any other
Guaranteed Party or the unenforceability of the Secured Obligations or any part
thereof from any cause, or the cessation from any cause of the liability of any
Borrower or any other Guaranteed Party, other than to the extent of the
indefeasible payment in cash of all the Secured Obligations. The Collateral
Agent and the other Secured Parties may, at their election, foreclose on any
security held by one or more of them by one or more judicial or nonjudicial
sales, accept an assignment of any such security in lieu of foreclosure,
compromise or adjust any part of the Secured Obligations, make any other
accommodation with any Borrower or any other Guaranteed Party or exercise any
other right or remedy available to them against any Borrower or any other
Guaranteed Party, without affecting or impairing in any way the liability of any
Guarantor hereunder except to the extent the Secured Obligations have been fully
and indefeasibly paid in full in cash. To the fullest extent permitted by
applicable law, each Guarantor waives any defense arising out of any such
election even though such election operates, pursuant to applicable law, to
impair or to extinguish any right of reimbursement or subrogation or other right
or remedy of such Guarantor against any Borrower or any other Guaranteed Party,
as the case may be, or any security.
Section 2.04    . Reinstatement. Each of the Guarantors agrees that its
guarantee hereunder shall continue to be effective or be reinstated, as the case
may be, if at any time payment, or any part thereof, of any Obligation is
rescinded or must otherwise be restored by the Collateral Agent or any other
Secured Party upon the bankruptcy or reorganization of any Borrower, any other
Guaranteed Party or otherwise, as if such payment had been due but not made at
such time.
Section 2.05    . Agreement to Pay; Subrogation. In furtherance of the foregoing
and not in limitation of any other right that the Collateral Agent or any other
Secured Party has at law or in equity against any Guarantor by virtue hereof,
upon the failure of any Borrower or any other Guaranteed Party to pay any
Obligation when and as the same shall become due, whether at maturity, by
acceleration, after notice of prepayment or otherwise, each Guarantor hereby
promises to and will forthwith pay, or cause to be paid, to the Collateral Agent
for distribution to the applicable Secured Parties in cash the amount of such
unpaid Obligation. Upon payment by or on behalf of any Guarantor of any sums to
the Collateral Agent as provided above, all rights of such Guarantor against any
Borrower or any other Guaranteed Party arising as a result thereof by way of
right of subrogation, contribution, reimbursement, indemnity or otherwise shall
in all respects be subject to Article 6.
Section 2.06    . Information. Each Guarantor assumes all responsibility for
being and keeping itself informed of each Borrower’s and each other Guaranteed
Party’s financial condition and assets, and of all other circumstances bearing
upon the risk of nonpayment of the Secured Obligations and the nature,

7
 

--------------------------------------------------------------------------------

scope and extent of the risks that such Guarantor assumes and incurs hereunder,
and agrees that none of the Collateral Agent or the other Secured Parties will
have any duty to advise such Guarantor of information known to it or any of them
regarding such circumstances or risks.
Section 2.07    . Keepwell. Each Qualified ECP Guarantor hereby jointly and
severally absolutely, unconditionally and irrevocably undertakes to provide such
funds or other support as may be needed from time to time by each other
Guarantor to honor all of its obligations under the guaranty given hereby in
respect of the Swap Obligations; provided, however, that each Qualified ECP
Guarantor shall only be liable under this Section 2.07 for the maximum amount of
such liability that can be hereby incurred without rendering its obligations
under this Section 2.07, or otherwise under the guaranty given hereby, voidable
under applicable law relating to fraudulent conveyance or fraudulent transfer,
and not for any greater amount. The obligations of each Qualified ECP Guarantor
under this Section 2.07 shall remain in full force and effect until the
termination of the Commitments and the repayment, satisfaction or discharge of
all other Obligations (other than contingent indemnification obligations). Each
Qualified ECP Guarantor intends that this Section 2.07 constitute, and this
Section 2.07 shall be deemed to constitute, a “keepwell, support, or other
agreement” for the benefit of each other Guarantor for all purposes of Section
1a(18)(A)(v)(II) of the Commodity Exchange Act.
ARTICLE 3    
PLEDGE OF SECURITIES
Section 3.01    . Pledge. As security for the payment or performance, as the
case may be, in full of the Secured Obligations, each Grantor hereby
collaterally assigns and pledges to the Collateral Agent, its successors and
assigns, for the benefit of the Secured Parties, and hereby grants to the
Collateral Agent, its successors and assigns, for the benefit of the Secured
Parties, a security interest in, all of such Grantor’s right, title and interest
in, to and under:
(a)    [reserved];
(b)    the Pledged Debt Securities;
(c)    subject to Section 3.06, all payments of principal or interest, cash,
instruments and other property from time to time received, receivable or
otherwise distributed in respect of, in exchange for or upon the conversion of,
and all other Proceeds received in respect of, the securities referred to in
clause (b) above; and

8
 

--------------------------------------------------------------------------------

(d)    all Proceeds of any of the foregoing (the items referred to in clauses
(b), (c) and (d) of this Section 3.01 above being collectively referred to as
the “Pledged Collateral”).
Notwithstanding anything herein to the contrary, in no event shall the security
interest granted hereunder attach to any Excluded Assets, and the terms “Pledged
Debt Securities” and “Pledged Collateral,” shall, in each case, expressly
exclude all Excluded Assets.
TO HAVE AND TO HOLD the Pledged Collateral, together with all right, title,
interest, powers, privileges and preferences pertaining or incidental thereto,
unto the Collateral Agent, its successors and assigns, for the benefit of the
Secured Parties, as security for the payment or performance, as the case may be,
in full of the Secured Obligations; subject, however, to the terms, covenants
and conditions hereinafter set forth.
Section 3.02    . Delivery of the Pledged Collateral. (i) Each Grantor agrees
promptly (and with respect to Pledged Debt Securities owned on the date of this
Agreement, in any event within 45 days after the date of this Agreement) to
deliver or cause to be delivered to the Collateral Agent any and all Pledged
Debt Securities at any time owned by such Grantor.
(c)    Upon delivery to the Collateral Agent, (i) any Pledged Debt Securities
shall be accompanied by instruments of transfer reasonably satisfactory to the
Collateral Agent and by such other instruments and documents as the Collateral
Agent may reasonably request and (ii) all other property comprising part of the
Pledged Collateral shall be accompanied by proper instruments of assignment duly
executed by the applicable Grantor and such other instruments or documents as
the Collateral Agent may reasonably request. Each delivery of Pledged Debt
Securities after the date of this Agreement shall be accompanied by a schedule
describing the Pledged Debt Securities so delivered, which schedule shall be
attached hereto as a supplement to Schedule 2 and made a part hereof; provided
that failure to attach any such schedule hereto shall not affect the validity of
such pledge of such Pledged Debt Securities.
(d)    The assignment, pledges and security interests granted in Section 3.01
are granted as security only and shall not subject the Collateral Agent or any
other Secured Party to, or in any way alter or modify, any obligation or
liability of any Grantor with respect to or arising out of the Pledged
Collateral.
Section 3.03    . Representations, Warranties and Covenants. The Grantors
jointly and severally represent, warrant and covenant to and with the Collateral
Agent, for the benefit of the Secured Parties, that:
(a)    Schedule 2 correctly sets forth, as of the Sixth Amendment Effective
Date, with respect to each Grantor, all Pledged Debt Securities owned by such
Grantor;

9
 

--------------------------------------------------------------------------------

(b)    To each Grantor’s knowledge, the Pledged Debt Securities pledged by such
Grantor have been duly and validly authorized and issued by the issuers thereof
and are legal, valid and binding obligations of the issuers thereof, subject to
applicable bankruptcy, insolvency, reorganization, moratorium or other laws
affecting creditors’ rights generally and subject to general principles of
equity, regardless of whether considered in a proceeding in equity or at law;
(c)    except for the security interests granted hereunder, each of the Grantors
(i) is and, subject to any repayments, sales, transfers or other dispositions
made in compliance with the Credit Agreement, will continue to be the direct
owner, beneficially and of record, of the Pledged Debt Securities indicated on
Schedule 2 as owned by such Grantor, (ii) holds the same free and clear of all
Liens (other than Permitted Liens), (iii) except for Permitted Liens, will not
pledge or hypothecate, or otherwise create a consensual Lien on, the Pledged
Collateral, and (iv) will defend its title or interest thereto or therein
against any and all Liens (other than Permitted Liens), however arising, of all
Persons whomsoever;
(d)    each of the Grantors has the power and authority to pledge the Pledged
Collateral pledged by it hereunder in the manner hereby done or contemplated;
(e)    no consent or approval of any Governmental Authority or any other Person
was or is necessary to the validity of the pledge effected hereby (other than
such as have been obtained and are in full force and effect);
(f)    by virtue of the execution and delivery by the Grantors of this
Agreement, when any Pledged Debt Securities are delivered to the Collateral
Agent in accordance with this Agreement, the Collateral Agent will obtain a
legal, valid and perfected lien upon and security interest in such Pledged Debt
Securities as security for the payment and performance of the Secured
Obligations; and
(g)    the pledge effected hereby is effective to vest in the Collateral Agent,
for the benefit of the Secured Parties, the rights of the Collateral Agent in
the Pledged Collateral as set forth herein.
Section 3.04    . [Reserved].
Section 3.05    . Registration in Nominee Name; Denominations. The Collateral
Agent, on behalf of the Secured Parties, shall have the right (in its sole and
absolute discretion) to hold the Pledged Debt Securities in the name of the
applicable Grantor, endorsed or assigned in blank. The Collateral Agent shall,
at any time after the occurrence and during the continuance of an Event of
Default, have the right (in its sole discretion) to require the Grantors to
exchange the certificates representing Pledged Debt Securities for certificates
of smaller or larger denominations for any purpose consistent with this
Agreement.

10
 

--------------------------------------------------------------------------------

Section 3.06    . Interest. (i) Unless and until an Event of Default shall have
occurred and be continuing and the Collateral Agent shall have notified the
Grantors in writing that their rights under this Section 3.06 are being
suspended:
(ii)    Each Grantor shall be entitled to exercise any and all rights and powers
inuring to an owner of the Pledged Debt Securities or any part thereof for any
purpose consistent with the terms of this Agreement, the Credit Agreement and
the other Loan Documents.
(iii)    The Collateral Agent shall execute and deliver to each Grantor, or
cause to be executed and delivered to such Grantor, all such powers of attorney
and other instruments as such Grantor may reasonably request for the purpose of
enabling such Grantor to exercise the powers it is entitled to exercise pursuant
to paragraph (i) above and to receive the interest, principal and other
distributions it is entitled to receive and retain pursuant to paragraph (iii)
below.
(iv)    Each Grantor shall be entitled to receive and retain any and all
interest, principal, cash, instruments and other property and all distributions
from time to time received, receivable or otherwise paid on or distributed in
respect of or in exchange for the Pledged Debt Securities to the extent and only
to the extent that such interest, principal and other distributions are
permitted by, and otherwise paid or distributed in accordance with, the terms
and conditions of the Credit Agreement, the other Loan Documents and applicable
laws; provided that any noncash interest, principal or other distributions that
would constitute Pledged Debt Securities, received in exchange for Pledged Debt
Securities or any part thereof shall be and become part of the Pledged
Collateral (except for Excluded Assets), and, if received by any Grantor, shall
not be commingled by such Grantor with any of its other funds or property but
shall be held separate and apart therefrom, shall be held in trust for the
benefit of the Collateral Agent and shall be forthwith delivered to the
Collateral Agent in the same form as so received (with any necessary
endorsement).
(b)    Upon the occurrence and during the continuance of an Event of Default,
after the Collateral Agent shall have notified the Grantors in writing of the
suspension of their rights under paragraph (a)(iii) above, all rights of any
Grantor to interest, principal or other distributions that such Grantor is
authorized to receive pursuant to paragraph (a)(iii) above, and the obligations
of the Collateral Agent under paragraph (a)(ii) above, shall cease, and all such
rights shall thereupon become vested in the Collateral Agent, which shall have
the sole and exclusive right and authority to receive and retain such interest,
principal or other distributions. All interest, principal or other distributions
received by any Grantor contrary to the provisions of this Section 3.06 shall be
held in trust for the

11
 

--------------------------------------------------------------------------------

benefit of the Collateral Agent, shall be segregated from other property or
funds of such Grantor and shall be forthwith delivered to the Collateral Agent
upon demand in the same form as so received (with any necessary endorsement).
Any and all money and other property paid over to or received by the Collateral
Agent pursuant to the provisions of this paragraph (b) shall be retained by the
Collateral Agent in an account to be established by the Collateral Agent upon
receipt of such money or other property and shall be applied in accordance with
the provisions of Section 5.02. After all Events of Default have been cured or
waived and Resolute has delivered to the Collateral Agent a certificate to that
effect, the Collateral Agent shall promptly repay to each Grantor (without
interest) all interest, principal or other distributions that such Grantor would
otherwise be permitted to retain pursuant to the terms of paragraph (a)(iii)
above and that remain in such account.
(c)    Upon the occurrence and during the continuance of an Event of Default,
after the Collateral Agent shall have notified the Grantors in writing of the
suspension of their rights under paragraph (a)(i) above, all rights of any
Grantor to exercise the rights and powers it is entitled to exercise pursuant to
paragraph (a)(i) above, and the obligations of the Collateral Agent under
paragraph (a)(ii) above, shall cease, and all such rights shall thereupon become
vested in the Collateral Agent, which shall have the sole and exclusive right
and authority to exercise such rights and powers; provided that, unless
otherwise directed by the Required Lenders, the Collateral Agent shall have the
right from time to time following and during the continuance of an Event of
Default to permit the Grantors to exercise such rights.
(d)    Any notice given by the Collateral Agent to the Grantors suspending their
rights under paragraph (a) of this Section 3.06 (i) may be given by telephone to
any Responsible Officer if promptly confirmed in writing, (ii) may be given to
one or more of the Grantors at the same or different times and (iii) may suspend
the rights of the Grantors under paragraph (a)(i) or paragraph (a)(iii) in part
without suspending all such rights (as specified by the Collateral Agent in its
sole and absolute discretion) and without waiving or otherwise affecting the
Collateral Agent’s right to give additional notices from time to time suspending
other rights so long as an Event of Default has occurred and is continuing.
Section 3.07    . [Reserved].
Section 3.08    . [Reserved].
ARTICLE 4    
SECURITY INTERESTS IN PERSONAL PROPERTY
Section 4.01    . Security Interest. (v) As security for the payment or
performance, as the case may be, in full of the Secured Obligations, each
Grantor

12
 

--------------------------------------------------------------------------------

hereby collaterally assigns and pledges to the Collateral Agent, its successors
and assigns, for the benefit of the Secured Parties, and hereby grants to the
Collateral Agent, its successors and assigns, for the benefit of the Secured
Parties, a security interest (the “Security Interest”) in, all right, title and
interest in, to or under any and all of the following assets and properties now
owned or at any time hereafter acquired by such Grantor or in which such Grantor
now has or at any time in the future may acquire any right, title or interest
(collectively, the “Collateral”):
(vi)    all Accounts;
(vii)    all cash and all Deposit Accounts and all monies deposited therein;
(viii)    all Inventory;
(ix)    all commodities contracts, commodities accounts, securities and
securities accounts (and security entitlements or financial assets credited
thereto);
(x)    to the extent evidencing or governing any of the items referred to in the
preceding clauses (i) through (iv), (A) all documents, (B) all chattel paper
(including, without limitation, all tangible chattel paper and all electronic
chattel paper), (C) all General Intangibles (excluding Intellectual Property),
(D) all Contracts (together with all Contract Rights arising thereunder) and (E)
all instruments;
(xi)    each promissory note listed opposite the name of such Grantor on
Schedule 2 and each other promissory note evidencing Indebtedness that
evidences, governs or arises out of the disposition of any accounts receivable
included in the preceding clause (i) or Inventory included in the preceding
clause (iii), excluding in each case promissory notes in a principal amount of
less than $20,000,000, so long as the aggregate principal amount of promissory
notes not so pledged under this exclusion does not exceed $40,000,000 (the
“Pledged Debt Securities”);
(xii)    to the extent securing or supporting any of the items referred to in
the preceding clauses (i) through (v), all supporting obligations and letter of
credit rights (whether or not the respective letter of credit is evidenced by a
writing);
(xiii)    all books and Records pertaining to the foregoing; and
(xiv)    all products and Proceeds of the foregoing (including, without
limitation, all insurance and claims for insurance effected or held for the
benefit of the Grantors or the Secured Parties in

13
 

--------------------------------------------------------------------------------

respect thereof and all collateral security and guarantees given by any Person
with respect to any of the foregoing).
Notwithstanding anything herein to the contrary, in no event shall the security
interest granted hereunder attach to any Excluded Assets, and the term
“Collateral” shall expressly exclude all such Excluded Assets.
(e)    Each Grantor hereby irrevocably authorizes the Collateral Agent at any
time and from time to time to file in any relevant jurisdiction any financing
statements with respect to the Collateral or any part thereof and amendments
thereto that (v) contain a description of the Collateral in accordance with
Section 9-108 of the Uniform Commercial Code, and (vi) contain the information
required by Article 9 of the Uniform Commercial Code or other applicable law of
each applicable jurisdiction for the filing of any financing statement or
amendment, including whether such Grantor is an organization, the type of
organization and any organizational identification number issued to such
Grantor. Each Grantor agrees to provide such information to the Collateral Agent
promptly upon request.
Each Grantor also ratifies its authorization for the Collateral Agent to file in
any relevant jurisdiction any initial financing statements or amendments thereto
if filed prior to the date hereof.
Each Grantor will pay any applicable filing fees, recordation taxes and related
expenses relating to its Collateral. To the extent that any financing statement
or other filing includes any Excluded Assets, the Collateral Agent shall take
such action from time to time as reasonably requested by any Grantor, at such
Grantor’s expense, as necessary to evidence or reflect the exclusion thereof
from the Security Interest, provided that such Grantor shall have delivered to
the Collateral Agent such documentation and certification with respect thereto
as the Collateral Agent may reasonably request.
(f)    The Security Interest is granted as security only and shall not subject
the Collateral Agent or any other Secured Party to, or in any way alter or
modify, any obligation or liability of any Grantor with respect to or arising
out of the Collateral.
Section 4.02    . Representations and Warranties. The Grantors jointly and
severally represent and warrant to the Collateral Agent and the Secured Parties
that:
(h)    Each Grantor has good and valid rights in the Collateral with respect to
which it has purported to grant a Security Interest hereunder and has full power
and authority to grant to the Collateral Agent the Security Interest in such
Collateral pursuant hereto and to execute, deliver and perform its obligations
in accordance with the terms of this Agreement, without the consent or approval
of any other Person other than any consent or approval that has been obtained.

14
 

--------------------------------------------------------------------------------

(i)    The Perfection Certificate most recently delivered pursuant to the Credit
Agreement has been duly prepared, completed and executed and the information set
forth therein, including the exact legal name of each Grantor, was correct and
complete in all material respects as of the date thereof. The Uniform Commercial
Code financing statements prepared by the Collateral Agent based upon the
information provided to the Collateral Agent in the Perfection Certificate for
filing in each governmental, municipal or other office specified in Schedule 6
to the Perfection Certificate, are all the filings, recordings and registrations
that are necessary as of the date of such Perfection Certificate to publish
notice of and protect the validity of and to establish a legal, valid and
perfected security interest in favor of the Collateral Agent (for the benefit of
the Secured Parties) in respect of all Collateral in which the Security Interest
may be perfected by filing a Uniform Commercial Code financing statement in the
United States (or any political subdivision thereof).
(j)    The Security Interest constitutes (i) a legal and valid security interest
in all the Collateral securing the payment and performance of the Secured
Obligations and (ii) subject to the filings described in Section 4.02(b), a
perfected security interest in all Collateral in which a security interest may
be perfected by filing Uniform Commercial Code financing statements in the
United States (or any political subdivision thereof). The Security Interest is
and shall be prior to any other Lien on any of the Collateral, other than
Permitted Liens.
(k)    The Collateral is owned by the Grantors free and clear of any Lien,
except for Permitted Liens. None of the Grantors has filed or consented to the
filing of any financing statement or analogous document under the Uniform
Commercial Code or any other applicable laws covering any Collateral except for
Permitted Liens and Liens that shall be discharged on or about the Sixth
Amendment Effective Date.
(l)    [Reserved].
Section 4.03    . Covenants. (iii) Each Grantor agrees promptly to notify the
Collateral Agent in writing of any change (iv) in corporate name, (v) in its
identity or type of organization or corporate structure, (vi) in its
organizational identification number or (vii) in its jurisdiction of
organization in each case other than changes listed on Schedule 4. Each Grantor
agrees to promptly provide the Collateral Agent with certified organizational
documents reflecting any of the changes described in the first sentence of this
paragraph (a). Each Grantor agrees to, promptly following any change referred to
in the preceding sentence (and in any event within ten days), make all filings
required under the Uniform Commercial Code or otherwise for the Collateral Agent
to continue at all times following such change to have a valid, legal and
perfected first priority security interest, subject to Permitted Liens, in all
the Collateral.

15
 

--------------------------------------------------------------------------------

(b)    Each Grantor agrees to maintain, at its own cost and expense, such
complete and accurate records with respect to the Collateral owned by it in
accordance with such prudent and standard practices used in industries that are
the same as or similar to those in which such Grantor is engaged.
(c)    Each Grantor shall, at its own expense, take any and all actions
reasonably necessary to defend title to the Collateral against all Persons and
to defend the Security Interest of the Collateral Agent in the Collateral and
the priority thereof against any Liens other than any Permitted Lien.
(d)    Each Grantor agrees, at its own expense, to execute, acknowledge, deliver
and cause to be duly filed all such further instruments and documents and take
all such actions as the Collateral Agent may from time to time reasonably
request to better assure, preserve, protect and perfect the Security Interest
and the rights and remedies created hereby, including the payment of any fees
and taxes required in connection with the execution and delivery of this
Agreement, the granting of the Security Interest and the filing of any financing
statements or other documents in connection herewith or therewith.
(e)    The Collateral Agent and such Persons as the Collateral Agent may
reasonably designate shall have the right, at the Grantors’ own cost and
expense, to inspect the Collateral, all records related thereto (and to make
extracts and copies from such records) and the premises upon which any of the
Collateral is located, to discuss the Grantors’ affairs with the officers of the
Grantors and their independent accountants, all in accordance with and subject
to the terms and conditions relating to inspections as set forth in Section 9.06
of the Credit Agreement, and to verify under reasonable procedures the validity,
amount, quality, quantity, value, condition and status of, or any other matter
relating to, the Collateral, including, in the case of Accounts or Collateral in
the possession of any third person, by contacting, with advance notice to and in
coordination with the Grantors (unless an Event of Default has occurred and is
continuing) Account Debtors or the third person possessing such Collateral for
the purpose of making such a verification. The Collateral Agent shall have the
absolute right to share any information it gains from such inspection or
verification with any Lender (it being understood that any such information
shall be deemed to be “Information” subject to the provisions of Section 9.10 of
the Credit Agreement).
(f)    At its option (it being understood the Collateral Agent shall have no
duty to any Grantor or Secured Party to exercise such option), the Collateral
Agent may discharge past due taxes, assessments, charges, fees, Liens, security
interests or other encumbrances at any time levied or placed on the Collateral
and not permitted pursuant to the Credit Agreement, and may pay for the
maintenance and preservation of the Collateral to the extent any Grantor fails
to do so as required by the Credit Agreement or this Agreement after written
notice thereof is delivered to Resolute by the Collateral Agent, and each
Grantor jointly and

16
 

--------------------------------------------------------------------------------

severally agrees to reimburse the Collateral Agent on demand for any payment
made or any expense incurred by the Collateral Agent pursuant to the foregoing
authorization; provided that nothing in this paragraph (f) shall be interpreted
as excusing any Grantor from the performance of, or imposing any obligation on
the Collateral Agent or any Secured Party to cure or perform, any covenants or
other promises of any Grantor with respect to taxes, assessments, charges, fees,
Liens, security interests or other encumbrances and maintenance as set forth
herein or in the other Loan Documents.
(g)    Each Grantor shall remain liable to observe and perform all the
conditions and obligations to be observed and performed by it under each
contract, Agreement or instrument included in the Collateral, all in accordance
with the terms and conditions thereof, and each Grantor jointly and severally
agrees to indemnify and hold harmless the Collateral Agent and the Secured
Parties from and against any and all liability for such performance.
(h)    None of the Grantors shall make or permit to be made an assignment,
pledge or hypothecation of the Collateral or shall grant any other Lien in
respect of the Collateral, except as permitted by the Credit Agreement. None of
the Grantors shall make or permit to be made any transfer of the Collateral
except that unless and until the Collateral Agent shall notify the Grantors in
writing that an Event of Default shall have occurred and be continuing and that
during the continuance thereof the Grantors shall not sell, convey, lease,
assign, transfer or otherwise dispose of any Collateral, the Grantors may use
and dispose of the Collateral in any lawful manner not inconsistent with the
provisions of this Agreement, the Credit Agreement or any other Loan Document.
(i)    The Grantors, at their own expense, shall maintain or cause to be
maintained insurance covering physical loss or damage to the Inventory in
accordance with the requirements set forth in 9.02 of the Credit Agreement. Each
Grantor irrevocably makes, constitutes and appoints the Collateral Agent (and
all officers, employees or agents designated by the Collateral Agent) as such
Grantor’s true and lawful agent (and attorney in fact) for the purpose, during
the continuance of an Event of Default, of making, settling and adjusting claims
in respect of Collateral under policies of insurance, endorsing the name of such
Grantor on any check, draft, instrument or other item of payment for the
proceeds of such policies of insurance and for making all determinations and
decisions with respect thereto. In the event that any Grantor at any time or
times shall fail to obtain or maintain any of the policies of insurance required
hereby or to pay any premium in whole or part relating thereto, the Collateral
Agent may (it being understood the Collateral Agent shall have no duty to any
Grantor or Secured Party to exercise such option), without waiving or releasing
any obligation or liability of the Grantors hereunder or any Event of Default,
in its sole discretion, upon notice to Resolute obtain and maintain such
policies of insurance and pay such premium and take any other actions with
respect thereto as the Collateral

17
 

--------------------------------------------------------------------------------

Agent deems advisable. All sums disbursed by the Collateral Agent in connection
with this paragraph, including reasonable attorneys’ fees, court costs, expenses
and other charges relating thereto, shall be payable, upon demand, by the
Grantors to the Collateral Agent and shall be additional Secured Obligations
secured hereby.
(j)    Each Grantor shall maintain, in form and manner reasonably satisfactory
to the Collateral Agent, records of its chattel paper and its books, records and
documents evidencing or pertaining thereto.
(k)    Each Grantor will keep and maintain at its own cost and expense
materially accurate records of its Accounts and Contracts, including, but not
limited to, originals or copies of all material documentation (including each
Contract) with respect thereto, material records of all payments received, all
credits granted thereon, all merchandise returned and all other dealings
therewith, and such Grantor will make the same available, in accordance with and
subject to the terms and conditions relating to inspections set forth in the
Credit Agreement to the Collateral Agent for inspection at such Grantor’s own
cost and expense. Upon the occurrence and during the continuance of an Event of
Default and at the request of the Collateral Agent, such Grantor shall, at its
own cost and expense, deliver (to the extent available) all tangible evidence of
its Accounts and Contract Rights (including, without limitation, all documents
evidencing the Accounts and all Contracts) and such books and records to the
Collateral Agent or to its representatives (copies of which evidence and books
and records may be retained by such Grantor). If the Collateral Agent so
directs, upon the occurrence and during the continuance of an Event of Default,
such Grantor shall legend, in form and manner satisfactory to the Collateral
Agent, the Accounts and the Contracts, as well as books, records and documents
(if any) of such Grantor evidencing or pertaining to such Accounts and Contracts
with an appropriate reference to the fact that such Accounts and Contracts have
been assigned to the Collateral Agent and that the Collateral Agent has a
security interest therein.
(l)    Upon the occurrence and during the continuance of an Event of Default, if
the Collateral Agent so directs any Grantor in writing, such Grantor agrees (x)
to cause all payments on account of the Accounts and Contracts to be made
directly to a Cash Collateral Account, (y) that the Collateral Agent may, at its
option, directly notify the obligors with respect to any Accounts and/or under
any Contracts to make payments with respect thereto as provided in the preceding
clause (x), and (z) that the Collateral Agent may enforce collection of any such
Accounts and Contracts and may adjust, settle or compromise the amount of
payment thereof, in the same manner and to the same extent as such Grantor.
Without notice to or assent by any Grantor, the Collateral Agent may, upon the
occurrence and during the continuance of an Event of Default, apply any or all
amounts then in, or thereafter deposited in, a Cash Collateral Account toward
the payment of the Secured Obligations in the manner provided in Section 5.02 of
this

18
 

--------------------------------------------------------------------------------

Agreement. The reasonable costs and expenses of collection (including reasonable
attorneys’ fees), whether incurred by a Grantor or the Collateral Agent, shall
be borne by the relevant Grantor. The Collateral Agent shall deliver a copy of
each notice referred to in the preceding clause (y) to the relevant Grantor,
provided that the failure by the Collateral Agent to so notify such Grantor
shall not affect the effectiveness of such notice or the other rights of the
Collateral Agent created by this clause (l).
(m)    Each Grantor shall endeavor in accordance with reasonable business
judgment to cause to be collected from the account debtor named in each of its
Accounts or obligor under any Contract, as and when due (including, without
limitation, amounts which are delinquent, such amounts to be collected in
accordance with generally accepted lawful collection procedures) any and all
amounts owing under or on account of such Account or Contract, and promptly
apply upon receipt thereof all such amounts as are so collected to the
outstanding balance of such Account or under such Contract.
(n)    Anything herein to the contrary notwithstanding, the Grantors shall
remain liable under each of the Accounts and Contracts to observe and perform
all of the conditions and obligations to be observed and performed by it
thereunder, all in accordance with the terms of any agreement giving rise to
such Accounts or such Contracts, as the case may be. Neither the Collateral
Agent nor any other Secured Party shall have any obligation or liability under
any Account (or any agreement giving rise thereto) or any Contract by reason of
or arising out of this Agreement or the receipt by the Collateral Agent or any
other Secured Party of any payment relating to such Account or Contract, as the
case may be, pursuant hereto, nor shall the Collateral Agent or any other
Secured Party be obligated in any manner to perform any of the obligations of
any Grantor under or pursuant to any Account (or any agreement giving rise
thereto) or any Contract, to make any payment, to make any inquiry as to the
nature or the sufficiency of any payment received by them or as to the
sufficiency of any performance by any party under any Account (or any agreement
giving rise thereto) or any Contract, to present or file any claim, to take any
action to enforce any performance or to collect the payment of any amounts which
may have been assigned to them or to which they may be entitled at any time or
times.
Section 4.04    . Other Actions. In order to further insure the attachment,
perfection and priority of, and the ability of the Collateral Agent to enforce,
the Security Interest, each Grantor agrees, in each case at such Grantor’s own
expense, to take the following actions with respect to the following Collateral:
(a)    Instruments and Tangible Chattel Paper. In accordance with and in
furtherance of Article 3, if any Grantor shall at any time hold or acquire any
instruments constituting Collateral (other than any instrument with a face
amount of less than $20,000,000 so long as the aggregate principal amount of
instruments

19
 

--------------------------------------------------------------------------------

under this exclusion does not exceed $40,000,000) or tangible chattel paper
constituting Collateral with a value of $10,000,000 or more, such Grantor shall
forthwith endorse, assign and deliver the same to the Collateral Agent,
accompanied by such instruments of transfer or assignment duly executed in blank
as the Collateral Agent may from time to time reasonably request. For the
purposes of this Section 4.04(a), the term “Instruments” excludes (i) letters of
credit which are subject to the provisions of Section 4.04(e) hereof and (ii)
promissory notes not constituting Pledged Debt Securities.
(b)    Deposit Accounts. For each Deposit Account (or any other demand, time,
savings, passbook or similar account whose jurisdiction (determined in
accordance with Section 9-304 of the UCC) is within a State of the United
States) that any Grantor at any time opens or maintains (other than any Excluded
Account and any Specified Collection Account), such Grantor shall cause the
depositary bank to enter into a Control Agreement with such Grantor and the
Collateral Agent. The Collateral Agent agrees with each Grantor that, except
with respect to Designated Blocked Accounts, the Collateral Agent shall not
exercise dominion and control over, or give any instructions or withhold any
withdrawal rights from any Grantor, with respect to such accounts or any funds
in such accounts, unless an Event of Default has occurred and is continuing.
(c)    Investment Property. If any Grantor holds any investment property
constituting Collateral, whether certificated or uncertificated, or any
investment property constituting Collateral now or hereafter acquired by any
Grantor is held by such Grantor or its nominee through a securities intermediary
or commodity intermediary, such Grantor shall promptly notify the Collateral
Agent thereof and, at the Collateral Agent’s request and option, pursuant to a
Control Agreement in form and substance reasonably satisfactory to the
Collateral Agent, cause such securities intermediary or commodity intermediary,
as the case may be, to agree to comply with entitlement orders or other
instructions from the Collateral Agent to such securities intermediary as to
such security entitlements or to apply any value distributed on account of any
commodity contract as directed by the Collateral Agent to such commodity
intermediary, as the case may be, in each case without further consent of any
Grantor, such nominee, or any other Person. The Collateral Agent agrees with
each of the Grantors that the Collateral Agent shall not give any such
entitlement orders or instructions or directions to any such issuer, securities
intermediary or commodity intermediary, and, except with respect to Designated
Blocked Accounts, shall not exercise dominion and control over or withhold its
consent to the exercise of any withdrawal or dealing rights by any Grantor,
unless a Dominion Period has occurred and is continuing, or, after giving effect
to any such investment and withdrawal rights, would occur.
(d)    Electronic Chattel Paper and Transferable Records. If any Grantor at any
time holds or acquires an interest in any electronic chattel paper or any
“transferable record”, as that term is defined in Section 201 of the Federal

20
 

--------------------------------------------------------------------------------

Electronic Signatures in Global and National Commerce Act, or in Section 16 of
the Uniform Electronic Transactions Act as in effect in any relevant
jurisdiction, in each case constituting Collateral, such Grantor shall promptly
notify the Collateral Agent thereof and, at the request of the Collateral Agent,
shall take such action as the Collateral Agent may reasonably request to vest in
the Collateral Agent control under New York UCC Section 9 105 of such electronic
chattel paper or control under Section 201 of the Federal Electronic Signatures
in Global and National Commerce Act or, as the case may be, Section 16 of the
Uniform Electronic Transactions Act, as so in effect in such jurisdiction, of
such transferable record. The Collateral Agent agrees with such Grantor that the
Collateral Agent will arrange, pursuant to procedures reasonably satisfactory to
the Collateral Agent and so long as such procedures will not result in the
Collateral Agent’s loss of control, for the Grantor to make alterations to the
electronic chattel paper or transferable record permitted under UCC Section
9-105 or, as the case may be, Section 201 of the Federal Electronic Signatures
in Global and National Commerce Act or Section 16 of the Uniform Electronic
Transactions Act for a party in control to allow without loss of control, unless
an Event of Default has occurred and is continuing or would occur after taking
into account any action by such Grantor with respect to such electronic chattel
paper or transferable record.
(e)    Letter-of-Credit Rights. If any Grantor is at any time a beneficiary
under a letter of credit included in the Collateral now or hereafter issued in
favor of such Grantor with a face amount greater than $10,000,000, such Grantor
shall promptly notify the Collateral Agent thereof and, at the request and
option of the Collateral Agent, such Grantor shall use commercially reasonable
efforts to, pursuant to an agreement in form and substance reasonably
satisfactory to the Collateral Agent, either (i) arrange for the issuer and any
confirmer of such letter of credit to consent to an assignment to the Collateral
Agent of the proceeds of any drawing under the letter of credit or (ii) arrange
for the Collateral Agent to become the transferee beneficiary of the letter of
credit, with the Collateral Agent agreeing, in each case, that the proceeds of
any drawing under the letter of credit are to be paid to the applicable Grantor
unless an Event of Default has occurred or is continuing.
(f)    [Reserved].
(g)    Each Grantor will, at its own expense, make, execute, endorse,
acknowledge, file and/or deliver to the Collateral Agent from time to time such
vouchers, invoices, schedules, confirmatory assignments, conveyances, financing
statements, transfer endorsements, certificates, reports and other assurances or
instruments and take such further steps, including any and all actions as may be
necessary or required under the Federal Assignment of Claims Act, relating to
its Accounts, Contracts, instruments and other property or rights covered by the
security interest hereby granted, as the Collateral Agent may reasonably require

21
 

--------------------------------------------------------------------------------

and consistent with the other terms and conditions of this Agreement and the
Credit Agreement.
Section 4.05    . [Reserved].
ARTICLE 5    
REMEDIES
Section 5.01    . Remedies Upon Default. Upon the occurrence and during the
continuance of an Event of Default, it is agreed that the Collateral Agent shall
have the right to take any of or all the following actions at the same or
different times: with or without legal process and with or without prior notice
or demand for performance, to take possession of the Collateral and without
liability for trespass to enter any premises where the Collateral may be located
for the purpose of taking possession of or removing the Collateral and,
generally, to exercise any and all rights afforded to a secured party under this
Agreement, the Uniform Commercial Code or other applicable law. Without limiting
the generality of the foregoing, upon the occurrence and during the continuance
of an Event of Default, each Grantor agrees that the Collateral Agent shall have
the right, subject to the mandatory requirements of applicable law, to sell or
otherwise dispose of all or any part of the Collateral at a public or private
sale or at any broker’s board or on any securities exchange, for cash, upon
credit or for future delivery as the Collateral Agent shall deem appropriate.
The Collateral Agent shall be authorized at any such sale of securities (if it
deems it advisable to do so) to restrict the prospective bidders or purchasers
to Persons who will represent and agree that they are purchasing the Collateral
for their own account for investment and not with a view to the distribution or
sale thereof, and upon consummation of any such sale the Collateral Agent shall
have the right to assign, transfer and deliver to the purchaser or purchasers
thereof the Collateral so sold. Each such purchaser at any sale of Collateral
shall hold the property sold absolutely, free from any claim or right on the
part of any Grantor, and each Grantor hereby waives (to the extent permitted by
law) all rights of redemption, stay and appraisal which such Grantor now has or
may at any time in the future have under any rule of law or statute now existing
or hereafter enacted.
The Collateral Agent shall give the applicable Grantors 10 days’ prior written
notice (which each Grantor agrees is reasonable notice within the meaning of
Section 9 611 of the New York UCC or its equivalent in other jurisdictions) of
the Collateral Agent’s intention to make any sale of Collateral. Such notice, in
the case of a public sale, shall state the time and place for such sale and, in
the case of a sale at a broker’s board or on a securities exchange, shall state
the board or exchange at which such sale is to be made and the day on which the
Collateral, or portion thereof, will first be offered for sale at such board or
exchange. Any such public sale shall be held at such time or times within
ordinary business hours and at such place or places as the Collateral Agent may
fix and state in the notice (if any) of such sale. At any such sale, the
Collateral, or portion thereof, to be sold

22
 

--------------------------------------------------------------------------------

may be sold in one lot as an entirety or in separate parcels, as the Collateral
Agent may (in its sole and absolute discretion) determine. The Collateral Agent
shall not be obligated to make any sale of any Collateral if it shall determine
not to do so, regardless of the fact that notice of sale of such Collateral
shall have been given. The Collateral Agent may, without notice or publication,
adjourn any public or private sale or cause the same to be adjourned from time
to time by announcement at the time and place fixed for sale, and such sale may,
without further notice, be made at the time and place to which the same was so
adjourned. In case any sale of all or any part of the Collateral is made on
credit or for future delivery, the Collateral so sold may be retained by the
Collateral Agent until the sale price is paid by the purchaser or purchasers
thereof, but the Collateral Agent shall not incur any liability in case any such
purchaser or purchasers shall fail to take up and pay for the Collateral so sold
and, in case of any such failure, such Collateral may be sold again upon like
notice. At any public (or, to the extent permitted by law, private) sale made
pursuant to this Agreement, any Secured Party may bid for or purchase, free (to
the extent permitted by law) from any right of redemption, stay, valuation or
appraisal on the part of any Grantor (all said rights being also hereby waived
and released to the extent permitted by law), the Collateral or any part thereof
offered for sale and may make payment on account thereof by using any claim then
due and payable to such Secured Party from any Grantor as a credit against the
purchase price, and such Secured Party may, upon compliance with the terms of
sale, hold, retain and dispose of such property without further accountability
to any Grantor therefor. For purposes hereof, a written agreement to purchase
the Collateral or any portion thereof shall be treated as a sale thereof; the
Collateral Agent shall be free to carry out such sale pursuant to such agreement
and no Grantor shall be entitled to the return of the Collateral or any portion
thereof subject thereto, notwithstanding the fact that after the Collateral
Agent shall have entered into such an agreement all Events of Default shall have
been remedied and the Secured Obligations paid in full. As an alternative to
exercising the power of sale herein conferred upon it, the Collateral Agent may
proceed by a suit or suits at law or in equity to foreclose this Agreement and
to sell the Collateral or any portion thereof pursuant to a judgment or decree
of a court or courts having competent jurisdiction or pursuant to a proceeding
by a court appointed receiver. Any sale pursuant to the provisions of this
Section 5.01 shall be deemed to conform to the commercially reasonable standards
as provided in Section 9 610(b) of the New York UCC or its equivalent in other
jurisdictions.
Section 5.02    . Application of Proceeds. The Collateral Agent shall apply the
proceeds of any collection or sale of Collateral, including any Collateral
consisting of cash, and the amounts paid or caused to be paid by any Guarantor
in accordance with Article 2, as follows:
FIRST, to the payment of all reasonable costs and expenses incurred by the
Collateral Agent in connection with such collection or sale or otherwise in
connection with this Agreement, any other Loan Document or any of the Secured
Obligations, including all court costs and the reasonable fees and expenses of
its agents and legal counsel, the repayment of all advances made by the
Collateral Agent hereunder or under any other Loan Document on behalf of any
Grantor and any other costs or expenses incurred in connection with the exercise
of any right or remedy hereunder or under any other Loan Document;

23
 

--------------------------------------------------------------------------------

SECOND, to the payment in full of the Secured Obligations (the amounts so
applied to be distributed among the Secured Parties in accordance with Section
11.02 of the Credit Agreement); and
THIRD, to the Grantors, their successors or assigns, or as a court of competent
jurisdiction may otherwise direct.
The Collateral Agent shall have absolute discretion as to the time of
application of any such proceeds, moneys or balances in accordance with this
Agreement. Upon any sale of Collateral by the Collateral Agent (including
pursuant to a power of sale granted by statute or under a judicial proceeding),
the receipt by the Collateral Agent of the proceeds of any sale shall be a
sufficient discharge to the purchaser or purchasers of the Collateral so sold
and such purchaser or purchasers shall not be obligated to see to the
application of any part of the purchase money paid over to the Collateral Agent
or such officer or be answerable in any way for the misapplication thereof. It
is understood that the Grantors shall remain jointly and severally liable to the
extent of any deficiency between the amount of the proceeds of the Collateral
and the aggregate amount of the Secured Obligations.
Section 5.03    . Grant of License to Use Intellectual Property. For the purpose
of enabling the Collateral Agent to exercise rights and remedies under this
Agreement at such time as the Collateral Agent shall be lawfully entitled to
exercise such rights and remedies, each Grantor hereby grants to the Collateral
Agent an irrevocable, nonexclusive license (exercisable without payment of
royalty or other compensation to the Grantors) to use, license or sublicense any
Intellectual Property now owned or hereafter acquired by such Grantor, and
wherever the same may be located, and including in such license reasonable
access to all media in which any of the licensed items may be recorded or stored
and to all computer software and programs used for the compilation or printout
thereof. The use of such license by the Collateral Agent may only be exercised,
at the option of the Collateral Agent, upon the occurrence and during the
continuation of an Event of Default after written notice is given to Resolute of
the Collateral Agent’s election to exercise such license; provided that any
license, sublicense or other transaction entered into by the Collateral Agent in
accordance herewith shall be binding upon the Grantors notwithstanding any
subsequent cure of an Event of Default. In operating under the license granted
by each Grantor pursuant to this Section 5.03, the Collateral Agent agrees that
the goods sold and services rendered under any Trademarks shall be of a nature
and quality substantially consistent with those theretofore offered under such
Trademarks by such Grantor and such Grantor shall have the right to inspect
during the term of such license, at any reasonable time or times upon reasonable
notice to the Collateral Agent, and at such Grantor’s own cost and expense,
representative samples of goods sold and services rendered under such
Trademarks.
Section 5.04    . Securities Act. In view of the position of the Grantors in
relation to the Pledged Collateral, or because of other current or future
circumstances, a question may arise under the Securities Act of 1933, as now or

24
 

--------------------------------------------------------------------------------

hereafter in effect, or any similar statute hereafter enacted analogous in
purpose or effect (such Act and any such similar statute as from time to time in
effect being called the “Federal Securities Laws”) with respect to any
disposition of the Pledged Collateral permitted hereunder. Each Grantor
understands that compliance with the Federal Securities Laws might very strictly
limit the course of conduct of the Collateral Agent if the Collateral Agent were
to attempt to dispose of all or any part of the Pledged Collateral, and might
also limit the extent to which or the manner in which any subsequent transferee
of any Pledged Collateral could dispose of the same. Similarly, there may be
other legal restrictions or limitations affecting the Collateral Agent in any
attempt to dispose of all or part of the Pledged Collateral granted hereunder
under applicable Blue Sky or other state securities laws or similar laws
analogous in purpose or effect. Each Grantor recognizes that in light of such
restrictions and limitations the Collateral Agent may, with respect to any sale
of the Pledged Collateral, limit the purchasers to those who will agree, among
other things, to acquire such Pledged Collateral for their own account, for
investment, and not with a view to the distribution or resale thereof. Each
Grantor acknowledges and agrees that in light of such restrictions and
limitations, the Collateral Agent, in its sole and absolute discretion (i) may
proceed to make such a sale whether or not a registration statement for the
purpose of registering such Pledged Collateral or part thereof shall have been
filed under the Federal Securities Laws and (ii) may approach and negotiate with
a single potential purchaser to effect such sale. Each Grantor acknowledges and
agrees that any such sale might result in prices and other terms less favorable
to the seller than if such sale were a public sale without such restrictions. In
the event of any such sale, the Collateral Agent shall incur no responsibility
or liability for selling all or any part of the Pledged Collateral at a price
that the Collateral Agent, in its sole and absolute discretion, may in good
faith deem reasonable under the circumstances, notwithstanding the possibility
that a substantially higher price might have been realized if the sale were
deferred until after registration as aforesaid or if more than a single
purchaser were approached. The provisions of this Section 5.04 will apply
notwithstanding the existence of a public or private market upon which the
quotations or sales prices may exceed substantially the price at which the
Collateral Agent sells.
ARTICLE 6    
INDEMNITY, SUBROGATION AND SUBORDINATION
Section 6.01    . Indemnity and Subrogation. In addition to all such rights of
indemnity and subrogation as the Guarantors may have under applicable law (but
subject to Section 6.03), the Borrowers agree that (i) in the event a payment of
an obligation shall be made by any Guarantor under this Agreement, each Borrower
shall indemnify such Guarantor for the full amount of such payment and such
Guarantor shall be subrogated to the rights of the Person to whom such payment
shall have been made to the extent of such payment and (ii) in the event

25
 

--------------------------------------------------------------------------------

any assets of any Grantor shall be sold pursuant to this Agreement or any other
Security Document to satisfy in whole or in part an obligation owed to any
Secured Party, each Borrower shall indemnify such Grantor in an amount equal to
the greater of the book value or the fair market value of the assets so sold.
Section 6.02    . Contribution and Subrogation. Each Guarantor and Grantor (a
“Contributing Party”) agrees (subject to Section 6.03) that, in the event a
payment shall be made by any other Grantor hereunder in respect of any
Obligation or assets of any other Grantor shall be sold pursuant to any Security
Document to satisfy any Obligation owed to any Secured Party and such other
Guarantor or Grantor (the “Claiming Party”) shall not have been fully
indemnified by the applicable Borrower as provided in Section 6.01, the
Contributing Party shall indemnify the Claiming Party in an amount equal to the
amount of such payment or the greater of the book value or the fair market value
of such assets, as the case may be, in each case multiplied by a fraction of
which the numerator shall be the net worth of the Contributing Party on the date
hereof and the denominator shall be the aggregate net worth of all the
Guarantors and Grantors on the date hereof (or, in the case of any Guarantor or
Grantor becoming a party hereto pursuant to Section 7.14, the date of the
supplement hereto executed and delivered by such Guarantor or Grantor). Any
Contributing Party making any payment to a Claiming Party pursuant to this
Section 6.02 shall be subrogated to the rights of such Claiming Party under
Section 6.01 to the extent of such payment.
Section 6.03    . Subordination. (iii) Notwithstanding any provision of this
Agreement to the contrary, all rights of the Guarantors and Grantors under
Sections 6.01 and 6.02 and all other rights of indemnity, contribution or
subrogation under applicable law or otherwise shall be fully subordinated to the
indefeasible payment in full in cash of the Secured Obligations. No failure on
the part of any Borrower or any Guarantor or Grantor to make the payments
required by Sections 6.01 and 6.02 (or any other payments required under
applicable law or otherwise) shall in any respect limit the obligations and
liabilities of any Guarantor or Grantor with respect to its obligations
hereunder, and each Guarantor and Grantor shall remain liable for the full
amount of the obligations of such Guarantor or Grantor hereunder.
(e)    Each Guarantor and Grantor hereby agrees that all Indebtedness and other
monetary obligations owed to it by, or by it to, as the case may be, any other
Guarantor, Grantor or any other Subsidiary shall be fully subordinated to the
indefeasible payment in full in cash of the Secured Obligations.
ARTICLE 7    
MISCELLANEOUS

26
 

--------------------------------------------------------------------------------

Section 7.01    . Notices. All communications and notices hereunder shall
(except as otherwise expressly permitted herein) be in writing and given as
provided in Section 13.03 of the Credit Agreement. All communications and
notices hereunder to any Guarantor (other than Resolute) shall be given to it in
care of Resolute as provided in Section 13.03 of the Credit Agreement.
Section 7.02    . Waivers; Amendment. (i) No failure or delay by the Collateral
Agent or any Lender in exercising any right or power hereunder or under any
other Loan Document shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power. The rights
and remedies of the Collateral Agent and the Lenders hereunder and under the
other Loan Documents are cumulative and are not exclusive of any rights or
remedies that they would otherwise have. No waiver of any provision of this
Agreement or consent to any departure by any Loan Party therefrom shall in any
event be effective unless the same shall be permitted by paragraph (b) below,
and then such waiver or consent shall be effective only in the specific instance
and for the purpose for which given. Without limiting the generality of the
foregoing, the making of a Loan shall not be construed as a waiver of any
Default, regardless of whether the Collateral Agent or any Lender may have had
notice or knowledge of such Default at the time. No notice or demand on any Loan
Party in any case shall entitle any Loan Party to any other or further notice or
demand in similar or other circumstances.
(f)    Neither this Agreement nor any provision hereof may be waived, amended or
modified except pursuant to an agreement or agreements in writing entered into
by the Collateral Agent and the Loan Party or Loan Parties with respect to which
such waiver, amendment or modification is to apply, subject to any consent
required in accordance with Section 13.12 of the Credit Agreement.
Section 7.03    . Collateral Agent’s Fees and Expenses; Indemnification. (i) The
parties hereto agree that the Collateral Agent shall be entitled to
reimbursement of its reasonable out-of-pocket expenses incurred hereunder as
provided in Section 13.01 of the Credit Agreement.
(b)    Without limitation of its indemnification obligations under the other
Loan Documents, each Grantor and each Guarantor jointly and severally agrees to
indemnify the Collateral Agent against, and hold the Collateral Agent harmless
from, any and all losses, claims, damages, liabilities and related expenses,
including reasonable counsel fees, disbursements and other charges, incurred by
or asserted against the Collateral Agent arising out of, in connection with, or
as a result of, the execution, delivery or performance of this Agreement or any
claim, litigation, investigation or proceeding relating to any of the foregoing,
or any agreement or instrument contemplated hereby, or to the Collateral,
whether or not

27
 

--------------------------------------------------------------------------------

any Indemnitee is a party thereto; provided that such indemnity shall not, as to
any Indemnitee, be available to the extent that such losses, claims, damages,
liabilities or related expenses have resulted from the gross negligence or
wilful misconduct of the Collateral Agent.
(c)    Any such amounts payable as provided hereunder shall be additional
Secured Obligations secured hereby and by the other Security Documents. The
provisions of this Section 7.03 shall remain operative and in full force and
effect regardless of the termination of this Agreement or any other Loan
Document, the consummation of the transactions contemplated hereby, the
repayment of any of the Secured Obligations, the invalidity or unenforceability
of any term or provision of this Agreement or any other Loan Document, or any
investigation made by or on behalf of the Collateral Agent or any other Secured
Party. All amounts due under this Section 7.03 shall be payable on written
demand therefor.
Section 7.04    . Successors and Assigns. Whenever in this Agreement any of the
parties hereto is referred to, such reference shall be deemed to include the
permitted successors and assigns of such party; and all covenants, promises and
agreements by or on behalf of any Guarantor, Grantor or the Collateral Agent
that are contained in this Agreement shall bind and inure to the benefit of
their respective successors and assigns.
Section 7.05    . Survival of Agreement. All covenants, agreements,
representations and warranties made by the Loan Parties in the Loan Documents
and in the certificates or other instruments prepared or delivered in connection
with or pursuant to this Agreement or any other Loan Document shall be
considered to have been relied upon by the Lenders and shall survive the
execution and delivery of the Loan Documents and the making of any Loans,
regardless of any investigation made by any Lender or on its behalf and
notwithstanding that the Collateral Agent or any Lender may have had notice or
knowledge of any Default or incorrect representation or warranty at the time any
credit is extended under the Credit Agreement, and shall continue in full force
and effect as long as the principal of or any accrued interest on any Loan or
any fee or any other amount payable under any Loan Document is outstanding and
unpaid and so long as the Commitments have not expired or terminated.
Section 7.06    . Counterparts; Effectiveness; Several Agreement. This Agreement
may be executed in counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. Delivery of an executed
signature page to this Agreement by facsimile or other electronic imaging shall
be as effective as delivery of a manually signed counterpart of this Agreement.
This Agreement shall become effective as to any Loan Party when a counterpart
hereof executed on behalf of such Loan Party shall have been delivered to the
Collateral Agent and a counterpart hereof shall have been executed on behalf of
the

28
 

--------------------------------------------------------------------------------

Collateral Agent, and thereafter shall be binding upon such Loan Party and the
Collateral Agent and their respective permitted successors and assigns, and
shall inure to the benefit of such Loan Party, the Collateral Agent and the
other Secured Parties and their respective successors and assigns, except that
no Loan Party shall have the right to assign or transfer its rights or
obligations hereunder or any interest herein (and any such assignment or
transfer shall be void) except as expressly permitted by the Credit Agreement.
This Agreement shall be construed as a separate agreement with respect to each
Loan Party and may be amended, modified, supplemented, waived or released with
respect to any Loan Party without the approval of any other Loan Party and
without affecting the obligations of any other Loan Party hereunder.
Section 7.07    . Severability. Any provision of this Agreement held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction. The parties shall endeavor in good faith negotiations to replace
the invalid, illegal or unenforceable provisions with valid provisions the
economic effect of which comes as close as possible to that of the invalid,
illegal or unenforceable provisions.
Section 7.08    . Right of Set-Off. Each Loan Party expressly agrees to the
provisions set forth in 13.02 of the Credit Agreement with the same force and
effect as if such provisions were set forth in full herein.
Section 7.09    . Governing Law; Jurisdiction; Consent to Service of Process.
(i) This Agreement shall be governed by, and construed in accordance with, the
laws of the State of New York, including Sections 5-1401 and 5-1402 of Title 14
of the New York General Obligations Law but excluding all other choice of law
and conflicts of laws rules thereof.
(b)    Each of the Loan Parties hereby irrevocably and unconditionally submits,
for itself and its property, to the exclusive jurisdiction of any New York State
court or Federal court of the United States of America sitting in New York City,
and any appellate court from any thereof, in any action or proceeding arising
out of or relating to this Agreement or any other Loan Document, or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in such New York State or,
to the extent permitted by law, in such Federal court. Each of the parties
hereto agrees 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. Nothing in this Agreement or any other Loan
Document

29
 

--------------------------------------------------------------------------------

shall affect any right that the Collateral Agent or any Lender may otherwise
have to bring any action or proceeding relating to this Agreement or any other
Loan Document against any Grantor or Guarantor, or its properties in the courts
of any jurisdiction.
(c)    Each of the Loan Parties hereby irrevocably and unconditionally waives,
to the fullest extent permitted by law, any objection that it may now or
hereafter have to the laying of venue of any suit, action or proceeding arising
out of or relating to this Agreement or any other Loan Document in any court
referred to in paragraph (b) above. Each of the parties hereto hereby
irrevocably waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court.
(d)    Each party to this Agreement irrevocably consents to service of process
in the manner provided for notices in Section 7.01. Nothing in this Agreement or
any other Loan Document will affect the right of any party to this Agreement to
serve process in any other manner permitted by law.
Section 7.10    . Waiver of Jury Trial. EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO
(A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES
THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS
AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION 7.10.
Section 7.11    . Headings. Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of this
Agreement and are not to affect the construction of, or to be taken into
consideration in interpreting, this Agreement.
Section 7.12    . Security Interest Absolute. All rights of the Collateral Agent
hereunder, the Security Interest, the grant of a security interest in the
Pledged Collateral and all obligations of each Grantor and Guarantor hereunder
shall be absolute and unconditional irrespective of (i) any lack of validity or
enforceability of the Credit Agreement, any other Loan Document, any agreement
with respect to any of the Secured Obligations or any other agreement or
instrument relating to any of the foregoing, (ii) any change in the time, manner
or

30
 

--------------------------------------------------------------------------------

place of payment of, or in any other term of, all or any of the Secured
Obligations, or any other amendment or waiver of or any consent to any departure
from the Credit Agreement, any other Loan Document or any other agreement or
instrument, (iii) any exchange, release or non-perfection of any Lien on other
collateral, or any release or amendment or waiver of or consent under or
departure from any guarantee, securing or guaranteeing all or any of the Secured
Obligations, or (iv) any other circumstance that might otherwise constitute a
defense available to, or a discharge of, any Grantor or Guarantor in respect of
the Secured Obligations or this Agreement.
Section 7.13    . Termination or Release. (iii) This Agreement, the Guarantees
made herein, the Security Interest, the grant of a security interest in the
Pledged Collateral and all other security interests granted hereby shall
terminate upon the payment in full in cash of the Loans and all the other Loan
Document Obligations (other than unasserted contingent and indemnification
obligations), termination of all Commitments and Incremental Commitments and
reduction of all exposure under any letters of credit issued under the Credit
Agreement to zero (or the making of other arrangements satisfactory to the
issuers thereof).
(b)    A Guarantor shall automatically be released from its obligations
hereunder and the Security Interest in the Collateral of such Guarantor shall be
automatically released upon the consummation of any transaction permitted by the
Credit Agreement as a result of which such Guarantor ceases to be a Subsidiary;
provided that the Required Lenders shall have consented to such transaction (to
the extent required by the Credit Agreement) and the terms of such consent did
not provide otherwise.
(c)    Upon any sale or other transfer by any Grantor of any Collateral that is
permitted under the Credit Agreement (other than a sale or other transfer to
Resolute or any Subsidiary of Resolute), or upon the effectiveness of any
written consent to the release of the security interest granted hereby in any
Collateral pursuant to Section 12.10 of the Credit Agreement, the security
interest in such Collateral shall be automatically released.
(d)    At any time that a Grantor desires that the Collateral Agent take any
action to acknowledge or give effect to any release of a Grantor or Collateral
pursuant to the foregoing Section 7.13(b) or (c), Resolute shall deliver to the
Collateral Agent a certificate signed by a principal executive officer of
Resolute stating that the release of the respective Grantor or Collateral is
permitted pursuant to such Section 7.13(b) or (c). In connection with any
termination or release pursuant to paragraph (a), (b) or (c), the Collateral
Agent shall execute and deliver to any Grantor, at such Grantor’s expense, all
documents that such Grantor shall reasonably request to evidence such
termination or release; provided, however, that (i) the Collateral Agent shall
not be required to execute any such

31
 

--------------------------------------------------------------------------------

document on terms which, in its opinion, would expose it to liability or create
any obligation or entail any consequence other than the release of such Liens
without recourse or warranty, and (ii) such release shall not in any manner
discharge, affect or impair the Secured Obligations or any Liens upon (or
obligations of the Grantors in respect of) all interests in Collateral retained
by the Grantors. Any execution and delivery of documents pursuant to this
Section 7.13 shall be without recourse to or warranty by the Collateral Agent.
(e)    The Collateral Agent shall have no liability whatsoever to any other
Secured Party as the result of any release of any Guarantor or Collateral by it
in accordance with (or which the Collateral Agent in good faith believes to be
in accordance with) this Section 7.13.
Section 7.14    . Additional Subsidiaries. Pursuant to Sections 9.09, 10.05(e)
and 10.15 of the Credit Agreement, certain Domestic Subsidiaries are required to
enter into this Agreement as Grantors and Guarantors. Upon execution and
delivery by the Collateral Agent and a Subsidiary of an instrument in the form
of Exhibit A hereto, such Subsidiary shall become a Grantor and a Guarantor
hereunder with the same force and effect as if originally named as a Grantor and
a Guarantor herein. The execution and delivery of any such instrument shall not
require the consent of any other Loan Party hereunder. The rights and
obligations of each Loan Party hereunder shall remain in full force and effect
notwithstanding the addition of any new Loan Party as a party to this Agreement.
Section 7.15    . Collateral Agent Appointed Attorney-in-Fact. Each Grantor
hereby appoints the Collateral Agent the attorney-in-fact of such Grantor, upon
the occurrence and during the continuance of an Event of Default, with full
power of substitution either in the Collateral Agent’s name or in the name of
such Grantor (i) to receive, endorse, assign and/or deliver any and all notes,
acceptances, checks, drafts, money orders or other evidences of payment arising
out of the Collateral or any part thereof; (ii) to demand, collect, receive
payment of, give receipt for and give discharges and releases of all or any of
the Collateral; (iii) to sign the name of any Grantor on any invoice or bill of
lading included in the Collateral; (iv) to send verifications of Accounts to any
Account Debtor; (v) to commence and prosecute any and all suits, actions or
proceedings at law or in equity in any court of competent jurisdiction to
collect or otherwise realize on all or any of the Collateral or to enforce any
rights in respect of any Collateral; (vi) to settle, compromise, compound,
adjust or defend any actions, suits or proceedings relating to all or any of the
Collateral; (vii) to make, settle and adjust claims in respect of Collateral
under policies of insurance and to endorse the name of such Grantor on any
check, draft, instrument or any other item of payment for the proceeds of such
policies of insurance and for making all determinations and decisions with
respect thereto; (viii) to notify, or to require any Grantor to notify, Account
Debtors to make payment directly to the Collateral Agent; and (ix) to use, sell,
assign, transfer, pledge, make any agreement with respect to or

32
 

--------------------------------------------------------------------------------

otherwise deal with all or any of the Collateral, and to do all other acts and
things necessary to carry out the purposes of this Agreement, as fully and
completely as though the Collateral Agent were the absolute owner of the
Collateral for all purposes; provided that nothing herein contained shall be
construed as requiring or obligating the Collateral Agent to make any commitment
or to make any inquiry as to the nature or sufficiency of any payment received
by the Collateral Agent, or to present or file any claim or notice, or to take
any action with respect to the Collateral or any part thereof or the moneys due
or to become due in respect thereof or any property covered thereby. The
Collateral Agent and the other Secured Parties shall be accountable only for
amounts actually received as a result of the exercise of the powers granted to
them herein, and neither they nor their officers, directors, employees or agents
shall be responsible to any Grantor for any act or failure to act hereunder,
except for their own gross negligence or wilful misconduct.
Section 7.16    . Recourse. This Agreement is made with full recourse to each
U.S. Loan Party and pursuant to and upon all the warranties, representations,
covenants and agreements on the part of such U.S. Loan Party contained herein,
in the Loan Documents, Secured Hedging Agreements or Secured Cash Management
Agreements and otherwise in writing in connection herewith or therewith.
Section 7.17    . Release. The Collateral Agent hereby releases any Lien or
security interest granted under the Loan Documents in any property or assets of
any Grantor owned by such Grantor on the Sixth Amendment Effective Date which
was included in the “Collateral” (as defined in the Existing Guarantee and
Collateral Agreement) but which is not included in the Collateral (as defined
herein). The Collateral Agent hereby agrees to execute and deliver to the
Grantors, and authorizes the Grantors to file, (x) amendments to the UCC
financing statements and other similar registration forms to amend the
description of collateral contained therein so as to conform such description to
the description of the Collateral hereunder and (y) any other documents
reasonably requested to evidence such release. Any execution and delivery of
documents pursuant to this Section 7.17 shall be without recourse to or warranty
by the Collateral Agent.

[Signature Page Follows]

33
 

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the day and year first above written.
RESOLUTE FOREST PRODUCTS INC.
By:
 
 
Name:
 
 
Title:
 

CITIBANK, N.A., as Collateral Agent,
By:
 
 
Name:
 
 
Title:
 

[Names of other U.S. Borrowers]
By:
 
Name:
Title:

[Signature Page to the Guarantee and Collateral Agreement]

--------------------------------------------------------------------------------

Schedule 1 to
the Guarantee and
Collateral Agreement
[Reserved]

--------------------------------------------------------------------------------

Schedule 2 to
the Guarantee and
Collateral Agreement

PLEDGED DEBT SECURITIES
Holder
Issuer
Principal Amount
Date of Note
Maturity Date
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

--------------------------------------------------------------------------------

Schedule 3 to
the Guarantee and
Collateral Agreement
[Reserved]

--------------------------------------------------------------------------------

Schedule 4 to
the Guarantee and
Collateral Agreement
CORPORATE NAME CHANGES, ETC.

--------------------------------------------------------------------------------

Exhibit A to the
Guarantee and
Collateral Agreement
SUPPLEMENT NO. __ dated as of [ ], to the Amended and Restated Guarantee and
Collateral Agreement dated as of February 25, 2014 (the “Guarantee and
Collateral Agreement”), by and among RESOLUTE FOREST PRODUCTS INC. (“Resolute”),
a Delaware corporation, certain of its Subsidiaries party thereto (each such
subsidiary individually a “Subsidiary Grantor” and collectively, the “Subsidiary
Grantors”; the Subsidiary Grantors and Resolute are referred to collectively
herein as the “Grantors”) and CITIBANK, N.A. (“Citibank”), as Collateral Agent
(in such capacity, the “Collateral Agent”).
A. Reference is made to the ABL Credit Agreement dated as of December 9, 2010
(as amended by Amendment No. 1 dated as of April 28, 2011, Amendment No. 2 dated
as of October 28, 2011, Amendment No. 3 dated as of March 21, 2012, Amendment
No. 4 dated as of April 12, 2013, Amendment No. 5 dated as of May 8, 2013 and
Amendment No. 6 dated as of February 25, 2014, and as otherwise modified from
time to time, the “Credit Agreement”), among Resolute, certain of its
Subsidiaries party thereto, the lenders from time to time party thereto and
Citibank, as Administrative Agent.
B. Capitalized terms used herein and not otherwise defined herein shall have the
meanings assigned to such terms in the Credit Agreement and the Guarantee and
Collateral Agreement referred to therein.
C. The Grantors have entered into the Guarantee and Collateral Agreement in
order to induce the Lenders to make Loans to the Borrowers. Section 7.14 of
Guarantee and Collateral Agreement provides that additional Domestic
Subsidiaries of Resolute may become Guarantors under the Guarantee and
Collateral Agreement by execution and delivery of an instrument in the form of
this Supplement. The undersigned Subsidiary (the “New Subsidiary”) is executing
this Supplement in accordance with the requirements of the Credit Agreement to
become a Guarantor under the Guarantee and Collateral Agreement in order to
induce the Lenders to make additional Loans to the Borrowers and as
consideration for Loans previously made to the Borrowers.
Accordingly, the Collateral Agent and the New Subsidiary agree as follows:
SECTION 1. In accordance with Section 7.14 of the Guarantee and Collateral
Agreement, the New Subsidiary by its signature below becomes a Grantor and
Guarantor under the Guarantee and Collateral Agreement with the same force and
effect as if originally named therein as a Grantor and Guarantor and the New
Subsidiary hereby (a) agrees to all the terms and provisions of the Guarantee
and Collateral Agreement applicable to it as a Grantor and Guarantor thereunder
and (b) represents and warrants that the representations and warranties made by
it as a Grantor and Guarantor thereunder are true and correct on and as of the
date hereof. In furtherance of the foregoing, the New Subsidiary, as security
for the payment and performance in full of the Secured Obligations (as defined
in the Collateral Agreement), does hereby create and grant to the Collateral
Agent, its successors and assigns, for the benefit of the Secured Parties, their
successors

A-1

--------------------------------------------------------------------------------

and assigns, a security interest in and lien on all of the New Subsidiary’s
right, title and interest in and to the Collateral (as defined in the Guarantee
and Collateral Agreement) of the New Subsidiary. Each reference to a “Guarantor”
or “Grantor” in the Guarantee and Collateral Agreement shall be deemed to
include the New Subsidiary. The Guarantee and Collateral Agreement is hereby
incorporated herein by reference.
SECTION 2. The New Subsidiary represents and warrants to the Collateral Agent
and the other Secured Parties that this Supplement has been duly authorized,
executed and delivered by it and constitutes its legal, valid and binding
obligation, enforceable against it in accordance with its terms, except as the
enforceability thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the enforcement of creditors’ rights
generally and subject to general principles of equity (whether enforcement is
sought by a proceeding in equity or at law).
SECTION 3. This Supplement may be executed in counterparts (and by different
parties hereto on different counterparts), each of which shall constitute an
original, but all of which when taken together shall constitute a single
contract. This Supplement shall become effective when the Collateral Agent shall
have received a counterpart of this Supplement that bears the signature of the
New Subsidiary and the Collateral Agent has executed a counterpart hereof.
Delivery of an executed signature page to this Supplement by facsimile
transmission shall be as effective as delivery of a manually signed counterpart
of this Supplement.
SECTION 4. The New Subsidiary hereby represents and warrants that (a) set forth
on Schedule 1 attached hereto is a true and correct schedule as of the date
hereof with the true and correct legal name of the New Subsidiary, its
jurisdiction of formation and the location of its chief executive office, (b)
set forth on Schedule 2 attached hereto is a true and correct schedule, as of
the date hereof, of all debt securities and promissory notes owned by the New
Subsidiary required to be pledged under Article 3 or Section 4.04(c). The New
Subsidiary shall deliver to the Collateral Agent a certificate executed by a
Responsible Officer of the New Subsidiary setting forth the information (other
than that set forth on the Schedules described above) required pursuant to the
Perfection Certificate.
SECTION 5. Except as expressly supplemented hereby, the Guarantee and Collateral
Agreement shall remain in full force and effect.
SECTION 6. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK, INCLUDING SECTIONS 5-1401 AND 5-1402 OF
TITLE 14 OF THE NEW YORK GENERAL OBLIGATIONS LAW BUT EXCLUDING ALL OTHER CHOICE
OF LAW AND CONFLICTS OF LAWS RULES THEREOF.
SECTION 7. In case any one or more of the provisions contained in this
Supplement should be held invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein and in the Guarantee and Collateral Agreement shall not in any way be
affected or impaired thereby (it being understood that the invalidity of a
particular provision in a particular jurisdiction shall not in and of itself
affect the validity of such provision in any other jurisdiction). The parties
hereto shall endeavor in good-faith negotiations to replace the invalid, illegal
or unenforceable provisions with

A-2

--------------------------------------------------------------------------------

valid provisions the economic effect of which comes as close as possible to that
of the invalid, illegal or unenforceable provisions.
SECTION 8. All communications and notices hereunder shall be in writing and
given as provided in Section 7.01 of the Guarantee and Collateral Agreement.
SECTION 9. The New Subsidiary agrees to reimburse the Collateral Agent for its
reasonable out-of-pocket expenses in connection with this Supplement, including
the reasonable fees, other charges and disbursements of counsel for the
Collateral Agent.
[Signature Page Follows]

A-3

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the New Subsidiary and the Collateral Agent have duly
executed this Supplement to the Collateral Agreement as of the day and year
first above written.
[NAME OF NEW SUBSIDIARY],
By:
 
 
Name:
 
 
Title:
 

CITIBANK, N.A., as Collateral Agent,
By:
 
 
Name:
 
 
Title:
 

A-4

--------------------------------------------------------------------------------

Schedule 1
to Supplement No. __ to the
Guarantee and
Collateral Agreement
NEW SUBSIDIARY INFORMATION
Name
Jurisdiction of Formation
Chief Executive Office

A-5

--------------------------------------------------------------------------------

Schedule 2
to Supplement No. __ to the
Guarantee and
Collateral Agreement

PLEDGED DEBT SECURITIES
Issuer
Principal Amount
Date of Note
Maturity Date
 
 
 
 

A-6

--------------------------------------------------------------------------------

EXHIBIT C

FORM OF CANADIAN GUARANTEE AND COLLATERAL AGREEMENT

A-7

--------------------------------------------------------------------------------

Execution Copy
AMENDED AND RESTATED CANADIAN GUARANTEE
AND COLLATERAL AGREEMENT
dated as of
February 25, 2014
among
THE CANADIAN GUARANTORS PARTY HERETO
and
CITIBANK, N.A.,
as Collateral Agent

--------------------------------------------------------------------------------

Article 1 Definitions    1
Credit Agreement
1

Other Defined Terms
2

Article 2 Guarantee    5
Guarantee
5

Guarantee of Payment
6

No Limitations
6

Reinstatement
7

Agreement to Pay; Subrogation
7

Information
7

[Reserved].
7

Keepwell
7

Article 3 Pledge of Debt Securities    8
Pledge
8

Delivery of the Pledged Collateral
8

Representations, Warranties and Covenants
9

[Reserved]
10

Registration in Nominee Name; Denominations
10

Interest.
10

[Reserved].
11

[Reserved].
11

Article 4 Security Interests in Personal Property    11
Security Interest.
11

Representations and Warranties
13

Covenants
14

Other Actions
17

[Reserved].
19

Amalgamation
19

Article 5 Remedies    19
Remedies Upon Default
19

Application of Proceeds
21

Grant of License to Use Intellectual Property
22

Securities Laws
22

Article 6 Indemnity, Subrogation and Subordination    23
Indemnity and Subrogation
23

Contribution and Subrogation
23

Subordination.
23

--------------------------------------------------------------------------------

- 2 -

Article 7 Miscellaneous    24
Notices
24

Waivers; Amendment.
24

Collateral Agent’s Fees and Expenses; Indemnification.
24

Successors and Assigns
25

Survival of Agreement
25

Counterparts; Effectiveness; Several Agreement
25

Severability
26

Right of Set-Off
26

Governing Law; Jurisdiction; Consent to Service of Process.
26

Waiver of Jury Trial
27

Headings
27

Security Interest Absolute
27

Termination or Release.
28

Additional Canadian Subsidiaries
29

Collateral Agent Appointed Attorney-in-Fact
29

Recourse
30

--------------------------------------------------------------------------------

Schedules
Schedule 1    Corporate Name Changes, Etc.
Schedule 2    Pledged Debt Securities
Exhibits
Exhibit A    Form of Canadian Guarantee and Collateral Agreement Supplement

--------------------------------------------------------------------------------

AMENDED AND RESTATED CANADIAN GUARANTEE AND COLLATERAL AGREEMENT (this
“Agreement”) dated as of February 25, 2014, among each Canadian Guarantor set
forth on the signature pages hereto and Citibank, N.A. (“Citibank”), as
Collateral Agent.
WHEREAS, Resolute Forest Products Inc. (f/k/a AbitibiBowater Inc.) (“Resolute”)
entered into (i) that certain ABL Credit Agreement dated as of December 9, 2010
(as amended by Amendment No. 1 dated as of April 28, 2011, Amendment No. 2 dated
as of October 28, 2011, Amendment No. 3 dated as of March 21, 2012, Amendment
No. 4 dated as of April 12, 2013 and Amendment No. 5 dated as of May 8, 2013,
and as otherwise modified from time to time, the “Existing Credit Agreement”),
among Resolute, certain of its Subsidiaries party thereto, the Lenders party
thereto and Citibank, as Administrative Agent and (ii) that certain Canadian
Guarantee and Collateral Agreement dated as of December 9, 2010, as amended by
Amendment No. 2 described above, among each Canadian Guarantor set forth on the
signature pages thereto, and Citibank, as Collateral Agent (the “Existing
Guarantee and Collateral Agreement”), as supplemented by Supplement No. 1 dated
as of September 14, 2012 among each Canadian Guarantor set forth on the
signature pages thereto, and Citibank, as Collateral Agent;
WHEREAS, Resolute has requested that the Administrative Agent and the Lenders
amend the Existing Credit Agreement pursuant to Amendment No. 6 to the Existing
Credit Agreement dated as of February 25, 2014 (“Amendment No. 6”; the Existing
Credit Agreement, as amended by Amendment No. 6, the “Credit Agreement”), among
Resolute, certain of its subsidiaries party thereto, the Lenders party thereto
and Citibank, as Administrative Agent;
WHEREAS, in connection with Amendment No. 6, Resolute and the Administrative
Agent (acting at the direction of the Required Lenders (as defined in the
Existing Credit Agreement)) have agreed to amend the Existing Guarantee and
Collateral Agreement as set forth herein in order to, among other things,
reflect certain changes to the collateral granted hereunder; and
WHEREAS, each Grantor is a Canadian Subsidiary Guarantor and/or a Canadian
Borrower under the Credit Agreement and an affiliate of each other Grantor, will
derive substantial benefits from the extension of credit to the Canadian
Borrowers pursuant to the Credit Agreement and is willing to execute and deliver
this Agreement in order to induce the Lenders to extend such credit.
NOW, THEREFORE, the parties hereto covenant and agree that the Existing
Guarantee and Collateral Agreement is hereby amended and restated in its
entirety, and do hereby agree as follows:

--------------------------------------------------------------------------------

- 2 -

Article 1
Definitions
Section 1.01.    Credit Agreement.
(a)    Capitalized terms used in this Agreement, including the preamble and
introductory paragraph hereto, and not otherwise defined herein have the
meanings specified in the Credit Agreement. All terms defined in the PPSA and
not defined in this Agreement have the meanings specified therein.
(b)    The rules of construction specified in Section 1.03 of the Credit
Agreement also apply to this Agreement.
Section 1.02.    Other Defined Terms. As used in this Agreement, the following
terms have the meanings specified below:
“Account Debtor” means any Person who is or who may become obligated to any
Grantor under, with respect to or on account of an Account.
“Amendment No. 6” has the meaning assigned to such term in the preliminary
statements of this Agreement.
“Borrowers” has the meaning assigned to such term in the Credit Agreement and
includes any successor by merger, consolidation or amalgamation.
“Canadian Borrowers” has the meaning assigned to such term in the Credit
Agreement and includes any successor by merger, consolidation or amalgamation.
“Cash Collateral Account” means a non-interest bearing cash collateral account
maintained with, and in the sole dominion and control of, the Collateral Agent
for the benefit of the Secured Parties.
“Claiming Party” has the meaning assigned to such term in Section 6.02.
“Collateral” has the meaning assigned to such term in Section 4.01.
“Contract Rights” means all rights of any Grantor under each Contract,
including, without limitation, (i) any and all rights to receive and demand
payments under any or all Contracts, (ii) any and all rights to receive and
compel performance under any or all Contracts and (iii) any and all other
rights, interests and claims now existing or in the future arising in connection
with any or all Contracts.
“Contracts” means all contracts between any Grantor and one or more additional
parties (including, without limitation, any Hedging Agreements, licensing
agreements and any partnership agreements, joint venture agreements and limited
liability company agreements).

--------------------------------------------------------------------------------

- 3 -

“Contributing Party” has the meaning assigned to such term in Section 6.02.
“Copyright License” means any written agreement, now or hereafter in effect,
granting any right to any third party under any Copyright now or hereafter owned
by any Grantor or that such Grantor otherwise has the right to license, or
granting any right to any Grantor under any copyright now or hereafter owned by
any third party, and all rights of such Grantor under any such agreement.
“Copyrights” means all of the following now owned or hereafter acquired by any
Grantor: (a) all copyright rights in any work subject to the copyright laws of
Canada, the United States or any other jurisdiction, whether as author,
assignee, transferee or otherwise, and (b) all registrations and applications
for registration of any such copyright in Canada, the United States or any other
jurisdiction, including registrations, recordings, supplemental registrations
and pending applications for registration in the Canadian Intellectual Property
Office, the United States Copyright Office or similar office in any
jurisdiction.
“Credit Agreement” has the meaning assigned to such term in the preliminary
statements of this Agreement.
“Excluded Assets” means (i) any shares of capital stock or other Equity
Interests of any Subsidiary of a Grantor, (ii) any shares of capital stock or
other Equity Interests of any Joint Venture Subsidiary, (iii) Excluded Accounts,
(iv) Intellectual Property, and (v) any property to the extent that a grant of a
security interest therein would violate applicable law, require a consent not
obtained of any Governmental Authority, or constitute a breach of or default
under, or result in the termination of or require a consent not obtained under,
any contract, lease, license or other agreement evidencing or giving rise to
such property, or result in the invalidation thereof or provide any party
thereto with a right of termination; provided, however, that such security
interest shall attach immediately at such time as the condition causing such
prohibition, unenforceability, breach or termination shall be remedied or shall
otherwise cease to exist. Notwithstanding the foregoing, “Excluded Assets” shall
not include any property or assets that constitute direct Proceeds of property
or assets described in clause (a) or (b) of Section 3.01 or in any of clauses
(i) through (viii) of Section 4.01 (a).
“Excluded Investment Property” means, at any time, Investment Property held by
any Grantor in the form of Equity Interests or other securities, in each case,
(a) that are not publicly traded, (b) with respect to which a grant of a
security interest is not prohibited or does not constitute or result in a breach
or termination under the terms of, or a default under, any contract or agreement
relating to such Investment Property and (c) whose book value, together with the
aggregate book value of all other Excluded Investment Property, does not exceed
$40,000,000 in the aggregate at such time.
“Existing Credit Agreement” has the meaning assigned to such term in the
preliminary statements of this Agreement.
“Existing Guarantee and Collateral Agreement” has the meaning assigned to such
term in the preliminary statements of this Agreement.

--------------------------------------------------------------------------------

- 4 -

“Grantors” means each Canadian Subsidiary set forth on the signature pages
hereto, and each other Canadian Subsidiary that becomes a Guarantor pursuant to
Section 7.14 hereof by executing a supplement to this Agreement.
“Guaranteed Party” shall mean the Canadian Borrowers, each other Guarantor and
each Canadian Subsidiary party to any Secured Hedging Agreement or any Secured
Cash Management Agreement.
“Guarantors” means each of the Grantors.
“Intangibles” means all Intangibles as defined in the PPSA, and shall include
any personal property, including choses in action, other than Accounts, Chattel
Paper, bank accounts, Documents of Title, Goods, Instruments, Investment
Property, Letter-of-Credit Rights, letters of credit and Money. The term
includes payment intangibles and software.
“Intellectual Property” means all industrial, intellectual and similar property
of every kind and nature now owned or hereafter acquired by any Grantor,
including inventions, designs, Patents, Copyrights, Licenses, Trademarks,
industrial designs, integrated circuit topographies, trade secrets, confidential
or proprietary technical and business information, know-how, show-how or other
data or information, software and databases and all embodiments or fixations
thereof and related documentation, registrations and franchises, and all
additions, improvements and accessions to, and books and records describing or
used in connection with, any of the foregoing.
“Letter-of-Credit Rights” shall mean a right to payment or performance under a
letter of credit, whether or not the beneficiary has demanded or is at the time
entitled to demand payment or performance, but does not include the right of a
beneficiary to demand payment or performance under a letter of credit.
“License” means any Patent License, Trademark License, Copyright License or
other license or sublicense agreement relating to intellectual property to which
any Grantor is a party.
“Patent License” means any written agreement, now or hereafter in effect,
granting to any third party any right to make, use or sell any invention on
which a Patent, now or hereafter owned by any Grantor or that any Grantor
otherwise has the right to license, is in existence, or granting to any Grantor
any right to make, use or sell any invention on which a patent, now or hereafter
owned by any third party, is in existence, and all rights of any Grantor under
any such agreement.
“Patents” means all of the following now owned or hereafter acquired by any
Grantor: (a) all letters patent of Canada, the United States or any other
jurisdiction, all registrations and recordings thereof, and all applications for
letters patent of Canada, the United States or any other jurisdiction, including
registrations, recordings and pending applications in the Canadian Intellectual
Property Office, the United States Patent and Trademark Office or similar office
in any other jurisdiction, and (b) all reissues, continuations, divisions,
continuations-in-part, renewals or extensions thereof, and the inventions
disclosed or claimed therein, including the right to make, use and/or sell the
inventions disclosed or claimed therein.

--------------------------------------------------------------------------------

- 5 -

“Pledged Collateral” has the meaning assigned to such term in Section 3.01.
“Pledged Debt Securities” has the meaning assigned to such term in Section 3.01.
“Qualified ECP Guarantor” means, in respect of any Swap Obligation, each
Guarantor that constitutes an “eligible contract participant” under the
Commodity Exchange Act or any regulations promulgated thereunder and can cause
another person to qualify as an “eligible contract participant” at such time by
entering into a keepwell under Section 1a(18)(A)(v)(II) of the Commodity
Exchange Act.
“Receiver” means a receiver, a manager or a receiver and manager.
“Secured Parties” means (a) the Lenders, (b) the Administrative Agent, (c) the
Collateral Agent, (d) each counterparty to any Secured Hedging Agreement, (e)
each Person to whom any Cash Management Services Obligations in respect of any
Secured Cash Management Agreement are owed, (f) the beneficiaries of each
indemnification obligation undertaken by any Loan Party under any Loan Document
and (g) the successors and assigns of each of the foregoing, in each case to the
extent holding Canadian Secured Obligations.
“Securities Laws” has the meaning assigned to such term in Section 5.04.
“Security Interest” has the meaning assigned to such term in Section 4.01.
“Supporting Obligation” shall mean any Letter-of-Credit Right or secondary
obligation that supports the payment or performance of an Account, Chattel
Paper, Document of Title, Intangible, Instrument or Investment Property.
“Trademark License” means any written agreement, now or hereafter in effect,
granting to any third party any right to use any Trademark now or hereafter
owned by any Grantor or that any Grantor otherwise has the right to license, or
granting to any Grantor any right to use any trademark now or hereafter owned by
any third party, and all rights of any Grantor under any such agreement.
“Trademarks” means all of the following now owned or hereafter acquired by any
Grantor: (a) all trademarks, service marks, trade names, corporate names,
company names, business names, fictitious business names, trade styles, trade
dress, logos, other source or business identifiers, designs and Intangibles of
like nature, now existing or hereafter adopted or acquired, all registrations
and recordings thereof, and all registration and recording applications filed in
connection therewith, including registrations and registration applications in
the Canadian Intellectual Property Office, the United States Patent and
Trademark Office or any similar office in any other jurisdiction, and all
extensions or renewals thereof, (b) all goodwill associated therewith or
symbolized thereby and (c) all other assets, rights and interests that uniquely
reflect or embody such goodwill.
Article 2
Guarantee
Section 2.01.    Guarantee. Each Guarantor unconditionally and irrevocably
guarantees, jointly with the other Guarantors and severally, as the primary
obligation and debt of each Guarantor and not merely as a surety, the due,
prompt and complete payment and performance of the Canadian Secured Obligations.
Each of the Guarantors further agrees that the Canadian Secured Obligations may
be extended or renewed, in whole or in part, without notice to or further assent
from it, and that it will remain bound upon its guarantee notwithstanding any
extension or renewal of any Canadian Secured Obligation. Each of the Guarantors
waives presentment to, demand of payment from and protest to any Canadian
Borrower or any other Guaranteed Party of any of the Canadian Secured
Obligations, and also waives notice of acceptance of its guarantee and notice of
protest for nonpayment.

--------------------------------------------------------------------------------

- 6 -

Section 2.02.    Guarantee of Payment. Each Guarantor further agrees that its
guarantee hereunder constitutes a guarantee of payment when due and not of
collection, and waives any right to require that any resort be had by the
Collateral Agent or any other Secured Party to any other Guarantor or any
Guaranteed Party to any security held for the payment of the Canadian Secured
Obligations or to any balance of any deposit account or credit on the books of
the Collateral Agent or any other Secured Party in favour of any Canadian
Borrower or any other Person.
Section 2.03.    No Limitations.
(a)    Except for termination or release of a Guarantor’s obligations hereunder
as expressly provided in Section 7.13, the obligations of each Guarantor
hereunder shall not be subject to any reduction, limitation, impairment or
termination for any reason, including any claim of waiver, release, surrender,
alteration or compromise, and shall not be subject to any defense (other than
defense of payment in full in cash) or set-off, counterclaim, recoupment or
termination whatsoever by reason of the invalidity, illegality or
unenforceability of the Canadian Secured Obligations or otherwise. Without
limiting the generality of the foregoing, the obligations of each Guarantor
hereunder shall not be discharged or impaired or otherwise affected by (i) the
failure of the Collateral Agent or any other Secured Party to assert any claim
or demand or to enforce any right or remedy under the provisions of any Loan
Document, Secured Hedging Agreement, Secured Cash Management Agreement or
otherwise; (ii) any rescission, waiver, amendment or modification of, or any
release from any of the terms or provisions of, any Loan Document, Secured
Hedging Agreement, Secured Cash Management Agreement or any other agreement,
including with respect to any other Guarantor under this Agreement; (iii) the
release of any security held by the Collateral Agent or any other Secured Party
for the Canadian Secured Obligations or any of them; (iv) any default, failure
or delay, wilful or otherwise, in the performance of the Canadian Secured
Obligations; or (v) any other act or omission that may or might in any manner or
to any extent vary the risk of any Guarantor or otherwise operate as a discharge
of any Guarantor as a matter of law or equity (other than to the extent of the
indefeasible payment in cash of all the Canadian Secured Obligations). Each
Guarantor expressly authorizes the Secured Parties to take and hold security for
the payment and performance of the Canadian Secured Obligations, to exchange,
waive or release any or all such security (with or without consideration), to
enforce or apply such security and direct the order and manner of any sale
thereof in their sole discretion or to release or substitute any one or more
other guarantors or obligors upon or in respect of the Canadian Secured
Obligations, all without affecting the obligations of any Guarantor hereunder.
(b)    To the fullest extent permitted by applicable law, each Guarantor waives
any defense based on or arising out of any defense of any Canadian Borrower or
any other Guaranteed Party or the unenforceability of the Canadian Secured
Obligations or any part thereof from any cause, or the cessation from any cause
of the liability of any Canadian Borrower or any other Guaranteed Party, other
than to the extent of indefeasible payment in cash of all the Canadian Secured
Obligations. The Collateral Agent and the other Secured Parties may, at their
election, enforce any security held by one or more of them, compromise or adjust
any part of the Canadian Secured Obligations, make any other accommodation with
any Canadian Borrower or any other Guaranteed Party or exercise any other right
or remedy available to them against any Canadian Borrower or any other
Guaranteed Party, without affecting or impairing in any way the liability of any
Guarantor

--------------------------------------------------------------------------------

- 7 -

hereunder except to the extent the Canadian Secured Obligations have been fully
and indefeasibly paid in full in cash. To the fullest extent permitted by
applicable law, each Guarantor waives any defense arising out of any such action
even though such action operates, pursuant to applicable law, to impair or to
extinguish any right of reimbursement or subrogation or other right or remedy of
such Guarantor against any Canadian Borrower or any other Guaranteed Party, as
the case may be, or any security.
Section 2.04.    Reinstatement. Each of the Guarantors agrees that its guarantee
hereunder shall continue to be effective or be reinstated, as the case may be,
if at any time payment, or any part thereof, of any Canadian Secured Obligation
is rescinded or must otherwise be restored by the Collateral Agent or any other
Secured Party upon the bankruptcy or reorganization of any Canadian Borrower,
any other Guaranteed Party or otherwise, as if such payment had been due but not
made at such time.
Section 2.05.    Agreement to Pay; Subrogation. In furtherance of the foregoing
and not in limitation of any other right that the Collateral Agent or any other
Secured Party has at law or in equity against any Guarantor by virtue hereof,
upon the failure of any Canadian Borrower or any other Guaranteed Party to pay
any Canadian Secured Obligation when and as the same shall become due, whether
at maturity, by acceleration, after notice of prepayment or otherwise, each
Guarantor hereby promises to and will forthwith pay, or cause to be paid, to the
Collateral Agent for distribution to the applicable Secured Parties in cash the
amount of such unpaid Canadian Secured Obligation. Upon payment by or on behalf
of any Guarantor of any sums to the Collateral Agent as provided above, all
rights of such Guarantor against any Canadian Borrower or any other Guaranteed
Party arising as a result thereof by way of right of subrogation, contribution,
reimbursement, indemnity or otherwise shall in all respects be subject to
Article 6.
Section 2.06.    Information. Each Guarantor assumes all responsibility for
being and keeping itself informed of each Canadian Borrower’s and each other
Guaranteed Party’s financial condition and assets, and of all other
circumstances bearing upon the risk of nonpayment of the Canadian Secured
Obligations and the nature, scope and extent of the risks that such Guarantor
assumes and incurs hereunder, and agrees that none of the Collateral Agent or
the other Secured Parties will have any duty to advise such Guarantor of
information known to it or any of them regarding such circumstances or risks.
Section 2.07.    [Reserved].
Section 2.08.    Keepwell. Each Qualified ECP Guarantor hereby jointly and
severally absolutely, unconditionally and irrevocably undertakes to provide such
funds or other support as may be needed from time to time by each other
Guarantor to honor all of its obligations under the guaranty given hereby in
respect of the Swap Obligations; provided, however, that each Qualified ECP
Guarantor shall only be liable under this Section 2.08 for the maximum amount of
such liability that can be hereby incurred without rendering its obligations
under this Section 2.08, or otherwise under the guaranty given hereby, voidable
under applicable law relating to fraudulent conveyance or fraudulent transfer,
and not for any greater amount. The obligations of each Qualified ECP Guarantor
under this Section 2.08 shall remain in full force and effect until the
termination of the Commitments and the repayment, satisfaction or discharge of
all other Obligations (other than contingent

--------------------------------------------------------------------------------

- 8 -

indemnification obligations). Each Qualified ECP Guarantor intends that this
Section 2.08 constitute, and this Section 2.08 shall be deemed to constitute, a
“keepwell, support, or other agreement” for the benefit of each other Guarantor
for all purposes of Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.
Article 3
Pledge of Debt Securities
Section 3.01.    Pledge. As security for the payment or performance, as the case
may be, in full of the Canadian Secured Obligations, each Grantor hereby
collaterally assigns and pledges to the Collateral Agent, its successors and
assigns, for the benefit of the Secured Parties, and hereby grants to the
Collateral Agent, its successors and assigns, for the benefit of the Secured
Parties, a security interest in, all of such Grantor’s right, title and interest
in, to and under:
(a)    (i) the promissory notes owned by it on the Sixth Amendment Effective
Date and listed opposite the name of such Grantor on Schedule 2, and (ii) each
other promissory note evidencing Indebtedness that evidences, governs or arises
out of the disposition of any accounts receivable included in Section 4.01(a)(i)
or Inventory referred to in Section 4.01(a)(v) on or after the date hereof owed
to such Grantor, excluding in each case promissory notes in a principal amount
of less than $20,000,000, so long as the aggregate principal amount of
promissory notes not so pledged under this exclusion does not exceed $40,000,000
(the “Pledged Debt Securities”);
(b)    subject to Section 3.06, all payments of principal or interest, cash,
instruments and other property from time to time received, receivable or
otherwise distributed in respect of, in exchange for or upon the conversion of,
and all other Proceeds received in respect of, the securities referred to in
clause (a) above; and
(c)    all Proceeds of any of the foregoing (the items referred to in clauses
(a), (b) and (c) of this Section 3.01 above being collectively referred to as
the “Pledged Collateral”).
Notwithstanding anything herein to the contrary, in no event shall the security
interest granted hereunder attach to any Excluded Assets, and the terms “Pledged
Debt Securities,” and “Pledged Collateral,” shall, in each case, expressly
exclude all Excluded Assets.
TO HAVE AND TO HOLD the Pledged Collateral, together with all right, title,
interest, powers, privileges and preferences pertaining or incidental thereto,
unto the Collateral Agent, its successors and assigns, for the benefit of the
Secured Parties, as security for the payment or performance, as the case may be,
in full of the Canadian Secured Obligations; subject, however, to the terms,
covenants and conditions hereinafter set forth.
Section 3.02.    Delivery of the Pledged Collateral.
(c)    Each Grantor agrees promptly (and with respect to Pledged Debt Securities
owned on the date of this Agreement, in any event within 45 days after the date
of this Agreement) to

--------------------------------------------------------------------------------

- 9 -

deliver or cause to be delivered to the Collateral Agent any and all Pledged
Debt Securities at any time owned by such Grantor.
(d)    Upon delivery to the Collateral Agent, (i) any Pledged Debt Securities
shall be accompanied by instruments of transfer reasonably satisfactory to the
Collateral Agent and by such other instruments and documents as the Collateral
Agent may reasonably request and (ii) all other property comprising part of the
Pledged Collateral shall be accompanied by proper instruments of assignment duly
executed by the applicable Grantor and such other instruments or documents as
the Collateral Agent may reasonably request. Each delivery of Pledged Debt
Securities after the date of this Agreement shall be accompanied by a schedule
describing the Pledged Debt Securities so delivered, which schedule shall be
attached hereto as a supplement to Schedule 2 and made a part hereof; provided
that failure to attach any such schedule hereto shall not affect the validity of
such pledge of such Pledged Debt Securities.
(e)    The assignment, pledges and security interests granted in Section 3.01
are granted as security only and shall not subject the Collateral Agent or any
other Secured Party to, or in any way alter or modify, any obligation or
liability of any Grantor with respect to or arising out of the Pledged
Collateral.
Section 3.03.    Representations, Warranties and Covenants. The Grantors jointly
and severally represent, warrant and covenant to and with the Collateral Agent,
for the benefit of the Secured Parties, that:
(a)    Schedule 2 correctly sets forth, as of the Sixth Amendment Effective
Date, with respect to each Grantor, all Pledged Debt Securities owned by such
Grantor;
(b)    To each Grantor’s knowledge, the Pledged Debt Securities pledged by such
Grantor have been duly and validly authorized and issued by the issuers thereof
and are legal, valid and binding obligations of the issuers thereof, subject to
applicable bankruptcy, insolvency, reorganization, moratorium or other laws
affecting creditors’ rights generally and subject to general principles of
equity, regardless of whether considered in a proceeding in equity or at law;
(c)    except for the security interests granted hereunder, each of the Grantors
(i) is and, subject to any repayments, sales, transfers or other dispositions
made in compliance with the Credit Agreement, will continue to be the direct
owner, beneficially and of record, of the Pledged Debt Securities indicated on
Schedule 2 as owned by such Grantor, (ii) holds the same free and clear of all
Liens (other than Permitted Liens), (iii) except for Permitted Liens, will not
pledge or hypothecate, or otherwise create a consensual Lien on, the Pledged
Collateral, and (iv) will defend its title or interest thereto or therein
against any and all Liens (other than Permitted Liens), however arising, of all
Persons whomsoever;
(d)    each of the Grantors has the power and authority to pledge the Pledged
Collateral pledged by it hereunder in the manner hereby done or contemplated;
(e)    no consent or approval of any Person was or is necessary to the validity
of the pledge effected hereby (other than such as have been obtained and are in
full force and effect);

--------------------------------------------------------------------------------

- 10 -

(f)    by virtue of the execution and delivery by the Grantors of this
Agreement, when any Pledged Debt Securities are delivered to the Collateral
Agent in accordance with this Agreement, the Collateral Agent will obtain a
legal, valid and perfected lien upon and security interest in such Pledged Debt
Securities as security for the payment and performance of the Canadian Secured
Obligations; and
(g)    the pledge effected hereby is effective to vest in the Collateral Agent,
for the benefit of the Secured Parties, the rights of the Collateral Agent in
the Pledged Collateral as set forth herein.
Section 3.04.    [Reserved]
Section 3.05.    Registration in Nominee Name; Denominations. The Collateral
Agent, on behalf of the Secured Parties, shall have the right (in its sole and
absolute discretion) to hold the Pledged Debt Securities in the name of the
applicable Grantor, endorsed or assigned in blank. The Collateral Agent shall,
at any time after the occurrence and during the continuance of an Event of
Default, have the right (in its sole discretion) to require the Grantors to
exchange the certificates representing Pledged Debt Securities for certificates
of smaller or larger denominations for any purpose consistent with this
Agreement.
Section 3.06.    Interest.Unless and until an Event of Default shall have
occurred and be continuing and the Collateral Agent shall have notified the
Grantors in writing that their rights under this Section 3.06 are being
suspended:
(i)    Each Grantor shall be entitled to exercise any and all rights and powers
inuring to an owner of the Pledged Debt Securities or any part thereof for any
purpose consistent with the terms of this Agreement, the Credit Agreement and
the other Loan Documents.
(ii)    The Collateral Agent shall execute and deliver to each Grantor, or cause
to be executed and delivered to such Grantor, all such powers of attorney and
other instruments as such Grantor may reasonably request for the purpose of
enabling such Grantor to exercise the powers it is entitled to exercise pursuant
to paragraph (i) above and to receive the interest, principal and other
distributions it is entitled to receive and retain pursuant to paragraph (iii)
below.
(iii)    Each Grantor shall be entitled to receive and retain any and all
interest, principal, cash, instruments and other property and all distributions
from time to time received, receivable or otherwise paid on or distributed in
respect of or in exchange for the Pledged Debt Securities to the extent and only
to the extent that such interest, principal and other distributions are
permitted by, and otherwise paid or distributed in accordance with, the terms
and conditions of the Credit Agreement, the other Loan Documents and applicable
laws; provided that any noncash interest, principal or other distributions that
would constitute Pledged Debt Securities received in exchange for Pledged Debt
Securities or any part thereof shall be and become part of the Pledged
Collateral (except for Excluded Assets), and, if received by any Grantor, shall
not be commingled by such Grantor with any of its other funds or property but
shall be held separate and apart therefrom, shall be held in trust for

--------------------------------------------------------------------------------

- 11 -

the benefit of the Collateral Agent and shall be forthwith delivered to the
Collateral Agent in the same form as so received (with any necessary
endorsement).
(b)    Upon the occurrence and during the continuance of an Event of Default,
after the Collateral Agent shall have notified the Grantors in writing of the
suspension of their rights under paragraph (a)(iii) above, all rights of any
Grantor to interest, principal or other distributions that such Grantor is
authorized to receive pursuant to paragraph (a)(iii) above, and the obligations
of the Collateral Agent under paragraph (a)(ii) above, shall cease, and all such
rights shall thereupon become vested in the Collateral Agent, which shall have
the sole and exclusive right and authority to receive and retain such interest,
principal or other distributions. All interest, principal or other distributions
received by any Grantor contrary to the provisions of this Section 3.06 shall be
held in trust for the benefit of the Collateral Agent, shall be segregated from
other property or funds of such Grantor and shall be forthwith delivered to the
Collateral Agent upon demand in the same form as so received (with any necessary
endorsement). Any and all money and other property paid over to or received by
the Collateral Agent pursuant to the provisions of this paragraph (b) shall be
retained by the Collateral Agent in an account to be established by the
Collateral Agent upon receipt of such money or other property and shall be
applied in accordance with the provisions of Section 5.02. After all Events of
Default have been cured or waived and Resolute has delivered to the Collateral
Agent a certificate to that effect, the Collateral Agent shall promptly repay to
each Grantor (without interest) all interest, principal or other distributions
that such Grantor would otherwise be permitted to retain pursuant to the terms
of paragraph (a)(iii) above and that remain in such account.
(c)    Upon the occurrence and during the continuance of an Event of Default,
after the Collateral Agent shall have notified the Grantors in writing of the
suspension of their rights under paragraph (a)(i) above, all rights of any
Grantor to exercise the rights and powers it is entitled to exercise pursuant to
paragraph (a)(i) above, and the obligations of the Collateral Agent under
paragraph (a)(ii) above, shall cease, and all such rights shall thereupon become
vested in the Collateral Agent, which shall have the sole and exclusive right
and authority to exercise such rights and powers; provided that, unless
otherwise directed by the Required Lenders, the Collateral Agent shall have the
right from time to time following and during the continuance of an Event of
Default to permit the Grantors to exercise such rights.
(d)    Any notice given by the Collateral Agent to the Grantors suspending their
rights under paragraph (a) of this Section 3.06 (i) may be given by telephone to
any Responsible Officer if promptly confirmed in writing, (ii) may be given to
one or more of the Grantors at the same or different times and (iii) may suspend
the rights of the Grantors under paragraph (a)(i) or paragraph (a)(iii) in part
without suspending all such rights (as specified by the Collateral Agent in its
sole and absolute discretion) and without waiving or otherwise affecting the
Collateral Agent’s right to give additional notices from time to time suspending
other rights so long as an Event of Default has occurred and is continuing.
Section 3.07.    [Reserved].
Section 3.08.    [Reserved].

--------------------------------------------------------------------------------

- 12 -

Article 4
Security Interests in Personal Property
Section 4.01.    Security Interest.
(f)    As security for the payment or performance, as the case may be, in full
of the Canadian Secured Obligations, each Grantor hereby collaterally assigns
and pledges to the Collateral Agent, its successors and assigns, for the benefit
of the Secured Parties, and hereby grants to the Collateral Agent, its
successors and assigns, for the benefit of the Secured Parties, a security
interest (the “Security Interest”) in, all right, title and interest in, to or
under any and all of the following assets and properties now owned or at any
time hereafter acquired by such Grantor or in which such Grantor now has or at
any time in the future may acquire any right, title or interest (collectively,
the “Collateral”):
(i)    all Accounts;
(ii)    [Reserved]
(iii)    all Money and all bank accounts and all monies deposited therein;
(iv)    all Investment Property (including all Future Contracts, Future
Accounts, Securities and Securities Accounts and Security Entitlements or
Financial Assets credited thereto);
(v)    all Inventory;
(vi)    to the extent evidencing or governing any of the items referred to in
the preceding clauses (i) through (v), all Chattel Paper, Documents of Title,
Intangibles (excluding Intellectual Property), Contracts, Contract Rights and
Instruments;
(vii)    to the extent securing or supporting any of the items referred to in
the preceding clauses (i) through (vi), all Supporting Obligations and
Letter-of-Credit Rights;
(viii)    all books and Records pertaining to the foregoing; and
(ix)    all products and Proceeds of the foregoing (including, without
limitation, all insurance and claims for insurance effected or held for the
benefit of the Grantors or the Secured Parties in respect thereof and all
collateral security and guarantees given by any Person with respect to any of
the foregoing).
Notwithstanding anything herein to the contrary, in no event shall the security
interest granted hereunder attach to any Excluded Assets, and the term
"Collateral" shall expressly exclude all such Excluded Assets.
(g)    Each Grantor hereby irrevocably authorizes the Collateral Agent at any
time and from time to time to file in any relevant jurisdiction any financing
statements with respect to the

--------------------------------------------------------------------------------

- 13 -

Collateral or any part thereof and amendments thereto that (i) indicate the
Collateral of such Grantor as defined herein and (ii) contain the information
required by the PPSA or other applicable law of each applicable jurisdiction for
the filing of any financing statement or financing change statement. Each
Grantor agrees to provide such information to the Collateral Agent promptly upon
request.
Each Grantor also ratifies its authorization for the Collateral Agent to file in
any relevant jurisdiction any initial financing statements or amendments thereto
if filed prior to the date hereof.
To the extent that any financing statement or other filing includes any Excluded
Assets, or any other property or assets that are not included in the Collateral,
the Collateral Agent shall take such action from time to time as reasonably
requested by any Grantor, at such Grantor’s expense, as necessary to evidence or
reflect the exclusion thereof from the Security Interest, provided that such
Grantor shall have delivered to the Collateral Agent such documentation and
certification with respect thereto as the Collateral Agent may reasonably
request.
(h)    The Security Interest is granted as security only and shall not subject
the Collateral Agent or any other Secured Party to, or in any way alter or
modify, any obligation or liability of any Grantor with respect to or arising
out of the Collateral.
(i)    Each Grantor acknowledges that (i) value has been given, (ii) it has
rights in the Collateral or the power to transfer rights in the Collateral to
the Collateral Agent (other than after-acquired Collateral), (iii) it has not
agreed to postpone the time of attachment of the Security Interest, and (iv) it
has received an executed copy of this Agreement and, to the extent permitted by
applicable law, waives the right to receive a copy of any financing statement or
financing change statement registered in connection with this Agreement or any
verification statement issued in respect of any such financing statement or
financing change statement.
Section 4.02.    Representations and Warranties. The Grantors jointly and
severally represent and warrant to the Collateral Agent and the Secured Parties
that:
(h)    Each Grantor has good and valid rights in the Collateral with respect to
which it has purported to grant a Security Interest hereunder and has full power
and authority to grant to the Collateral Agent the Security Interest in such
Collateral pursuant hereto and to execute, deliver and perform its obligations
in accordance with the terms of this Agreement, without the consent or approval
of any other Person other than any consent or approval that has been obtained.
(i)    The Canadian Perfection Certificate most recently delivered pursuant to
the Credit Agreement has been duly prepared, completed and executed and the
information set forth therein, including the exact legal name of each Grantor,
was correct and complete in all material respects as of the date thereof. The
PPSA financing statements prepared by the Collateral Agent based upon the
information provided to the Collateral Agent in the Canadian Perfection
Certificate, are all the filings, recordings and registrations that are
necessary as of the date of such Perfection Certificate to publish notice of and
protect the validity of and to establish a legal, valid and perfected security
interest in favour of the Collateral Agent (for the benefit of the Secured
Parties) in respect of all Collateral in which the Security Interest may be
perfected by filing a PPSA financing statement in any province of Canada (other
than Quebec) (or any political subdivision thereof), and no further

--------------------------------------------------------------------------------

- 14 -

or subsequent filing, refiling, recording, rerecording, registration or
reregistration is necessary in Canada or any other jurisdiction for any such
Collateral, except as provided under applicable law with respect to the filing
of financing change statements to effect a renewal of an existing PPSA
registration.
(j)    The Security Interest constitutes (i) a legal and valid security interest
in all the Collateral securing the payment and performance of the Canadian
Secured Obligations, (ii) subject to the registration of the financing
statements described in Section 4.02(b), a perfected security interest in all
Collateral in which a security interest may be perfected by filing PPSA
financing statements (or analogous documents) in the applicable province of
Canada or other applicable jurisdiction (other than Quebec). The Security
Interest is and shall be prior to any other Lien on any of the Collateral, other
than Permitted Liens.
(k)    The Collateral is owned by the Grantors free and clear of any Lien,
except for Permitted Liens. None of the Grantors has filed or consented to the
filing of any financing statement or analogous document under the PPSA or any
other applicable laws covering any Collateral except for Permitted Liens and
Liens that shall be discharged on or about the Sixth Amendment Effective Date.
Section 4.03.    Covenants.
(a)    Each Grantor agrees promptly to notify the Collateral Agent in writing of
any change (1) in corporate name, (2) in the location of its chief executive
office or its principal place of business, (3) in its identity or type of
organization or corporate structure, or (4) in its jurisdiction of organization,
in each case other than changes listed on Schedule 1. Each Grantor agrees to
promptly provide the Collateral Agent with certified organizational documents
reflecting any of the changes described in the first sentence of this paragraph
(a). Each Grantor agrees to, promptly following any change referred to in the
preceding sentence (and in any event within ten days), make all filings required
under the PPSA or otherwise for the Collateral Agent to continue at all times
following such change to have a valid, legal and perfected first priority
security interest, subject to Permitted Liens, in all the Collateral.
(b)    Each Grantor agrees to maintain, at its own cost and expense, such
complete and accurate records with respect to the Collateral owned by it in
accordance with such prudent and standard practices used in industries that are
the same as or similar to those in which such Grantor is engaged.
(c)    Each Grantor shall, at its own expense, take any and all actions
reasonably necessary to defend title to the Collateral against all Persons and
to defend the Security Interest of the Collateral Agent in the Collateral and
the priority thereof against any Liens other than any Permitted Lien.
(d)    Each Grantor agrees, at its own expense, to execute, acknowledge, deliver
and cause to be duly filed all such further instruments and documents and take
all such actions as the Collateral Agent may from time to time reasonably
request to better assure, preserve, protect and perfect the Security Interest
and the rights and remedies created hereby, including the payment of any fees
and taxes required in connection with the execution and delivery of this
Agreement, the granting of the

--------------------------------------------------------------------------------

- 15 -

Security Interest and the filing of any financing statements or other documents
in connection herewith or therewith.
(e)    The Collateral Agent and such Persons as the Collateral Agent may
reasonably designate shall have the right, at the Grantors’ own cost and
expense, to inspect the Collateral, all records related thereto (and to make
extracts and copies from such records) and the premises upon which any of the
Collateral is located, to discuss the Grantors’ affairs with the officers of the
Grantors and their independent accountants, all in accordance with and subject
to the terms and conditions relating to inspections as set forth in Section 9.06
of the Credit Agreement, and to verify under reasonable procedures the validity,
amount, quality, quantity, value, condition and status of, or any other matter
relating to, the Collateral, including, in the case of Accounts or Collateral in
the possession of any third person, by contacting, with advance notice to and in
coordination with the Grantors (unless an Event of Default has occurred and is
continuing) Account Debtors or the third person possessing such Collateral for
the purpose of making such a verification. The Collateral Agent shall have the
absolute right to share any information it gains from such inspection or
verification with any Lender (it being understood that any such information
shall be deemed to be “Information” subject to the provisions of Section 9.10 of
the Credit Agreement).
(f)    At its option (it being understood the Collateral Agent shall have no
duty to any Grantor or Secured Party to exercise such option), the Collateral
Agent may discharge past due taxes, assessments, charges, fees, Liens, security
interests or other encumbrances at any time levied or placed on the Collateral
and not permitted pursuant to the Credit Agreement, and may pay for the
maintenance and preservation of the Collateral to the extent any Grantor fails
to do so as required by the Credit Agreement or this Agreement after written
notice thereof is delivered to Resolute by the Collateral Agent, and each
Grantor jointly and severally agrees to reimburse the Collateral Agent on demand
for any payment made or any expense incurred by the Collateral Agent pursuant to
the foregoing authorization; provided that nothing in this paragraph (f) shall
be interpreted as excusing any Grantor from the performance of, or imposing any
obligation on the Collateral Agent or any Secured Party to cure or perform, any
covenants or other promises of any Grantor with respect to taxes, assessments,
charges, fees, Liens, security interests or other encumbrances and maintenance
as set forth herein or in the other Loan Documents.
(g)    Each Grantor shall remain liable to observe and perform all the
conditions and obligations to be observed and performed by it under each
Contract, agreement or instrument included in the Collateral, all in accordance
with the terms and conditions thereof, and each Grantor jointly and severally
agrees to indemnify and hold harmless the Collateral Agent and the Secured
Parties from and against any and all liability for such performance.
(h)    None of the Grantors shall make or permit to be made an assignment,
pledge or hypothecation of the Collateral or shall grant or suffer to exist any
other Lien in respect of the Collateral, except as permitted by the Credit
Agreement. None of the Grantors shall make or permit to be made any transfer of
the Collateral except that unless and until the Collateral Agent shall notify
the Grantors in writing that an Event of Default shall have occurred and be
continuing and that during the continuance thereof the Grantors shall not sell,
convey, lease, assign, transfer or otherwise dispose of any Collateral, the
Grantors may use and dispose of the Collateral in any lawful manner

--------------------------------------------------------------------------------

- 16 -

not inconsistent with the provisions of this Agreement, the Credit Agreement or
any other Loan Document.
(i)    The Grantors, at their own expense, shall maintain or cause to be
maintained insurance covering physical loss or damage to the Inventory in
accordance with the requirements set forth in 9.02 of the Credit Agreement. Each
Grantor irrevocably makes, constitutes and appoints the Collateral Agent (and
all officers, employees or agents designated by the Collateral Agent) as such
Grantor’s true and lawful agent (and attorney in fact) for the purpose, during
the continuance of an Event of Default, of making, settling and adjusting claims
in respect of Collateral under policies of insurance, endorsing the name of such
Grantor on any cheque, draft, instrument or other item of payment for the
proceeds of such policies of insurance and for making all determinations and
decisions with respect thereto. In the event that any Grantor at any time or
times shall fail to obtain or maintain any of the policies of insurance required
hereby or to pay any premium in whole or part relating thereto, the Collateral
Agent may (it being understood the Collateral Agent shall have no duty to any
Grantor or Secured Party to exercise such option), without waiving or releasing
any obligation or liability of the Grantors hereunder or any Event of Default,
in its sole discretion, upon notice to Resolute obtain and maintain such
policies of insurance and pay such premium and take any other actions with
respect thereto as the Collateral Agent deems advisable. All sums disbursed by
the Collateral Agent in connection with this paragraph, including reasonable
legal fees, court costs, expenses and other charges relating thereto, shall be
payable, upon demand, by the Grantors to the Collateral Agent and shall be
additional Canadian Secured Obligations secured hereby.
(j)    Each Grantor shall maintain, in form and manner reasonably satisfactory
to the Collateral Agent, records of its Chattel Paper and its books, records and
documents evidencing or pertaining thereto.
(k)    Each Grantor will keep and maintain at its own cost and expense
materially accurate records of its Accounts and Contracts, including, but not
limited to, originals or copies of all material documentation (including each
Contract) with respect thereto, material records of all payments received, all
credits granted thereon, all merchandise returned and all other dealings
therewith, and such Grantor will make the same available, in accordance with and
subject to the terms and conditions relating to inspections set forth in the
Credit Agreement to the Collateral Agent for inspection at such Grantor’s own
cost and expense. Upon the occurrence and during the continuance of an Event of
Default and at the request of the Collateral Agent, such Grantor shall, at its
own cost and expense, deliver (to the extent available) all tangible evidence of
its Accounts and Contract Rights (including, without limitation, all documents
evidencing the Accounts and all Contracts) and such books and records to the
Collateral Agent or to its representatives (copies of which evidence and books
and records may be retained by such Grantor). If the Collateral Agent so
directs, upon the occurrence and during the continuance of an Event of Default,
such Grantor shall legend, in form and manner satisfactory to the Collateral
Agent, the Accounts and the Contracts, as well as books, records and documents
(if any) of such Grantor evidencing or pertaining to such Accounts and Contracts
with an appropriate reference to the fact that such Accounts and Contracts have
been assigned to the Collateral Agent and that the Collateral Agent has a
security interest therein.

--------------------------------------------------------------------------------

- 17 -

(l)    Upon the occurrence and during the continuance of an Event of Default, if
the Collateral Agent so directs any Grantor in writing, such Grantor agrees (x)
to cause all payments on account of the Accounts and Contracts to be made
directly to a Cash Collateral Account, (y) that the Collateral Agent may, at its
option, directly notify the obligors with respect to any Accounts and/or under
any Contracts to make payments with respect thereto as provided in the preceding
clause (x), and (z) that the Collateral Agent may enforce collection of any such
Accounts and Contracts and may adjust, settle or compromise the amount of
payment thereof, in the same manner and to the same extent as such Grantor.
Without notice to or assent by any Grantor, the Collateral Agent may, upon the
occurrence and during the continuance of an Event of Default, apply any or all
amounts then in, or thereafter deposited in, a Cash Collateral Account toward
the payment of the Canadian Secured Obligations in the manner provided in
Section 5.02 of this Agreement. The reasonable costs and expenses of collection
(including reasonable legal fees), whether incurred by a Grantor or the
Collateral Agent, shall be borne by the relevant Grantor. The Collateral Agent
shall deliver a copy of each notice referred to in the preceding clause (y) to
the relevant Grantor, provided that the failure by the Collateral Agent to so
notify such Grantor shall not affect the effectiveness of such notice or the
other rights of the Collateral Agent created by this clause (l).
(m)    Each Grantor shall endeavor in accordance with reasonable business
judgment to cause to be collected from the account debtor named in each of its
Accounts or obligor under any Contract, as and when due (including, without
limitation, amounts which are delinquent, such amounts to be collected in
accordance with generally accepted lawful collection procedures) any and all
amounts owing under or on account of such Account or Contract, and promptly
apply upon receipt thereof all such amounts as are so collected to the
outstanding balance of such Account or under such Contract.
(n)    Anything herein to the contrary notwithstanding, the Grantors shall
remain liable under each of the Accounts and Contracts to observe and perform
all of the conditions and obligations to be observed and performed by it
thereunder, all in accordance with the terms of any agreement giving rise to
such Accounts or such Contracts, as the case may be. Neither the Collateral
Agent nor any other Secured Party shall have any obligation or liability under
any Account (or any agreement giving rise thereto) or any Contract by reason of
or arising out of this Agreement or the receipt by the Collateral Agent or any
other Secured Party of any payment relating to such Account or Contract, as the
case may be, pursuant hereto, nor shall the Collateral Agent or any other
Secured Party be obligated in any manner to perform any of the obligations of
any Grantor under or pursuant to any Account (or any agreement giving rise
thereto) or any Contract, to make any payment, to make any inquiry as to the
nature or the sufficiency of any payment received by them or as to the
sufficiency of any performance by any party under any Account (or any agreement
giving rise thereto) or any Contract, to present or file any claim, to take any
action to enforce any performance or to collect the payment of any amounts which
may have been assigned to them or to which they may be entitled at any time or
times.
Section 4.04.    Other Actions. In order to further insure the attachment,
perfection and priority of, and the ability of the Collateral Agent to enforce,
the Security Interest, each Grantor agrees, in each case at such Grantor’s own
expense, to take the following actions with respect to the following Collateral:

--------------------------------------------------------------------------------

- 18 -

(a)    Instruments and Chattel Paper. In accordance with and in furtherance of
Article 3, if any Grantor shall at any time hold or acquire any Instruments
constituting Collateral (other than any Instrument with a face amount of less
than $20,000,000 so long as the aggregate principal amount of Instruments under
this exclusion does not exceed $40,000,000) or Chattel Paper constituting
Collateral with a value of $10,000,000 or more, such Grantor shall forthwith
endorse, assign and deliver the same to the Collateral Agent, accompanied by
such instruments of transfer or assignment duly executed in blank as the
Collateral Agent may from time to time reasonably request. For the purposes of
this Section 4.04(a), the term “Instruments” excludes (i) letters of credit
which are subject to the provisions of Section 4.04(e) hereof and (ii)
promissory notes not constituting Pledged Debt Securities.
(b)    Bank Accounts. For each bank account that any Grantor at any time opens
or maintains (other than any Excluded Account, any Specified Collection Account
and the CIBC Cash Collateral Account), such Grantor shall cause the bank to
enter into a Control Agreement with such Grantor and the Collateral Agent. The
Collateral Agent agrees with each Grantor that, except with respect to
Designated Blocked Accounts, the Collateral Agent shall not exercise dominion
and control over, or give any instructions or withhold any withdrawal rights
from any Grantor, with respect to such accounts or any funds in such accounts,
unless an Event of Default has occurred and is continuing.
(c)    Investment Property. If any Grantor holds any Investment Property
constituting Collateral (other than any Excluded Investment Property), whether
certificated or uncertificated, or other Investment Property (other than any
Excluded Investment Property) now or hereafter acquired by any Grantor is held
by such Grantor or its nominee through a Securities Intermediary or Futures
Intermediary, such Grantor shall promptly notify the Collateral Agent thereof
and, at the Collateral Agent’s request and option, pursuant to a Control
Agreement in form and substance reasonably satisfactory to the Collateral Agent,
cause such Securities Intermediary or Futures Intermediary, as the case may be,
to agree to comply with Entitlement Orders or other instructions from the
Collateral Agent to such Securities Intermediary as to such Security
Entitlements or to apply any value distributed on account of any commodity
contract as directed by the Collateral Agent to such Futures Intermediary, as
the case may be, in each case without further consent of any Grantor, such
nominee, or any other Person. The Collateral Agent agrees with each of the
Grantors that the Collateral Agent shall not give any such Entitlement Orders or
instructions or directions to any such issuer, Securities Intermediary or
Futures Intermediary, and except with respect to Designated Blocked Accounts
shall not exercise dominion and control over or withhold its consent to the
exercise of any withdrawal or dealing rights by any Grantor, unless an Event of
Default has occurred and is continuing, or, after giving effect to any such
investment and withdrawal rights, would occur.
(d)    [Reserved].
(e)    Letter-of-Credit Rights. If any Grantor is at any time a beneficiary
under a letter of credit included in the Collateral now or hereafter issued in
favor of such Grantor with a face amount greater than $10,000,000, such Grantor
shall promptly notify the Collateral Agent thereof and, at the request and
option of the Collateral Agent, such Grantor shall use commercially reasonable

--------------------------------------------------------------------------------

- 19 -

efforts to, pursuant to an agreement in form and substance reasonably
satisfactory to the Collateral Agent, either (i) arrange for the issuer and any
confirmer of such letter of credit to consent to an assignment to the Collateral
Agent of the proceeds of any drawing under the letter of credit or (ii) arrange
for the Collateral Agent to become the transferee beneficiary of the letter of
credit, with the Collateral Agent agreeing, in each case, that the proceeds of
any drawing under the letter of credit are to be paid to the applicable Grantor
unless an Event of Default has occurred or is continuing.
(f)    [Reserved.]
(g)    Each Grantor will, at its own expense, make, execute, endorse,
acknowledge, file and/or deliver to the Collateral Agent from time to time such
vouchers, invoices, schedules, confirmatory assignments, conveyances, financing
statements, transfer endorsements, certificates, reports and other assurances or
instruments and take such further steps, relating to its Accounts, Contracts,
instruments and other property or rights covered by the security interest hereby
granted, as the Collateral Agent may reasonably require and consistent with the
other terms and conditions of this Agreement and the Credit Agreement.
Section 4.05.    [Reserved].
Section 4.06.    Amalgamation. If any Grantor is a corporation, company or other
body corporate, such Grantor acknowledges that if it amalgamates or merges with
any other corporation or corporations, then (i) the Collateral and the Liens
thereon will extend to and include all the property and assets of the
amalgamated corporation that constitutes Collateral and to any property or
assets of the amalgamated corporation thereafter that constitutes Collateral
owned or acquired, (ii) the term “Grantor”, where used in this Agreement, will
extend to and include the amalgamated corporation, company or body corporate and
(iii) the term “Canadian Secured Obligations”, where used in this Agreement,
will extend to and include the Canadian Secured Obligations of the amalgamated
corporation.
Article 5
Remedies
Section 5.01.    Remedies Upon Default. Upon the occurrence and during the
continuance of an Event of Default, it is agreed that the Collateral Agent shall
have the right to take any of or all the following actions at the same or
different times, with or without legal process and with or without prior notice
or demand for performance, take possession of the Collateral and without
liability for trespass to enter any premises where the Collateral may be located
for the purpose of taking possession of or removing the Collateral and,
generally, to exercise any and all rights afforded to a secured party under this
Agreement, the PPSA or other applicable law. Without limiting the generality of
the foregoing, upon the occurrence and during the continuance of an Event of
Default, each Grantor agrees that the Collateral Agent shall have the right,
subject to the mandatory requirements of applicable law, to sell or otherwise
dispose of all or any part of the Collateral at a public or private sale or at
any broker’s board or on any securities exchange, for cash, upon credit or for
future delivery as the Collateral Agent shall deem appropriate. The Collateral
Agent shall be authorized at any such sale of securities (if it deems it
advisable to do so) to restrict the prospective

--------------------------------------------------------------------------------

- 20 -

bidders or purchasers to Persons who will represent and agree that they are
purchasing the Collateral for their own account for investment and not with a
view to the distribution or sale thereof, and upon consummation of any such sale
the Collateral Agent shall have the right to assign, transfer and deliver to the
purchaser or purchasers thereof the Collateral so sold. Each such purchaser at
any sale of Collateral shall hold the property sold absolutely, free from any
claim or right on the part of any Grantor, and each Grantor hereby waives (to
the extent permitted by law) all rights of redemption, stay and appraisal which
such Grantor now has or may at any time in the future have under any rule of law
or statute now existing or hereafter enacted.
In addition to any rights now or hereafter existing under applicable law, the
Collateral Agent may, personally or by agent, at such time or times as the
Collateral Agent in its discretion may determine following the occurrence of an
Event of Default which is continuing, do any one or more of the following: (a)
carry on, or concur in the carrying on of, any or all of the business or
undertaking of any Grantor and enter on, occupy and use (without charge by any
Grantor) any of the premises, buildings, plant and undertaking of, or occupied
or used by, any Grantor, (b) obtain from any court of competent jurisdiction an
order for the sale or foreclosure of any or all of the Collateral, (c) notify
(whether in its own name or in the name of a Grantor) any Account Debtors of the
assignment of such Accounts to the Collateral Agent and direct such Account
Debtors to make payment of all amounts due or to become due to a Grantor in
respect of such Accounts directly to the Collateral Agent and, upon such
notification and at the expense of such Grantor, enforce collection of any such
Accounts, and adjust, settle or compromise the amount or payment of such
Accounts, in such manner and to such extent as the Collateral Agent deems
appropriate in the circumstances, (d) appoint by instrument in writing one or
more Receivers of any Grantor or any or all of the Collateral with such rights,
powers and authority (including any or all of the rights, powers and authority
of the Collateral Agent under this Agreement) as may be provided for in the
instrument of appointment or any supplemental instrument, and remove and replace
any such Receiver from time to time (to the extent permitted by applicable law,
any Receiver appointed by the Collateral Agent will, for purposes relating to
responsibility for the Receiver’s acts or omissions, be considered to be the
agent of the applicable Grantors and not of the Collateral Agent or any of the
other Secured Parties, or (e) obtain from any court of competent jurisdiction an
order for the appointment of a Receiver of any Grantor or of any or all of the
Collateral.
The Collateral Agent shall give the applicable Grantors 10 days’ prior written
notice (which each Grantor agrees is reasonable notice) or such longer period as
may be required by applicable law of the Collateral Agent’s intention to make
any sale of Collateral. Such notice, in the case of a public sale, shall state
the time and place for such sale and, in the case of a sale at a broker’s board
or on a securities exchange, shall state the board or exchange at which such
sale is to be made and the day on which the Collateral, or portion thereof, will
first be offered for sale at such board or exchange. Any such public sale shall
be held at such time or times within ordinary business hours and at such place
or places as the Collateral Agent may fix and state in the notice (if any) of
such sale. At any such sale, the Collateral, or portion thereof, to be sold may
be sold in one lot as an entirety or in separate parcels, as the Collateral
Agent may (in its sole and absolute discretion) determine. The Collateral Agent
shall not be obligated to make any sale of any Collateral if it shall determine
not to do so, regardless of the fact that notice of sale of such Collateral
shall have been given. The Collateral Agent may, without notice or publication,
adjourn any public or private sale

--------------------------------------------------------------------------------

- 21 -

or cause the same to be adjourned from time to time by announcement at the time
and place fixed for sale, and such sale may, without further notice, be made at
the time and place to which the same was so adjourned. In case any sale of all
or any part of the Collateral is made on credit or for future delivery, the
Collateral so sold may be retained by the Collateral Agent until the sale price
is paid by the purchaser or purchasers thereof, but the Collateral Agent shall
not incur any liability in case any such purchaser or purchasers shall fail to
take up and pay for the Collateral so sold and, in case of any such failure,
such Collateral may be sold again upon like notice. At any public (or, to the
extent permitted by law, private) sale made pursuant to this Agreement, any
Secured Party may bid for or purchase, free (to the extent permitted by law)
from any right of redemption, stay, valuation or appraisal on the part of any
Grantor (all said rights being also hereby waived and released to the extent
permitted by law), the Collateral or any part thereof offered for sale and may
make payment on account thereof by using any claim then due and payable to such
Secured Party from any Grantor as a credit against the purchase price, and such
Secured Party may, upon compliance with the terms of sale, hold, retain and
dispose of such property without further accountability to any Grantor therefor.
For purposes hereof, a written agreement to purchase the Collateral or any
portion thereof shall be treated as a sale thereof; the Collateral Agent shall
be free to carry out such sale pursuant to such agreement and no Grantor shall
be entitled to the return of the Collateral or any portion thereof subject
thereto, notwithstanding the fact that after the Collateral Agent shall have
entered into such an agreement all Events of Default shall have been remedied
and the Canadian Secured Obligations paid in full. As an alternative to
exercising the power of sale herein conferred upon it, and without limiting its
other rights hereunder, the Collateral Agent may proceed by a suit or suits at
law or in equity to foreclose this Agreement and to sell the Collateral or any
portion thereof pursuant to a judgment or decree of a court or courts having
competent jurisdiction or pursuant to a proceeding by a court appointed
Receiver. Any sale pursuant to the provisions of this Section 5.01 shall be
deemed to conform to commercially reasonable standards.
The Collateral Agent may exercise any or all of the foregoing rights and
remedies without demand of performance or other demand, presentment, protest,
advertisement or notice of any kind (except as required by applicable law) to or
on any Grantor or any other Person, and the Grantors hereby waive each such
demand, presentment, protest, advertisement and notice to the extent permitted
by applicable law. None of the above rights or remedies will be exclusive of or
dependent on or merge in any other right or remedy, and one or more of such
rights and remedies may be exercised independently or in combination from time
to time. The Grantors acknowledge and agree that any action taken by the
Collateral Agent hereunder following the occurrence and during the continuance
of an Event of Default shall not be rendered invalid or ineffective as a result
of the curing of the Event of Default on which such action was based.
Section 5.02.    Application of Proceeds. The Collateral Agent shall apply the
proceeds of any collection or sale of Collateral, including any Collateral
consisting of cash, and the amounts paid or caused to be paid by any Guarantor
in accordance with Article 2, as follows:
FIRST, to the payment of all reasonable costs and expenses incurred by the
Collateral Agent in connection with such collection or sale or otherwise in
connection with this Agreement, any other Loan Document or any of the Canadian
Secured Obligations, including all court costs and the reasonable fees and
expenses of its agents and legal counsel, the repayment of all advances made

--------------------------------------------------------------------------------

- 22 -

by the Collateral Agent hereunder or under any other Loan Document on behalf of
any Grantor and any other costs or expenses incurred in connection with the
exercise of any right or remedy hereunder or under any other Loan Document;
SECOND, to the payment in full of the Canadian Secured Obligations (the amounts
so applied to be distributed among the Secured Parties in accordance with
Section 11.02 of the Credit Agreement); and
THIRD, to the Grantors, their successors or assigns, or as a court of competent
jurisdiction may otherwise direct.
The Collateral Agent shall have absolute discretion as to the time of
application of any such proceeds, moneys or balances in accordance with this
Agreement. Upon any sale of Collateral by the Collateral Agent (including
pursuant to a power of sale granted by statute or under a judicial proceeding),
the receipt by the Collateral Agent of the proceeds of any sale shall be a
sufficient discharge to the purchaser or purchasers of the Collateral so sold
and such purchaser or purchasers shall not be obligated to see to the
application of any part of the purchase money paid over to the Collateral Agent
or such officer or be answerable in any way for the misapplication thereof. It
is understood that the Grantors shall remain jointly and severally liable to the
extent of any deficiency between the amount of the proceeds of the Collateral
and the aggregate amount of the Canadian Secured Obligations.
Section 5.03.    Grant of License to Use Intellectual Property. For the purpose
of enabling the Collateral Agent to exercise rights and remedies under this
Agreement at such time as the Collateral Agent shall be lawfully entitled to
exercise such rights and remedies, each Grantor hereby grants to the Collateral
Agent an irrevocable, nonexclusive license (exercisable without payment of
royalty or other compensation to the Grantors) to use, license or sublicense any
Intellectual Property now owned or hereafter acquired by such Grantor, and
wherever the same may be located, and including in such license reasonable
access to all media in which any of the licensed items may be recorded or stored
and to all computer software and programs used for the compilation or printout
thereof. The use of such license by the Collateral Agent may only be exercised,
at the option of the Collateral Agent, upon the occurrence and during the
continuation of an Event of Default after written notice is given to Resolute of
the Collateral Agent’s election to exercise such license; provided that any
license, sublicense or other transaction entered into by the Collateral Agent in
accordance herewith shall be binding upon the Grantors notwithstanding any
subsequent cure of an Event of Default. In operating under the license granted
by each Grantor pursuant to this Section 5.03, the Collateral Agent agrees that
the goods sold and services rendered under any Trademarks shall be of a nature
and quality substantially consistent with those theretofore offered under such
Trademarks by such Grantor and such Grantor shall have the right to inspect
during the term of such license, at any reasonable time or times upon reasonable
notice to the Collateral Agent, and at such Grantor’s own cost and expense,
representative samples of goods sold and services rendered under such
Trademarks.
Section 5.04.    Securities Laws. In view of the position of the Grantors in
relation to the Investment Property charged hereunder, or because of other
current or future circumstances, a question may arise under applicable
securities laws (including, without limitation, the Securities Act (Ontario)

--------------------------------------------------------------------------------

- 23 -

(such Act and any similar statute as from time to time in effect being called
the “Securities Laws”)) with respect to any disposition of the Investment
Property permitted hereunder. Each Grantor understands that compliance with the
Securities Laws might very strictly limit the course of conduct of the
Collateral Agent if the Collateral Agent were to attempt to dispose of all or
any part of the Investment Property charged hereunder, and might also limit the
extent to which or the manner in which any subsequent transferee of any
Investment Property could dispose of the same. Each Grantor recognizes that in
light of such restrictions and limitations the Collateral Agent may, with
respect to any sale of the Investment Property charged hereunder, limit the
purchasers to those who will agree, among other things, to acquire such
Investment Property for their own account, for investment, and not with a view
to the distribution or resale thereof. Each Grantor acknowledges and agrees that
in light of such restrictions and limitations, the Collateral Agent, in its sole
and absolute discretion (a) may proceed to make such a sale whether or not a
prospectus shall have been filed under the Securities Laws and (b) may approach
and negotiate with a single potential purchaser to effect such sale. Each
Grantor acknowledges and agrees that any such sale might result in prices and
other terms less favourable to the seller than if such sale were a public sale
without such restrictions. In the event of any such sale, the Collateral Agent
shall incur no responsibility or liability for selling all or any part of the
Investment Property at a price that the Collateral Agent, in its sole and
absolute discretion, may in good faith deem reasonable under the circumstances,
notwithstanding the possibility that a substantially higher price might have
been realized if the sale were deferred until after a prospectus has been filed
as aforesaid or if more than a single purchaser were approached. The provisions
of this Section 5.04 will apply notwithstanding the existence of a public or
private market upon which the quotations or sales prices may exceed
substantially the price at which the Collateral Agent sells.
Article 6
Indemnity, Subrogation and Subordination
Section 6.01.    Indemnity and Subrogation. In addition to all such rights of
indemnity and subrogation as the Guarantors may have under applicable law (but
subject to Section 6.03), the Canadian Borrowers agree that (a) in the event a
payment of an obligation shall be made by any Guarantor under this Agreement,
each Canadian Borrower shall indemnify such Guarantor for the full amount of
such payment and such Guarantor shall be subrogated to the rights of the Person
to whom such payment shall have been made to the extent of such payment and (b)
in the event any assets of any Grantor shall be sold pursuant to this Agreement
or any other Security Document to satisfy in whole or in part an obligation owed
to any Secured Party, each Canadian Borrower shall indemnify such Grantor in an
amount equal to the greater of the book value or the fair market value of the
assets so sold.
Section 6.02.    Contribution and Subrogation. Each Guarantor and Grantor (a
“Contributing Party”) agrees (subject to Section 6.03) that, in the event a
payment shall be made by any other Grantor hereunder in respect of any Canadian
Secured Obligation or assets of any other Grantor shall be sold pursuant to any
Security Document to satisfy any Canadian Secured Obligation owed to any Secured
Party and such other Guarantor or Grantor (the “Claiming Party”) shall not have
been fully indemnified by the applicable Canadian Borrower as provided in
Section 6.01, the

--------------------------------------------------------------------------------

- 24 -

Contributing Party shall indemnify the Claiming Party in an amount equal to the
amount of such payment or the greater of the book value or the fair market value
of such assets, as the case may be, in each case multiplied by a fraction of
which the numerator shall be the net worth of the Contributing Party on the date
hereof and the denominator shall be the aggregate net worth of all the
Guarantors and Grantors on the date hereof (or, in the case of any Guarantor or
Grantor becoming a party hereto pursuant to Section 7.14, the date of the
supplement hereto executed and delivered by such Guarantor or Grantor). Any
Contributing Party making any payment to a Claiming Party pursuant to this
Section 6.02 shall be subrogated to the rights of such Claiming Party under
Section 6.01 to the extent of such payment.
Section 6.03.    Subordination.
(e)    Notwithstanding any provision of this Agreement to the contrary, all
rights of the Guarantors and Grantors under Sections 6.01 and 6.02 and all other
rights of indemnity, contribution or subrogation under applicable law or
otherwise shall be fully subordinated to the indefeasible payment in full in
cash of the Canadian Secured Obligations. No failure on the part of any Canadian
Borrower or any Guarantor or Grantor to make the payments required by Sections
6.01 and 6.02 (or any other payments required under applicable law or otherwise)
shall in any respect limit the obligations and liabilities of any Guarantor or
Grantor with respect to its obligations hereunder, and each Guarantor and
Grantor shall remain liable for the full amount of the obligations of such
Guarantor or Grantor hereunder.
(f)    Each Guarantor and Grantor hereby agrees that all Indebtedness and other
monetary obligations owed to it by, or by it to, as the case may be, any other
Guarantor, Grantor or any other Canadian Subsidiary shall be fully subordinated
to the indefeasible payment in full in cash of the Canadian Secured Obligations.
Article 7
Miscellaneous
Section 7.01.    Notices. All communications and notices hereunder shall (except
as otherwise expressly permitted herein) be in writing and given as provided in
Section 13.03 of the Credit Agreement. All communications and notices hereunder
to any Guarantor (other than Resolute) shall be given to it in care of Resolute
as provided in Section 13.03 of the Credit Agreement.
Section 7.02.    Waivers; Amendment.
(g)    No failure or delay by the Collateral Agent or any Lender in exercising
any right or power hereunder or under any other Loan Document shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right or
power, or any abandonment or discontinuance of steps to enforce such a right or
power, preclude any other or further exercise thereof or the exercise of any
other right or power. The rights and remedies of the Collateral Agent and the
Lenders hereunder and under the other Loan Documents are cumulative and are not
exclusive of any rights or remedies that they would otherwise have. No waiver of
any provision of this Agreement or consent to any departure by any Canadian Loan
Party therefrom shall in any event be effective

--------------------------------------------------------------------------------

- 25 -

unless the same shall be permitted by paragraph (b) below, and then such waiver
or consent shall be effective only in the specific instance and for the purpose
for which given. Without limiting the generality of the foregoing, the making of
a Loan shall not be construed as a waiver of any Default, regardless of whether
the Collateral Agent or any Lender may have had notice or knowledge of such
Default at the time. No notice or demand on any Canadian Loan Party in any case
shall entitle any Canadian Loan Party to any other or further notice or demand
in similar or other circumstances.
(h)    Neither this Agreement nor any provision hereof may be waived, amended or
modified except pursuant to an agreement or agreements in writing entered into
by the Collateral Agent and the Canadian Loan Party or Canadian Loan Parties
with respect to which such waiver, amendment or modification is to apply,
subject to any consent required in accordance with Section 13.12 of the Credit
Agreement.
Section 7.03.    Collateral Agent’s Fees and Expenses; Indemnification.
(a)    The parties hereto agree that the Collateral Agent shall be entitled to
reimbursement of its reasonable out-of-pocket expenses incurred hereunder as
provided in Section 13.01 of the Credit Agreement.
(b)    Without limitation of its indemnification obligations under the other
Loan Documents, each Grantor and each Guarantor jointly and severally agrees to
indemnify the Collateral Agent against, and hold the Collateral Agent harmless
from, any and all losses, claims, damages, liabilities and related expenses,
including reasonable counsel fees, disbursements and other charges, incurred by
or asserted against the Collateral Agent arising out of, in connection with, or
as a result of, the execution, delivery or performance of this Agreement or any
claim, litigation, investigation or proceeding relating to any of the foregoing,
or any agreement or instrument contemplated hereby, or to the Collateral,
whether or not any Indemnitee is a party thereto; provided that such indemnity
shall not, as to any Indemnitee, be available to the extent that such losses,
claims, damages, liabilities or related expenses have resulted from the gross
negligence or wilful misconduct of the Collateral Agent.
(c)    Any such amounts payable as provided hereunder shall be additional
Canadian Secured Obligations secured hereby and by the other Security Documents.
The provisions of this Section 7.03 shall remain operative and in full force and
effect regardless of the termination of this Agreement or any other Loan
Document, the consummation of the transactions contemplated hereby, the
repayment of any of the Canadian Secured Obligations, the invalidity or
unenforceability of any term or provision of this Agreement or any other Loan
Document, or any investigation made by or on behalf of the Collateral Agent or
any other Secured Party. All amounts due under this Section 7.03 shall be
payable on written demand therefor.
Section 7.04.    Successors and Assigns. Whenever in this Agreement any of the
parties hereto is referred to, such reference shall be deemed to include the
permitted successors and assigns of such party; and all covenants, promises and
agreements by or on behalf of any Guarantor, Grantor or the Collateral Agent
that are contained in this Agreement shall bind and inure to the benefit of
their respective successors and assigns.

--------------------------------------------------------------------------------

- 26 -

Section 7.05.    Survival of Agreement. All covenants, agreements,
representations and warranties made by the Loan Parties in the Loan Documents
and in the certificates or other instruments prepared or delivered in connection
with or pursuant to this Agreement or any other Loan Document shall be
considered to have been relied upon by the Lenders and shall survive the
execution and delivery of the Loan Documents and the making of any Loans,
regardless of any investigation made by any Lender or on its behalf and
notwithstanding that the Collateral Agent or any Lender may have had notice or
knowledge of any Default or incorrect representation or warranty at the time any
credit is extended under the Credit Agreement, and shall continue in full force
and effect as long as the principal of or any accrued interest on any Loan or
any fee or any other amount payable under any Loan Document is outstanding and
unpaid and so long as the Commitments have not expired or terminated.
Section 7.06.    Counterparts; Effectiveness; Several Agreement. This Agreement
may be executed in counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. Delivery of an executed
signature page to this Agreement by facsimile or other electronic imaging shall
be as effective as delivery of a manually signed counterpart of this Agreement.
This Agreement shall become effective as to any Canadian Loan Party when a
counterpart hereof executed on behalf of such Canadian Loan Party shall have
been delivered to the Collateral Agent and a counterpart hereof shall have been
executed on behalf of the Collateral Agent, and thereafter shall be binding upon
such Canadian Loan Party and the Collateral Agent and their respective permitted
successors and assigns, and shall inure to the benefit of such Canadian Loan
Party, the Collateral Agent and the other Secured Parties and their respective
successors and assigns, except that no Canadian Loan Party shall have the right
to assign or transfer its rights or obligations hereunder or any interest herein
(and any such assignment or transfer shall be void) except as expressly
permitted by the Credit Agreement. This Agreement shall be construed as a
separate agreement with respect to each Canadian Loan Party and may be amended,
modified, supplemented, waived or released with respect to any Canadian Loan
Party without the approval of any other Canadian Loan Party and without
affecting the obligations of any other Canadian Loan Party hereunder.
Section 7.07.    Severability. Any provision of this Agreement held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction. The parties shall endeavor in good faith negotiations to replace
the invalid, illegal or unenforceable provisions with valid provisions the
economic effect of which comes as close as possible to that of the invalid,
illegal or unenforceable provisions.
Section 7.08.    Right of Set-Off. (a) Each Canadian Loan Party expressly agrees
to the provisions set forth in 13.02 of the Credit Agreement with the same force
and effect as if such provisions were set forth in full herein.
Section 7.09.    Governing Law; Jurisdiction; Consent to Service of Process.

--------------------------------------------------------------------------------

- 27 -

(a)    This Agreement shall be governed by, and construed in accordance with,
(i) the laws of the State of New York (including Sections 5-1401 and 5-1402 of
Title 14 of the New York General Obligations Law but excluding all other choice
of law and conflicts of laws rules thereof) with respect to the guarantees and
other matters contemplated by Article 2 and Article 6 hereof, and other
provisions hereof as they relate to such guarantees and other matters, and (ii)
the laws of the Province of Ontario, and the laws of Canada applicable therein,
with respect to Article 3, Article 4, and Article 5, and other provisions hereof
as they relate to Collateral.
(b)    Each of the Canadian Loan Parties hereby irrevocably and unconditionally
submits, for itself and its property, with respect to the guarantees and other
matters contemplated by Article 2 and Article 6 hereof, and other provisions
hereof as they relate to such guarantees and other matters, to the jurisdiction
of any New York State court or Federal court of the United States of America
sitting in New York City, and any appellate court from any thereof, exclusively,
in any action or proceeding arising out of or relating to such matters and to
this Agreement or any other Loan Document, or for recognition or enforcement of
any judgment, and each of the parties hereto hereby irrevocably and
unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the extent
permitted by law, in such Federal court. Furthermore, each of the Canadian Loan
Parties hereby irrevocably and unconditionally submits, for itself and its
property, with respect to Article 3, Article 4, and Article 5, and other
provisions hereof as they relate to Collateral, to the jurisdiction of any court
of the Province of Ontario, and any appellate court thereof, non-exclusively, in
any action or proceeding arising out of or relating to such matters and to this
Agreement or any other Loan Document, or for recognition or enforcement of any
judgment, and each of the parties hereto hereby irrevocably and unconditionally
agrees that all claims in respect of any such action or proceeding may be heard
and determined in such Ontario court. Each of the parties hereto agrees that a
final judgment in any such New York or Ontario, as applicable, 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. Nothing in this
Agreement or any other Loan Document shall affect any right that the Collateral
Agent or any Lender may otherwise have to bring any action or proceeding
relating to this Agreement or any other Loan Document against any Grantor or
Guarantor, or its properties in the courts of any jurisdiction.
(c)    Each of the Canadian Loan Parties hereby irrevocably and unconditionally
waives, to the fullest extent permitted by law, any objection that it may now or
hereafter have to the laying of venue of any suit, action or proceeding arising
out of or relating to this Agreement or any other Loan Document in any court
referred to in paragraph (b) above. Each of the parties hereto hereby
irrevocably waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court.
(d)    Each party to this Agreement irrevocably consents to service of process
in the manner provided for notices in Section 7.01. Nothing in this Agreement or
any other Loan Document will affect the right of any party to this Agreement to
serve process in any other manner permitted by law.

--------------------------------------------------------------------------------

- 28 -

Section 7.10.    Waiver of Jury Trial. EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO
(A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES
THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS
AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION 7.10.
Section 7.11.    Headings. Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of this
Agreement and are not to affect the construction of, or to be taken into
consideration in interpreting, this Agreement.
Section 7.12.    Security Interest Absolute. All rights of the Collateral Agent
hereunder, the Security Interest, the grant of a security interest in the
Pledged Collateral and all obligations of each Grantor and Guarantor hereunder
shall be absolute and unconditional irrespective of (a) any lack of validity or
enforceability of the Credit Agreement, any other Loan Document, any agreement
with respect to any of the Canadian Secured Obligations or any other agreement
or instrument relating to any of the foregoing, (b) any change in the time,
manner or place of payment of, or in any other term of, all or any of the
Canadian Secured Obligations, or any other amendment or waiver of or any consent
to any departure from the Credit Agreement, any other Loan Document or any other
agreement or instrument, (c) any exchange, release or non-perfection of any Lien
on other collateral, or any release or amendment or waiver of or consent under
or departure from any guarantee, securing or guaranteeing all or any of the
Canadian Secured Obligations, or (d) any other circumstance that might otherwise
constitute a defense available to, or a discharge of, any Grantor or Guarantor
in respect of the Canadian Secured Obligations or this Agreement.
Section 7.13.    Termination or Release.
(a)    This Agreement, the Guarantees made herein, the Security Interest, the
grant of security interest in the Pledged Collateral and all other security
interests granted hereby shall terminate upon the payment in full in cash of the
Loans and all the other Loan Document Obligations (other than unasserted
contingent and indemnification obligations), termination of all Commitments and
Incremental Commitments and reduction of all exposure under any letters of
credit issued under the Credit Agreement to zero (or the making of other
arrangements satisfactory to the issuers thereof).
(b)    A Guarantor shall automatically be released from its obligations
hereunder and the Security Interest in the Collateral of such Guarantor shall be
automatically released upon the consummation of any transaction permitted by the
Credit Agreement as a result of which such Guarantor ceases to be a Subsidiary;
provided that the Required Lenders shall have consented to such transaction (to
the extent required by the Credit Agreement) and the terms of such consent did
not provide otherwise.

--------------------------------------------------------------------------------

- 29 -

(c)    Upon any sale or other transfer by any Grantor of any Collateral that is
permitted under the Credit Agreement (other than a sale or other transfer to
Resolute or any Subsidiary of Resolute), or upon the effectiveness of any
written consent to the release of the security interest granted hereby in any
Collateral pursuant to Section 12.10 of the Credit Agreement, the security
interest in such Collateral shall be automatically released.
(d)    At any time that a Grantor desires that the Collateral Agent take any
action to acknowledge or give effect to any release of a Grantor or Collateral
pursuant to the foregoing Section 7.13 (b) or (c), Resolute shall deliver to the
Collateral Agent a certificate signed by a principal executive officer of
Resolute stating that the release of the respective Grantor or Collateral is
permitted pursuant to such Section 7.13 (b) or (c). In connection with any
termination or release pursuant to paragraph (a), (b) or (c), the Collateral
Agent shall execute and deliver to any Grantor, at such Grantor’s expense, all
documents that such Grantor shall reasonably request to evidence such
termination or release; provided, however, that (i) the Collateral Agent shall
not be required to execute any such document on terms which, in its opinion,
would expose it to liability or create any obligation or entail any consequence
other than the release of such Liens without recourse or warranty, and (ii) such
release shall not in any manner discharge, affect or impair the Canadian Secured
Obligations or any Liens upon (or obligations of the Grantors in respect of) all
interests in Collateral retained by the Grantors. Any execution and delivery of
documents pursuant to this Section 7.13 shall be without recourse to or warranty
by the Collateral Agent.
(e)    The Collateral Agent shall have no liability whatsoever to any other
Secured Party as the result of any release of any Guarantor or Collateral by it
in accordance with (or which the Collateral Agent in good faith believes to be
in accordance with) this Section 7.13.
Section 7.14.    Additional Canadian Subsidiaries. Pursuant to Sections 9.09,
10.05(e) and 10.15 of the Credit Agreement, certain Canadian Subsidiaries are
required to enter into this Agreement as Grantors and Guarantors. Upon execution
and delivery by the Collateral Agent and a Canadian Subsidiary of an instrument
in the form of Exhibit A hereto, such Canadian Subsidiary shall become a Grantor
and a Guarantor hereunder with the same force and effect as if originally named
as a Grantor and a Guarantor herein. The execution and delivery of any such
instrument shall not require the consent of any other Canadian Loan Party
hereunder. The rights and obligations of each Canadian Loan Party hereunder
shall remain in full force and effect notwithstanding the addition of any new
Canadian Loan Party as a party to this Agreement.
Section 7.15.    Collateral Agent Appointed Attorney-in-Fact. Each Grantor
hereby appoints the Collateral Agent the attorney-in-fact of such Grantor upon
the occurrence and during the continuance of an Event of Default, with full
power of substitution either in the Collateral Agent’s name or in the name of
such Grantor (a) to receive, endorse, assign and/or deliver any and all notes,
acceptances, cheques, drafts, money orders or other evidences of payment arising
out of the Collateral or any part thereof; (b) to demand, collect, receive
payment of, give receipt for and give discharges and releases of all or any of
the Collateral; (c) to sign the name of any Grantor on any invoice or bill of
lading included in the Collateral; (d) to send verifications of Accounts to any
Account Debtor; (e) to commence and prosecute any and all suits, actions or
proceedings at law or in equity in any court of competent jurisdiction to
collect or otherwise realize on all or any of the Collateral or to enforce

--------------------------------------------------------------------------------

- 30 -

any rights in respect of any Collateral; (f) to settle, compromise, compound,
adjust or defend any actions, suits or proceedings relating to all or any of the
Collateral; (g) to make, settle and adjust claims in respect of Collateral under
policies of insurance and to endorse the name of such Grantor on any cheque,
draft, instrument or any other item of payment for the proceeds of such policies
of insurance and for making all determinations and decisions with respect
thereto; (h) to notify, or to require any Grantor to notify, Account Debtors to
make payment directly to the Collateral Agent; and (i) to use, sell, assign,
transfer, pledge, make any agreement with respect to or otherwise deal with all
or any of the Collateral, and to do all other acts and things necessary to carry
out the purposes of this Agreement, as fully and completely as though the
Collateral Agent were the absolute owner of the Collateral for all purposes;
provided that nothing herein contained shall be construed as requiring or
obligating the Collateral Agent to make any commitment or to make any inquiry as
to the nature or sufficiency of any payment received by the Collateral Agent, or
to present or file any claim or notice, or to take any action with respect to
the Collateral or any part thereof or the moneys due or to become due in respect
thereof or any property covered thereby. The Collateral Agent and the other
Secured Parties shall be accountable only for amounts actually received as a
result of the exercise of the powers granted to them herein, and neither they
nor their officers, directors, employees or agents shall be responsible to any
Grantor for any act or failure to act hereunder, except for their own gross
negligence or wilful misconduct.
Section 7.16.    Recourse. This Agreement is made with full recourse to each
Canadian Loan Party and pursuant to and upon all the warranties,
representations, covenants and agreements on the part of such Canadian Loan
Party contained herein, in the Loan Documents, Secured Hedging Agreements or
Secured Cash Management Agreements and otherwise in writing in connection
herewith or therewith.
[Signature Page Follows]

IN WITNESS WHEREOF, the parties hereto have duly executed this Canadian
Guarantee and Collateral Agreement as of the day and year first above written.

ABITIBIBOWATER CANADA INC.
By:
 
 
Name:
Jo-Ann Longworth
 
Title:
Vice-President and Chief Financial Officer

--------------------------------------------------------------------------------

S-1

RESOLUTE FP CANADA INC.
By:
 
 
Name:
Jo-Ann Longworth
 
Title:
Vice-President and Chief Financial Officer

BOWATER CANADIAN LIMITED
By:
 
 
Name:
Jo-Ann Longworth
 
Title:
Vice-President and Chief Financial Officer

BOWATER LAHAVE CORPORATION
By:
 
 
Name:
Jo-Ann Longworth
 
Title:
Vice-President and Chief Financial Officer

FIBREK HOLDING INC.
By:
 
 
Name:
Jo-Ann Longworth
 
Title:
Vice-President and Chief Financial Officer

--------------------------------------------------------------------------------

S-2

FIBREK GENERAL PARTNERSHIP acting and represented by FIBREK HOLDING INC.
By:
 
 
Name:
Jo-Ann Longworth
 
Title:
Vice-President and Chief Financial Officer

FIBREK INTERNATIONAL INC.
By:
 
 
Name:
Jo-Ann Longworth
 
Title:
Vice-President and Chief Financial Officer

--------------------------------------------------------------------------------

S-3

CITIBANK, N.A., as Collateral Agent,
By:
 
 
Name:
 
 
Title:
 

--------------------------------------------------------------------------------

S-1

Schedule 1 to
the Canadian Guarantee and
Collateral Agreement
CORPORATE NAME CHANGES, ETC.

None.

--------------------------------------------------------------------------------

S-1

Schedule 2 to
the Canadian Guarantee and
Collateral Agreement

Pledged Debt Securities

None.

--------------------------------------------------------------------------------

S-1

Exhibit A to the
Canadian Guarantee and
Collateral Agreement
SUPPLEMENT NO. __ dated as of [ ], to the Amended and Restated Canadian
Guarantee and Collateral Agreement dated as of February 25, 2014, by and among
the Canadian Guarantors party thereto (the “Grantors”) and CITIBANK, N.A.
(“Citibank”), as Collateral Agent (in such capacity, the “Collateral Agent”).
A. Reference is made to the ABL Credit Agreement dated as of December 9, 2010
(as amended by Amendment No. 1 dated as of April 28, 2011, Amendment No. 2 dated
as of October 28, 2011, Amendment No. 3 dated as of March 21, 2012, Amendment
No. 4 dated as of April 12, 2013 and Amendment No. 5 dated as of May 8, 2013,
and as otherwise modified from time to time, the “Credit Agreement”), among
Resolute Forest Products Inc. (f/k/a Abitibibowater Inc.) (“Resolute”), certain
of its Subsidiaries party thereto, the Lenders party thereto and Citibank, as
Administrative Agent
B. Capitalized terms used herein and not otherwise defined herein shall have the
meanings assigned to such terms in the Credit Agreement and the Canadian
Guarantee and Collateral Agreement referred to therein.
C. The Grantors have entered into the Canadian Guarantee and Collateral
Agreement in order to induce the Lenders to make Loans to the Borrowers. Section
7.14 of Canadian Guarantee and Collateral Agreement provides that additional
Canadian Subsidiaries of Resolute may become Guarantors under the Canadian
Guarantee and Collateral Agreement by execution and delivery of an instrument in
the form of this Supplement. The undersigned Canadian Subsidiary (the “New
Canadian Subsidiary”) is executing this Supplement in accordance with the
requirements of the Credit Agreement to become a Guarantor under the Canadian
Guarantee and Collateral Agreement in order to induce the Lenders to make
additional Loans to the Canadian Borrowers and as consideration for Loans
previously made to the Canadian Borrowers.

Accordingly, the Collateral Agent and the New Canadian Subsidiary agree as
follows:
SECTION 1. In accordance with Section 7.14 of the Canadian Guarantee and
Collateral Agreement, the New Canadian Subsidiary by its signature below becomes
a Grantor and Guarantor under the Canadian Guarantee and Collateral Agreement
with the same force and effect as if originally named therein as a Grantor and
Guarantor and the New Canadian Subsidiary hereby (a) agrees to all the terms and
provisions of the Canadian Guarantee and Collateral Agreement applicable to it
as a Grantor and Guarantor thereunder and (b) represents and warrants that the
representations and warranties made by it as a Grantor and Guarantor thereunder
are true and correct on and as of the date hereof. In furtherance of the
foregoing, the New Canadian Subsidiary, as security for the payment and
performance in full of the Canadian Secured Obligations (as defined in the
Credit Agreement), does hereby create and grant to the Collateral Agent, its
successors and assigns, for the benefit of the Secured Parties, their successors
and assigns, a security interest in and lien on all

--------------------------------------------------------------------------------

- 1 -

of the New Canadian Subsidiary’s right, title and interest in and to the
Collateral (as defined in the Canadian Guarantee and Collateral Agreement) of
the New Canadian Subsidiary. Each reference to a “Guarantor” or “Grantor” in the
Canadian Guarantee and Collateral Agreement shall be deemed to include the New
Canadian Subsidiary. The Canadian Guarantee and Collateral Agreement is hereby
incorporated herein by reference.
SECTION 2. The New Canadian Subsidiary represents and warrants to the Collateral
Agent and the other Secured Parties that this Supplement has been duly
authorized, executed and delivered by it and constitutes its legal, valid and
binding obligation, enforceable against it in accordance with its terms, except
as the enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors’ rights generally and subject to general principles of equity (whether
enforcement is sought by a proceeding in equity or at law).
SECTION 3. This Supplement may be executed in counterparts (and by different
parties hereto on different counterparts), each of which shall constitute an
original, but all of which when taken together shall constitute a single
contract. This Supplement shall become effective when the Collateral Agent shall
have received a counterpart of this Supplement that bears the signature of the
New Canadian Subsidiary and the Collateral Agent has executed a counterpart
hereof. Delivery of an executed signature page to this Supplement by facsimile
transmission shall be as effective as delivery of a manually signed counterpart
of this Supplement.
SECTION 4. The New Canadian Subsidiary hereby represents and warrants that (a)
set forth on Schedule 1 attached hereto is a true and correct schedule as of the
date hereof with the true and correct legal name of the New Canadian Subsidiary,
its jurisdiction of formation and the location of its chief executive office.
The New Canadian Subsidiary shall deliver to the Collateral Agent a certificate
executed by a Responsible Officer of the New Canadian Subsidiary setting forth
the information (other than that set forth on the Schedule described above)
required pursuant to the Canadian Perfection Certificate.
SECTION 5. Except as expressly supplemented hereby, the Canadian Guarantee and
Collateral Agreement shall remain in full force and effect.
SECTION 6. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS SPECIFIED IN SECTION 7.09 OF THE CANADIAN GUARANTEE AND
COLLATERAL AGREEMENT.
SECTION 7. In case any one or more of the provisions contained in this
Supplement should be held invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein and in the Canadian Guarantee and Collateral Agreement shall not in any
way be affected or impaired thereby (it being understood that the invalidity of
a particular provision in a particular jurisdiction shall not in and of itself
affect the validity of such provision in any other jurisdiction). The parties
hereto shall endeavor in good-faith negotiations to replace the invalid, illegal
or unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.

--------------------------------------------------------------------------------

- 2 -

SECTION 8. All communications and notices hereunder shall be in writing and
given as provided in Section 7.01 of the Canadian Guarantee and Collateral
Agreement.
SECTION 9. The New Canadian Subsidiary agrees to reimburse the Collateral Agent
for its reasonable out-of-pocket expenses in connection with this Supplement,
including the reasonable fees, other charges and disbursements of counsel for
the Collateral Agent.
[Signature page follows]

--------------------------------------------------------------------------------

S-1

IN WITNESS WHEREOF, the New Canadian Subsidiary and the Collateral Agent have
duly executed this Supplement to the Canadian Guarantee and Collateral Agreement
as of the day and year first above written.
[NAME OF NEW CANADIAN SUBSIDIARY],
By:
 
 
Name:
 
 
Title:
 

CITIBANK, N.A., as Collateral Agent,
By:
 
 
Name:
 
 
Title:
 

--------------------------------------------------------------------------------

Schedule 1
to Supplement No.__ to the
Canadian Guarantee and
Collateral Agreement
NEW CANADIAN SUBSIDIARY INFORMATION
Name
 
Jurisdiction of Formation
 
Chief Executive Office
 
 
 
 
 

PLEDGED DEBT SECURITIES
Holder
 
Issuer
 
Principal Amount
 
Date of Note
 
Maturity Date
 
 
 
 
 
 
 
 
 

--------------------------------------------------------------------------------

EXHIBIT D

FORM OF HYPOTHEC

--------------------------------------------------------------------------------

SECOND SUPPLEMENTAL DEED OF HYPOTHEC
ON THE

BEFORE Mtre. Shalini Sangani, the undersigned Notary for the Province of Québec,
practising at the City of Montréal
APPEARED:
CITIBANK, N.A., a national banking association organized under the laws of the
United States of America, having an office at Citibank, N.A., Global Loans OPS
III, 1615 Brett Road, New Castle, Delaware, 19720 (USA), herein acting as “fondé
de pouvoir” under Article 2692 of the Civil Code of Québec and represented by
Viorelia Guzun, its representative, duly authorized for the purposes hereof as
she so declares

(hereinafter the “Attorney”)
AND:
RESOLUTE FP CANADA INC. / PF RÉSOLU CANADA INC. (a successor to AbiBow and ACI,
as described below), a corporation duly amalgamated pursuant to the Canada
Business Corporations Act, having its registered office at 111 Duke Street,
Suite 5000, Montreal, Province of Quebec, H3C 2M1, herein represented by
Jo‑Ann Longworth, its Vice-President and Chief Financial Officer, duly
authorized pursuant to a resolution of its shareholders, an original, certified
copy or photocopy of which is hereunto annexed after having been acknowledged as
true and having been signed by said representative before the undersigned Notary

(hereinafter the “Issuer”)
AND:
BOWATER CANADIAN LIMITED / BOWATER CANADIENNE LIMITÉE, a corporation duly
continued pursuant to the Canada Business Corporations Act, having its
registered office at 1959 Upper Water Street, Suite 1600, Halifax, Province of
Nova Scotia, B3J 3N2, herein represented by Jo‑Ann Longworth, its Vice-President
and Chief Financial Officer, duly authorized pursuant to a resolution of its
sole shareholder, an original, certified copy or photocopy of which is hereunto
annexed after having been acknowledged as true and having been signed by said
representative before the undersigned Notary

(hereinafter “BCL”)
AND:
ABITIBIBOWATER CANADA INC., a corporation duly incorporated pursuant to the
Canada Business Corporations Act, having its registered office at c/o Ogilvy
Renault LLP, 200 Bay Street, Royal Bank Plaza, South

--------------------------------------------------------------------------------

Tower, Suite 3800, Toronto, Province of Ontario, M5J 2Z4, herein represented by
Jo‑Ann Longworth, its Vice-President and Chief Financial Officer, duly
authorized pursuant to a resolution of its sole shareholder, an original,
certified copy or photocopy of which is hereunto annexed after having been
acknowledged as true and having been signed by said representative before the
undersigned Notary
(hereinafter “ABCI”)
AND:
BOWATER LAHAVE CORPORATION, a company duly incorporated pursuant to the
Companies Act (Nova Scotia), having its registered office at 1959 Upper Water
Street, Suite 900, Halifax, Province of Nova Scotia, B3J 3N2, herein acting and
represented by Jo‑Ann Longworth, its Vice-President and Chief Financial Officer,
duly authorized pursuant to a resolution of its board of directors, an original,
certified copy or photocopy of which is hereunto annexed after having been
acknowledged as true and having been signed by said representative before the
undersigned Notary

(hereinafter “BLHC”)
AND:
FIBREK HOLDING INC. / GESTION FIBREK INC., a corporation duly amalgamated
pursuant to the Canada Business Corporations Act (the successor by amalgamation
to Fibrek Holding Pre-amalgamation (as defined below) and Fibrek (as defined
below)), having its registered office at 111 Duke Street, Suite 5000, Montreal,
Province of Québec, H3C 2M1, herein represented by Jo‑Ann Longworth, its
Vice‑President and Chief Financial Officer, duly authorized pursuant to a
resolution of its board of directors, an original, certified copy or photocopy
of which is hereunto annexed after having been acknowledged as true and having
been signed by said representative before the undersigned Notary

(hereinafter “Fibrek Holding”)
AND:
FIBREK GENERAL PARTNERSHIP / FIBREK S.E.N.C., a general partnership constituted
under the laws of Québec, having its registered office at 111 Duke Street, Suite
5000, Montreal, Province of Québec, H3C 2M1, herein acting and represented by
FIBREK HOLDING INC. / GESTION FIBREK INC., its managing partner, itself herein
acting represented by Jo‑Ann Longworth, its Vice‑President and Chief Financial
Officer, duly authorized pursuant to a resolution of its board of directors, an
original, certified copy or photocopy of which is hereunto annexed after having
been acknowledged as true and having been signed by said representative before
the undersigned Notary

(hereinafter “Fibrek Partnership”)

--------------------------------------------------------------------------------

AND:
FIBREK INTERNATIONAL INC., a corporation duly incorporated pursuant to the
Canada Business Corporations Act, having its registered office at 111 Duke
Street, Suite 5000, Montreal, Province of Québec, H3C 2M1, herein represented by
Jo‑Ann Longworth, its Vice‑President and Chief Financial Officer, duly
authorized pursuant to a resolution of its board of directors, an original,
certified copy or photocopy of which is hereunto annexed after having been
acknowledged as true and having been signed by said representative before the
undersigned Notary

(hereinafter “Fibrek International”)

WHICH PARTIES HAVE DECLARED AS FOLLOWS:
WHEREAS on the third (3rd) day of December Two Thousand and Ten (2010),
Abitibi-Consolidated Inc. (“ACI”)(a predecessor of the Issuer), BCL, ABCI and
BLHC and the Attorney have entered into the Principal Deed (as hereinafter
defined);
WHEREAS on the eighth (8th) day of December Two Thousand and Ten (2010), ACI
continued as a limited liability company under the Business Corporations Act
(British Columbia) and on the ninth (9th) day of December Two Thousand and Ten
(2010) further amalgamated with various entities, with the amalgamated and
continuing entity being Abitibi-Consolidated Inc. (“Continued and Amalgamated
ACI”), a limited liability company under the Business Corporations Act (British
Columbia);
WHEREAS on the ninth (9th) day of December Two Thousand and Ten (2010),
immediately after the amalgamation described in the immediately preceding
Recital, the Continued and Amalgamated ACI entered into a confirmation agreement
in favour of the Attorney pursuant to which the Continued and Amalgamated ACI,
amongst other things, confirmed and acknowledged that, as continuing corporation
from the foregoing amalgamation, it has succeeded, by operation of law, to all
of the business, undertaking, property, assets, rights, entitlements,
franchises, licenses and permits of each of the amalgamating entities, including
ACI, and further confirmed and agreed that it continues to be bound by the terms
and obligations of ACI contained in, existing under or created by the Principal
Deed and that the Principal Deed is in all respects ratified, confirmed and
remained in full force and effect;
WHEREAS on the tenth (10th) day of December Two Thousand and Ten (2010), the
Continued and Amalgamated ACI was continued as a corporation under the Canada
Business Corporations Act and changed its name to AbiBow Canada Inc. (“AbiBow”);
WHEREAS on the tenth (10th) day of December Two Thousand and Ten (2010),
immediately after the continuation and change of name described in the
immediately preceding Recital, AbiBow entered into a confirmation agreement in
favour of the Attorney pursuant to which AbiBow, amongst other things, confirmed
and acknowledged that, following such continuance, it has succeeded, by
operation of law, to all of the business, undertaking, property, assets, rights,
entitlements, franchises, licenses and permits of the Continued and Amalgamated
ACI, and further confirmed and agreed that it continues to be bound by the terms
and obligations of the Continued and Amalgamated ACI

--------------------------------------------------------------------------------

contained in, existing under or created by the Credit Agreement and the Security
Documents (as the foregoing two terms are defined in said confirmation agreement
of December 10, 2010) and that the Credit Agreement and the Security Documents
are in all respects ratified, confirmed and remained in full force and effect;
WHEREAS on the twenty-fourth (24th) day of May Two Thousand and Twelve (2012),
AbiBow changed its name to Resolute FP Canada Inc. / PF Résolu Canada Inc.;
WHEREAS the Issuer is the successor in rights, title and obligations to ACI and
to the Continued and Amalgamated ACI, including in respect of the Principal
Deed;
WHEREAS on September 14, 2012 Fibrek Partnership, Fibrek International, Fibrek
Inc. (“Fibrek”), Fibrek Holding Inc. (prior to its amalgamation with Fibrek Inc.
on January 1, 2013; “Fibrek Holding Pre-amalgamation”), SFK Pulp Trust (“SFK
Trust”) and SFK Pulp Fund (“SFK Fund”) became party to the Canadian Guarantee
and Collateral Agreement (as defined in the Credit Agreement (as hereinafter
defined)) pursuant to which they became Grantors and Guarantors (as such two
terms are defined therein) as such is required under the Credit Agreement;
WHEREAS on September 14, 2012 Fibrek Partnership, Fibrek International, Fibrek,
Fibrek Holding Pre-amalgamation, SFK Trust and SFK Fund have granted a Hypothec
(as defined in the First Supplemental Deed (defined hereafter)) on the Charged
Property (as defined in the First Supplemental Deed) in order to secure the
Secured Obligations (as defined in the First Supplemental Deed), the whole
pursuant to the terms and conditions set out in the First Supplemental Deed;
WHEREAS on December 31, 2012 SFK Trust and SFK Fund have been liquidated into
Fibrek Holding Pre-amalgamation and terminated;
WHEREAS on January 1, 2013 Fibrek Holding Pre-amalgamation amalgamated with
Fibrek, with Fibrek Holding being the continuing corporation resulting from the
foregoing amalgamation and having succeeded, by operation of law, to all of the
business, undertaking, property, assets, rights, entitlements, franchises,
licenses and permits of Fibrek Holding Pre-Amalgamation and Fibrek, and further
being bound by, inter alia, the terms and obligations of, and the hypothecs
granted by, Fibrek Holding Pre-Amalgamation and Fibrek pursuant to the First
Supplemental Deed;
WHEREAS, in connection with Amendment No. 6 to Credit Agreement and consent and
Authorization relating to Security Documents dated as of or about the date
hereof among the parties to the Credit Agreement, the Attorney, the Original
Grantors (as hereinafter defined) and the Fibrek Grantors (as hereafter
defined), have agreed to amend the Principal Deed and the First Supplemental
Deed on the terms and conditions set forth in this Second Supplemental Deed (as
hereafter defined);
WHEREAS the execution of this Second Supplemental Deed has been duly authorized
by each Fibrek Grantor and each Original Grantor; and
WHEREAS the foregoing recitals are made as representations and warranties and
statements of fact by each Fibrek Grantor and each Original Grantor and not the
Attorney.
NOW, THEREFORE, THE PARTIES HERETO HAVE AGREED AS FOLLOWS:

--------------------------------------------------------------------------------

1.
INTERPRETATION

1.1
Definitions

The following terms, wherever used in this Second Supplemental Deed, shall,
unless there be something in the context inconsistent therewith, have the
following meanings:
1.1.1
“Attorney” means Citibank, N.A., acting as “fondé de pouvoir” for the
Bondholders under the Principal Deed, the First Supplemental Deed and this
Second Supplemental Deed, and shall include its successors or assigns appointed
pursuant to the provisions of the foregoing deeds and under the Credit
Agreement;

1.1.2
“Business Day” means a Business Day (as defined in the Credit Agreement) or, for
any act to be performed in the Province of Quebec or for calculation of time
periods pursuant to applicable Law of the Province of Quebec, means any day,
other than a Saturday or Sunday, in the Province of Québec on which Canadian
chartered banks are generally open for business in the City of Montréal,
Province of Québec;

1.1.3
“Credit Agreement” means the ABL credit agreement dated as of December 9, 2010
among RFP (formerly AbitibiBowater Inc.) and certain of its subsidiaries, that
are or may become parties thereto, the several banks and other financial
institutions from time to time parties thereto, Citibank, N.A., as
administrative agent and collateral agent, and the other parties party thereto,
as amended by Amendment No. 1 to the Credit Agreement dated as of April 28,
2011, Amendment No. 2 to the Credit Agreement, Amendment No. 1 to Guarantee and
Collateral Agreement, and Amendment No. 1 to Canadian Guarantee and Collateral
Agreement dated as of October 28, 2011, Consent and Limited Waiver dated
December 5, 2011, Amendment No. 3 dated as of March 21, 2012, Amendment No. 4
dated as of April 12, 2013, Amendment No. 5 dated as of May 8, 2013 and
Amendment No. 6 to Credit Agreement and Consent and Authorization relating to
Security Documents dated as of or about the date hereof, and as same may be
further amended, supplemented, restated or replaced from time to time;

1.1.4
“Deed” means the Principal Deed, as supplemented by the First Supplemental Deed
and by this Second Supplemental Deed, and as same may be further amended,
modified, supplemented, restated, extended, renewed, or superseded from time to
time;

1.1.5
“Fibrek Grantor” means each of Fibrek Holding, Fibrek Partnership and Fibrek
International and any of their respective permitted successors and assigns, and
“Fibrek Grantors” is the collective reference thereto;

1.1.6
“First Supplemental Deed” means the First Supplemental Deed of Hypothec entered
into on September 14, 2012 among the Original Grantors, Fibrek Partnership,
Fibrek International, Fibrek Holding Pre-amalgamation, Fibrek, SFK

--------------------------------------------------------------------------------

Trust and SKF Fund, as grantors, and the Attorney, as holder, before Me Shalini
Sangani, Notary, under her minute number 59;
1.1.7
“Law” means all federal, provincial, municipal, foreign and international
statutes, acts, codes, ordinances, decrees, treaties, rules, regulations,
municipal by-laws, judicial or arbitral or administrative or ministerial or
departmental or regulatory judgments, orders, decisions, rulings or awards or
any provisions of the foregoing, including general principles of common and
civil law and equity, and all policies, practices and guidelines of any
Governmental Authority binding on or affecting the Person referred to in the
context in which such word is used; and “Law” means any one or more of the
foregoing;

1.1.8
“Original Grantors” means collectively the Issuer (as successor to ACI and the
Continued and Amalgamated ACI), BCL, ABCI and BLHC and any of their respective
permitted successors and assigns;

1.1.9
“Principal Deed” means the deed of hypothec and issue of bonds entered into on
December 3, 2010 among ACI (a predecessor of the Issuer), BCL, ABCI and BLHC, as
grantors, and the Attorney, as holder, before Me Kevin Leonard, Notary, under
his minute number 6696;

1.1.10
“RFP” means Resolute Forest Products Inc., a Delaware Corporation (formerly
AbitibiBowater Inc.);

1.1.11
“This Second Supplemental Deed”, “these presents”, “herein”, “hereby”,
“hereunder”, “hereof” and similar expressions refer to this Second Supplemental
Deed of Hypothec, and to any deed or document supplemental or complementary
hereto or restating this Second Supplemental Deed, and any and all renewals,
modifications, amendments, supplements, extensions, consolidations,
substitutions and replacements of this instrument.

1.2
Capitalized Terms

All capitalized terms and expressions used but not defined herein shall have the
same meaning as that ascribed to them (directly or by reference to other
agreements or instruments) in the Principal Deed, except to the extent otherwise
provided in or expressly amended by this Second Supplemental Deed or unless
there is something in the context inconsistent therewith.
1.3
Preamble

The preamble shall form an integral part of this Second Supplemental Deed as if
recited herein at length.
1.4
Gender

Unless there be something in the context inconsistent therewith, words importing
the masculine gender shall include the feminine gender and vice versa and words
importing the

--------------------------------------------------------------------------------

singular include the plural and vice versa. When used in this Second
Supplemental Deed, the word “including” (or includes) means “including (or
includes) without limitation”.
1.5
Headings

The division of this Second Supplemental Deed into sections, subsections and
paragraphs and the insertion of titles are for convenience of reference only and
do not affect the meaning or the interpretation of the present Second
Supplemental Deed. Unless otherwise indicated, a reference to a particular
Section, subsection or paragraph is a reference to the particular Section,
subsection or paragraph in this Second Supplemental Deed.
1.6
Benefits of this Second Supplemental Deed

The parties hereto and the Bondholders shall be bound by the provisions hereof
and the benefits, rights, remedies or claims under this Second Supplemental Deed
shall enure to them to the exclusion of any others.
1.7
Delays and Calculation of Time Periods

The time periods provided hereunder are calculated simultaneously with the time
periods imposed by Law and are not in addition to such time periods. In the
calculation of time periods, the first day is not included but the last is. When
the date on which a time period expires or a payment has to be made or an act
has to be done is not a Business Day, the delay expires or the payment must be
made or the act must be done on the next following Business Day, unless the
context indicates otherwise.
1.8
Currency

All references to dollar amounts are, unless expressly otherwise provided,
expressed in terms of the lawful money of Canada.
1.9
The Principal Deed, the First Supplemental Deed and this Second Supplemental
Deed

This Second Supplemental Deed amends and is supplemental to the Principal Deed,
as supplemented and amended by the First Supplemental Deed, is to form part of
and shall have the same effect as if incorporated in the Principal Deed, as
supplemented and amended by the First Supplemental Deed, and the Principal Deed,
the First Supplemental Deed and this Second Supplemental Deed shall henceforth
be read together and shall have effect so far as practicable as though all the
provisions thereof and hereof were contained in one instrument. Except as
amended, supplemented or otherwise modified hereunder, the Principal Deed, as
supplemented and amended by the First Supplemental Deed shall continue in full
force and effect in accordance with their terms. Any reference to the Deed, the
Principal Deed or the First Supplemental Deed in the Credit Agreement and in any
other Loan Documents (as defined in the Credit Agreement) shall be a reference
to the Principal Deed as supplemented and amended by the First Supplemental Deed
and this Second Supplemental Deed, and as same may be further supplemented,
amended, restated or otherwise modified by any deed or document supplemental or
complementary thereto or restating the foregoing deeds.

--------------------------------------------------------------------------------

1.10
Reserve of hypothecs and other security

This Second Supplemental Deed is executed under express reserve by the Attorney
of the hypothecs, security interests and assignments granted and of all other
rights subsisting in favour of the Attorney under the Principal Deed and the
First Supplemental Deed (except to the extent expressly amended by this Second
Supplemental Deed), and without novation of any kind or derogation from the
provisions thereof or the rank or priority thereof.
2.
CONFIRMATION OF HYPOTHECS, PRINCIPAL DEED ETC.

2.1
Confirmation of hypothecs and other security

Each Original Grantor and each Fibrek Grantor hereby expressly acknowledges and
confirms the hypothecs, assignments and other security constituted pursuant to
the Principal Deed and the First Supplemental Deed, as applicable, and further
confirms and agrees that the Principal Deed and the First Supplemental Deed
shall continue in full force and effect in accordance with the terms thereof,
except as amended, supplemented or otherwise modified herein.
3.
AMENDMENTS TO THE PRINCIPAL DEED

The Principal Deed is hereby amended as follows:
3.1
Sections 10.1.2, 10.1.4, 10.1.5 and 10.1.6

Sections 10.1.2, 10.1.4, 10.1.5 and 10.1.6 of the Principal Deed are deleted in
their entirety.
3.2
Section 10.1.3

Section 10.1.3 of the Principal Deed is replaced in its entirety with the
following Section:
“10.1.2    of the existence of any hypothec securing Hypothecated Claims with a
principal amount in excess of US$10,000,000 each and, in such cases, to provide
the Attorney, upon demand, with satisfactory proof that such hypothec has been
registered or published in accordance with applicable Law in order for the
rights of the Attorney to be set up against third Persons.”.
3.3
Section 10.8

Section 10.8 of the Principal Deed is replaced in its entirety with the
following Section:
“10.8    Instruments
If any Grantor shall at any time hold or acquire any Instruments constituting
Charged Property (other than any Instrument with a face amount of less than
US$20,000,000, so long as the aggregate principal amount of Instruments under
this exclusion does not exceed US$40,000,000), such Grantor shall forthwith
endorse, assign and deliver the same to the

--------------------------------------------------------------------------------

Attorney, accompanied by such instruments of transfer or assignment duly
executed in blank as the Attorney may from time to time reasonably request. For
the purposes of this Section 10.8, the term “Instruments” excludes letters of
credit which are subject to the provisions of Section 10.11 hereof .”.
3.4
Section 10.9

Section 10.9 of the Principal Deed is replaced in its entirety with the
following Section:
“10.9    Bank Accounts
For each bank account that any Grantor at any time opens or maintains (other
than any Excluded Account, any Specified Collection Account and the CIBC Cash
Collateral Account (as such capitalized terms are defined in the Credit
Agreement)), such Grantor shall cause the bank to enter into a Control Agreement
with such Grantor and the Attorney. The Attorney agrees with each Grantor that,
except with respect to Designated Blocked Accounts (as such capitalized term is
defined in the Credit Agreement), the Attorney shall not exercise dominion and
control over, or give any instructions or withhold any withdrawal rights from
any Grantor, with respect to such accounts or any funds in such accounts, unless
an Event of Default has occurred and is continuing.”.
3.5
Section 10.11

Section 10.11 of the Principal Deed is replaced in its entirety with the
following Section:
“10.11     Letter of Credit Rights
If any Grantor is at any time a beneficiary under a letter of credit included in
the Charged Property now or hereafter issued in favour of such Grantor with a
face amount greater than US$10,000,000, such Grantor shall promptly notify the
Attorney thereof and, at the request and option of the Attorney, such Grantor
shall use commercially reasonable efforts to, pursuant to an agreement in form
and substance reasonably satisfactory to the Attorney, either (i) arrange for
the issuer and any confirmer of such letter of credit to consent to an
assignment to the Attorney of the proceeds of any drawing under the letter of
credit or (ii) arrange for the Attorney to become the transferee beneficiary of
the letter of credit, with the Attorney agreeing, in each case, that the
proceeds of any drawing under the letter of credit are to be paid to the
applicable Grantor unless an Event of Default has occurred or is continuing.”.
3.6
Section 10.12

Section 10.12 of the Principal Deed is replaced in its entirety with the
following Section:
“10.12     [Reserved]”.

--------------------------------------------------------------------------------

3.7
Pledge and hypothec with delivery

For the purposes of Section 7 and the last paragraph of Section 4 of the
Principal Deed and notwithstanding the definition of “Pledged Debt Securities”
in the Principal Deed, the obligation of each Grantor to deliver Pledged Debt
Securities (or Pledged Securities) shall exclude Pledged Debt Securities that
evidence Indebtedness owed to any Grantor in a principal amount of less than
US$20,000,000, so long as the aggregate principal amount of the Pledged Debt
Securities not so pledged under this exclusion does not exceed US$40,000,000.
The Attorney shall return to the relevant Grantor, concurrently with the
execution of this Second Supplemental Deed or soon thereafter, any Pledged Debt
Security in its possession, if any, which is now excluded from the delivery
obligation set forth in Section 7 of the Principal Deed as amended hereby.
4.
AMENDMENTS TO THE FIRST SUPPLEMENTAL DEED

The First Supplemental Deed is hereby amended as follows:
4.1
Sections 10.1.2, 10.1.4, 10.1.5 and 10.1.6

Sections 10.1.2, 10.1.4, 10.1.5 and 10.1.6 of the First Supplemental Deed are
deleted in their entirety.
4.2
Section 10.1.3

Section 10.1.3 of the First Supplemental Deed is replaced in its entirety with
the following Section:
“10.1.2    of the existence of any hypothec securing Hypothecated Claims with a
principal amount in excess of US$10,000,000 each and, in such cases, to provide
the Attorney, upon demand, with satisfactory proof that such hypothec has been
registered or published in accordance with applicable Law in order for the
rights of the Attorney to be set up against third Persons.”.
4.3
Section 10.8

Section 10.8 of the First Supplemental Deed is replaced in its entirety with the
following Section:
“10.8    Instruments
If any Fibrek Grantor shall at any time hold or acquire any Instruments
constituting Charged Property (other than any Instrument with a face amount of
less than US$20,000,000, so long as the aggregate principal amount of
Instruments under this exclusion does not exceed US$40,000,000), such Fibrek
Grantor shall forthwith endorse, assign and deliver the same to the Attorney,
accompanied by such instruments of transfer or assignment duly executed in

--------------------------------------------------------------------------------

blank as the Attorney may from time to time reasonably request. For the purposes
of this Section 10.8, the term “Instruments” excludes letters of credit which
are subject to the provisions of Section 10.11 hereof.”.
4.4
Section 10.9

Section 10.9 of the First Supplemental Deed is is replaced in its entirety with
the following Section:
“10.9    Bank Accounts
For each bank account that any Fibrek Grantor at any time opens or maintains
(other than any Excluded Account, any Specified Collection Account and the CIBC
Cash Collateral Account (as such capitalized terms are defined in the Credit
Agreement)), such Fibrek Grantor shall cause the bank to enter into a Control
Agreement with such Fibrek Grantor and the Attorney. The Attorney agrees with
each Fibrek Grantor that, except with respect to Designated Blocked Accounts (as
such capitalized term is defined in the Credit Agreement), the Attorney shall
not exercise dominion and control over, or give any instructions or withhold any
withdrawal rights from any Fibrek Grantor, with respect to such accounts or any
funds in such accounts, unless an Event of Default has occurred and is
continuing.”.
4.5
Section 10.11

Section 10.11 of the First Supplemental Deed is replaced in its entirety with
the following Section:
“10.11     Letter of Credit Rights
If any Fibrek Grantor is at any time a beneficiary under a letter of credit
included in the Charged Property now or hereafter issued in favour of such
Fibrek Grantor with a face amount greater than US$10,000,000, such Fibrek
Grantor shall promptly notify the Attorney thereof and, at the request and
option of the Attorney, such Fibrek Grantor shall use commercially reasonable
efforts to, pursuant to an agreement in form and substance reasonably
satisfactory to the Attorney, either (i) arrange for the issuer and any
confirmer of such letter of credit to consent to an assignment to the Attorney
of the proceeds of any drawing under the letter of credit or (ii) arrange for
the Attorney to become the transferee beneficiary of the letter of credit, with
the Attorney agreeing, in each case, that the proceeds of any drawing under the
letter of credit are to be paid to the applicable Fibrek Grantor unless an Event
of Default has occurred or is continuing.”.
4.6
Section 10.12

Section 10.12 of the First Supplemental Deed is replaced in its entirety with
the following Section:
“10.12     [Reserved]”.

--------------------------------------------------------------------------------

4.7
Pledge and hypothec with delivery

For the purposes of Section 7 and the last paragraph of Section 4 of the First
Supplemental Deed and notwithstanding the definition of “Pledged Debt
Securities” in the First Supplemental Deed, the obligation of each Fibrek
Grantor to deliver Pledged Debt Securities (or Pledged Securities) shall exclude
Pledged Debt Securities that evidence Indebtedness owed to any Fibrek Grantor in
a principal amount of less than US$20,000,000, so long as the aggregate
principal amount of the Pledged Debt Securities not so pledged under this
exclusion does not exceed US$40,000,000.
The Attorney shall return to the relevant Fibrek Grantor, concurrently with the
execution of this Second Supplemental Deed or soon thereafter, any Pledged Debt
Security in its possession, if any, which is now excluded from the delivery
obligation set forth in Section 7 of the First Supplemental Deed as amended
hereby.
5.
GENERAL PROVISIONS

5.1
Further Assurances

Each party to this Second Supplemental Deed shall promptly execute and deliver
such further instruments and agreements and do such further acts and things as
may be reasonably requested by any other party hereto that may be necessary or
desirable in order to give effect to this Second Supplemental Deed.
5.2
Severability

Any provision of this Second Supplemental Deed that is prohibited or
unenforceable in any jurisdiction will, as to that jurisdiction, be ineffective
to the extent of such prohibition or unenforceability and will be severed from
the balance of this Second Supplemental Deed, all without affecting the
remaining provisions of this Second Supplemental Deed or affecting the validity
or enforceability of such provision in any other jurisdiction.
6.
AMENDMENTS

No amendment may be made to this Second Supplemental Deed unless signed by the
Fibrek Grantors, the Original Grantors and the Attorney acting pursuant to a
Bondholder’s Instrument.
7.
GOVERNING LAW

This Second Supplemental Deed shall be governed by, and construed in accordance
with, the laws of the Province of Québec and the federal laws of Canada
applicable therein.

--------------------------------------------------------------------------------

8.
ENGLISH LANGUAGE

The parties hereto confirm that the present Second Supplemental Deed has been
drawn up in the English language at their request. Les parties aux présentes
confirment que le présent acte a été rédigé en langue anglaise à leur demande.

--------------------------------------------------------------------------------

WHEREOF ACT:
DONE AND PASSED in the City of Montréal, Province of Québec, on the date
hereinabove set forth, under number
                                                             
of the original of the minutes of the undersigned Notary.
AND after the parties had declared to have taken cognizance of these presents
and to have exempted the said Notary from reading them or causing them to be
read, the said duly authorized officers, directors or representatives of each
Fibrek Grantor, each Original Grantor and the Attorney respectively have signed
these presents, all in the presence of the said Notary who has also signed.
CITIBANK, N.A., as “fondé de pouvoir”
By: _____________________________
Name: Viorelia Guzun
Title: Authorized representative
RESOLUTE FP CANADA INC. / PF RÉSOLU CANADA INC.
By: _____________________________
Name: Jo‑Ann Longworth
Title: Vice-President and Chief Financial Officer
BOWATER CANADIAN LIMITED BOWATER CANADIENNE LIMITÉE
By: _____________________________
Name: Jo‑Ann Longworth
Title: Vice-President and Chief Financial Officer
 

--------------------------------------------------------------------------------

ABITIBIBOWATER CANADA INC.
By: _____________________________
Name: Jo‑Ann Longworth
Title: Vice-President and Chief Financial Officer
BOWATER LAHAVE CORPORATION
By: _____________________________
Name: Jo‑Ann Longworth
Title: Vice-President and Chief Financial Officer

FIBREK HOLDING INC. / GESTION FIBREK INC.
By: _____________________________
Name: Jo‑Ann Longworth
Title: Vice-President and Chief Financial Officer
FIBREK GENERAL PARTNERSHIP / FIBREK S.E.N.C. by its managing partner FIBREK
HOLDING INC. / GESTION FIBREK INC.  
By: _____________________________
Name: Jo‑Ann Longworth
Title: Vice-President and Chief Financial Officer

FIBREK INTERNATIONAL INC.
By: _____________________________
Name: Jo‑Ann Longworth
Title: Vice-President and Chief Financial Officer
   
Mtre. Shalini Sangani, Notary