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                                                                     EXHIBIT 4.1


January 18, 2002

Sterling Pulp Chemicals, Ltd.
302 The East Mall, Suite 200
Toronto, Ontario
M9B 6C7

         RE:      FINANCING AGREEMENT-THIRD AMENDING AGREEMENT

         Reference is made to the financing agreement dated as of July 11, 2001,
as amended by letter agreements dated July 26, 2001 and September 14, 2001
(collectively, the "FINANCING AGREEMENT") between Sterling Pulp Chemicals, Ltd.
(the "BORROWER"), CIT Business Credit Canada Inc. (the "AGENT") as agent and
lender and the other Lenders party thereto. Capitalized terms used herein and
not otherwise defined shall have the meanings ascribed thereto in the Financing
Agreement.

         The Agent and the Lenders hereby wish to confirm our understanding that
the Financing Agreement is amended as follows:

1.       DEFINITION OF "BOWATER PROJECT"

         The definition of "Bowater Project" is hereby deleted in its entirety
and replaced with the following:

         "BOWATER PROJECT means the lease and related agreements to be entered
         into by the Company with Bowater pursuant to which the Company will
         lease from Bowater the facility for a merchant sodium chlorite plant to
         be located at Bowater's Thunder Bay, Ontario, pulp mill."

2.       DEFINITION OF "LEASES"

         The definition of "Leases" is hereby deleted in its entirety and
replaced with the following:

         "LEASES means the leases, subleases, rights to occupy and licences of
         real property or buildings and fixtures to which the Company is a party
         as listed on Schedule 3."

3.       DEFINITION OF "LETTER OF CREDIT SUB-LINE"

         The definition of "Letter of Credit Sub-Line" is hereby deleted in its
entirety and replaced with the following:

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         "LETTER OF CREDIT SUB-LINE shall mean the commitment of the Lenders to
         assist the Company in obtaining Letters of Credit, pursuant to Section
         5 hereof, in an aggregate amount not to exceed $10,000,000."

4.       DEFINITION OF "OWNED PROPERTIES"

         The definition of "Owed Properties" is hereby deleted in its entirety
and replaced with the following:

         "OWNED PROPERTIES means, collectively, the land and premises owned by
         the Company as listed on Schedule 4."

5.       DEFINITION OF "SURPLUS CASH"

         The definition of "Surplus Cash" is hereby deleted in its entirety and
replaced with the following:

         "SURPLUS CASH shall mean for any Fiscal Year (a) the sum of (i) EBITDA
         and (ii) other non-cash charges of the Company (excluding depreciation
         and amortization to the extent already included in EBITDA) less (b) the
         sum of (i) all interest obligations paid or due by the Company, (ii)
         the amount of principal repaid to the Lenders on the Term Loan, (iii)
         Capital Expenditures actually incurred, (iv) all federal, provincial,
         state and local cash taxes paid by the Company and (v) any dividends or
         management fees permitted by the Agent and the Lenders to be included
         in this definition of Surplus Cash."

6.       SECTION 4(5)

         Section 4(5) is hereby deleted in its entirety and replaced with the
following:

         "(5)     At any time prior to repayment in full of the Term Loan, in
                  the event the Company has Surplus Cash in any Fiscal Year
                  commencing with the Fiscal Year beginning on October 1, 2001,
                  the Company must make a Mandatory Prepayment of the Term Loan
                  by an amount equal to twenty-five percent (25%) of said
                  Surplus Cash on or before the 90th day after the end of each
                  Fiscal Year of the Company."

7.       SECTIONS 7(5)(b) AND (c)(i)

         Sections 7(5)(b) and (c)(i) are hereby deleted in their entirety and
replaced with the following:


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         "(b)     Without limiting the generality of the foregoing, the Company
                  agrees to maintain insurance (or cause to be maintained) on
                  its Real Estate, Equipment and Inventory under such policies
                  of insurance, with such insurance companies, in such
                  reasonable amounts and covering such insurable risks as are at
                  all times reasonably satisfactory to the Agent. All policies
                  covering the Company's Real Estate, Equipment and Inventory
                  are, subject to the rights of any holders of Permitted Liens
                  holding claims senior to the Agent, to be made payable to the
                  Agent, on behalf of the Lenders, in case of loss, under a
                  standard non-contributory "MORTGAGEE", "LENDER" or "SECURED
                  PARTY" clause and are to contain such other provisions as the
                  Agent may require to fully protect the Agent's interest in the
                  Company's Real Estate, Inventory and Equipment and to any
                  payments to be made under such policies. All original policies
                  or true copies thereof are to be delivered to the Agent,
                  premium prepaid, with the loss payable endorsement in the
                  Agent's favour, and shall provide for not less than thirty
                  (30) days prior written notice to the Agent of the exercise of
                  any right of cancellation. At the Company's request, or if the
                  Company fails to maintain such insurance, the Agent may
                  arrange for such insurance, but at the Company's expense and
                  without any responsibility on the Agent's part for: (i)
                  obtaining the insurance; (ii) the solvency of the insurance
                  companies; (iii) the adequacy of the coverage; or (iv) the
                  collection of claims. Upon the occurrence of an Event of
                  Default which is not waived in writing by the Required
                  Lenders, the Agent shall, subject to the rights of any holders
                  of Permitted Liens holding claims senior to the Agent, have
                  the sole right and at its option, in the name of the Agent or
                  the Company, to file claims under any such insurance policies,
                  to receive, receipt and give acquittance for any payments that
                  may be payable thereunder, and to execute any and all
                  endorsements, receipts, releases, assignments, reassignments
                  or other documents that may be necessary to effect the
                  collection, compromise or settlement of any claims under any
                  such insurance policies.

         (c)

                  (i)      In the event of any loss or damage by fire or other
                           casualty, Insurance Proceeds relating to Inventory
                           shall first reduce the Company's Revolving Loans,
                           then the Term Loan. Upon the occurrence of a Default
                           or Event of Default, such Insurance Proceeds may be
                           applied to the Obligations in such order as the Agent
                           may elect;"


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8.       SECTION 7(13)(b)

         Section 7(13)(b) is hereby deleted in its entirety and replaced with
the following:

         "(b)     not enter into or permit any subsidiary to enter into any
                  Operating Lease if after giving effect thereto the aggregate
                  obligations with respect to Operating Leases of the Company
                  during any Fiscal Year would exceed $10,000,000;"

9.       SECTION 7(16)

         Section 7(16) is hereby deleted in its entirety and replaced with
following:

         "(16)    Except as otherwise specifically permitted by this Agreement,
                  without the prior written consent of the Agent, the Company
                  agrees that it will not enter into any transaction, including,
                  without limitation, any purchase, sale, lease, loan or
                  exchange of property, with the Parent or any subsidiary or
                  affiliate of either the Company or Parent, provided that,
                  except as otherwise set forth in this Financing Agreement, the
                  Company may enter into sale, service and other transactions in
                  the ordinary course of its business and pursuant to the
                  reasonable requirements of the Company, and upon standard
                  terms and conditions and fair and reasonable terms, no less
                  favourable to the Company than the Company could obtain in a
                  comparable arm's length transaction with an unrelated third
                  party, provided further that no Default or Event of Default
                  exists or will occur hereunder prior to and after giving
                  effect to any such transaction. Notwithstanding the foregoing,
                  the Company is permitted to enter into the transactions and
                  agreements described in Schedule 11."

10.      SECTION 7(17)

         The following Section 7(17) is hereby added to the Financing Agreement:

         "(17)    The Company may from time to time supplement or amend (i)
                  Schedules 1, 3, 4, 9 and 10 without the consent of the Agent
                  and for no additional fee, and (ii) Schedules 2, 5, 6, 7, 8
                  and 11 only with the prior written consent of the Agent, and,
                  at the discretion of the Agent, upon payment of a fee agreed
                  to between the Agent and the Company. No such supplement or
                  amendment to any such schedule shall be or be deemed to be a
                  waiver of any Default or Event of Default arising as a result
                  of the information disclosed in such supplement or amendment,
                  except as otherwise consented to


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                  by the Agent. For the purpose of any requirement under this
                  Agreement or the other Loan Documents that the Company or one
                  of its officers confirms, repeats or is deemed to have
                  repeated, the accuracy of a representation and warranty which
                  relies upon a schedule for disclosure of information as at any
                  time after the date hereof, the schedule referred to in that
                  representation and warranty shall be deemed to be a reference
                  to the most recently amended or supplemented schedule."

11.      SECTION 10(1)(b)

         Section 10(1)(b) is hereby deleted in its entirety and replaced with
the following:

         "(b)     any of the Company, the Parent or any of the Parent's
                  subsidiaries fails to pay the principal of, or premium or
                  interest on, any of its Debt (excluding Debt under this
                  Financing Agreement or under the Parent Credit Agreement)
                  which is outstanding in an aggregate principal amount
                  exceeding $2,000,000 in the case of the Company and
                  U.S.$5,000,000 in the case of the Parent or any of its
                  subsidiaries (or the equivalent amount in any other currency)
                  when such amount becomes due and payable (whether by scheduled
                  maturity, required prepayment, acceleration, demand or
                  otherwise) and such failure continues after the applicable
                  grace period, if any, specified in the agreement or instrument
                  relating to the Debt or any other event occurs or condition
                  exists and continues after the applicable grace period, if
                  any, specified in any agreement or instrument relating to any
                  such Debt, if its effect is to accelerate, or permit the
                  acceleration of the Debt; or any such Debt shall be declared
                  to be due and payable prior to its stated maturity; provided,
                  however, that this Event of Default (b) shall not apply with
                  respect to the Parent and any of its subsidiaries in respect
                  of any obligations of the Parent or such subsidiaries incurred
                  prior to the Filing Date (as defined in the Parent Credit
                  Agreement);"

12.      SCHEDULE 1

         Schedule 1 is hereby amended by adding the following address under
"Collateral Locations":

         "302 The East Mall
         Suite 200
         Toronto, Ontario
         M9B 6C7"


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13.      SECTION 10(1)(o)

         Section 10(1)(o) is hereby deleted in its entirety.

         On and after the date hereof, each reference in the Financing Agreement
to "this Financing Agreement" and each reference to the Financing Agreement in
the Loan Documents and any and all other agreements, documents and instruments
delivered by any of the Agent, the Lenders, the Borrower or any other Person
shall mean and be a reference to the Financing Agreement as amended by this
letter agreement. Except as specifically amended by this letter agreement, the
Financing Agreement shall remain in full force and effect and is hereby ratified
and confirmed.

         This letter agreement may be executed in any number of counterparts
(including counterparts by facsimile) and all such counterparts taken together
shall be deemed to constitute one and the same instrument.

         This letter agreement shall constitute a Loan Document and shall be
governed by and construed in accordance with the laws of the Province of Ontario
and the federal laws of Canada applicable therein.

         If the foregoing is in accordance with your understanding and
agreement, please sign this letter agreement where indicated below.

                                         Yours truly,

                                         CIT BUSINESS CREDIT CANADA INC.

                                         Per:
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                                         Per:
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ACKNOWLEDGED AND AGREED THIS ________ DAY OF JANUARY 2002.


                                         STERLING PULP CHEMICALS, LTD.

                                         Per:
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                                         Per:
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