Document:

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                                                                     EXHIBIT 4.3

                        NORSKE SKOG CANADA LIMITED ET AL

                                       AND

                                TD SECURITIES AND
                               RBC CAPITAL MARKETS

                                  AS ARRANGERS

                                       AND

                          THE LENDERS FROM TIME TO TIME
                             PARTY TO THIS AGREEMENT

                                       AND

                            THE TORONTO-DOMINION BANK
                             AS ADMINISTRATION AGENT

                                       AND

                              ROYAL BANK OF CANADA
                              AS SYNDICATION AGENT

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

                        CDN. $350,000,000 CREDIT FACILITY
                                CREDIT AGREEMENT
                            DATED AS OF 19 JULY 2002

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

                            BORDEN LADNER GERVAIS LLP
                                 LAWSON LUNDELL

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              THIS CREDIT AGREEMENT is made as of 19 July 2002

B E T W E E N:

             NORSKE SKOG CANADA LIMITED, NORSKE SKOG CANADA FINANCE
           LIMITED AND THE OTHER RESTRICTED PARTIES FROM TIME TO TIME

                                     - and -

               TD SECURITIES AS LEAD ARRANGER AND BOOK MANAGER AND
                     RBC CAPITAL MARKETS AS CO-LEAD ARRANGER
                         (collectively, the "Arrangers")

                                     - and -

                       THE LENDERS FROM TIME TO TIME PARTY
                                TO THIS AGREEMENT
                                 (the "Lenders")

                                     - and -

                            THE TORONTO-DOMINION BANK
                     in its capacity as Administration Agent
                                  (the "Agent")

                                     - and -

                              ROYAL BANK OF CANADA
                      in its capacity as Syndication Agent
                            (the "Syndication Agent")

RECITALS:

A. Norske Skog Canada Finance Limited (the "Borrower") has requested the
Arrangers to arrange a senior secured credit facility of up to a maximum amount
of Cdn. $350,000,000 to be used to finance the general corporate purposes of the
Restricted Parties.

B. The Lenders have each agreed to provide their respective commitments to the
Borrower, subject to the terms and conditions of this Agreement.

C. The parties are entering into this Agreement to provide for the terms of the
credits.

              THEREFORE, for value received, and intending to be legally bound
by this Agreement, the parties agree as follows:

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                                     - 2 -

                                    ARTICLE I
                                 INTERPRETATION

1.1           DEFINED TERMS

              In this Agreement, unless something in the subject matter or
context is inconsistent therewith:

1.1.1         "ACCEPTING LENDER" has the meaning defined in Section 2.4.3.

1.1.2         "ADJUSTED BALANCE SHEET" means NSCL's consolidated balance sheet
              at any time, prepared in accordance with GAAP and adjusted to
              exclude the assets, liabilities and shareholders' equity of all
              persons that are not Restricted Parties.

1.1.3         "ADVANCE" means an availment of a Credit by the Borrower by way of
              Prime Rate Advance, Base Rate Advance, acceptance of Bankers'
              Acceptances, L/C or LIBOR Advance, deemed Advances and
              conversions, renewals and rollovers of existing Advances, and any
              reference relating to the amount of Advances shall mean the sum of
              all outstanding Prime Rate Advances, Base Rate Advances and LIBOR
              Advances, plus the face amount of all outstanding Bankers'
              Acceptances and L/Cs.

1.1.4         "AGENT" means TD in its role as administration agent for the
              Lenders, and any successor administration agent appointed in
              accordance with this Agreement.

1.1.5         "AGREEMENT", "HEREOF", "HEREIN", "HERETO", "HEREUNDER" or similar
              expressions mean this Agreement and any Schedules hereto, as
              amended, supplemented, restated and replaced from time to time.

1.1.6         "APPLICABLE FEE RATE" means, on any day, in respect of any Advance
              by way of Bankers' Acceptance or L/C, as the case may be, the
              applicable rate (expressed as a percentage per annum) set forth
              below, and "APPLICABLE MARGIN" means, on any day, with respect to
              any Prime Rate Advance, Base Rate Advance or LIBOR Advance, the
              applicable margin (expressed as a percentage per annum) set forth
              below, in each case based upon the Reference Debt Ratings on that
              day.

<TABLE>
<CAPTION>
------------------------ --------------- ------------- ------------- -------------- ------------- ---------------
                         Level 1         Level 2       Level 3       Level 4        Level 5       Level 6
------------------------ --------------- ------------- ------------- -------------- ------------- ---------------
<S>                      <C>             <C>           <C>           <C>            <C>           <C>
Moody's                  Baa1 or above   Baa2          Baa3          Ba1            Ba2           Less than Ba2
S&P                      BBB+ or above   BBB           BBB-          BB+            BB            Less than BB
------------------------ --------------- ------------- ------------- -------------- ------------- ---------------
Margin for               0               0.125%         0.25%         1.25%          1.625%       2.25%
Prime Rate Advances/
Base Rate Advances
------------------------ --------------- ------------- ------------- -------------- ------------- ---------------
</TABLE>

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                                     - 3 -

<TABLE>
<CAPTION>
------------------------ --------------- ------------- ------------- -------------- ------------- ---------------
                         Level 1         Level 2       Level 3       Level 4        Level 5       Level 6
------------------------ --------------- ------------- ------------- -------------- ------------- ---------------
<S>                      <C>             <C>           <C>           <C>            <C>           <C>
Margin for               1.00%           1.125%        1.25%         2.25%          2.625%        3.25%
LIBO Rate Advances
------------------------ --------------- ------------- ------------- -------------- ------------- ---------------
Rate for                 1.00%           1.125%        1.25%         2.25%          2.625%        3.25%
Bankers'
Acceptance Fee/
L/C Fee
------------------------ --------------- ------------- ------------- -------------- ------------- ---------------
</TABLE>

              At the date of this Agreement, the Applicable Fee Rate and
              Applicable Margin are based on Level 4.

              For purposes hereof, (i) if the ratings established (or deemed to
              have been established, as provided in clause (ii) below) by
              Moody's and S&P fall within different Levels as set out above, the
              Applicable Fee Rate and Applicable Margin will be the higher of
              the alternative Applicable Fee Rates and Applicable Margins, (ii)
              if at any time there is only one of Moody's and S&P which has in
              effect a Reference Debt Rating (other than (a) because such
              ratings agency is no longer in the business of rating corporate
              debt obligations, (b) as a result of a change in the rating system
              of Moody's or S&P or (c) for any other reason reasonably
              determined by the Agent to be outside of the control of and
              unrelated to NSCL), then the Applicable Fee Rate and Applicable
              Margin shall be determined as if each rating agency had
              established a Reference Debt Rating in Level 6 and (iii) if any
              rating established (or deemed to have been established, as
              provided in clause (ii) above) by Moody's or S&P is changed (other
              than as a result of a change in the rating system of Moody's or
              S&P), the change shall be effective as of the date on which it is
              first publicly announced by the applicable rating agency. Each
              change in the Applicable Fee Rate and Applicable Margin shall
              apply during the period commencing on the effective date of such
              change and ending on the date immediately preceding the effective
              date of the next such change. On the effective date of each
              change, the Borrower shall pay any additional amount attributable
              to a higher Applicable Fee Rate with respect to a Bankers'
              Acceptance or an L/C outstanding on that date for the remaining
              term of the Bankers' Acceptance or L/C, or the Lenders shall remit
              to the Agent, who shall refund to the Borrower, any amount
              attributable to a lower Applicable Fee Rate. If at any time only
              one of Moody's and S&P has in effect a Reference Debt Rating (x)
              because the rating system of Moody's or S&P has changed, (y)
              because such rating agency has ceased to be in the business of
              rating corporate debt obligations, or (z) for any other reason
              reasonably determined by the Agent to be outside of the control of
              and unrelated to NSCL, NSCL and the Lenders (acting through the
              Agent) shall negotiate in good faith to amend the references to
              specific ratings in this definition to reflect such changed rating
              system or the non-availability of ratings from such rating agency
              and, pending the effectiveness of any such amendment, the
              Applicable Fee Rate and Applicable Margin shall be determined by
              reference to the Level most recently in effect.

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                                     - 4 -

1.1.7         "ARRANGERS" means, collectively, TD Securities as Lead Arranger
              and Book Manager and RBC Capital Markets as Co-Lead Arranger.

1.1.8         "ASSIGNMENT AGREEMENT" means an agreement in the form of Schedule
              D to this Agreement.

1.1.9         "BA DISCOUNT PROCEEDS" means, in respect of any Bankers'
              Acceptance, an amount calculated on the applicable Drawdown Date
              which is (rounded to the nearest full cent, with one-half of one
              cent being rounded up) equal to the face amount of such Bankers'
              Acceptance multiplied by the price, where the price is calculated
              by dividing one by the sum of one plus the product of (i) the BA
              Discount Rate applicable thereto expressed as a decimal fraction
              multiplied by (ii) a fraction, the numerator of which is the term
              of such Bankers' Acceptance and the denominator of which is 365,
              which calculated price will be rounded to the nearest multiple of
              0.001%.

1.1.10        "BA DISCOUNT RATE" means, (a) with respect to any Bankers'
              Acceptance accepted by a Lender named on Schedule I to the BANK
              ACT (Canada), the average rate that appears on the Reuters Screen
              CDOR Page at or about 10:00 a.m. (Toronto time) on the applicable
              Drawdown Date, for bankers' acceptances having an identical
              maturity date to the maturity date of such Bankers' Acceptance,
              and (b) with respect to any Bankers' Acceptance accepted by any
              other Lender, the rate determined established in accordance with
              (a) above plus 0.07% per annum.

1.1.11        "BA EQUIVALENT LOAN" has the meaning defined in Section 5.15.5.

1.1.12        "BANKERS' ACCEPTANCE" means a depository bill as defined in the
              DEPOSITORY BILLS AND NOTES ACT (Canada) in Canadian Dollars that
              is in the form of an order signed by the Borrower and accepted by
              a Lender pursuant to this Agreement or, for Lenders not
              participating in clearing services contemplated in that Act, a
              draft or bill of exchange in Canadian Dollars that is drawn by the
              Borrower and accepted by a Lender pursuant to this Agreement.
              Orders that become depository bills, drafts and bills of exchange
              are sometimes collectively referred to in this Agreement as
              "orders." Any depository bill may be made payable to "CDS & Co."
              and deposited with the Canadian Depository for Securities Limited.

1.1.13        "BANKERS' ACCEPTANCE FEE" means the amount calculated by
              multiplying the face amount of each Bankers' Acceptance by the
              rate for the Bankers' Acceptance Fee specified in Section 2.5, and
              then multiplying the result by a fraction, the numerator of which
              is the duration of its term on the basis of the actual number of
              days to elapse from and including the date of acceptance of a
              Bankers Acceptance by the Lender up to but excluding the maturity
              date of the Bankers' Acceptance and the denominator of which is
              365.

1.1.14        "BASE RATE" means, on any day, the greater of:

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                                     - 5 -

              (a)    the annual rate of interest (expressed as a percentage per
                     annum on the basis of a 365 day year) announced by TD on
                     that day as its reference rate for commercial loans made in
                     Canada in US Dollars; and

              (b)    the Federal Funds Effective Rate plus 1% per annum.

1.1.15        "BASE RATE ADVANCE" means an Advance in US Dollars bearing
              interest based on the Base Rate and includes deemed Base Rate
              Advances provided for in this Agreement.

1.1.16        "BORROWER" means Norske Skog Canada Finance Limited, a company
              governed by the COMPANY ACT (British Columbia).

1.1.17        "BORROWING BASE" means at any time, the aggregate of:

              (a)    75% of the net book value of accounts receivable of NSCL,
                     other than accounts receivable owing by employees of any
                     Restricted Party, based on the Adjusted Balance Sheet; and

              (b)    an amount equal to the lesser of item (a) above and 50% of
                     the aggregate inventory of NSCL, other than work in
                     process, based on the Adjusted Balance Sheet.

1.1.18        "BORROWING BASE CERTIFICATE" means a certificate of NSCL in the
              form of Schedule G.

1.1.19        "BRANCH OF ACCOUNT" means the Agency Account, Toronto-Dominion
              International Centre, Toronto, Ontario.

1.1.20        "BUSINESS DAY" means a day of the year, other than Saturday or
              Sunday, on which (a) the Agent is open for business at its
              executive offices in Toronto, Ontario and at its main branch in
              Vancouver, British Columbia (or in other locations specified by
              any successor to TD as Agent) and (b) in respect of notices,
              determinations, payments or Advances relating to LIBOR Advances,
              the Agent is open for business at its principal offices in London,
              England. Notwithstanding the foregoing, if the Agent will be open
              in some locations referred to above and closed in others on a
              particular day, and the Agent in consultation with NSCL determines
              that the closing on that day will not adversely affect completion
              of relevant transactions in accordance with customary banking
              market and trading practices, the Agent may, on reasonable notice
              to NSCL and the Lenders, specify the particular day to be a
              Business Day.

1.1.21        "CANADIAN DOLLARS", "CDN. DOLLARS", "CDN. $" and "$" mean lawful
              money of Canada.

1.1.22        "CAPITAL STOCK" means, with respect to any person, any and all
              present and future shares, partnership or other interests,
              participations or other equivalent

<PAGE>
                                     - 6 -

              rights in the person's capital, however designated and whether
              voting or non-voting.

1.1.23        "CHANGE OF CONTROL DEFAULT" means a change of control of NSCL
              which results in the Reference Debt Rating by Moody's or S&P being
              lowered by three or more levels, a level being, for example, the
              difference between A and A+. For the purpose of this Agreement, a
              change in control of NSCL shall be deemed to have occurred only in
              the following circumstances:

              (a)    if the Existing Major Shareholder then directly or
                     indirectly holds Capital Stock of NSCL to which is attached
                     30% or more of the votes that may be cast to elect
                     directors of NSCL or 30% or more of the total shareholders'
                     equity of NSCL, a change of control shall be deemed to have
                     occurred if Capital Stock of NSCL is held by or for the
                     benefit of any person, or group of persons acting jointly
                     or in concert, other than by way of security only, in a
                     quantity to which is attached more of the votes or more of
                     the shareholders' equity than are attached to the Capital
                     Stock of NSCL then held by the Existing Major Shareholder,
                     or

              (b)    if the Existing Major Shareholder does not then directly or
                     indirectly hold Capital Stock of NSCL to which is attached
                     30% or more of the votes that may be cast to elect
                     directors of NSCL or 30% or more of the total shareholders'
                     equity of NSCL, a change of control shall be deemed to have
                     occurred if Capital Stock of NSCL to which is attached 30%
                     or more of the votes that may be cast to elect directors of
                     NSCL or 30% or more of the total shareholders' equity of
                     NSCL is held by or for the benefit of any person, or group
                     of persons acting jointly or in concert, other than by way
                     of security only.

1.1.24        "COLLATERAL" means cash, a bank draft or a letter of credit, all
              in a form, and in the case of a letter of credit, from an issuer,
              satisfactory to the Lenders, acting reasonably.

1.1.25        "COMMITMENT" means in respect of each Lender from time to time,
              the commitment to make Advances to the Borrower in the Lender's
              Proportionate Share of the maximum amount of any Credit as set out
              on Schedule E and, where the context requires, the maximum amount
              of Advances which the Lender has made or committed to make.

1.1.26        "COMPLIANCE CERTIFICATE" means a certificate in the form of
              Schedule C.

1.1.27        "CONSOLIDATED NET TANGIBLE ASSETS" means the sum of the net book
              value of the assets of the Restricted Parties less, without
              duplication, the sum of (a) the net book value of the Restricted
              Parties' goodwill, trademarks, copyrights, patents, trade names,
              organization expense, treasury stock, deferred charges,
              unamortized debt discount expense and other similar intangible
              assets and (b) the

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                                     - 7 -

              net book value of the Restricted Parties' liabilities (including
              deferred taxes but excluding Funded Debt) and minority interests.

1.1.28        "CONSTATING DOCUMENTS" means, with respect to any Restricted
              Party, its articles or certificate of incorporation, amendment,
              amalgamation or continuance, memorandum of association, by-laws,
              partnership agreement, limited liability company agreement or
              other similar document, and all unanimous shareholder agreements,
              other shareholder agreements, voting trust agreements and similar
              arrangements applicable to the Restricted Party's Capital Stock,
              all as amended from time to time.

1.1.29        "CONTRACTS" means agreements, franchises, leases, easements,
              servitudes, privileges and other rights, other than Permits.

1.1.30        "CONTRIBUTING LENDER" shall have the meaning defined in Section
              9.3.2.

1.1.31        "CREDITS" means collectively the revolving credit of up to
              $297,500,000 or the US Dollar equivalent thereof (designated as
              "CREDIT 1") and the revolving credit of up to $52,500,000 or the
              US Dollar equivalent thereof (designated as "CREDIT 2") which are
              established by this Agreement, and "CREDIT" means either of them.

1.1.32        "CREDIT DOCUMENTS" means this Agreement, the Security and all
              other documents relating to the Credits, or any of them.

1.1.33        "DEBT" means, with respect to any person, without duplication and
              without regard to any interest component thereof (whether actual
              or imputed) that is not due and payable, the aggregate of the
              following amounts, each calculated in accordance with GAAP unless
              the context otherwise requires:

              (a)    all obligations (including, without limitation, by way of
                     overdraft and drafts or orders accepted representing
                     extensions of credit) that would be considered to be
                     indebtedness for borrowed money, and all obligations
                     (whether or not with respect to the borrowing of money)
                     that are evidenced by bonds, debentures, notes or other
                     similar instruments;

             (b)     the BA Discount Proceeds of all outstanding Bankers'
                     Acceptances, less the Bankers' Acceptance Fees in respect
                     thereof, and the equivalent amounts in respect of any
                     similar instruments not issued under this Agreement;

             (c)     all liabilities upon which interest charges are customarily
                     paid by that person;

             (d)     any Capital Stock of that person (or of any Subsidiary of
                     that person that is not held by that person or by a
                     Subsidiary of that person that is wholly owned, directly or
                     indirectly) which Capital Stock, by its terms (or by the
                     terms of any security into which it is convertible or for
                     which it is

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                                     - 8 -

                     exchangeable at the option of the holder), or upon the
                     happening of any event, matures or is mandatorily
                     redeemable, pursuant to a sinking fund obligation or
                     otherwise, or is redeemable at the option of the holder
                     thereof, in whole or in part, for cash or securities
                     constituting Debt;

              (e)    all capital lease obligations, synthetic lease obligations,
                     obligations under sale and leaseback transactions and
                     purchase money obligations;

              (f)    all obligations for the deferred purchase price of Property
                     or services acquired by such person or any predecessor and
                     all obligations of such person under any conditional sale
                     or other title retention agreement with respect to any
                     Property;

              (g)    all obligations secured by any Encumbrance upon or in any
                     Property owned by such person whether or not such person
                     has assumed or become liable for the payment of such
                     obligations;

              (h)    the Market Value of all Derivatives in respect of which the
                     Market Value is negative from that person's perspective
                     (that is, the person is "out of the money");

              (i)    the amount of all contingent liabilities in respect of L/Cs
                     and other letters of credit and letters of guarantee;

              (j)    the amount of all contingent liabilities in respect of
                     performance bonds and surety bonds, and any other guarantee
                     or other contingent liability of any part or all of an
                     obligation of a person other than a Restricted Party, in
                     each case only to the extent that the guarantee or other
                     contingent liability is required by GAAP to be treated as a
                     liability on a balance sheet of the guarantor or person
                     contingently liable; and

              (k)    the amount of the contingent liability under any guarantee
                     (other than by endorsement of negotiable instruments for
                     collection or deposit in the ordinary course of business)
                     in any manner of any part or all of an obligation of
                     another person of the type included in any of the other
                     items in this definition;

              provided that trade payables and accrued liabilities that are
              current liabilities incurred in the ordinary course of business do
              not constitute Debt. The amount of a person's Debt as calculated
              above shall be reduced by the Market Value of all Derivatives
              entered into by that person with a counterparty in respect of
              which the Market Value is positive, but the reduction for any
              counterparty shall not exceed the Market Value of any Derivatives
              entered into with the same counterparty that have a negative
              Market Value, except if the counterparty is a Lender, the
              reduction shall not exceed the aggregate of the principal amount
              of the Obligations owed to the same Lender and the Market Value of
              all Derivatives entered into by that person with the same Lender
              in respect of which the Market Value is negative.

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                                     - 9 -

1.1.34        "DECLINING LENDER" has the meaning defined in Section 2.4.1.

1.1.35        "DEFAULTING LENDER" has the meaning defined in Section 9.3.2.

1.1.36        "DERIVATIVE" means any transaction of a type commonly considered
              to be a derivative, any combination of such transactions or any
              agreement relating to any such transaction or combination of
              transactions, in each case whether relating to one or more of
              interest, currencies, commodities, securities or other matters,
              including but not limited to (a) any cap, collar, floor or option,
              (b) any forward contract, and (c) any rate swap, basis swap,
              commodity swap, cross-currency swap or other swap or contract for
              differences.

1.1.37        "DERIVATIVE AGENT" means a Lender which may be appointed as
              contemplated in Schedule L.

1.1.38        "DESIGNATED ACCOUNT" means, in respect of any Advance, the account
              or accounts maintained by the Borrower at a branch of RBC in
              Vancouver, British Columbia that the Borrower designates in its
              notice requesting an Advance.

1.1.39        "DRAWDOWN DATE" means the date, which shall be a Business Day, of
              any Advance.

1.1.40        "EBITDA" means, for any relevant period, an amount equal to NSCL's
              net income or net loss for the period, calculated on a
              consolidated basis;

              (a)    plus, amounts deducted in calculating net income or net
                     loss in respect of depreciation and amortization;

              (b)    plus, Total Interest Expense;

              (c)    plus, upfront fees paid to the Agent, Arrangers or Lenders
                     in connection with this Agreement;

              (d)    plus, amounts deducted in calculating net income or net
                     loss in respect of income taxes (but not capital taxes
                     except those that are considered by GAAP to be income
                     taxes), whether or not deferred;

              (e)    minus, any non-cash items increasing consolidated net
                     income for such period;

              (f)    plus, any non-cash items decreasing consolidated net income
                     for such period;

              (g)    plus, unusual non-cash charges which require an accrual of,
                     or a reserve for, cash charges for any future period;

              (h)    minus, all cash payments during such period relating to
                     non-cash charges which were added back in determining
                     EBITDA in any prior period;

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                                     - 10 -

              and excluding:

              (i)    any gain or loss attributable to the sale, conversion,
                     abandonment or other disposition of Property, other than
                     sales of inventory in the ordinary course of business; and

              (j)    gains resulting from the write-up of Property and losses
                     resulting from the write-down of Property (other than
                     allowances for doubtful accounts receivable and any
                     inventory adjustments); and

              (k)    any gain or loss on the repurchase or redemption of any
                     securities (including in connection with the early
                     retirement or defeasance of any Debt); and

              (l)    any foreign exchange gain or loss (other than foreign
                     exchange gains or losses in respect of accounts receivable
                     and accounts payable and hedges or forward exchange
                     contracts in respect of revenues, in each case that are
                     realized in the ordinary course of business); and

              (m)    any income or loss attributable to discontinued operations;
                     and

              (n)    any other extraordinary items; and

              (o)    net income or net loss and other amounts specified in the
                     other items of this definition that are attributable to
                     persons other than Restricted Parties or to minority
                     interests in Restricted Parties;

              all of which shall be calculated without duplication in accordance
              with GAAP unless otherwise expressly described. If NSCL has
              established a new Restricted Party or has disposed of a Restricted
              Party or material Property out of the ordinary course of business
              during the relevant period, EBITDA shall be calculated in
              accordance with GAAP (or otherwise on a basis satisfactory to the
              Agent, acting reasonably), as if the new Restricted Party had been
              a Restricted Party during the entire period or the disposition had
              occurred at the beginning of the period. If NSCL has acquired
              material Property out of the ordinary course of business during
              the relevant period for which there are separate historical
              financial statements, EBITDA shall be calculated in accordance
              with GAAP (or otherwise on a basis satisfactory to the Agent,
              acting reasonably), as if the acquisition had occurred at the
              beginning of the period.

1.1.41        "ENCUMBRANCE" means any mortgage, debenture, pledge, hypothec,
              deposit, lien, charge, assignment by way of security, consignment,
              capital lease, hypothecation, security interest or other security
              agreement, trust or arrangement having the effect of security for
              the payment of any debt, liability or obligation, or any other
              adverse claim affecting Property, and "ENCUMBRANCES",
              "ENCUMBRANCER", "ENCUMBER" and "ENCUMBERED" shall have
              corresponding meanings.

<PAGE>
                                     - 11 -

1.1.42        "ENVIRONMENTAL LAWS" means all applicable Requirements of Law,
              Permits and guidelines or requirements of any governmental body
              (whether or not having the force of law, and including consent
              decrees as to which any Restricted Party is a party or otherwise
              subject, and administrative orders which may affect a Restricted
              Party) relating to public health and safety, protection of the
              environment, the release of Hazardous Materials or occupational
              health and safety.

1.1.43        "EVENT OF DEFAULT" has the meaning defined in Section 8.1.

1.1.44        "EXCHANGE RATE" means, on any day, for the purpose of calculations
              under this Agreement, the amount of Canadian Dollars into which US
              Dollars may be converted, or VICE VERSA, using the Agent's mid
              rate (i.e. the average of the Agent's spot buying and selling
              rates) for converting the first currency to the other currency at
              the relevant time on that day. If the Exchange Rate is being
              determined at any time in respect of a previous day, the noon spot
              rate of the Bank of Canada on that previous day shall be used
              instead of the Agent's mid rate.

1.1.45        "EXCLUDED TAXES" means any Taxes now or hereafter imposed, levied,
              collected, withheld or assessed on a Lender by Canada or any other
              jurisdiction in which that Lender is subject to Tax as a result of
              the Lender (i) carrying on a trade or business in such
              jurisdiction or being deemed to do so, or having a permanent
              establishment in such jurisdiction; (ii) being organized under the
              laws of such jurisdiction; (iii) being resident or deemed to be
              resident in such jurisdiction, (iv) not dealing at arm's length
              with the Restricted Parties or any other Lender or (v) being
              connected with the jurisdiction imposing such Taxes otherwise than
              by the mere advancement of credit hereunder, the receipt of
              payments under the Credit Documents or the enforcement of rights
              under the Credit Documents; but does not include any sales, goods
              or services Tax payable under the laws of any such jurisdiction
              with respect to any goods or services made available by a Lender
              to the Borrower under this Agreement or any withholding tax.

1.1.46        "EXISTING MAJOR SHAREHOLDER" means the principal shareholder of
              NSCL referred to on page 10 of NSCL's short form prospectus dated
              16 May 2002.

1.1.47        "EXISTING SPECIAL DERIVATIVES" has the meaning defined in Schedule
              L.

1.1.48        "FEDERAL FUNDS EFFECTIVE RATE" means for any period, a fluctuating
              interest rate per annum equal, for each day during such period, to
              the weighted average of the rates on overnight federal funds
              transactions with members of the Federal Reserve System arranged
              by Federal Funds brokers as published for such day (or, if such
              day is not a Business Day, for the next preceding Business Day) by
              the Federal Reserve Bank of New York or, for any day on which that
              rate is not published for that day by the Federal Reserve Bank of
              New York, the average of

<PAGE>
                                     - 12 -

              the quotations for that day for such transactions received by the
              Agent from three Federal Funds brokers of recognized standing.

1.1.49        "FEE AGREEMENT" means the agency fee agreement between the
              Borrower and the Agent dated as of 19 July 2002, as amended,
              supplemented, restated and replaced from time to time.

1.1.50        "FUNDED DEBT" means all Debt of NSCL on a consolidated basis other
              than Debt referred to in item (d) of the definition of Debt and
              Debt in respect of which no interest, fee or other compensation is
              charged and no Encumbrance is held.

1.1.51        "FUNDED DEBT RATIO" means at any time, the ratio calculated by
              dividing NSCL's (a) Funded Debt by (b) the aggregate of its Funded
              Debt plus its shareholders equity determined in accordance with
              GAAP on a consolidated basis.

1.1.52        "GAAP" means Canadian generally accepted accounting principles,
              including such principles recommended by the Canadian Institute of
              Chartered Accountants as contained in the "CICA Handbook" as
              amended, replaced or restated from time to time and, in the
              absence of a specific recommendation contained in the "CICA
              Handbook," accounting principles generally accepted in practice in
              Canada.

1.1.53        "HAZARDOUS MATERIALS" means:

              (a)    any oil, flammable substances, explosives, radioactive
                     materials, hazardous wastes or substances, toxic wastes or
                     substances or any other wastes, contaminates, materials or
                     pollutants which:

                     (i)    pose a hazard to any real property, or to persons on
                            or about any real property; or

                     (ii)   cause any real property to be in violation of any
                            Requirement of Law;

              (b)    asbestos in any form which is or could become friable, urea
                     formaldehyde foam insulation, transformers or other
                     equipment which contain dielectric fluid containing levels
                     of polychlorinated biphenyls in excess of limits prescribed
                     by Requirements of Law, or radon gas;

              (c)    any chemical, material or substance defined as or included
                     in the definition of "dangerous goods", "deleterious
                     substance", "hazardous substances", "hazardous wastes",
                     "hazardous materials", "extremely hazardous wastes",
                     "restricted hazardous waste", "toxic substances", "waste"
                     or words of similar import under any Law, including the
                     Canadian Environmental Protection Act (Canada), Fisheries
                     Act (Canada), Transportation of

<PAGE>
                                     - 13 -

                     Dangerous Goods Act (Canada), Canada Water Act (Canada) and
                     any applicable provincial legislation; and

              (d)    any other chemical, material or substance, exposure to
                     which is prohibited, limited or regulated by any
                     governmental body or which may or could pose a hazard to
                     the occupants of any real property or any other person
                     coming upon any real property or adjacent or surrounding
                     property;

              and references to a "release" of Hazardous Materials include
              spilling, leaking, pumping, pouring, emitting emptying,
              discharging, injecting, escaping, leaching, disposing, dumping or
              other form of release, or permitting any of the foregoing to
              occur.

1.1.54        "INTELLECTUAL PROPERTY" means patents, trademarks, service marks,
              trade names, copyrights, trade secrets, industrial designs and
              other similar rights.

1.1.55        "INTERBANK REFERENCE RATE" means, in respect of any currency, the
              interest rate expressed as a percentage per annum which is
              customarily used by the Agent when calculating interest due by it
              or owing to it arising from correction of errors in transactions
              in that currency between it and other chartered banks.

1.1.56        "INTERCREDITOR AGREEMENTS" means any intercreditor agreements that
              may be entered into from time to time to provide for the terms of
              subordination of any Debt in favour of the Obligations, or other
              relationship between the Lenders and the holders of other Debt,
              including, without limitation, any intercreditor agreements
              entered into with the holders of 1999 Notes, 2001 Notes, Permitted
              Senior Secured Indebtedness and Permitted Subordinated Secured
              Indebtedness, each as amended, supplemented, restated and replaced
              from time to time.

1.1.57        "INTEREST COVERAGE RATIO" means, at any time, the ratio calculated
              by dividing (a) EBITDA for NSCL's four most recently completed
              fiscal quarters by (b) Total Interest Expense for that period. For
              the purpose of calculating the Interest Coverage Ratio for the
              four fiscal quarters ending 30 June 2002, NSCL's EBITDA and Total
              Interest Expense for the fiscal quarter ended 30 September 2001
              shall be deemed to be $67,600,000 and $19,400,000, respectively,
              reflecting a PRO FORMA calculation taking into account NSCL's
              acquisition of Pacifica Papers Inc. during that quarter.

1.1.58        "INTEREST PAYMENT DATE" means (in connection with Prime Rate
              Advances and Base Rate Advances) the first day of each calendar
              month or if that is not a Business Day, the Business Day next
              following.

1.1.59        "ISSUING BANK" means the Lender making Advances under Credit 2,
              which is RBC unless changed in accordance with Section 2.1.1.

1.1.60        "L/C" means a standby letter of credit, letter of guarantee or
              commercial letter of credit in a form satisfactory to the Issuing
              Bank issued by the Issuing Bank at

<PAGE>
                                     - 14 -

              the request of the Borrower in favour of a third party to secure
              the payment or performance of an obligation of a Restricted Party
              to the third party.

1.1.61        "L/C FEE" means the amount calculated by multiplying the face
              amount of each L/C by the rate for the L/C Fee specified in
              Section 2.5, and then multiplying the result by a fraction, the
              numerator of which is the duration of its term on the basis of the
              actual number of days to elapse from and including the date of
              issuance of an L/C by the Issuing Bank up to but excluding the
              expiry date of the L/C and the denominator of which is 365.

1.1.62        "LENDERS" means each of the persons listed on Schedule E and other
              lenders that agree from time to time to become Lenders in
              accordance with Article X of this Agreement, and "LENDER" means
              any one of the Lenders.

1.1.63        "LIBO RATE" means, for any LIBOR Period and LIBOR Advance, either:

              (a)    the rate of interest (expressed as an annual rate on the
                     basis of a 360 day year) determined by the Agent to be the
                     arithmetic mean (rounded up to the nearest 0.01%) of the
                     offered rates for deposits in US Dollars for a period equal
                     to the particular LIBOR Period, which rates appear on (A)
                     the Reuters screen LIBO page, or (B) if the Reuters screen
                     LIBO page is not readily available to the Agent, Page 3750
                     of the Telerate screen, in either case as of 11:00 a.m.
                     (London time) on the second Business Day before the first
                     day of that LIBOR Period, or,

              (b)    if neither the Reuters screen LIBO page nor Page 3750 of
                     Telerate is readily available to the Agent for any reason,
                     the rate of interest determined by the Agent which is equal
                     to the simple average of the rates of interest (expressed
                     as a rate per annum on the basis of a year of 360 days and
                     rounded up to the nearest 0.01%) at which three of the five
                     largest (as to total assets) banks listed on Schedule I to
                     the BANK ACT (Canada) as selected by the Agent would be
                     prepared to offer leading banks in the London interbank
                     market a deposit in US Dollars for a period equal to the
                     LIBOR Period in an amount approximately equal to the
                     relevant LIBOR Advance at or about 10:00 a.m. (Toronto
                     time) on the second Business Day before the first day of
                     such Interest Period.

                     The LIBO Rate calculated as above shall be adjusted from
                     day to day for any Lender to whom the Eurocurrency Reserve
                     Percentage applies in respect of its LIBOR Advances under
                     this Agreement by dividing the LIBO Rate by a percentage
                     equal to 100% minus the Eurocurrency Reserve Percentage on
                     that day. The Eurocurrency Reserve Percentage is the
                     percentage prescribed by the Board of Governors of the
                     Federal Reserve System of the United States (or any
                     successor to its functions) for determining the maximum
                     reserve requirement (including but not limited to any
                     emergency, supplemental or other marginal reserve
                     requirement) for a member bank of the Federal Reserve
                     System in New York, New

<PAGE>
                                     - 15 -

                     York with deposits exceeding US $5 billion in respect of
                     Eurocurrency Liabilities (as defined in Regulation D of the
                     Board of Governors of the Federal Reserve System) or in
                     respect of any other category of liabilities which includes
                     deposits by reference to which the interest rate on LIBOR
                     Advances is determined or any category of extensions of
                     credit or assets which includes loans by a non-United
                     States office of any bank to United States residents.

1.1.64        "LIBOR ADVANCE" means an advance in US Dollars bearing interest
              based on the LIBO Rate.

1.1.65        "LIBOR PERIOD" means the period selected by the Borrower for a
              LIBOR Advance or the period applicable to the LIBOR Advance under
              the terms of this Agreement.

1.1.66        "MAJORITY LENDERS" means Lenders holding, in the aggregate, a
              minimum of 66 2/3% of the outstanding amount of the Commitments.

1.1.67        "MARKET VALUE" means, on any day, the total amount, if any,
              expressed in Canadian Dollars that a person would be required to
              pay to its counterparty under any Derivative in order to terminate
              the Derivative. The determination shall be made in accordance with
              current market practice using the average of the buy and sell
              prices of the underlying interest of the Derivative as of noon
              Toronto time on that date. The determination shall be made by the
              Derivative Agent if a Derivative Agent has been appointed.
              Otherwise, the determination may be made initially by NSCL but
              shall be subject to review by the Agent (whose determination, if
              made in good faith, shall be conclusive) if the Agent considers
              that review is appropriate.

1.1.68        "MATERIAL ADVERSE CHANGE" means any one or more transactions,
              events or conditions which, when taken together, have a material
              adverse effect on (a) the ability of the Restricted Parties as a
              whole to perform and discharge their obligations under this
              Agreement or the Material Contracts taken as a whole, (b) the
              Agent's or the Lenders' ability to enforce their rights or
              remedies under any of the Credit Documents, or (c) the financial
              condition, business or prospects of NSCL and its Subsidiaries,
              taken as a whole. Notwithstanding the foregoing, if the context
              requires, "Material Adverse Change" shall be interpreted having
              reference only to such persons (other than all of the Restricted
              Parties) as the context requires.

1.1.69        "MATERIAL CONTRACT" means any Contract:

              (a)    to which is attached obligations on the part of the
                     Restricted Parties or which has an economic value to the
                     Restricted Parties in excess of $25,000,000 per annum; or

<PAGE>
                                     - 16 -

              (b)    to which a Restricted Party is a party that, if terminated,
                     would materially impair the ability of the Restricted
                     Parties as a whole to carry on business in the ordinary
                     course or would cause a Material Adverse Change.

1.1.70        "MATERIAL PERMIT" means any Permit issued to a Restricted Party
              that, if terminated, would materially impair the ability of the
              Restricted Parties as a whole to carry on business in the ordinary
              course or would cause a Material Adverse Change.

1.1.71        "MOODY'S" means Moody's Investors Service, Inc.

1.1.72        "NON BA LENDER" has the meaning defined in Section 5.15.5.

1.1.73        "NEW LENDER" has the meaning defined in Section 2.4.4.

1.1.74        "1999 INDENTURE" means the trust indenture dated as of 12 March
              1999 between Pacifica Papers Inc., a predecessor by amalgamation
              of NSCL, as issuer, certain of its Subsidiaries as guarantors and
              Wells Fargo Bank Minnesota, National Association (originally
              Norwest Bank Minnesota, National Association), as Trustee, as
              amended and supplemented by agreements dated 12 March 1999, 30
              December 1999, 31 January 2001 and 1 September 2001 and otherwise
              as permitted by this Agreement.

1.1.75        "1999 NOTES" means the 10% senior notes due 2009 issued under the
              1999 Indenture.

1.1.76        "NOTEHOLDERS" means the holders from time to time of the 1999
              Notes and the 2001 Notes.

1.1.77        "NSCL" means Norske Skog Canada Limited, a corporation governed by
              the CANADA BUSINESS CORPORATIONS ACT.

1.1.78        "OBLIGATIONS" means all obligations of the Borrower to the Lenders
              under or in connection with this Agreement, other than the Other
              Secured Obligations, including but not limited to all debts and
              liabilities, present or future, direct or indirect, absolute or
              contingent, matured or not, at any time owing by the Borrower to
              the Lenders in any currency or remaining unpaid by the Borrower to
              the Lenders in any currency under or in connection with this
              Agreement, whether arising from dealings between the Lenders and
              the Borrower or from any other dealings or proceedings by which
              the Lenders may be or become in any manner whatever creditors of
              the Borrower under or in connection with this Agreement, and
              wherever incurred, and whether incurred by the Borrower alone or
              with another or others under or in connection with this Agreement,
              and whether as principal or surety, and all interest, fees, legal
              and other costs, charges and expenses. In this definition, "the
              Lenders" shall be interpreted as "the Lenders, or any of them".

<PAGE>
                                     - 17 -

1.1.79        "OTHER SECURED OBLIGATIONS" means the present and future debts,
              liabilities and obligations of any Restricted Party under or in
              connection with:

              (a)    Derivatives to exchange one of Canadian Dollars, US
                     Dollars, Euros or Japanese yen to another of those
                     currencies, provided that in the case of such Derivatives
                     that relate to Debt, such Derivatives do not increase the
                     principal amount of Debt outstanding other than as a result
                     of fluctuations in foreign currency exchange rates or by
                     reason of fees, indemnities or compensation payable
                     thereunder;

              (b)    Derivatives to provide for the exchange of floating
                     interest rate obligations for fixed interest rate
                     obligations, provided that the aggregate notional principal
                     amount (net of offsetting transactions) of such Derivatives
                     does not exceed the aggregate principal amount of NSCL's
                     consolidated floating rate Debt at the time any such
                     Derivative is entered into, and that the notional principal
                     amount of such Derivatives, at the time they are incurred,
                     does not exceed the principal amount of the Debt to which
                     such Derivatives relate;

              (c)    Derivatives to provide for the exchange of fixed interest
                     rate obligations for floating interest rate obligations in
                     an aggregate notional principal amount (net of offsetting
                     transactions) that does not exceed the aggregate principal
                     amount of NSCL's consolidated fixed rate Debt at the time
                     any such Derivative is entered into;

              (d)    Derivatives to manage fluctuations in prices of
                     commodities;

              (e)    any other Derivative that is not entered into for
                     speculative purposes provided that the Agent acting
                     reasonably, after consultation with counsel but without any
                     requirement to seek approval of the Majority Lenders,
                     concludes that the Derivative may be entered into without
                     breaching this Agreement, the 1999 Indenture, the 2001
                     Indenture, any Permitted Senior Secured Indebtedness, any
                     Permitted Subordinated Secured Indebtedness or any
                     Permitted Unsecured Indebtedness; and

              (f)    guarantees by Restricted Parties of Other Secured
                     Obligations incurred by other Restricted Parties;

              provided that:

              (g)    the debts, liabilities and obligations are, in each case,
                     held by (i.e. owed to) any person that, at the time the
                     relevant Derivative was entered into, was a Lender or an
                     affiliate (as defined in the CANADA BUSINESS CORPORATIONS
                     Act) of a Lender;

              (h)    the Derivative Agent (or the Agent, if no Derivative Agent
                     has then been appointed) has been notified in writing of
                     any particular Other Secured Obligation (other than those
                     listed on Schedule H) being entered into,

<PAGE>
                                     - 18 -

                     either within five Business Days of it being entered into
                     or within such longer time as is established in accordance
                     with any arrangements established as contemplated in
                     Schedule L; and

              (i)    except for the Existing Special Derivatives, if the
                     Derivative is of the type described in Sections (c), (d) or
                     (e), it is entered into in accordance with the arrangements
                     contemplated in Schedule L.

1.1.80        "PENDING EVENT OF DEFAULT" means an event which, with giving of
              notice, lapse of time, or both, or subject to any other condition
              subsequent to such event, would constitute an Event of Default.

1.1.81        "PENSION PLAN" means (a) a "registered pension plan" (as that term
              is defined in the INCOME TAX ACT (Canada)) which is subject to the
              funding requirements of applicable pension benefits legislation in
              any jurisdiction of Canada and is applicable to employees resident
              in Canada of any Restricted Party, or (b) any pension benefit
              plan, other post-retirement benefit plan or other similar
              arrangement applicable to employees of any Restricted Party.

1.1.82        "PERMITS" means governmental licenses, authorizations, consents,
              registrations, exemptions, permits and other approvals required by
              law.

1.1.83        "PERMITTED ENCUMBRANCES" means, with respect to any person, the
              following:

              (a)    Encumbrances for taxes, rates, assessments or other
                     governmental charges or levies not yet due, or for which
                     instalments have been paid based on reasonable estimates
                     pending final assessments, or if due, the validity of which
                     is being contested diligently and in good faith by
                     appropriate proceedings by that person and the payment of
                     which has been secured by such arrangements (including
                     Collateral) as the Lenders may require;

              (b)    undetermined or inchoate Encumbrances, rights of distress
                     and charges incidental to current operations which have not
                     at such time been filed or exercised and of which none of
                     the Lenders has been given notice, or which relate to
                     obligations not due or payable or if due, the validity of
                     which is being contested diligently and in good faith by
                     appropriate proceedings by that person and the payment of
                     which has been secured by such arrangements (including
                     Collateral) as the Lenders may require;

              (c)    reservations, limitations, provisos and conditions
                     expressed in any original grants from the Crown or other
                     grants of real or immovable property, or interests therein,
                     which do not materially affect the use of the affected land
                     for the purpose for which it is used by that person;

              (d)    zoning, land use and building restrictions, by-laws,
                     regulations and ordinances of federal, provincial,
                     municipal and other governmental authorities, licenses,
                     easements, rights-of-way and rights in the nature of
                     easements (including, without limiting the generality of
                     the foregoing,

<PAGE>
                                     - 19 -

                     licenses, easements, rights-of-way and rights in the nature
                     of easements for sidewalks, public ways, sewers, drains,
                     gas, steam and water mains or electric light and power, or
                     telephone and telegraph conduits, poles, wires and cables),
                     none of which will materially impair the use of the
                     affected land for the purpose for which it is used by that
                     person;

              (e)    title defects, encroachments or irregularities which are of
                     a minor nature and which in the aggregate will not
                     materially impair the use of the affected property for the
                     purpose for which it is used by that person;

              (f)    the right reserved to or vested in any municipality or
                     governmental or other public authority by the terms of any
                     lease, license, franchise, grant or permit acquired by that
                     person or by any statutory provision to terminate any such
                     lease, license, franchise, grant or permit, or to require
                     annual or other payments as a condition to the continuance
                     thereof;

              (g)    the Encumbrance resulting from the deposit of cash or
                     securities in connection with contracts (other than for the
                     payment of Debt), tenders or expropriation proceedings, or
                     to secure workers' compensation, unemployment insurance,
                     surety or appeal bonds, costs of litigation when required
                     by law, liens and claims incidental to current
                     construction, mechanics', warehousemen's, carriers' and
                     other similar liens, and public, statutory and other like
                     obligations incurred in the ordinary course of business, up
                     to a maximum at any time of $10,000,000 for all Restricted
                     Parties;

              (h)    security given to a public utility or any municipality or
                     governmental authority when required by such utility or
                     authority in connection with the operations of that person
                     in the ordinary course of its business, up to a maximum at
                     any time of $10,000,000 for all Restricted Parties;

              (i)    the Trustee Security, to the extent that it secures
                     debentures that have been issued under the trust deeds
                     forming part of the Trustee Security and pledged to secure
                     the debts, liabilities and obligations described in Section
                     3.2, and the pledges of those debentures;

              (j)    the Security other than the Trustee Security;

              (k)    the Encumbrance created by a judgment of a court of
                     competent jurisdiction, as long as the judgment is being
                     contested diligently and in good faith by appropriate
                     proceedings and payment has been secured by such
                     arrangements (including Collateral) as the Lenders may
                     require or the judgment is being satisfied by that person
                     and has not caused an Event of Default;

              (l)    Encumbrances on Property and the proceeds thereof created
                     or assumed to finance the acquisition or improvement or
                     secure the unpaid purchase price thereof (including the
                     principal amount of any capital lease or

<PAGE>
                                     - 20 -

                     Purchase Money Mortgage), provided that the aggregate
                     principal amount (or fair market value of the Property
                     Encumbered if no principal amount is designated) in respect
                     of all such Encumbrances entered into by all Restricted
                     Parties does not exceed 5% of Consolidated Net Tangible
                     Assets at any time;

              (m)    lease by Pacifica Papers Inc. to Haggard Trucking Ltd. of
                     that part of DL 1, Alberni District, Plan 1186-R and that
                     Part of Lot A, DL 2, Alberni District Plan 41766, dated 1
                     November 1999, with term to 31 October 2003, with rent of
                     $5,100 semi-annually (NSCL File No. 1701-02, PR No.
                     G-1243);

              (n)    lease by Pacifica Poplars Inc. to Peter Klein of Part of
                     Northwest 1/4 of the Northeast 1/4 of Section 30, Township
                     3810, Range 5, EWM, containing 1.75 acres more or less at
                     $1.00 per year to 21 October 2005 (NSCL File No. 4708-05,
                     PR No. G-4000);

              (o)    permit by NSCL to West Isle Resources Renewal Limited to
                     use Part of Part of Block 105 Alberni District Plan for a
                     4-year term at $1500 per quarter, for fish composting
                     operations (expires 30 June 2005);

              (p)    lease ED128285 by NSCL registered against one of the
                     properties comprising the Crofton Pulp and Paper lands
                     (PID: 009-922-431) to The Corporation of the District of
                     North Cowichan over the portion of the relevant property
                     shown on Plan VIP51593 for the purposes of a community
                     parking lot, boat launch ramp and water access for a term
                     of 20 years commencing on 1 May 1990 and terminating on 30
                     April 2010;

              (q)    lease EN73583 by Elk Falls Pulp and Paper Limited
                     registered against one of the properties comprising the Elk
                     Falls Mill lands (PID: 001-233-432) to Calpine Island
                     Cogeneration Project Inc. (Inc. No. A44467), for the
                     purposes of a cogeneration plant which provides steam to
                     the mill operations and also sells electricity to BC Hydro,
                     and being a long-term lease which has a term consistent
                     with the Mill Services Agreement dated 29 September 1998
                     (including a renewal); and

              (r)    other Encumbrances expressly agreed to in writing by the
                     Majority Lenders.

1.1.84        "PERMITTED OBLIGATIONS" means the following:

              (a)    the Obligations;

              (b)    the Other Secured Obligations;

              (c)    debts, liabilities and obligations of any Restricted Party
                     to another Restricted Party;

<PAGE>
                                     - 21 -

              (d)    the 1999 Notes and the 2001 Notes;

              (e)    Permitted Senior Secured Indebtedness;

              (f)    Permitted Subordinated Secured Indebtedness;

              (g)    Permitted Unsecured Indebtedness;

              (h)    other debts, liabilities and obligations secured by
                     Permitted Encumbrances;

              (i)    other unsecured Debt up to an aggregate amount outstanding
                     of $4,000,000 for all Restricted Parties at any time;

              (j)    current accounts payable, accrued expenses and other debts,
                     liabilities and obligations incurred in the ordinary course
                     of business which are not Debt;

              (k)    deferred taxes;

              (l)    actuarially determined obligations in respect of Pension
                     Plans;

              (m)    obligations arising from guarantees by one Restricted Party
                     of debts, liabilities and obligations of another Restricted
                     Party that are themselves Permitted Obligations;

              (n)    bankers' acceptances secured by L/Cs as contemplated in
                     Section 5.23; and

              (o)    other debts, liabilities and obligations expressly
                     permitted under this Agreement or expressly consented to by
                     the Majority Lenders in writing.

1.1.85        "PERMITTED SENIOR SECURED INDEBTEDNESS" means Debt of NSCL for
              borrowed money that:

              (a)    is secured by the Trustee Security PARI PASSU with the
                     Obligations and the Other Secured Obligations;

              (b)    other than as a result of default, does not require or
                     result in payment of principal in excess of an aggregate of
                     $50,000,000 for all Permitted Senior Secured Indebtedness
                     and Permitted Unsecured Indebtedness during any period of
                     36 consecutive months in the term of this Agreement;

              (c)    is on terms and conditions that, in the reasonable opinion
                     of the Majority Lenders, are no more restrictive to the
                     Restricted Parties than the terms of the Obligations
                     including, without limitation, the scheduled amortization
                     of the Debt;

              (d)    is not incurred at a time that an Event of Default or
                     Pending Event of Default has occurred and is continuing or
                     would, in the opinion of the Majority Lenders, acting
                     reasonably, based on their review of PRO FORMA

<PAGE>
                                     - 22 -

                     budgets and other information that the Lenders may require
                     from NSCL (all of which must be in form and substance
                     satisfactory to the Lenders, acting reasonably), result
                     from the incurrence of the Debt;

              (e)    if required by the Majority Lenders, is subject to the
                     terms of an Intercreditor Agreement entered into with the
                     Agent in form and substance satisfactory to the Majority
                     Lenders, acting reasonably; and

              (f)    has an aggregate principal amount outstanding at any time
                     during the term of this Agreement that does not exceed
                     $150,000,000.

1.1.86        "PERMITTED SUBORDINATED SECURED INDEBTEDNESS" means Debt of NSCL
              for borrowed money that:

              (a)    is on terms and conditions including, without limitation,
                     financial covenants that are satisfactory to the Majority
                     Lenders;

              (b)    if required by the Majority Lenders, is subject to the
                     terms of an Intercreditor Agreement entered into with the
                     Agent in form and substance satisfactory to the Majority
                     Lenders, acting reasonably;

              (c)    is secured by the Trustee Security but subordinate to the
                     Obligations and the Other Secured Obligations.

1.1.87        "PERMITTED UNSECURED INDEBTEDNESS" means Debt of NSCL for borrowed
              money that:

              (a)    other than as a result of default, does not require payment
                     of principal in excess of an aggregate of $50,000,000 for
                     all Permitted Senior Secured Indebtedness and Permitted
                     Unsecured Indebtedness during the term of this Agreement;

              (b)    is on terms and conditions that are no more restrictive to
                     the Restricted Parties than the terms of the Obligations
                     including, without limitation, the scheduled amortization
                     of the Debt; and

              (c)    is not incurred at a time that an Event of Default or
                     Pending Event of Default has occurred and is continuing or
                     would result from the incurrence of the Debt.

1.1.88        "PERSON" or "PERSON" means any individual, corporation, company,
              partnership, unincorporated association, trust, joint venture,
              estate or other judicial entity or any governmental body.

1.1.89        "PLEDGED SHARES" means the Capital Stock of the Restricted Parties
              and other persons that is pledged as part of the Trustee Security
              from time to time.

1.1.90        "PRIME RATE" means, on any day, the greater of:

<PAGE>
                                     - 23 -

              (a)    the annual rate of interest expressed as a percentage per
                     annum in effect on that day as TD's reference rate for
                     commercial loans made by it in Canada in Canadian Dollars;
                     and

              (b)    the average rate for 30 day Canadian Dollar bankers'
                     acceptances that appears on the Reuters Screen CDOR Page at
                     10:00 a.m. Toronto time on that day, plus 1% per annum.

1.1.91        "PRIME RATE ADVANCE" means an Advance in Canadian Dollars bearing
              interest based on the Prime Rate and includes deemed Prime Rate
              Advances provided for in this Agreement.

1.1.92        "PROPERTY" means, with respect to any person, any or all of its
              undertaking, property and assets.

1.1.93        "PROPORTIONATE SHARE" means the percentage of the maximum amount
              of the Credits which a Lender has agreed to advance to the
              Borrower, as set out on Schedule E , which shall be amended by the
              Agent from time to time as other persons become Lenders or the
              Proportionate Shares of Lenders otherwise change.

1.1.94        "PURCHASE MONEY MORTGAGE" means any Encumbrance, including a
              capital lease, created, issued or assumed by any Restricted Party
              to secure indebtedness assumed by that person as part of, or
              issued or incurred to provide funds to pay, and not exceeding 100%
              of, the unpaid purchase price (including installation cost) or
              construction cost of any Property, if the Encumbrance is limited
              to the Property acquired and is created, issued or assumed
              substantially concurrently with the acquisition of the Property or
              in connection with the refinancing of an existing Purchase Money
              Mortgage, if the principal amount has not increased and the
              Encumbrance continues to be limited to that Property. Purchase
              Money Mortgage also includes any other fixed charge over specific
              limited Property securing term debt of a person existing at the
              time the person is acquired by a Restricted Party or assumed by a
              Restricted Party in connection with the acquisition of Property
              from the person, but not incurred in connection with or in
              anticipation of the acquisition of the person or Property.

1.1.95        "RBC" means Royal Bank of Canada, a bank to which the BANK ACT
              (Canada) applies.

1.1.96        "REFERENCE DEBT RATING" means the public rating of the
              indebtedness and liability of the Borrower to the Lenders under
              the Credits or if either Moody's or S&P has not established a
              rating for indebtedness and liability under the Credits, the
              corporate credit or issuer ratings of NSCL established by Moody's
              or S&P, as the case may be, shall apply.

1.1.97        "REGISTER" has the meaning defined in Section 10.2.3.

<PAGE>
                                     - 24 -

1.1.98        "REPLACEMENT CONTRACT" means any one or more Contracts (a) entered
              into by a Restricted Party to replace a Material Contract that has
              been terminated or in respect of which a declaration of
              non-performance has been issued or similar step has been taken,
              (b) which provide the Restricted Party with rights, benefits and
              value substantially similar to and on terms and conditions not
              materially less favourable than those contained in the Material
              Contract being replaced and (c) which are entered into
              concurrently with or before a termination, declaration or similar
              step arising from a breach by or other event relating to a
              Restricted Party or within 30 days of a termination, declaration
              or similar step arising from a breach by or other event relating
              to a Person other than a Restricted Party. A Replacement Contract
              shall be deemed to be a Material Contract and shall be deemed to
              be a Special Material Contract if the Material Contract that it
              replaces was a Special Material Contract, and the Material
              Contract that is replaced shall cease to be a Material Contract.

1.1.99        "REQUIREMENT OF LAW" means, as to any person, any law, treaty,
              regulation, ordinance, decree, judgment, order or similar
              requirement made or issued under sovereign or statutory authority
              and applicable to or binding upon that person, or to which that
              person or any of its Property is subject.

1.1.100       "RESTRICTED PARTIES" means NSCL, the Borrower, Elk Falls Pulp and
              Paper Limited, NorskeCanada, Norske Skog Canada (Japan) Ltd,
              Norske Skog Canada Pulp Operations Limited, Norske Skog Canada
              Pulp Sales Inc, Norske Skog Canada Sales Inc., Norske Skog Canada
              (USA) Inc., Norske Skog Pulp Sales (Japan) Ltd., NSCL Holdings
              Inc., Pacifica Papers Sales Ltd., Pacifica Papers Sales Inc.,
              Pacifica Papers Kabushiki Kaisha, Pacifica Poplars Ltd., Pacifica
              Poplars Inc., and Pacifica Papers US Inc. and such other
              Subsidiaries of NSCL as may become Restricted Parties from time to
              time.

1.1.101       "S&P" means Standard & Poor's Corporation.

1.1.102       "SCHEDULE" means the designated schedule of this Agreement.

1.1.103       "SECTION" means the designated section of this Agreement.

1.1.104       "SECURED DEBT RATIO" means, at any time, the ratio of (a) the
              amount of Funded Debt that is secured by any Encumbrance to (b)
              the aggregate of all Funded Debt plus NSCL's shareholders' equity
              determined in accordance with GAAP on a consolidated basis.

1.1.105       "SECURITY" means the security held from time to time by or on
              behalf of the Lenders (including but not limited to the Trustee
              Security), securing or intended to secure repayment of the
              Obligations, including without limitation the security described
              in Section 3.1.

1.1.106       "SPECIAL MATERIAL CONTRACT" has the meaning defined in Section
              3.1.8.

<PAGE>
                                     - 25 -

1.1.107       "SUBSIDIARY" means, with respect to a Restricted Party, a
              subsidiary as defined in the CANADA BUSINESS CORPORATIONS ACT as
              of the date of this Agreement, and any partnership or other
              organization in which the Restricted Party or any of its
              Subsidiaries has the right to make or control management
              decisions.

1.1.108       "SUCCESSOR AGENT" has the meaning defined in Section 9.11.

1.1.109       "SYNDICATION AGENT" means RBC in its role as syndication agent for
              the Lenders.

1.1.110       "TAXES" means all taxes, levies, imposts, stamp taxes, duties,
              deductions, withholdings, rates, assessments, fees, dues and
              similar governmental impositions payable, levied, collected,
              withheld, imposed or assessed as of the date of this Agreement or
              at any time in the future, and "TAX" shall have a corresponding
              meaning.

1.1.111       "TD" means The Toronto-Dominion Bank, a bank to which the BANK ACT
              (Canada) applies.

1.1.112       "THRESHOLD AMOUNT" means, while the 1999 Notes are outstanding,
              the aggregate of:

              (a)    the greater of (i) $430,000,000 and (ii) the sum of 75% of
                     the net book value of the accounts receivable of NSCL and
                     its "Restricted Subsidiaries" as defined under the 1999
                     Indenture plus 50% of the net book value of inventory of
                     NSCL and its Restricted Subsidiaries plus $290,000,000;

              (b)    $40,000,000; and

              (c)    the amount of Advances outstanding under the Credits that
                     are trade letters of credit and standby letters of credit
                     incurred in the ordinary course of business and the amount
                     of Bankers' Acceptances outstanding under the Credits that
                     are incurred in the ordinary course of business, up to an
                     aggregate principal amount of $5,000,000 outstanding at any
                     one time;

              and, if the 1999 Notes are no longer outstanding and the 2001
              Notes are outstanding, means the aggregate of:

              (d)    the greater of (i) $725,000,000 and (ii) the sum of 75% of
                     the net book value of the accounts receivable of NSCL and
                     its "Restricted Subsidiaries" as defined under the 2001
                     Indenture plus 50% of the book value of inventory at the
                     lower of cost and net realizable value, net of any
                     allowance for obsolescence of NSCL and its Restricted
                     Subsidiaries plus $290,000,000;

              (e)    $40,000,000; and

<PAGE>
                                     - 26 -

              (f)    the amount of Advances outstanding under the Credits that
                     are trade letters of credit and standby letters of credit
                     incurred in the ordinary course of business and the amount
                     of Bankers' Acceptances outstanding under the Credits that
                     are incurred in the ordinary course of business, up to an
                     aggregate principal amount of $5,000,000 outstanding at any
                     one time.

              If neither the 1999 Notes nor the 2001 Notes are outstanding, the
              Threshold Amount shall be considered to be unlimited.

1.1.113       "TOTAL INTEREST EXPENSE" means, for any particular period, without
              duplication, the difference between (a) aggregate expense incurred
              for interest and equivalent costs of borrowing (taking into
              account the effect of any relevant Derivatives), including but not
              limited to (i) bankers' acceptance fees, (ii) discounts on
              bankers' acceptances, (iii) the interest portion of any capital
              lease, and (iv) all fees and other compensation paid to any person
              that has extended credit to the Restricted Parties, but excluding
              any upfront, extension and similar non-recurring fees paid to the
              Agent or Lenders or paid in connection with the 2001 Notes or 1999
              Notes, in each case whether or not actually paid (unless paid by
              the issuance of securities constituting Debt), and (b) the
              aggregate income earned from interest, in the case of each of (a)
              and (b), calculated in accordance with GAAP in respect of NSCL on
              a consolidated basis, omitting amounts that are not attributable
              to Restricted Parties. If the calculation of EBITDA is adjusted
              because of acquisitions, dispositions or other circumstances
              described in the last paragraph of Section 1.1.40, the calculation
              of Total Interest Expense shall be adjusted on the same basis.

1.1.114       "TRUSTEE" means The Canada Trust Company in its capacity as
              trustee under the Trustee Security from time to time, and any
              successor trustee.

1.1.115       "TRUSTEE SECURITY" means the trust deeds granted by the Restricted
              Parties to the Trustee and the pledges of Pledged Shares,
              assignments of Material Contracts and other collateral security
              for the trust deeds.

1.1.116       "2001 INDENTURE" means the trust indenture dated as of 14 August
              2001 between NSCL, certain of its Subsidiaries as guarantors and
              Wells Fargo Bank Minnesota, National Association as trustee, as
              amended and supplemented by agreements dated 28 August 2001 and 1
              September 2001 and otherwise as permitted by this Agreement.

1.1.117       "2001 NOTES" means the 8 5/8% senior notes due 2011 issued by NSCL
              under the 2001 Indenture.

1.1.118       "US DOLLARS" and "US $" mean lawful money of the United States of
              America.

<PAGE>
                                     - 27 -

                                   ARTICLE II
                                   THE CREDITS

2.1      AMOUNT AND AVAILMENT OPTIONS

2.1.1    Upon and subject to the terms and conditions of this Agreement, the
Lenders agree to provide credits for the use of the Borrower in the amount of up
to Cdn. $350,000,000 or the US Dollar equivalent thereof, which are referred to
collectively as the Credits and are comprised of a tranche of up to
Cdn.$297,500,000 referred to as Credit 1 and a tranche of up to Cdn. $52,500,000
referred to as Credit 2. Subject to Section 5.1, Advances under Credit 1 will be
made by the Lenders and Advances under Credit 2 will be made by RBC. The
Borrower may from time to time with the agreement of the Agent (without any
requirement to seek Majority Lender consent) and the proposed replacement,
designate another Lender to replace RBC in making Advances under Credit 2. In
that case, references in this Agreement to RBC in respect of Credit 2 shall be
interpreted as referring to the replacement.

2.1.2    At the option of the Borrower, Credit 1 may be used by requesting Prime
Rate Advances to be made by the Lenders, by requesting Base Rate Advances to be
made by the Lenders, by presenting orders to the Lenders for acceptance as
Bankers' Acceptances, or by requesting that LIBOR Advances be made by the
Lenders.

2.1.3    At the option of the Borrower, Credit 2 may be used by the Borrower
incurring overdrafts in its accounts with RBC, which shall be deemed to be Prime
Rate Advances in the case of Canadian Dollar overdrafts and Base Rate Advances
in the case of US Dollar overdrafts, by presenting orders to RBC for acceptance
as Bankers' Acceptances, by requesting that LIBOR Advances be made by RBC or by
requesting that L/Cs denominated in Canadian Dollars, US Dollars, Euros or
Japanese yen be issued by RBC.

2.1.4    The aggregate amount of all outstanding Advances to the Borrower under
the Credits shall not at any time exceed the amount of the Borrowing Base at
that time.

2.2      REVOLVING CREDIT

         The Credits are revolving credits and the principal amount of any
Advance under a Credit that is repaid may be reborrowed, if the Borrower is
otherwise entitled to an Advance under that Credit.

2.3      USE OF CREDITS

         The Credits shall be used to assist in financing the general corporate
requirements of the Restricted Parties.

2.4      TERM AND REPAYMENT

         The Credits shall be repaid in full and cancelled on or before 19 July
2005. If no Event of Default or Pending Event of Default has occurred and is
continuing, the

<PAGE>
                                     - 28 -

Borrower may request that the maturity date of the Credits be
extended by successive one year periods in accordance with the following
procedures:

2.4.1    The Borrower shall, if it wishes to extend the maturity date, make such
request to each Lender by written notice given to the Agent not earlier than 1
April nor later than 30 April in each year, after the forecasts contemplated in
Section 7.3.1(e) have been delivered to the Agent. Each Lender shall provide a
written response to such request to the Agent within 30 days after receiving the
request. If any Lender fails to respond, it shall be deemed to have declined to
grant any extension (and shall have no liability for failing to respond).
Promptly thereafter, the Agent will notify the Borrower of the response of the
Lenders, which notice shall include the names of all Lenders who declined or
were deemed to have declined to grant such extension (the "DECLINING LENDERS").

2.4.2    If all of the Lenders agree to extend the maturity date, the maturity
date shall be extended by one year from the then applicable maturity date.

2.4.3    If the aggregate amount of the Commitments in respect of all Lenders
who agree to extend the maturity date (the "ACCEPTING LENDERS") is less than or
equal to two-thirds of the aggregate Commitments in respect of the Credits of
all Lenders then in effect, the maturity date shall not be extended.

2.4.4    If the aggregate amount of the Commitments of the Accepting Lenders
exceeds two-thirds of the aggregate Commitments of all Lenders in respect of the
Credits then in effect, unless the Borrower elects not to extend the maturity
date by giving a further written notice to the Agent to that effect before the
then applicable maturity date, the maturity date shall be extended by one year
from the then applicable maturity date provided that the Borrower has, before
the then applicable maturity date, replaced or cancelled the Commitments in
respect of the Credits of all Declining Lenders in the following manner:

         (a)  the Borrower may negotiate an agreement with:

              (i)    one or more of the Accepting Lenders, or

              (ii)   one or more other financial institutions ("NEW
                     LENDERS") which have been identified by the Borrower
                     (with the assistance of the Agent, if requested) and
                     which are acceptable to the Accepting Lenders, acting
                     reasonably,

              to assume the Commitments of the Declining Lenders upon payment to
              the Declining Lenders of all amounts owed to the Declining Lenders
              under or in connection with the Credits, and in that event an
              assignment by the Declining Lenders to the Accepting Lenders or
              the New Lenders will be deemed to have occurred in accordance with
              the terms of the form of Assignment Agreement; and

       (b)    to the extent the Commitments of the Declining Lenders have not
              been fully assumed by the Accepting Lenders and the New Lenders
              pursuant to paragraph (a) above, the Borrower shall cancel the
              Commitments of the

<PAGE>
                                     - 29 -

              Declining Lenders and pay to the Declining Lenders on the latest
              maturity date to which the Declining Lenders have previously
              agreed, all amounts owed to the Declining Lenders under or in
              connection with the Credits, without penalty but subject to
              payment of any losses, costs and expenses payable to the Declining
              Lenders pursuant to this Agreement.

2.5           INTEREST RATES AND FEES

              Interest rates on Prime Rate Advances, Base Rate Advances and
LIBOR Advances and the rates for calculation of Bankers' Acceptance Fees and L/C
Fees shall vary according to the Reference Debt Ratings. The rate for
calculation of Bankers' Acceptance Fees and L/C Fees shall be the Applicable Fee
Rate per annum from time to time in effect. Interest shall accrue and be payable
on Prime Rate Advances and Base Rate Advances at the Prime Rate and Base Rate,
respectively, per annum plus the Applicable Margin from time to time in effect.
Interest shall accrue and be payable on LIBOR Advances at the LIBO Rate per
annum for the applicable LIBOR Period plus the Applicable Margin from time to
time in effect. Any change in the Applicable Fee Rate or Applicable Margin shall
take effect as provided in the definitions of those terms.

              Interest and fees for Credit 1 shall be promptly distributed by
the Agent to the Lenders based on their respective Proportionate Shares as
adjusted in accordance with Section 5.2. Subject to Section 5.1, interest for
Credit 2 shall be paid to RBC for its own account.

2.6           COMMITMENT FEE

              The Borrower shall pay commitment fees based on the daily undrawn
portion of Credits 1 and 2, respectively, at the following rates, which shall
vary according to the percentage of the aggregate amount of the Credit which is
drawn and the Applicable Fee Rate from time to time:

<TABLE>
<CAPTION>
                                               APPLICABLE COMMITMENT FEE
              PERCENTAGE WHICH IS DRAWN        (% OF APPLICABLE FEE RATE)
              -------------------------        --------------------------
              <S>                              <C>
              Less than 33%                    35%
              33% to 66%                       30%
              Less than 66%                    25%
</TABLE>

              The commitment fee shall be calculated daily beginning on 19 July
2002 and shall be payable quarterly in arrears on the third Business Day after
the end of each calendar quarter, with the first payment to be made on 3 October
2002. Commitment fees for Credit 1 shall be promptly distributed by the Agent to
the Lenders based on their respective Proportionate Shares as adjusted in
accordance with Section 5.2. Subject to Section 5.1, commitment fees for Credit
2 shall be paid to RBC for its own account.

<PAGE>
                                     - 30 -

2.7           OTHER FEES

              The Borrower shall also pay agency and other fees in respect of
the Credits to the Agent in accordance with the Fee Agreement and to TD and RBC
in accordance with the fee letters dated 10 May 2002 from those Lenders to the
Borrower.

2.8           EXISTING L/CS, BANKERS' ACCEPTANCES ETC.

2.8.1         The letters of credit listed on Schedule K, which were issued by
RBC before the date of this Agreement, shall be deemed to have been issued as
L/Cs and to be Advances under Credit 2, without any notice of Advance or payment
of any fee under this Agreement being required. The Borrower hereby confirms its
previous assumption of all debts, liabilities and obligations of NSCL under or
in connection with the letters of credit listed on Schedule K that were
originally issued for the account of NSCL.

2.8.2         The bankers' acceptances listed on Schedule K, which were accepted
by certain Lenders before the date of this Agreement, shall be deemed to have
been accepted as Bankers' Acceptances and to be Advances under Credit 1 (or
Credit 2 in the case of those accepted by RBC), without any notice of Advance or
payment of any fee under this Agreement being required. The parties acknowledge
that, until the maturity of those Bankers' Acceptances, the Lenders under Credit
1 may have Advances outstanding that are not in accordance with their
Commitments. No attempt will be made to make compensating adjustments in respect
of future Advances under Credit 1, but payments in respect of Credit 1 shall be
made based on the actual amounts outstanding rather than Commitments.

2.8.3         All "Advances" (as defined in the credit agreement dated as of 14
August 2001 to which certain of the parties to this Agreement are also party)
made by RBC under "Operating Credit 2" (as defined in this Agreement) that are
outstanding on the date of the initial Advance under this Agreement shall be
deemed to be Advances under Credit 2.

2.9           EXCHANGE RATE AND BORROWING BASE FLUCTUATIONS

              If fluctuations in rates of exchange in effect between US Dollars
and Cdn. Dollars cause the amount of Advances (expressed in Cdn. Dollars) under
a Credit to exceed the maximum amount of that Credit permitted herein by three
percent or more at any time, the Borrower shall immediately pay the Lenders such
amount as is necessary to repay the excess. If the amount of Advances
outstanding to the Borrower under the Credits exceeds the amount of the
Borrowing Base at that time, the Borrower shall immediately pay the Lenders such
amount as is necessary to repay the excess. If the Borrower is unable to
immediately pay any amount under this Section because LIBOR Periods have not
ended or Bankers' Acceptances have not matured, the Borrower shall immediately
post Collateral with the Agent in the amount of the excess, which shall form
part of the Security for the Obligations and be held until the amount of the
excess is paid in full or is less than three percent in the case of a
fluctuation in rates of exchange. If, on the date of any Advance under a Credit
(whether by rollover, conversion or otherwise), the amount of Advances
(expressed in Cdn. Dollars) under that Credit exceeds the maximum amount of that
Credit permitted herein because of fluctuations in rates of exchange, the
Borrower shall

<PAGE>
                                     - 31 -

immediately pay the Lenders the excess and shall not be entitled
to any Advance that would result in the amount of that Credit being exceeded.

                                  ARTICLE III
                                    SECURITY

3.1           SECURITY

3.1.1        The Security includes the following, all in form and substance
satisfactory to the Lenders and subject only to Permitted Encumbrances:

              (a)    a $5,000,000,000 trust deed granted by each Restricted
                     Party in favour of the Trustee, secured by a fixed charge
                     over all freehold and leasehold real property and all
                     equipment and a security interest and floating charge over
                     all other Property, together with such other documents as
                     the Lenders may require from time to time to charge
                     Property located outside of British Columbia;

              (b)    debentures issued under each trust deed and pledged in
                     favour of the Agent for the benefit of the Lenders;

              (c)    pledges in favour of the Trustee of all Capital Stock of
                     the Restricted Parties other than NSCL that are owned by
                     the Restricted Parties (including NSCL) from time to time;

              (d)    pledges in favour of the Trustee of all Capital Stock of
                     persons other than Restricted Parties that are owned by the
                     Restricted Parties from time to time;

              (e)    specific assignments by way of security of Material
                     Contracts that have been given by the relevant Restricted
                     Parties in favour of the Trustee before the date of this
                     Agreement;

              (f)    further specific assignments in favour of the Trustee of
                     those Material Contracts that are designated by the Agent
                     from time to time after Permitted Senior Secured
                     Indebtedness has been incurred in an aggregate principal
                     amount of $100,000,000 or more;

              (g)    a general assignment by way of security of all Material
                     Contracts (without any requirement that they be
                     individually listed), to be given in favour of the Trustee
                     by each Restricted Party designated by the Agent from time
                     to time;

              (h)    unconditional guarantees of the Obligations by each of the
                     Restricted Parties, excluding the Borrower, which shall be
                     unlimited except for limits imposed by applicable law.

<PAGE>
                                     - 32 -

3.1.2         Notwithstanding the foregoing, but subject to compliance with
Sections 7.5.3(d) and 7.5.3(e), the Restricted Parties shall not be required to
deliver Security documents in a form customarily used in jurisdictions outside
Canada and the United States or arrange registrations of the Security outside
Canada and the United States as a condition precedent to the initial Advance
under this Agreement, but shall cause such documents to be delivered before the
thresholds specified in Sections 7.5.3(d) and 7.5.3(e) are exceeded, together
with all opinions and supporting documents that the Agent reasonably requires.
For greater certainty, all Restricted Parties shall deliver all other documents
contemplated in Section 3.1.1.

3.1.3         Except for the companies listed in Schedule I (other than any
Restricted Parties), if at any time NSCL owns, establishes or acquires a
Subsidiary that is wholly owned by NSCL, directly or indirectly, NSCL shall
immediately cause that Subsidiary to become a Restricted Party, adopt this
Agreement by delivering an agreement in the form of Schedule B so as to be bound
by all of the terms applicable to Restricted Parties as if it had executed this
Agreement as a Restricted Party, and deliver a guarantee and other security
documents similar to those delivered by other Restricted Parties, which shall
become part of the Security. NSCL shall also deliver or cause the delivery of a
pledge of all of the Capital Stock of the new Subsidiary as part of the Trustee
Security and cause the delivery of such legal opinions and other supporting
documents as the Agent may reasonably require.

3.1.4         Notwithstanding the preceding paragraph, a wholly owned Subsidiary
not owned at the date of this Agreement shall not be required to become a
Restricted Party if:

              (a)    it is established, acquired and/or invested in using solely
                     the proceeds of Capital Stock issued by NSCL or Permitted
                     Unsecured Indebtedness; or

              (b)    it is established, acquired and/or invested in using
                     proceeds of Advances and the aggregate amount of proceeds
                     of Advances used to establish, acquire and/or invest in all
                     such Subsidiaries during any period of 36 consecutive
                     months does not exceed (i) $100,000,000 if any Permitted
                     Senior Secured Indebtedness or Permitted Subordinated
                     Secured Indebtedness is outstanding or (ii) $250,000,000 if
                     no Permitted Senior Secured Indebtedness or Permitted
                     Subordinated Secured Indebtedness is outstanding and if no
                     Restricted Party is providing any guarantee (or other
                     financial assistance which may result in an obligation to
                     make disbursements in an aggregate amount exceeding
                     $5,000,000) relating to any obligations of any such
                     Subsidiary; the limits of $100,000,000 and $250,000,000
                     shall be increased to the extent that the Restricted
                     Parties actually receive cash dividends or other cash
                     returns on their investments in such Subsidiaries during
                     the 36 month period and use the cash dividends or other
                     cash returns to repay the Credits.

              For greater certainty, if a wholly-owned Subsidiary is
established, acquired and/or invested in using proceeds of Permitted Senior
Secured Indebtedness or Permitted Subordinated Secured Indebtedness, NSCL must
immediately comply with Section 3.1.3.

<PAGE>
                                     - 33 -

3.1.5         NSCL shall cause a pledge in form satisfactory to the Agent of the
Capital Stock of any wholly owned Subsidiary that does not become a Restricted
Party as permitted by Section 3.1.4 to be delivered as part of the Security if
the aggregate amount used to establish, acquire and/or invest in all such
Subsidiaries during any period of 36 consecutive months exceeds $100,000,000.
The limit of $100,000,000 shall be increased to the extent that the Restricted
Parties actually receive cash dividends or other cash returns on their
investments in such Subsidiaries during the 36 month period and use the cash
dividends or other cash returns to repay the Credits. If the shareholder of any
such Subsidiary is itself not a Restricted Party, the pledge shall be without
recourse to the other Property of the shareholder.

3.1.6         If at any time any Restricted Party owns or obtains an interest in
a person that is not a wholly owned Subsidiary, other than Powell River Energy
Inc. or Powell River Energy LP, NSCL shall cause that interest to immediately be
pledged as part of the Trustee Security and cause the delivery of such legal
opinions and other supporting documents as the Agent may reasonably require.

3.1.7         If at any time all of the Capital Stock of a Restricted Party
other than the Borrower or NSCL is sold in accordance with the terms of this
Agreement, other than to another Restricted Party, then if no Event of Default
or Pending Event of Default has occurred and is continuing, the Restricted Party
of which the Capital Stock has been sold and any wholly-owned Subsidiary thereof
that is a Restricted Party shall, on request by NSCL, cease to be a Restricted
Party and the Agent shall deliver or direct the Trustee to deliver such releases
of the Security, including guarantees, as may reasonably be required to release
the obligations of those Restricted Parties. The Agent shall also discharge any
Security (or direct the Trustee to do so) to the extent necessary to allow any
Restricted Party to complete any sale or other disposition of Property permitted
by this Agreement.

3.1.8         Before incurring Permitted Senior Secured Indebtedness in an
aggregate principal amount of $100,000,000 during the term of this Agreement,
NSCL shall prepare and submit to the Agent for its approval (acting reasonably,
after consultation with counsel, but without any requirement to seek approval of
the Majority Lenders) a list of all of the then-existing Material Contracts. The
list shall be in a form similar to the lists prepared in connection with the
credit agreement dated as of 14 August 2001 to which NSCL, the Agent and others
were parties, it being acknowledged that NSCL has stated it considers certain
Contracts on those lists would not, in fact, qualify as Material Contracts and
that the contents of the existing lists shall not be determinative of the
content of the new list. Without limitation, the list shall be separated into
Part A, being the most important Material Contracts, which are referred to in
this Agreement as "SPECIAL MATERIAL CONTRACTS" and Part B, being the remainder.
The separation shall be done on a basis consistent with the separation of
Material Contracts in the lists prepared in connection with the credit agreement
dated as of 14 August 2001. Before incurring Permitted Senior Secured
Indebtedness in an aggregate principal amount of $100,000,000 during the term of
this Agreement, NSCL shall also (i) deliver specific assignments in favour of
the Trustee of those Material Contracts that are designated by the Agent which
have not already been specifically assigned, (ii) obtain agreements from other
parties to Special Material Contracts that have been specifically assigned if
agreements from those parties have not already been

<PAGE>
                                     - 34 -

obtained and (iii) diligently and in good faith use all commercially reasonable
efforts (both before and after incurring Permitted Senior Secured Indebtedness)
to obtain agreements from other parties to other Material Contracts that have
been specifically assigned if agreements from those parties have not already
been obtained.

3.2           OBLIGATIONS SECURED BY THE TRUSTEE SECURITY

3.2.1         Debentures shall be issued by the Restricted Parties under their
respective trust deeds and pledged to the Agent to secure:

              (a)    the Obligations that (taking into account other obligations
                     described in Section 7.7.2 that must be accounted for in
                     determining whether the Threshold Amount has been exceeded)
                     do not exceed the Threshold Amount;

              (b)    the Other Secured Obligations that are classified by NSCL
                     as being incurred under clauses (v) and (vi) of the
                     definition of "Permitted Indebtedness" in the 1999
                     Indenture and the definition of "Permitted Debt" in the
                     2001 Indenture (including guarantees by Restricted Parties
                     of those Other Secured Obligations as incurred by other
                     Restricted Parties);

              (c)    the Other Secured Obligations not mentioned in item (b)
                     above that (taking into account other obligations described
                     in Section 7.7.2 that must be accounted for in determining
                     whether the Threshold Amount has been exceeded) do not
                     exceed the Threshold Amount;

equally and ratably with each other and with any Permitted Senior Secured
Indebtedness but in priority to any other debts, liabilities and obligations
secured by the Trustee Security.

              Out of an abundance of caution (recognizing that the Restricted
Parties are not permitted to do anything that would result in the holders of the
1999 Notes or the 2001 Notes becoming entitled to be secured), further
debentures shall be issued by the Restricted Parties under their respective
trust deeds and pledged to the Agent to secure the Obligations and the Other
Secured Obligations not mentioned in item (b) above that exceed the Threshold
Amount, equally and ratably with the debts, liabilities and obligations of the
Restricted Parties under or in connection with the 1999 Notes and/or the 2001
Notes if the 1999 Notes and/or the 2001 Notes are required to be secured under
their terms.

              As between the Lenders, all Obligations shall rank equally and
ratably with each other notwithstanding that different Obligations may be
designated as having been incurred with reference to different provisions of the
1999 Indenture and the 2001 Indenture which might otherwise imply that different
Obligations have different rankings. Each Lender shall (and hereby absolutely,
unconditionally and irrevocably agrees to) do all such things, including
delivery of indemnity agreements and assignments to other Lenders of Advances
made by those Lenders as shall be required to ensure that result. Any such
action on the part of the Lenders shall be binding on the Borrower. If any
Lender fails to take the actions required under this Section, the Agent may,
without prejudice to the other rights of the Lenders, make such adjustments to
the payments to the defaulting Lender under this

<PAGE>
                                     - 35 -

Agreement as are necessary to compensate the other Lenders for the defaulting
Lender's failure.

              Further debentures may be issued by a Restricted Party under its
trust deed and pledged to another Restricted Party to secure debts, liabilities
and other obligations to the other Restricted Party as long as the debentures
are subordinate to all debentures pledged to secure the Obligations and the
Other Secured Obligations and are assigned to the Agent as additional security
for the Obligations up to the Threshold Amount.

              Subject to the other terms of this Agreement, further debentures
may be issued by a Restricted Party under its trust deed and pledged to secure
Permitted Senior Secured Indebtedness. Any debentures issued and pledged for
that purpose may rank equally and ratably as to proceeds of enforcement of
security with debentures issued and pledged to secure the Obligations and the
Other Secured Obligations, but shall be designated as "Ratable Debentures" under
the respective trust deeds.

              Subject to the other terms of this Agreement, further debentures
may be issued by a Restricted Party under its trust deed and pledged to secure
Permitted Subordinated Secured Indebtedness. Any debentures issued and pledged
for that purpose must rank junior in all respects to debentures issued and
pledged to secure the Obligations and the Other Secured Obligations.

3.2.2         For the purposes of section 4.06 of each of the 1999 Indenture and
the 2001 Indenture:

              (a)    Advances by way of L/Cs are hereby classified by NSCL as
                     being incurred under clause (xi) of the definition of
                     "Permitted Indebtedness" in the 1999 Indenture and the
                     definition of "Permitted Debt" in the 2001 Indenture until
                     all amounts permitted to be incurred under those clauses
                     from time to time have been incurred, thereafter under
                     clause (i) of the respective definitions until all amounts
                     permitted to be incurred under those clauses from time to
                     time have been incurred, and finally under clause (ix) of
                     the respective definitions until all amounts permitted to
                     be incurred under those clauses from time to time have been
                     incurred;

              (b)    Advances other than by way of L/Cs are hereby classified by
                     NSCL as being incurred under clause (i) of the definition
                     of "Permitted Indebtedness" in the 1999 Indenture and the
                     definition of "Permitted Debt" in the 2001 Indenture until
                     all amounts permitted to be incurred under those clauses
                     from time to time have been incurred, and thereafter under
                     clause (ix) of the respective definitions until all amounts
                     permitted to be incurred under those clauses from time to
                     time have been incurred.

              If NSCL incurs Permitted Senior Secured Indebtedness, Permitted
Subordinated Secured Indebtedness or Permitted Unsecured Indebtedness on terms
that require the classification of Advances, NSCL shall do so on a basis that is
approved by the Agent as being consistent with the classifications provided for
above. All classifications are

<PAGE>
                                     - 36 -

irrevocable without the consent of the Agent acting reasonably, after
consultation with counsel, but without any requirement to seek approval of the
Majority Lenders.

              If any Advance is within the Threshold Amount at the time it is
made and thereby entitled to be secured in priority to the 1999 Notes and the
2001 Notes, it shall remain entitled to that priority notwithstanding any
subsequent diminution of the Threshold Amount. If any repayment is made under a
Credit, it shall be deemed to have first been made in respect of any Advance
that was not within the Threshold Amount at the time it was made, and shall only
be made in respect of any Advance that was within the Threshold Amount at the
time it was made if no other Advances are then outstanding under that Credit.

3.2.3         If the Obligations other than outstanding Bankers' Acceptances
and/or L/Cs have been indefeasibly paid in full, the Lenders will release their
interest in the Security upon receiving Collateral to secure the remaining
Obligations, in an amount satisfactory to the respective Lenders, acting
reasonably.

3.2.4         As of the date of this Agreement, Lenders have entered into the
Derivatives with Restricted Parties which are listed in Schedule H and are Other
Secured Obligations. Lenders, or affiliates (as defined in the CANADA BUSINESS
CORPORATIONS ACT) of Lenders, may during the term of this Agreement enter into
further Derivatives with Restricted Parties, which shall be Other Secured
Obligations if they fall within the definition of Other Secured Obligations.

              For the purposes of section 4.06 of the each of the 1999 Indenture
and the 2001 Indenture:

              (a)    the Other Secured Obligations referred to in Section
                     1.1.79(a) are hereby classified by NSCL as being incurred
                     under clause (vi) of the definition of "Permitted
                     Indebtedness" in the 1999 Indenture and the definition of
                     "Permitted Debt" in the 2001 Indenture;

              (b)    the Other Secured Obligations referred to in Section
                     1.1.79(b) are hereby classified by NSCL as being incurred
                     under clause (v) of the definition of "Permitted
                     Indebtedness" in the 1999 Indenture and the definition of
                     "Permitted Debt" in the 2001 Indenture;

              (c)    the Other Secured Obligations referred to in Section
                     1.1.79(c) are hereby classified by NSCL as being incurred
                     under clause (i) of the respective definitions until all
                     amounts permitted to be incurred under those clauses from
                     time to time have been incurred and thereafter under clause
                     (ix) of the respective definitions until all amounts
                     permitted to be incurred under those clauses from time to
                     time have been incurred;

              (d)    the Other Secured Obligations referred to in Sections
                     1.1.79(d) and 1.1.79(e) are hereby classified by NSCL as
                     being incurred under clause (i) of the definition of
                     "Permitted Indebtedness" in the 1999 Indenture and the
                     definition of "Permitted Debt" in the 2001 Indenture until
                     all amounts permitted to be incurred under those clauses
                     from time to time have been

<PAGE>
                                     - 37 -

                     incurred and thereafter under clause (ix) of the respective
                     definitions until all amounts permitted to be incurred
                     under those clauses from time to time have been incurred.

              If NSCL incurs Permitted Senior Secured Indebtedness, Permitted
Subordinated Secured Indebtedness or Permitted Unsecured Indebtedness on terms
that require the classification of Other Secured Obligations, NSCL shall do so
on a basis that is approved by the Agent as being consistent with the
classifications provided for above. All classifications are irrevocable without
the consent of the Agent acting reasonably, after consultation with counsel, but
without any requirement to seek approval of the Majority Lenders.

              The Agent shall from time to time prepare and provide the Lenders
and NSCL with a revision of Schedule H to reflect changes in the Other Secured
Obligations, but the Agent's failure to do so shall not affect the security for
the Other Secured Obligations if the relevant Derivatives fall within the
definition of Other Secured Obligations. Derivatives that fall within the
definition of Other Secured Obligations shall be conclusively deemed to be
secured by the Trustee Security (in the absence of manifest error) and shall not
cease to be secured without the prior written consent of the respective holders
of the Other Secured Obligations. If the Obligations have been indefeasibly paid
in full, the holders of the Other Secured Obligations will release their
interest in the Security upon receiving Collateral to secure the Other Secured
Obligations, in an amount satisfactory to the respective holders, acting
reasonably.

              Notwithstanding the rights of holders of Other Secured Obligations
to benefit from the Trustee Security in respect of the Other Secured
Obligations, all decisions concerning the Trustee Security and the enforcement
thereof shall be made by the Lenders or the Majority Lenders in accordance with
this Agreement. No holder of Other Secured Obligations from time to time shall
have any additional right to influence the Trustee Security or the enforcement
thereof as a result of holding Other Secured Obligations as long as this
Agreement remains in force and the Agent shall vote any debentures issued under
the Trustee Security and pledged to secure the Other Secured Obligations in the
same manner as the debentures pledged to secure the Obligations. However, the
Other Secured Obligations shall continue to be secured by the Trustee Security
notwithstanding the termination of this Agreement by reason of payment of the
Credits, or for any other reason. After the termination of this Agreement,
decisions concerning the Trustee Security shall be made by the holders of Other
Secured Obligations as they may determine among themselves.

3.3           CONSENT TO ASSIGNMENT OF CONTRACTS

              Each Restricted Party that is a party to any Contract with, or
that has issued any instrument in favour of, any other Restricted Party or
Restricted Parties hereby acknowledges that the rights of the other Restricted
Party or Restricted Parties are charged by the Trustee Security, consents to the
granting of the Trustee Security and agrees that the Trustee shall be entitled
to enforce the Trustee Security in accordance with the terms thereof.

<PAGE>
                                     - 38 -

                                   ARTICLE IV
                             DISBURSEMENT CONDITIONS

4.1           CONDITIONS PRECEDENT TO INITIAL ADVANCE

              The following conditions precedent must be satisfied at or before
the time of the first Advance under this Agreement, unless waived in accordance
with Section 9.7.2. Where delivery of documents is referred to, the documents
shall be delivered to the Agent, for and on behalf of the Lenders, and shall be
in full force and effect and in form and substance satisfactory to the Lenders.

4.1.1         OTHER DEBT AND ENCUMBRANCES - The Agent shall have received:

              (a)    evidence that NSCL has completed an issuance of Capital
                     Stock for gross proceeds of not less than $150,000,000 and
                     has used the net proceeds to permanently repay Debt under
                     existing credit facilities;

              (b)    evidence that all existing credit facilities (including but
                     not limited to those established under the credit agreement
                     dated as of 14 August 2001 to which certain of the parties
                     to this Agreement are also party) and other Debt of the
                     Restricted Parties not forming part of Permitted
                     Obligations have been or will be paid and performed in full
                     and cancelled concurrently with the first Advance (except
                     to the extent they are secured by L/Cs as contemplated in
                     Section 5.23) and that all security held in connection
                     therewith has been or will be promptly released;

              (c)    releases, discharges and postponements (in registrable form
                     where appropriate) covering all Encumbrances affecting the
                     collateral Encumbered by the Security which are not
                     Permitted Encumbrances, and all statements and
                     acknowledgments that are reasonably required in respect of
                     other security interests affecting the Property of the
                     Restricted Parties or other parties delivering Security to
                     confirm that the collateral Encumbered by those
                     Encumbrances does not include the collateral Encumbered by
                     the Security or is a Permitted Encumbrance;

              (d)    a certificate of NSCL with copies of the 1999 Indenture,
                     the 2001 Indenture and any other documents necessary to
                     fully and fairly disclose all material terms of the 1999
                     Notes and 2001 Notes.

4.1.2         FINANCIAL INFORMATION - The Agent shall have received:

              (a)    a certificate of NSCL containing its audited consolidated
                     financial statements for its fiscal period ended 31
                     December 2001 and its unaudited consolidated financial
                     statements for its fiscal period ended 31 March 2002;

              (b)    a Compliance Certificate from NSCL for the fiscal period
                     ended 31 March 2002;

<PAGE>
                                     - 39 -

              (c)    a current Borrowing Base Certificate.

4.1.3         SECURITY AND OTHER DOCUMENTS - The Agent shall have received:

              (a)    duly executed copies of this Agreement and the Security,
                     duly registered as required;

              (b)    certificates representing the Pledged Shares, and executed
                     stock powers of attorney relating to those certificates;

              (c)    certificates of insurance or other evidence that the
                     covenants and conditions of the Credit Documents concerning
                     insurance coverage are being complied with;

              (d)    the Fee Agreement;

              (e)    agreements from other parties to Material Contracts that
                     have then been specifically assigned as part of the Trustee
                     Security (it being understood that such agreements have
                     previously been delivered and that no additional agreements
                     will be delivered as a condition of the initial Advance).

4.1.4         CORPORATE AND OTHER INFORMATION - The Agent shall have received:

              (a)    a certificate of each Restricted Party with copies of its
                     Constating Documents, a list of its officers and directors
                     with specimens of the signatures of those who are executing
                     Credit Documents on its behalf, and copies of the corporate
                     proceedings taken to authorize it to execute, deliver and
                     perform its obligations under the Credit Documents;

              (b)    evidence that the delivery of Credit Documents will not
                     contravene laws governing financial assistance or other
                     similar laws which affect the Credit Documents;

              (c)    evidence that the delivery of Credit Documents will not
                     contravene any material covenants or agreements to which
                     any Restricted Party is a party;

              (d)    consents that are required from the directors, shareholders
                     or partners of the Restricted Parties, either in connection
                     with the pledges of Pledged Shares or in connection with
                     any disposition of the Pledged Shares pursuant to the
                     Trustee Security (it being understood that consents
                     previously delivered to the Trustee need not be delivered
                     again).

4.1.5         OPINIONS - The Agent shall have received:

              (a)    the opinion of Borden Ladner Gervais LLP, counsel to the
                     Lenders, addressed to the Agent and the Lenders;

<PAGE>
                                     - 40 -

              (b)    the opinion of Lawson Lundell, Canadian counsel to the
                     Restricted Parties, addressed to the Agent, the Lenders and
                     Borden Ladner Gervais LLP;

              (c)    the opinion of Shearman & Sterling, US counsel to the
                     Restricted Parties, addressed to the Agent and the Lenders;

              (d)    the opinions of local counsel, addressed to the Agent, the
                     Lenders and Borden Ladner Gervais LLP.

4.1.6         OTHER MATTERS - The following conditions must also be satisfied:

              (a)    the Lenders must have received a certificate of NSCL, and
                     otherwise be satisfied, that no Material Adverse Change has
                     occurred since 31 March 2002;

              (b)    the Agent shall have received satisfactory evidence that
                     NSCL has obtained a Reference Debt Rating from each of
                     Moody's and S&P that expressly contemplates the issuance of
                     Capital Stock on a basis consistent with this Agreement and
                     have received satisfactory written or verbal confirmation
                     from each of them that they do not intend to amend their
                     Reference Debt Ratings;

              (c)    the Agent shall have received payment of all fees owing to
                     the Agent, the Lenders, or any of them and reimbursement of
                     all expenses incurred, including but not limited to legal
                     fees, in each case up to the time of the initial Advance;

              (d)    the Agent shall have received such other documents as the
                     Lenders may reasonably require.

4.1.7         DEADLINE FOR ADVANCE

              The initial Advance under the Credits must be made on or before 19
July 2002, failing which the Credits may be terminated at the option of any of
the Lenders unless, before that date, other persons identified by the Borrower
and satisfactory to the remaining Lenders have agreed to become Lenders in place
of those Lenders who are unwilling to continue beyond that date.

4.2           CONDITIONS PRECEDENT TO ALL ADVANCES

              The obligation of the Lenders to make any Advance is subject to
the conditions precedent that:

              (a)    no Event of Default or (except in the case of a conversion
                     of a LIBOR Advance into a Base Rate Advance, the conversion
                     of a Bankers' Acceptance to a Prime Rate Advance or an
                     Advance for the purpose of paying a demand under an L/C)
                     Pending Event of Default has occurred and is continuing on
                     the Drawdown Date, or would result from making the

<PAGE>
                                     - 41 -

                     Advance, and without limiting the foregoing, all
                     representations and warranties of the Restricted Parties
                     contained in this Agreement, other than those expressly
                     stated to be made as of a specific date, are true on and as
                     of the date of the Advance;

              (b)    the Advance is in compliance with the terms of the 1999
                     Notes, 2001 Notes, Permitted Senior Secured Indebtedness,
                     Permitted Subordinated Secured Indebtedness and Permitted
                     Unsecured Indebtedness, to the extent they are outstanding
                     (including but not limited to any limitation on additional
                     indebtedness contained in the documentation relating to the
                     1999 Notes, 2001 Notes, Permitted Senior Secured
                     Indebtedness, Permitted Subordinated Secured Indebtedness
                     or Permitted Unsecured Indebtedness) and will not
                     contravene or cause a default under any of the terms of the
                     1999 Notes, 2001 Notes, Permitted Senior Secured
                     Indebtedness, Permitted Subordinated Secured Indebtedness
                     and Permitted Unsecured Indebtedness;

              (c)    the Advance would not result in the holders of the 1999
                     Notes or the 2001 Notes becoming entitled to be secured;

              (d)    the Advance would not result in the holders of any other
                     unsecured Debt outstanding at any time becoming entitled to
                     be secured unless the unsecured Debt, if secured, would
                     constitute Permitted Senior Secured Indebtedness or
                     Permitted Subordinated Secured Indebtedness;

              (e)    the Agent has received timely notice as required under
                     Section 5.6;

              (f)    all other terms and conditions of this Agreement upon which
                     an Advance may be obtained are fulfilled.

                                   ARTICLE V
                                    ADVANCES

5.1           LENDERS' OBLIGATIONS RELATING TO CREDITS 1 AND 2

              Notwithstanding that Advances under Credit 2 are for the time
being made by RBC and its participation in Advances under Credit 1 is reduced,
and the participation of the other Lenders is increased, in accordance with
Section 5.2, it is the intention of the parties that the ultimate credit risk
and exposure of any Lender in respect of the Credit (including in respect of
L/Cs issued under Credit 2) be in accordance with its Proportionate Share of the
entire amount of the Credit. Accordingly, upon the Obligations becoming due and
payable under Section 8.2, each Lender shall (and hereby absolutely,
unconditionally and irrevocably agrees to) do all such things, including
delivery of indemnity agreements and assignments to other Lenders of Advances
made by RBC under Credit 2 or assignments to RBC of Advances made by other
Lenders under Credit 1 as shall be required to ensure that result. Any such
action on the part of the Lenders shall be binding on the Borrower.

<PAGE>
                                     - 42 -

              If any Lender fails to take the actions required under this
Section, the Agent may, without prejudice to the other rights of the Lenders,
make such adjustments to the payments to the defaulting Lender under this
Agreement as are necessary to compensate the other Lenders for the defaulting
Lender's failure.

5.2           ADJUSTMENT OF PROPORTIONATE SHARES FOR SPECIFIC CREDITS

              While RBC is the sole Lender making Advances under Credit 2, its
participation in Advances and payments (including commitment fees) under Credit
1 shall be reduced or eliminated and shall be adjusted by the Agent from time to
time, having regard to the maximum principal amounts of the Credits and the
overall Commitment of RBC to the Credits, so that RBC's separate Proportionate
Shares of Credits 1 and 2 reflect its overall Proportionate Share of the
Credits. The Agent shall amend Schedule E to this Agreement from time to time to
reflect such adjustments and notify NSCL and all affected Lenders of the
amendment.

5.3           EXCEPTIONS REGARDING PARTICULAR CREDITS

              Subject to the provisions of Section 5.1 regarding the assignment
of interests under Credit 2 in the event of acceleration of payment of the
Obligations, the provisions of this Agreement do not apply to Credit 2 to the
extent that the provisions contemplate the participation in Advances and
payments under Credit 2 by any Lender other than RBC. All Advances under Credit
2 shall be made solely by RBC and records concerning Advances shall be
maintained solely by RBC, but RBC shall provide information concerning such
Advances to the Agent from time to time upon request. All payments of principal,
interest, fees and other amounts relating to Credit 2 shall be made solely to
RBC. In addition, any notices by the Borrower in connection with Credit 2 shall
be made to RBC, and notice and minimum amount requirements for Advances shall
not apply to Advances by way of overdraft under Credit 2.

              In connection with Advances by way of overdraft, RBC shall
ascertain the positions or net positions of the Borrower's Canadian Dollar and
US Dollar accounts daily and, if the positions or net positions are debits in
favour of RBC, the debits will (if the Borrower is entitled to an Advance) be
deemed to be a Prime Rate Advance (in the case of Canadian Dollars) or a Base
Rate Advance (in the case of US Dollars) under Credit 2 in the respective
amounts of the debits. If the positions or net positions are credits in favour
of the Borrower, the credits will be deemed to be repayments of Prime Rate
Advances (in the case of Canadian Dollars) or Base Rate Advances (in the case of
US Dollars) under Credit 2 in the respective amounts of the credits.

5.4           EVIDENCE OF INDEBTEDNESS

              The Obligations resulting from Prime Rate Advances, Base Rate
Advances and LIBOR Advances made by the Lenders shall be evidenced by records
maintained by the Agent, and by each Lender concerning those Advances it has
made. The Agent shall also maintain records of the Obligations resulting from
Advances by way of Bankers' Acceptances and L/Cs, and each Lender shall also
maintain records relating to Bankers' Acceptances that it has accepted. The
Issuing Bank shall also maintain records relating to

<PAGE>
                                     - 43 -

L/Cs that it has issued. The records maintained by the Agent, and by the Issuing
Bank relating to L/Cs, shall constitute, in the absence of manifest error,
conclusive evidence of the Obligations and all details relating thereto. The
failure of the Agent or any Lender to correctly record any such amount or date
shall not, however, adversely affect the obligation of the Borrower to pay the
Obligations in accordance with this Agreement.

5.5           CONVERSIONS

              Subject to the other terms of this Agreement (including notice
requirements), the Borrower may from time to time convert all or any part of the
outstanding amount of any Advance into another form of Advance permitted by this
Agreement. A conversion does not, however, constitute a new advance of funds by
any Lender, but only an adjustment of the basis on which interest payable to the
Lenders will be calculated.

5.6           NOTICE OF ADVANCES AND PAYMENTS

              The Borrower shall give the Agent irrevocable written notice, in
the form attached as Schedule A to this Agreement, of any request for any
Advance to it under the Credits. The Borrower shall also give the Agent
irrevocable written notice in the same form of any payment by it (whether
resulting from repayment, prepayment, rollover or conversion) of any Advance
under the Credits.

              Notice shall be given on or before the third Business Day (but not
earlier than the fifth Business Day) prior to the date of any Advance or
payment, except that notice shall be given in respect of an Advance by way of
L/C at such earlier time as the Issuing Bank may reasonably require so that it
has sufficient time to review the proposed form of L/C, and except that notice
in respect of a Prime Rate Advance, Base Rate Advance or payment thereof may be
given on the Business Day before any such Advance or payment. Any cancellation
of part or all of any Credit shall only be effective on three Business Days'
notice as required by Section 5.7.

              Notices shall be given not later than 1:00 p.m. (Toronto time) on
the date for notice. Payments (other than those being made solely from the
proceeds of rollovers and conversions) must be made prior to 1:00 p.m. (Toronto
time) on the date for payment. If a notice or payment is not given or made by
those times, it shall be deemed to have been given or made on the next Business
Day, unless all Lenders affected by the late notice or payment agree, in their
sole discretion, to accept a notice or payment at a later time as being
effective on the date it is given or made.

5.7      PREPAYMENTS AND REDUCTIONS

              Subject to giving notice required by Section 5.6 and to the other
provisions of this Agreement, the Borrower may from time to time repay Advances
outstanding under any Credit without penalty, except that (i) LIBOR Advances may
not be paid prior to the end of the applicable LIBOR Periods unless the Borrower
indemnifies the Lenders for any loss or expense that the Lenders incur as a
result, including any breakage costs and (ii) Bankers' Acceptances may not be
paid prior to their respective maturity dates.

<PAGE>
                                     - 44 -

              The Borrower may from time to time, by giving not less than three
Business Days' express written notice to the Agent and paying all accrued and
unpaid commitment fees to the effective date of cancellation, irrevocably notify
the Agent of the cancellation in whole or in part of the undrawn amount of any
Credit by an amount which shall be a minimum of $1,000,000 and a whole multiple
of $100,000, or the equivalent thereof in US Dollars. The Borrower shall have no
right to any increase in the committed amount of that Credit thereafter.

5.8           PRIME RATE, BASE RATE AND LIBOR ADVANCES

              Upon timely fulfilment of all applicable conditions as set forth
in this Agreement, the Agent, in accordance with the procedures set forth in
Section 5.11, will make the requested amount of a Prime Rate Advance, Base Rate
Advance or LIBOR Advance available to the Borrower on the Drawdown Date
requested by the Borrower by transferring such amount to the Designated Account.
Each Prime Rate Advance shall be in an aggregate minimum amount of $1,000,000
and in a whole multiple of $100,000. Each Base Rate Advance shall be in an
aggregate minimum amount of US $1,000,000 and in a whole multiple of US
$100,000. Each LIBOR Advance shall be in minimum amount of US $1,000,000 and a
whole multiple of US $100,000. The Borrower shall pay interest to the Agent for
the account of the Lenders at the Branch of Account on any such Advances
outstanding to it from time to time hereunder at the applicable rate of interest
specified in Section 2.5.

              Interest on Prime Rate Advances and Base Rate Advances shall be
payable monthly on each Interest Payment Date. Interest on LIBOR Advances shall
be payable on the last day of the applicable LIBOR Period and, if the LIBOR
Period is longer than three months, every three months after the date of the
relevant LIBOR Advance. All interest shall accrue from day to day and shall be
payable in arrears for the actual number of days elapsed from and including the
date of Advance or the previous date on which interest was payable, as the case
may be, to but excluding the date on which interest is payable, both before and
after maturity, default and judgment, with interest on overdue interest at the
same rate payable on demand. Overdue interest with respect to a LIBOR Advance
shall, upon the expiry of the LIBOR Period applicable to such LIBOR Advance,
bear interest, payable on demand, calculated at the rates applicable to Base
Rate Advances.

              Interest calculated with reference to the Prime Rate shall be
calculated monthly on the basis of a calendar year. Interest calculated with
reference to the Base Rate shall be calculated monthly on the basis of a year of
365 days. Interest calculated with reference to the LIBO Rate shall be
calculated on the basis of a year of 360 days for a term equal to the applicable
LIBOR Period or, if a LIBOR Period is longer than three months, every three
months. Each rate of interest which is calculated with reference to a period
(the "DEEMED INTEREST PERIOD") that is less than the actual number of days in
the calendar year of calculation is, for the purposes of the INTEREST ACT
(Canada), equivalent to a rate based on a calendar year calculated by
multiplying such rate of interest by the actual number of days in the calendar
year of calculation and dividing by the number of days in the deemed interest
period.

<PAGE>
                                     - 45 -

5.9           LIBOR PERIODS

              The Borrower may select, by irrevocable notice to the Agent, LIBOR
Periods of one, two, three or six months to apply to any particular LIBOR
Advance, provided that the Agent, in circumstances of market disruption or
illiquidity, shall have the discretion to restrict the LIBOR Period. LIBOR
Periods of other lengths shall also be available at the discretion of the
Lenders from time to time. No LIBOR Period may end on a date which is not a
Business Day or on a date which is later than the date on which the principal
amount of any Credit is required to be reduced (in whole or in part) if that
would adversely affect the Borrower's ability to cause the reduction of the
Credit in question. The Borrower shall from time to time select and give notice
to the Agent of the LIBOR Period for a LIBOR Advance which shall commence upon
the making of the LIBOR Advance or at the expiry of any outstanding LIBOR Period
applicable to a LIBOR Advance that is being rolled over. If the Borrower fails
to select and give the Agent notice of a LIBOR Period for a LIBOR Advance in
accordance with Section 5.6, the Lenders shall be deemed to have made a Base
Rate Advance to the Borrower to replace the maturing LIBO Rate Advance. A
rollover of a LIBOR Advance does not constitute a new advance of funds by the
Lenders, but rather an adjustment of the basis on which interest is charged.

5.10          TERMINATION OF LIBOR ADVANCES

              If at any time a Lender determines in good faith and on reasonable
grounds (which determination shall be conclusive and binding on the Borrower)
that:

              (a)    adequate and reasonable means do not exist for ascertaining
                     the LIBO Rate applicable to a LIBOR Advance;

              (b)    the LIBO Rate does not adequately reflect the effective
                     cost to the Lender of making or maintaining a LIBOR
                     Advance, except as a result of the Lender failing to obtain
                     a deposit in the amount and for the term of the LIBOR
                     Advance; or

              (c)    it cannot readily obtain or retain funds in the London
                     interbank market in order to fund or maintain any LIBOR
                     Advance or cannot otherwise perform its obligations
                     hereunder with respect to any LIBOR Advance,

then upon written notice by the Agent to the Borrower,

              (d)    the right of the Borrower to request LIBOR Advances from
                     that Lender shall be and remain suspended until the Agent
                     notifies the Borrower that any condition causing such
                     determination no longer exists, and

              (e)    if the Lender is prevented from maintaining a LIBOR
                     Advance, the Borrower shall, at its option, either repay
                     the LIBOR Advances owing by it to that Lender or convert
                     the LIBOR Advances into other forms of Advance which are
                     permitted by this Agreement, but the Borrower shall be
                     responsible for any loss or expense that the Lender incurs
                     as a result,

<PAGE>
                                     - 46 -

                     including breakage costs if the Lender is prevented from
                     maintaining a LIBOR Advance for reasons beyond its control.

5.11          CO-ORDINATION OF PRIME RATE, BASE RATE AND LIBOR ADVANCES

              Each Lender shall advance its Proportionate Share of each Prime
Rate Advance, Base Rate Advance and LIBOR Advance in accordance with the
following provisions:

              (a)    the Agent shall advise each Lender of its receipt of a
                     notice from the Borrower pursuant to Section 5.6 on the day
                     such notice is received and shall, as soon as possible,
                     advise each Lender of such Lender's Proportionate Share of
                     any Advance requested by the notice;

              (b)    each Lender shall deliver its Proportionate Share of the
                     Advance to the Agent not later than 11:00 a.m. (Toronto
                     time) on the Drawdown Date;

              (c)    if the Agent determines that all the conditions precedent
                     to an Advance specified in this Agreement have been met, it
                     shall advance to the Borrower the amount delivered by each
                     Lender by transferring it to the Designated Account prior
                     to 2:00 p.m. (Toronto time) on the Drawdown Date, but if
                     the conditions precedent to the Advance are not met by 2:00
                     p.m. (Toronto time) on the Drawdown Date, the Agent shall
                     return the funds to the Lenders or invest them in an
                     overnight investment as orally instructed by each Lender
                     until such time as the Advance is made; and

              (d)    if the Agent determines that a Lender's Proportionate Share
                     of an Advance would not be a whole multiple of $100,000 or
                     US $100,000, as the case may be, the amount to be advanced
                     by that Lender may be increased or reduced by the Agent in
                     its sole discretion to the extent necessary to reflect the
                     requirements of this sub-paragraph.

5.12          EXECUTION OF BANKERS' ACCEPTANCES

              To facilitate the acceptance of Bankers' Acceptances hereunder,
the Borrower hereby appoints each Lender as its attorney to sign and endorse on
its behalf, as and when considered necessary by the Lender, an appropriate
number of orders in the form prescribed by that Lender.

              Each Lender may, at its option, execute any order in handwriting
or by the facsimile or mechanical signature of any of its authorized officers,
and the Lenders are hereby authorized to accept or pay, as the case may be, any
order of the Borrower which purports to bear such a signature notwithstanding
that any such individual has ceased to be an authorized officer of the Lender.
Any such order or Bankers' Acceptance shall be as valid as if he or she were an
authorized officer at the date of issue of the order or Bankers' Acceptance.

              Any order or Bankers' Acceptance signed by a Lender as attorney
for the Borrower, whether signed in handwriting or by the facsimile or
mechanical signature of an

<PAGE>
                                     - 47 -

authorized officer of a Lender may be dealt with by the Agent or any Lender to
all intents and purposes and shall bind the Borrower as if duly signed and
issued by the Borrower.

              The receipt by the Agent of a request for an Advance by way of
Bankers' Acceptances shall be each Lender's sufficient authority to execute, and
each Lender shall, subject to the terms and conditions of this Agreement,
execute orders in accordance with such request and the advice of the Agent given
pursuant to Section 5.15, and the orders so executed shall thereupon be deemed
to have been presented for acceptance.

5.13          SALE OF BANKERS' ACCEPTANCES

              It shall be the responsibility of each Lender to arrange, in
accordance with normal market practice, for the sale on each Drawdown Date of
the Bankers' Acceptances issued by the Borrower and to be accepted by that
Lender, failing which the Lender shall purchase its Bankers' Acceptances.

              In accordance with the procedures set forth in Section 5.15, the
Agent will make the net proceeds of the requested Advance by way of Bankers'
Acceptances received by it from the Lenders available to the Borrower on the
Drawdown Date by transferring such amount to the Designated Account.

              Notwithstanding the foregoing, if in the determination of the
Majority Lenders acting reasonably a market for Bankers' Acceptances does not
exist at any time, or the Lenders cannot for other reasons, after reasonable
efforts, readily sell Bankers' Acceptances or perform their other obligations
under this Agreement with respect to Bankers' Acceptances, then upon written
notice by the Agent to the Borrower, the Borrower's right to request Advances by
way of Bankers' Acceptances shall be and remain suspended until the Agent
notifies the Borrower that any condition causing such determination no longer
exists.

5.14          SIZE AND MATURITY OF BANKERS' ACCEPTANCES AND ROLLOVERS

              Each Advance of Bankers' Acceptances shall be in a minimum amount
of $1,000,000 and a whole multiple of $100,000. Each Bankers' Acceptance shall
have a term of one, two, three or six months after the date of acceptance of the
order by a Lender, provided that the Agent, in circumstances of market
disruption or illiquidity, shall have the discretion to restrict the term or
maturity dates of Bankers' Acceptances. Bankers' Acceptances of other lengths
shall also be available at the discretion of the Lenders from time to time. No
Bankers' Acceptance may mature on a date which is not a Business Day or on a
date which is later than the date on which the principal amount of any Credit is
required to be reduced (in whole or in part) if that would adversely affect the
Borrower's ability to cause the reduction of the Credit in question. The face
amount at maturity of a Bankers' Acceptance may be renewed as a Bankers'
Acceptance or converted into another form of Advance permitted by this
Agreement.

5.15          CO-ORDINATION OF BA ADVANCES

              Each Lender shall advance its Proportionate Share of each Advance
by way of Bankers' Acceptances in accordance with the provisions set forth
below.

<PAGE>
                                     - 48 -

5.15.1        The Agent, promptly following receipt of a notice from the
Borrower pursuant to Section 5.6 requesting an Advance by way of Bankers'
Acceptances, shall advise each Lender of the aggregate face amount and term(s)
of the Bankers' Acceptances to be accepted by it, which term(s) shall be
identical for all Lenders. The aggregate face amount of Bankers' Acceptances to
be accepted by a Lender shall be determined by the Agent by reference to the
respective Commitments of the Lenders, except that, if the face amount of a
Bankers' Acceptance would not be Cdn. $100,000 or a whole multiple thereof, the
face amount shall be increased or reduced by the Agent in its sole discretion to
the nearest whole multiple of Cdn. $100,000.

5.15.2        Each Lender shall transfer to the Agent at the Branch of Account
for value on each Drawdown Date immediately available Cdn. Dollars in an
aggregate amount equal to the BA Discount Proceeds of all Bankers' Acceptances
accepted and sold or purchased by the Lender on such Drawdown Date net of the
applicable Bankers' Acceptance Fee and net of the amount required to pay any of
its previously accepted Bankers' Acceptances that are maturing on the Drawdown
Date or any of its other Advances that are being converted to Bankers'
Acceptances on the Drawdown Date.

5.15.3        If the Agent determines that all the conditions precedent to an
Advance specified in this Agreement have been met, it shall advance to the
Borrower the amount delivered by each Lender by transferring it to the
Designated Account prior to 2:00 p.m. (Toronto time) on the Drawdown Date, but
if the conditions precedent to the Advance are not met by 2:00 p.m. (Toronto
time) on the Drawdown Date, the Agent shall return the funds to the Lenders or
invest them in an overnight investment as orally instructed by each Lender until
such time as the Advance is made.

5.15.4        Notwithstanding any other provision hereof, for the purpose of
determining the amount to be transferred by a Lender to the Agent for the
account of the Borrower in respect of the sale of any Bankers' Acceptance issued
by the Borrower and accepted by such Lender, the proceeds of sale thereof shall
be deemed to be an amount equal to the BA Discount Proceeds calculated with
respect thereto. Accordingly, in respect of any particular Bankers' Acceptance
accepted by it, a Lender in addition to its entitlement to retain the applicable
Bankers' Acceptance Fee for its own account (i) shall be entitled to retain for
its own account the amount, if any, by which the actual proceeds of sale thereof
exceed the BA Discount Proceeds calculated with respect thereto, and (ii) shall
be required to pay out of its own funds the amount, if any, by which the actual
proceeds of sale thereof are less than the BA Discount Proceeds calculated with
respect thereto.

5.15.5        Whenever the Borrower requests an Advance that includes Bankers'
Acceptances, each Lender that is not permitted by applicable law or by customary
market practice to accept a Bankers' Acceptance or any other Lender that in any
instance chooses not to accept a Bankers' Acceptance (each, a "NON BA LENDER")
shall, in lieu of accepting its PRO RATA amount of such Bankers' Acceptances,
make available to the Borrower on the Drawdown Date a loan (a "BA EQUIVALENT
LOAN") in Canadian Dollars and in an amount equal to the BA Discount Proceeds of
the Bankers' Acceptances that the Non BA Lender would have been required to
accept on the Drawdown Date if it were able to accept Bankers' Acceptances. Each
Non BA Lender shall also be entitled to deduct from the BA

<PAGE>
                                     - 49 -

Equivalent Loan an amount equal to the Bankers Acceptance Fee that would have
been applicable had it been able to accept Bankers' Acceptances. The BA
Equivalent Loan shall have a term equal to the term of the Bankers' Acceptances
that the Non BA Lender would otherwise have accepted and the Borrower shall, at
the end of that term, be obligated to pay the Non BA Lender an amount equal to
the aggregate face amount of the Bankers' Acceptances that it would otherwise
have accepted. All provisions of this Agreement applicable to Bankers'
Acceptances and Lenders that accept Bankers' Acceptances shall apply MUTATIS
MUTANDIS to BA Equivalent Loans and Non BA Lenders and, without limiting the
foregoing, Advances shall include BA Equivalent Loans.

5.16          PAYMENT OF BANKERS' ACCEPTANCES

              The Borrower shall provide for the payment to the Agent at the
Branch of Account for the account of the applicable Lenders of the full face
amount of each Bankers' Acceptance accepted for its account on the earlier of
(i) the date of maturity of a Bankers' Acceptance and (ii) the date on which any
Obligations become due and payable pursuant to Section 8.2. The Lenders shall be
entitled to recover interest from the Borrower at a rate of interest per annum
equal to the rate applicable to Prime Rate Advances under the Credit under which
the Bankers' Acceptance was issued, compounded monthly, upon any amount payment
of which has not been provided for by the Borrower in accordance with this
Section. Interest shall be calculated from and including the date of maturity of
each Bankers' Acceptance up to but excluding the date such payment, and all
interest thereon, both before and after demand, default and judgment, is
provided for by the Borrower.

              If the Borrower provides cash in response to any Obligations
becoming due and payable under Section 8.2, it shall be entitled to receive
interest on the cash provided in accordance with Section 11.16 as long as the
cash is held as Collateral.

5.17          DEEMED ADVANCE - BANKERS' ACCEPTANCES

              Except for amounts which are paid from the proceeds of a rollover
of a Bankers' Acceptance or for which payment has otherwise been funded by the
Borrower, any amount which a Lender pays to any third party on or after the date
of maturity of a Bankers' Acceptance in satisfaction thereof or which is owing
to the Lender in respect of such a Bankers' Acceptance on or after the date of
maturity of such a Bankers' Acceptance, shall be deemed to be a Prime Rate
Advance to the Borrower under this Agreement. Each Lender shall forthwith give
notice of the making of such a Prime Rate Advance to the Borrower and the Agent
(which shall promptly give similar notice to the other Lenders). Interest shall
be payable on such Prime Rate Advances in accordance with the terms applicable
to Prime Rate Advances.

5.18          WAIVER

              The Borrower shall not claim from a Lender any days of grace for
the payment at maturity of any Bankers' Acceptances presented and accepted by
the Lender pursuant to this Agreement. The Borrower waives any defence to
payment which might otherwise exist if for any reason a Bankers' Acceptance
shall be held by a Lender in its own right at the

<PAGE>
                                     - 50 -

maturity thereof, and the doctrine of merger shall not apply to any Bankers'
Acceptance that is at any time held by a Lender in its own right.

5.19          DEGREE OF CARE

              Any executed orders to be used as Bankers' Acceptances shall be
held in safekeeping with the same degree of care as if they were the Lender's
own property, and shall be kept at the place at which such orders are ordinarily
held by such Lender.

5.20          INDEMNITY

              The Borrower shall indemnify and hold the Lenders, and each of
them, harmless from any loss, cost, damage or expense with respect to any
Bankers' Acceptance dealt with by the Lenders for the Borrower's account, but
shall not be obliged to indemnify a Lender for any loss, cost, damage or expense
caused by the gross negligence or wilful misconduct of that Lender.

5.21          OBLIGATIONS ABSOLUTE

              The obligations of the Borrower with respect to Bankers'
Acceptances under this Agreement shall be unconditional and irrevocable, and
shall be paid strictly in accordance with the terms of this Agreement under all
circumstances, including, without limitation, the following circumstances:

                     (i)    any lack of validity or enforceability of any order
                            accepted by a Lender as a Bankers' Acceptance; or

                     (ii)   the existence of any claim, set-off, defence or
                            other right which the Borrower may have at any time
                            against the holder of a Bankers' Acceptance, a
                            Lender or any other person or entity, whether in
                            connection with this Agreement or otherwise.

5.22          SHORTFALL ON DRAWDOWNS, ROLLOVERS AND CONVERSIONS

              The Borrower agrees that:

              (a)    the difference between the amount of an Advance requested
                     by the Borrower by way of Bankers' Acceptances and the
                     actual proceeds of the Bankers' Acceptances;

              (b)    the difference between the actual proceeds of a Bankers'
                     Acceptance and the amount required to pay a maturing
                     Bankers' Acceptance, if a Bankers' Acceptance is being
                     rolled over; and

              (c)    the difference between the actual proceeds of a Bankers'
                     Acceptance and the amount required to repay any Advance
                     which is being converted to a Bankers' Acceptance;

<PAGE>
                                     - 51 -

shall be funded and paid by the Borrower from its own resources, by 11:00 a.m.
on the day of the Advance or may be advanced as a Prime Rate Advance under a
Credit if the Borrower is otherwise entitled to an Advance under the Credit.

5.23          PROHIBITED USE OF L/CS AND BANKERS' ACCEPTANCES

              The Borrower shall not enter into any agreement or arrangement of
any kind with any person to whom Bankers' Acceptances have been delivered
whereby the Borrower undertakes to replace such Bankers' Acceptances on a
continuing basis with other Bankers' Acceptances, nor shall the Borrower
directly or indirectly take, use or provide Bankers' Acceptances or L/Cs as
security for loans or advances from any other person. Notwithstanding the
preceding sentence, the Borrower may use L/Cs as security for industrial
development bonds and other similar types of instruments which may be
outstanding in connection with any Property acquired by any Restricted Party,
directly or indirectly. Such use of an L/C shall be considered to be financial
assistance for the purpose of Section 3.1.4(b). The Borrower may also use L/Cs
to secure bankers' acceptances maturing on or before 21 October 2002 that are
owing to National Bank of Canada and Comerica Bank in connection with the credit
agreement dated as of 14 August 2001.

5.24          ISSUANCE AND MATURITY OF L/CS

              A request for an Advance by way of L/C shall be made by a Borrower
in accordance with Section 5.6, except that the request shall be sent directly
to the Issuing Bank. A request shall include the details of the L/C to be
issued. The Issuing Bank shall promptly notify the Borrower of any comment
concerning the form of the L/C requested by the Borrower and shall, if the
Borrower is otherwise entitled to an Advance, issue the L/C to the Borrower at
the branch where its account is maintained on the Drawdown Date or as soon
thereafter as the Issuing Bank is satisfied with the form of L/C to be issued.

              Each L/C issued under this Agreement shall have a term which is
not more than one year after its issuance date or renewal date and does not
extend beyond the then-current maturity date of the Credits. Collateral shall be
provided for the benefit of the Lenders promptly upon demand by the Agent. An
L/C may be renewed by the Borrower subject to complying with the terms of this
Agreement applicable to an Advance by way of L/C.

5.25          PAYMENT OF L/C FEES

              Payment of L/C Fees shall be made to the Issuing Bank, shall be
made at the time of issuance or renewal of each L/C and shall be refunded PRO
RATA if the L/C is drawn, reduced in amount or terminated before its expiry
date. Fees shall be calculated for the period from and including the date of
issuance (or the day following the previous expiry date in the case of a
renewal) to and including the date of expiry of the relevant L/C.

5.26          PAYMENT OF L/CS

              The Borrower shall provide for the payment to the Issuing Bank at
the branch where the L/C was issued of the full face amount of each L/C (or the
amount actually paid in the case of a partial payment) on the earlier of (i) the
date on which the Issuing Bank makes a payment to the beneficiary of an L/C, and
(ii) the date on which any Obligations

<PAGE>
                                     - 52 -

become due and payable pursuant to Section 8.2. The Issuing Bank shall be
entitled to recover interest from the Borrower at a rate of interest per annum
equal to the rate applicable to Prime Rate Advances (in the case of Canadian
Dollar L/Cs) or Base Rate Advances (in the case of US Dollar L/Cs), compounded
monthly, upon any amount payment of which has not been provided for by the
Borrower in accordance with this Section. Interest shall be calculated from and
including the date on which the Issuing Bank makes a payment to the beneficiary
of an L/C, up to but excluding the date such payment, and all interest thereon,
both before and after demand, default and judgment, is provided for by the
Borrower.

              The obligation of the Borrower to reimburse the Issuing Bank for a
payment to a beneficiary of an L/C shall be absolute and unconditional, without
prejudice to the Borrower's right to subsequently claim damages for matters
arising from the Issuing Bank's wilful misconduct or gross negligence, and shall
not be reduced by any demand or other request for payment of an L/C (a "DEMAND")
paid or acted upon in good faith and in conformity with laws, regulations or
customs applicable thereto being invalid, insufficient, fraudulent or forged,
nor shall the Borrower's obligation be subject to any defence or be affected by
any right of set-off, counter-claim or recoupment which the Borrower may now or
hereafter have against the beneficiary, the Issuing Bank or any other person for
any reason whatsoever, including the fact that the Issuing Bank paid a Demand or
Demands (if applicable) aggregating up to the amount of the L/C notwithstanding
any contrary instructions from the Borrower to the Issuing Bank or the
occurrence of any event including, but not limited to, the commencement of legal
proceedings to prohibit payment by the Issuing Bank of a Demand. Any action,
inaction or omission taken or suffered by the Issuing Bank under or in
connection with an L/C or any Demand, if in good faith and in conformity with
laws, regulations or customs applicable thereto shall be binding on the Borrower
and shall not place any Lender under any resulting liability to the Borrower.
Without limiting the generality of the foregoing, the Issuing Bank may receive,
accept, or pay as complying with the terms of the L/C, any Demand otherwise in
order which may be signed by, or issued to, any administrator, executor, trustee
in bankruptcy, receiver or other person or entity acting as the representative
or in place of, the beneficiary.

              If the Borrower provides cash in response to any Obligations
becoming due and payable under Section 8.2, it shall be entitled to receive
interest on the cash provided in accordance with Section 11.16 as long as the
cash is held as Collateral.

5.27          DEEMED ADVANCE - L/CS

              Except for amounts which have been funded by the Borrower, any
amount which the Issuing Bank pays to any third party in respect of an L/C in
satisfaction or partial satisfaction thereof shall be deemed to be a Prime Rate
Advance in the case of Canadian Dollar L/Cs or a Base Rate Advance in the case
of US Dollar L/Cs, in each case under the Credit under which the L/C was issued.
Any amount which the Issuing Bank pays to any third party in respect of an L/C
denominated in Euros or Japanese yen in satisfaction or partial satisfaction
thereof shall be promptly converted by the Issuing Bank to Canadian Dollars in
accordance with its customary practices for conversion of currencies and the
amount of Canadian Dollars into which the amount paid is converted shall be
deemed to be a Prime Rate Advance under the Credit under which the L/C was
issued. The Issuing Bank

<PAGE>
                                     - 53 -

shall forthwith give notice of the making of such an Advance to the Borrower.
Interest shall be payable on such Advances in accordance with the terms
applicable to such Advances.

5.28          PROHIBITED RATES OF INTEREST

              It is the intention of the parties to comply with applicable usury
laws now or hereafter enacted. Accordingly, notwithstanding any other provisions
of this Agreement or any other Credit Document, in no event shall any Credit
Document require the payment or permit the collection of interest or other
amounts in an amount or at a rate in excess of the amount or rate that is
permitted by law or in an amount or at a rate that would result in the receipt
by the Lenders or the Agent of interest at a criminal rate, as the terms
"interest" and "criminal rate" are defined under the CRIMINAL CODE (Canada).
Where more than one such law is applicable to any Restricted Party, that
Restricted Party shall not be obliged to make payment in an amount or at a rate
higher than the lowest amount or rate permitted by such laws. If from any
circumstances whatever, fulfilment of any provision of any Credit Document shall
involve transcending the limit of validity prescribed by applicable law for the
collection or charging of interest, the obligation to be fulfilled shall be
reduced to the limit of such validity, and if from any such circumstances the
Agent or the Lenders shall ever receive anything of value as interest or deemed
interest under any Credit Document in an amount that would exceed the highest
lawful rate of interest permitted by applicable law, such amount that would be
excessive interest shall be applied to the reduction of the principal amount of
the relevant Credit, and not to the payment of interest, or if such excessive
interest exceeds the unpaid principal balance of the relevant Credit, the amount
exceeding the unpaid balance shall be refunded to the Borrower. In determining
whether or not the interest paid or payable under any specified contingency
exceeds the highest lawful rate, the Restricted Parties, the Agent and the
Lenders shall, to the maximum extent permitted by applicable law, (a)
characterize any non-principal payment as an expense, fee or premium rather than
as interest, (b) exclude voluntary prepayments and the effects thereof, (c)
amortize, prorate, allocate and spread the total amount of interest throughout
the term of such indebtedness so that interest thereon does not exceed the
maximum amount permitted by applicable law, and/or (d) allocate interest between
portions of such indebtedness to the end that no such portion shall bear
interest at a rate greater than that permitted by applicable law. For the
purposes of the application of the CRIMINAL CODE (Canada), the effective annual
rate of interest shall be determined in accordance with generally accepted
actuarial practices and principles and in the event of any dispute, a
certificate of a Fellow of the Canadian Institute of Actuaries appointed by the
Agent shall be conclusive for the purpose of such determination.

                                   ARTICLE VI
                         REPRESENTATIONS AND WARRANTIES

6.1           REPRESENTATIONS AND WARRANTIES

              Each Restricted Party represents and warrants to the Lenders as
specified below.

6.1.1         CORPORATE MATTERS

<PAGE>
                                     - 54 -

              (a)    It is a duly incorporated or amalgamated and validly
                     existing corporation or a duly organized and validly
                     existing partnership, as the case may be, and has the power
                     and authority to enter into and perform its obligations
                     under any Credit Documents to which it is or will be a
                     party, to own its Property and to carry on the business in
                     which it is engaged.

              (b)    It is in compliance with the requirements for carrying on
                     business in all jurisdictions in which it carries on
                     business except to the extent that the non-compliance would
                     not have a material adverse effect on the ability of the
                     Restricted Parties, taken as a whole, to carry on business.

              (c)    It has all Permits required as of the date hereof, to enter
                     into and perform its obligations under any Credit Documents
                     to which it is or will be a party, to own its Property and
                     to carry on the business in which it is engaged, except to
                     the extent that the absence of Permits would not have a
                     material adverse effect on the ability of the Restricted
                     Parties, taken as a whole, to do all things contemplated in
                     this paragraph.

              (d)    The entering into and the performance by it of the Credit
                     Documents to which it is or will be a party (i) have been
                     duly authorized by all necessary corporate action on its
                     part, (ii) do not and will not violate its Constating
                     Documents, any Requirement of Law, the 1999 Indenture, the
                     2001 Indenture or the terms of any Permitted Senior Secured
                     Indebtedness, Permitted Subordinated Secured Indebtedness
                     or Permitted Unsecured Indebtedness, (iii) do not and will
                     not violate any Permit or any Contract not mentioned in
                     item (ii) to which it is a party, except to the extent that
                     any violation would not cause a Material Adverse Change,
                     and (iv) will not result in the creation of any Encumbrance
                     on any of its Property or require it to create any
                     Encumbrance on any of its Property other than, in either
                     case, Permitted Encumbrances and will not result in the
                     forfeiture of any of its Property.

              (e)    Its Constating Documents do not restrict the power of its
                     directors to borrow money, to give financial assistance by
                     way of loan, guarantee or otherwise, or to encumber any or
                     all of its present and future Property to secure the
                     Obligations, except for restrictions under any Constating
                     Document which have been complied with in connection with
                     the Credit Documents and the Permitted Obligations.

              (f)    It is not in violation of any term of its Constating
                     Documents and is not in violation of any Requirement of
                     Law, Permit or Contract, the violation of which would
                     materially and adversely affect its ability to own its
                     Property and conduct its business, nor will its execution,
                     delivery and performance of any Credit Documents to which
                     it is a party result in any such violation.

              (g)    It has good and marketable title to or the right to use or
                     good, valid and subsisting leases or licenses in respect of
                     all of the Property necessary for

<PAGE>
                                     - 55 -

                     the operation of its business, free and clear of any
                     Encumbrances, other than Permitted Encumbrances, and no
                     person has any agreement or right to acquire any of its
                     Property out of the ordinary course of business.

6.1.2         CREDIT DOCUMENTS

              (a)    The Credit Documents to which it is or will be a party have
                     been or will be duly executed and delivered by it and, when
                     executed and delivered, will constitute legal, valid and
                     binding obligations enforceable against it in accordance
                     with their respective terms, subject to the availability of
                     equitable remedies and the effect of bankruptcy, insolvency
                     and similar laws affecting the rights of creditors
                     generally.

              (b)    As of the date of this Agreement, no Event of Default or
                     Pending Event of Default has occurred and is continuing.

              (c)    From and after the date on which the relevant Security is
                     delivered, the Lenders will have the benefit of legal,
                     valid and enforceable security upon all of its present and
                     future Property subject only to Permitted Encumbrances, the
                     availability of equitable remedies, and the effect of
                     bankruptcy, insolvency and similar laws affecting the
                     rights of creditors generally.

6.1.3         LITIGATION, FINANCIAL STATEMENTS ETC.

              (a)    As of the date of execution of this Agreement, there are no
                     litigation, arbitration or administrative proceedings or
                     industrial or labour disputes outstanding and, to its
                     knowledge after having made reasonable inquiry, there are
                     no proceedings or disputes pending or threatened, against
                     it which, in either case, could constitute a Material
                     Adverse Change, except as disclosed on Schedule J.

              (b)    All of the historical financial statements which have been
                     furnished to the Lenders, or any of them, in connection
                     with this Agreement are complete and, to its knowledge
                     after reasonable inquiry, fairly present in all material
                     respects the financial position of NSCL on a consolidated
                     basis as of the dates referred to therein and have been
                     prepared in accordance with GAAP except, in the case of
                     quarterly financial statements, notes to the statements and
                     normal year-end audit adjustments required by GAAP are not
                     included.

              (c)    All projections, including forecasts, budgets, PRO FORMAS
                     and business plans provided to the Agent were prepared in
                     good faith based on assumptions which were believed to be
                     reasonable and were believed at the time of preparation to
                     be reasonable estimates of the prospects of the businesses
                     referred to therein, and all material changes in the
                     estimates of the prospects of those businesses occurring
                     between the time of

<PAGE>
                                     - 56 -

                     preparation and the date of this Agreement have been
                     disclosed to the Lenders in writing.

              (d)    As of the date of execution of this Agreement, it has no
                     liabilities (contingent or other) or other obligations of
                     the type required to be included in the consolidated
                     financial statements of the Restricted Parties in
                     accordance with GAAP which are not fully included on NSCL's
                     audited financial statements provided to the Lenders for
                     its fiscal year ended 31 December 2001 or NSCL's unaudited
                     financial statements for the fiscal period ended 31 March
                     2002, other than liabilities and obligations incurred
                     thereafter in the ordinary course of its business and the
                     Obligations, none of which constitutes a Material Adverse
                     Change.

              (e)    It is not in default under any of the Permitted
                     Encumbrances to an extent that would materially and
                     adversely affect the financial position of NSCL on a
                     consolidated basis, or the Restricted Party's ability to
                     carry on its business or perform its obligations under the
                     Credit Documents to which it is or will be a party.

              (f)    There is no fact that it has not disclosed to the Agent in
                     writing that materially and adversely affects its ability
                     to perform its obligations under the Credit Documents to
                     which it is or will be a party.

6.1.4         OTHER DEBT

              (a)    This Agreement is in compliance with the terms of the 1999
                     Notes, the 2001 Notes, and any outstanding Permitted Senior
                     Secured Indebtedness, Permitted Subordinated Secured
                     Indebtedness and Permitted Unsecured Indebtedness
                     (including but not limited to any limitation on additional
                     indebtedness contained in the documentation relating to the
                     1999 Notes, 2001 Notes, Permitted Senior Secured
                     Indebtedness, Permitted Subordinated Secured Indebtedness
                     and Permitted Unsecured Indebtedness) and will not
                     contravene or cause a default under any of the 1999 Notes,
                     2001 Notes, Permitted Senior Secured Indebtedness,
                     Permitted Subordinated Secured Indebtedness and Permitted
                     Unsecured Indebtedness.

              (b)    All Obligations are "Permitted Indebtedness" under the 1999
                     Indenture, "Permitted Debt" under the 2001 Indenture and
                     the equivalent of those terms under the terms of any
                     outstanding Permitted Senior Secured Indebtedness,
                     Permitted Subordinated Secured Indebtedness and Permitted
                     Unsecured Indebtedness.

              (c)    All Obligations are "Senior Indebtedness" and "Designated
                     Senior Indebtedness" or the equivalent of those terms under
                     the terms of any outstanding Permitted Subordinated Secured
                     Indebtedness and the terms of any Permitted Unsecured
                     Indebtedness which is expressed to be

<PAGE>
                                     - 57 -

                     subordinated and are entitled to the benefit of all
                     subordination provisions under the terms of any such Debt.

              (d)    The Credits constitute "New Credit Facilities" under the
                     terms of the 1999 Notes and the 2001 Notes. As of 30 June
                     2002, the Threshold Amount was not less than $600,000,000.

6.1.5         PROPERTY AND CAPITAL STOCK

              (a)    Schedule F fully and fairly describes as of the date of
                     this Agreement, the ownership of all of its issued and
                     outstanding Capital Stock, the Capital Stock in Restricted
                     Parties and other persons that it owns, the nature of the
                     business that it carries on, the locations of its head
                     office (and chief executive office, if different) and its
                     freehold (or fee as the case may be) and leasehold real
                     property, and the jurisdictions in which its other Property
                     (other than accounts receivable) are located.

              (b)    The Pledged Shares are validly issued as fully paid and
                     non-assessable Capital Stock of the respective Restricted
                     Parties or other issuers.

              (c)    The consents of the shareholders or directors of the
                     respective Restricted Parties or other issuers and any
                     other consents that will be delivered at or prior to the
                     time that the Pledged Shares become part of the Trustee
                     Security are the only consents that are necessary or
                     desirable in connection with the pledges of the Pledged
                     Shares as part of the Trustee Security (including the
                     enforcement of the pledges), and will be kept in full force
                     and effect as long as they remain necessary or desirable.

6.1.6         ENVIRONMENTAL MATTERS

              (a)    To its knowledge having made all due inquiry, (i) there are
                     no active or abandoned underground storage tanks located on
                     any land which it occupies or controls, except those that
                     comply with applicable Requirements of Law, (ii) there are
                     no Hazardous Materials located on, above or below the
                     surface of any land which it occupies or controls or
                     contained in the soil or water constituting such land
                     (except those that are in compliance with applicable
                     Requirements of Law), (iii) no release of Hazardous
                     Materials has occurred on or from such land (except those
                     minor items that are in accordance with Permits or
                     otherwise do not violate applicable Requirements of Law)
                     and (iv) no land that it occupies or controls has been used
                     as a landfill or waste disposal site, except in each case
                     as disclosed on Schedule J or as would not reasonably be
                     expected to cause a Material Adverse Change.

              (b)    Its business and Property have been and are being owned,
                     occupied and operated in substantial compliance with
                     applicable Requirements of Law intended to protect the
                     environment (including, without limitation, laws respecting
                     the disposal or emission of Hazardous Materials), to the
                     best of

<PAGE>
                                     - 58 -

                     its knowledge after reasonable inquiry there are no
                     breaches thereof and no enforcement actions in respect
                     thereof are threatened or pending which, in any such case,
                     would reasonably be expected to cause a Material Adverse
                     Change.

6.1.7         TAXES AND WITHHOLDINGS

              (a)    It has (i) duly filed on a timely basis all material tax
                     returns, elections and reports required to be filed by it
                     and has paid, collected and remitted all material Taxes due
                     and payable, collectible or remittable by it, except Taxes
                     for which instalments have been paid based on reasonable
                     estimates pending final assessments, or the validity of
                     which is being contested by it diligently and in good faith
                     by appropriate proceedings and the payment of which has
                     been secured by such arrangements (including Collateral) as
                     the Lenders may require, (ii) made adequate provision for
                     material Taxes payable by it for the current period and any
                     previous period for which tax returns are not yet required
                     to be filed and, except as disclosed in writing to the
                     Agent from time to time, there are no actions, proceedings
                     or claims pending or, to its knowledge, threatened, against
                     it in respect of material Taxes, and (iii) collected and
                     remitted to the appropriate tax authority when required by
                     law to do so all material amounts collectible and
                     remittable in respect of goods and services tax and similar
                     provincial or state Taxes, and has paid all such material
                     amounts payable by it on account of sales Taxes including
                     goods and services and value-added taxes, except in each
                     case Taxes for which instalments have been paid based on
                     reasonable estimates pending final assessments, or the
                     validity of which is being contested by it diligently and
                     in good faith by appropriate proceedings and the payment of
                     which has been secured by such arrangements (including
                     Collateral) as the Lenders may require (it being agreed
                     that, for purposes of this paragraph, the amount of a Tax
                     is material if it equals or exceeds Cdn. $10,000,000 or the
                     equivalent thereof in another currency).

              (b)    It has withheld from each payment made to any of its past
                     or present employees, officers or directors, and to any
                     non-resident of the country in which it is resident, the
                     amount of all material Taxes and other deductions required
                     to be withheld therefrom and has paid the same to the
                     appropriate tax authority within the time required under
                     any applicable legislation (it being agreed that, for
                     purposes of this paragraph, the amount of a Tax is material
                     if it equals or exceeds Cdn. $2,000,000 or the equivalent
                     thereof in another currency).

6.1.8         ABORIGINAL CLAIMS

              (a)    Except for matters which would not, in the aggregate,
                     reasonably be expected to cause a Material Adverse Change,
                     no Aboriginal group has asserted, by virtue of its
                     Aboriginal status:

<PAGE>
                                     - 59 -

                     (i)    any claim against any Property of a Restricted
                            Party;

                     (ii)   any right, title, benefit or interest in any real
                            property of a Restricted Party;

                     (iii)  any claim of jurisdiction over any real property of
                            a Restricted Party; or

                     (iv)   any right to be consulted with respect to any change
                            in the use, development or improvement in any real
                            property of a Restricted Party.

              (b)    Except for matters which would not, in the aggregate,
                     reasonably be expected to cause a Material Adverse Change,
                     it is not aware of and has not received, in relation to any
                     of its real property, any notice of:

                     (i)    the existence or potential existence of any
                            Aboriginal heritage sites;

                     (ii)   any actual or alleged interference with Aboriginal
                            rights; or

                     (iii)  any specific or comprehensive claims.

              (c)    Except for matters which would not, in the aggregate,
                     reasonably be expected to cause a Material Adverse Change,
                     it has disclosed to the Lenders all written correspondence,
                     notices or minutes of meetings received from or involving
                     any Aboriginal group relating to any claim, conflict or
                     controversy.

6.1.9         OTHER MATTERS

              (a)    Neither it nor any of its Subsidiaries is an "investment
                     company" within the meaning of the INVESTMENT COMPANY ACT
                     OF 1940 (United States), as amended, or a "holding
                     company", or a "subsidiary company" of a "holding company",
                     or an "affiliate" of a "holding company" or of a
                     "subsidiary company" of a "holding company," within the
                     meaning of the PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
                     (United States), as amended.

              (b)    None of the proceeds of any Advance shall be used to
                     purchase or carry, or to reduce or retire or refinance any
                     credit incurred to purchase or carry, any margin stock
                     (within the meaning of Regulations U and X of the Board of
                     Governors of the Federal Reserve System of the United
                     States) or to extend credit to others for the purpose of
                     purchasing or carrying any margin stock.

<PAGE>
                                     - 60 -

6.2           SURVIVAL OF REPRESENTATIONS AND WARRANTIES

              Unless expressly stated to be made as of a specific date, the
representations and warranties made in this Agreement shall survive the
execution of this Agreement and all other Credit Documents, and shall be deemed
to be repeated as of the date of each Advance (including any deemed Advance),
subject to modifications made by NSCL to the Lenders in writing and accepted by
the Majority Lenders, acting reasonably. The Lenders shall be deemed to have
relied upon such representations and warranties at each such time as a condition
of making an Advance hereunder or continuing to extend the Credits hereunder.

                                  ARTICLE VII
                            COVENANTS AND CONDITIONS

7.1           FINANCIAL COVENANTS

7.1.1         During the term of this Agreement, the Funded Debt Ratio shall not
at any time exceed 0.60 to 1.

7.1.2         During the term of this Agreement, NSCL shall at all times
maintain a consolidated shareholders' equity of not less than a minimum of
$779,300,000. The minimum shall increase annually as of 31 December in each
year, beginning in 2002, by an amount equal to 50% of NSCL's consolidated net
income for each year, excluding any year in which NSCL incurs a consolidated net
loss.

7.1.3         During the term of this Agreement, the Secured Debt Ratio shall
not at any time exceed 0.30 to 1.

7.1.4         At all times during the term of this Agreement when Permitted
Senior Secured Indebtedness or Permitted Subordinated Secured Indebtness is
outstanding and the Funded Debt Ratio is greater than 0.40 to 1, NSCL shall
maintain an Interest Coverage Ratio of not less than the following:

<TABLE>
<CAPTION>
              PERIOD                                                   INTEREST COVERAGE RATIO
              ------                                                   -----------------------
              <S>                                                      <C>
              to 31 December 2002                                      1.10 to 1
              from 1 January 2003 to 31 March 2003                     1.75 to 1
              on and after 1 April 2003                                2.50 to 1
</TABLE>

7.2           POSITIVE COVENANTS

              During the term of this Agreement, each Restricted Party shall
perform the covenants specified below.

7.2.1         PAYMENT; OPERATION OF BUSINESS

              (a)    It shall duly and punctually pay the Obligations, either as
                     Borrower or in accordance with its guarantee of the
                     Obligations, at the times and places and in the manner
                     required by the terms thereof.

<PAGE>
                                     - 61 -

              (b)    It shall keep proper books of account and record, maintain
                     its corporate status in all jurisdictions where it carries
                     on business, operate its business in accordance with sound
                     business practice and in compliance in all material
                     respects with all applicable Requirements of Law (including
                     but not limited to those regarding ownership of persons
                     carrying on the type of business that it carries on) and
                     Material Contracts and Material Permits.

              (c)    It shall maintain in good standing and shall obtain, as and
                     when required, all Permits and Contracts which may be
                     material to permit it to acquire, own, operate and maintain
                     its business and Property, lease any land forming part of
                     its Property, and perform its obligations under the Credit
                     Documents to which it is or will be a party.

              (d)    At any time after Permitted Senior Secured Indebtedness in
                     an aggregate principal amount of $100,000,000 or more has
                     been incurred during the term of this Agreement, it shall
                     not (i) amend any provision of any Material Contract to
                     which it is a party or give any consent, concession or
                     waiver with respect thereto which, in either case, would
                     cause a Material Adverse Change, or (ii) cancel, terminate
                     or accept the surrender of any Material Contract if the
                     cancellation, termination or surrender would cause a
                     Material Adverse Change, unless a Replacement Contract is
                     entered into in respect of the Material Contract in
                     question.

7.2.2         INSPECTION

              It shall at all reasonable times and from time to time upon
reasonable notice, permit representatives of the Lenders to inspect any of its
Property and to examine and take extracts from its financial books, accounts and
records, including but not limited to accounts and records stored in computer
data banks and computer software systems, and to discuss its financial condition
with its senior officers and (in the presence of such of its representatives as
it may designate) its auditors, the reasonable expense of all of which shall be
paid by the Borrower provided that:

              (a)    the Lenders' exercise of their rights under this paragraph
                     does not unreasonably interfere with the operations of the
                     Restricted Parties;

              (b)    the Lenders maintain the confidentiality of all information
                     they receive in accordance with usual requirements of
                     banker / customer confidentiality, and do not disclose or
                     use it except for the purposes of this Agreement;

              (c)    any representative of a Lender who is not an employee of
                     that Lender has executed and delivered an agreement in
                     favour of the Restricted Parties and the Lenders to use any
                     information obtained as a result of any inspection or
                     examination on behalf of a Lender only for the purposes of
                     this Agreement, and has established to the reasonable
                     satisfaction of NSCL and the Lenders that there is no
                     inherent conflict of interest between the business and
                     clientele of the Restricted Parties and the business and
                     clientele (other than the Lenders) of that representative.

<PAGE>
                                     - 62 -

7.2.3         INSURANCE

              (a)    It shall maintain insurance on all its Property with
                     financially sound and reputable insurance companies or
                     associations including all-risk property insurance,
                     comprehensive general liability insurance and business
                     interruption insurance, in amounts, with deductibles or
                     retentions, and against risks that would be maintained by a
                     prudent owner carrying on similar businesses in similar
                     locations, and shall furnish to the Agent, on written
                     request, satisfactory evidence of the insurance carried.

              (b)    It shall cause policies of insurance referred to above to
                     contain a standard mortgage clause and other customary
                     endorsements for the benefit of lenders (including
                     endorsements naming the Trustee as loss payee and
                     additional insured as required by the Agent), all in a form
                     acceptable to the Lenders acting reasonably, and a
                     provision that such policies will not be amended in any
                     manner which is prejudicial to the Lenders or be cancelled
                     without 30 days' prior written notice being given to the
                     Trustee by the issuers thereof. It shall also, subject to
                     Section 7.6, cause all of the proceeds of insurance under
                     such policies to be made payable and to be paid to the
                     Trustee.

              (c)    Whenever reasonably requested in writing by the Agent, it
                     shall cause certified copies of the policies of insurance
                     carried pursuant to this Section to be delivered to the
                     Agent.

              (d)    It shall provide the Agent promptly with such other
                     evidence of the insurance as the Lenders may from time to
                     time reasonably require.

7.2.4         TAXES, ENCUMBRANCES AND WITHHOLDINGS

              (a)    It shall pay all Taxes and Encumbrances in respect of
                     itself or its Property as they become due and payable
                     unless they are being contested in good faith by
                     appropriate proceedings and it has made adequate provision
                     for payment of the contested amount.

              (b)    It shall withhold from each payment made to any of its past
                     or present employees, officers or directors, and to any
                     non-resident of the country in which it is resident, the
                     amount of all Taxes and other deductions required to be
                     withheld therefrom and pay the same to the appropriate tax
                     authority within the time required under any applicable
                     Requirement of Law.

              (c)    It shall collect from all Persons the amount of all Taxes
                     required to be collected from them and remit the same to
                     the proper tax or other receiving officers within the time
                     required under any applicable Requirement of Law.

7.2.5         OTHER MATTERS

<PAGE>
                                     - 63 -

              (a)    It shall, immediately upon receipt, deliver to the Trustee
                     certificates representing all Capital Stock of other
                     Restricted Parties or of other persons in which it owns
                     Capital Stock that it acquires after the date that Capital
                     Stock of the Restricted Parties or other persons is first
                     delivered as part of the Trustee Security, together with
                     executed stock powers of attorney relating to those
                     certificates (or if certificates in respect of such Capital
                     Stock are not available, take such other steps to perfect
                     the Trustee Security relating to such Capital Stock as the
                     Agent requires).

              (b)    It shall observe and comply in all material respects at all
                     times with the provisions of all Environmental Laws and
                     shall provide such evidence of on-going compliance with
                     Environmental Laws as the Majority Lenders may reasonably
                     require from time to time including, without limitation, if
                     so requested by the Majority Lenders, acting reasonably
                     upon reasonable cause, arranging for one or more
                     environmental site assessment and/or compliance audits
                     (each consisting of a non-intrusive phase I audit and
                     recommendations with respect to the findings described
                     therein and such other audits or investigations recommended
                     in each such phase I audit, including, without limitation,
                     an intrusive phase II audit) and reports thereon by an
                     independent consultant engaged by the Restricted Parties
                     and acceptable to the Majority Lenders, acting reasonably.
                     It shall also remove, clean up or otherwise remedy the
                     matters referred to in Section 7.3.2(d).

              (c)    If it is listed on Schedule I, it shall comply with the
                     limits on its Property, business activities and other
                     matters described on that Schedule and, if it owns Capital
                     Stock of any other person listed on Schedule , it shall
                     cause that person to comply with the limits on its
                     Property, business activities and other matters described
                     on that Schedule I.

              (d)    It shall diligently and in good faith use all commercially
                     reasonable efforts to obtain agreements in form and
                     substance satisfactory to the Agent from other parties to
                     Material Contracts that are specifically assigned as part
                     of the Trustee Security from time to time after the
                     agreements contemplated in Section 3.1.8 have been
                     obtained.

              (e)    It shall diligently and in good faith use all commercially
                     reasonable efforts to obtain consents in respect of the
                     Security in form and substance satisfactory to the Agent
                     from landlords of material leasehold real property
                     designated by the Agent from time to time in which any
                     Restricted Party carries on business.

              (f)    In the case of NSCL, if it issues Permitted Senior Secured
                     Indebtedness, Permitted Subordinated Secured Indebtedness
                     or Permitted Unsecured Indebtedness, it shall concurrently
                     deliver a certificate to the Agent with copies of the
                     indenture or agreement under which that Debt is incurred
                     and

<PAGE>
                                     - 64 -

                     any other documents necessary to fully and fairly disclose
                     all material terms thereof.

7.3           REPORTING AND NOTICE REQUIREMENTS

              During the term of this Agreement, NSCL shall deliver or cause the
delivery of the periodic reports specified below and shall give notices in the
circumstances specified below, or cause notices to be given. All financial
statements and other reports shall be in a form satisfactory to the Lenders and
all financial statements shall be prepared in accordance with GAAP. NSCL shall,
as directed by the Agent from time to time, either distribute financial
statements and other reports directly to the Lenders or supply the Agent with
sufficient copies of financial statements and other reports to allow the Agent
to distribute them to the Lenders.

7.3.1         PERIODIC REPORTS

              (a)    NSCL shall, as soon as practicable and in any event within
                     30 days of the end of each calendar month, prepare and
                     deliver a Borrowing Base Certificate and a statement of the
                     Restricted Parties' inventory and aged accounts receivable
                     (including amounts owing by account debtor name for account
                     debtors owing an aggregate of $1,000,000 or more each) as
                     at the end of that month. The Borrowing Base Certificate
                     may be delivered by e-mail and, if delivered by NSCL by
                     e-mail, it shall be considered to be a representation by
                     NSCL even if not manually signed by NSCL.

              (b)    NSCL shall, as soon as practicable and in any event within
                     45 days of the end of each of its fiscal quarters
                     (including the fourth quarter), prepare and deliver its
                     interim unaudited consolidated financial statements,
                     modified to exclude persons that are not Restricted
                     Parties, and the interim unaudited financial statements of
                     the Borrower, as at the end of such quarter, in each case
                     including, without limitation, balance sheet, statement of
                     income and retained earnings and statement of changes in
                     financial position.

              (c)    NSCL shall, as soon as practicable and in any event within
                     90 days after the end of each of its fiscal years, prepare
                     and deliver its consolidated annual financial statements,
                     including supplemental consolidating information
                     identifying Restricted Parties and persons that are not
                     Restricted Parties, and the annual financial statements of
                     the Borrower, including, without limitation, balance sheet,
                     statement of income and retained earnings and statement of
                     changes in financial position for such fiscal year, all of
                     which shall be audited by an internationally recognized
                     accounting firm.

              (d)    NSCL shall, concurrently with the delivery of each of its
                     quarterly financial statements, prepare and deliver a
                     Compliance Certificate.

              (e)    NSCL shall, as soon as practicable and in any event not
                     later than 120 days after the beginning of each of its
                     fiscal years, prepare and deliver its

<PAGE>
                                     - 65 -

                     financial forecast for its current fiscal year and the
                     following two fiscal years, which shall cover NSCL on a
                     consolidated basis and shall include, without limitation, a
                     projected income statement, a projected statement of
                     changes in funds, estimates of capital expenditures and tax
                     losses and deferrals.

              (f)    NSCL shall promptly deliver copies of all information
                     concerning its financial condition and Property that is
                     provided to the Noteholders and the holders of the
                     Permitted Senior Secured Indebtedness, Permitted
                     Subordinated Secured Indebtedness and Permitted Unsecured
                     Indebtedness and not otherwise provided to the Lenders,
                     copies of all notices received from the Noteholders and the
                     holders of the Permitted Senior Secured Indebtedness,
                     Permitted Subordinated Secured Indebtedness and Permitted
                     Unsecured Indebtedness, and all other information
                     reasonably requested by the Lenders from time to time
                     concerning the business, financial condition and Property
                     of the Restricted Parties.

              If there is any change in a subsequent period from the accounting
policies, practices and calculation methods used by NSCL in preparing its
financial statements for its fiscal year ended 31 December 2001, or components
thereof, NSCL shall provide the Lenders with all information that the Lenders
require to ensure that reports provided to the Lenders after any change are
comparable to previous reports. In addition, all calculations made for the
purposes of this Agreement shall continue to be made based on the accounting
policies, practices and calculation methods that were used in preparing NSCL's
financial statements for its fiscal year ended 31 December 2001 if the changed
policies, practices and methods would materially affect the results of those
calculations.

7.3.2         REQUIREMENTS FOR NOTICE

              (a)    NSCL shall promptly notify the Lenders of any Event of
                     Default or Pending Event of Default.

              (b)    If an aggregate principal amount of $100,000,000 or more of
                     Permitted Senior Secured Indebtedness is then outstanding,
                     NSCL shall promptly notify the Lenders of (i) any material
                     default (either by a Restricted Party or by any other
                     party) under any Material Contract or Material Permit, (ii)
                     any event which, with or without the giving of notice,
                     lapse of time or any other condition subsequent, would be a
                     material default or would otherwise allow the termination
                     of any Material Contract or Material Permit or the
                     imposition of any material sanction on any party to a
                     Material Contract or Material Permit, (iii) the occurrence
                     of any "force majeure" event as described in any Material
                     Contract, (iv) any litigation or arbitration proceedings
                     concerning any Material Contract, and (v) any matters
                     requiring the consent of any other party to a Material
                     Contract, and shall from time to time provide the Lenders
                     with all information reasonably requested by any of the
                     Lenders concerning the status thereof.
<PAGE>
                                     - 66 -

              (c)    NSCL shall promptly notify the Lenders on becoming aware of
                     the occurrence of any litigation, dispute, arbitration,
                     proceeding, labour or industrial dispute or any other
                     circumstance affecting it, the result of which if
                     determined adversely would cause a Material Adverse Change,
                     and shall from time to time provide the Lenders with all
                     reasonable information requested by any of the Lenders
                     concerning the status thereof.

              (d)    NSCL shall promptly notify the Agent of (i) any release of
                     Hazardous Materials on or from any land which any
                     Restricted Party occupies or controls that is reportable
                     under applicable Requirements of Law and that has resulted
                     in any material personal injury or illness or is reasonably
                     expected to result in a cost of remediation of $1,000,000
                     or more, and (ii) any enforcement actions, special
                     investigations, control orders, stop orders, injunctions,
                     prosecutions or civil proceedings under any Environmental
                     Law or based on any allegation of environmental damage or
                     release of Hazardous Materials, and shall provide the Agent
                     with details, including cost, of the work required to
                     remove, clean up or otherwise remedy the matters referred
                     to in the notice.

              (e)    NSCL shall promptly notify the Agent if any change occurs
                     in the ratings used to determine the Applicable Fee Rate
                     and the Applicable Margin or (except as prohibited by
                     confidentiality agreements with relevant ratings agencies)
                     if it learns that any change will be made by the relevant
                     ratings agencies.

              (f)    NSCL shall promptly notify the Agent if it is within
                     $10,000,000 of any of the thresholds that would require it
                     to take action specified in Section 7.7 or item 3 of
                     Schedule L, and promptly provide such further reports as
                     the Agent may require while it remains within $10,000,000
                     of either threshold.

7.4           OWNERSHIP OF THE RESTRICTED PARTIES

              During the term of this Agreement, there shall not be any change
in the ownership or control of the Restricted Parties other than NSCL from that
described on Schedule F, except if:

              (a)    the change is otherwise expressly permitted in this
                     Agreement and NSCL gives the Agent reasonable advance
                     notice of the change and immediately takes whatever steps
                     and delivers whatever documents (including opinions of
                     counsel satisfactory to the Lenders) are reasonably
                     required to ensure that the Security is not adversely
                     affected as a result;

              (b)    the Restricted Party was owned or controlled, as the case
                     may be, by another Restricted Party incorporated in Canada
                     and the change will result in the first Restricted Party
                     being owned or controlled by a Restricted Party or
                     Restricted Parties incorporated in Canada, and NSCL gives
                     the Agent reasonable advance notice of the change and
                     immediately takes

<PAGE>
                                     - 67 -

                     whatever steps and delivers whatever documents (including
                     opinions of counsel satisfactory to the Lenders) are
                     reasonably required to ensure that the Security is not
                     adversely affected as a result; or

              (c)    the Agent (acting reasonably, after consultation with
                     counsel) determines that the Lenders' ability to recover
                     under the Security would not be adversely affected by the
                     change.

7.5           NEGATIVE COVENANTS

              During the term of this Agreement, the Restricted Parties shall
not do any of the things specified in this Section without the prior written
consent of the Majority Lenders, which shall not be unreasonably withheld.

7.5.1         FINANCIAL TRANSACTIONS AND ENCUMBRANCES

              No Restricted Party shall:

              (a)    create, incur or assume or suffer to exist or cause or
                     permit any Encumbrance upon or in respect of any of its
                     Property, except for Permitted Encumbrances;

              (b)    do or permit anything to adversely affect the ranking or
                     validity of the Security except by incurring a Permitted
                     Encumbrance;

              (c)    create, incur, assume or permit any debts, liabilities or
                     obligations of any kind (including contingent liabilities)
                     to remain outstanding, other than Permitted Obligations;

              (d)    prepay, redeem, defease, repurchase or make other payments
                     in respect of any of its Debt for borrowed money, other
                     than:

                     (i)    the Obligations;

                     (ii)   scheduled interest and principal payments under the
                            1999 Notes, the 2001 Notes, any Permitted Senior
                            Secured Indebtedness and any Permitted Unsecured
                            Indebtedness that is not expressed to be
                            subordinated;

                     (iii)  scheduled interest payments under any Permitted
                            Subordinated Secured Indebtedness and any Permitted
                            Unsecured Indebtedness that is expressed to be
                            subordinated, as long as no Event of Default or
                            Pending Event of Default has occurred and is
                            continuing or would result from payment being made;

                     (iv)   the purchase money and other obligations
                            contemplated in Section 1.1.83(l);

                     (v)    Debts owing by any Restricted Party to another
                            Restricted Party;

<PAGE>
                                     - 68 -

                     (vi)   payments made with the proceeds of any issuance of
                            Capital Stock, any right to acquire Capital Stock or
                            any equity-equivalent security, to the extent not
                            required by this Agreement to be paid on account of
                            the Obligations;

              (e)    make loans to any other person, guarantee, endorse or
                     otherwise become liable for any debts, liabilities or
                     obligations of any other person, or give other financial
                     assistance of any kind to any other person, except for:

                     (i)    the guarantees given as part of the Security or in
                            connection with other debentures permitted to be
                            issued under the Trustee Security;

                     (ii)   loans and advances to other Restricted Parties that
                            are incorporated in Canada;

                     (iii)  loans and advances to other Restricted Parties that
                            are not incorporated in Canada if the Agent (acting
                            reasonably, after consultation with counsel, but
                            without any requirement to seek approval of the
                            Majority Lenders) determines that the Lenders'
                            ability to recover under the Security would not be
                            adversely affected by the loans and advances;

                     (iv)   loans and advances to Powell River Energy Inc. or
                            Powell River Energy LP;

                     (v)    loans to persons other than Restricted Parties of
                            which the lender is a shareholder that would comply
                            with Section 7.5.2(b) if the amount of the loan was
                            instead used to acquire Capital Stock or other
                            securities of, or make investments in, the person;

                     (vi)   guarantees of debts, liabilities and obligations of
                            other Restricted Parties that are Permitted
                            Obligations;

                     (vii)  financial assistance not permitted by the other
                            items in this Section 7.5.1(e) in an aggregate
                            amount outstanding at any time of not greater than
                            $5,000,000, or $20,000,000 while no Permitted Senior
                            Secured Indebtedness is outstanding;

              (f)    (i) enter into any Derivative for speculative purposes,
                     (ii) enter into any Derivative except for Derivatives
                     secured by the Trustee Security as Other Secured
                     Obligations or other Derivatives of the type described in
                     Sections 1.1.79(a) to 1.1.79(e) inclusive that are
                     unsecured, or (iii) enter into any Derivative if (A) the
                     notional amount or the term of the proposed transaction
                     would adversely affect the Borrower's ability to make
                     principal payments required under the terms of this
                     Agreement or, (B) in the case of interest rate Derivatives,
                     the aggregate notional amount swapped by all Restricted
                     Parties at any time (net of offsetting transactions)
                     exceeds the

<PAGE>
                                     - 69 -

                     outstanding amount of the Credits, the 1999 Notes and the
                     2001 Notes at that time;

              (g)    do anything that would result in the holders of the 1999
                     Notes or the 2001 Notes becoming entitled to be secured;

              (h)    do anything that would result in the holders of any other
                     unsecured Debt outstanding at any time becoming entitled to
                     be secured unless the unsecured Debt, if secured, would
                     constitute Permitted Senior Secured Indebtedness or
                     Permitted Subordinated Secured Indebtedness.

7.5.2         BUSINESS AND PROPERTY

              No Restricted Party shall:

              (a)    effect any material change in the nature of its business,
                     being the manufacture and sale of paper, pulp and
                     containerboard, except that the Restricted Parties
                     generally may discontinue their containerboard business and
                     any Restricted Party may discontinue any aspect of its
                     business that is transferred to and continued by another
                     Restricted Party;

              (b)    acquire Capital Stock or other securities of, or make
                     investments in, any other person, unless (i) the
                     acquisition or investment is in, or is incidental to, the
                     manufacture and/or sale of paper, pulp and/or
                     containerboard, (ii) the acquisition or investment is made
                     at a time that no Event of Default or Pending Event of
                     Default has occurred and is continuing or would result from
                     the acquisition or investment, (iii) NSCL submits PRO FORMA
                     financial statements and calculations of financial covenant
                     compliance, prepared in accordance with GAAP and reflecting
                     the acquisition or investment, to the Agent a reasonable
                     time in advance of completion of the acquisition or
                     investment, and (iv) Sections 3.1.3, 3.1.4, 3.1.5 and 3.1.6
                     are complied with in connection with the acquisition or
                     investment; for greater certainty, the terms "securities"
                     and "investment" as used in this paragraph do not include
                     matters referred to in Section 7.5.1(e);

              (c)    permit any sale, lease, sale and lease-back or other
                     disposition of any part of its Property (including Capital
                     Stock it holds) except for (i) sales of inventory and
                     obsolete or redundant equipment in the ordinary course of
                     business, (ii) dispositions to another Restricted Party,
                     provided that Property owned by a Restricted Party
                     incorporated in Canada is not transferred to a Restricted
                     Party not incorporated in Canada and Property located in
                     Canada is not transferred outside Canada, (iii)
                     dispositions in connection with transactions permitted by
                     Section 7.5.3(a), (iv) other dispositions of Property
                     (including Capital Stock of any other person) having a fair
                     market value for all Restricted Parties up to an aggregate
                     for all Restricted Parties during any period of 36
                     consecutive months of 12.5% (20% if no Permitted Senior
                     Secured Indebtedness is outstanding at the

<PAGE>
                                     - 70 -

                     time of the disposition) of the Consolidated Net Tangible
                     Assets valued immediately before any disposition;

              (d)    except for transactions between two or more Restricted
                     Parties each of which is incorporated in the same
                     jurisdiction, enter into any transaction of any kind with
                     any affiliate or associate (as those terms are defined in
                     the CANADA BUSINESS CORPORATIONS ACT), or person of which
                     it is an associate except on terms that are no more onerous
                     to a Restricted Party than if it were dealing with such
                     person on an arm's length basis.

7.5.3         CORPORATE MATTERS

              No Restricted Party shall:

              (a)    consolidate, amalgamate or merge with any other person,
                     enter into any corporate reorganization or other
                     transaction intended to effect or otherwise permit a change
                     in its existing Constating Documents, liquidate, wind-up or
                     dissolve itself, or permit any liquidation, winding-up or
                     dissolution, except for transactions involving only one or
                     more Restricted Parties if NSCL gives the Agent reasonable
                     advance notice of the transactions and immediately takes
                     whatever steps and delivers whatever documents (including
                     opinions of counsel satisfactory to the Lenders) are
                     reasonably required to ensure that the Lenders' rights are
                     not adversely affected as a result;

              (b)    change its name without providing the Lenders with prior
                     written notice thereof and promptly taking other steps, if
                     any, as the Lenders reasonably request to permit the
                     Trustee and/or Agent to perfect the Security with respect
                     to the change in name;

              (c)    change the location of its Property (except for goods in
                     transit) or the location of its chief executive office from
                     the respective jurisdictions specified on Schedule F
                     without providing the Agent with prior written notice
                     thereof and promptly taking other steps, if any, as the
                     Lenders reasonably request to permit the Trustee and/or
                     Agent to perfect the Security with respect to the change in
                     location;

              (d)    allow inventory to be located in any jurisdiction where the
                     Trustee Security over inventory has not been registered in
                     accordance with local requirements unless (i) the amount of
                     all such inventory for all Restricted Parties in each such
                     jurisdiction is less than 50,000 tonnes and (ii) the net
                     book value of all such inventory for all Restricted Parties
                     in all such jurisdictions, measured on 30 June of each year
                     with an adjustment for any unusual movements of inventory
                     on or before that date, is less than 30% of then-existing
                     consolidated net book value of NSCL's inventory;

              (e)    allow Property other than inventory to be located in any
                     jurisdiction where the Trustee Security over that Property
                     has not been registered in

<PAGE>
                                     - 71 -

                     accordance with local requirements unless the net book
                     value of all such Property for all Restricted Parties in
                     all such jurisdictions is less than 4% of then-existing
                     consolidated net book value of NSCL's fixed assets; for
                     greater certainty, accounts receivable of a Restricted
                     Party shall be considered for the purpose of this item to
                     be located where the chief executive office of the
                     Restricted Party is located;

              (f)    in the case of NSCL and the Borrower, change its fiscal
                     year end, being 31 December;

              (g)    change its auditors, unless an internationally recognized
                     accounting firm is appointed;

              (h)    be a party to any amendment or waiver of the terms of any
                     Permitted Senior Secured Indebtedness, Permitted
                     Subordinated Secured Indebtedness or Permitted Unsecured
                     Indebtedness unless expressly permitted by any applicable
                     Intercreditor Agreement;

              (i)    be a party to any amendment or waiver to the terms of the
                     1999 Notes or 2001 Notes or any documents relating to any
                     of them if the amendment would adversely affect the rights
                     of any Lender or make the terms thereof more onerous to any
                     Restricted Party (including but not limited to any
                     amendment that would shorten the maturity, require any
                     additional prepayment, increase the interest rate or other
                     compensation payable to Noteholders, impose additional
                     requirements for securing the Noteholders or further limit
                     the rights of the Restricted Parties to incur Debt or grant
                     Encumbrances), or be a party to any amendment of any kind
                     without immediately providing the Agent with copies of all
                     documents and other information relating to the amendment.

7.6           USE OF INSURANCE PROCEEDS

7.6.1         Unless otherwise specified in this Section 7.6, all proceeds of
insurance required to be maintained by the Restricted Parties under the terms of
this Agreement shall be paid to the Trustee.

7.6.2         Proceeds of liability insurance shall be paid to the person to
whom the affected Restricted Party is liable. Proceeds of insurance covering
loss of or damage to property in an amount of less than $25,000,000 per claim,
or in any amount if no Permitted Senior Secured Indebtedness is outstanding, may
be paid by the insurer directly to the affected Restricted Party unless, if an
Event of Default or Pending Event of Default has occurred and is continuing, the
Agent requires that payment be made to the Trustee.

7.6.3         Subject to the rights of any holder of a Permitted Encumbrance
that has priority over the Security, proceeds of insurance covering loss of or
damage to property not covered by Section 7.6.2 shall be paid to the Trustee and
the Agent shall direct the Trustee to disburse the proceeds to the affected
Restricted Party on conditions customary for construction or equipment
financing, to fund the repair or replacement of the property in

<PAGE>
                                     - 72 -

respect of which the insurance proceeds are payable, or to acquire revenue
producing Property within the core business of the Restricted Parties, provided
that:

              (a)    no Event of Default (including but not limited to one
                     relating to Material Adverse Change) or Pending Event of
                     Default has occurred and is continuing;

              (b)    the Majority Lenders are satisfied, acting reasonably,
                     that, if repair or replacement is contemplated, the
                     proceeds of such insurance together with other resources
                     available to the affected Restricted Party (the use of
                     which would not contravene this Agreement) are sufficient
                     to fully repair or replace the property in respect of which
                     the insurance proceeds are payable within the remaining
                     term of the then-outstanding Credits or within 365 days,
                     whichever is less.

7.6.4         The proceeds of business interruption insurance shall be used to
repay the Credits, without prejudice to the Borrower's rights to further
Advances under the Credits. If the Credits are repaid in full at any time, the
proceeds may be used to carry on the business of the Restricted Parties as long
as the Majority Lenders are satisfied, acting reasonably, that adequate
provision has been made for payment of the Obligations and any other obligations
secured by the Security (payment of which is permitted in accordance with this
Agreement).

7.7           ADJUSTMENTS TO AMOUNT OF DEBT

7.7.1         If the aggregate of the Market Values of all Derivatives that are
Other Secured Obligations (whether in respect of interest rates, currencies,
commodities or other matters permitted by this Agreement) is at any time
negative from the Restricted Parties' perspective (that is, the Restricted
Parties on an aggregate basis are "out of the money") to the extent of
$150,000,000 or more, the Restricted Parties shall, within five Business Days of
receiving notice from the Agent, terminate or re-price one or more Derivatives
or take other action acceptable to the Agent acting reasonably so that the
Market Value of those Derivatives is immediately reduced to a negative Market
Value of not more than $135,000,000.

7.7.2         If the aggregate of:

              (a)    the outstanding principal amount of the Credits;

              (b)    the outstanding principal amount of any Permitted Senior
                     Secured Indebtedness and Permitted Subordinated Secured
                     Indebtedness;

              (c)    the absolute value of the Market Value, if negative, of the
                     Existing Special Derivatives;

              (d)    the absolute value of the Market Value, if negative, of all
                     Derivatives not mentioned in item (c) that are Other
                     Secured Obligations and have been classified as being
                     incurred under clauses (i) or (ix) of the definition of

<PAGE>
                                     - 73 -

                     "Permitted Indebtedness" in the 1999 Indenture and the
                     definition of "Permitted Debt" in the 2001 Indenture;

              (e)    the amount, as determined under the 1999 Indenture and the
                     2001 Indenture, respectively, of any other obligations that
                     have been classified as being incurred under clauses (i) or
                     (ix) of the definition of "Permitted Indebtedness" in the
                     1999 Indenture and the definition of "Permitted Debt" in
                     the 2001 Indenture

exceeds an amount equal to the Threshold Amount less $20,000,000, the Restricted
Parties shall within five Business Days of receiving notice from the Agent repay
Advances, repay Permitted Senior Secured Indebtedness, repay Permitted
Subordinated Secured Indebtedness, terminate or re-price one or more Derivatives
and/or take other action acceptable to the Agent acting reasonably so that the
aggregate of those amounts is reduced to not greater than an amount equal to the
Threshold Amount less $35,000,000.

7.7.3         The definition of Market Value in this Agreement shall not,
however, be binding on the Restricted Parties or any other person for the
purpose of determining the price or other basis on which any such action is
taken.

                                  ARTICLE VIII
                                     DEFAULT

8.1           EVENTS OF DEFAULT

              Each of the following events shall constitute an Event of Default
under this Agreement:

              (a)    the Borrower fails to pay any amount of principal,
                     interest, fees or other Obligations (including any amount
                     relating to a Bankers' Acceptance or an L/C) within five
                     Business Days of when due; or

              (b)    a Restricted Party makes any representation or warranty
                     under any of the Credit Documents which is incorrect or
                     incomplete in any material respect when made or deemed to
                     be made, it being agreed that an incorrect representation
                     that there is no Pending Event of Default shall not result
                     in the Restricted Parties being disentitled to any cure
                     period otherwise associated with the Pending Event of
                     Default; or

              (c)    a Restricted Party ceases or threatens to cease to carry on
                     its business, except as expressly permitted in this
                     Agreement, or admits its inability or fails to pay its
                     debts generally; or

              (d)    a Restricted Party permits any default under one or more
                     agreements or instruments relating to its Debt other than
                     the Obligations (including but not limited to the Debt
                     under the 1999 Notes, 2001 Notes, Permitted Senior Secured
                     Indebtedness, Permitted Subordinated Secured Indebtedness
                     and Permitted Unsecured Indebtedness to the extent they are

<PAGE>
                                     - 74 -

                     outstanding) or permits any other event to occur and to
                     continue without being waived or cured after any applicable
                     grace period specified in such agreements or instruments,
                     if the effect of one or more of such events is to
                     accelerate, or to permit (in accordance with any applicable
                     inter-creditor and subordination arrangements) the
                     acceleration of, the date on which Debt in an aggregate
                     amount of $25,000,000 or more becomes due (whether or not
                     acceleration actually occurs), or if any such Debt in an
                     aggregate amount of $25,000,000 or more is not paid when
                     due, taking into account any applicable grace periods; or

              (e)    a Restricted Party becomes a bankrupt (voluntarily or
                     involuntarily); or becomes subject to any proceeding
                     seeking liquidation, arrangement, relief of creditors or
                     the appointment of a receiver or trustee over, or any
                     judgment or order which has or might have a material and
                     adverse effect on, any material part of its Property, and
                     such proceeding, if instituted against the Restricted
                     Party, or such judgment or order, is not contested
                     diligently, in good faith and on a timely basis and
                     dismissed or stayed within 30 days of its commencement or
                     issuance; or

              (f)    a Restricted Party denies, to any material extent, its
                     obligations under the Credit Documents or claims any of the
                     Credit Documents to be invalid, withdrawn or terminated in
                     whole or in part; or any of the Credit Documents is
                     invalidated in any material respect by any act, regulation
                     or governmental action or is determined to be invalid in
                     any material respect by a court or other judicial entity
                     and such determination has not been stayed pending appeal;
                     or

              (g)    one or more final judgments, writs of execution,
                     garnishments or attachments or similar processes
                     representing claims in an aggregate of $25,000,000 or more
                     for all Restricted Parties at any time are issued or levied
                     against any of their Property and are not released, bonded,
                     satisfied, discharged, vacated, stayed or accepted for
                     payment by an insurer within 30 days after their entry,
                     commencement or levy, unless such process is contested
                     diligently, in good faith and on a timely basis and the
                     applicable Restricted Party has made sufficient cash offset
                     or other arrangements satisfactory to the Lenders with
                     respect thereto; or

              (h)    an Encumbrancer takes possession of all or a substantial
                     portion of the Property of a Restricted Party by
                     appointment of a receiver, receiver and manager, or
                     otherwise; or

              (i)    one or more transactions, events or conditions occur or
                     exist which, when taken together, have a material adverse
                     effect on the Agent's or the Lenders' ability to enforce
                     their rights or remedies under any of the Credit Documents,
                     or the financial condition, business or prospects of NSCL
                     and its Subsidiaries, taken as a whole, in each case as
                     determined by the

<PAGE>
                                     - 75 -

                     Majority Lenders, acting in good faith and on commercially
                     reasonable grounds; or

              (j)    there is a breach of Section 7.1 and NSCL does not, within
                     30 days after it first identifies the breach, receive
                     proceeds of an equity investment in a form and an amount
                     sufficient to satisfy the Agent that the breach would not
                     have occurred had the equity investment been made at the
                     beginning of the relevant period for measurement of the
                     provision of Section 7.1 that has been breached; or

              (k)    there is a breach of Section 7.7 or the Restricted Parties
                     do not comply with the requirements of Schedule L or any
                     arrangements that may be entered into as contemplated in
                     Schedule L; or

              (l)    there is a breach of any other provision of any of the
                     Credit Documents and such breach is not corrected or
                     otherwise satisfied within 30 days after the Agent, for and
                     on behalf of the Lenders, gives written notice thereof; or
                     (m) there is a Change of Control Default or another change
                     in the ownership or control of a Restricted Party which is
                     not permitted by this Agreement; or

              (n)    at a time when Permitted Senior Secured Indebtedness in an
                     aggregate principal amount of $100,000,000 or more is
                     outstanding, any Material Permit expires or is withdrawn,
                     cancelled, terminated, or modified so as to cause a
                     Material Adverse Change, and is not reinstated or replaced
                     within 30 days thereafter so as to reverse the Material
                     Adverse Change; or

              (o)    at a time when Permitted Senior Secured Indebtedness in an
                     aggregate principal amount of $100,000,000 or more is
                     outstanding, a default under any Material Contract by a
                     Restricted Party or any other party to a Material Contract
                     occurs, or any other event occurs under any Material
                     Contract, and continues without being waived after any
                     applicable grace period specified in the Material Contract,
                     if the effect of the default or other event (if not waived)
                     is to terminate the Material Contract or if the default or
                     other event results in a declaration of non-performance
                     being issued or similar step being taken with respect to a
                     Restricted Party, and the termination, declaration or
                     similar step, if it arose from a breach by or other event
                     relating to a Restricted Party, would cause a Material
                     Adverse Change or, if it relates to a Special Material
                     Contract and arose from a breach by or other event relating
                     to a Person other than a Restricted Party, would cause an
                     Event of Default under clause (i) above or would have a
                     material adverse effect on the ability of the Restricted
                     Parties as a whole to perform and discharge their
                     obligations under this Agreement or the Material Contracts
                     taken as a whole, in each case unless a Replacement
                     Contract is entered into in respect of the Material
                     Contract in question.

<PAGE>
                                     - 76 -

8.2           ACCELERATION AND TERMINATION OF RIGHTS

              If any Event of Default occurs, no Lender shall be under any
further obligation to make Advances and the Majority Lenders may instruct the
Agent to give notice to the Borrower (i) declaring the Lenders' obligations to
make Advances to be terminated, whereupon the same shall forthwith terminate,
(ii) declaring the Obligations or any of them to be forthwith due and payable,
whereupon they shall become and be forthwith due and payable without
presentment, demand, protest or further notice of any kind, all of which are
hereby expressly waived by the Borrower, and/or (iii) demanding that the
Borrower deposit forthwith with the Agent for the Lenders' benefit Collateral
equal to the full principal amount at maturity of all L/Cs and Bankers'
Acceptances then outstanding for its account.

              Notwithstanding the preceding paragraph, if a Restricted Party
becomes a bankrupt (voluntarily or involuntarily), or institutes any proceeding
seeking liquidation, rearrangement, relief of debtors or creditor or the
appointment of a receiver or trustee over any material part of its Property,
then without prejudice to the other rights of the Lenders as a result of any
such event, without any notice or action of any kind by the Agent or the
Lenders, and without presentment, demand or protest, the Lenders' obligation to
make Advances shall immediately terminate, the Obligations shall immediately
become due and payable and the Borrower shall be obligated to deposit forthwith
with the Agent for the Lenders' benefit Collateral equal to the full principal
amount at maturity of all L/Cs and Bankers' Acceptances then outstanding for its
account.

8.3           PAYMENT OF L/CS

              Immediately upon any Obligations becoming due and payable under
Section 8.2, the Borrower shall, without necessity of further act or evidence,
be and become thereby unconditionally obligated to deposit forthwith with the
Agent for the Lenders' benefit Collateral equal to the full principal amount at
maturity of all L/Cs and Bankers' Acceptances then outstanding for its account
and the Borrower hereby unconditionally promises and agrees to deposit with the
Agent immediately upon such demand Collateral in the amount so demanded. The
Borrower authorizes the Lenders, or any of them, to debit its accounts with the
amount required to pay such L/Cs and to pay such Bankers' Acceptances,
notwithstanding that such Bankers' Acceptances may be held by the Lenders, or
any of them, in their own right at maturity. Amounts paid to the Agent pursuant
to such a demand in respect of Bankers' Acceptances and L/Cs shall be applied
against, and shall reduce, PRO RATA among the Lenders, to the extent of the
amounts paid to the Agent in respect of Bankers' Acceptances and L/Cs,
respectively, the obligations of the Borrower to pay amounts then or thereafter
payable under Bankers' Acceptances and L/Cs, respectively, at the times amounts
become payable thereunder.

              The Borrower shall be entitled to receive interest on cash held as
Collateral in accordance with Section 11.16.

8.4           REMEDIES

              Upon the occurrence of any event by which any of the Obligations
become due and payable under Section 8.2, the Security shall become immediately
enforceable and the

<PAGE>
                                     - 77 -

Majority Lenders may instruct the Agent to take such action or proceedings on
behalf of the Lenders and in compliance with applicable Requirements of Law as
the Majority Lenders in their sole discretion deem expedient to enforce the
same, all without any additional notice, presentment, demand, protest or other
formality, all of which are hereby expressly waived by the Restricted Parties.

8.5           SAVING

              The Lenders shall not be under any obligation to the Restricted
Parties or any other person to realize any collateral or enforce the Security or
any part thereof or to allow any of the collateral to be sold, dealt with or
otherwise disposed of. The Lenders shall not be responsible or liable to the
Restricted Parties or any other person for any loss or damage upon the
realization or enforcement of, the failure to realize or enforce the collateral
or any part thereof or the failure to allow any of the collateral to be sold,
dealt with or otherwise disposed of or for any act or omission on their
respective parts or on the part of any director, officer, agent, servant or
adviser in connection with any of the foregoing, except that a Lender may be
responsible or liable for any loss or damage arising from the wilful misconduct
or gross negligence of that Lender.

8.6           PERFORM OBLIGATIONS

              If an Event of Default has occurred and is continuing and if any
Restricted Party has failed to perform any of its covenants or agreements in the
Credit Documents, the Majority Lenders, may, but shall be under no obligation
to, instruct the Agent on behalf of the Lenders to perform any such covenants or
agreements in any manner deemed fit by the Majority Lenders without thereby
waiving any rights to enforce the Credit Documents. The reasonable expenses
(including any legal costs) paid by the Agent and/or the Lenders in respect of
the foregoing shall be secured by the Security.

8.7           THIRD PARTIES

              No person dealing with the Lenders or any agent of the Lenders
shall be concerned to inquire whether the Security has become enforceable, or
whether the powers which the Lenders are purporting to exercise have become
exercisable, or whether any Obligations remain outstanding upon the security
thereof, or as to the necessity or expediency of the stipulations and conditions
subject to which any sale shall be made, or otherwise as to the propriety or
regularity of any sale or other disposition or any other dealing with the
collateral charged by such Security or any part thereof.

8.8           POWER OF ATTORNEY

              Effective upon occurrence and during the continuance of an Event
of Default, each Restricted Party hereby irrevocably constitutes and appoints
any Vice-President, Managing Director or more senior officer of the Agent its
due and lawful attorney with full power of substitution in its name and on its
behalf, during the continuance of an Event of Default, to enforce any right,
title or interest of the Lenders in, to or under the Security or any part
thereof or any obligation to that Restricted Party or remedy available to that

<PAGE>
                                     - 78 -

Restricted Party. This appointment is irrevocable to the maximum extent
permitted by applicable law.

8.9           REMEDIES CUMULATIVE

              The rights and remedies of the Lenders under the Credit Documents
are cumulative and are in addition to and not in substitution for any rights or
remedies provided by law. Any single or partial exercise by the Lenders of any
right or remedy for a default or breach of any term, covenant, condition or
agreement herein contained shall not be deemed to be a waiver of or to alter,
affect, or prejudice any other right or remedy or other rights or remedies to
which the Lenders may be lawfully entitled for the same default or breach. Any
waiver by the Lenders of the strict observance, performance or compliance with
any term, covenant, condition or agreement herein contained, and any indulgence
granted by the Lenders shall be deemed not to be a waiver of any subsequent
default.

8.10          SET-OFF OR COMPENSATION

              In addition to and not in limitation of any rights now or
hereafter granted under applicable law, if the Obligations become due and
payable pursuant to Section 8.2, the Lenders, or any of them, may at any time
and from time to time without notice to the Restricted Parties or any other
person, any notice being expressly waived by the Restricted Parties, set-off and
compensate and apply any and all deposits, general or special, time or demand,
provisional or final, matured or unmatured, the Market Value of Derivatives that
is positive from any Restricted Party's perspective, and any other indebtedness
at any time owing by the Lenders, or any of them, to or for the credit of or the
account of any Restricted Party against and on account of the Obligations
notwithstanding that any of them are contingent or unmatured.

                                   ARTICLE IX
                            THE AGENT AND THE LENDERS

9.1           AUTHORIZATION OF AGENT AND RELATIONSHIP

              Each Lender hereby appoints TD as Agent and TD hereby accepts such
appointment. The appointment may only be terminated as expressly provided in
this Agreement. Each Lender hereby authorizes the Agent to take all action on
its behalf and to exercise such powers and perform such duties under this
Agreement as are expressly delegated to the Agent by its terms, together with
all powers reasonably incidental thereto. The Agent shall have only those duties
and responsibilities which are of a solely mechanical and administrative nature
and which are expressly specified in this Agreement, and it may perform such
duties by or through its agents or employees, but shall not by reason of this
Agreement have a fiduciary duty in respect of any Lender. As to any matters not
expressly provided for by this Agreement, the Agent is not required to exercise
any discretion or to take any action, but is required to act or to refrain from
acting (and is fully protected in so acting or refraining from acting) upon the
instructions of the Lenders or the Majority Lenders, as the case may be. Those
instructions shall be binding upon all Lenders, but the Agent is not required to
take any action which exposes the Agent to personal liability or which is
contrary to this Agreement or applicable law.

<PAGE>
                                     - 79 -

              Without limiting the foregoing, each of the Lenders hereby grants
to the Agent a power of attorney, for the purposes of laws applicable to the
Security from time to time, to sign documents comprising the Security from time
to time (as the party accepting the grant of the security), and also grants to
the Agent the right to delegate its authority as attorney to any other person,
whether or not an officer or employee of the Agent. Each of the Lenders also
hereby grants to the Agent, while it is acting as collateral agent or trustee in
connection with the Security, a power of attorney, for the purposes of Article
2692 of the Civil Code of Quebec and for the purposes of other laws applicable
to the Security from time to time, to sign documents comprising the Security
from time to time (as the party accepting the grant of the security), and also
grants to the Agent in that capacity the right to delegate its authority as
attorney to any other person, whether or not an officer or employee of the
Agent.

              Without limiting the foregoing, the Agent may perform its duties
through one or more of its offices, may designate different offices for the
performance of different duties from time to time and may delegate its duties to
one or more of its affiliates from time to time. The provisions of this
Agreement regarding the Agent shall apply MUTATIS MUTANDIS to the affiliates of
the Agent to whom duties may be delegated from time to time.

              Neither the Arrangers nor the Syndication Agents have any
responsibility to the Borrower or the Lenders in that capacity.

9.2           DISCLAIMER OF AGENT

              The Agent makes no representation or warranty, and assumes no
responsibility with respect to the due execution, legality, validity,
sufficiency, enforceability or collectability of this Agreement or any other
Credit Document. The Agent assumes no responsibility for the financial condition
of the Restricted Parties, or for the performance of the obligations of the
Restricted Parties under this Agreement or any other Credit Document. The Agent
assumes no responsibility with respect to the accuracy, authenticity, legality,
validity, sufficiency or enforceability of any documents, papers, materials or
other information furnished by the Restricted Parties to the Agent on behalf of
the Lenders. The Agent shall not be required to ascertain or inquire as to the
performance or observance of any of the terms, conditions, provisions, covenants
or agreements contained herein or as to the use of the proceeds of the Credits
or (unless the officers or employees of the Lender acting as Agent active in
their capacity as officers or employees on the Restricted Parties' accounts have
actual knowledge thereof, or have been notified thereof in writing by a
Restricted Party or a Lender) of the existence or possible existence of any
Event of Default or Pending Event of Default. Neither the Agent nor any of its
directors, officers, agents or employees shall be liable for any action taken or
omitted to be taken by it or them as Agent under or in connection with the
Agreement except for its or their own gross negligence or wilful misconduct.
With respect to its Commitment, the Lender acting as Agent shall have the same
rights and powers hereunder as any other Lender, and may exercise the same as
though it were not performing the duties and functions delegated to it as Agent
hereunder.

<PAGE>
                                     - 80 -

9.3           FAILURE OF LENDER TO FUND

9.3.1         Unless the Agent has actual knowledge that a Lender has not made
or will not make available to the Agent for value on a Drawdown Date the
applicable amount required from such Lender pursuant to Sections 5.11 or 5.15,
the Agent shall be entitled to assume that such amount has been or will be
received from such Lender when so due and the Agent may (but shall not be
obliged to), in reliance upon such assumption, make available to the Borrower a
corresponding amount. If such amount is not in fact received by the Agent from
such Lender on such Drawdown Date and the Agent has made available a
corresponding amount to the Borrower on such Drawdown Date as aforesaid, such
Lender shall pay to the Agent on demand an amount equal to the product of (i)
the Interbank Reference Rate per annum multiplied by (ii) the amount that should
have been paid to the Agent by such Lender on such Drawdown Date and was not,
multiplied by (iii) a fraction, the numerator of which is the number of days
that have elapsed from and including such Drawdown Date to but excluding the
date on which the amount is received by the Agent from such Lender and the
denominator of which is 365. A certificate of the Agent containing details of
the amount owing by a Lender under this Section shall be binding and conclusive
in the absence of manifest error. If any such amount is not in fact received by
the Agent from such Lender on such Drawdown Date, the Agent shall be entitled to
recover from the Borrower, on demand, the related amount made available by the
Agent to the Borrower as aforesaid together with interest thereon at the
applicable rate per annum payable by the Borrower hereunder.

9.3.2         Notwithstanding the provisions of Section 9.3.1, if any Lender
fails to make available to the Agent its Proportionate Share of any Advance
(such Lender being herein called the "DEFAULTING LENDER"), the Agent shall
forthwith give notice of such failure by the Defaulting Lender to the Borrower
and the other Lenders. The Agent shall then forthwith give notice to the other
Lenders that any Lender may make available to the Agent all or any portion of
the Defaulting Lender's Proportionate Share of such Advance (but in no way shall
any other Lender or the Agent be obliged to do so) in the place of the
Defaulting Lender. If more than one Lender gives notice that it is prepared to
make funds available in the place of a Defaulting Lender in such circumstances
and the aggregate of the funds which such Lenders (herein collectively called
the "CONTRIBUTING LENDERS" and individually called the "CONTRIBUTING LENDER")
are prepared to make available exceeds the amount of the Advance which the
Defaulting Lender failed to make, then each Contributing Lender shall be deemed
to have given notice that it is prepared to make available its Proportionate
Share of such Advance based on the Contributing Lenders' relative commitments to
advance in such circumstances. If any Contributing Lender makes funds available
in the place of a Defaulting Lender in such circumstances, then the Defaulting
Lender shall pay to any Contributing Lender making the funds available in its
place, forthwith on demand, any amount advanced on its behalf together with
interest thereon at the rate applicable to such Advance from the date of advance
to the date of payment, against payment by the Contributing Lender making the
funds available of all interest received in respect of the Advance from the
Borrower. The failure of any Lender to make available to the Agent its
Proportionate Share of any Advance as required herein shall not relieve any
other Lender of its obligations to make available to the Agent its Proportionate
Share of any Advance as required herein.

<PAGE>
                                     - 81 -

9.4           PAYMENTS BY THE BORROWER

              All payments made by or on behalf of the Borrower pursuant to this
Agreement shall be made to and received by the Agent and shall be distributed by
the Agent to the Lenders as soon as possible upon receipt by the Agent. Except
as required to make payments in respect of the Other Secured Obligations or as
otherwise provided in this Agreement (including but not limited to Section 9.5),
the Agent shall distribute:

              (a)    payments of interest in accordance with each Lender's
                     Proportionate Share of the relevant Credit;

              (b)    repayments of principal in accordance with each Lender's
                     Proportionate Share of the relevant Credit; or

              (c)    all other payments received by the Agent including, without
                     limitation, amounts received upon the realization of
                     Security, in accordance with each Lender's Proportionate
                     Share of the relevant Credit provided, however, that with
                     respect to proceeds of realization, no Lender shall receive
                     an amount in excess of the amounts owing to it in respect
                     of the Obligations.

              If the Agent does not distribute a Lender's share of a payment
made by the Borrower to that Lender for value on the day that payment is made or
deemed to have been made to the Agent, the Agent shall pay to the Lender on
demand an amount equal to the product of (i) the Interbank Reference Rate per
annum multiplied by (ii) the Lender's share of the amount received by the Agent
from the Borrower and not so distributed, multiplied by (iii) a fraction, the
numerator of which is the number of days that have elapsed from and including
the date of receipt of the payment by the Agent to but excluding the date on
which the payment is made by the Agent to such Lender and the denominator of
which is 365.

9.5           PAYMENTS BY AGENT

9.5.1         For greater certainty, the following provisions shall apply to any
and all payments made by the Agent to the Lenders hereunder:

              (a)    the Agent shall be under no obligation to make any payment
                     (whether in respect of principal, interest, fees or
                     otherwise) to any Lender until an amount in respect of such
                     payment has been received by the Agent from the Borrower;

              (b)    if the Agent receives less than the full amount of any
                     payment of principal, interest, fees or other amount owing
                     by the Borrower under this Agreement, the Agent shall have
                     no obligation to remit to each Lender any amount other than
                     such Lender's Proportionate Share of that amount which is
                     the amount actually received by the Agent;

              (c)    if any Lender advances more or less than its Proportionate
                     Share of a Credit, such Lender's entitlement to such
                     payment shall be increased or

<PAGE>
                                     - 82 -

                     reduced, as the case may be, in proportion to the amount
                     actually advanced by such Lender;

              (d)    if a Lender's Proportionate Share of an Advance has been
                     advanced, or a Lender's Commitment has been outstanding,
                     for less than the full period to which any payment (other
                     than a payment of principal) by the Borrower relates, such
                     Lender's entitlement to such payment shall be reduced in
                     proportion to the length of time such Lender's
                     Proportionate Share of the relevant Credit or such Lender's
                     Commitment, as the case may be, has actually been
                     outstanding;

              (e)    the Agent acting reasonably and in good faith shall, after
                     consultation with the Lenders in the case of any dispute,
                     determine in all cases the amount of all payments to which
                     each Lender is entitled and such determination shall, in
                     the absence of manifest error, be binding and conclusive;
                     and

              (f)    upon request, the Agent shall deliver a statement detailing
                     any of the payments to the Lenders referred to herein.

9.5.2         Unless the Agent has actual knowledge that the Borrower has not
made or will not make a payment to the Agent for value on the date in respect of
which the Borrower has notified the Agent that the payment will be made, the
Agent shall be entitled to assume that such payment has been or will be received
from the Borrower when due and the Agent may (but shall not be obliged to), in
reliance upon such assumption, pay the Lenders corresponding amounts. If the
payment by such Borrower is in fact not received by the Agent on the required
date and the Agent has made available corresponding amounts to the Lenders, the
Borrower shall, without limiting its other obligations under this Agreement,
indemnify the Agent against any and all liabilities, obligations, losses,
damages, penalties, costs, expenses or disbursements of any kind or nature
whatsoever that may be imposed on or incurred by the Agent as a result, except
for those arising from the Agent's gross negligence or wilful misconduct. A
certificate of the Agent with respect to any amount owing by the Borrower under
this Section shall be conclusive evidence of the amount owing in the absence of
manifest error. If the payment is not received by the Agent from the Borrower
within a reasonable time following the disbursement to the Lenders by the Agent,
the Lenders shall return the amounts received by them to the Agent with interest
at the Interbank Reference Rate.

9.6           DIRECT PAYMENTS

              The Lenders agree among themselves that, except as otherwise
provided for in this Agreement (including but not limited to Sections 11.14 and
11.15), except as necessary to adjust for Advances that are not in each Lender's
Proportionate Share under the Credits, and except for receipts relating to the
Other Secured Obligations, all sums received by a Lender relating to this
Agreement or by virtue of the Security, whether received by voluntary payment,
by the exercise of the right of set-off or compensation or by counterclaim,
cross-action or as proceeds of realization of any Security or otherwise, shall
be shared by each Lender in its Proportionate Share under the Credits and each
Lender

<PAGE>
                                     - 83 -

undertakes to do all such things as may be reasonably required to give full
effect to this Section, including without limitation, the purchase from other
Lenders of such notes or a portion thereof by the Lender who has received an
amount in excess of its Proportionate Share under the Credits as shall be
necessary to cause such purchasing Lender to share the excess amount rateably in
its Proportionate Share under the Credits with the other Lenders. If any sum
which is so shared is later recovered from the Lenders who originally received
it, the Lender shall restore its Proportionate Share under the Credits of such
sum to such Lenders, without interest. If any Lender shall obtain any payment of
moneys due under this Agreement as referred to above, it shall forthwith remit
such payment to the Agent and, upon receipt, the Agent shall distribute such
payment in accordance with the provisions of Section 9.5.

9.7           ADMINISTRATION OF THE CREDITS

9.7.1         Unless otherwise specified herein, the Agent shall perform the
following duties under this Agreement:

              (a)    prior to an Advance, ensure that all conditions precedent
                     have been fulfilled in accordance with the terms of this
                     Agreement, subject to Section 9.8.2 and any other
                     applicable terms of this Agreement;

              (b)    take delivery of each Lender's Proportionate Share of an
                     Advance and make all Advances hereunder in accordance with
                     the procedures set forth in Sections 5.11 and 5.15;

              (c)    use reasonable efforts to collect promptly all sums due and
                     payable by the Borrower pursuant to this Agreement;

              (d)    make all payments to the Lenders in accordance with the
                     provisions hereof;

              (e)    hold the Security other than the Trustee Security on behalf
                     of the Lenders and take all necessary steps to comply with
                     registration requirements so that the Security remains
                     perfected under applicable laws, but each Lender shall
                     notify the Agent of any circumstance that might affect the
                     perfection of the Security of which the Lender becomes
                     aware;

              (f)    hold all legal documents relating to the Credits, maintain
                     complete and accurate records showing all Advances made by
                     the Lenders, all remittances and payments made by the
                     Borrower to the Agent, all remittances and payments made by
                     the Agent to the Lenders and all fees or any other sums
                     received by the Agent and, except for accounts, records and
                     documents relating to the fees payable under the Fee
                     Agreement, allow each Lender and their respective advisors
                     to examine such accounts, records and documents at their
                     own expense, and provide any Lender, upon reasonable
                     notice, with such copies thereof as such Lender may
                     reasonably require from time to time at the Lender's
                     expense;

<PAGE>
                                     - 84 -

              (g)    except as otherwise specifically provided for in this
                     Agreement, promptly advise each Lender upon receipt of each
                     notice and deliver to each Lender, promptly upon receipt,
                     all other written communications furnished by the
                     Restricted Parties to the Agent on behalf of the Lenders
                     pursuant to this Agreement, including without limitation
                     copies of financial reports and certificates which are to
                     be furnished to the Agent;

              (h)    forward to each of the Lenders, upon request and at the
                     expense of the Lender so requesting (other than customary
                     record books which shall be provided at the expense of the
                     Borrower), copies of this Agreement, the Security and other
                     Credit Documents (other than the Fee Agreement);

              (i)    promptly forward to each Lender, upon request, an
                     up-to-date loan status report; and

              (j)    upon learning of same, promptly advise each Lender in
                     writing of the occurrence of an Event of Default or Pending
                     Event of Default or the occurrence of any event, condition
                     or circumstance which would cause a Material Adverse Change
                     or of any material adverse information coming to the
                     attention of the Agent (using reasonable efforts) relative
                     to the Security, provided that, except as aforesaid, the
                     Agent shall be under no duty or obligation whatsoever to
                     provide any notice to the Lenders and further provided that
                     each Lender hereby agrees to notify the Agent of any Event
                     of Default or Pending Event of Default of which it may
                     reasonably become aware.

9.7.2         The Agent may take the following actions only with the prior
consent of the Majority Lenders, unless otherwise specified in this Agreement:

              (a)    subject to Section 9.7.3, exercise any and all rights of
                     approval conferred upon the Lenders by this Agreement;

              (b)    give written notice to the Restricted Parties in respect of
                     any matter in respect of which notice may be required,
                     permitted, necessary or desirable in accordance with or
                     pursuant to this Agreement, promptly after receiving the
                     consent of the Majority Lenders, except that the Agent
                     shall, without direction from the Lenders, immediately give
                     the Borrower notice of any payment that is due or overdue
                     under the terms of this Agreement unless the Agent
                     considers that it should request the direction of the
                     Majority Lenders, in which case the Agent shall promptly
                     request that direction;

              (c)    amend, modify or waive any of the terms of this Agreement,
                     including waiver of an Event of Default or Pending Event of
                     Default, if such action is not otherwise provided for in
                     Section 9.7.3;

              (d)    declare an Event of Default or take action to enforce
                     performance of the Obligations and to realize upon the
                     Security including the appointment of a receiver, the
                     exercise of powers of distress, lease or sale given by the

<PAGE>
                                     - 85 -

                     Security or by law and take foreclosure proceedings and/or
                     pursue any other legal remedy necessary;

              (e)    decide to accelerate the amounts outstanding under the
                     Credits;

              (f)    pay insurance premiums, taxes and any other sums as may be
                     reasonably required to protect the interests of the
                     Lenders; and

              (g)    enter into or amend, modify or waive any term of any
                     Intercreditor Agreement.

9.7.3         The Agent may take the following actions only if the prior
unanimous consent of the Lenders is obtained, unless otherwise specified herein:

              (a)    amend, modify, discharge, terminate or waive any of the
                     terms of the Security;

              (b)    amend, modify, discharge, terminate or waive any of the
                     terms of this Agreement if such amendment, modification,
                     discharge, termination or waiver would increase the amount
                     of any Credit, amend the purpose of any Credit, reduce the
                     interest rates and similar charges applicable to any
                     Credit, reduce the fees payable with respect to any Credit,
                     extend any date fixed for payment of principal, interest or
                     any other amount relating to any Credit or extend the term
                     of any Credit (for greater certainty, any extension of the
                     Credits shall be made in accordance with Section 2.4); and

              (c)    amend the definition of "Majority Lenders" or this Section
                     9.7.3.

              For greater certainty, no Lender's Commitment or Proportionate
Share may be amended without the consent of that Lender.

9.7.4         Notwithstanding Sections 9.7.2 and 9.7.3, the Agent may, without
the consent of the Lenders, make amendments to the Credit Documents that are for
the sole purpose of curing any immaterial or administrative ambiguity, defect or
inconsistency, but shall immediately notify the Lenders of any such action. The
Agent may also consent from time to time to any change to the list of Material
Contracts provided by NSCL in accordance with Section 3.1.8 and may discharge
any Security (or direct the Trustee to do so) to the extent necessary to allow
any Restricted Party to complete any sale or other disposition of Property
permitted by this Agreement.

9.7.5         As between the Restricted Parties, on the one hand, and the Agent
and the Lenders, on the other hand:

              (a)    all statements, certificates, consents and other documents
                     which the Agent purports to deliver on behalf of the
                     Lenders or the Majority Lenders shall be binding on each of
                     the Lenders, and the Restricted Parties shall not be

<PAGE>
                                     - 86 -

                     required to ascertain or confirm the authority of the Agent
                     in delivering such documents;

              (b)    all certificates, statements, notices and other documents
                     which are delivered by the Restricted Parties to the Agent
                     in accordance with this Agreement shall be deemed to have
                     been duly delivered to each of the Lenders;

              (c)    all payments which are delivered by the Borrower to the
                     Agent in accordance with this Agreement shall be deemed to
                     have been duly delivered to each of the Lenders;

              (d)    unless an Event of Default or Pending Event of Default has
                     occurred and is continuing, NSCL's consent to the
                     appointment of any Successor Agent must be obtained, but
                     NSCL's consent shall not be unreasonably withheld.

9.8           RIGHTS OF AGENT

9.8.1         In administering the Credits, the Agent may retain, at the expense
of the Lenders if such expenses are not recoverable from the Borrower, such
solicitors, counsel, auditors and other experts and agents as the Agent may
select, in its sole discretion, acting reasonably and in good faith after
consultation with the Lenders.

9.8.2         The Agent shall be entitled to rely on any communication,
instrument or document believed by it to be genuine and correct and to have been
signed by the proper individual or individuals, and shall be entitled to rely
and shall be protected in relying as to legal matters upon opinions of
independent legal advisors selected by it. The Agent may also assume that any
representation made by a Restricted Party is true and that no Event of Default
or Pending Event of Default has occurred unless the officers or employees of the
Lender acting as Agent, active in their capacity as officers or employees
responsible for the Restricted Parties' account have actual knowledge to the
contrary or have received notice to the contrary from any other party to this
Agreement.

9.8.3         The Agent may, without any liability to account, accept deposits
from and lend money to and generally engage in any kind of banking, or other
business with the Restricted Parties, as if it were not the Agent.

9.8.4         Except in its own right as a Lender, the Agent shall not be
required to advance its own funds for any purpose, and in particular, shall not
be required to pay with its own funds insurance premiums, taxes or public
utility charges or the cost of repairs or maintenance with respect to the assets
which are the subject matter of the Security, nor shall it be required to pay
with its own funds the fees of solicitors, counsel, auditors, experts or agents
engaged by it as permitted hereby.

9.8.5         The Agent shall be entitled to receive a fee for acting as Agent
as agreed in the Fee Agreement or as otherwise agreed between the Agent and NSCL
from time to time.

<PAGE>
                                     - 87 -

9.9           ACKNOWLEDGEMENTS, REPRESENTATIONS AND COVENANTS OF LENDERS

9.9.1         It is acknowledged and agreed by each Lender that it has itself
been, and will continue to be, solely responsible for making its own independent
appraisal of and investigations into the financial condition, creditworthiness,
property, affairs, status and nature of the Restricted Parties. Accordingly,
each Lender confirms to the Agent that it has not relied, and will not hereafter
rely, on the Agent (a) to check or inquire on its behalf into the adequacy or
completeness of any information provided by the Restricted Parties under or in
connection with this Agreement or the transactions herein contemplated (whether
or not such information has been or is hereafter distributed to such Lender by
the Agent) or (b) to assess or keep under review on its behalf the financial
condition, creditworthiness, property, affairs, status or nature of the
Restricted Parties.

9.9.2         Each Lender represents and warrants that it has the legal capacity
to enter into this Agreement pursuant to its charter and any applicable
legislation and has not violated its charter, constating documents or any
applicable legislation by so doing.

9.9.3         Each Lender agrees to indemnify the Agent (to the extent not
reimbursed by the Borrower), rateably according to its Proportionate Share from
and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever which may be imposed on, incurred by, or asserted against the
Agent in any way relating to or arising out of the Credit Documents or the
transactions therein contemplated, provided that no Lender shall be liable for
any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting from the
Agent's gross negligence or wilful misconduct. Without limiting the generality
of the foregoing, each Lender agrees to reimburse the Agent for its
Proportionate Share of any out-of-pocket expenses (including counsel fees)
incurred by the Agent in connection with the preservation of any rights of the
Agent or the Lenders under, or the enforcement of, or legal advice in respect of
rights or responsibilities under this Agreement, to the extent that the Agent is
not reimbursed for such expenses by the Borrower. The obligation of the Lenders
to indemnify the Agent shall survive the termination of this Agreement and shall
be performed by the Lenders promptly upon demand by the Agent.

9.9.4         Each of the Lenders acknowledges and confirms that in the event
that the Agent does not receive payment in accordance with this Agreement, it
shall not be the obligation of the Agent to maintain the Credits in good
standing nor shall any Lender have recourse to the Agent in respect of any
amounts owing to such Lender under this Agreement.

9.9.5         Each Lender acknowledges and agrees that its obligation to advance
its Proportionate Share of Advances in accordance with the terms of this
Agreement is independent and in no way related to the obligation of any other
Lender hereunder.

9.9.6         Each Lender hereby acknowledges receipt of a copy of this
Agreement and the Security (to the extent that the Security has been delivered)
and acknowledges that it is satisfied with the form and content of such
documents.

<PAGE>
                                     - 88 -

9.10          COLLECTIVE ACTION OF THE LENDERS

              Each of the Lenders hereby acknowledges that to the extent
permitted by applicable law, the Security and the remedies provided under the
Credit Documents to the Lenders are for the benefit of the Lenders collectively
and acting together and not severally and further acknowledges that its rights
hereunder and under the Security are to be exercised not severally, but by the
Agent upon the decision of the Majority Lenders or Lenders as required by this
Agreement. Accordingly, notwithstanding any of the provisions contained herein
or in the Security each of the Lenders hereby covenants and agrees that it shall
not be entitled to take any action hereunder or thereunder including, without
limitation, any declaration of default hereunder or thereunder but that any such
action shall be taken only by the Agent with the prior written agreement of the
Majority Lenders. Each of the Lenders hereby further covenants and agrees that
upon any such written agreement being given by the Majority Lenders, it shall
co-operate fully with the Agent to the extent requested by the Agent.
Notwithstanding the foregoing, in the absence of instructions from the Lenders
and where in the sole opinion of the Agent, acting reasonably and in good faith,
the exigencies of the situation warrant such action, the Agent may without
notice to or consent of the Lenders take such action on behalf of the Lenders as
it deems appropriate or desirable in the interest of the Lenders.

9.11          SUCCESSOR AGENT

              Subject to the appointment and acceptance of a Successor Agent as
provided in this Section, and subject to Section 9.7.5(d), the Agent may resign
at any time by giving 30 days' written notice thereof to the Lenders and NSCL,
and may be removed at any time by the Majority Lenders upon 30 days' written
notice. Upon receipt of notice by the Lenders of the resignation of the Agent,
or upon giving notice of termination to the Agent, the Majority Lenders may,
within 21 days, appoint a successor from among the Lenders or, if no Lender is
willing to accept such an appointment, from among other banks to which the BANK
ACT (Canada) applies, which each have combined capital and reserves in excess of
$250,000,000, and which have offices in Vancouver, Toronto and New York (the
"SUCCESSOR AGENT"). If no Successor Agent has been so appointed and has accepted
such appointment within 21 days after the retiring Agent's giving of notice of
resignation or receiving of notice of termination, then the retiring Agent may,
on behalf of the Lenders, appoint a Successor Agent. Upon the acceptance of any
appointment as Agent hereunder by a Successor Agent, the retiring Agent shall
pay the Successor Agent any unearned portion of any fee paid to the Agent for
acting as such, and the Successor Agent shall succeed to and become vested with
all the rights, powers, privileges and duties of the retiring Agent, and the
retiring Agent shall be discharged from its further duties and obligations as
Agent under this Agreement and the other Credit Documents. After any retiring
Agent's resignation hereunder as Agent, the provisions of this Article shall
continue to enure to its benefit and be binding upon it as to any actions taken
or omitted to be taken by it while it was Agent hereunder.

9.12          PROVISIONS OPERATIVE BETWEEN LENDERS AND AGENT ONLY

              Except for the provisions of Sections 9.7.5, 9.9.2, 9.9.5, 9.10,
9.11 and 9.12, the provisions of this Article relating to the rights and
obligations of the Lenders and the Agent

<PAGE>
                                     - 89 -

INTER SE shall be operative as between the Lenders and the Agent only, and the
Restricted Parties shall not have any rights or obligations under or be entitled
to rely for any purpose upon such provisions.

                                   ARTICLE X
                               ADDITIONAL LENDERS,
                             SUCCESSORS AND ASSIGNS

10.1          SUCCESSORS AND ASSIGNS

10.1.1        The Credit Documents shall be binding upon and enure to the
benefit of the Agent, the Arrangers, each Lender, the Restricted Parties and
their respective successors and permitted assigns, except that the Restricted
Parties shall not assign any rights or obligations with respect to this
Agreement or any of the other Credit Documents without the prior written consent
of each Lender.

              The collective rights and obligations of the Lenders under this
Agreement are assignable in whole or in part (PRO RATA) and any Lender shall be
entitled to assign in whole or in part its individual rights and obligations
hereunder or to permit other financial institutions to participate in the
Credits, all in accordance with the provisions of Section 10.2 and the other
terms of this Agreement. The Restricted Parties hereby consent to the disclosure
of any information relating to the Restricted Parties to any potential Lender or
participant provided that the potential Lender or participant agrees in writing
to keep the information confidential.

              No assignment shall be made in respect of an aggregate Commitment
of less than $5,000,000 in respect of the Credits. No assignment may result in
the Commitment of any Lender, determined as of the effective date of the
Assignment Agreement with respect to such assignment, being less than
$5,000,000.

              Notwithstanding any other provisions of this Agreement, each
Lender agrees that it shall not offer to assign or assign any portion of its
rights and obligations under this Agreement including, without limitation, any
portion of its Commitment, without the prior written consent of the Agent and
NSCL, which consent shall not be unreasonably withheld, except that (i) the
consent of the Agent and NSCL shall not be required for an assignment of a
Lender's interest in the Credits to another Lender and (ii) the consent of NSCL
shall not be required if an Event of Default has occurred and is continuing. The
Lenders agree that NSCL's consent shall not be considered to be unreasonably
withheld if the proposed assignment would result in any material additional cost
being incurred by the Borrower, including but not limited to any gross-up for
withholding tax under Section 11.14. Notwithstanding the foregoing, the Borrower
may not withhold its consent because of any increase in the discount rate
applicable to Bankers' Acceptances of the proposed assignee compared to the
assignor.

10.1.2        A participation by a Lender of its interest (or a part thereof)
hereunder or a payment by a participant to a Lender as a result of the
participation will not constitute a payment hereunder to the Lender or an
Advance to the Borrower. A payment (excluding the effect of any premium or
discount) made by an assignee to an assigning Lender in order

<PAGE>
                                     - 90 -

for the assignee to assume its Proportionate Share of Advances made by the
assigning Lender will reduce the Advances owing by the Borrower to the assigning
Lender by the amount of the payment and will be result in Advances in the amount
of the payment becoming owed to the assignee by the Borrowers as of the date
that the payment is made. However, no such payment shall, as between the
Borrowers and the Lenders, be or be deemed to be a repayment by the Borrowers or
a new Advance by the Lenders.

10.2          ASSIGNMENTS

10.2.1        Subject to Section 10.1 and the other terms of this Agreement, the
Lenders collectively or individually may assign to one or more assignees all or
a portion of their respective rights and obligations under this Agreement
(including, without limitation, all or a portion of their respective
Commitments). The parties to each such assignment shall execute and deliver an
Assignment Agreement to the Agent, for its consent (if necessary) and recording
in the Register and shall pay a processing and recording fee to the Agent in the
amount of $3500. After such execution, delivery, consent and recording (i) the
assignee thereunder shall be a party to this Agreement and, to the extent that
rights and obligations hereunder have been assigned to it, have the rights and
obligations of a Lender hereunder and (ii) the assigning Lender thereunder
shall, to the extent that rights and obligations hereunder have been assigned by
it pursuant to such Assignment Agreement, relinquish its rights, other than
rights to expense reimbursement and indemnification to which it is then entitled
hereunder, and be released from its obligations under this Agreement, other than
obligations in respect of which it is then in default and liabilities arising
from its actions prior to the assignment. In the case of an Assignment Agreement
covering all or the remaining portion of an assigning Lender's rights and
obligations under this Agreement, such Lender shall cease to be a party hereto.

10.2.2        The agreements of an assignee contained in an Assignment Agreement
shall benefit the assigning Lender thereunder, the other Lenders and the Agent
in accordance with the terms of the Assignment Agreement.

10.2.3        The Agent shall maintain at its address referred to herein a copy
of each Assignment Agreement delivered to and acknowledged by it and a register
for recording the names and addresses of the Lenders and the Commitment under
the Credits of each Lender from time to time (the "REGISTER"). The entries in
the Register shall be conclusive and binding for all purposes, absent manifest
error. The Borrower, the Agent and each of the Lenders may treat each person
whose name is recorded in the Register as a Lender hereunder for all purposes of
this Agreement, and need not recognize any person as a Lender unless it is
recorded in the Register as a Lender. The Register shall be available for
inspection by the Borrower or any Lender at any reasonable time and from time to
time upon reasonable prior notice.

10.2.4        Upon its receipt of an Assignment Agreement executed by an
assigning Lender and an assignee and approved by the Agent (as evidenced by its
execution thereof), the Agent shall, if the Assignment Agreement has been
completed and is in the required form with such immaterial changes as are
acceptable to the Agent, record the information

<PAGE>
                                     - 91 -

contained therein in the Register and update Schedule E. The Agent shall provide
NSCL with an updated version of Schedule E following any change to Schedule E.

10.3          PARTICIPATIONS

              Each Lender may (subject to the provisions of Section 10.1) sell
participations to one or more financial institutions or other persons in or to
all or a portion of its rights and obligations under this Agreement (including,
without limitation, all or a portion of its Commitment), but the participant
shall not become a Lender and:

              (a)    the Lender's obligations under this Agreement (including,
                     without limitation, its Commitment) shall remain unchanged;

              (b)    the Lender shall remain solely responsible to the other
                     parties hereto for the performance of such obligations;

              (c)    the Borrower, the Agent and the other Lenders shall
                     continue to deal solely and directly with the Lender in
                     connection with the Lender's rights and obligations under
                     this Agreement;

              (d)    no participant shall have any right to approve any
                     amendment or waiver of any provision of this Agreement, or
                     any consent to any departure by any person therefrom.

              Notwithstanding the foregoing, each participant shall have the
same benefit, as if it was a Lender, with respect to the rights provided to the
Lenders in Section 11.15. Each participant shall also have the right to be
provided by the Lender from whom it has obtained its participation with all
information relating to the Restricted Parties which is provided to any Lender.
Without limiting the foregoing, no participant shall have the benefit of Section
11.14 except to the extent that the Lender from whom it has obtained its
participation is itself entitled to compensation under that Section.

                                   ARTICLE XI
                            MISCELLANEOUS PROVISIONS

11.1          HEADINGS AND TABLE OF CONTENTS

              The headings of the Articles and Sections and the Table of
Contents are inserted for convenience of reference only and shall not affect the
construction or interpretation of this Agreement.

11.2          ACCOUNTING TERMS

              Each accounting term used in this Agreement, unless otherwise
defined herein, has the meaning assigned to it under GAAP.

<PAGE>
                                     - 92 -

11.3          CAPITALIZED TERMS

              All capitalized terms used in any of the Credit Documents (other
than this Agreement) which are defined in this Agreement shall have the meaning
defined herein unless otherwise defined in the other document.

11.4          SEVERABILITY

              Any provision of this Agreement which is or becomes prohibited or
unenforceable in any relevant jurisdiction shall not invalidate or impair the
remaining provisions hereof which shall be deemed severable from such prohibited
or unenforceable provision and any such prohibition or unenforceability in any
such jurisdiction shall not invalidate or render unenforceable such provision in
any other jurisdiction. Should this Agreement fail to provide for any relevant
matter, the validity, legality or enforceability of this Agreement shall not
thereby be affected.

11.5          NUMBER AND GENDER

              Unless the context otherwise requires, words importing the
singular number shall include the plural and vice versa, words importing any
gender include all genders and references to agreements and other contractual
instruments shall be deemed to include all present or future amendments,
supplements, restatements or replacements thereof or thereto.

11.6          AMENDMENT, SUPPLEMENT OR WAIVER

              No amendment, supplement or waiver of any provision of the Credit
Documents, nor any consent to any departure by a Restricted Party therefrom,
shall in any event be effective unless it is in writing, makes express reference
to the provision affected thereby and is signed by the Agent for and on behalf
of the Lenders or the Majority Lenders, as the case may be, and then such waiver
or consent shall be effective only in the specific instance and for the specific
purpose for which given. In addition, any amendment or supplement shall require
the written consent of the other parties to the Credit Document in question. No
waiver or act or omission of the Agent, the Lenders, or any of them, shall
extend to or be taken in any manner whatsoever to affect any subsequent Event of
Default or breach by a Restricted Party of any provision of the Credit Documents
or the rights resulting therefrom.

11.7          GOVERNING LAW

              Each of the Credit Documents, except for those which expressly
provide otherwise, shall be conclusively deemed to be a contract made under, and
shall for all purposes be exclusively governed by and construed in accordance
with, the laws of the Province of British Columbia and the laws of Canada
applicable in British Columbia. Each party to this Agreement hereby irrevocably
and unconditionally attorns to the non-exclusive jurisdiction of the courts of
British Columbia and all courts competent to hear appeals therefrom.

<PAGE>
                                     - 93 -

11.8          THIS AGREEMENT TO GOVERN

              In the event of any conflict between the terms of this Agreement
and the terms of any other Credit Document (other than the Fee Agreement and any
Intercreditor Agreement, which shall prevail as against this Agreement), the
provisions of this Agreement shall govern to the extent necessary to remove the
conflict.

11.9          PERMITTED ENCUMBRANCES

              The designation of an Encumbrance as a Permitted Encumbrance is
not, and shall not be deemed to be, an acknowledgment by the Lenders that the
Encumbrance shall have priority over the Security.

11.10         CURRENCY

              All payments made hereunder shall be made in the currency in
respect of which the obligation requiring such payment arose. Unless the context
otherwise requires, all amounts expressed in this Agreement in terms of money
shall refer to Canadian Dollars.

              Except as otherwise expressly provided in this Agreement, wherever
this Agreement contemplates or requires the calculation of the equivalent in one
currency of an amount expressed in another currency, the calculation shall be
made on the basis of the Exchange Rate at the effective date of the calculation.

11.11         LIABILITY OF LENDERS

              The liability of the Lenders in respect of all matters relating to
this Agreement and the other Credit Documents is several and not joint or joint
and several. Without limiting that statement, the obligations of the Lenders to
make Advances is limited to their respective Proportionate Shares of any Advance
that is requested, and, in the aggregate, to their respective Proportionate
Shares of the total amounts of the Credits.

11.12         EXPENSES AND INDEMNITY

              All statements, reports, certificates, opinions, appraisals and
other documents or information required to be furnished to the Lenders, the
Agent, or any of them, by the Restricted Parties under this Agreement shall be
supplied without cost to the Lenders, the Agent, or any of them. The Borrower
shall pay on demand all reasonable third party costs and expenses of the
Lenders, or any of them (including, without limitation, the reasonable fees and
expenses of counsel for the Lenders and the Agent collectively, but not
separately for individual Lenders and the Agent, on a solicitor and own client
basis), incurred in connection with (i) the preparation, execution, delivery,
administration, periodic review and enforcement of the Credit Documents; (ii)
obtaining advice as to their rights and responsibilities in connection with the
Credits and the Credit Documents; (iii) reviewing, inspecting and appraising the
collateral that is the subject of the Security at reasonable intervals; (iv) the
syndication of the Credits; (v) due diligence; and (vi) other matters relating
to the Credits. Such costs and expenses shall be payable whether or not an
Advance is made under this Agreement.

<PAGE>
                                     - 94 -

              The Borrower shall indemnify the Lenders, the Agent, the
Arrangers, the Syndication Agents, and each of them, and their respective
officers, directors, trustees, employees and agents against any liability,
obligation, loss or expense which any of them may sustain or incur as a
consequence of (i) any representation or warranty made herein by a Restricted
Party which was incorrect at the time it was made or deemed to have been made,
(ii) a default by the Borrower in the payment of any sum due from it under or in
connection with the Credit Documents (irrespective of whether an Advance is
deemed to be made to pay the amount that has not been paid), including, but not
limited to, all sums (whether in respect of principal, interest or any other
amount) paid or payable to lenders of funds borrowed by the Lenders, the Agent,
or any of them, in order to fund the amount of any such unpaid amount to the
extent the Lenders, the Agent, or any of them, are not reimbursed pursuant to
any other provisions of this Agreement, (iii) the failure of the Borrower to
complete any Advance or make any payment after notice therefor has been given
under this Agreement, (iv) the failure of a purchaser of Bankers' Acceptances
(other than one of the Lenders) to pay for and take delivery of them in any
arrangement for sale made by the Borrower and communicated to the Agent, (v) any
other default by a Restricted Party hereunder, and (vi) generally, the Lenders
and the Agent having entered into this Agreement and the other Credit Documents
and made Advances to the Borrower. A certificate of a Lender or the Agent as to
the amount of any such loss or expense shall be conclusive evidence as to the
amount thereof, in the absence of manifest error provided that the Lender
determines the amount owing to it in good faith using any reasonable method and
provides a detailed description of its calculation of the amount owing to it.

              In no event shall any party to this Agreement be liable for
consequential damages suffered by any other party.

              The agreements in this Section shall survive the termination of
this Agreement and repayment of the Obligations.

11.13         ENVIRONMENTAL INDEMNITY

              The Borrower shall protect, indemnify and hold the Agent and the
Lenders and all directors, officers, employees and agents of the Agent or the
Lenders harmless from and against any and all actual or potential claims,
liabilities, damages, losses, fines, penalties, sanctions, judgments, awards,
costs and expenses whatsoever (including, without limitation, costs and expenses
of investigating, denying or defending any of the foregoing and costs and
expenses for preparing any necessary environmental assessment report or other
such reports) which arise out of or relate in any way to:

              (a)    the presence, use, handling, production, transportation,
                     storage, release, deposit, discharge or disposal of any
                     Hazardous Materials in, on or about any Property owned,
                     operated or occupied by the Restricted Parties and their
                     Subsidiaries, whether by the Restricted Parties or any
                     other person;

              (b)    any remedial action taken by the Agent or any Lender in
                     connection with any matter referred to in paragraph (a),
                     including without limitation any repair, clean-up,
                     remediation or detoxification of any of such Property and
                     the preparation of any closure or other required plans; and

<PAGE>
                                     - 95 -

              (c)    any breach by any Restricted Party of any Environmental
                     Law.

              Notwithstanding anything to the contrary contained in this
Agreement, (i) the indemnity provisions set forth above shall not apply with
respect to Hazardous Materials, contaminants, wastes or other substances which
the Borrower establishes were first placed on, in, under or about the property
in question after the Agent or a Lender or other indemnified party took actual
and exclusive possession of the property (either through foreclosure or
otherwise), and (ii) the indemnity provisions set forth above are not intended
to indemnify any indemnified party for its own gross negligence or wilful
misconduct.

              If any Hazardous Materials are caused to be removed by any
Restricted Party, the Agent, a Lender or any other indemnified party, then such
Hazardous Materials will be and remain the property of the Restricted Party to
which they belonged before removal, and such Restricted Party will assume any
and all liability for such removed Hazardous Materials. The Borrower understands
that its liability to the indemnified parties under this Section will survive
the termination of this Agreement and repayment of the Obligations.

11.14         MANNER OF PAYMENT AND TAXES

              All payments to be made by or on behalf of the Restricted Parties
(or in the case of upfront fees and indemnity fees, by the Agent or any Lender
to another Lender or to an assignee of an interest in the Credits) in connection
with the Credit Documents are to be made without set-off, compensation or
counterclaim, free and clear of and without deduction for or on account of any
Tax, including but not limited to withholding taxes, other than Excluded Taxes,
except if such deduction is required by law or the administration thereof. If
any Tax, other than Excluded Taxes, is deducted or withheld from any payments
under the Credit Documents (including the remittance provided for in this
Section), the Restricted Party making payment shall promptly remit to the Agent
for the Lenders' benefit in the currency in which such payment was made, the
equivalent of the amount of Tax so deducted or withheld together with the
relevant receipt issued by the taxing or other receiving authority. Subject to
Section 5.28, if the Borrower is prevented by operation of law or otherwise from
paying, causing to be paid or remitting such Tax, the interest or other amount
payable under the Credit Documents will be increased to such rates as are
necessary to yield and remit to the Lenders the principal sum advanced or made
available together with interest at the rates specified in the Credit Documents
after provision for payment of such Tax.

              If any Lender or the Agent becomes liable for any Tax in the
jurisdiction in which the person making a payment:

              (a)    under the Credit Documents, or

              (b)    to Restricted Parties or Subsidiaries,

is located, as a result of a payment being made without the required Tax in that
jurisdiction having been deducted or withheld, NSCL shall indemnify the Lender
or the Agent, as the case may be, for such Tax and any interest and penalties
thereon, and the indemnity payment shall be increased as necessary so that after
the imposition of any Tax in that

<PAGE>
                                     - 96 -

jurisdiction on the indemnity payment (including Tax in respect of any such
increase in the indemnity payment), the Lender or the Agent shall receive the
full amount of Taxes, interest and penalties for which it is liable in that
jurisdiction as a result of the failure to deduct or withhold Tax.

11.15         INCREASED COSTS ETC.

              If the introduction of or any change in or in the interpretation
of, or any change in the application to any Restricted Party or any Lender of,
any law or any regulation or guideline from any central bank or other
governmental authority that is binding on any Restricted Party or any Lender
(whether or not having the force of law), including but not limited to any
reserve or special deposit requirement or any Tax (other than Excluded Taxes) or
any capital requirement, has due to the Lenders' compliance therewith the
effect, directly or indirectly, of (i) increasing the cost to the Lenders, or
any of them, of performing their respective obligations hereunder; (ii) reducing
any amount received or receivable by the Lenders, or any of them, hereunder or
its effective return hereunder or on its capital; or (iii) causing the Lenders,
or any of them, to make any payment or to forego any return based on any amount
received or receivable by the Lenders, or any of them, hereunder, then upon
demand from time to time the affected Restricted Party shall pay such amount as
shall compensate the Lenders for any such cost, reduction, payment or foregone
return that is not fully offset by an increase in the applicable interest rate
or rates or fees hereunder. Any certificate of a Lender in respect of the
foregoing will be conclusive evidence of the foregoing, except for manifest
error, provided that the Lender determines the amounts owing to it in good faith
using any reasonable averaging and attribution methods and provides a detailed
description of its calculation of the amounts owing to it.

11.16         INTEREST ON MISCELLANEOUS AMOUNTS

              If a Restricted Party fails to pay any amount payable hereunder
(other than principal, interest thereon or interest upon interest which is
payable as otherwise provided in this Agreement) on the due date, that
Restricted Party shall, on demand, pay interest on such overdue amount to the
Agent from and including such due date up to but excluding the date of actual
payment, both before and after demand, default or judgment, at a rate of
interest per annum equal to the sum of the Prime Rate plus 3.0% per annum,
compounded monthly.

              If the Borrower deposits cash as Collateral pursuant to a
requirement under this Agreement, the Lender or Lenders holding the cash shall
pay the Borrower interest on the cash while it continues to be held as
Collateral at the rate offered by the relevant Lenders from time to time for
deposits in the relevant currency of comparable size and term.

11.17         CURRENCY INDEMNITY

              In the event of a judgment or order being rendered by any court or
tribunal for the payment of any amounts owing to the Lenders or any of them
under this Agreement or for the payment of damages in respect of any breach of
this Agreement or under or in respect of a judgment or order of another court or
tribunal for the payment of such amounts or damages, such judgment or order
being expressed in a currency (the "JUDGMENT CURRENCY") other than the currency
payable hereunder or thereunder ("the AGREED

<PAGE>
                                     - 97 -

CURRENCY"), the party against whom the judgment or order is made shall indemnify
and hold the Lenders harmless against any deficiency in terms of the Agreed
Currency in the amounts received by the Lenders arising or resulting from any
variation as between (i) the exchange rate at which the Agreed Currency is
converted into the Judgment Currency for the purposes of such judgment or order,
and (ii) the exchange rate at which each Lender is able to purchase the Agreed
Currency with the amount of the Judgment Currency actually received by the
Lender on the date of such receipt. The indemnity in this Section shall
constitute a separate and independent obligation from the other obligations of
the Restricted Parties hereunder, shall apply irrespective of any indulgence
granted by the Lenders, and shall be secured by the Security.

11.18         ADDRESS FOR NOTICE

              Notice to be given under the Credit Documents shall, except as
otherwise specifically provided, be in writing addressed to the party for whom
it is intended and, unless the law or a specific provision in another Credit
Document deems a particular notice to be received earlier, a notice shall not be
deemed received until actual receipt thereof by the other party. The addresses
of the parties hereto for the purposes hereof shall be the addresses specified
beside their respective signatures to this Agreement or on any Assignment
Agreement, or such other mailing or telecopier addresses as each party from time
to time may notify the other as aforesaid. Notice to the other Restricted
Parties shall be sent in care of NSCL.

11.19         TIME OF THE ESSENCE

              Time shall be of the essence in this Agreement.

11.20         FURTHER ASSURANCES

              The Restricted Parties shall, at the request of the Agent acting
on the instructions of the Majority Lenders, do all such further acts and
execute and deliver all such further documents as may, in the reasonable opinion
of the Majority Lenders, be necessary or desirable in order to fully perform and
carry out the purpose and intent of the Credit Documents.

11.21         TERM OF AGREEMENT

              Except as otherwise provided herein, this Agreement shall remain
in full force and effect until the payment and performance in full of all of the
Obligations.

11.22         PAYMENTS ON BUSINESS DAY

              Whenever any payment or performance under the Credit Documents
would otherwise be due on a day other than a Business Day, such payment shall be
made on the following Business Day, unless the following Business Day is in a
different calendar month, in which case the payment shall be made on the
preceding Business Day.

<PAGE>
                                     - 98 -

11.23         COUNTERPARTS AND FACSIMILE

              This Agreement may be executed in any number of counterparts, each
of which when executed and delivered shall be deemed to be an original, and such
counterparts together shall constitute one and the same agreement. For the
purposes of this Section, the delivery of a facsimile copy of an executed
counterpart of this Agreement shall be deemed to be valid execution and delivery
of this Agreement, but the party delivering a facsimile copy shall deliver an
original copy of this Agreement as soon as possible after delivering the
facsimile copy.

11.24         WAIVER OF JURY TRIAL, CONSEQUENTIAL DAMAGES ETC.

              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 the Credit
Documents, the transactions contemplated thereby or any course of conduct,
course of dealing, statements (whether oral or written) or actions of any party
(whether based on contract, tort or any other theory).

              No party shall assert, and each party hereby waives (to the
fullest extent permitted by applicable law), any claim against any other party
on any theory of liability, for special, indirect, consequential or punitive
damages (as opposed to direct or actual damages) arising out of, in connection
with, or as a result of, the Credit Documents, the transactions contemplated
thereby or any course of conduct, course of dealing, statements (whether oral or
written) or actions of any party (whether based on contract, tort or any other
theory).

              The Restricted Parties acknowledge and agree that none of the
Agent or the Lenders shall have any liability to them in relation to any due
diligence investigations conducted by any of them in connection with the
transactions contemplated hereby or be under any obligation whatsoever to
disclose to them any information received or facts disclosed by any such
investigations. The Restricted Parties further acknowledge and agree that they
are not relying, will not rely, and will not be deemed, in any respect
whatsoever, to have relied upon the facts received by and information disclosed
to any of the Agent or the Lenders under or in connection with such due
diligence investigations.

              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
provisions and (b) acknowledges that it and the other parties hereto have been
induced to enter into this Agreement by, among other things, the waivers,
acknowledgments and certifications in this Section.

11.25         ENTIRE AGREEMENT

              Except as expressly provided in the commitment letter, summary of
terms and conditions and fee letters dated 10 May 2002 issued by TD and RBC as
underwriters to the Borrower, this Agreement, the Fee Agreement and the
Intercreditor Agreements constitute the entire agreement between the parties
hereto concerning the matters addressed in this Agreement, and cancel and
supersede any prior agreements, undertakings, declarations or representations,
written or verbal, in respect thereof. Without limiting the foregoing, the

<PAGE>
                                     - 99 -

commitment letter, summary of terms and conditions and fee letter referred to
above are cancelled and superseded except as expressly provided therein.

11.26         DATE OF AGREEMENT

              This  Agreement  may  be  referred  to as  being  dated  19  July
2002 or as of 19 July 2002, notwithstanding the actual date of execution.

      [NOTE: THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK]

<PAGE>

                                       S-1

IN WITNESS OF WHICH, the parties have executed this Agreement.

<TABLE>
<CAPTION>
ADDRESS FOR NOTICE                                        THE TORONTO-DOMINION
                                                          BANK, as Administration Agent
<S>                                                       <C>
The Toronto-Dominion Bank
Corporate and Investment Banking                          By: /s/ authorized signatory
66 Wellington Street West, 38th Floor                        ------------------------------------
Toronto-Dominion Bank Tower                                    Name:
Toronto, Ontario                                               Title:
M5K 1A2

Attention:  Vice President, Loan                          By: /s/ authorized signatory
            Syndications - Agency                            ------------------------------------
Facsimile:  416-982-5535                                       Name:
                                                               Title:
</TABLE>

[SIGNATURE PAGE FOR CREDIT AGREEMENT DATED AS OF 19 JULY 2002 RELATING TO NORSKE
SKOG CANADA LIMITED ET AL]

<PAGE>
                                      S-2

<TABLE>
<CAPTION>
ADDRESS FOR NOTICE                                        THE TORONTO-DOMINION
                                                          BANK, as Lender
<S>                                                       <C>
The Toronto-Dominion Bank
TD Tower - Suite 660                                      By: /s/ authorized signatory
700 West Georgia Street                                      ----------------------------------
Vancouver, BC                                                  Name:
V7Y 1A2                                                        Title:

Attention:  Vice President, Corporate &                   By: /s/ authorized signatory
            Investment Banking                               ----------------------------------
Facsimile:  604-654-3166                                        Name:
                                                                Title:
</TABLE>

[SIGNATURE PAGE FOR CREDIT AGREEMENT DATED AS OF 19 JULY 2002 RELATING TO NORSKE
SKOG CANADA LIMITED ET AL]

<PAGE>

                                      S-3

<TABLE>
<CAPTION>
ADDRESS FOR NOTICE                                        ROYAL BANK OF CANADA
------------------
<S>                                                       <C>
Royal Bank of Canada
Corporate Credit                                          By: /s/ authorized signatory
Suite 2100, Park Place,                                      -----------------------------------
666 Burrard Street                                             Gerald W. Derbyshire
Vancouver, B.C.                                                Managing Director, Global Banking
V6C 3B1

Attention:  Managing Director                             By: /s/ authorized signatory
Facsimile:  604-665-6465                                     -----------------------------------
                                                               Baljit Mann
                                                               Associate
</TABLE>

[SIGNATURE PAGE FOR CREDIT AGREEMENT DATED AS OF 19 JULY 2002 RELATING TO NORSKE
SKOG CANADA LIMITED ET AL]

<PAGE>

                                      S-4

<TABLE>
<CAPTION>
ADDRESS FOR NOTICE                                        MERRILL LYNCH CAPITAL
                                                          CANADA INC.
<S>                                                       <C>
Merrill Lynch Capital Canada Inc.
181 Bay Street
5th Floor                                                 By: /s/ authorized signatory
Toronto, Ontario                                             --------------------------------------
M5J 2V8                                                       Name:
                                                              Title:

Attention:  Marcelo Cosma                                 By: /s/ authorized signatory
Facsimile:  416-369-4551                                     --------------------------------------
                                                               Name:
                                                               Title:
</TABLE>

[SIGNATURE PAGE FOR CREDIT AGREEMENT DATED AS OF 19 JULY 2002 RELATING TO NORSKE
SKOG CANADA LIMITED ET AL]

<PAGE>

                                      S-5

<TABLE>
<CAPTION>
ADDRESS FOR NOTICE                                        THE BANK OF NOVA SCOTIA
------------------
<S>                                                       <C>
The Bank of Nova Scotia                                   By: /s/ authorized signatory
650 West Georgia Street, 18th Floor                          ---------------------------------
Vancouver, BC                                                 Name:
V6B 4N7                                                       Title:

Attention:  Kurt Foellmer                                 By: /s/ authorized signatory
Facsimile:  604-661-1474                                     ---------------------------------
                                                              Name:
                                                              Title:
</TABLE>

[SIGNATURE PAGE FOR CREDIT AGREEMENT DATED AS OF 19 JULY 2002 RELATING TO NORSKE
SKOG CANADA LIMITED ET AL]

<PAGE>

                                      S-6

<TABLE>
<CAPTION>
ADDRESS FOR NOTICE                                        BANK OF MONTREAL
<S>                                                       <C>
Bank of Montreal
1400, 421-7th Avenue S.W.                                 By: /s/ authorized signatory
Calgary, Alberta                                             ------------------------------------
T2P 4K9                                                       Name:
                                                              Title:

Attention:  Dana Fleury                                   By: /s/ authorized signatory
Facsimile:  403-515-3650                                     ------------------------------------
                                                              Name:
                                                              Title:
</TABLE>

[SIGNATURE PAGE FOR CREDIT AGREEMENT DATED AS OF 19 JULY 2002 RELATING TO NORSKE
SKOG CANADA LIMITED ET AL]

<PAGE>

                                      S-7

<TABLE>
<CAPTION>
ADDRESS FOR NOTICE                                        HSBC BANK CANADA
------------------
<S>                                                       <C>
HSBC Bank Canada                                          By: /s/ authorized signatory
885 West Georgia Street                                      ------------------------------------
Suite 200                                                     Name:
Vancouver, B.C.                                               Title:
V6C 3E9

                                                          By: /s/ authorized signatory
Attention:  Ralph Hilton                                     ------------------------------------
Facsimile:  604-641-3095                                      Name:
                                                              Title:
</TABLE>

[SIGNATURE PAGE FOR CREDIT AGREEMENT DATED AS OF 19 JULY 2002 RELATING TO NORSKE
SKOG CANADA LIMITED ET AL]

<PAGE>

                                      S-8

<TABLE>
<CAPTION>
ADDRESS FOR NOTICE                                        LAURENTIAN BANK OF CANADA
------------------
<S>                                                       <C>
Laurentian Bank of Canada                                 By: /s/ authorized signatory
130 Adelaide Street West                                     ----------------------------------
Toronto, Ontario                                              Name:
M5H 3P5                                                       Title:

                                                          By: /s/ authorized signatory
Attention:  William Galbraith                                ----------------------------------
Facsimile:  416-865-5717                                      Name:
                                                              Title:
</TABLE>

[SIGNATURE PAGE FOR CREDIT AGREEMENT DATED AS OF 19 JULY 2002 RELATING TO NORSKE
SKOG CANADA LIMITED ET AL]

<PAGE>

                                      S-9

<TABLE>
<CAPTION>
ADDRESS FOR NOTICE                                        CANADIAN WESTERN BANK
------------------
<S>                                                       <C>
Canadian Western Bank
Park Place Branch                                         By: /s/ authorized signatory
666 Burrard Street, Suite 100                                -----------------------------------
Vancouver, B.C.                                               Name:
V6C 2X8                                                       Title:

                                                          By: /s/ authorized signatory
Attention:  Bob Duffield                                     -----------------------------------
Facsimile:  604-688-7117                                      Name:
                                                              Title:
</TABLE>

[SIGNATURE PAGE FOR CREDIT AGREEMENT DATED AS OF 19 JULY 2002 RELATING TO NORSKE
SKOG CANADA LIMITED ET AL]

<PAGE>

                                      S-10

<TABLE>
<CAPTION>
ADDRESS FOR NOTICE                                        BANK OF AMERICA, N.A.
                                                          CANADA BRANCH
<S>                                                       <C>
Bank of America, N.A., Canada Branch
200 Front Street West                                     By: /s/ authorized signatory
Suite 2700                                                   -------------------------------------
Toronto, Ontario                                              Name:
M5V 3L2                                                       Title:

Attention:  Clara McGibbon                                By: /s/ authorized signatory
Facsimile:  416-349-4282                                     -------------------------------------
                                                              Name:
                                                              Title:
</TABLE>

[SIGNATURE PAGE FOR CREDIT AGREEMENT DATED AS OF 19 JULY 2002 RELATING TO NORSKE
SKOG CANADA LIMITED ET AL]

<PAGE>

                                      S-11

<TABLE>
<CAPTION>
ADDRESS FOR NOTICE                                        CANADIAN IMPERIAL BANK OF COMMERCE
------------------
<S>                                                       <C>
Canadian Imperial Bank of Commerce                        By: /s/ authorized signatory
BCE Place                                                    ---------------------------------------
161 Bay Street, 8th Floor                                     Name:
Toronto, Ontario                                              Title:
M5J 2S8
                                                          By: /s/ authorized signatory
                                                             ---------------------------------------
Attention:        Mark Chandler                               Name:
Facsimile:  416-956-6680                                      Title:
</TABLE>

[SIGNATURE PAGE FOR CREDIT AGREEMENT DATED AS OF 19 JULY 2002 RELATING TO NORSKE
SKOG CANADA LIMITED ET AL]

<PAGE>

                                      S-12

<TABLE>
<CAPTION>
ADDRESS FOR NOTICE                                        NORSKE SKOG CANADA LIMITED
------------------
<S>                                                       <C>
Norske Skog Canada Limited                                By: /s/ Peter Staiger
9th Floor                                                    -----------------------------------------
700 West Georgia Street                                       Peter Staiger
Vancouver, British Columbia                                   Treasurer
V7Y 1J7

Attention:   Chief Financial Officer                      By: /s/ Ralph Leverton
Facsimile:  604-654-4070                                     -----------------------------------------
                                                              Ralph Leverton
                                                              Vice President Finance and Chief
                                                              Financial Officer
with a copy to:
                                                          NORSKE SKOG CANADA
Lawson Lundell                                            FINANCE LIMITED
Barristers and Solicitors
Suite 1600 Cathedral Place
925 West Georgia Street
Vancouver, British Columbia                               By: /s/ Peter Staiger
V6C 3L2                                                      -----------------------------------------
                                                              Peter Staiger
Attention:  David J. Smith                                    Treasurer
Facsimile:  604-669-1620
                                                          ELK FALLS PULP AND PAPER LIMITED

                                                          By: /s/ Peter Staiger
                                                             -----------------------------------------
                                                              Peter Staiger
                                                              President
</TABLE>

[SIGNATURE PAGE FOR CREDIT AGREEMENT DATED AS OF 19 JULY 2002 RELATING TO NORSKE
SKOG CANADA LIMITED ET AL]

<PAGE>

                                      S-13

<TABLE>
<CAPTION>
                                                          NORSKE SKOG CANADA
<S>                                                       <C>
                                                          LIMITED AS MANAGING PARTNER FOR
                                                          AND ON BEHALF OF NORSKECANADA

                                                          By: /s/ Peter Staiger
                                                             ---------------------------------------
                                                              Peter Staiger
                                                              Treasurer

                                                          By: /s/ Ralph Leverton
                                                             ---------------------------------------
                                                              Ralph Leverton
                                                              Vice President Finance and
                                                              Chief Financial Officer

                                                          NORSKE SKOG CANADA PULP
                                                          OPERATIONS LIMITED

                                                          By: /s/ Peter Staiger
                                                             ----------------------------------------
                                                              Peter Staiger
                                                              Treasurer

                                                          NORSKE SKOG CANADA SALES INC.

                                                          By: /s/ Peter Staiger
                                                             ----------------------------------------
                                                              Peter Staiger
                                                              Treasurer

                                                          NSCL HOLDINGS INC.

                                                          By: /s/ Peter Staiger
                                                             ----------------------------------------
                                                              Peter Staiger
                                                              Treasurer

                                                          NORSKE SKOG CANADA (USA) INC.

                                                          By: /s/ Peter Staiger
                                                             ----------------------------------------
                                                              Peter Staiger
                                                              Treasurer
</TABLE>

[SIGNATURE PAGE FOR CREDIT AGREEMENT DATED AS OF 19 JULY 2002 RELATING TO NORSKE
SKOG CANADA LIMITED ET AL]

<PAGE>

                                      S-14

<TABLE>
<CAPTION>

<S>                                                      <C>
                                                          NORSKE SKOG CANADA (JAPAN) LTD.

                                                          By: /s/ James E. Armitage
                                                             ----------------------------------------
                                                              James E. Armitage
                                                              Director

                                                          NORSKE SKOG PULP SALES (JAPAN) LTD.

                                                          By: /s/ Paul D. Simkin
                                                             ----------------------------------------
                                                              Paul D. Simkin
                                                              Director

                                                          NORSKE SKOG CANADA PULP SALES INC.

                                                          By: /s/ Peter Staiger
                                                              ----------------------------------------
                                                               Peter Staiger
                                                               Treasurer

                                                          PACIFICA PAPERS SALES LTD.

                                                           By: /s/ Peter Staiger
                                                              ----------------------------------------
                                                               Peter Staiger
                                                               President

                                                          PACIFICA PAPERS SALES INC.

                                                           By: /s/ Peter Staiger
                                                               ----------------------------------------
                                                                Peter Staiger
                                                                Treasurer
</TABLE>

[SIGNATURE PAGE FOR CREDIT AGREEMENT DATED AS OF 19 JULY 2002 RELATING TO NORSKE
SKOG CANADA LIMITED ET AL]

<PAGE>

<TABLE>
<CAPTION>
                                                          PACIFICA PAPERS KABUSHIKI KAISHA
<S>                                                       <C>
                                                          By: /s/ Peter Staiger
                                                             ----------------------------------------
                                                              Peter Staiger
                                                              Director

                                                          PACIFICA POPLARS LTD.

                                                          By: /s/ Peter Staiger
                                                             ----------------------------------------
                                                              Peter Staiger
                                                              President

                                                         PACIFICA POPLARS INC..

                                                          By: /s/ Peter Staiger
                                                             ----------------------------------------
                                                              Peter Staiger
                                                              Treasurer

                                                          PACIFICA PAPERS US INC.

                                                          By: /s/ Peter Staiger
                                                             ----------------------------------------
                                                              Peter Staiger
                                                              Treasurer
</TABLE>

[SIGNATURE PAGE FOR CREDIT AGREEMENT DATED AS OF 19 JULY 2002 RELATING TO NORSKE
SKOG CANADA LIMITED ET AL]

<PAGE>

                                   SCHEDULE A
                          NOTICE OF ADVANCE OR PAYMENT

                         [SEE REFERENCE IN SECTION 5.6]

TO:              THE TORONTO-DOMINION BANK
                 Corporate and Investment Banking
                 66 Wellington Street West, 38th Floor
                 Toronto-Dominion Bank Tower
                 Toronto, Ontario
                 M5K 1A2
                 Attention:   Vice President, Loan Syndications - Agency
                 Facsimile:   416-982-5535
[NOTE:  NOTICE TO BE SENT TO RBC IN CONNECTION WITH CREDIT 2]

              We refer to the credit agreement dated as of 19 July 2002 between
Norske Skog Canada Limited and others as Restricted Parties, The
Toronto-Dominion Bank as Administration Agent and the Lenders, Arrangers and
Syndication Agents named therein, as amended, supplemented, restated or replaced
from time to time (the "Credit Agreement"). All capitalized terms used in this
certificate and defined in the Credit Agreement have the meanings defined in the
Credit Agreement.

              REQUEST FOR ADVANCE

              Notice is hereby given pursuant to Section 5.6 of the Credit
Agreement that the undersigned hereby irrevocably requests as follows:

(A) that an Advance be made under the following Credit [CHECK ONE]:

              Credit 1                                                      (  )
              Credit 2                                                      (  )

(B) the requested Advance represents the following [CHECK ONE OR MORE]:

              initial Advance under the Credit                              (  )
              Increase in Advances under the Credit                         (  )
              Rollover of existing Advances under the Credit                (  )
              conversion of existing Advances to another type of Advance    (  )

(C) the Drawdown Date shall be
                              --------------------------------------------------

(D) the Advance shall be in the form of [CHECK ONE OR MORE AND COMPLETE
    DETAILS]:

              Prime Rate Advance                                            (  )
              Amount                 $
                                      --------------------

<PAGE>
                                     - 2 -

                     Bankers' Acceptances                                   (  )
                          Face Amount:
                                             --------------------
                          Term:
                                             --------------------

                     Base Rate Advance                                      (  )
                          Amount          US$
                                             --------------------

                     LIBOR Advance                                          (  )
                          Currency:
                                              ---------------------------
                          Amount:
                                              ---------------------------
                          End of LIBOR Period:
                                              ---------------------------

                     L/C                                                    (  )
                          Nominal amount:
                                              ---------------------------
                          Expiry date:
                                              ---------------------------

                     [NOTE: ATTACH PROPOSED FORM OR DETAILS]

(E) the proceeds of the Advance shall be deposited in [SPECIFY DESIGNATED
ACCOUNT]

The undersigned hereby confirms as follows:

(a)      the representations and warranties made in Section 6.1 of the Credit
         Agreement, other than those expressly stated to be made as of a
         specific date, are true on and as of the date hereof with the same
         effect as if such representations and warranties had been made on and
         as of the date hereof, subject to modifications made by NSCL to the
         Lenders in writing and accepted by the Majority Lenders;

(b)      no Pending Event of Default or Event of Default has occurred and is
         continuing on the date hereof or will result from the Advance(s)
         requested herein [EXCEPT o];

(c)      after reasonable inquiry, there is no reason to believe that NSCL will
         not be in compliance with all covenants contained in Section 7.1 of the
         Credit Agreement at the end of its current fiscal quarter and was not
         in compliance with those covenants at the end of its immediately
         preceding fiscal quarter if it has not yet delivered its Compliance
         Certificate for that quarter [EXCEPT o];

(d)      the undersigned will immediately notify you if it becomes aware of the
         occurrence of any event which would mean that the statements in the
         immediately preceding paragraphs (a), (b) and (c) would not be true if
         made on the Drawdown Date;

(e)      all other  conditions  precedent  set out in Section  4.2 [AND  SECTION
         4.1] of the Credit  Agreement have been fulfilled.

<PAGE>
                                     - 3 -

              NOTICE OF PAYMENT

              Pursuant to Section 5.6 of the Credit Agreement, the undersigned
hereby irrevocably notifies you of the following:

(a) that a payment will be made under the following Credit [CHECK ONE]:

                     Credit 1                                               (  )
                     Credit 2                                               (  )

(b) the payment represents the following [CHECK ONE OR MORE]:

                     reduction in Advances under the Credit                 (  )
                     payment of existing Advances which will be rolled      (  )
                     over as the same type of Advance under the Credit
                     payment of existing  Advances which will be            (  )
                     converted to another type of Advance under the Credit

(c) the payment date shall be
                               ----------------------

(d) the  Advance  to be paid  shall  be in the  form of [CHECK ONE OR MORE AND
    COMPLETE details]:

                     Prime Rate Advance                                     (  )
                          Amount           $
                                              ------------------

                     Bankers' Acceptances                                   (  )
                          Face Amount
                                              ------------------
                          Maturity Date
                                              ------------------

                     Base Rate Advance                                      (  )
                          Amount          US$
                                              ------------------

                     LIBOR Advance                                          (  )
                          Currency:
                                                ---------------------------
                          Amount:
                                                ---------------------------
                          Start of LIBOR Period:
                                                ---------------------------

<PAGE>
                                     - 4 -

DATED:
      ----------------------------------------------------------

                                            NORSKE SKOG CANADA FINANCE LIMITED

                                            By:
                                               ---------------------------------
                                                Name:
                                                Title:

<PAGE>

                                   SCHEDULE B
                     AGREEMENT OF NEW RESTRICTED SUBSIDIARY
                         SUPPLEMENT TO CREDIT AGREEMENT

                         [SEE REFERENCE IN SECTION 3.1]

              THIS AGREEMENT supplements the credit agreement dated as of 19
July 2002 between Norske Skog Canada Limited and others as Restricted Parties,
The Toronto-Dominion Bank as Administration Agent and the Lenders, Arrangers and
Syndication Agents named therein, as amended, supplemented, restated or replaced
from time to time (the "Credit Agreement").

RECITALS

A. Capitalized terms used and not defined in this Agreement have the meanings
defined in the Credit Agreement.

B. The Credit Agreement contemplates that further Subsidiaries of NSCL shall
become Restricted Parties in certain circumstances.

C. o (the "New Subsidiary") is required by the Credit Agreement to become a
Restricted Party.

D. The New Subsidiary has delivered the documents listed on Appendix A to this
Agreement, which form part of the Security, an opinion of its counsel and other
resolutions and ancillary documents required by the Agent, and a pledge of all
shares of the New Subsidiary owned by the other Restricted Parties has also been
delivered as part of the Security.

              THEREFORE, for value received, and intending to be legally bound
by this Agreement, the parties agree as follows:

1. The New Subsidiary hereby acknowledges and agrees to the terms of the Credit
Agreement and agrees to be bound by all obligations of a Restricted Party under
the Credit Agreement as if it had been an original signatory thereto.

2. The Agent, on behalf of the Lenders, acknowledges that the New Subsidiary
shall be a Restricted Party as of the date of this Agreement.

<PAGE>
                                     - 2 -

              IN WITNESS OF WHICH, the undersigned have executed this Agreement
as of o.

                                              THE TORONTO-DOMINION BANK as Agent

                                              By:
                                                 -------------------------------
                                                  Name:
                                                  Title:

                                             [NEW SUBSIDIARY]

                                              By:
                                                 -------------------------------
                                                  Name:
                                                  Title:

               [NOTE: APPENDIX A TO BE ATTACHED TO LIST SECURITY]

<PAGE>

                                   SCHEDULE C
                             COMPLIANCE CERTIFICATE

                        [SEE REFERENCE IN SECTION 1.1.26]

TO:       THE LENDERS (as defined in the Credit Agreement referred to below)
AND TO:   THE TORONTO-DOMINION BANK, as Agent
--------------------------------------------------------------------------------

              We refer to Section 7.3.1(d) of the credit agreement dated as of
19 July 2002 between Norske Skog Canada Limited and others as Restricted
Parties, The Toronto-Dominion Bank as Administration Agent and the Lenders,
Arrangers and Syndication Agents named therein, as amended, supplemented,
restated or replaced from time to time (the "Credit Agreement"). All capitalized
terms used in this certificate and defined in the Credit Agreement have the
meanings defined in the Credit Agreement.

1.       The undersigned hereby certifies that:

         (a)      the representations and warranties made in Section 6.1 of the
                  Credit Agreement, other than those expressly stated to be made
                  as of a specific date, are true on and as of the date hereof
                  with the same effect as if such representations and warranties
                  had been made on and as of the date hereof, subject to
                  modifications made by the undersigned to the Lenders in
                  writing and accepted by the Majority Lenders;

         (b)      no Pending Event of Default or Event of Default has occurred
                  and is continuing on the date hereof [OR AS THE CASE MAY BE].

2.       The undersigned hereby certifies that, as of the end of its
         most-recently completed fiscal quarter, which ended on         ,

         (a)      [INCLUDE ONLY IF PERMITTED SENIOR SECURED INDEBTEDNESS OR
                  PERMITTED SUBORDINATED SECURED INDEBTEDNESS IS OUTSTANDING AND
                  THE FUNDED DEBT RATIO IS GREATER THAN 0.40 TO 1] the Interest
                  Coverage Ratio is ______: 1.

         (b)      the Funded Debt Ratio is ______: 1.

         (c)      the Secured Debt Ratio is ______: 1.

         (d)      the value of its Consolidated Net Tangible Assets is
                  $______________________.

         (e)      its "Consolidated Fixed Charge Coverage Ratio" as defined
                  under the 1999 Indenture and the 2001 Indenture is ______: 1
                  and ______: 1, respectively.

         (f)      the Threshold Amount is $___________.

         (g)      [INCLUDE FOR YEAR END ONLY] its shareholders equity is
                  $_________.

<PAGE>
                                     - 2 -

3.       Appendix A attached sets out the calculations of the amounts referred
         to in paragraph 2 above.

4.       Appendix B attached contains a list of all sales or other dispositions
         of any Property of Restricted Parties (including Capital Stock of any
         other person) during the term of this Agreement, other than
         dispositions to another Restricted Party and sales of inventory in the
         ordinary course of its business, and a list of all material Property of
         a Restricted Party which has been expropriated, condemned, destroyed,
         damaged or otherwise lost, with a description of the use of the
         proceeds of disposition, insurance or other compensation.

5.       Appendix C attached contains details of (i) all Other Secured
         Obligations as of the end of the undersigned's most-recently completed
         fiscal quarter, the classification under which they were incurred for
         the purposes of section 4.06 of the each of the 1999 Indenture and the
         2001 Indenture and the Market Value thereof, (ii) all outstanding
         Permitted Senior Secured Indebtedness and Permitted Subordinated
         Secured Indebtedness as of the end of the undersigned's most-recently
         completed fiscal quarter and the classification under which it was
         incurred for the purposes of section 4.06 of the each of the 1999
         Indenture and the 2001 Indenture and (iii) the amount, as determined
         under the 1999 Indenture and the 2001 Indenture, respectively, of any
         other obligations that have been classified as being incurred under
         clauses (i) or (ix) of the definition of "Permitted Indebtedness" in
         the 1999 Indenture and the definition of "Permitted Debt" in the 2001
         Indenture.

6.       The undersigned hereby certifies that the current Reference Debt
         Ratings established by Moody's and S&P are o and o, respectively.
         Accordingly, the Applicable Fee Rate is o% per annum and the Applicable
         Margins are as follows:

         Margin for Prime Rate Advances/ Base Rate Advances - o%
         Margin for LIBO Rate Advances - o%

7.       [INCLUDE WITH REPORT FOR QUARTER IN WHICH 30 JUNE FALLS] The
         undersigned hereby certifies that the consolidated net book value of
         its inventory as at 30 June [YEAR] is $o and the net book value of all
         inventory located in any jurisdiction where the Security has not been
         registered over inventory in accordance with local requirements is $o
         as at that date.

8.       The undersigned hereby certifies that there is no jurisdiction where
         the Security has not been registered over inventory in accordance with
         local requirements in which the amount of inventory for all Restricted
         Parties is greater than 50,000 tonnes.

9.       The undersigned hereby certifies that the current consolidated net book
         value of its fixed assets is $o and the net book value of all Property
         other than inventory located in any jurisdiction where the Security
         over such Property has not been registered in accordance with local
         requirements is $o.

<PAGE>
                                     - 3 -

10.      [REQUIRED ONLY IF PERMITTED SENIOR SECURED DEBT IN AN AGGREGATE
         PRINCIPAL AMOUNT OF $100,000,000 OR MORE HAS BEEN INCURRED DURING THE
         TERM OF THIS AGREEMENT] Appendix D attached is an up to date list of
         all Material Contracts. [OR There has been no change to the list of
         Material Contracts dated o]

11.      Appendix E attached contains details of all releases of Hazardous
         Materials on or from any land which any Restricted Party occupies or
         controls during its most-recently completed fiscal quarter that were
         reportable under applicable Requirements of Law, that have not
         previously been reported to the Agent and in respect of which any
         Restricted Party is or remains in non-compliance with any Environmental
         Law as of the date of this certificate.

DATED _______________________________
                                             NORSKE SKOG CANADA LIMITED

                                             By:
                                                --------------------------------
                                                 Name:
                                                 Title:

                                             By:
                                                --------------------------------
                                                 Name:
                                                 Title:

<PAGE>

                                   SCHEDULE D
                              ASSIGNMENT AGREEMENT

                        [SEE REFERENCE IN SECTION 1.1.8]

              The undersigned refer to the credit agreement dated as of 19 July
2002 between Norske Skog Canada Limited and others as Restricted Parties, The
Toronto-Dominion Bank as Administration Agent and the Lenders, Arrangers and
Syndication Agents named therein as amended, supplemented, restated or replaced
from time to time (the "Credit Agreement"). All capitalized terms used in this
Assignment Agreement and defined in the Credit Agreement have the meanings
defined in the Credit Agreement.

              For value received, the "Assignor" and the "Assignee" named below
hereby agree as follows:

1. The Assignor hereby sells and assigns, without recourse, to the Assignee, and
the Assignee hereby purchases and assumes from the Assignor, the Proportionate
Share specified on Appendix 1 in and to the Assignor's rights and obligations
under the Credit Agreement, the Security and all other Credit Documents.

2. The Assignor (a) represents and warrants that it is the legal and beneficial
owner of the interest being assigned by it hereunder, that such interest is free
and clear of any lien or security interest and that it is entitled to enter into
this Assignment Agreement; (b) makes no representation or warranty, other than
as provided in this Assignment Agreement and assumes no responsibility with
respect to any statements, warranties or representations made in or in
connection with the Credit Agreement or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Credit Agreement or any
other Credit Document; and (c) makes no representation or warranty and assumes
no responsibility with respect to the financial condition of the Restricted
Parties or any other guarantor or the performance or observance by the
Restricted Parties or any other guarantor of any of the obligations under the
Credit Agreement or any other Credit Document.

3. The Assignee, for the benefit of the Restricted Parties, the Agent and all
Lenders from time to time, including the Assignor, (a) acknowledges receipt of
any upfront fee payable by the Assignor, (b) confirms that it has received a
copy of the Credit Agreement, together with such other documents and information
as it has deemed appropriate to make its own credit analysis and decision to
enter into this Assignment Agreement; (c) agrees that it will, independently and
without reliance upon the Agent, the Assignor or any other Lender and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
the Credit Agreement; (d) appoints and authorizes the Agent to take such action
on its behalf and to exercise such powers and discretion under the Credit
Agreement as are delegated to the Agent by the terms thereof, together with such
powers and discretion as are reasonably incidental thereto; (e) ratifies and
adopts the powers of attorney and related powers given to the Agent under the
Credit Agreement; (f) agrees that it will perform in accordance with their terms
all of the obligations that by the terms of the Credit Agreement are required to
be performed by it as a Lender, (g) agrees to be bound by the terms of all
Intercreditor

<PAGE>
                                     - 2 -

Agreements, and (h) specifies as its address for notice and payments its office
at the address set forth on Appendix 1 hereto.

4. Following the execution of this Assignment Agreement, it shall immediately be
delivered to the Agent, together with the processing and recording fee specified
in Section 10.2.1 of the Credit Agreement if applicable, for approval and
recording by the Agent, and NSCL, if applicable. The Assignee's agreement to
become a Lender, as constituted by this Assignment Agreement, is irrevocable,
unless the Assignee is not approved by the Agent, and NSCL if applicable. The
Assignee shall become a Lender, and shall be bound by the obligations and
entitled to the benefits in the Credit Agreement, immediately upon this
Assignment Agreement being approved and recorded by the Agent and NSCL, if
applicable (the "Effective Date"). On the Effective Date, the Assignee (a) shall
pay the Assignor an amount equal to the Assignee's Proportionate Share of Prime
Rate Advances and Base Rate Advances made by the Assignor as of the Effective
Date and (b) shall become entitled to receive standby fees in accordance with
the Credit Agreement in respect of its Proportionate Share of the aggregate
amount of the Credit that has not been advanced by the Lenders. The Assignee
shall make further Advances to the Borrower beginning on the first Drawdown Date
that is at least three Business Days following the Effective Date, as LIBOR
Advances and Advances by way of Bankers' Acceptances made by the Assignor
mature, until the Assignee has made Advances in an amount equal to its
Proportionate Share of the aggregate Advances made by all Lenders under the
Credit Agreement.

5. If Advances made by the Assignee to the Borrower are for any reason less than
the Assignee's Proportionate Share of the aggregate Advances made by all Lenders
under the Credit Agreement, the Assignee shall, on demand, indemnify the
Assignor in respect of the principal amount of the corresponding Advances made
by the Assignor in excess of the Assignor's Proportionate Share. The Advances by
the Assignor in respect of which the Assignee is bound to indemnify the Assignor
are set out on Appendix 2 to this Assignment Agreement. The Assignor shall pay
the Assignee indemnity fees during the period in which the Assignee is obliged
to indemnify the Assignor. The fee shall be in the amount specified on Appendix
2 and shall be payable on the Effective Date in respect of Advances by way of
Bankers' Acceptances, and on each date on which the Borrower pays interest on
LIBOR Advances, in respect of LIBOR Advances.

6. This Assignment Agreement shall be exclusively governed by, and construed in
accordance with the laws of the Province of British Columbia, Canada.

7. This Assignment Agreement may be executed in any number of counterparts and
by different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement. Delivery of an executed counterpart of
this Assignment Agreement by telecopier shall be effective as delivery of a
manually executed counterpart of this Assignment Agreement.

<PAGE>
                                     - 3 -

              IN WITNESS WHEREOF, the Assignor and the Assignee have caused this
Assignment Agreement to be executed by their duly authorized officers as of the
dates specified below.

                                 Assignor:
                                          --------------------------------------

                                           By:
                                              ----------------------------------
                                               Name:
                                               Title:

                                        Dated:
                                              ----------------------------------

                                  Assignee:
                                           -------------------------------------

                                            By:
                                              ----------------------------------
                                               Name:
                                               Title:

                                        Dated:
                                              ----------------------------------

                                          [IF APPLICABLE]
Approved on                               Approved on
            --------------------------                --------------------------

THE TORONTO-DOMINION BANK,                NORSKE SKOG CANADA LIMITED
as Agent

             By:                              By:
                -------------------------        -------------------------------
                 Name:                            Name:
                 Title:                           Title:

Effective Date:                             Date:
               --------------------------        -------------------------------

<PAGE>

                                   APPENDIX 1
                                       TO
                              ASSIGNMENT AGREEMENT

Proportionate Share assigned by Assignor:
                                         ---------------------------------------

Proportionate Share retained by Assignor:
                                         ---------------------------------------

Payment Details, including address of Assignee for notices:

                                   APPENDIX 2
                                       TO
                              ASSIGNMENT AGREEMENT

Advances in respect of which the Assignee is to indemnify the Assignor, as of
the Effective Date:

<TABLE>
<CAPTION>
TYPE OF ADVANCE                  MATURITY DATE OF ADVANCE              PRINCIPAL AMOUNT OF ADVANCE
<S>                              <C>                                   <C>

Indemnity fee:
</TABLE>

<PAGE>

                                   SCHEDULE E
                         PROPORTIONATE SHARES OF LENDERS

        [SEE REFERENCES IN SECTIONS 1.1.25, 1.1.62, 1.1.93, 5.2, 10.2.4]

      [PROPORTIONATE SHARES IN CREDITS ARE NIL UNLESS OTHERWISE SPECIFIED.
                  DOLLAR FIGURES REPRESENT INITIAL COMMITMENT]

TD

Credit 1 (adjusted in accordance with Section 5.2) - 17.647% ($52,500,000)
Credits (overall) - 15.000% ($52,500,000)

RBC

Credit 2 (adjusted in accordance with Section 5.2) -100% ($52,500,000)
Credits (overall) - 15.000% ($52,500,000)

CANADIAN IMPERIAL BANK OF COMMERCE

Credit 1 (adjusted in accordance with Section 5.2) - 14.286 % ($42,500,000)
Credits (overall) - 12.143% ($42,500,000)

BANK OF MONTREAL

Credit 1 (adjusted in accordance with Section 5.2) - 14.286 % ($42,500,000)
Credits (overall) - 12.143% ($42,500,000)

THE BANK OF NOVA SCOTIA

Credit 1 (adjusted in accordance with Section 5.2) - 14.286 % ($42,500,000)
Credits (overall) - 12.143% ($42,500,000)

HSBC BANK CANADA

Credit 1 (adjusted in accordance with Section 5.2) - 10.084% ($30,000,000)
Credits (overall) - 8.571% ($30,000,000)

BANK OF AMERICA, N.A. CANADA BRANCH

Credit 1 (adjusted in accordance with Section 5.2) - 10.084% ($30,000,000)
Credits (overall) - 8.571% ($30,000,000)

MERRILL LYNCH CAPITAL CANADA INC.

Credit 1 (adjusted in accordance with Section 5.2) - 8.403% ($25,000,000)
Credits (overall) - 7.143% ($25,000,000)

<PAGE>

                                       2

CANADIAN WESTERN BANK

Credit 1 (adjusted in accordance with Section 5.2) - 5.882% ($17,500,000)
Credits (overall) - 5.000% ($17,500,000)

LAURENTIAN BANK OF CANADA

Credit 1 (adjusted in accordance with Section 5.2) - 5.042% ($15,000,000)
Credits (overall) - 4.286% ($15,000,000)

<PAGE>

                                   SCHEDULE F
                     DETAILS OF CAPITAL STOCK, PROPERTY ETC.

              [SEE REFERENCES IN SECTIONS 6.1.5(a), 7.4, 7.5.3(c)]

1.          NORSKE SKOG CANADA LIMITED

CAPITAL STOCK:    Public Company

HEAD OFFICE:      9th Floor, 700 West Georgia Street
                  P.O. Box 10058 Pacific Centre
                  Vancouver, British Columbia
                  V7Y 1J7

REAL PROPERTY:

Owned:

<TABLE>
<CAPTION>
PID:          LEGAL DESCRIPTION:

<S>           <C>
005 932 092   Those parts of Lot 2 Section 5 Range 9 Chemainus  District Plan
              5803 shown  outlined in red on Plan 925 RW
007 388 004   Lot 1 Section 3 Range 10 Chemainus District Plan 1471 except parts
              in Plans 11613, 13731 and 16471
009 024 212   That part of Parcel C (DD 36578I) of Section 2 Range 7 Chemainus
              District outlined in red on Plan 920 RW
005 419 239   That part of Lot 1 Section 2 Range 7 Chemainus District Plan 8697
              in Plan 920 RW
009 024 174   That part of Parcel B (DD  99604I) of Section 5 Range 10 Chemainus
              District  outlined  in red on Plan 925 RW
005  932 190  That part of Lot 2 Section 5 Range 9 Chemainus  District Plan 5803
              lying to the south east of the south easterly boundary of
              Plan 925 RW
009 024 336   That part of Section 3 Range 8 Chemainus District outlined in red
              on Plan 920 RW
009 024 310   That part of Section 4 Range 9 Chemainus District outlined in red
              on Plan 925 RW
009 024 379   That part of Parcel E (DD  141335I)  of Section 4 Range 8
              Chemainus  District  outlined  in red on Plan 920 RW
009 024 417   That part of Parcel D (DD 65699I) of Section 4 Range 9 Chemainus
              District  outlined in red on Plan 920 RW
009 044 132   That part of Parcel D (DD  118337I) of Section 4 and 5 Range 8
              Chemainus  District  outlined in red on Plan 920 RW and lying
              wholly within Section 4
005 968 585   That  portion  of that part of Lot 3 Section 1 Range 7  Chemainus
              District  Plan 5467 lying to the West of the  Westerly  boundary
              of Plan  645 RW  shown  outlined  in red on Plan  911 RW and
              containing 1.27 acres more or less
009 739 637   Section 8 Range 9 Chemainus District
009 739 611   Section 7 Range 9 Chemainus District
009 739 718   Those  parts of  Section 9 Range 8  Chemainus  District  lying
              East of the  Chemainus  River, including all that part of a strip
              of land 33 feet wide as shown coloured  purple and green on
              Plan 16 BL known as Mainguy Road
009 739 688   Those  parts of  Section 8 Range 8  Chemainus  District  lying
              East of the  Chemainus  River, including all that part of a strip
              of land 33 feet wide as shown coloured  purple and green on
              Plan 16 BL, known as Mainguy Road
009 739 653   Those  parts of  Section 7 Range 8  Chemainus  District,  lying
              East of the  Chemainus  River including all that part of a strip
              of land 33 feet wide as shown coloured  purple and green on
              Plan 16 BL, known as Mainguy Road
009 739 785   Lot 2A Chemainus District
</TABLE>

<PAGE>
                                     - 2 -
<TABLE>
<S>           <C>
009 739 777   Lot 2 Chemainus District
003 982 840   Lot 1 Section 3 Range 10 Chemainus District Plan 16471
004 798 619   Lot 1 Section 1 Range 7 Chemainus District Plan 12696
004 979 087   Lot 1 Sections 3 and 4 Ranges 9 and 10 Chemainus District
              Plan 12168
006 244 637   Lot 2 Section 4 Range 10 Chemainus District Plan 3198
009 956 069   Section 3 Range 9 Chemainus District except parts in Plans 920 RW
              and 921 RW
009 573 488   That part of Section 5 Renfrew District (situate in Cowichan Lake
              District) as shown outlined in red on Plan 457 BL
006 912 524   Lot 3 Bl 3 Section 5 Renfrew District (situate in Cowichan Lake
              District) Plan 1750
006 912 516   Lot 2 Bl 3 Section 5 Renfrew District (situate in Cowichan Lake
              District) Plan 1750
008 768 820   District Lot 101 Cowichan Lake District
006 912 567   Lot 4 Bl 3 Section 5 Renfrew District (situate in Cowichan Lake
              District) Plan 1750
006 912 494   Lot 1 Bl 3 Section 5 Renfrew District (situate in Cowichan Lake
              District) Plan 1750
006 912 451   Lot 1 Bl 2 Section 5 Renfrew District (situate in Cowichan Lake
              District) Plan 1750
007 655 517   Block 3 DL 12 Cowichan Lake District Plan 1231 except part in
              Plan 31221
005 145 473   Lot 1 DL 12 Cowichan Lake District Plan 11206
007 663 544   That part of District Lot 12 Cowichan Lake District being that
              portion of Fern Road dedicated by Plan 1231 and closed by
              Order-In-Council  No.  1754 dated 16th day of July,  1956 as shown
              outlined in red on Plan 458 BL
018 195 326   Lot 2 Section 20 Range 4 Quamichan District Plan VIP56262
005 338 859   That part of Lot 1 Section 17 Range 4 Quamichan District Plan 9537
              shown in red on Plan 903 RW
009 662 481   That part of Parcel G (DD 36290I) of Sections 18 and 19 Range 4
              Quamichan District shown outlined in red on Plan 903 RW and
              containing 0.08 acres and 0.30 acres more or less
009 662 278   That part of Parcel P (DD 76080I) of Sections 17, 18 and 19 Range
              4 Quamichan District shown outlined in red on Plan 903 RW and
              lying entirely in Section 18
006 360 564   That part of Lot 10 Sections 17 and 18 Range 4  Quamichan
              District  Plan 2785 shown in red on Plan 903 RW
006 738 567   That part of Lot 4 Bl 1 Section 20 Range 4 Quamichan  District
              Plan 1908 shown  outlined in red on Plan 903 RW
006 738 524   That part of Lot 3 Bl 1 Section 20 Range 4 Quamichan  District
              Plan 1908 shown  outlined in red on Plan 903 RW
006 738 354   That part of Lot 2 Bl 1 Section 20 Range 4 Quamichan  District
              Plan 1908 shown  outlined in red on Plan 903 RW
006 360 742   That part of Lot 11 Section 17 Range 4 Quamichan District Plan
              2785 shown in red on Plan 903 RW
006 157 971   That part of Lot 1 Section 19 Range 4 Quamichan District Plan 3853
              outlined red on Plan 903 RW
009 668 314   That part of Parcel D (DD 106367I) of Section 19 Range 4 Quamichan
              District shown outlined in red on Plan 903 RW
006 068 065   That part of Lot 1 Section 19 Range 4 Quamichan District Plan 4134
              shown in red on Plan 903 RW
004 680 499   Lot A Section 19 Range 4 Quamichan District Plan 12945
005 586 445   Lot 6 Section 17 Range 5 Quamichan District Plan 8636
005 586 437   Lot 5 Section 17 Range 5 Quamichan District Plan 8636
005 586 429   Lot 4 Section 17 Range 5 Quamichan District Plan 8636
006 442 382   That part of Lot 9 Section 10 Range 4 Somenos District Plan 2196
              shown outlined in red on Plan 910 RW
008 162 794   That part of Lot 4 Bl 1 Section 1 Range 4 Somenos District Plan
              972 shown outlined in red on Plan 903 RW
009 797 807   That part of Section 20 Range 7 Somenos District outlined in red
              on Plan 911 RW and containing 0.66 acres more or less
009 797 939   That part of Section 19 Range 7 Somenos District lying West of
              Parcel A (DD 43540I) outlined in red on Plan 911 RW and containing
              0.67 acres more or less
009 744 495   That part of the East 70 acres of Section 17 Range 6 Somenos
              District shown outlined in red on Plan 911 RW
</TABLE>

<PAGE>
                                     - 3 -

<TABLE>
<S>           <C>
006 406 891   That part of Lot 2 Section 2 Range 4 Somenos District Plan 2825
              shown outlined in red on Plan 902 RW
006 405 754   That part of Lot 1 Section 2 Range 4 Somenos District Plan 2825
              shown outlined in red on Plan 902 RW
005 557 755   Lot 5 Section 1 Range 4 Somenos District Plan 9162
007 104 057   That part of Lot 1 Bl 1 Section 6 Range 4 Somenos District Plan
              1599 shown outlined in red on Plan 902 RW
008 162 760   That part of Lot 3 Bl 1 Section 1 Range 4 Somenos District Plan
              972 shown outlined in red on Plan 903 RW
005 934 389   That part of Lot 3 Section 16 Range 6 Somenos District Plan 5814
              shown outlined in red on Plan 911 RW
009 796 649   That part of Parcel A (DD 43540I) of Sections 19 and 20 Range 7
              Somenos District lying within Section 19 included in Plan 911 RW
009 772 995   That part of Parcel A (DD 42185I) of Section 12 Range 5 Somenos
              District shown outlined in red on Plan 910 RW
009 773 398   That part of Section 13 Range 5 Somenos District outlined in red
              on Plan 910 RW
005 934 354   That part of Lot 2 Section 16 Range 6 Somenos District Plan 5814
              shown outlined in red on Plan 911 RW
008 162 824   That part of Lot 5 Bl 1 Section 1 Range 4 Somenos District Plan
              972 shown outlined in red on Plan 903 RW
007 105 045   That part of Lot 4 Bl 1 Section 6 Range 4 Somenos District Plan
              1599 shown outlined in red on Plan 902 RW
009 773 185   That part of Section 12 Range 5 Somenos District lying to the
              south of Parcel A (DD 42185I) shown outlined in red on Plan 910 RW
009 774 483   Those parts of Parcel A (DD 89348I) of Sections 14 and 15 Range 5
              Somenos District outlined in red on Plans 910 RW and 911 RW except
              part in Plan 15076
006 248 110   That part of Lot 3 Sections 15 and 16 Range 5 Somenos District
              Plan 3313 shown outlined in red on Plan 827R included within Plan
              911 RW
006 441 980   That part of Lot 8 Sections 9 and 10 Range 4 Somenos District Plan
              2196 shown outlined in red on Plan 910 RW
006 246 541   That part of Lot 1 Sections 15 and 16 Range 5 Somenos District
              Plan 3313 shown outlined in red on Plan 911 RW except that part in
              Plan 15076
009 744 517   That part of the west 50 acres of Section 18 Range 7 Somenos
              District shown outlined in red on Plan 911 RW
009 744 444   That part of Parcel B (DD 77714I) of Lot 82 Somenos District shown
              outlined in red on Plan 911 RW 009 744 509 That part of the West
              50 acres of Section 17 Range 7 Somenos District shown outlined in
              red on plan deposited under DD 23410 included in Plan 911 RW
009 744 487   Those parts of Parcel A (DD 77714I) of Section 16 Range 6 Somenos
              District shown outlined in red on Plan 911 RW
006 582 311   That part of Lot B Section 7 Range 4 Somenos District Plan 2457
              shown outlined in red on Plan 902 RW
006 568 556   That part of Lot 7 Section 2 Range 3 Somenos District Plan 2461
              shown in red on Plan 902 RW
009 872 906   That part of the south 1/2 of Section 8 Range 4 Somenos District
              shown outlined in red on Plan 902 RW
006 441 505   That part of Lot 5 Sections 8 and 9 Somenos District Plan 2196
              shown outlined in red on Plan 902 RW
006 563 643   That part of Lot 1 Section 4 Range 4 Somenos District Plan 2458
              shown outlined in red on Plan 902 RW
006 609 007   That part of Lot D Section 7 Range 4 Somenos District Plan 2457
              shown outlined in red on Plan 902 RW
006 246 851   That part of Lot 2 Section 15 Range 5 Somenos District Plan 3313
              shown outlined in red on Plan 911 RW except that part in Plan
              15076
006 442 641   That part of Lot 16 Section 11 Range 5 Somenos District Plan 2196
              shown outlined in red on Plan 910 RW
</TABLE>

<PAGE>
                                     - 4 -

<TABLE>
<S>           <C>
006 442 561   That part of Lot 10 Section 10 Range 4 Somenos District Plan 2196
              shown outlined in red on Plan 910 RW
005 576 695   That part of Section 11 Range 4 Somenos District shown outlined in
              red on Plan 910 RW
009 759 492   That part of Section 4 Range 3 Somenos District shown outlined in
              red on Plan 902 RW
006 407 234   That part of Lot 4 Section 2 Range 4 Somenos District Plan 2825
              shown outlined in red on Plan 902 RW
009 774 939   That part of Parcel C (DD 174586I) of Section 14 Range 5 Somenos
              District outlined in red on Plan 910 RW
006 581 684   That part of Lot A Section 7 Range 4 Somenos District Plan 2457
              shown outlined in red on Plan 902 RW
006 608 787   That part of Lot C Section 7 Range 4 Somenos District Plan 2457
              shown outlined in red on Plan 902 RW
009 764 151   That part of Section 5 Range 4 Somenos District shown outlined in
              red on Plan 902 RW
005 576 571   That part of Lot 2 Section 1 Range 4 Somenos District Plan 8611
              shown in red on Plan 903 RW
006 440 347   That part of Lot 3 Section 9 Range 4 Somenos District Plan 2196
              shown outlined in red on Plan 910 RW
007 104 375   That part of Lot 2 Bl 1 Section 6 Range 4 Somenos District Plan
              1599 shown outlined in red on Plan 902 RW
006 406 939   That part of Lot 3 Section 2 Range 4 Somenos District Plan 2825
              shown outlined in red on Plan 902 RW
007 104 936   That part of Lot 3 Bl 1 Section 6 Range 4 Somenos District Plan
              1599 shown outlined in red on Plan 902 RW
006 373 968   That part of Lot 2 Section 3 Ranges 3 and 4 Somenos District Plan
              2794 shown in red on Plan 902 RW
006 383 025   That part of Lot 1 Section 3 Range 3 Somenos District Plan 2776
              shown outlined in red on Plan 902 RW
005 576 539   Lot 1 Section 1 Range 4 Somenos District Plan 8611 003 733 998 Lot
              1 Section 9 Range 4 Somenos District Plan 19355
007 388 209   Lot 15 Section 3 Range 10 Chemainus District Plan 1471 Except part
              in Plan 11574
013 194 976   That part of Section 5 Ranges 8, 9 and 10 and Section 4 Range 8
              Chemainus District shown outlined in red in DD 27614
013 194 470   That part of Sections 4 and 5 Range 8 Chemainus District shown
              outlined in red on plan attached to DD 24931
013 194 381   That part of Section 4 Range 8 Chemainus District shown outlined
              in red on plan attached to DD 23242
013 143 123   That part of Sections 5 and 6 Range 10 and that part of the
              foreshore of District Lot 172 Chemainus District shown coloured
              red on plan deposited under DD 14529I
009 922 431   That part of Section 1 Range 11 Chemainus District lying to the
              North of the Northerly boundary of Chaplin Street as said street
              is shown on Plan 739 and the production easterly of the said
              northerly boundary, except parts in Plans 4257 and 23431
009 920 145   That part of Section 5 Range 9 Chemainus District lying Northerly
              and Westerly of Plan 5803, except parts in Plans 4302 and 9775
009 925 431   District Lot 4 Chemainus District
009 921 168   That part of Section 2 Ranges 10 and 11 Chemainus District in Plan
              DD 8239I containing 31.7 acres more or less except part in Plan
              856 BL
009 862 021   District Lot 8 Chemainus District 005 852 293 Lot 1 District Lot 7
              Chemainus District Plan 6538
009 034 595   District Lot 7 Chemainus District except part in Plan 6538
009 861 998   District Lot 6 Chemainus District
004 627 938   Lot 3 Chemainus District
009 926 887   District Lot 172 Chemainus District except that part included in
              the right of way of the Esquimalt and Nanaimo Railway Company
006 116 981   That part of Lot 1 Section 1 Range 10 Chemainus District Plan 4357
              shown outlined in red on Plan 815 R
000 167 886   Lot A Section 4 Range 9 Chemainus District Plan 32612
</TABLE>

<PAGE>
                                     - 5 -

<TABLE>
<S>           <C>
004 169 948   Lot 1 Section 4 Range 10 Chemainus District Plan 15020
000 573 736   Lot 1 Section 4 Range 10 Chemainus District Plan 5180 except part
              in Plan 15020 and 41332
006 116 965   That part of Lot 1 Section 1 Range 10 Chemainus District Plan 4357
              lying to the north of a boundary parallel to the northerly
              boundary of said lot and extending from a point on the easterly
              boundary of said lot distant 1.515 chs. from the north east corner
              of said lot
006 116 973   That part of Lot 1 Section 1 Range 10 Chemainus District Plan 4357
              lying south of a boundary parallel to the northern boundary of
              said lot and extending from a point on the easterly boundary
              thereof distant 1.515 chs. from the north east corner of said lot,
              except that part thereof shown outlined in red on Plan 815R
006 066 551   Lot 1 Section 1 Range 11 Chemainus District Plan 4257
009 921 958   That part of Section 6 Range 10 Chemainus District lying to the
              north of the right of way of the Esquimalt and Nanaimo Railway
              Company
009 920 196   Section 6 Range 9 Chemainus District except parts in Plans 4302
              and 5803
009 920 803   Section 4 Range 9 Chemainus District except the west 30 chains and
              except parts in Plans 925 RW, 13072, 22398 and 32612
009 920 064   That part of Section 5 Range 8 Chemainus District lying easterly
              of the centre line of Tsussie Creek (which is the easterly
              boundary of Plan 4302) and to the north of the northerly boundary
              of the right of way of the Esquimalt and Nanaimo Railway Company
              shown on Plan DD 27614, except parts in Plans 5803 and 9775
024 662 666   Lot 1 of Sections 4, 5 & 6 Range 10 Chemainus District Plan
              VIP69811
024 662 674   Lot 2 of Sections 2, 3 & 4 Ranges 10 & 11 Chemainus District and
              of Sections 5 & 6 Range 10 Chemainus District and of District Lots
              141 and 475 Cowichan District Plan VIP69811
024 663 018   Lot 3 of Sections 2, 3, & 4 Ranges 10 & 11 and District Lot 107
              Chemainus District and of District Lots 141 and 145 Cowichan
              District Plan VIP69811
024 663 034   Lot 4 of Sections 2, 3 & 4 Range 10 Plan VIP69811
024 663 115   Lot 5 Section 2 Ranges 10 and 11 Chemainus District Plan VIP69811
</TABLE>

(formerly PACIFICA)
Vancouver Land Title Office

<TABLE>
<S>           <C>
015-890-317   District Lot 3091 Group 1 New Westminster District Except Lot A2
              (Reference Plan 490)
002-560-194   Block 46, Except those portions included in Plans 8519, 10829,
              Reference Plan 3573 and Explanatory Plan 6151 and Plans 12506 and
              14689 District Lot 450 Plan 8096
010-264-469   Block 44 District Lot 450 Plan 8096
004-781-856   District Lot 7213 Group 1 New Westminster District
004-781-821   District Lot 7212 Group 1 New Westminster District
015-863-310   District Lot 4070, Group 1 New Westminster District Except Part
              in Reference Plan 2267
015-890-333   District Lot 3088 Group 1 New Westminster District
015-890-309   Lot A2 (Reference Plan 490) District Lot 3091 Group 1
              New Westminster District
010-863-141   Lot 1 Block 10 District Lot 450 Plan 6606
015-890-325   District Lot 3090 Group 1 New Westminster District
002-554-682   Block 43, Except those portions in Plans 12273 and 14778
              Explanatory Plans 5457 and 7624, District Lot 450 Plan 8096
              010-267-760 Block 57 District Lot 450 Plan 8096
015-875-121   District Lot 3437 Group 1 New Westminster District
011-528-443   Lot 4 Block 2 District Lot 450 Plan 4533 010-865-349 Lot 21 Block
              10 District Lot 450 Plan 4533
010-267-727   Block 58 District Lot 450 Plan 8096
010-267-361   Block 55 Except Portions in Plans 13475, 14965 and 16963, District
              Lot 450, Plan 8096
010-237-321   Block 48 District Lot 1901A Plan 8096
010-237-283   Block 47 District Lot 1901A Plan 8096
010-862-757   Lot 8, Except Part in Reference Plan 5142 and Except Part in
              Explanatory Plan 3085 Block 13 District Lot 450 Plan 6606
010-863-231   Lot 20 Block 10 District Lot 450 Plan 6606
010-863-222   Lot 19 Block 10 District Lot 450 Plan 6606
</TABLE>

<PAGE>
                                     - 6 -

<TABLE>
<S>           <C>
011-528-401   Lot 3 Block 2 District Lot 450 Plan 4533
010-863-176   Lot 2 Block 10 District Lot 450 Plan 6606
010-263-501   Block 37 (Explanatory Plan 4343) Except Part in Plan 13855,
              District Lot 450, Plan 8096
010-863-206   Lot 3 Block 10 District Lot 450 Plan 6606
</TABLE>

(formerly PACIFICA)
Victoria Land Title Office

<TABLE>
<S>           <C>
004-172-981   Lot 1, District Lot 1, Alberni District, Plan 15070, Except Part
              in Plans 31593, 51178 and VIP67137
016-926-099   Lot A, District Lots 159 and 196 and Block 105, Alberni District,
              Plan VIP51573, Except Part in Plan VIP68610
008-569-258   That Part of District Lot 61, Alberni District, Outlined in Red on
              Plan 462 RW
024-623-628   Lot A District Lot 1 Alberni District and Part of the Bed of the
              Public Harbour of Alberni Plan VIP69746
008-676-607   District Lot 308, Alberni District
008-418-004   District Lot 310, Alberni District, Containing 0.42 Acres more or
              less
008-569-070   District Lot 303, Alberni District
008-569-134   That Part of District Lot 141, Alberni District, Outlined in Red
              on Plan 487 RW
004-548-906   That Part of Lot 2, District Lots 61 and 141, Alberni District,
              Plan 15961 Lying to the East of Plan 487 RW
008-569-789   That Part of Parcel A (DD 3333N) of District Lot 81, Alberni
              District, Shown Outlined in Red on Plan 890 RW
000-987-417   Lot C, District Lot 1, Alberni District, Plan 41766
008-371-342   That Part of District Lot 1, Alberni District, Shown Outlined in
              Red on Plan 1186R
008-569-185   That Part of District Lot 105, Alberni District, Outlined in Red
              on Plan 471 RW, Except Part in Plan 33608
008-569-924   That Part of District Lot 105, Alberni District, Outlined in Red
              on Plan 890 RW, Except Part in Plan 33608
008-569-827   That Part of District Lot 81, Alberni District, Outlined in Red on
              Plan 479 RW
008-569-886   That Part of District Lot 61, Alberni District, Outlined in Red on
              Plan 889 RW
008-569-771   That Part of District Lot 81, Alberni District, Shown Outlined in
              Red on Plan 890 RW, Except Part in Parcel A (DD 3333N), and Except
              Part in Plan 2192
008-569-240   That Part of District Lot 81, Alberni District, Outlined in Red on
              Plan 492 RW
008-569-142   That Part of District Lot 127, Alberni District, Outlined in Red
              on Plan 472 RW
000-818-429   That Part of Parcel C (DD 64557I), District Lot 85, Alberni
              District, Shown Outlined in Red on Plan 889 RW, Except that Part
              in Plan VIP56579
008-569-851   That Part of Parcel A (DD 3333N) of District Lot 81, Alberni
              District, Outlined in Red on Plan 478 RW
000-820-474   Those Parts of Parcel C (DD 64557I), District Lot 85, Alberni
              District, Shown Outlined in Red on Plan 486 RW, Except that Part
              in Plan VIP56579
008-593-906   That Part of Parcel C (DD 20890N) of District Lot 86, Alberni
              District, Outlined in Red on Plan 464 RW
008-593-922   That Part of Parcel D (DD 526N) of District Lot 86, Alberni
              District, Outlined in Red on Plan 464 RW
025-030-396   Lot 5 District Lot 5 Alberni District Plan VIP72153 See Plan for
              Limited Access - Access by Water Only
008-569-720   That Part of District Lot 127, Alberni District, Shown Outlined in
              Red on Plan 890 RW
024-379-603   Lot A District Lot 1 and Part of the Bed of Public Harbour of
              Alberni Alberni District Plan VIP68454
008-608-326   That Part of Parcel D (DD 526N) of District Lot 86, Alberni
              District, Included in Plan 889 RW
008-608-300   That Part of Parcel C (DD 20890N) of District Lot 86, Alberni
              District, Included in Plan 889 RW
</TABLE>

<PAGE>
                                     - 7 -

Port Alberni Waterlots

<TABLE>
<S>           <C>
(H2565)       That Portion of the bed of Port Alberni Harbour adjacent to Hoik
              Island, Alberni District, Vancouver Island, Province of British
              Columbia, as shown outlined in red on an Explanatory Plan of Lease
              #152 prepared by Messrs. Acres & Pollock B.C.L.S. file # 9624 and
              certified correct on April 13, 1988, containing in the aggregate
              15.549 hectares (38.42 Acres) more or less

(H1305,       Part of the bed of Port Alberni Harbour, commencing at the most
Lease 1305)   southerly corner of Lease number One Hundred Forty-Nine (149) in
              Port Alberni Harbour; thence south seven hundred fifty (750) feet;
              thence west nine hundred (900) feet; thence north nine hundred
              (900) feet; thence east eight hundred fifteen and nine tenths
              (815.9) feet more or less to an intersection with the
              southwesterly boundary of the said Lease number One Hundred
              Forty-Nine (149); thence southeasterly and following the said
              southwesterly boundary one hundred seventy-one and ninety-seven
              hundredths (171.97) feet more or less to the point of
              commencement. The whole of the hereinbefore described parcel
              contains eighteen and forty-five hundredths (18.45) acres, be the
              same more or less, and is shown outlined in red colour on a plan
              prepared by Kenneth Douglas Mawle, British Columbia Land Surveyor,
              sworn on the twenty-ninth (29th) day of December 1965

(H1140,       Lot 280-G, 27.00 acres in size; Lot 292-G, 33.54 acres in size;
H1301,        Lot 293-G, 14.75 in size; Lot 278-G, 45.40 acres in size and Lot
H1302,        279-G, 18.00 acres in size; all of Alberni District
H1139,
H1764)

N/A           That strip of land lying between two lines commencing at a point
              on the easterly boundary of Lot 5, Alberni District, distant
              nineteen hundred and forty-five and four tenths feet (1945.4 ft.)
              south and three hundred and twenty-one and five tenths feet (321.5
              ft.) east from the northwest corner thereof, thence south
              sixty-seven degrees, twenty minutes east (S67 DEG. 20'E) a
              distance of eight hundred and seventy and eight tenths feet (870.8
              ft.) more or less, to the easterly bank of the Somass River

(H1151)       Lot 126, Alberni District, and more particularly described by a
              British Columbia Land Survey completed on December 10, 1963

(H1152)       Lot 128, Alberni District, and more particularly described by a
              British Columbia Land Survey completed on January 20, 1964

(H1374,       A portion of the foreshore and bed of Port Alberni Harbour shown
Lease 137)    outlined in red colour on a plan entitled "Plan accompanying
              application to the Port Alberni Harbour Commissioners by MacMillan
              Bloedel Limited for effluent pipe and power cable easement through
              tidal lands and the bed of the Somass River in Port Alberni
              Harbour" which said plan was sworn to by Kenneth Douglas Mawle,
              British Columbia Land Surveyor, on the 10th day of July in the
              year of 1970, containing in the aggregate Seventy Four/One
              Hundredths (.74) acres (.2995 ha.) more or less
</TABLE>

<PAGE>
                                     - 8 -

<TABLE>

<S>           <C>
(H1375,       That portion covered by the waters of the Alberni Inlet commencing
Lease 135     at a point South Twelve degrees fifty-four minutes forty seconds
and 135A)     East (12(0) 54' 40" E) two hundred thirty-six and four tenths
              (236.40) feet from the most westerly corner of the fourteen and
              six hundredths (14.06) acre parcel outlined in red on Land
              Registry Office Plan one thousand six hundred and eighty-four
              (1684) R; thence South eighty-three degrees thirty-eight minutes
              twenty seconds East (S 83(0) 38' 20" E) two hundred sixty-six and
              two tenths (266.20) feet; thence South forty-eight degrees
              fifty-nine minutes thirty seconds East (S 48(0) 59' 30" E) seven
              hundred fifty (750) feet; thence South thirty-nine degrees
              thirty-two minutes twenty seconds East (S 39(0) 32" 20" E) one
              hundred eighty-two and twenty-seven hundredths (182.27) feet;
              thence on a tangential circular curve to the right having a radius
              of one hundred thirty-nine and two tenths (139.20) feet, a
              distance of one hundred ninety-one and four hundredths (191.04)
              feet; thence South thirty-nine degrees five minutes forty seconds
              West (S 39(0) 05' 40" W) one thousand eighty-one and fifty-three
              hundredths (1081.53) feet; thence on a tangential circular curve
              to the right having a radius of two hundred twenty-four and
              thirty-two hundredths (224.32) feet, a distance of three hundred
              fifty-two and forty-two hundredths (352.42) feet; thence North
              fifty degrees four minutes thirty seconds West (N 50(0) 04' 30" W)
              nine hundred twenty-five and seventy-four hundredths (925.74)
              feet; thence on a tangential circular curve to the right having a
              radius of one hundred twenty-four and forty-four hundredths
              (124.44) feet, a distance of one hundred seventy-two and two
              hundredths (172.02) feet; thence North twenty-nine degrees seven
              minutes forty seconds East (N 29(0) 07' 40" E) one hundred
              sixty-six and three hundredths (166.03) feet; thence North
              forty-five degrees twenty minutes East (N 45(0) 20' E) four
              hundred seventy and forty-five hundredths (470.45) feet; thence
              north thirty-seven degrees fifty-three minutes, forty seconds East
              (N 37(0) 53' 40" E) six hundred twelve and nine hundredths
              (612.09) feet, more or less to the point of commencement,
              containing in the aggregate 35.8 acres (14.50 ha.) more or less

(Rockfill)    Portion of the bed of the Port Alberni Harbour formerly covered by
              water, now filled, shown outlined in red on a plan entitled "Plan
              to Accompany Application" by MacMillan Bloedel Limited for lease
              of part of the bed of Port Alberni Harbour, which said plan was
              sworn to by Kenneth Douglas Mawle, British Columbia Land Surveyor,
              on the 16th day of December, 1970

(H1671,       Those certain parcels or tracts of land situate lying and being in
Lease 109)    the bed of Alberni Harbour and consisting of strips of said bed
              lying between two lines drawn parallel to, and perpendicularly
              distant 25 feet from and on opposite sides of, a centre line and
              terminated by high water mark, said centre line being more
              particularly described as follows:

              A. Commencing at a point 290.45 feet north of the southerly
              boundary of Parcel A of Lots 2 and 6 (D.D. 13188N), Alberni
              District, and 1614.88 feet on bearing N 85(0) 34' E from the
              southwest corner of said Parcel A; thence S 73(0) 38' E 419.3
              feet, said strip of land containing 0.481 acres more or less

              B. Commencing at a point 101.3 feet south of the southerly
              boundary of Parcel A of Lots 2 and 6 (D.D. 13188N), Alberni
              District, and 2673.74 feet on bearing N 85(0) 34' E from the
              southwest corner of said Parcel A; thence S 73(0) 38' E 231.8
              feet, said strip of land containing 0.276 acres more or less

              C. Commencing at a point 251.5 feet south of the southerly
              boundary of Parcel A of Lots 2 and 6 (D.D. 13188N), Alberni
              District, and 3059.0 feet on bearing N 85(0) 34 'E from the
              southwest corner of said Parcel A; thence S 67(0) 20' E 168.4
              feet, said strip of land containing 0.193 acres more or less
</TABLE>

<PAGE>
                                     - 9 -

<TABLE>
<S>           <C>
(H4234)       That portion of the bed of Port Alberni Harbour adjacent to Hoik
              Island, Alberni District, Vancouver Island, Province of British
              Columbia, as shown outlined in red on Plan of Survey of Lease
              #144-1 (being a subdivision of Lease Lot 144) Bed of Port Alberni
              Harbour, British Columbia prepared by Richard Derek Wright and
              certified correct on April 8, 1998, containing in the aggregate
              53.627 acres (21.7 hectares) more or less

(H1304)       That portion of the bed of Port Alberni Harbour covered by water,
              which said portion is shown as "Lease 132, Amended Area,
              containing 2.58 Acres 1.045 ha.), and outlined in red colour on a
              plan entitled "Plan of Amendments to Leases 118, 119 and 132,
              within Port Alberni Federal Harbour, Alberni District, B.C." which
              said plan was certified correct by K.D. Mawle, British Columbia
              Land Surveyor, on December 16, 1970
</TABLE>

Powell River Waterlots

<TABLE>
<S>           <C>
(H1276)       District Lots 4071, 4072, 5922, 5923, 6071, 6174 and 6237A, Group
              1 New Westminster District containing a total of 69.70 hectares
(H1288)       District Lot 7079 and 7240 Group 1 New Westminster District
              containing 22.95 hectares
(H1367)       District Lot 1203 Group 1 New Westminster District, containing
              50.59 hectares
(H1287)       District Lot 7078 Group 1 New Westminster District, containing
              18.7 hectares
</TABLE>

Leased:

REAL PROPERTY LEASES

<TABLE>
<CAPTION>
PID               LEGAL DESCRIPTION

<S>           <C>
005-003-580   District Lot 541, Block 52 (EP9962), Plan 210 and Parcels A, B, C
              et al, Toronto Dominion Tower, 700 West Georgia, Vancouver
              (Originally 81760 Sq. Ft. Floors 7-11 amended numerous times) Head
              Lease Bos HQ FCCL
007-388-411   Sections 2 and 3, Chemainus Lot 6, Range 10, Plan 1471, Gas
              Monitoring Trailer Site, Cecil Street, Crofton P&P (Fletcher
              Challenge Canada Limited)
023 512 512   Lot 1 District Lot 12 and 13 Group 2 and of the Bed of the Fraser
              River New Westminster District Plan LMP29318
009 523 197   Lot 1 of the Bed of the Fraser River New Westminster District Plan
              76570
004 501 110   Lot 14 District Lots 9, 10 and 11 Group 2 New Westminster District
              Plan 41612
007-913-362   Lot 24, Block 33, District Lot 541, Plan 210, 580 Granville Street
              (sublease of 5860 sq. ft. on the second floor)
007-913-397   Lot 25, Block 33, District Lot 541, Plan 210 (see Lot 24 above)
007-913-435   Lot 26, Block 33, District Lot 541, Plan 210 (see Lot 24 above)
010-240-004   Block 42, District Lot 541, Plan 210, except Plan 18901 and
              EP13277 (month to month lease of offices 46 & 47 at 1500-701 West
              Georgia Street, note that the legal description includes all of
              Pacific Centre not just offices 46 &47)
</TABLE>

NATURE OF BUSINESS:  Paper Manufacturing

JURISDICTIONS IN WHICH ITS PROPERTY OTHER THAN ACCOUNTS RECEIVABLE IS LOCATED:
British Columbia

CAPITAL STOCK HOLDINGS:

<TABLE>
<CAPTION>
------------------------------------------------- ---------------------- ----------------------------------------
CORPORATION                                          CERTIFICATE NO.     NUMBER AND CLASS OF SECURITIES

------------------------------------------------- ---------------------- ----------------------------------------
<S>                                               <C>                    <C>
Elk Falls Pulp and Paper Limited                            3            1 common share
</TABLE>

<PAGE>
                                     - 10 -

<TABLE>
<CAPTION>
------------------------------------------------- ---------------------- ----------------------------------------
<S>                                               <C>                    <C>
Elk Falls Forest Industries Limited                         4            1,000 common shares
                                                            5            1,699,200 common shares
                                                            6            4,500,000 common shares
------------------------------------------------- ---------------------- ----------------------------------------
Norske Skog Canada  (Japan) Ltd.                        C No.003         1,000 shares
------------------------------------------------- ---------------------- ----------------------------------------
Norske Skog Canada Pulp Operations Limited                  6            53,683,253 common shares
                                                            7            46,026,332 common shares
                                                            8            24,474,668 common shares
                                                            9            1 common share
------------------------------------------------- ---------------------- ----------------------------------------
Norske Skog Canada Sales Inc.                               7            1,000 common shares
------------------------------------------------- ---------------------- ----------------------------------------
3264904 Canada Limited                                      3            1 common share
------------------------------------------------- ---------------------- ----------------------------------------
468327 B.C. Ltd.                                           2-C           2,000 common shares
------------------------------------------------- ---------------------- ----------------------------------------
British Columbia Forest Products Limited                    3            1 common share
------------------------------------------------- ---------------------- ----------------------------------------
Catalyst Paper Corporation (B.C.)                           2            1 common share
------------------------------------------------- ---------------------- ----------------------------------------
Catalyst Paper Corporation (Canada)                         2            1 common share
------------------------------------------------- ---------------------- ----------------------------------------
Crofton Pulp and Paper Limited                              9            2 common shares
------------------------------------------------- ---------------------- ----------------------------------------
Echelon Paper Corporation (B.C.)                            2            1 common share
------------------------------------------------- ---------------------- ----------------------------------------
Echelon Paper Corporation (Canada)                          2            1 common share
------------------------------------------------- ---------------------- ----------------------------------------
Export Sales Company  Limited (formerly                     8            10 common shares
Mackenzie Forest Products Limited n/c Dec.11/01)
------------------------------------------------- ---------------------- ----------------------------------------
NSC Holdings (Barbados) Limited                                          100% of capital stock (details unknown)
------------------------------------------------- ---------------------- ----------------------------------------
NSC Holdings (Philippines) Inc.                         (unknown)        79,475 common shares
------------------------------------------------- ---------------------- ----------------------------------------
NSCL Holdings Inc.                                          4            1,000 common stock
------------------------------------------------- ---------------------- ----------------------------------------
Pacifica Poplars Ltd.                                       8            90,001 common shares
------------------------------------------------- ---------------------- ----------------------------------------
Pacifica Papers Sales Ltd.                                  4            1 common share
------------------------------------------------- ---------------------- ----------------------------------------
Pacifica Papers Kabushiki Kaisha                          X0001          1,000 shares
------------------------------------------------- ---------------------- ----------------------------------------
NorskeCanada                                               A1            124,070 Class A Units
                                                           A3            118,224 Class A Units
                                                           A5            84,455 Class A Units
                                                           B1            8,317 Class B Units
                                                           B3            5,913 Class B Units
------------------------------------------------- ---------------------- ----------------------------------------
Powell River Energy Inc.                                    4            50,001 common shares
------------------------------------------------- ---------------------- ----------------------------------------
Powell River Energy Limited Partnership              Not applicable      49.95% interest (no units issued)
------------------------------------------------- ---------------------- ----------------------------------------
Norske Skog Canada Finance Limited                          3            10 common shares
------------------------------------------------- ---------------------- ----------------------------------------
</TABLE>

2.       NORSKE SKOG CANADA FINANCE LIMITED

CAPITAL STOCK:    Authorized Capital: 10,000 Common Shares without par value
                  Issued and outstanding Shares: 10 Common Shares
                   Members: Norske Skog Canada Limited

HEAD OFFICE:      9th Floor, 700 West Georgia Street
                  P.O. Box 10058 Pacific Centre
                  Vancouver, British Columbia
                  V7Y 1J7

REAL PROPERTY:

Owned:   Nil

Leased:  Nil

NATURE OF
BUSINESS:      To borrow funds and lend them on to the Norske Group of Companies

<PAGE>
                                     - 11 -

JURISDICTIONS IN WHICH ITS PROPERTY OTHER THAN ACCOUNTS RECEIVABLE IS LOCATED:
British Columbia

CAPITAL STOCK HOLDINGS:  Nil

3.       NORSKE SKOG CANADA PULP OPERATIONS LIMITED

CAPITAL STOCK:  Authorized capital:  500,000,000 common shares without par value
                Issued and outstanding shares:  124,189,254 common shares
                Members:  Norske Skog Canada Limited

HEAD OFFICE:    9th Floor, 700 West Georgia Street
                P.O. Box 10058 Pacific Centre
                Vancouver, British Columbia
                V7Y 1J7

REAL PROPERTY:

Owned:   Nil

Leased:  Nil

NATURE OF BUSINESS:  Pulp Manufacturing

JURISDICTIONS IN WHICH ITS PROPERTY OTHER THAN ACCOUNTS RECEIVABLE IS LOCATED:
British Columbia

CAPITAL STOCK HOLDINGS:

<TABLE>
<CAPTION>
------------------------------------------------- ---------------------- ----------------------------------------
CORPORATION                                          CERTIFICATE NO.     NUMBER AND CLASS OF SECURITIES

------------------------------------------------- ---------------------- ----------------------------------------
<S>                                                <C>                   <C>
Norske Skog Canada Pulp Sales Inc.                          3            1 common share
------------------------------------------------- ---------------------- ----------------------------------------
Norske Skog Pulp Sales (Japan) Ltd.                     B No.001         600 shares
------------------------------------------------- ---------------------- ----------------------------------------
Allwin Technical Services Inc.                              2            1 common share
                                                            4            1,349,999 common shares
                                                            5            1,350,000 common shares
------------------------------------------------- ---------------------- ----------------------------------------
NorskeCanada                                               A2            15,444 Class A Units
                                                           A4            111,697 Class A Units
                                                           A6            25,304 Class A Units
                                                           B2            1,683 Class B Units
                                                           B4            4,087 Class B Units
------------------------------------------------- ---------------------- ----------------------------------------
</TABLE>

4.       ELK FALLS PULP AND PAPER LIMITED

CAPITAL STOCK:   Authorized capital:  10,000,000 common shares without par value
                 Issued and outstanding shares:  1 common share
                 Members:  Norske Skog Canada Limited

HEAD OFFICE:     9th Floor, 700 West Georgia Street
                 P.O. Box 10058 Pacific Centre
                 Vancouver, British Columbia
                 V7Y 1J7

REAL PROPERTY:

Owned:

PID:              LEGAL DESCRIPTION:

<PAGE>
                                     - 12 -

<TABLE>
<S>               <C>
000 849 731       District Lot 120 (DD 2157781) Sayward District Except Part in Plans 14946 and VIP57724
000 849 821       That part of District Lot 67 Sayward District shown outlined in red on Plan 1374 RW
000 848 905       Lot A DL 68 Sayward District Plan 20538
000 849 561       That part of DL 151 Sayward District shown outlined in red on Plan 1433R
000 849 502       That Part of DL 163 Sayward District shown outlined in red on Plan 1431R
001 233 475       Block B of Lot 1504 Sayward District
001 233 467       Block C of Lot 1504 Sayward District
001 233 459       Block D of Lot 1504, Sayward District
000 848 913       Lot 1 DL 68 Sayward District Plan 16712
000 849 855       That part of DL 52 Sayward District shown outlined in red on Plan 659 RW
000 849 847       That part of DL 67 Sayward District shown outlined in red on Plan 659 RW
000 849 910       District Lot 26 Sayward District except part in Plans 34604 and 42540
000 848 921       Lot 1 DL 109 Sayward District Plan 16956
000 849 430       District Lot 164 Sayward District shown outlined in red on Plan 1431R
001 233 432       District Lot 109 Sayward District except Parcel A (DD 285472-I) and those parts in Plans
                  1373-R, 16956, 19371, 50636 and VIP54479 and VIP64521
001 233 441       Lot 1599 Sayward District except that portion in Plan VIP 64521
000 846 287       District Lot 2 Sayward District except those parts in Plans 19371, 42540, 50636, VIP 64521
                  and VIP 64522
015 101 231       Amended Bl 24 (See 235568L) DL 313 Plan 827
015 101 240       Lot A (See M51221L) Bl 23 DL 313 Plan 827
</TABLE>

Note: Elk Falls Pulp and Paper Limited holds legal title only to the above
properties. Norske Skog Canada Limited holds beneficial title.

Leased:

<TABLE>
<CAPTION>
PID:              LEGAL DESCRIPTION:
<S>               <C>
N/A               Site Lease CNR #10763, NWD PT FR Sections 1 and 2, B5NR2W
                  TP38, Port Mann Chip Loading Site, 14021 Port Mann Shore
                  District of Surrey, Fibre Supply EFFIL (Elk Falls Pulp and
                  Paper Limited)
</TABLE>

NATURE OF BUSINESS:        Bare Trustee

JURISDICTIONS IN WHICH ITS PROPERTY OTHER THAN ACCOUNTS RECEIVABLE IS LOCATED:
British Columbia

CAPITAL STOCK HOLDINGS:  Nil

5.       NORSKE SKOG CANADA SALES INC.

CAPITAL STOCK:    Authorized capital:  10,000 common shares without par value
                  Issued and outstanding shares:  1,000 common shares
                  Members:  Norske Skog Canada Limited

HEAD OFFICE:      9th Floor, 700 West Georgia Street
                  P.O. Box 10058 Pacific Centre
                  Vancouver, British Columbia
                  V7Y 1J7 REAL PROPERTY:

Owned:   Nil

Leased:  Nil

<PAGE>
                                     - 13 -

NATURE OF BUSINESS:  Pulp and Paper Sales

JURISDICTIONS IN WHICH ITS PROPERTY OTHER THAN ACCOUNTS RECEIVABLE IS LOCATED:
British Columbia, Alberta

CAPITAL STOCK HOLDINGS:  Nil
6.       NORSKE SKOG CANADA PULP SALES INC.

<TABLE>
<S>               <C>
CAPITAL STOCK:    Authorized capital:  100,000,000 common shares without par value
                  Issued and outstanding shares:  1 common share
                  Members:  Norske Skog Canada Pulp Operations Limited

HEAD OFFICE:      9th Floor, 700 West Georgia Street
                  P.O. Box 10058 Pacific Centre
                  Vancouver, British Columbia
                  V7Y 1J7
</TABLE>

REAL PROPERTY:

Owned:   Nil

Leased:  Nil

NATURE OF BUSINESS:  Fibre Sales

JURISDICTIONS IN WHICH ITS PROPERTY OTHER THAN ACCOUNTS RECEIVABLE IS LOCATED:
British Columbia

CAPITAL STOCK HOLDINGS:  Nil

7.       NORSKE SKOG PULP SALES (JAPAN) LTD.

<TABLE>
<S>               <C>
CAPITAL STOCK:    Authorized capital:  800 shares with a par value of (Y)50,000 each
                  Issued and outstanding shares:  600 shares
                  Members:  Norske Skog Canada Pulp Operations Limited
</TABLE>

HEAD OFFICE:      Ginza Fujiya Building 6F
                  3-1 Ginza 1-chome, Chuo-ku
                  Tokyo 104-0061, Japan

<PAGE>
                                     - 14 -

REAL PROPERTY:

Owned:   Nil

Leased:  Nil

NATURE OF BUSINESS:  Pulp Sales

JURISDICTIONS IN WHICH ITS PROPERTY OTHER THAN ACCOUNTS RECEIVABLE IS LOCATED:
Japan

CAPITAL STOCK HOLDINGS:  Nil

8.       NORSKE SKOG CANADA (JAPAN) LTD.

(known as Fletcher Challenge Paper Sales (Japan) Ltd. until 1 August 2001)

<TABLE>
<S>               <C>
CAPITAL STOCK:    Authorized capital:  4,000 shares with a par value of(Y)50,000 each
                  Issued and outstanding shares:  1,000 shares
                  Members:  Norske Skog Canada Limited
</TABLE>

HEAD OFFICE:      Ginza Fujiya Building 6F
                  3-1 Ginza 1-chome, Chuo-ku
                  Tokyo 104-0061, Japan
REAL PROPERTY:

Owned:   Nil

Leased:  Nil

NATURE OF BUSINESS:  Pulp and Paper Sales.

JURISDICTIONS IN WHICH ITS PROPERTY OTHER THAN ACCOUNTS RECEIVABLE IS LOCATED:
Japan

CAPITAL STOCK HOLDINGS:  Nil

9.       NSCL HOLDINGS INC.

<TABLE>
<S>               <C>
CAPITAL STOCK:    Authorized capital:  1,000,000 common stock with a par value of US$1 each
                  Issued and outstanding shares:  1,000 common stock
                  Members: Norske Skog Canada Limited
</TABLE>

HEAD OFFICE:      Suite 700, Waterfront Place Building
                  1101 Western Avenue
                  Seattle, Washington  98101

REAL PROPERTY:

Owned:   Nil

Leased:  Nil

NATURE OF BUSINESS:  Holding Company

JURISDICTIONS IN WHICH ITS PROPERTY OTHER THAN ACCOUNTS RECEIVABLE IS LOCATED:
not applicable (holding company)

<PAGE>
                                     - 15 -

CAPITAL STOCK HOLDINGS:

<TABLE>
<CAPTION>
------------------------------------------------- ---------------------- ----------------------------------------
CORPORATION                                          CERTIFICATE NO.     NUMBER AND CLASS OF SECURITIES
------------------------------------------------- ---------------------- ----------------------------------------
<S>                                               <C>                    <C>
Norske Skog Canada (USA) Inc.                               4            1,000 common stock
------------------------------------------------- ---------------------- ----------------------------------------
Arizona Newsprint Industries Corporation                    4            1,000 common stock
------------------------------------------------- ---------------------- ----------------------------------------
NSC Fibre Inc.                                              2            1,000 common stock
------------------------------------------------- ---------------------- ----------------------------------------
Pacifica Papers US Inc.                                     7            100 common shares
------------------------------------------------- ---------------------- ----------------------------------------
</TABLE>

10.      NORSKE SKOG CANADA (USA) INC.

(Known as Norske Skog Paper Company until 13 September 2001)

CAPITAL STOCK:    Authorized capital:  1,000,000 common shares
                  Issued and outstanding shares:  1,000 common shares
                  Member: NSCL Holdings Inc.

HEAD OFFICE:      Suite 700, Waterfront Place Building
                  1101 Western Avenue
                  Seattle, Washington  98101

REAL PROPERTY:

Owned:   Nil

Leased:  Nil

NATURE OF BUSINESS:  Pulp and Paper Sales

JURISDICTIONS IN WHICH ITS PROPERTY OTHER THAN ACCOUNTS RECEIVABLE IS LOCATED:
California, Colorado, Illinois, Washington, Oregon, Alabama, Michigan

CAPITAL STOCK HOLDINGS:
<TABLE>
<CAPTION>
------------------------------------------------- ---------------------- ----------------------------------------
CORPORATION                                          CERTIFICATE NO.     NUMBER AND CLASS OF SECURITIES
------------------------------------------------- ---------------------- ----------------------------------------
<S>                                               <C>                    <c>
Norske Skog North America LLC                        Not applicable      50% equity interest
------------------------------------------------- ---------------------- ----------------------------------------
</TABLE>

11.      NORSKECANADA

<TABLE>
<S>                        <C>
PARTNERSHIP UNITS:         Authorized units:  Unlimited number of Class A Units and Class B Units
                           Issued and outstanding units:  479,194 Class A Units and 20,000 Class B Units
                           Partners:  Norske Skog Canada Limited and Norske Skog Canada Pulp Operations
                                      Limited
</TABLE>

HEAD OFFICE:               9th Floor, 700 West Georgia Street
                           P.O. Box 10058 Pacific Centre
                           Vancouver, B.C.
                           V7Y 1J7

REAL PROPERTY:

Owned:  Nil

<PAGE>
                                     - 16 -

Leased:
<TABLE>
<CAPTION>
PID:              LEGAL DESCRIPTION:

               <C>
009-021-558       Section 2,  Chemainus Lot A Range 6 and 7, Plan 45436,  Gas  Monitoring  Trailer Site,  Nimmo
                  Road, Crofton P&P
000-222-437       Sections  12 and 13,  Lot 4, Range 2, Plan  32988,  Comaiken,  Gas  Monitoring  Trailer  Site
                  Located at 7338 Walton Mountain Road, Crofton P&P
N/A               District Lot 196, PT Lots 25, 26, 27, 28, Block 43, District
                  Plan 198, 625 Powell Street, Vancouver (basement storage
                  space) Bos FCCL (also contains TWFL historical records)

PROVINCIAL WATER LOT LEASES

Crofton Facility:

N/A               W/Lot  Lease  #102130 - District  Lot 107G;  Blk D  Chemainus  (Prev. #13180) Log Booming
                  & Wharfage (Sublet 15 Dec 1993 Stuart Channel Wharves)
N/A               W/Lot Lease #102653 - District Lot 107G; Blk A & B Chemainus
                  (Prev. #13181) Warehouse & Dock #1 & #2 & Part Stuart Channel
                  Wharves Dock #3 (.2274 AC. SCW)
N/A               W/Lot Lease #101412 - Lot 161; Blk B Cowichan Log Storage, Shipping &
                  Industrial PT
N/A               W/Lot Lease #106051 - DL 565, 676, 2008; Blk E Cowichan (Prev. #101709 & PT 103929)
                  Log Dumping, Booming, Storage, Scow & Chip Barge Moorage, Industrial Purposes

Elk Falls Facility:

N/A               W/Lot Lease #101447 - Blk A Lot 1504;  Sayward  (Prev.  #29554) Duncan Bay Fronting Pulp Mill
                  Complex
N/A               W/Lot Lease  #100785 - Lot 411 and Lot 1516;  Blk B Sayward  Duncan Bay next to Middle  Point
                  Barge Tie Up & Log Storage (Upland DL 2,26)

FEDERAL WATER LOT LEASES

N/A               W/Lot Lease #05020, between the North Fraser Port Authority
                  (landlord) and Norske Skog Canada Limited (tenant), for a Chip
                  Loading Site Fronting Kent Avenue (0.806 ha.)
N/A               W/Lot Lease #E-04-06, between the Fraser River Port Authority
                  (landlord) and 3264912 Canada Limited (now Norske Skog Canada
                  Pulp Operations Limited), for a Barge Tie-up & Fiber Supply
                  Loading Area near Port Mann (2.248 ha.)
</TABLE>

NATURE OF BUSINESS:  Operation of pulp and paper manufacturing facilities

JURISDICTION IN WHICH ITS PROPERTY OTHER THAN ACCOUNTS
RECEIVABLE IS LOCATED:    British Columbia

CAPITAL STOCK HOLDINGS:   Nil

12.      PACIFICA PAPERS SALES LTD.

CAPITAL STOCK:    Authorized capital:  500,000,000 common shares
                  Issued and outstanding:  1
                  Member:  Norske Skog Canada Limited

HEAD OFFICE:      9th Floor, 700 West Georgia Street
                  P.O. Box 10058 Pacific Centre
                  Vancouver, B.C.  V7Y 1J7

<PAGE>
                                     - 17 -

Real Property:

Owned:   Nil

Leased:  Nil

NATURE OF BUSINESS:  Canadian marketing agent

JURISDICTION IN WHICH ITS PROPERTY OTHER THAN ACCOUNTS RECEIVABLE IS LOCATED:
British Columbia

CAPITAL STOCK HOLDINGS:  Nil

13.      PACIFICA POPLARS LTD.

CAPITAL STOCK:    Authorized capital:  100,000 common shares
                  Issued and outstanding:  90,001
                  Member: Norske Skog Canada Limited

HEAD OFFICE:      9th Floor, 700 West Georgia Street
                  P.O. Box 10058 Pacific Centre
                  Vancouver, B.C.  V7Y 1J7

REAL PROPERTY:

Owned:

<TABLE>
<CAPTION>
PID:                      LEGAL DESCRIPTION:

                     <C>
023-636-271             Lot 2, District Lots 60 and 130, Alberni District, Plan VIP64541
007-622-317             Lot 22, Loop Farms, Alberni District, Plan 1297 Except that Part in Plan VIP65075
007-622-376             Lot 25, Loop Farms, Alberni District, Plan 1297
007-622-392             Lot 26, Loop Farms, Alberni District, Plan 1297
009-531-238             District Lot 101, Comox District
003-838-935             Lot A, Block 29, Comox District, Plan 3433, Except that
                        Part thereof Lying to the South of the Southerly
                        Boundary of Dove Creek Road as said Road is Described in
                        B.C. Gazette Dated 31.08.1933, Page 1273, and Except
                        that Part thereof included within the Boundaries of Plan
                        1551R
008-921-253             The Fractional South West 1/4 of Section 23, Township 9, Comox
                        District, Plan 552G
008-921-326             The Fractional South East 1/4 of Section 23,
                        Township 9, Comox District, Plan 552G
000-101-745             The West 1/2 of the North East 1/4, Section 8, Township 3,
                        Sayward District, Except the South
                        West 1/4 of the North East 1/4 of said Section 8,
                        Township 3, Sayward District, Except Part in Plan 40329
000-101-826             The East 1/2 of the North West 1/4,  Section 8,  Township 3,
                        Sayward  District,  Except  Parts Shown Coloured Red and Yellow on Plan 280 RW
</TABLE>

<PAGE>
                                     - 18 -

<TABLE>
<CAPTION>
PID:                      LEGAL DESCRIPTION:

                     <C>
023-964-146             Lot A, Section 18, Township 7 and Lot 280, Sayward District, Plan VIP66279
025-030-264             Lot 2 of District Lots 2 2A 6 and 66 Alberni District Plan VIP72153
025-030-213             Lot 1 of District Lots 2A and 6 Alberni District Plan VIP72153
000-174-246             Lot A, District Lot 81, Alberni District, Plan 32673
010-276-556             Block 36, Except 9(A) Those Portions in Plans 8230, 8368, 8765,
                        9240, 10196, 12203, 12273, 13678, 13855, 13904, 14438, 14728, 14857,
                        15509 and 15920 (B) Part outlined green on Explanatory Plan 3126 (C)
                        Parcel 7 (Reference Plan 5651) and Part subdivided by Plan LMP25234
                        District Lot 450 Group 1 New Westminster District Plan 8096
023-209-119             Lot B District Lot 450 Group 1 New Westminster District Plan LMP25234
010-274-847             The Closed Part of the Powell  River-Westview  Road Shown  Outlined in Green on Reference  Plan
                        3470 Block 36 District Lot 450 Plan 8096
010-267-409             Block 56, Except Part in Plan 12767, District Lot 450 Plan 8096
</TABLE>

Leased:

REAL PROPERTY LEASES

         Lease from Bruce & Diane Beacham of Lot A, Block 29, Comox District,
         Plan VIP65659 Lease from Raymond E. Hockey & Wanda L. Hockey of Lot 53,
         District Lot 8, Cameron District, Plan 1981
         Lease from Robert H. Hanyes of Part of Lot 1, District Lot 107, Plan
         18030 Alberni Land District
         Lease from Ed & Leslie Gee of Part of Lot 1, Section 27, Township 9,
         Comox District, Plan 41139 Lease from John & Margrith Shaughnessy of
         Part of Lot 40, Block 29, Comox District, Plan 2262,
         Except Part in Plan 38715 as shown in red on the attached plan and
         comprising of 29.8 acres (2.06 HA), more or less
         Lease from Irene Wenngatz of that Part of District Lot 19, Nanoose
         District, except that part included within the boundaries of Plan
         13475, containing approximately 13.32 HA (Northern Portion)
         Lease from Irene Wenngatz of that Part of District Lot 19, Nanoose
         District, except that part included within the boundaries of Plan
         13475, containing approximately 16.6 HA (Southern Portion)
         Lease from HIPP Enterprises Ltd. of that Part of the South 1/2 of
         District Lot 83, Nanoose District,
         Except Amended Parcel B (DD14401N) and Except the R/W of the E&N
         Railway Company shown colored red on plan deposited DD9088F and except
         that Part in Plan 13475, containing approximately 6.38HA
         Lease from Inder Singh Gill & Hachhatter Sing Gill of Part of Section
         7, Township 14, New Westminster District Plan LMP 1570 (H4018)
         Lease from Morrison Gardens Ltd. of that Part of Lot 1 Except: Part
         Dedicated Road on Plan 69971, Section 14, Township 11, New Westminster
         District Plan 4534 as outlined in red on the attached plan and
         comprising an area of 35 acres (22.5 HA), more or less
         Lease from Gurdarshen Singh of Part of the West Half of the North East
         Quarter Section 29, Township 26, New Westminster District
         Lease from Alphonse Joseph Knapp and Bernadette Knapp of Part of the
         North Half of DL 8, Group 1 Except 1 PCL C (Plan B427) 2. Pt of Plan
         6465, 3. PCL "B" (Ref Plan 11261), 4. PT PCL "14" Plan 8809, 5. PT of
         Plan 27426A, 6 PT Subdiv by Pl 11421, 7. PT in Expl Plan 11824, 8.PT
         Subd by Plan 36609, 9. Part on Hwy Pl 47424, 10. Part Subd by Plan
         52465, Yale Div, Yale Dist, Containing 45 Acres more or less
         Lease from Lester & Sheila Gentry of Part of Lot 1, Section 32 and
         Section 33, Township 4, Range 27, West of the 6th Meridian, New
         Westminster District Plan 27690, and Part of Lot 1, District Lot 55

<PAGE>
                                     - 19 -

         "A", Group 1, Yale Division of Yale District, Plan 15730 as shown in
         red on the attached print and comprising 35 acres (14.16 HA) more or
         less
         Lease from Fran Rudolph Krimmel of Lot 9 Section 11 Township 18
         Westminster District Plan 3529
         Lease from Emil H. Clancy of Part of Lot 1 District Lot 4169 Group 1
         New Westminster District in West Half of District Lot 4168 Except Plan
         7623 Group 1 New Westminster District
         Lease from Mrs. Pluck of Lot 52, District Lot. 8, Cameron District,
         Plan 1981
         Lease from Ms. Thomas of part of Lot 25, District Lot 8, Cameron
         District, Plan 1981

NATURE OF BUSINESS:  Canadian poplar tree plantation business

JURISDICTION IN WHICH ITS PROPERTY OTHER THAN ACCOUNTS RECEIVABLE IS LOCATED:
British Columbia

CAPITAL STOCK HOLDINGS:  Nil

14.      PACIFICA PAPERS KABUSHIKI KAISHA

<TABLE>
<S>               <C>
CAPITAL STOCK:    Authorized capital:  2,000 shares with par value of (Y)50,000 per share
                  Issued and outstanding:  1,000
                  Member:  Norske Skog Canada Limited
</TABLE>

HEAD OFFICE:      Ginza Fujiya Building 6F
                  3-1 Ginza 1-chome, Chuo-ku
                  Tokyo 104-0061, Japan

REAL PROPERTY:

Owned:   Nil

Leased:  Nil

NATURE OF BUSINESS:  Selling agent in Japan

JURISDICTION IN WHICH ITS PROPERTY OTHER THAN ACCOUNTS RECEIVABLE IS LOCATED:
Japan

CAPITAL STOCK HOLDINGS:  Nil

15.      PACIFICA PAPERS US INC.

CAPITAL STOCK:    Authorized capital:  1,000 common shares
                  Issued and outstanding:  100
                  Member:  NSCL Holdings Inc.

HEAD OFFICE:      The Corporation Trust Company
                  Corporation Trust Center
                  1209 Orange Street
                  Wilmington, DE 19801 USA

CHIEF EXECUTIVE OFFICE:    Suite 700, Waterfront Place Building
                           1101 Western Avenue
                           Seattle, Washington  98101

<PAGE>
                                     - 20 -

REAL PROPERTY:

Owned:   Nil

Leased:  Nil

NATURE OF BUSINESS:  U.S. holding company

JURISDICTION IN WHICH ITS PROPERTY OTHER THAN ACCOUNTS RECEIVABLE IS LOCATED:
Washington

CAPITAL STOCK HOLDINGS:

<TABLE>
<CAPTION>

------------------------------------------------- ---------------------- ----------------------------------------
CORPORATION                                          CERTIFICATE NO.     NUMBER AND CLASS OF SECURITIES

------------------------------------------------- ---------------------- ----------------------------------------
<S>                                                  <C>                 <C>

Pacifica Papers Sales Inc.                                  8            100 common shares
------------------------------------------------- ---------------------- ----------------------------------------
Pacifica Poplars Inc.                                      11            850 shares of common stock
------------------------------------------------- ---------------------- ----------------------------------------
</TABLE>

16.      PACIFICA PAPERS SALES INC.

CAPITAL STOCK:    Authorized capital:  1,000 common shares
                  Issued and outstanding:  100
                  Member:  Pacifica Papers US Inc.

HEAD OFFICE:      The Corporation Trust Company
                  Corporation Trust Center
                  1209 Orange Street
                  Wilmington, DE 19801 USA

CHIEF EXECUTIVE OFFICE:    Suite 700, Waterfront Place Building
                           1101 Western Avenue
                           Seattle, Washington  98101

REAL PROPERTY:

Owned:   Nil

Leased:  Nil

NATURE OF BUSINESS:  U.S. marketing agent

JURISDICTION IN WHICH ITS PROPERTY OTHER THAN ACCOUNTS RECEIVABLE IS LOCATED:
Washington

CAPITAL STOCK HOLDINGS:  Nil

17.      PACIFICA POPLARS INC.

CAPITAL STOCK:    Authorized capital: 1,000 shares of common stock
                  Issued and outstanding:  850
                  Member:  Pacifica Papers US Inc.

HEAD OFFICE:      The Corporation Trust Company
                  Corporation Trust Center
                  1209 Orange Street
                  Wilmington, DE 19801 USA

<PAGE>
                                     - 21 -

CHIEF EXECUTIVE OFFICE:    Suite 700, Waterfront Place Building
                           1101 Western Avenue
                           Seattle, Washington  98101

REAL PROPERTY:

Owned:

<TABLE>
<CAPTION>

Property Record      TITLE NO.       LEGAL DESCRIPTION
& FILE NOS.
---------------      ----------      -----------------
<S>                  <C>             <C>

F-4098               9610110803      N/E1/4& portion  of the E1/2of the NW1/4of Section  11,  Township  26N,  Range 6 E.W.M.,
4101-01                              King County, except a portion of the NE1/4Section 11, Township 26N, Range 6 East W.M.
F-4118               9701140877      The S1/2of the SE1/4and that  portion of the SE1/4of the SW 1/4 , Section  11,  Township
4102-01                              26N, Range 6 East, W.M., King County.
F-4114               9701100908      That  portion of the N1/2of the NW1/4and  portion of the NW1/4of the NE1/4of Section 14,
4103-01                              Township 26N, Range 6 East, W.M., King County.
F-4051               9601030073      Parcel A, part of the east 6 acres of the SW1/4of the SE1/4of Section  6, lying  south &
4301-01                              west of Conner  Slough,  and part of Gov't Lot 2, lying  south & west of Conner  Slough,
                                     Section 7, all within TWP 35N, Range 3 East of W.M., (See deed for full legal).
F-4080               9604100060      Part  of the SW1/4of the NE1/4and  the W1/2of the SE1/4of the NE1/4,  all in  Section  2,
4302-01                              Township 34N,  Range 4 E.W.M.,  except County Road R/W's.  Also,  part of the N1/2of the
                                     SE 1/4 of Section 2, TWP 34N, Range 4 E.W.M., Skagit County.
F-4145               9703140056      That portion of Lot 3, of Short Plat No. 51-81,  lying north of the County Road known as
4302-06                              Mud Lake Road  previously  known as Noah Stevens Road,  Township 34N, Range 4 East, W.M.
                                     (See deed for full legal description).
F-4084               9606040120      The S1/2of the NW1/4and the N1/2of the SW1/4in Sec. 4,  Township  35N,  Range 3 E, W.M.,
4304-01                              except roads and drainage ditch  rights-of-way,  and except that portion,  in any, lying
                                     south of the north line of the south 80 acres of said SW 1/4, Section 4, Plan 9.
F-4088               9608120155      Parcel "A" the E1/2of the SE1/4of the NE1/4of Section 2, Township  34N,  Range 4 E.W.M.,
4305-01                              except  County  Road & Parcel "B" the  portion of the W1/2of the SW1/4of the NW1/4& that
                                     portion of the SW 1/4 of Section 1, Township 34N, Range 4E.
F-4117               9709090008      Portions of Government Lots 1 & 2 of Section 7, Township 34N, Range 3 East, W.M.,
4306-01                              Government Lot 2 and portion of Government Lot 3, of Section 1, Township 34N, Range 2 East,
                                     W.M., and portion of the North 1/2, Section 12, Township 34N, Range.
F-4127               9710100109      Tract 2 of Skagit County Short Plat No. 97-0056 approved
4307-01                              September 8, 1997, recorded September 17, 1997, in Volume 13, page 36-38
                                     of Short Plats, under auditor's file No. 9709170034, being a portion of Northeast
                                     1/4 of Section 12, Township 34N, Range 2 East; except that portion described by quit
                                     claim deed dated the 1st of June, 1999.
F-4040               9508290366      Parcel A - Sec 19, TWP 28N,  Range 6 E,W.M.  and Parcel B - Sec 20, TWP 28N,  Range 6 E,
4501-01                              W.M. (see deed for full legal).
F-4041               9508020290      Those  portions of Government  Lots 6 & 7 of Sec 13; the NW 1/4of  Government  Lots 3 & 4
4502-01                              and the N 1/2of the S 1/2of Sec 14;  the E 1/2of Sec 15;  and  Government  Lot 7 of Section
                                     10; all in Township 28N, Range 5 East, W.M., Snohomish County (see deed for details).
F-4034               9506290020      The NW 1/4of the SW 1/4,  Section 26,  lying west of SR 530 (Parcel A);  Government  Lot 1,
4503-01                              Section 35 (Parcel B);  Government  Lot 1,  Section 36 (Parcel  C), all within  Township
                                     32N, Range 4 East, W.M., all situate in the County of Snohomish. (see deed for full legal).
F-4052               9512280191      Parcel A being part of Section 16,  Township  28N,  Range 5 East,  W.M.;  Parcel B being
4504-01                              part of the NW 1/4of the SW 1/4of  Section  15,  Township  28N,  Range 5 East,  W.M.;  and
                                     Parcel C being Lot 5, Stetcher acre tracts,all situate within Snohomish County.
</TABLE>

<PAGE>
                                     - 22 -

<TABLE>
<CAPTION>
Property Record      TITLE NO.       LEGAL DESCRIPTION
& FILE NOS.
---------------      ----------      -----------------
<S>                  <C>             <C>
F-4055               9512050402      Parcel  A,  being the E 3/4ths of the NE 1/4 of the SW 1/4; & the E 1/2 of the E 1/2 of the
4505-01                              SE 1/4 of the SW 1/4 of Sec 15 Parcel B, being,  the SW 1/4 of the SE 1/4 of Sec 15,  Parcel C,
                                     being a 20' wide road easement; Parcel D, being part of the NE 1/4 of Section 22, TWP 28
F-4081               9602160309      That portion of Government  Lots 8 & 14 and SE 1/4 of the SW 1/4, Sec 6; and portions of the
4506-01                              NE 1/4 and the NW 1/4,  N 1/2 of the NE 1/4, Sec 1/4 of the NW 1/4, and SW 1/4 of the NE 1/4,
                                     Sec 7; all in TWP 27N, Rng 6 E.W.M. Snohomish County.
F-4083               9604300349      Part of the NE 1/4of the NW 1/4 of Sec 16 and  part of the SW 1/4 of the NW 1/4 of Sec 16,
4507-01                              TWP 28N,  Rng 5 E.  W.M.;  also Lot 1,  Stetcher  acre  tracts  know as Lot 2 of BLA  95233,
                                     situated in Snohomish County.
F-4086               9602290717      SW 1/4 of  the  SW 1/4, W 3/4 of the SE 1/4 of the SW 1/4, W 1/2 of the W 1/2 of the NE 1/4 of
4508-01                              the SW 1/4, all in Section  15, the S 1/2 of the SE 1/4 of Sec 16, the N 1/2 of the N 1/2 of
                                     the NE 1/4 of the NE 1/4 of Section 21; Township 2.
F-4087               9606120171      All that  portion of the north half of the NE 1/4 of Section  27,  Township  28N,  Range 6
4509-01                              East,  W.M., lying westerly of State Road No. 2, except the NW corner of the NE 1/4 of the
                                     NW 1/4; thence east 40 feet; thence south 81 feet; thence west 540 feet.
F-4093               9607150122      Beginning  at the NW corner of the NE 1/4 of the SE 1/4 of Sec 19,  TWP 28N,  Rng 6 E. W.M.;
4510-01                              thence  north  along  the  West line of the SE 1/4 of  the  NE 1/4 of  said  Sec 19 to the
                                     intersection with the southerly right of way line of the Puget Sound Traction Ligh.
F-4091               9607150124      The SE 1/4 of the SW 1/4 of the NE 1/4 of Section 27,  Township  28N,  Range 6 E., W.M.,  less
4511-01                              State  Highway 2.  Together with that portion of the S 1/2 of the SE 1/4 of the NW 1/4 of said
                                     Section 27, lying easterly of State Highway 2 (see attached F).
F-4090               9607150179      Parcels A, B & C,  Snohomish  County,  described as the N 1/2 of the SE 1/4 of the NW 1/4; all
4512-01                              that portion of the N 1/2 of the S 1/2 of the NE 1/4; all in Section 27,  Township 28N,  Range
                                     6 E.W.M., (see title for full legal).
F-4092               9609130400      Parcel "A" in Gov't Lot 5; Parcel  "B-1" in the SE 1/4 of the SE 1/4; Parcel "B-2" the south
4513-01                              25' of SE 1/4 of the SE 1/4 plus the  south 25' of the east 165 feet of the SW 1/4 of the
                                     SE 1/4 all located in Sec 36, TWP 27 N, Rng 6 E.W.M.; Parcel "B-3" part of Gov't Lot.
F-4094               9609130263      That  portion of the SE 1/4 of the SW 1/4 of Sec 8, and that portion of the NE 1/4 of the
4514-01                              NW 1/4 of Sec 17, TWP 27 N, Rng 6 E.W.M., in Snohomish County (see title for full legal).
F-4101               9610220418      Parcel A: portion of the W 1/2 of Sec 8, TWP 27N,  Rng 6E, W.M.;  Parcel B: portion of the
4515-01                              SW 1/4 of Sec 8, TWP 27N,  Rng 6E, W.M. & Parcel C:  portion of Gov't Lot 2, Sec 8 and N 1/2
                                     of NE 1/4 of Sec 7, TWP 27N, Rng 6E, W.M. with exceptions
F-4097               9611150060      The NE 1/4 of the SW 1/4 of Sec 22, TWP 29N, Rng 5 E.W.M.,  except  the south 30 feet,  the
4516-01                              north 20 feet and the west 10 feet and hereof;  also except that  portion  lying  within
                                     Cherry Avenue.
F-4134               9711180246      Parcel  A: the W 1/2 of the SW 1/4 of Sec 22;  Parcel B: the SE 1/4 of the SE 1/4 and the
4518-01                              E 1/2 of the NE 1/4 of the SE 1/4 of Sec 21; Parcel C: the NE 1/4 of the NE 1/4 of Sec 28; all
                                     in TWP 28N, Rng 6 E, W.M., with the exceptions (see title for full legal).
F-4047               951011032       A tract of land in Section 7,  Township  38N,  Range 2E of W.M.  described  as  follows:
4701-01                              bounded on north and the west by the Old Nooksack  River as  meandered  in 1859;  on the
                                     east by Ferndale Road, and on the south by Marine Drive, less roads, situate in Whatc.
F-4026               950505035       The north half of the south half of the NW quarter  and the SE quarter of the SE quarter
4702-01                              of the NW quarter of Section 32,  Township 38N, Range 5 East of the W.M. except railroad
                                     right of way and except State Route No. 9.
F-4032               950512020       The E 1/2 of the SW 1/4; the NW 1/4 of the SW 1/4 and the N 1/2 of the SW 1/4 of  Section  8,
4703-01                              Township 37N, Range 5 East of the W.M. (see title for full legal).
F-4033               950615017       The SW 1/4 of the SW 1/4 of Section 20,  Township  38N,  Range 5 East of the W.M.  Whatcom
4704-01                              County (for exceptions see full legal on deed).
F-4035               950609089       The NW 1/4 of the SE 1/4 of Section  19,  less the west 25'  thereof;  the south 417' of the
</TABLE>

<PAGE>
                                     - 23 -

<TABLE>
<CAPTION>
Property Record      TITLE NO.       LEGAL DESCRIPTION
& FILE NOS.
---------------      ----------      -----------------
<S>                  <C>             <C>
4705-1                               east 417' of the NE 1/4 of the SE 1/4 of Section 19,  less  road; the SE 1/4 of the SE 1/4 of
                                     Section 19 less roads; the SW 1/4 of the SE 1/4 of Section 19
F-4042               951019081       Lot 6, within the NW 1/4 of Section 31,  Township 39N,  Range 2 East of the W.M. (see Deed
4706-01                              for full legal).
F-4044               951031158       Beginning  at a point  561'  south of the NE corner of the SE 1/4 of the NW 1/4,  Section 1,
4707-01                              Township  38N,  Range 1 East,  W.M.,  Washington  thence south 561',  thence west 1320',
                                     thence north 561', thence east 1320', to point of beginning
F-4045               960327151       The NW 1/4 of the NE 1/4 of Section 30, TWP 38N, Rng 5E, W.M.,  except the north 417' of
4708-01                              the east 417'  thereof;  except  the north  355' of the west 612'  thereof;  and  except
                                     Strand Road (see deed for full legal description).
F-4046               951004092       The S 1/2 of the N 2/3rds of Government  Lot 4 of Section 5, Township 38N, Range 2 East of
4709-01                              W.M., less the road, situate in Whatcom County, State of Washington.
F-4050               951212038       Government Lot 4, Section 30, Township 39N, Range 2 East of W.M., except roads.
4710-01
F-4053               951215105       Parcel A being part of the W 1/2 of the SW 1/4 of the SW 1/4 of Section 16; also the SE 1/4 of
4711-01                              the SE 1/4 of Section  17;  Parcel B being part of the NE 1/4 of the NE 1/4,  Section  20, all
                                     within Township 37N, Range 5 East W.M., Whatcom County (see deed).
F-4124               1970800864      Parcel A, a strip of land 30' in width  across  the south end of the SE1/4of the SE 1/4 of
4711-06                              Section  17; and Parcel B, a strip of land 30' in width  across the south end of the W 1/2
                                     of the SW 1/4 of the SW 1/4 of Section 16; all in Township 37N.
F-4054               960105050       The S 1/3 of  Government  Lot 4,  Section 5,  Township  38N,  Range 2 East,  of W.M.  in
4712-01                              Whatcom County, Washington.
F-4057               960313031       The south 60 acres of the west half of thesoutheast quarter of Section 36, Township 39N,
4713-01                              Range 1 East of W.M., less roads, situate in the County of Whatcom, State of Washington.
F-4082               960415012       Parcel `A';  Government  Lot 3 of Sec 31 and Parcel `B';  the north 20 acres of the SE 1/4
4714-01                              of the SW 1/4 of Sec 31; TWP 39N, Rng 2 E.W.M.,  except Imhof Road and Slough,  situate in
                                     Whatcom County.
F-4095               1980102713      All of Lots 6, 7 and 11 and the SE 1/4 of the SW 1/4 of Sec 32, TWP 39N,  Rng 2E, W.M.  also
4715-01                              a strip of land 15' in width along the westerly bank of the Nooksack  River in Lot 6 and
                                     along the 1/4 sec line running east and west in said Sec 32, which forms the North.
F-4096               961015018       All that  part of Gov't Lot 8 and the SW 1/4 of the SE 1/4, Sec 8, and the NW 1/4 of the
4716-01                              NE 1/4, Sec 17, TWP 37N, Rng 5 E.W.M., Whatcom County (see Exhibit "A" for full legal).
F-4125               1970704143      The  east  20  acres of  the N 1/2 of the SW 1/4 and  the S 1/2 of the SW 1/4 of  Section  32,
4717-01                              Township 38N, Range 5 East,  W.M. except the R/W for State Route No. 9; and that portion
                                     of said South 1/2 of the SW 1/4 lying west of State Route No. 9
F-4143               1980401482      Parcel A: the SW 1/4 of Sec 5;  Parcel B: part of Sec 5;  Parcel C: Lots 19, 20 and 21 in the
4719-01                              NE 1/4 of the NE 1/4 of Sec 7; Parcel D:  the NW 1/4 of the SW 1/4 and  the NW 1/4 of Sec 8;
                                     all in Township 38N, Range 2 E. W.M. with exceptions.
F-4144               1980700595      Parcel A:  Blocks 9, 10, 19, 20, 21, 28, 29 and 30 "Plat of the  Marietta  Garden  Farms
4720-01                              Whatcom County" and Parcel B: that portion of Sec 5, TWP 38N, Range 2 East of the W.M.
</TABLE>

LEASED:  Nil

NATURE OF BUSINESS:  U.S. poplar tree plantation business

<PAGE>
                                     - 24 -

JURISDICTION IN WHICH ITS PROPERTY OTHER THAN ACCOUNTS
RECEIVABLE IS LOCATED:    United States

CAPITAL STOCK HOLDINGS:   Nil

<PAGE>

                                   SCHEDULE G
                           BORROWING BASE CERTIFICATE

                        [SEE REFERENCE IN SECTION 1.1.18]

TO:           THE LENDERS (as defined in the Credit Agreement referred to below)
AND TO:       THE TORONTO-DOMINION BANK, as Agent
----------------- --------------------------------------------------------------

              We refer to Section 7.3.1(a) of the credit agreement dated as of
19 July 2002 between Norske Skog Canada Limited and others as Restricted
Parties, The Toronto-Dominion Bank as Administration Agent and the Lenders,
Arrangers and Syndication Agents named therein, as amended, supplemented,
restated or replaced from time to time (the "Credit Agreement"). All capitalized
terms used in this certificate and defined in the Credit Agreement have the
meanings defined in the Credit Agreement.

              We hereby certify that the following is a true and correct
calculation of our Borrowing Base as of [DATE] and that the attached documents
accurately set out the details from which the Borrowing Base is calculated.
<TABLE>
<CAPTION>
                                          ($'000S)

          ACCOUNTS RECEIVABLE
          <S>                                                       <C>
          Trade AR
                Paper                                               o
                Pulp                                                o
                Fibre                                               o
                Allowance for doubtful accounts                     (o)
                Accrued rebates, discounts and price adjustment     (o)
                Foreign Exchange & other                            o
                                                                    -----------
                Net Total                                           o

          Other AR
                Employee AR                                         o
                Taxes                                               o
                Other                                               o
                                                                    -----------
                                                                    o
                                                                    -----------
          Consolidated AR per Financial Statements                  o

          Less: Employee AR                                         (o)
          Less: AR of Unrestricted Parties                          (o)

                                                                    -----------
          Adjusted AR                                               o
                                                                    -----------
</TABLE>

<PAGE>
                                     - 2 -

<TABLE>
          <S>                                                       <C>
                                                                    -----------
          75% OF ADJUSTED AR                                        o
                                                                    -----------

     B    INVENTORY

          Finished Goods
                Paper                                               o
                Pulp                                                o
                                                                    -----------
                Sub total                                           o

          WIP                                                       o

          Raw Materials
                Chips                                               o
                Logs                                                o
                Sawdust                                             o
                DIP/Other purchased pulp                            o
                Other                                               o
                                                                    -----------
                Sub total                                           o

          Supplies
                Crofton                                             o
                Elk Falls                                           o
                Powell River                                        o
                Port Alberni                                        o
                Other                                               o
                                                                    -----------
                Sub total                                           o

          Consolidated Inventory per FS                             o

          Less: WIP                                                 (o)
          Less: Inventory of Unrestricted Parties                   (o)

                                                                    -----------
          Adjusted Inventory                                        o
                                                                    -----------

                                                                    -----------
          50% OF ADJUSTED INVENTORY                                 o
                                                                    -----------

                                                                    ===========
BORROWING BASE                                                      o
                                                                    ===========
(A + the lesser of A and B)
</TABLE>

<PAGE>
                                     - 3 -

DATED _____________

                                        NORSKE SKOG CANADA LIMITED

                                              By:
                                                   ----------------------------
                                                   Name:
                                                   Title:

                                              By:
                                                   ----------------------------
                                                   ----------------------------
                                                   Name:
                                                   Title:

<PAGE>

                                   SCHEDULE H
                            OTHER SECURED OBLIGATIONS

                         [SEE REFERENCE IN SECTION 3.2]

U.S. dollar to Canadian dollar foreign exchange contracts between Norske Skog
Canada Finance Limited and the following Lenders existing as of the close of
business on 18 July 2002:

                 LENDER                                       TOTAL AMOUNT - US$
                 ------                                       ------------------
        Royal Bank of Canada                                     $88,000,000.00
        The Toronto-Dominion Bank                                $52,500,000.00
        The Bank of Nova Scotia                                  $75,500,000.00
        Bank of Montreal                                         $ 8,000,000.00
        HSBC Bank Canada                                         $ 3,000,000.00
        Laurentian Bank of Canada                                $ 2,000,000.00

Japanese yen to U.S. dollar foreign exchange contracts between Norske Skog
Canada Finance Limited and the following Lenders existing as of the close of
business on 18 July 2002:

                 LENDER                                       TOTAL AMOUNT - JPY
                 ------                                       ------------------
        Royal Bank of Canada                                    Y 50,000,000.00
        The Toronto-Dominion Bank                               Y300,000,000.00
        The Bank of Nova Scotia                                 Y150,000,000.00
        HSBC Bank Canada                                        Y225,000,000.00

U.S. dollar to Canadian dollar call option agreements between Norske Skog Canada
Finance Limited and the following Lenders existing as at the close of business
on 18 July 2002:

                 LENDER                                       TOTAL AMOUNT - US$
                 ------                                       ------------------
        The Toronto-Dominion Bank                                 $34,000,000.00

U.S. dollar to Canadian dollar put and call option agreements with down and in
barrier price on USD call/Canada put currency pair between Norske Skog Canada
Finance Limited and the following Lenders existing as at the close of business
on 18 July 2002:

                 LENDER                                       TOTAL AMOUNT - US$
                 ------                                       ------------------
        Bank of Montreal                                           $6,000,000.00

<PAGE>
                                     - 2 -

U.S. dollar to Canadian dollar collar option agreements between Norske Skog
Canada Finance Limited and the following Lenders existing as of the close of
business on 18 July 2002:

                 LENDER                                       TOTAL AMOUNT - US$
                 ------                                       ------------------
        Royal Bank of Canada                                     $144,000,000.00
        The Toronto-Dominion Bank                                $ 31,000,000.00
        The Bank of Nova Scotia                                  $  9,000,000.00
        HSBC Bank Canada                                         $ 60,000,000.00
        Bank of Montreal                                         $ 78,000,000.00
        Laurentian Bank of Canada                                $ 12,000,000.00

Canadian dollar to U.S. dollar foreign exchange contracts between Norske Skog
Canada Finance Limited and the following Lenders existing as of the close of
business on 18 July 2002:

                  LENDER                                      TOTAL AMOUNT - US$
                  ------                                      ------------------
        Royal Bank of Canada                                    $ 131,000,000.00
        The Toronto-Dominion Bank                               $ 108,000,000.00
        The Bank of Nova Scotia                                 $  69,800,000.00
        HSBC Bank Canada                                        $  38,200,000.00
        Bank of Montreal                                        $  10,000,000.00

Canadian dollar to U.S. dollar call option agreements between Norske Skog Canada
Finance Limited and the following lenders existing as at the close of business
on 18 July 2002:

                 LENDER                                       TOTAL AMOUNT - US$
                 ------                                       ------------------
        Royal Bank of Canada                                      $10,000,000.00

U.S. dollar interest rate swap contracts to exchange fixed for floating interest
rates between Norske Skog Canada Finance Limited and the following Lenders
existing as of the close of business on 18 July 2002:

                LENDER                     TOTAL NOTIONAL PRINCIPAL AMOUNT - US$
                ------                     -------------------------------------
        Royal Bank of Canada                                      $75,000,000.00
        The Toronto-Dominion Bank                                 $20,000,000.00
        HSBC Bank Canada                                          $30,000,000.00

<PAGE>

                                   SCHEDULE I
            LIMITATIONS ON CERTAIN SUBSIDIARIES OF RESTRICTED PARTIES

                   [SEE REFERENCES IN SECTIONS 3.1, 7.2.5(c)]

None of 3264904 Canada Limited, Catalyst Paper Corporation (a British Columbia
company), Catalyst Paper Corporation (a CANADA BUSINESS CORPORATIONS ACT
company), Echelon Paper Corporation (a British Columbia company), Echelon Paper
Corporation (a CANADA BUSINESS CORPORATIONS ACT company), Export Sales Company
Limited (formerly Mackenzie Forest Products Limited), Crofton Pulp & Paper
Limited, 468327 B.C. Ltd., British Columbia Forest Products Limited, FCC
Holdings (Philippines) Inc., NSC Holdings (Barbados) Limited , NSC Fibre Inc.,
Arizona Newsprint Industries Corporation, Elk Falls Forest Industries Limited,
Norske Skog North America LLC and Allwin Technical Services Inc. shall at any
time carry on any business or have any material Property unless it first becomes
a Restricted Party in accordance with this Agreement.

<PAGE>

                                   SCHEDULE J
                      LITIGATION AND ENVIRONMENTAL MATTERS

                 [SEE REFERENCES IN SECTIONS 6.1.3(a), 6.1.6(a)]

A.       LITIGATION
<TABLE>
<CAPTION>
           PLAINTIFF                 DEFENDANT                   NATURE                     STATUS
<S>        <C>                <C>                       <C>                        <C>
1.         Avenor Inc.        Norske Skog Canada        Claim for contribution     Unknown (claimant has
                              Limited                   or indemnity in respect    not provided any detail)
                                                        of any judgment
                                                        International Forest
                                                        Products Limited may
                                                        obtain against Avenor
                                                        Inc. in respect of
                                                        contaminants and other
                                                        hazardous or toxic
                                                        substances

2.         International      Crown Forest Industries   Contamination of Crown     Writ of Summons issued
           Forest Products    Limited, Fletcher         Forest Industries          and Appearance entered.
           Limited            Challenge Canada          Limited former Fraser      International Forest
                              Limited, Elk Falls        Mill site                  Products Limited has
                              Forest Industries                                    agreed to discontinue
                              Limited and Elk Falls                                its action against Elk
                              Pulp and Paper Limited                               Falls Forest Industries
                                                                                   Limited.

</TABLE>

<PAGE>
                                     - 2 -

B.       GRIEVANCES

Nothing which meets the materiality threshold.

C.       ENVIRONMENTAL

Nothing which meets the materiality threshold.

<PAGE>

                                   SCHEDULE K
                     EXISTING L/CS AND BANKERS' ACCEPTANCES

                         [SEE REFERENCE IN SECTION 2.8]

EXISTING L/CS

<TABLE>
<CAPTION>

BENEFICIARY                         REFERENCE        ISSUE DATE      EXPIRY DATE      AMOUNT
                                    NUMBER

<S>                                  <C>             <C>             <C>              <C>
CIBC Mellon Trust Co. (re           G21522V00010     27 Nov '91      31 Mar. '03      $25,987,000.00
executive pension)

Her Majesty the Queen in Right of   G24914V0010      13 Apr. '92     12 Apr. '03      $100,000.00
the Province of BC (Minister of
Lands & Parks) (re waterlot leases)
</TABLE>

EXISTING BANKERS' ACCEPTANCES
[NOTE:  MATURITY DATES ARE ALL IN 2002.  AMOUNTS ARE IN THOUSANDS OF DOLLARS]

<TABLE>
<CAPTION>

                                              22 Jul   30 Jul    6 Aug     26 Aug     21 Oct     Total

<S>                                           <C>      <C>       <C>       <C>        <C>        <C>
The Toronto-Dominion Bank                     300      100       200       300        200        1100
Royal Bank of Canada                          300      300       200       200        200        1200
Bank of Montreal                              800      800       600       500        500        3200
The Bank of Nova Scotia                       800      800       600       500        500        3200
HSBC Bank Canada                              800      800       600       500        500        3200
Merrill Lynch Capital Canada Inc.             300      300       200       200        200        1200
Canadian Western Bank                         200      300       200       200        200        1100
Laurentian Bank of Canada                     400      400       300       100        300        1500
                                                                                                 15700
</TABLE>

<PAGE>

                                   SCHEDULE L
                          SPECIAL DERIVATIVE PROVISIONS

     [SEE REFERENCES IN SECTIONS 1.1.37, 1.1.47, 1.1.79(i), 7.7 AND 8.1(k)]

NSCL has indicated that it is desirable, having regard to certain provisions of
the 1999 Indenture and the 2001 Indenture, to establish further arrangements on
which Derivatives described in Sections 1.1.79(c), 1.1.79(d) and 1.1.79(e) would
be entered into. These arrangements may include the appointment of a Lender to
act as an agent in connection with the administration of Derivatives (the
"DERIVATIVE AGENT"). NSCL has asked that the establishment of these arrangements
be deferred until after the initial Advance under this Agreement. Accordingly,
until otherwise agreed by amendment to this Agreement consented to by all
Lenders, the following provisions shall apply notwithstanding any other
provision of this Agreement:

1.  No Restricted Party shall be a party to any Derivative of the type described
in Sections 1.1.79(c), 1.1.79(d) and 1.1.79(e), whether secured or unsecured and
whether entered into with a Lender or not, except for those that are outstanding
at the date of this Agreement and described on Schedule H (the "EXISTING SPECIAL
DERIVATIVES") and except that, if the amendment to this Agreement contemplated
in the preceding paragraph has not been entered into on or before 9 August 2002,
the Restricted Parties may enter into unsecured Derivatives of the type
described in Sections 1.1.79(c), 1.1.79(d) and 1.1.79(e) with persons other than
Lenders.

2.  If the aggregate of the Market Values of all Existing Special Derivatives is
at any time negative from the Restricted Parties' perspective (that is, the
Restricted Parties on an aggregate basis are "out of the money") by more than
$10,000,000, the Restricted Parties shall, within five Business Days of
receiving notice from the Agent, terminate or re-price one or more Existing
Special Derivatives or take other action acceptable to the Agent acting
reasonably so that the negative Market Value of those Derivatives is immediately
reduced to less than $10,000,000.

3.  NSCL shall report the current Market Value of the Existing Special
Derivatives to the Agent not less frequently than weekly.

<PAGE>

                                TABLE OF CONTENTS

ARTICLE I INTERPRETATION.......................................................2

         1.1      Defined Terms................................................2

ARTICLE II THE CREDITS........................................................27

         2.1      Amount and Availment Options................................27

         2.2      Revolving Credit............................................27

         2.3      Use of Credits..............................................27

         2.4      Term and Repayment..........................................27

         2.5      Interest Rates and Fees.....................................29

         2.6      Commitment Fee..............................................29

         2.7      Other Fees..................................................30

         2.8      Existing L/CS, Bankers' Acceptances Etc.....................30

         2.9      Exchange Rate and Borrowing Base Fluctuations...............30

ARTICLE III SECURITY..........................................................31

         3.1      Security....................................................31

         3.2      Obligations Secured by the Trustee Security.................34

         3.3      Consent to Assignment of Contracts..........................37

ARTICLE IV DISBURSEMENT CONDITIONS............................................38

         4.1      Conditions Precedent to Initial Advance.....................38

         4.1.1    Other Debt and Encumbrances.................................38

         4.1.2    Financial Information.......................................38

         4.1.3    Security and Other Documents................................39

         4.1.4    Corporate and Other Information.............................39

         4.1.5    Opinions....................................................39

         4.1.6    Other Matters...............................................40

         4.1.7    Deadline for Advance........................................40

         4.2      Conditions Precedent to All Advances........................40

ARTICLE V ADVANCES............................................................41

<PAGE>
                                     - 2 -

         5.1      Lenders' Obligations Relating to Credits 1 and 2............41

         5.2      Adjustment of Proportionate Shares for Specific Credits.....42

         5.3      Exceptions Regarding Particular Credits.....................42

         5.4      Evidence of Indebtedness....................................42

         5.5      Conversions.................................................43

         5.6      Notice of Advances and Payments.............................43

         5.7      Prepayments and Reductions..................................43

         5.8      Prime Rate, Base Rate and LIBOR Advances....................44

         5.9      LIBOR Periods...............................................45

         5.10     Termination of LIBOR Advances...............................45

         5.11     Co-ordination of Prime Rate, Base Rate and LIBOR Advances...46

         5.12     Execution of Bankers' Acceptances...........................46

         5.13     Sale of Bankers' Acceptances................................47

         5.14     Size and Maturity of Bankers' Acceptances and Rollovers.....47

         5.15     Co-ordination of BA Advances................................47

         5.16     Payment of Bankers' Acceptances.............................49

         5.17     Deemed Advance - Bankers' Acceptances.......................49

         5.18     Waiver......................................................49

         5.19     Degree of Care..............................................50

         5.20     Indemnity...................................................50

         5.21     Obligations Absolute........................................50

         5.22     Shortfall on Drawdowns, Rollovers and Conversions...........50

         5.23     Prohibited Use of L/CS and Bankers' Acceptances.............51

         5.24     Issuance and Maturity of L/CS...............................51

         5.25     Payment of L/C Fees.........................................51

         5.26     Payment of L/CS.............................................51

         5.27     Deemed Advance - L/CS.......................................52

         5.28     Prohibited Rates of Interest................................53

<PAGE>
                                     - 3 -

ARTICLE VI REPRESENTATIONS AND WARRANTIES.....................................53

         6.1      Representations and Warranties..............................53

         6.1.1    Corporate Matters...........................................53

         6.1.2    Credit Documents............................................55

         6.1.3    Litigation, Financial Statements etc........................55

         6.1.4    Other Debt..................................................56

         6.1.5    Property and Capital Stock..................................57

         6.1.6    Environmental Matters.......................................57

         6.1.7    Taxes and Withholdings......................................58

         6.1.8    Aboriginal Claims...........................................58

         6.1.9    Other Matters...............................................59

         6.2      Survival of Representations and Warranties..................60

ARTICLE VII COVENANTS AND CONDITIONS..........................................60

         7.1      Financial Covenants.........................................60

         7.2      Positive Covenants..........................................60

         7.2.1    Payment; Operation of Business..............................60

         7.2.2    Inspection..................................................61

         7.2.3    Insurance...................................................62

         7.2.4    Taxes, Encumbrances and Withholdings........................62

         7.2.5    Other Matters...............................................62

         7.3      Reporting and Notice Requirements...........................64

         7.3.1    Periodic Reports............................................64

         7.3.2    Requirements for Notice.....................................65

         7.4      Ownership of the Restricted Parties.........................66

         7.5      Negative Covenants..........................................67

         7.5.1    Financial Transactions and Encumbrances.....................67

         7.5.2    Business and Property.......................................69

         7.5.3    Corporate Matters...........................................70

<PAGE>
                                     - 4 -

         7.6      Use of Insurance Proceeds...................................71

         7.7      Adjustments to Amount of Debt...............................72

ARTICLE VIII DEFAULT..........................................................73

         8.1      Events of Default...........................................73

         8.2      Acceleration and Termination of Rights......................76

         8.3      Payment of L/CS.............................................76

         8.4      Remedies....................................................76

         8.5      Saving......................................................77

         8.6      Perform Obligations.........................................77

         8.7      Third Parties...............................................77

         8.8      Power of Attorney...........................................77

         8.9      Remedies Cumulative.........................................78

         8.10     Set-Off or Compensation.....................................78

ARTICLE IX THE AGENT AND THE LENDERS..........................................78

         9.1      Authorization of Agent and Relationship.....................78

         9.2      Disclaimer of Agent.........................................79

         9.3      Failure of Lender to Fund...................................80

         9.4      Payments by the Borrower....................................81

         9.5      Payments by Agent...........................................81

         9.6      Direct Payments.............................................82

         9.7      Administration of the Credits...............................83

         9.8      Rights of Agent.............................................86

         9.9      Acknowledgements, Representations and Covenants of Lenders..87

         9.10     Collective Action of the Lenders............................88

         9.11     Successor Agent.............................................88

         9.12     Provisions Operative Between Lenders and Agent Only.........88

ARTICLE X ADDITIONAL LENDERS, SUCCESSORS AND ASSIGNS..........................89

         10.1     Successors and Assigns......................................89

<PAGE>
                                     - 5 -

         10.2     Assignments.................................................90

         10.3     Participations..............................................91

ARTICLE XI MISCELLANEOUS PROVISIONS...........................................91

         11.1     Headings and Table of Contents..............................91

         11.2     Accounting Terms............................................91

         11.3     Capitalized Terms...........................................92

         11.4     Severability................................................92

         11.5     Number and Gender...........................................92

         11.6     Amendment, Supplement or Waiver.............................92

         11.7     Governing Law...............................................92

         11.8     This Agreement to Govern....................................93

         11.9     Permitted Encumbrances......................................93

         11.10    Currency ...................................................93

         11.11    Liability of Lenders........................................93

         11.12    Expenses and Indemnity......................................93

         11.13    Environmental Indemnity.....................................94

         11.14    Manner of Payment and Taxes.................................95

         11.15    Increased Costs etc.........................................96

         11.16    Interest on Miscellaneous Amounts ..........................96

         11.17    Currency Indemnity .........................................96

         11.18    Address for Notice .........................................97

         11.19    Time of the Essence ........................................97

         11.20    Further Assurances .........................................97

         11.21    Term of Agreement ..........................................97

         11.22    Payments on Business Day ...................................97

         11.23    Counterparts and Facsimile .................................98

         11.24    Waiver of Jury Trial, Consequential Damages etc. ...........98

         11.25    Entire Agreement ...........................................98

<PAGE>
                                     - 6 -

         11.26    Date of Agreement...........................................90

SCHEDULE A NOTICE OF ADVANCE OR PAYMENT........................................1

SCHEDULE B AGREEMENT OF NEW RESTRICTED SUBSIDIARY SUPPLEMENT TO CREDIT
     AGREEMENT.................................................................1

SCHEDULE C COMPLIANCE CERTIFICATE..............................................1

SCHEDULE D ASSIGNMENT AGREEMENT................................................1

SCHEDULE E PROPORTIONATE SHARES OF LENDERS.....................................1

SCHEDULE F DETAILS OF CAPITAL STOCK, PROPERTY ETC..............................1

SCHEDULE G BORROWING BASE CERTIFICATE..........................................1

SCHEDULE H OTHER SECURED OBLIGATIONS...........................................1

SCHEDULE I LIMITATIONS ON CERTAIN SUBSIDIARIES OF RESTRICTED PARTIES...........1

SCHEDULE J LITIGATION AND ENVIRONMENTAL MATTERS................................1

SCHEDULE K EXISTING L/CS AND BANKERS' ACCEPTANCES..............................1

SCHEDULE L SPECIAL DERIVATIVE PROVISIONS.......................................1<Page>

                                                                     EXHIBIT 4.4

             THIS FIRST AMENDING AGREEMENT is made as of 8 May 2003

B E T W E E N:

         NORSKE SKOG CANADA LIMITED, NORSKE SKOG CANADA FINANCE LIMITED
               AND THE OTHER RESTRICTED PARTIES FROM TIME TO TIME

                                     - and -

                           THE LENDERS WHO ARE PARTIES
                        TO THE EXISTING CREDIT AGREEMENT

                                     - and -

                            THE TORONTO-DOMINION BANK
                     in its capacity as Administration Agent

                                  (the "AGENT")

RECITALS:

A. The parties to this agreement are also parties to a credit agreement dated as
of 19 July 2002 (the "EXISTING CREDIT AGREEMENT").

B. Capitalized terms used in this agreement and not otherwise defined have the
meanings defined in the Existing Credit Agreement.

C. The parties have agreed to certain amendments to the Existing Credit
Agreement and to a pledge agreement forming part of the Security, and are
therefore entering into this agreement to amend the provisions of the Existing
Credit Agreement and the Security as agreed by the parties.

D. This agreement is being signed by the Agent on behalf of the Lenders pursuant
to the approval of the Lenders or Majority Lenders as required.

         THEREFORE, for value received, and intending to be legally bound by
this agreement, the parties agree as follows:

1.       AMENDMENTS TO SECTION 1.1 OF EXISTING CREDIT AGREEMENT

(a)      Section 1.1.17 of the Existing Credit Agreement is deleted and replaced
 by the following:

                  "Borrowing Base" means at any time, the aggregate of:

                  (a)      75% of the net book value of accounts receivable of
                           NSCL, other than accounts receivable owing by
                           employees of any Restricted Party, based on the
                           Adjusted Balance Sheet; and

<Page>

                                      -2-

                  (b)      an amount equal to the lesser of item (a) above and
                           50% of the aggregate inventory of NSCL, other than
                           work in process, based on the Adjusted Balance Sheet;

                  except that, effective 60 days after NSCL gives express notice
                  to the Agent requesting a change in the calculation of the
                  Borrowing Base (which notice may be irrevocably given by NSCL
                  at its option during the term of this Agreement), the
                  Borrowing Base shall be the amount calculated in accordance
                  with Schedule M.

(b) Section 1.1.18 of the Existing Credit Agreement is deleted and replaced by
the following:

                  "Borrowing Base Certificate" means a certificate of NSCL in
                  the form of Schedule G or, if pursuant to Section 1.1.79 the
                  Borrowing Base is calculated in accordance Schedule M, means a
                  certificate of NSCL in the form of Schedule M.

(c) Section 1.1.37 of the Existing Credit Agreement is deleted and replaced by
the following:

                  "Derivative Agent" means RBC and any successor to it as the
                  "Group Valuation Agent" appointed under the Repricing
                  Agreement.

(d) Section 1.1.47 of the Existing Credit Agreement (definition of Existing
Special Derivatives) is deleted.

(e) Section 1.1.67 of the Existing Credit Agreement is deleted and replaced by
the following:

                  "Market Value" means, on any day, the total amount, if any,
                  expressed in Canadian Dollars that would be required to be
                  paid under any Derivative in order to terminate the
                  Derivative. The determination shall be made in accordance with
                  the procedures described in the definition of "Hedging
                  Transaction Exposure" under the Repricing Agreement.

(f) The first two lines of Section 1.1.79 of the Existing Credit Agreement are
deleted and replaced by the following:

                  "Other Secured Obligations" means the present and future
                  debts, liabilities and obligations of the Borrower (or any
                  other Restricted Party in respect of item (f) below) under or
                  in connection with:

(g) Item (a) of Section 1.1.79 of the Existing Credit Agreement is deleted and
replaced by the following:

                  "(a)     Derivatives to exchange one of Canadian Dollars, US
                           Dollars, Euros, Japanese yen, Australian dollars,
                           British pounds sterling or such other currencies as
                           may be approved by the Agent, after consultation with
                           counsel but without any requirement to seek approval
                           of the Majority

<Page>

                                      -3-

                           Lenders, to another of those currencies, provided
                           that in the case of such Derivatives that relate
                           to Debt, such Derivatives do not increase the
                           principal amount of Debt outstanding other than as a
                           result of fluctuations in foreign currency exchange
                           rates or by reason of fees, indemnities or
                           compensation payable thereunder;

(h) Item (f) and following of Section 1.1.79 of the Existing Credit Agreement is
deleted and replaced by the following:

         "(f)     guarantees by other Restricted Parties of Other Secured
                  Obligations incurred by the Borrower;

         provided that:

         (g)      the debts, liabilities and obligations are, in each case other
                  than any guarantee given to the Agent, incurred pursuant to a
                  1992 ISDA master agreement and held by (i.e. owed to) a person
                  that, at the time the relevant Derivative was entered into,
                  was a Lender or an affiliate (as defined in the CANADA
                  BUSINESS CORPORATIONS ACT) of a Lender and that, if the
                  Derivative is of a type described in items (c), (d) and (e)
                  above, is a party to the Repricing Agreement;

         (h)      the Derivative Agent is notified in accordance with the
                  Repricing Agreement of the particular Other Secured Obligation
                  being entered into, except that a delay in notifying the
                  Derivative Agent shall not disqualify any debt, liability or
                  obligation from being an Other Secured Obligation as long as
                  its later inclusion as an Other Secured Obligation does not
                  result in one of the events contemplated in section 2(a) of
                  the Repricing Agreement."

(i)      Item (b) of Section 1.1.87 of the Existing Credit Agreement (definition
         of Permitted Unsecured Indebtedness) is deleted and replaced by the
         following:

         "(b)     is on terms and conditions that are no more restrictive to the
                  Restricted Parties than one or both of:

                  (i)      the terms of the Obligations including, without
                           limitation, the scheduled amortization of the Debt;
                           and

                  (ii)     the terms of any of the 1999 Notes and the 2001 Notes
                           including, without limitation, the stated maturity of
                           any of the 1999 Notes and the 2001 Notes (for greater
                           certainty, the 1999 Notes and 2001 Notes shall be
                           used as a basis for comparison whether or not they
                           remain outstanding and any entitlement of the holder
                           of the Debt to convert it to

<Page>

                                      -4-

                           Capital Stock shall not be considered more
                           restrictive to the Restricted Parties); and"

(j) Section 1.1.100 of the Existing Credit Agreement is deleted and replaced by
the following:

                  "Restricted Parties" means NSCL, the Borrower, Elk Falls Pulp
                  and Paper Limited, NorskeCanada, Norske Skog Canada (Japan)
                  Ltd., Norske Skog Canada Pulp Operations Limited, Norske Skog
                  Canada Pulp Sales Inc, Norske Skog Canada Sales Inc., Norske
                  Skog Canada (USA) Inc., NSCL Holdings Inc., Pacifica Papers
                  Sales Ltd., Pacifica Papers Sales Inc., Pacifica Poplars Ltd.,
                  Pacifica Poplars Inc., and Pacifica Papers US Inc. and such
                  other Subsidiaries of NSCL as may become Restricted Parties
                  from time to time.

(k)      Section 1.1.112 of the Existing Credit Agreement (definition of
         Threshold Amount) is amended by replacing the last sentence with the
         following:

                  "If neither the 1999 Notes nor the 2001 Notes are outstanding
                  but Similar Notes are outstanding, the Threshold Amount shall
                  be calculated by adapting the foregoing as required to reflect
                  the provisions of the Similar Indenture that correspond to
                  clauses (i), (ix) and (xi), respectively, of the definition of
                  "Permitted Indebtedness" in the 1999 Indenture and "Permitted
                  Debt" in the 2001 Indenture. If no 1999 Notes, 2001 Notes or
                  Similar Notes are outstanding, the Threshold Amount shall be
                  considered to be unlimited. For greater certainty, because of
                  the requirements of the definition of Similar Indenture, the
                  Threshold Amount based on any Similar Indenture shall not be
                  lower than the Threshold Amount based on the 2001 Indenture."

(l) Section 1.1.113 of the Existing Credit Agreement is deleted and replaced by
the following:

                  "TOTAL INTEREST EXPENSE" means, for any particular period,
                  without duplication, the difference between (a) aggregate
                  expense incurred for interest and equivalent costs of
                  borrowing (taking into account the effect of any relevant
                  Derivatives), including but not limited to (i) bankers'
                  acceptance fees, (ii) discounts on bankers' acceptances, (iii)
                  the interest portion of any capital lease, and (iv) all fees
                  and other compensation paid to any person that has extended
                  credit to the Restricted Parties, but excluding any upfront,
                  extension and similar non-recurring fees paid to the Agent or
                  Lenders or paid in connection with the 2001 Notes, the 1999
                  Notes or any Similar Notes, in each case whether or not
                  actually paid (unless paid by the issuance of securities
                  constituting Debt), and (b) the aggregate income earned from
                  interest, in the case of each of (a) and (b), calculated in
                  accordance with GAAP in respect of NSCL on a consolidated
                  basis, omitting amounts that are not

<Page>

                                      -5-

                  attributable to Restricted Parties. If the calculation of
                  EBITDA is adjusted because of acquisitions, dispositions or
                  other circumstances described in the last paragraph of Section
                  1.1.40, the calculation of Total Interest Expense shall be
                  adjusted on the same basis.

(m) The following additional definitions are added to Section 1.1 of the
Existing Credit Agreement:

                  "Monetization Transaction" means a sale on a discounted basis
                  by a Restricted Party to a Lender or an affiliate (as defined
                  in the CANADA BUSINESS CORPORATIONS Act) of a Lender of
                  accounts receivable of the Restricted Party, which may include
                  the sale or assignment of the Restricted Party's rights to any
                  insurance or security for the accounts receivable that are
                  sold.

                  "Repricing Agreement" means the agreement in the form attached
                  as Schedule L, as amended, supplemented, restated and replaced
                  from time to time.

                  "Similar Indenture" means an indenture under which Permitted
                  Unsecured Indebtedness is issued (a) that contains
                  substantially the same provisions as the 1999 Indenture or the
                  2001 Indenture or (b) the provisions of which are based on the
                  same "template" as the 1999 Indenture and the 2001 Indenture
                  but are less restrictive to the Restricted Parties (as the
                  provisions of the 2001 Indenture are less onerous than the
                  1999 Indenture).

                  "Similar Notes" means notes issued under a Similar Indenture.

2.       EXTENSION UNDER SECTION 2.4 OF EXISTING CREDIT AGREEMENT

         In response to a request by the Borrower pursuant to Section 2.4 of the
Existing Credit Agreement that the maturity date of the Credits be extended to
19 July 2006, TD, RBC, Canadian Imperial Bank of Commerce, Bank of Montreal, The
Bank of Nova Scotia, HSBC Bank Canada, Bank of America, N.A. Canada Branch,
Merrill Lynch Capital Canada Inc. and Canadian Western Bank were Accepting
Lenders and Laurentian Bank of Canada was a Declining Lender. Accordingly, the
maturity date of the Credits shall be extended to 19 July 2006 subject to the
Borrower complying with Section 2.4.4 of the Existing Credit Agreement.

3.       AMENDMENTS TO SECTION 3.2 OF EXISTING CREDIT AGREEMENT

(a)      The first sentence of the third paragraph of Section 3.2.1 of the
         Existing Credit Agreement is deleted and replaced by the following:

                  "As between the Lenders, all Obligations shall rank equally
                  and ratably with each other notwithstanding that different
                  Obligations may be designated as having been incurred with
                  reference to different provisions of the 1999 Indenture, the
                  2001 Indenture or

<Page>

                                      -6-

                  any Similar Indenture which might otherwise imply that
                  different Obligations have different rankings."

(b)      The first sentence of the final paragraph of Section 3.2.2 of the
         Existing Credit Agreement is deleted and replaced by the following:

                  "If any Advance is within the Threshold Amount at the time it
                  is made and thereby entitled to be secured in priority to the
                  1999 Notes, the 2001 Notes and any Similar Notes, it shall
                  remain entitled to that priority notwithstanding any
                  subsequent diminution of the Threshold Amount."

4.       AMENDMENT TO SECTION 6.1 OF EXISTING CREDIT AGREEMENT

         Section 6.1.4(d) of the Existing Credit Agreement is deleted and
replaced by the following:

                  "The Credits constitute "New Credit Facilities" under the
                  terms of the 1999 Notes, the 2001 Notes and any Similar Notes.
                  As of 30 June 2002, the Threshold Amount was not less than
                  $600,000,000."

5.       AMENDMENT TO SECTION 7.3 OF EXISTING CREDIT AGREEMENT

         Section 7.3.2(f) of the Existing Credit Agreement is deleted and
replaced by the following:

                  "NSCL shall promptly notify the Agent if (i) it is within
                  $10,000,000 of any of the thresholds that would require it to
                  take action specified in Section 7.7, or (ii) the "Aggregate
                  Special Derivative Exposure" is within $10,000,000 of the
                  "Permitted Special Derivative Exposure," as those terms are
                  defined in the Repricing Agreement, and promptly provide such
                  further reports as the Agent may require while any of those
                  circumstances continues."

6.       AMENDMENTS TO SECTION 7.5 OF EXISTING CREDIT AGREEMENT

(a)      Section 7.5.1(d) of the Existing Credit Agreement is amended by adding
         the following immediately after item (vi) thereof:

                  "(vii)   the repurchase of 1999 Notes, 2001 Notes, Permitted
                           Senior Secured Indebtedness, Permitted Subordinated
                           Secured Indebtedness or Permitted Unsecured
                           Indebtedness under an exchange offer made by NSCL
                           pursuant to a registration statement filed with the
                           Securities and Exchange Commission of the United
                           States, provided that the sole consideration for the
                           repurchase is (in the case of Permitted Senior
                           Secured Indebtedness and Permitted Subordinated
                           Secured Indebtedness) notes of NSCL that

<Page>

                                      -7-

                           constitute Permitted Senior Secured Indebtedness and
                           Permitted Subordinated Secured Indebtedness,
                           respectively, or (in the case of the 1999 Notes, 2001
                           Notes or Permitted Unsecured Indebtedness) Permitted
                           Unsecured Indebtedness, in all cases in an aggregate
                           amount that does not increase the obligations of
                           NSCL, taking into account any difference in interest
                           rates

                  (viii)   the conversion of any Permitted Unsecured
                           Indebtedness to Capital Stock of NSCL"

(b) Section 7.5.1(e) of the Existing Credit Agreement is amended by adding the
following immediately after item (vii) thereof:

                  "(viii)  guarantees, indemnities or other financial assistance
                           of any kind in favour of the purchasers in
                           Monetization Transactions, in respect of payment of
                           the accounts receivable sold"

(c) Item (B) in Section 7.5.1(f) of the Existing Credit Agreement is deleted and
replaced by the following:

                  "in the case of interest rate Derivatives, the aggregate
                  notional amount swapped by all Restricted Parties at any time
                  (net of offsetting transactions) exceeds the outstanding
                  amount of the Credits, the 1999 Notes, the 2001 Notes and any
                  Similar Notes at that time"

(d) Section 7.5.2(c) of the Existing Credit Agreement is deleted and replaced by
the following:

                  "permit any sale, lease, sale and lease-back or other
                  disposition of any part of its Property (including Capital
                  Stock it holds) except for (i) sales of inventory and obsolete
                  or redundant equipment in the ordinary course of business,
                  (ii) dispositions to another Restricted Party, provided that
                  Property owned by a Restricted Party incorporated in Canada is
                  not transferred to a Restricted Party not incorporated in
                  Canada and Property located in Canada is not transferred
                  outside Canada, (iii) dispositions in connection with
                  transactions permitted by Section 7.5.3(a), (iv) sales
                  constituting Monetization Transactions, and (v) other
                  dispositions of Property (including Capital Stock of any other
                  person) having a fair market value for all Restricted Parties
                  up to an aggregate for all Restricted Parties during any
                  period of 36 consecutive months of 12.5% (20% if no Permitted
                  Senior Secured Indebtedness is outstanding at the time of the
                  disposition) of the Consolidated Net Tangible Assets valued
                  immediately before any disposition;"

(e) Section 7.5.3(h) of the Existing Credit Agreement is deleted.

<Page>

                                      -8-

(f) Section 7.5.3(i) of the Existing Credit Agreement is deleted and replaced by
the following:

                  "(A) be a party to any amendment or waiver to the terms of the
                  1999 Notes, 2001 Notes, Permitted Senior Secured Indebtedness,
                  Permitted Subordinated Secured Indebtedness or Permitted
                  Unsecured Indebtedness or any documents relating to them
                  unless expressly permitted by any applicable Intercreditor
                  Agreement, or (B) if there is no applicable Intercreditor
                  Agreement, be a party to any such amendment or waiver if the
                  amendment or waiver would adversely affect the rights of any
                  Lender or make the terms thereof more onerous to any
                  Restricted Party (including but not limited to any amendment
                  that would shorten the maturity, require any prepayment not
                  required in the 1999 Indenture, 2001 Indenture or other
                  applicable document, increase the interest rate or other
                  compensation payable to holders thereof, impose additional
                  requirements for securing the holders or further limit the
                  rights of the Restricted Parties to incur Debt or grant
                  Encumbrances), except that it may pay a consent solicitation
                  fee to holders in connection with the solicitation of consents
                  to an amendment or waiver that is otherwise permitted under
                  this item (i) provided that such fee does not exceed customary
                  amounts in the circumstances, or (C) be a party to any
                  amendment or waiver permitted by (A) or (B) without
                  immediately providing the Agent with copies of all documents
                  and other information relating to the amendment or waiver."

7.       AMENDMENTS TO SECTION 7.7 OF EXISTING CREDIT AGREEMENT

(a)      Section 7.7.2(c) of the Existing Credit Agreement is deleted.

(b)      Section 7.7.2(d) of the Existing Credit Agreement is deleted and
         replaced by the following:

                  "the amount of the limit on liability established by
                  sections 5(d) and 5(e) of the Repricing Agreement"

(c)      Section 7.7.2(e) of the Existing Credit Agreement is deleted and
         replaced by the following:

                  "the amount, as determined under the 1999 Indenture, the 2001
                  Indenture or any Similar Indenture, of any other obligations
                  that have been classified as being incurred under clauses (i)
                  or (ix) of the definitions referred to in that sentence"

8.       ADDITION OF SECTION 7.8 TO EXISTING CREDIT AGREEMENT

         The following is added after Section 7.7 of the Existing Credit
Agreement:

<Page>

                                      -9-

                  "7.8     REPRICING AGREEMENT

                  Any Lender or affiliate of a Lender that holds Other Secured
                  Obligations of the type described in Sections 1.1.79(c), (d)
                  and (e) must be aparty to the Repricing Agreement. Any Lender
                  or affiliate of a Lender that holds only other types of Other
                  Secured Obligations may, but need not, be a party to the
                  Repricing Agreement. However, any such non-party:

                  (a)      shall provide trade details to the Derivative Agent
                           and notify the Derivative Agent as required by
                           section 3(c) of the Repricing Agreement, which is
                           incorporated herein by reference;

                  (b)      shall provide the Borrower with a listing of its
                           Derivatives as required by the first two lines of
                           section 3(g) of the Repricing Agreement, which are
                           incorporated herein by reference;

                  (c)      shall comply with section 6(a) of the Repricing
                           Agreement, which is incorporated herein by reference;

                  (d)      accepts the provisions of sections 11(a), (b) and (c)
                           of the Repricing Agreement, which are incorporated
                           herein by reference."

9.       AMENDMENT TO SECTION 8.1 OF EXISTING CREDIT AGREEMENT

         Section 8.1(k) of the Existing Credit Agreement is deleted and replaced
by the following:

                  "there is a breach of Section 7.7 or NSCFL does not comply
                  with the requirements of the Repricing Agreement"

10.      AMENDMENTS TO SCHEDULE C OF EXISTING CREDIT AGREEMENT

(a)      Item 2(e) in Schedule C of the Existing Credit Agreement is deleted and
         replaced by the following:

                  "its "Consolidated Fixed Charge Coverage Ratio" as defined
                  under the 1999 Indenture, the 2001 Indenture and any Similar
                  Indenture is         : 1"
                              --------

(b)      Item 5 in Schedule C of the Existing Credit Agreement is deleted and
         replaced by the following:

                  "Appendix C attached contains details of (i) all Other Secured
                  Obligations as of the end of the undersigned's most-recently
                  completed fiscal quarter, the classification under which they
                  were incurred for the purposes of section 4.06 of the each of
                  the 1999 Indenture and the 2001 Indenture and the
                  corresponding provision of any Similar Indenture and the
                  Market Value thereof, (ii) all

<Page>

                                      -10-

                  outstanding Permitted Senior Secured Indebtedness and
                  Permitted Subordinated Secured Indebtedness as of the end of
                  the undersigned's most-recently completed fiscal quarter and
                  the classification under which it was incurred for the
                  purposes of section 4.06 of the each of the 1999 Indenture and
                  the 2001 Indenture and the corresponding provision of any
                  Similar Indenture and (iii) the amount, as determined under
                  the 1999 Indenture, the 2001 Indenture and any Similar
                  Indenture, respectively, of any other obligations that have
                  been classified as being incurred under clauses (i) or (ix) of
                  the definition of "Permitted Indebtedness" in the 1999
                  Indenture, the definition of "Permitted Debt" in the 2001
                  Indenture and the corresponding provisions of any Similar
                  Indenture."

11.      AMENDMENT TO SCHEDULE L OF EXISTING CREDIT AGREEMENT

         Schedule L of the Existing Credit Agreement is deleted and replaced by
Schedule L attached to this agreement.

12.      ADDITION OF SCHEDULE TO EXISTING CREDIT AGREEMENT

         Schedule M attached to this agreement is added as Schedule M to the
Existing Credit Agreement.

13.      AMENDMENT TO OMNIBUS PLEDGE AGREEMENT

         Section 3 on page 4 of the omnibus pledge agreement dated as of 19 July
2002 (the "OMNIBUS PLEDGE") by which the Restricted Parties pledged debentures
to the Agent as contemplated in Section 3.3.1(b) of the Existing Credit
Agreement is amended and replaced by the following:

                  "Each Pledgor hereby assigns, pledges and hypothecates to the
                  Pledgee, and grants to the Pledgee for and on behalf of and
                  for the benefit of the Secured Parties a security interest in,
                  its Debentures designated as Series A No. 4 as general and
                  continuing collateral security for the payment and performance
                  by such Pledgor of all "Other Secured Obligations" of the
                  Pledgor as defined in the Syndicated Credit Agreement that are
                  classified by Norske Skog Canada Limited as being incurred
                  under clauses (v) and (vi) of the definition of "Permitted
                  Indebtedness" in the 1999 Indenture (as defined in the
                  Syndicated Credit Agreement), the definition of "Permitted
                  Debt" in the 2001 Indenture (as defined in the Syndicated
                  Credit Agreement) and the corresponding definition in any
                  Similar Indenture (as defined in the Syndicated Credit
                  Agreement). For greater certainty, the pledge of each Series A
                  No. 4 Debenture shall continue to secure the Other Secured
                  Obligations described above notwithstanding the termination of
                  the Syndicated Credit Agreement for any reason."

<Page>

                                      -11-

14.      CONDITIONS PRECEDENT

         The obligations of the Lenders under this agreement are subject to the
Agent receiving opinions of counsel to the Restricted Parties concerning the
authorization, execution and enforceability of this agreement and concerning
relevant matters relating to the 1999 Indenture and the 2001 Indenture, all in
form and substance satisfactory to the Agent.

15.      REPRESENTATIONS OF RESTRICTED PARTIES

         The Restricted Parties acknowledge that this agreement is a Credit
Document and that all of their representations and warranties concerning Credit
Documents that are contained in the Existing Credit Agreement apply to this
agreement and are deemed to be repeated on their execution of this agreement as
if set out in full in this agreement. The Restricted Parties also represent that
there are no consents or other agreements required from third parties to avoid
this agreement causing a breach or default under any other agreement to which
any Restricted Party is a party.

16.      RATIFICATION AND CONFIRMATION

         The Existing Credit Agreement and the Omnibus Pledge, as amended by
this agreement, remain in full force and effect and are hereby ratified and
confirmed. Without in any way limiting the terms of the Existing Credit
Agreement or the other Credit Documents, the Restricted Parties confirm that the
Security shall continue to secure the Obligations and the Other Secured
Obligations, including but not limited to any arising as a result of this
agreement.

17.      COUNTERPARTS AND FACSIMILE

         This agreement may be executed in any number of counterparts, each of
which when executed and delivered shall be deemed to be an original, and such
counterparts together shall constitute one and the same agreement. The delivery
of a facsimile copy of an executed counterpart of this agreement shall be deemed
to be valid execution and delivery of this agreement, but the party delivering a
facsimile copy shall deliver an original copy of this agreement as soon as
possible after delivering the facsimile copy.

                            [SIGNATURE PAGES FOLLOW]

<Page>

                                      -12-

         IN WITNESS OF WHICH, the parties have executed this agreement.

                                  NORSKE SKOG CANADA LIMITED
                                  By:  /s/ Peter Staiger
                                       ---------------------------------------
                                       Peter Staiger
                                       Treasurer

                                  By:  /s/ Ralph Leverton
                                       ---------------------------------------
                                       Ralph Leverton
                                       Vice President Finance and Chief
                                       Financial Officer

                                  NORSKE SKOG CANADA FINANCE LIMITED

                                  By:  /s/ Peter Staiger
                                       ---------------------------------------
                                       Peter Staiger
                                       Treasurer

                                  ELK FALLS PULP AND PAPER LIMITED

                                  By:  /s/ Peter Staiger
                                       ---------------------------------------
                                       Peter Staiger
                                       President

[SIGNATURE PAGE FOR FIRST AMENDING AGREEMENT DATED AS OF 8 MAY 2003 RELATING TO
NORSKE SKOG CANADA LIMITED ET AL]

<Page>

                                      -13-

                                   NORSKE SKOG CANADA LIMITED
                                   AS MANAGING PARTNER FOR
                                   AND ON BEHALF OF NORSKECANADA

                                   By:  /s/ Peter Staiger
                                        ---------------------------------------
                                        Peter Staiger
                                        Treasurer

                                   By:  /s/ Ralph Leverton
                                        ---------------------------------------
                                        Ralph Leverton
                                        Vice President Finance and
                                        Chief Financial Officer

                                   NORSKE SKOG CANADA PULP OPERATIONS LIMITED

                                   By:  /s/ Peter Staiger
                                        ----------------------------------------
                                        Peter Staiger
                                        Treasurer

                                   NORSKE SKOG CANADA SALES INC.

                                   By:  /s/ Peter Staiger
                                        ----------------------------------------
                                        Peter Staiger
                                        Treasurer

                                   NSCL HOLDINGS INC.

                                   By:  /s/ Peter Staiger
                                        ----------------------------------------
                                        Peter Staiger
                                        Treasurer

                                   NORSKE SKOG CANADA (USA) INC.

                                   By:  /s/ Peter Staiger
                                        ----------------------------------------
                                        Peter Staiger
                                        Treasurer

[SIGNATURE PAGE FOR FIRST AMENDING AGREEMENT DATED AS OF 8 MAY 2003 RELATING TO
NORSKE SKOG CANADA LIMITED ET AL]

<Page>

                                      -14-

                                NORSKE SKOG CANADA (JAPAN) LTD.

                                By:  /s/ James E. Armitage
                                      ----------------------------------------
                                      James E. Armitage
                                      Director

                                NORSKE SKOG CANADA PULP SALES INC.

                                 By:  /s/ Peter Staiger
                                      ----------------------------------------
                                      Peter Staiger
                                      Treasurer

                                PACIFICA PAPERS SALES LTD.

                                 By:  /s/ Peter Staiger
                                      ----------------------------------------
                                      Peter Staiger
                                      President

                                 PACIFICA PAPERS SALES INC.

                                 By:  /s/ Peter Staiger
                                      ----------------------------------------
                                      Peter Staiger
                                      Treasurer

                                PACIFICA POPLARS LTD.

                                 By:  /s/ Peter Staiger
                                      ----------------------------------------
                                      Peter Staiger
                                      President

                                 PACIFICA POPLARS INC.

                                 By:  /s/ Peter Staiger
                                      ----------------------------------------
                                      Peter Staiger
                                      Treasurer

                                 PACIFICA PAPERS US INC.

                                 By:  /s/ Peter Staiger
                                      ----------------------------------------
                                      Peter Staiger
                                      Treasurer

[SIGNATURE PAGE FOR FIRST AMENDING AGREEMENT DATED AS OF 8 MAY 2003 RELATING TO
NORSKE SKOG CANADA LIMITED ET AL]

<Page>

                                      THE TORONTO-DOMINION BANK, as Agent

                                      By:      /s/ authorized signatory
                                               ---------------------------------
                                               Name:
                                               Title:

 [SIGNATURE PAGE FOR FIRST AMENDING AGREEMENT DATED AS OF 8 MAY 2003 RELATING TO
NORSKE SKOG CANADA LIMITED ET AL]

<Page>

                                   SCHEDULE L

                           FORM OF REPRICING AGREEMENT

                              [NOTE: SEE ATTACHED]

<Page>

                                   SCHEDULE M

                      ALTERNATE BORROWING BASE CERTIFICATE

                        [SEE REFERENCE IN SECTION 1.1.18]

TO:           THE LENDERS (as defined in the Credit Agreement referred to below)

AND TO:       THE TORONTO-DOMINION BANK, as Agent
--------------------------------------------------------------------------------

         We refer to Section 7.3.1(a) of the credit agreement dated as of 19
July 2002 between Norske Skog Canada Limited and others as Restricted Parties,
The Toronto-Dominion Bank as Administration Agent and the Lenders, Arrangers and
Syndication Agents named therein, as amended, supplemented, restated or replaced
from time to time (the "Credit Agreement"). All capitalized terms used in this
certificate and defined in the Credit Agreement have the meanings defined in the
Credit Agreement.

         We hereby certify that the following is a true and correct calculation
of our Borrowing Base as of [DATE] and that the attached documents accurately
set out the details from which the Borrowing Base is calculated. The amounts of
accounts receivable and inventory referred to below are based on the Adjusted
Balance Sheet.

                                    ($'000S)

    A     ACCOUNTS RECEIVABLE

             (a)      100% of accounts receivable, each of which is fully
                      backed by a standby letter of credit, a letter of
                      guarantee or a commercial letter of credit, other
                      than an L/C, issued by a financial institution          o
                      acceptable to the Agent (each, an "Acceptable
                      Letter"); plus

             (b)      90% of accounts receivable that are insured to the
                      extent of at least 90% by Export Development Canada
                      or other insurer acceptable to the Agent acting         o
                      reasonably (each, an "Insured Account"); plus

             (c)      80% of non-Insured Account, non-Acceptable Letter
                      backed accounts receivable from Pan Asia Paper Co.
                      Pte Ltd. (as long as it is at least 40% owned by        o
                      Norske Skogindustriere ASA), Norske Skogindustriere
                      ASA or its Subsidiaries and Powell River Energy
                      Inc.; plus

             (d)      80% of non-Insured Account, non-Acceptable Letter
                      backed accounts receivable, including fibre
                      receivables, owing by a debtor located in Canada, the
                      United States of America, Australia or the United       o
                      Kingdom that NSCL reasonably considers to be good

<Page>

                                      -2-

                      and collectable in the normal course; plus

             (e)      70% of non-Insured Account, non-Acceptable Letter
                      backed accounts receivable owing by a debtor located    o
                      in a country other than Canada, the United States of
                      America, Australia or the United Kingdom; plus

             (f)      100% of amounts owing by the Government of Canada in
                      respect of goods and services tax payable pursuant to   o
                      the EXCISE TAX ACT (Canada); plus

             (g)      70% of other accounts receivable including accrued
                      interest receivables, freight/traffic claims and
                      other sundry receivables but excluding accounts
                      receivable owing by employees of a Restricted Party;   (o)

             less:

             (h)      all amounts included in items (c) through (e) and (g)
                      above which relate to accounts receivable that are 60
                      days past due

                NET TOTAL                                                    o

    B     INVENTORY

          Finished Goods
                Paper                                                        o
                Pulp                                                         o
                Sub total                                                    o

          WIP                                                                o

          Raw Materials
                Chips                                                        o
                Logs                                                         o
                Sawdust                                                      o
                DIP/Other purchased pulp                                     o
                Other                                                        o
                Sub total                                                    o

          Supplies
                Crofton                                                      o
                Elk Falls                                                    o
                Powell River                                                 o
                Port Alberni                                                 o

<Page>

                                      -3-

                Other                                                        o
                Sub total                                                    o

          Consolidated Inventory per FS                                      o

          Less: WIP                                                          (o)
          Less: Inventory of Unrestricted Parties                            (o)

          Adjusted Inventory                                                 o

          50% OF ADJUSTED INVENTORY                                          O

BORROWING BASE
(A + the lesser of A and B)

DATED _____________

                                      NORSKE SKOG CANADA LIMITED

                                      By:
                                           -------------------------------------
                                           Name:
                                           Title:

                                      By:
                                           -------------------------------------
                                           Name:
                                           Title:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00052-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00052-of-00352.parquet"}]]