Common use of Limitations on Indebtedness Clause in Contracts

Limitations on Indebtedness. The Borrower shall not, and shall not permit any of its Subsidiaries to create, incur, assume or permit to exist any Indebtedness except: (a) Indebtedness existing hereunder; (b) Indebtedness of the Borrower or any of its Subsidiaries which is expressly subordinated to the Obligations pursuant to terms and conditions reasonably satisfactory to the Agent and the Required Lenders (the “Subordinated Debt”); (c) Purchase money financing not to exceed in the aggregate outstanding at any time 3.5% of the Borrower’s consolidated Net Worth; (d) Indebtedness that constitutes a renewal, refinancing or extension of any Indebtedness referred to in this Section 10.3; provided, that (i) no Lien existing at the time of such renewal reflecting an extension shall be extended to cover any property not already subject to such Lien and (ii) the principal amount of any Indebtedness renewed, refinanced or extended shall not exceed the amount of such Indebtedness outstanding immediately prior to such renewal, refinancing or extension; (e) Capital Lease Obligations not to exceed $500,000 in the aggregate outstanding at any time; (f) Indebtedness owing by H. ▇. ▇▇▇▇▇▇▇ Canada, Ltd. not to exceed one million Dollars (US $1,000,000) in the aggregate outstanding at any time; and (g) Indebtedness incurred by Borrower under a Hedge Agreement. (h) Indebtedness with respect to letters of credit (not subject to the terms and conditions of this Agreement), issued by a Bank, such letters of credit not to exceed $20,000,000 in amounts available to be drawn thereunder at any time.

Limitations on Indebtedness. The Borrower shall not, and shall not permit any of its Subsidiaries to createCreate, incur, assume or permit suffer to exist any Indebtedness except: (a) Indebtedness existing hereunder(i) the Obligations (excluding Hedging Obligations permitted pursuant to Section 10.1(c)) and (ii) the Guaranty Obligations in favor of the Administrative Agent for the benefit of the Secured Parties; (b) (i) the U.S. Obligations (excluding any U.S. Obligations pursuant to Hedging Agreements permitted pursuant to Section 10.1(c)) and (ii) the Guaranty Obligations in respect of the U.S. Obligations in favor of the U.S. Administrative Agent for the benefit of the U.S. Secured Parties; (c) Indebtedness incurred in connection with a Hedging Agreement (i) which is entered into for interest rate, foreign currency or other business purposes and not for speculative purposes and (ii) with a counterparty reasonably satisfactory to the Administrative Agent and the U.S. Administrative Agent; provided that any counterparty that is a Lender, a U.S. Lender or any Affiliate thereof shall be deemed satisfactory to the Administrative Agent and the U.S. Administrative Agent; (d) Indebtedness existing on the Closing Date and not otherwise permitted under this Section and, to the extent that the outstanding principal amount of such Indebtedness is in excess of $25,000,000, listed on Schedule 10.1 (including any Indebtedness (including, without limitation, any Guaranty Obligation of Indebtedness of another Person) issued to refinance or to refund such Indebtedness or any Indebtedness which constitutes a renewal or extension of such Indebtedness); provided that (i) the principal amount of such Indebtedness may not be increased at the time of such refinancing, refunding, renewal or extension except (A) by an amount equal to a reasonable premium or other reasonable amount paid, and fees and expenses reasonably incurred, in connection with such refinancing, refunding, renewal or extension and by an amount equal to any existing commitments unutilized thereunder and (B) by additional amounts, to the extent that the Consolidated Total Leverage Ratio, on a pro forma basis after giving effect to such increase, would be no greater than 5.50 to 1.00, (ii) no Default or Event of Default exists and is continuing or would be caused by the refinancing, refunding, renewal or extension thereof, (iii) the Administrative Agent and the U.S. Administrative Agent shall have received satisfactory written evidence that the U.S. Borrower and its Subsidiaries would be in compliance with all covenants in this Agreement and the U.S. Credit Agreement on a pro forma basis after giving effect to the refinancing, refunding, renewal or extension thereof, (iv) the weighted average life of such Indebtedness shall not be shorter than the weighted average life of the Indebtedness being refinanced, refunded, renewed or extended, (v) any terms of subordination set forth in the Indebtedness being refinanced, refunded, renewed or extended are not adversely affected in any material respect and (vi) none of the Existing Notes nor any Indebtedness incurred in accordance with this paragraph to refinance, refund, renew or extend the Existing Notes shall be guaranteed by the U.S. Borrower or any of its Subsidiaries (other than (A) those Existing Notes which is expressly are guaranteed by the U.S. Borrower as of the Closing Date and identified on Schedule 10.1 as being so guaranteed and (B) any Indebtedness issued to refinance any Existing Notes which, as of the Closing Date, (1) have an outstanding principal balance in excess of $50,000,000 and (2) mature or are subject to mandatory redemption prior to the U.S. Maturity Date); (e) Indebtedness incurred in connection with Capital Leases, including those Capital Leases existing on the Closing Date, and purchase money Indebtedness, including all purchase money Indebtedness existing on the Closing Date, in an aggregate amount not to exceed $50,000,000 on any date of determination; (f) Guaranty Obligations with respect to Indebtedness permitted pursuant to subsections (c), (e), (h), (l), (m) and (n) of this Section (provided that (i) any Guaranty Obligations of Indebtedness incurred pursuant to subsection (h) or, to the extent applicable, subsection (n) of this Section shall be subordinated to the Obligations and the U.S. Obligations to the same extent as the Indebtedness that is being guaranteed and (ii) with respect to any Guaranty Obligations guaranteeing Indebtedness incurred pursuant to subsection (m) of this Section, the U.S. Borrower and its Subsidiaries shall have complied with Section 8.12); (g) (i) (A) Indebtedness owed by any U.S. Credit Party to any other U.S. Credit Party, including, without limitation, Indebtedness evidenced by the Catawba Note (provided that, if requested by the U.S. Administrative Agent, such Indebtedness (other than the Catawba Note) shall be subordinated to the U.S. Obligations on terms and conditions reasonably satisfactory to the Agent U.S. Administrative Agent) and (B) Indebtedness owed by any Credit Party (other than the Required Lenders U.S. Borrower) to any other Credit Party (other than the “Subordinated Debt”U.S. Borrower) (provided that, if requested by the Administrative Agent, such Indebtedness shall be subordinated to the Obligations on terms and conditions reasonably satisfactory to the Administrative Agent); (c) Purchase money financing not to exceed in the aggregate outstanding at any time 3.5% of the Borrower’s consolidated Net Worth; (dA) Indebtedness owed by any Credit Party (other than the U.S. Borrower) to any U.S. Credit Party (provided that constitutes a renewal, refinancing or extension of any such Indebtedness referred to in this Section 10.3; provided, that (i) no Lien existing at the time of such renewal reflecting an extension shall be extended to cover any property not already subject to payable by such Lien Credit Party on demand by the applicable U.S. Credit Party) and (iiB) the principal amount of Indebtedness owed by any Indebtedness renewed, refinanced or extended shall not exceed the amount of U.S. Credit Party to any Credit Party (provided that such Indebtedness outstanding immediately prior to shall be payable by such renewal, refinancing or extensionU.S. Credit Party (other than the U.S. Borrower) on demand by the applicable Credit Party); (e) Capital Lease Obligations not to exceed $500,000 in the aggregate outstanding at any time; (f) Indebtedness owing by H. ▇. ▇▇▇▇▇▇▇ Canada, Ltd. not to exceed one million Dollars (US $1,000,000) in the aggregate outstanding at any time; and (g) Indebtedness incurred by Borrower under a Hedge Agreement. (h) Indebtedness with respect to letters of credit (not subject to the terms and conditions of this Agreement), issued by a Bank, such letters of credit not to exceed $20,000,000 in amounts available to be drawn thereunder at any time.

Limitations on Indebtedness. The Borrower shall not, and shall not permit any of its Subsidiaries to createCreate, incur, assume or permit suffer to exist any Indebtedness except: (a) Indebtedness existing hereunder(i) the Obligations (excluding Hedging Obligations permitted pursuant to Section 10.1(c)) and (ii) the Guaranty Obligations in favor of the Administrative Agent for the benefit of the Secured Parties; (b) (i) the Canadian Obligations (excluding any Canadian Obligations pursuant to Hedging Agreements permitted pursuant to Section 10.1(c)) and (ii) the Guaranty Obligations in respect of the Canadian Obligations in favor of the Canadian Administrative Agent for the benefit of the Canadian Secured Parties; (c) Indebtedness incurred in connection with a Hedging Agreement (i) which is entered into for interest rate, foreign currency or other business purposes and not for speculative purposes and (ii) with a counterparty reasonably satisfactory to the Administrative Agent and the Canadian Administrative Agent; provided that any counterparty that is a Lender, a Canadian Lender or any Affiliate thereof shall be deemed satisfactory to the Administrative Agent and the Canadian Administrative Agent; (d) Indebtedness existing on the Closing Date and not otherwise permitted under this Section and, to the extent that the outstanding principal amount of such Indebtedness is in excess of $25,000,000, listed on Schedule 10.1 (including any Indebtedness (including, without limitation, any Guaranty Obligation of Indebtedness of another Person, but excluding the April 2008 Convertible Indebtedness) issued to refinance or to refund such Indebtedness or any Indebtedness which constitutes a renewal or extension of such Indebtedness); provided that (i) the principal amount of such Indebtedness may not be increased at the time of such refinancing, refunding, renewal or extension except (A) by an amount equal to a reasonable premium or other reasonable amount paid, and fees and expenses reasonably incurred, in connection with such refinancing, refunding, renewal or extension and by an amount equal to any existing commitments unutilized thereunder and (B) by additional amounts, to the extent that the Consolidated Total Leverage Ratio, on a pro forma basis after giving effect to such increase, would be no greater than 5.50 to 1.00, (ii) no Default or Event of Default exists and is continuing or would be caused by the refinancing, refunding, renewal or extension thereof, (iii) the Administrative Agent and the Canadian Administrative Agent shall have received satisfactory written evidence that the Borrower and its Subsidiaries would be in compliance with all covenants in this Agreement and the Canadian Credit Agreement on a pro forma basis after giving effect to the refinancing, refunding, renewal or extension thereof, (iv) the weighted average life of such Indebtedness shall not be shorter than the weighted average life of the Indebtedness being refinanced, refunded, renewed or extended, (v) any terms of subordination set forth in the Indebtedness being refinanced, refunded, renewed or extended are not adversely affected in any material respect and (vi) none of the Existing Notes nor any Indebtedness incurred in accordance with this paragraph to refinance, refund, renew or extend the Existing Notes shall be guaranteed by the Borrower or any of its Subsidiaries (other than (A) those Existing Notes which is expressly are guaranteed by the Borrower as of the Closing Date and identified on Schedule 10.1 as being so guaranteed and (B) any Indebtedness issued to refinance any Existing Notes which, as of the Closing Date, (1) have an outstanding principal balance in excess of $50,000,000 and (2) mature or are subject to mandatory redemption prior to the Maturity Date); (e) Indebtedness incurred in connection with Capital Leases, including those Capital Leases existing on the Closing Date, and purchase money Indebtedness, including all purchase money Indebtedness existing on the Closing Date, in an aggregate amount not to exceed $50,000,000 on any date of determination; (i) Guaranty Obligations with respect to Indebtedness permitted pursuant to subsections (c), (e), (h), (l) and (n) of this Section (provided that any Guaranty Obligations of Indebtedness incurred pursuant to subsection (h) or, to the extent applicable, subsection (n) of this Section shall be subordinated to the Obligations pursuant and the Canadian Obligations to the same extent as the Indebtedness that is being guaranteed); or (ii) Guaranty Obligations of the Original Borrower with respect to the April 2008 Convertible Indebtedness; provided that (A) the Original Borrower shall not be permitted to create, incur, assume or suffer to exist such Guaranty Obligations unless (1) it shall have delivered to the Administrative Agent evidence, in form and substance reasonably satisfactory to the Administrative Agent, that the Abitibi Entities shall have consummated (or will concurrently consummate) their previously announced financing plan which will consist of the following: (x) $250,000,000 to $325,000,000 of new senior unsecured exchange notes of Abitibi, (y) $350,000,000 to $450,000,000 of new 364-day term loans of Abitibi and (z) approximately $400,000,000 of new senior secured notes or a term loan of Abitibi not to exceed a five year term (provided that Abitibi may replace or amend the financings described in this clause (A)(1) above so long as such replacement or amendment consists of non-convertible debt financings of Abitibi that are not guaranteed by, or secured by the assets of, the Borrower or any of its Subsidiaries and would not reduce the aggregate amount of proceeds reflected above in this clause (A) in excess of $50,000,000) or (2) the proceeds of such Indebtedness are used to permanently reduce, on a pro rata basis, the Commitment under this Agreement and the “Commitment” under and as defined in the Canadian Credit Agreement and to permanently repay, on a pro rata basis, Extensions of Credit under this Agreement and Canadian Extensions of Credit under the Canadian Credit Agreement or for such other use approved in writing by the Required Lenders (it being understood that any use that involves the reduction of the commitments or repayment of the extensions of credit under this Credit Facility or the Canadian Credit Facility shall continue to be applied to this Credit Facility and the Canadian Credit Facility on a pro rata basis unless otherwise agreed to by the Required Agreement Lenders and the Canadian Required Agreement Lenders); and (B) such Guaranty Obligations shall be unsecured and shall not exceed $350,000,000 in an aggregate principal amount (plus any paid-in-kind interest thereon) on any date of determination. (g) (i) (A) Indebtedness owed by any Credit Party to any other Credit Party including, without limitation, Indebtedness evidenced by the New Borrower Notes (provided that, if requested by the Administrative Agent, such Indebtedness shall be subordinated to the Obligations on terms and conditions reasonably satisfactory to the Agent Administrative Agent) and (B) Indebtedness owed by any Canadian Credit Party (other than the Required Lenders Borrower) to any other Canadian Credit Party (other than the “Subordinated Debt”Borrower) (provided that, if requested by the Canadian Administrative Agent, such Indebtedness shall be subordinated to the Canadian Obligations on terms and conditions reasonably satisfactory to the Canadian Administrative Agent); (cA) Purchase money financing not to exceed in the aggregate outstanding at Indebtedness owed by any time 3.5% of Canadian Credit Party (other than the Borrower’s consolidated Net Worth; ) to any Credit Party (dprovided that such Indebtedness shall be payable by such Canadian Credit Party on demand by the applicable Credit Party) and (B) Indebtedness owed by any Credit Party to any Canadian Credit Party (provided that constitutes a renewal, refinancing or extension of any such Indebtedness referred to in this Section 10.3; provided, that (i) no Lien existing at the time of such renewal reflecting an extension shall be extended to cover any property not already subject to payable by such Lien and Credit Party (iiother than the Borrower) on demand by the principal amount of any Indebtedness renewed, refinanced or extended shall not exceed the amount of such Indebtedness outstanding immediately prior to such renewal, refinancing or extensionapplicable Canadian Credit Party); (e) Capital Lease Obligations not to exceed $500,000 in the aggregate outstanding at any time; (f) Indebtedness owing by H. ▇. ▇▇▇▇▇▇▇ Canada, Ltd. not to exceed one million Dollars (US $1,000,000) in the aggregate outstanding at any time; and (g) Indebtedness incurred by Borrower under a Hedge Agreement. (h) Indebtedness with respect to letters of credit (not subject to the terms and conditions of this Agreement), issued by a Bank, such letters of credit not to exceed $20,000,000 in amounts available to be drawn thereunder at any time.

Limitations on Indebtedness. The Borrower shall not, and shall not permit any of its Subsidiaries to createCreate, incur, assume or permit suffer to exist any Indebtedness except: (a) Indebtedness existing hereunder(i) the Obligations (excluding Hedging Obligations permitted pursuant to Section 10.1(c)) and (ii) the Guaranty Obligations in favor of the Administrative Agent for the benefit of the Secured Parties; (b) (i) the Canadian Obligations (excluding any Canadian Obligations pursuant to Hedging Agreements permitted pursuant to Section 10.1(c)) and (ii) the Guaranty Obligations in respect of the Canadian Obligations in favor of the Canadian Administrative Agent for the benefit of the Canadian Secured Parties; (c) Indebtedness incurred in connection with a Hedging Agreement (i) which is entered into for interest rate, foreign currency or other business purposes and not for speculative purposes and (ii) with a counterparty reasonably satisfactory to the Administrative Agent and the Canadian Administrative Agent; provided that any counterparty that is a Lender, a Canadian Lender or any Affiliate thereof shall be deemed satisfactory to the Administrative Agent and the Canadian Administrative Agent; (d) Indebtedness existing on the Closing Date and not otherwise permitted under this Section and, to the extent that the outstanding principal amount of such Indebtedness is in excess of $25,000,000, listed on Schedule 10.1 (including any Indebtedness (including, without limitation, any Guaranty Obligation of Indebtedness of another Person) issued to refinance or to refund such Indebtedness or any Indebtedness which constitutes a renewal or extension of such Indebtedness); provided that (i) the principal amount of such Indebtedness may not be increased at the time of such refinancing, refunding, renewal or extension except (A) by an amount equal to a reasonable premium or other reasonable amount paid, and fees and expenses reasonably incurred, in connection with such refinancing, refunding, renewal or extension and by an amount equal to any existing commitments unutilized thereunder and (B) by additional amounts, to the extent that the Consolidated Total Leverage Ratio, on a pro forma basis after giving effect to such increase, would be no greater than 5.50 to 1.00, (ii) no Default or Event of Default exists and is continuing or would be caused by the refinancing, refunding, renewal or extension thereof, (iii) the Administrative Agent and the Canadian Administrative Agent shall have received satisfactory written evidence that the Borrower and its Subsidiaries would be in compliance with all covenants in this Agreement and the Canadian Credit Agreement on a pro forma basis after giving effect to the refinancing, refunding, renewal or extension thereof, (iv) the weighted average life of such Indebtedness shall not be shorter than the weighted average life of the Indebtedness being refinanced, refunded, renewed or extended, (v) any terms of subordination set forth in the Indebtedness being refinanced, refunded, renewed or extended are not adversely affected in any material respect and (vi) none of the Existing Notes nor any Indebtedness incurred in accordance with this paragraph to refinance, refund, renew or extend the Existing Notes shall be guaranteed by the Borrower or any of its Subsidiaries (other than (A) those Existing Notes which is expressly are guaranteed by the Borrower as of the Closing Date and identified on Schedule 10.1 as being so guaranteed and (B) any Indebtedness issued to refinance any Existing Notes which, as of the Closing Date, (1) have an outstanding principal balance in excess of $50,000,000 and (2) mature or are subject to mandatory redemption prior to the Maturity Date); (e) Indebtedness incurred in connection with Capital Leases, including those Capital Leases existing on the Closing Date, and purchase money Indebtedness, including all purchase money Indebtedness existing on the Closing Date, in an aggregate amount not to exceed $50,000,000 on any date of determination; (f) Guaranty Obligations with respect to Indebtedness permitted pursuant to subsections (c), (e), (h), (l), (m) and (n) of this Section (provided that (i) any Guaranty Obligations of Indebtedness incurred pursuant to subsection (h) or, to the extent applicable, subsection (n) of this Section shall be subordinated to the Obligations and the Canadian Obligations to the same extent as the Indebtedness that is being guaranteed and (ii) with respect to any Guaranty Obligations guaranteeing Indebtedness incurred pursuant to subsection (m) of this Section, the Borrower and its Subsidiaries shall have complied with Section 8.12); (g) (i)(A) Indebtedness owed by any Credit Party to any other Credit Party including, without limitation, Indebtedness evidenced by the Catawba Note (provided that, if requested by the Administrative Agent, such Indebtedness (other than the Catawba Note) shall be subordinated to the Obligations on terms and conditions reasonably satisfactory to the Agent Administrative Agent) and (B) Indebtedness owed by any Canadian Credit Party (other than the Required Lenders Borrower) to any other Canadian Credit Party (other than the “Subordinated Debt”Borrower) (provided that, if requested by the Canadian Administrative Agent, such Indebtedness shall be subordinated to the Canadian Obligations on terms and conditions reasonably satisfactory to the Canadian Administrative Agent); (cA) Purchase money financing not to exceed in the aggregate outstanding at Indebtedness owed by any time 3.5% of Canadian Credit Party (other than the Borrower’s consolidated Net Worth; ) to any Credit Party (dprovided that such Indebtedness shall be payable by such Canadian Credit Party on demand by the applicable Credit Party) and (B) Indebtedness owed by any Credit Party to any Canadian Credit Party (provided that constitutes a renewal, refinancing or extension of any such Indebtedness referred to in this Section 10.3; provided, that (i) no Lien existing at the time of such renewal reflecting an extension shall be extended to cover any property not already subject to payable by such Lien and Credit Party (iiother than the Borrower) on demand by the principal amount of any Indebtedness renewed, refinanced or extended shall not exceed the amount of such Indebtedness outstanding immediately prior to such renewal, refinancing or extensionapplicable Canadian Credit Party); (e) Capital Lease Obligations not to exceed $500,000 in the aggregate outstanding at any time; (f) Indebtedness owing by H. ▇. ▇▇▇▇▇▇▇ Canada, Ltd. not to exceed one million Dollars (US $1,000,000) in the aggregate outstanding at any time; and (g) Indebtedness incurred by Borrower under a Hedge Agreement. (h) Indebtedness with respect to letters of credit (not subject to the terms and conditions of this Agreement), issued by a Bank, such letters of credit not to exceed $20,000,000 in amounts available to be drawn thereunder at any time.

Limitations on Indebtedness. The Borrower shall not, and shall not permit any of its Subsidiaries to createCreate, incur, assume or permit suffer to exist any Indebtedness except: (a) Indebtedness existing hereunder(i) the Obligations (excluding Hedging Obligations permitted pursuant to Section 10.1(c)) and (ii) the Guaranty Obligations in favor of the Administrative Agent for the benefit of the Secured Parties; (b) (i) the Canadian Obligations (excluding any Canadian Obligations pursuant to Hedging Agreements permitted pursuant to Section 10.1(c)) and (ii) the Guaranty Obligations in respect of the Canadian Obligations in favor of the Canadian Administrative Agent for the benefit of the Canadian Secured Parties; (c) Indebtedness incurred in connection with a Hedging Agreement (i) which is entered into for interest rate, foreign currency or other business purposes and not for speculative purposes and (ii) with a counterparty reasonably satisfactory to the Administrative Agent and the Canadian Administrative Agent; provided that any counterparty that is a Lender, a Canadian Lender or any Affiliate thereof shall be deemed satisfactory to the Administrative Agent and the Canadian Administrative Agent; (d) Indebtedness existing on the Closing Date and not otherwise permitted under this Section and, to the extent that the outstanding principal amount of such Indebtedness is in excess of $25,000,000, listed on Schedule 10.1 (including any Indebtedness (including, without limitation, any Guaranty Obligation of Indebtedness of another Person, but excluding the April 2008 Convertible Indebtedness) issued to refinance or to refund such Indebtedness or any Indebtedness which constitutes a renewal or extension of such Indebtedness); provided that (i) the principal amount of such Indebtedness may not be increased at the time of such refinancing, refunding, renewal or extension except (A) by an amount equal to a reasonable premium or other reasonable amount paid, and fees and expenses reasonably incurred, in connection with such refinancing, refunding, renewal or extension and by an amount equal to any existing commitments unutilized thereunder and (B) by additional amounts, to the extent that the Consolidated Total Leverage Ratio, on a pro forma basis after giving effect to such increase, would be no greater than 5.50 to 1.00, (ii) no Default or Event of Default exists and is continuing or would be caused by the refinancing, refunding, renewal or extension thereof, (iii) the Administrative Agent and the Canadian Administrative Agent shall have received satisfactory written evidence that the Borrower and its Subsidiaries would be in compliance with all covenants in this Agreement and the Canadian Credit Agreement on a pro forma basis after giving effect to the refinancing, refunding, renewal or extension thereof, (iv) the weighted average life of such Indebtedness shall not be shorter than the weighted average life of the Indebtedness being refinanced, refunded, renewed or extended, (v) any terms of subordination set forth in the Indebtedness being refinanced, refunded, renewed or extended are not adversely affected in any material respect, (vi) if the Indebtedness being refinanced is not secured by the assets of any Credit Party or any of its Subsidiaries, such refinancing Indebtedness shall also not be secured by the assets of any Credit Party or any of its Subsidiaries and (vii) none of the Existing Notes nor any Indebtedness incurred in accordance with this paragraph to refinance, refund, renew or extend the Existing Notes shall be guaranteed by the Borrower or any of its Subsidiaries (other than (A) those Existing Notes which is expressly are guaranteed by the Borrower as of the Closing Date and identified on Schedule 10.1 as being so guaranteed and (B) any Indebtedness issued to refinance any Existing Notes which, as of the Closing Date, (1) have an outstanding principal balance in excess of $50,000,000 and (2) mature or are subject to mandatory redemption prior to the Maturity Date); (e) Indebtedness incurred in connection with Capital Leases, including those Capital Leases existing on the Closing Date, and purchase money Indebtedness, including all purchase money Indebtedness existing on the Closing Date, in an aggregate amount not to exceed $50,000,000 on any date of determination; (i) Guaranty Obligations with respect to Indebtedness permitted pursuant to subsections (c), (e), (h), (l), (m) and (n) of this Section (provided that any Guaranty Obligations of Indebtedness incurred pursuant to subsection (h) or, to the extent applicable, subsection (n) of this Section shall be subordinated to the Obligations pursuant and the Canadian Obligations to the same extent as the Indebtedness that is being guaranteed); or (ii) Guaranty Obligations of the Original Borrower with respect to the April 2008 Convertible Indebtedness; provided that (A) the Original Borrower shall not be permitted to create, incur, assume or suffer to exist such Guaranty Obligations unless (1) it shall have delivered to the Administrative Agent evidence, in form and substance reasonably satisfactory to the Administrative Agent, that the Abitibi Entities shall have consummated (or will concurrently consummate) their previously announced financing plan which will consist of the following: (x) $250,000,000 to $325,000,000 of new senior unsecured exchange notes of Abitibi, (y) $350,000,000 to $450,000,000 of new 364-day term loans of Abitibi and (z) approximately $400,000,000 of new senior secured notes or a term loan of Abitibi not to exceed a five year term (provided that Abitibi may replace or amend the financings described in this clause (A)(1) above so long as such replacement or amendment consists of non-convertible debt financings of Abitibi that are not guaranteed by, or secured by the assets of, the Borrower or any of its Subsidiaries and would not reduce the aggregate amount of proceeds reflected above in this clause (A) in excess of $50,000,000) or (2) the proceeds of such Indebtedness are used to permanently reduce, on a pro rata basis, the Commitment under this Agreement and the Canadian Credit Agreement Commitment and to permanently repay, on a pro rata basis, Extensions of Credit under this Agreement and Canadian Extensions of Credit under the Canadian Credit Agreement or for such other use approved in writing by the Required Lenders (it being understood that any use that involves the reduction of the commitments or repayment of the extensions of credit under this Credit Facility or the Canadian Credit Facility shall continue to be applied to this Credit Facility and the Canadian Credit Facility on a pro rata basis unless otherwise agreed to by the Required Agreement Lenders and the Canadian Required Agreement Lenders); and (B) such Guaranty Obligations shall be unsecured and shall not exceed $350,000,000 in an aggregate principal amount (plus any paid-in-kind interest thereon) on any date of determination. (g) (i) (A) Indebtedness owed by any Credit Party to any other Credit Party including, without limitation, Indebtedness evidenced by the New Borrower Notes (provided that, if requested by the Administrative Agent, such Indebtedness shall be subordinated to the Obligations on terms and conditions reasonably satisfactory to the Agent Administrative Agent) and (B) Indebtedness owed by any Canadian Credit Party (other than the Required Lenders Borrower) to any other Canadian Credit Party (other than the “Subordinated Debt”Borrower) (provided that, if requested by the Canadian Administrative Agent, such Indebtedness shall be subordinated to the Canadian Obligations on terms and conditions reasonably satisfactory to the Canadian Administrative Agent); (cA) Purchase money financing not to exceed in the aggregate outstanding at Indebtedness owed by any time 3.5% of Canadian Credit Party (other than the Borrower’s consolidated Net Worth; ) to any Credit Party (dprovided that such Indebtedness shall be payable by such Canadian Credit Party on demand by the applicable Credit Party) and (B) Indebtedness owed by any Credit Party to any Canadian Credit Party (provided that constitutes a renewal, refinancing or extension of any such Indebtedness referred to in this Section 10.3; provided, that (i) no Lien existing at the time of such renewal reflecting an extension shall be extended to cover any property not already subject to payable by such Lien and Credit Party (iiother than the Borrower) on demand by the principal amount of any Indebtedness renewed, refinanced or extended shall not exceed the amount of such Indebtedness outstanding immediately prior to such renewal, refinancing or extensionapplicable Canadian Credit Party); (e) Capital Lease Obligations not to exceed $500,000 in the aggregate outstanding at any time; (f) Indebtedness owing by H. ▇. ▇▇▇▇▇▇▇ Canada, Ltd. not to exceed one million Dollars (US $1,000,000) in the aggregate outstanding at any time; and (g) Indebtedness incurred by Borrower under a Hedge Agreement. (h) Indebtedness with respect to letters of credit (not subject to the terms and conditions of this Agreement), issued by a Bank, such letters of credit not to exceed $20,000,000 in amounts available to be drawn thereunder at any time.

Limitations on Indebtedness. The Borrower shall not, and shall not permit any of its Subsidiaries to createCreate, incur, assume or permit suffer to exist any Indebtedness except: (a) Indebtedness existing hereunder(i) the Obligations (excluding Hedging Obligations permitted pursuant to Section 10.1(c)) and (ii) the Guaranty Obligations in favor of the Administrative Agent for the benefit of the Secured Parties; (b) (i) the Canadian Obligations (excluding Hedging Obligations permitted pursuant to Section 10.1(c)) and (ii) the Guaranty Obligations in favor of the Canadian Administrative Agent for the benefit of the Canadian Secured Parties; (c) Indebtedness incurred in connection with a Hedging Agreement (i) which is entered into for interest rate, foreign currency or other business purposes and not for speculative purposes and (ii) with a counterparty reasonably satisfactory to the Administrative Agent and the Canadian Administrative Agent; provided that any counterparty that is a Lender, a Canadian Lender or any Affiliate thereof shall be deemed satisfactory to the Administrative Agent and the Canadian Administrative Agent; (d) Indebtedness existing on the Closing Date and not otherwise permitted under this Section and, to the extent that the outstanding principal amount of such Indebtedness is in excess of $25,000,000, listed on Schedule 10.1 (including any Indebtedness issued to refinance or to refund such Indebtedness or any Indebtedness which constitutes a renewal or extension of such Indebtedness); provided that (i) the principal amount of such Indebtedness may not be increased at the time of such refinancing, refunding, renewal or extension except (A) by an amount equal to a reasonable premium or other reasonable amount paid, and fees and expenses reasonably incurred, in connection with such refinancing, refunding, renewal or extension and by an amount equal to any existing commitments unutilized thereunder and (B) by additional amounts, to the extent that the Consolidated Total Leverage Ratio, on a pro forma basis after giving effect to such increase, would be no greater than 5.50 to 1.00, (ii) no Default or Event of Default exists and is continuing or would be caused by the refinancing, refunding, renewal or extension thereof, (iii) the Administrative Agent and the Canadian Administrative Agent shall have received satisfactory written evidence that the Borrower and its Subsidiaries would be in compliance with all covenants in this Agreement and the Canadian Credit Agreement on a pro forma basis after giving effect to the refinancing, refunding, renewal or extension thereof, (iv) the weighted average life of such Indebtedness shall not be shorter than the weighted average life of the Indebtedness being refinanced, refunded, renewed or extended, (v) any terms of subordination set forth in the Indebtedness being refinanced, refunded, renewed or extended are not adversely affected in any material respect and (vi) none of the Existing Notes nor any Indebtedness incurred in accordance with this paragraph to refinance, refund, renew or extend the Existing Notes shall be guaranteed by the Borrower or any of its Subsidiaries (other than (A) those Existing Notes which is expressly are guaranteed by the Borrower as of the Closing Date and identified on Schedule 10.1 as being so guaranteed and (B) any Indebtedness issued to refinance any Existing Notes which, as of the Closing Date, (1) have an outstanding principal balance in excess of $50,000,000 and (2) mature or are subject to mandatory redemption prior to the Maturity Date); (e) Indebtedness incurred in connection with Capital Leases, including those Capital Leases existing on the Closing Date, and purchase money Indebtedness, including all purchase money Indebtedness existing on the Closing Date, in an aggregate amount not to exceed $50,000,000 on any date of determination; (f) Guaranty Obligations with respect to Indebtedness permitted pursuant to subsections (c), (e), (h), (l) and (m) of this Section (provided that any Guaranty Obligations of Indebtedness incurred pursuant to subsection (h) or, to the extent applicable, subsection (m) of this Section shall be subordinated to the Obligations pursuant and the Canadian Obligations to the same extent as the Indebtedness that is being guaranteed); (g) (i) (A) Indebtedness owed by any Credit Party to any other Credit Party (provided that, if requested by the Administrative Agent, such Indebtedness shall be subordinated to the Obligations on terms and conditions reasonably satisfactory to the Agent Administrative Agent) and the Required Lenders (the “Subordinated Debt”); (c) Purchase money financing not to exceed in the aggregate outstanding at any time 3.5% of the Borrower’s consolidated Net Worth; (dB) Indebtedness that constitutes a renewalowed by any Canadian Credit Party to any other Canadian Credit Party (provided that, refinancing or extension of any if requested by the Canadian Administrative Agent, such Indebtedness referred to in this Section 10.3; provided, that (i) no Lien existing at the time of such renewal reflecting an extension shall be extended to cover any property not already subject to such Lien and (ii) the principal amount of any Indebtedness renewed, refinanced or extended shall not exceed the amount of such Indebtedness outstanding immediately prior to such renewal, refinancing or extension; (e) Capital Lease Obligations not to exceed $500,000 in the aggregate outstanding at any time; (f) Indebtedness owing by H. ▇. ▇▇▇▇▇▇▇ Canada, Ltd. not to exceed one million Dollars (US $1,000,000) in the aggregate outstanding at any time; and (g) Indebtedness incurred by Borrower under a Hedge Agreement. (h) Indebtedness with respect to letters of credit (not subject subordinated to the Canadian Obligations on terms and conditions of this Agreementreasonably satisfactory to the Canadian Administrative Agent), issued by a Bank, such letters of credit not to exceed $20,000,000 in amounts available to be drawn thereunder at any time.;

Limitations on Indebtedness. The Borrower shall not, and shall not permit any of its Subsidiaries to createCreate, incur, assume or permit suffer to exist any Indebtedness except: (a) Indebtedness existing hereunder(i) the Obligations (excluding Hedging Obligations permitted pursuant to Section 10.1(c)) and (ii) the Guaranty Obligations in favor of the Administrative Agent for the benefit of the Secured Parties; (b) Indebtedness (i) the U.S. Obligations (excluding Hedging Agreements permitted pursuant to Section 10.1(c)) and (ii) the Guaranty Obligations in favor of the U.S. Administrative Agent for the benefit of the U.S. Secured Parties; (c) Indebtedness incurred in connection with a Hedging Agreement (i) which is entered into for interest rate, foreign currency or other business purposes and not for speculative purposes and (ii) with a counterparty reasonably satisfactory to the Administrative Agent and the U.S. Administrative Agent; provided that any counterparty that is a Lender, a U.S. Lender or any Affiliate thereof shall be deemed satisfactory to the Administrative Agent and the U.S. Administrative Agent; (d) Indebtedness existing on the Closing Date and not otherwise permitted under this Section and, to the extent that the outstanding principal amount of such Indebtedness is in excess of $25,000,000, listed on Schedule 10.1 (including any Indebtedness issued to refinance or to refund such Indebtedness or any Indebtedness which constitutes a renewal or extension of such Indebtedness); provided that (i) the principal amount of such Indebtedness may not be increased at the time of such refinancing, refunding, renewal or extension except (A) by an amount equal to a reasonable premium or other reasonable amount paid, and fees and expenses reasonably incurred, in connection with such refinancing, refunding, renewal or extension and by an amount equal to any existing commitments unutilized thereunder and (B) by additional amounts, to the extent that the Consolidated Total Leverage Ratio, on a pro forma basis after giving effect to such increase, would be no greater than 5.50 to 1.00, (ii) no Default or Event of Default exists and is continuing or would be caused by the refinancing, refunding, renewal or extension thereof, (iii) the Administrative Agent and the U.S. Administrative Agent shall have received satisfactory written evidence that the U.S. Borrower and its Subsidiaries would be in compliance with all covenants in this Agreement and the U.S. Credit Agreement on a pro forma basis after giving effect to the refinancing, refunding, renewal or extension thereof, (iv) the weighted average life of such Indebtedness shall not be shorter than the weighted average life of the Indebtedness being refinanced, refunded, renewed or extended, (v) any terms of subordination set forth in the Indebtedness being refinanced, refunded, renewed or extended are not adversely affected in any material respect and (vi) none of the Existing Notes nor any Indebtedness incurred in accordance with this paragraph to refinance, refund, renew or extend the Existing Notes shall be guaranteed by the U.S. Borrower or any of its Subsidiaries (other than (A) those Existing Notes which is expressly are guaranteed by the U.S. Borrower as of the Closing Date and identified on Schedule 10.1 as being so guaranteed and (B) any Indebtedness issued to refinance any Existing Notes which, as of the Closing Date, (1) have an outstanding principal balance in excess of $50,000,000 and (2) mature or are subject to mandatory redemption prior to the U.S. Maturity Date); (e) Indebtedness incurred in connection with Capital Leases, including those Capital Leases existing on the Closing Date, and purchase money Indebtedness, including all purchase money Indebtedness existing on the Closing Date, in an aggregate amount not to exceed $50,000,000 on any date of determination; (f) Guaranty Obligations with respect to Indebtedness permitted pursuant to subsections (c), (e), (h), (l) and (m) of this Section (provided that any Guaranty Obligations of Indebtedness incurred pursuant to subsection (h) or, to the extent applicable, subsection (m) of this Section shall be subordinated to the Obligations pursuant and the U.S. Obligations to the same extent as the Indebtedness that is being guaranteed); (g) (i) (A) Indebtedness owed by any U.S. Credit Party to any other U.S. Credit Party (provided that, if requested by the U.S. Administrative Agent, such Indebtedness shall be subordinated to the U.S. Obligations on terms and conditions reasonably satisfactory to the Agent U.S. Administrative Agent) and the Required Lenders (the “Subordinated Debt”); (c) Purchase money financing not to exceed in the aggregate outstanding at any time 3.5% of the Borrower’s consolidated Net Worth; (dB) Indebtedness that constitutes a renewalowed by any Credit Party (other than the U.S. Borrower) to any other Credit Party (other than the U.S. Borrower) (provided that, refinancing or extension of any if requested by the Administrative Agent, such Indebtedness referred to in this Section 10.3; provided, that (i) no Lien existing at the time of such renewal reflecting an extension shall be extended to cover any property not already subject to such Lien and (ii) the principal amount of any Indebtedness renewed, refinanced or extended shall not exceed the amount of such Indebtedness outstanding immediately prior to such renewal, refinancing or extension; (e) Capital Lease Obligations not to exceed $500,000 in the aggregate outstanding at any time; (f) Indebtedness owing by H. ▇. ▇▇▇▇▇▇▇ Canada, Ltd. not to exceed one million Dollars (US $1,000,000) in the aggregate outstanding at any time; and (g) Indebtedness incurred by Borrower under a Hedge Agreement. (h) Indebtedness with respect to letters of credit (not subject subordinated to the Obligations on terms and conditions of this Agreementreasonably satisfactory to the Administrative Agent), issued by a Bank, such letters of credit not to exceed $20,000,000 in amounts available to be drawn thereunder at any time.;

Limitations on Indebtedness. The Borrower shall not, and shall not permit any of its Subsidiaries to createCreate, incur, assume or permit suffer to exist any Indebtedness except: (a) Indebtedness existing hereunder(i) the Obligations (excluding Hedging Obligations permitted pursuant to Section 10.1(c)) and (ii) the Guaranty Obligations in favor of the Administrative Agent for the benefit of the Secured Parties; (b) (i) the U.S. Obligations (excluding any U.S. Obligations pursuant to Hedging Agreements permitted pursuant to Section 10.1(c)) and (ii) the Guaranty Obligations in respect of the U.S. Obligations in favor of the U.S. Administrative Agent for the benefit of the U.S. Secured Parties; (c) Indebtedness incurred in connection with a Hedging Agreement (i) which is entered into for interest rate, foreign currency or other business purposes and not for speculative purposes and (ii) with a counterparty reasonably satisfactory to the Administrative Agent and the U.S. Administrative Agent; provided that any counterparty that is a Lender, a U.S. Lender or any Affiliate thereof shall be deemed satisfactory to the Administrative Agent and the U.S. Administrative Agent; (d) Indebtedness existing on the Closing Date and not otherwise permitted under this Section and, to the extent that the outstanding principal amount of such Indebtedness is in excess of $25,000,000, listed on Schedule 10.1 (including any Indebtedness (including, without limitation, any Guaranty Obligation of Indebtedness of another Person but excluding the April 2008 Convertible Indebtedness) issued to refinance or to refund such Indebtedness or any Indebtedness which constitutes a renewal or extension of such Indebtedness); provided that (i) the principal amount of such Indebtedness may not be increased at the time of such refinancing, refunding, renewal or extension except (A) by an amount equal to a reasonable premium or other reasonable amount paid, and fees and expenses reasonably incurred, in connection with such refinancing, refunding, renewal or extension and by an amount equal to any existing -- commitments unutilized thereunder and (B) by additional amounts, to the extent that the Consolidated Total Leverage Ratio, on a pro forma basis after giving effect to such increase, would be no greater than 5.50 to 1.00, (ii) no Default or Event of Default exists and is continuing or would be caused by the refinancing, refunding, renewal or extension thereof, (iii) the Administrative Agent and the U.S. Administrative Agent shall have received satisfactory written evidence that the U.S. Borrower and its Subsidiaries would be in compliance with all covenants in this Agreement and the U.S. Credit Agreement on a pro forma basis after giving effect to the refinancing, refunding, renewal or extension thereof, (iv) the weighted average life of such Indebtedness shall not be shorter than the weighted average life of the Indebtedness being refinanced, refunded, renewed or extended, (v) any terms of subordination set forth in the Indebtedness being refinanced, refunded, renewed or extended are not adversely affected in any material respect, (vi) if the Indebtedness being refinanced is not secured by the assets of any Credit Party or its Subsidiaries or any U.S. Credit Party or its Subsidiaries, such refinancing Indebtedness shall also not be secured by the assets of any Credit Party or its Subsidiaries or any U.S. Credit Party or its Subsidiaries and (vii) none of the Existing Notes nor any Indebtedness incurred in accordance with this paragraph to refinance, refund, renew or extend the Existing Notes shall be guaranteed by the U.S. Borrower or any of its Subsidiaries (other than (A) those Existing Notes which is expressly are guaranteed by the U.S. Borrower as of the Closing Date and identified on Schedule 10.1 as being so guaranteed and (B) any Indebtedness issued to refinance any Existing Notes which, as of the Closing Date, (1) have an outstanding principal balance in excess of $50,000,000 and (2) mature or are subject to mandatory redemption prior to the U.S. Maturity Date); (e) Indebtedness incurred in connection with Capital Leases, including those Capital Leases existing on the Closing Date, and purchase money Indebtedness, including all purchase money Indebtedness existing on the Closing Date, in an aggregate amount not to exceed $50,000,000 on any date of determination; (i) Guaranty Obligations with respect to Indebtedness permitted pursuant to subsections (c), (e), (h), (l), (m) and (n) of this Section (provided that any Guaranty Obligations of Indebtedness incurred pursuant to subsection (h) or, to the extent applicable, subsection (n)of this Section shall be subordinated to the Obligations pursuant and the U.S. Obligations to the same extent as the Indebtedness that is being guaranteed); or (ii) Guaranty Obligations of the Original U.S. Borrower with respect to the April 2008 Convertible Indebtedness; provided that (A) the Original U.S. Borrower shall not be permitted to create, incur, assume or suffer to exist such Guaranty Obligations unless (1) it shall have delivered to the U.S. Administrative Agent evidence, in form and substance reasonably satisfactory to the U.S. Administrative Agent, that the Abitibi Entities shall have consummated (or will concurrently consummate) their previously announced financing plan which will consist of the following: (x) $250,000,000 to $325,000,000 of new senior unsecured exchange notes of Abitibi, (y) $350,000,000 to $450,000,000 of new 364-day term loans of Abitibi and (z) approximately $400,000,000 of new senior secured notes or a term loan of Abitibi not to exceed a five year term (provided that Abitibi may replace or amend the financings described in this clause (A)(1) above so long as such replacement or amendment consists of non-convertible debt financings of Abitibi that are not guaranteed by, or secured by the assets of, the U.S. -- Borrower or any of its Subsidiaries and would not reduce the aggregate amount of proceeds reflected above in this clause (A) in excess of $50,000,000) or (2) the proceeds of such Indebtedness are used to permanently reduce, on a pro rata basis, the Commitment under this Agreement and the U.S. Commitment and to permanently repay, on a pro rata basis, Extensions of Credit under this Agreement and U.S. Extensions of Credit under the U.S. Credit Agreement or for such other use approved in writing by the Required Lenders (it being understood that any use that involves the reduction of the commitments or repayment of the extensions of credit under this Credit Facility or the U.S. Credit Facility shall continue to be applied to this Credit Facility and the U.S. Credit Facility on a pro rata basis unless otherwise agreed to by the Required Agreement Lenders and the U.S. Required Agreement Lenders); and (B) such Guaranty Obligations shall be unsecured and shall not exceed $350,000,000 in an aggregate principal amount (plus any paid-in-kind interest thereon) on any date of determination; (g) (i) (A) Indebtedness owed by any U.S. Credit Party to any other U.S. Credit Party, including, without limitation, Indebtedness evidenced by the New U.S. Borrower Notes (provided that, if requested by the U.S. Administrative Agent, such Indebtedness shall be subordinated to the U.S. Obligations on terms and conditions reasonably satisfactory to the Agent U.S. Administrative Agent) and (B) Indebtedness owed by any Credit Party (other than the Required Lenders U.S. Borrower) to any other Credit Party (other than the “Subordinated Debt”U.S. Borrower) (provided that, if requested by the Administrative Agent, such Indebtedness shall be subordinated to the Obligations on terms and conditions reasonably satisfactory to the Administrative Agent); (ci) Purchase money financing not (A) Indebtedness owed by any Credit Party (other than the U.S. Borrower) to exceed in any U.S. Credit Party ( provided that such Indebtedness shall be payable by such Credit Party on demand by the aggregate outstanding at applicable U.S. Credit Party) and (B) Indebtedness owed by any time 3.5% of U.S. Credit Party to any Credit Party (provided that such Indebtedness shall be payable by such U.S. Credit Party (other than the U.S. Borrower’s consolidated Net Worth) on demand by the applicable Credit Party); (dii) Indebtedness that constitutes owed by any Subsidiary which is not a renewal, refinancing U.S. Credit Party or extension of a Credit Party to any Indebtedness referred to in this Section 10.3; provided, that (i) no Lien existing at the time of such renewal reflecting an extension shall be extended to cover any property other Subsidiary which is not already subject to such Lien and (ii) the principal amount of any Indebtedness renewed, refinanced a U.S. Credit Party or extended shall not exceed the amount of such Indebtedness outstanding immediately prior to such renewal, refinancing or extensiona Credit Party; (e) Capital Lease Obligations not to exceed $500,000 in the aggregate outstanding at any time; (fiii) Indebtedness owing owed by H. any U.S. Credit Party or any Credit Party to a Subsidiary that is not a U.S. Credit Party or a Credit Party (provided that such Indebtedness (other than Indebtedness existing as of the Closing Date pursuant to the ▇. ▇▇▇▇▇▇-▇▇▇▇▇▇▇ CanadaArrangement) shall be subordinated to the U.S. Obligations and the Obligations, Ltd. not as applicable, pursuant to exceed one million Dollars (US $1,000,000) in the aggregate outstanding at any timean Intercompany Subordination Agreement); and (g) Indebtedness incurred by Borrower under a Hedge Agreement. (h) Indebtedness with respect to letters of credit (not subject to the terms and conditions of this Agreement), issued by a Bank, such letters of credit not to exceed $20,000,000 in amounts available to be drawn thereunder at any time.

Limitations on Indebtedness. The Borrower shall not, and shall not permit any of its Subsidiaries to createCreate, incur, assume or permit suffer to exist any Indebtedness except: (a) Indebtedness existing hereunder(i) the Obligations (excluding Hedging Obligations permitted pursuant to Section 10.1(c)) and (ii) the Guaranty Obligations in favor of the Administrative Agent for the benefit of the Secured Parties; (b) (i) the U.S. Obligations (excluding any U.S. Obligations pursuant to Hedging Agreements permitted pursuant to Section 10.1(c)) and (ii) the Guaranty Obligations in respect of the U.S. Obligations in favor of the U.S. Administrative Agent for the benefit of the U.S. Secured Parties; (c) Indebtedness incurred in connection with a Hedging Agreement (i) which is entered into for interest rate, foreign currency or other business purposes and not for speculative purposes and (ii) with a counterparty reasonably satisfactory to the Administrative Agent and the U.S. Administrative Agent; provided that any counterparty that is a Lender, a U.S. Lender or any Affiliate thereof shall be deemed satisfactory to the Administrative Agent and the U.S. Administrative Agent; (d) Indebtedness existing on the Closing Date and not otherwise permitted under this Section and, to the extent that the outstanding principal amount of such Indebtedness is in excess of $25,000,000, listed on Schedule 10.1 (including any Indebtedness (including, without limitation, any Guaranty Obligation of Indebtedness of another Person but excluding the April 2008 Convertible Indebtedness) issued to refinance or to refund such Indebtedness or any Indebtedness which constitutes a renewal or extension of such Indebtedness); provided that (i) the principal amount of such Indebtedness may not be increased at the time of such refinancing, refunding, renewal or extension except (A) by an amount equal to a reasonable premium or other reasonable amount paid, and fees and expenses reasonably incurred, in connection with such refinancing, refunding, renewal or extension and by an amount equal to any existing -- commitments unutilized thereunder and (B) by additional amounts, to the extent that the Consolidated Total Leverage Ratio, on a pro forma basis after giving effect to such increase, would be no greater than 5.50 to 1.00, (ii) no Default or Event of Default exists and is continuing or would be caused by the refinancing, refunding, renewal or extension thereof, (iii) the Administrative Agent and the U.S. Administrative Agent shall have received satisfactory written evidence that the U.S. Borrower and its Subsidiaries would be in compliance with all covenants in this Agreement and the U.S. Credit Agreement on a pro forma basis after giving effect to the refinancing, refunding, renewal or extension thereof, (iv) the weighted average life of such Indebtedness shall not be shorter than the weighted average life of the Indebtedness being refinanced, refunded, renewed or extended, (v) any terms of subordination set forth in the Indebtedness being refinanced, refunded, renewed or extended are not adversely affected in any material respect, (vi) if the Indebtedness being refinanced is not secured by the assets of any Credit Party or its Subsidiaries or any U.S. Credit Party or its Subsidiaries, such refinancing Indebtedness shall also not be secured by the assets of any Credit Party or its Subsidiaries or any U.S. Credit Party or its Subsidiaries and (vii) none of the Existing Notes nor any Indebtedness incurred in accordance with this paragraph to refinance, refund, renew or extend the Existing Notes shall be guaranteed by the U.S. Borrower or any of its Subsidiaries (other than (A) those Existing Notes which is expressly are guaranteed by the U.S. Borrower as of the Closing Date and identified on Schedule 10.1 as being so guaranteed and (B) any Indebtedness issued to refinance any Existing Notes which, as of the Closing Date, (1) have an outstanding principal balance in excess of $50,000,000 and (2) mature or are subject to mandatory redemption prior to the U.S. Maturity Date); (e) Indebtedness incurred in connection with Capital Leases, including those Capital Leases existing on the Closing Date, and purchase money Indebtedness, including all purchase money Indebtedness existing on the Closing Date, in an aggregate amount not to exceed $50,000,000 on any date of determination; (i) Guaranty Obligations with respect to Indebtedness permitted pursuant to subsections (c), (e), (h), (l), (m) and (n) of this Section (provided that any Guaranty Obligations of Indebtedness incurred pursuant to subsection (h) or, to the extent applicable, subsection (n)of this Section shall be subordinated to the Obligations pursuant and the U.S. Obligations to the same extent as the Indebtedness that is being guaranteed); or (ii) Guaranty Obligations of the Original U.S. Borrower with respect to the April 2008 Convertible Indebtedness; provided that (A) the Original U.S. Borrower shall not be permitted to create, incur, assume or suffer to exist such Guaranty Obligations unless (1) it shall have delivered to the U.S. Administrative Agent evidence, in form and substance reasonably satisfactory to the U.S. Administrative Agent, that the Abitibi Entities shall have consummated (or will concurrently consummate) their previously announced financing plan which will consist of the following: (x) $250,000,000 to $325,000,000 of new senior unsecured exchange notes of Abitibi, (y) $350,000,000 to $450,000,000 of new 364-day term loans of Abitibi and (z) approximately $400,000,000 of new senior secured notes or a term loan of Abitibi not to exceed a five year term (provided that Abitibi may replace or amend the financings described in this clause (A)(1) above so long as such replacement or amendment consists of non-convertible debt financings of Abitibi that are not guaranteed by, or secured by the assets of, the U.S. -- Borrower or any of its Subsidiaries and would not reduce the aggregate amount of proceeds reflected above in this clause (A) in excess of $50,000,000) or (2) the proceeds of such Indebtedness are used to permanently reduce, on a pro rata basis, the Commitment under this Agreement and the U.S. Commitment and to permanently repay, on a pro rata basis, Extensions of Credit under this Agreement and U.S. Extensions of Credit under the U.S. Credit Agreement or for such other use approved in writing by the Required Lenders (it being understood that any use that involves the reduction of the commitments or repayment of the extensions of credit under this Credit Facility or the U.S. Credit Facility shall continue to be applied to this Credit Facility and the U.S. Credit Facility on a pro rata basis unless otherwise agreed to by the Required Agreement Lenders and the U.S. Required Agreement Lenders); and (B) such Guaranty Obligations shall be unsecured and shall not exceed $350,000,000 in an aggregate principal amount (plus any paid-in-kind interest thereon) on any date of determination; (g) (i) (A) Indebtedness owed by any U.S. Credit Party to any other U.S. Credit Party, including, without limitation, Indebtedness evidenced by the New U.S. Borrower Notes (provided that, if requested by the U.S. Administrative Agent, such Indebtedness shall be subordinated to the U.S. Obligations on terms and conditions reasonably satisfactory to the Agent U.S. Administrative Agent) and (B) Indebtedness owed by any Credit Party (other than the Required Lenders U.S. Borrower) to any other Credit Party (other than the “Subordinated Debt”U.S. Borrower) (provided that, if requested by the Administrative Agent, such Indebtedness shall be subordinated to the Obligations on terms and conditions reasonably satisfactory to the Administrative Agent); (ci) Purchase money financing not (A) Indebtedness owed by any Credit Party (other than the U.S. Borrower) to exceed in any U.S. Credit Party (provided that such Indebtedness shall be payable by such Credit Party on demand by the aggregate outstanding at applicable U.S. Credit Party) and (B) Indebtedness owed by any time 3.5% of U.S. Credit Party to any Credit Party (provided that such Indebtedness shall be payable by such U.S. Credit Party (other than the U.S. Borrower’s consolidated Net Worth) on demand by the applicable Credit Party); (dii) Indebtedness that constitutes owed by any Subsidiary which is not a renewal, refinancing U.S. Credit Party or extension of a Credit Party to any Indebtedness referred to in this Section 10.3; provided, that (i) no Lien existing at the time of such renewal reflecting an extension shall be extended to cover any property other Subsidiary which is not already subject to such Lien and (ii) the principal amount of any Indebtedness renewed, refinanced a U.S. Credit Party or extended shall not exceed the amount of such Indebtedness outstanding immediately prior to such renewal, refinancing or extensiona Credit Party; (e) Capital Lease Obligations not to exceed $500,000 in the aggregate outstanding at any time; (fiii) Indebtedness owing owed by H. any U.S. Credit Party or any Credit Party to a Subsidiary that is not a U.S. Credit Party or a Credit Party (provided that such Indebtedness (other than Indebtedness existing as of the Closing Date pursuant to the ▇. ▇▇▇▇▇▇-▇▇▇▇▇▇▇ CanadaArrangement) shall be subordinated to the U.S. Obligations and the Obligations, Ltd. not as applicable, pursuant to exceed one million Dollars (US $1,000,000) in the aggregate outstanding at any timean Intercompany Subordination Agreement); and (g) Indebtedness incurred by Borrower under a Hedge Agreement. (h) Indebtedness with respect to letters of credit (not subject to the terms and conditions of this Agreement), issued by a Bank, such letters of credit not to exceed $20,000,000 in amounts available to be drawn thereunder at any time.

Limitations on Indebtedness. The Borrower shall not, and shall not permit any of its Subsidiaries to createCreate, incur, assume or permit suffer to exist any Indebtedness except: (a) Indebtedness existing hereunder(i) the Obligations (excluding Hedging Obligations permitted pursuant to Section 10.1(c)) and (ii) the Guaranty Obligations in favor of the Administrative Agent for the benefit of the Secured Parties; (b) (i) the U.S. Obligations (excluding any U.S. Obligations pursuant to Hedging Agreements permitted pursuant to Section 10.1(c)) and (ii) the Guaranty Obligations in respect of the U.S. Obligations in favor of the U.S. Administrative Agent for the benefit of the U.S. Secured Parties; (c) Indebtedness incurred in connection with a Hedging Agreement (i) which is entered into for interest rate, foreign currency or other business purposes and not for speculative purposes and (ii) with a counterparty reasonably satisfactory to the Administrative Agent and the U.S. Administrative Agent; provided that any counterparty that is a Lender, a U.S. Lender or any Affiliate thereof shall be deemed satisfactory to the Administrative Agent and the U.S. Administrative Agent; (d) Indebtedness existing on the Closing Date and not otherwise permitted under this Section and, to the extent that the outstanding principal amount of such Indebtedness is in excess of $25,000,000, listed on Schedule 10.1 (including any Indebtedness (including, without limitation, any Guaranty Obligation of Indebtedness of another Person but excluding the April 2008 Convertible Indebtedness) issued to refinance or to refund such Indebtedness or any Indebtedness which constitutes a renewal or extension of such Indebtedness); provided that (i) the principal amount of such Indebtedness may not be increased at the time of such refinancing, refunding, renewal or extension except (A) by an amount equal to a reasonable premium or other reasonable amount paid, and fees and expenses reasonably incurred, in connection with such refinancing, refunding, renewal or extension and by an amount equal to any existing commitments unutilized thereunder and (B) by additional amounts, to the extent that the Consolidated Total Leverage Ratio, on a pro forma basis after giving effect to such increase, would be no greater than 5.50 to 1.00, (ii) no Default or Event of Default exists and is continuing or would be caused by the refinancing, refunding, renewal or extension thereof, (iii) the Administrative Agent and the U.S. Administrative Agent shall have received satisfactory written evidence that the U.S. Borrower and its Subsidiaries would be in compliance with all covenants in this Agreement and the U.S. Credit Agreement on a pro forma basis after giving effect to the refinancing, refunding, renewal or extension thereof, (iv) the weighted average life of such Indebtedness shall not be shorter than the weighted average life of the Indebtedness being refinanced, refunded, renewed or extended, (v) any terms of subordination set forth in the Indebtedness being refinanced, refunded, renewed or extended are not adversely affected in any material respect and (vi) none of the Existing Notes nor any Indebtedness incurred in accordance with this paragraph to refinance, refund, renew or extend the Existing Notes shall be guaranteed by the U.S. Borrower or any of its Subsidiaries (other than (A) those Existing Notes which is expressly are guaranteed by the U.S. Borrower as of the Closing Date and identified on Schedule 10.1 as being so guaranteed and (B) any Indebtedness issued to refinance any Existing Notes which, as of the Closing Date, (1) have an outstanding principal balance in excess of $50,000,000 and (2) mature or are subject to mandatory redemption prior to the U.S. Maturity Date); (e) Indebtedness incurred in connection with Capital Leases, including those Capital Leases existing on the Closing Date, and purchase money Indebtedness, including all purchase money Indebtedness existing on the Closing Date, in an aggregate amount not to exceed $50,000,000 on any date of determination; (i) Guaranty Obligations with respect to Indebtedness permitted pursuant to subsections (c), (e), (h), (l) and (n) of this Section (provided that any Guaranty Obligations of Indebtedness incurred pursuant to subsection (h) or, to the extent applicable, subsection (n) of this Section shall be subordinated to the Obligations pursuant and the U.S. Obligations to the same extent as the Indebtedness that is being guaranteed); or (ii) Guaranty Obligations of the Original U.S. Borrower with respect to the April 2008 Convertible Indebtedness; provided that (A) the Original U.S. Borrower shall not be permitted to create, incur, assume or suffer to exist such Guaranty Obligations unless (1) it shall have delivered to the U.S. Administrative Agent evidence, in form and substance reasonably satisfactory to the U.S. Administrative Agent, that the Abitibi Entities shall have consummated (or will concurrently consummate) their previously announced financing plan which will consist of the following: (x) $250,000,000 to $325,000,000 of new senior unsecured exchange notes of Abitibi, (y) $350,000,000 to $450,000,000 of new 364-day term loans of Abitibi and (z) approximately $400,000,000 of new senior secured notes or a term loan of Abitibi not to exceed a five year term (provided that Abitibi may replace or amend the financings described in this clause (A)(1) above so long as such replacement or amendment consists of non-convertible debt financings of Abitibi that are not guaranteed by, or secured by the assets of, the U.S. Borrower or any of its Subsidiaries and would not reduce the aggregate amount of proceeds reflected above in this clause (A) in excess of $50,000,000) or (2) the proceeds of such Indebtedness are used to permanently reduce, on a pro rata basis, the Commitment under this Agreement and the "Commitment" under and as defined in the U.S. Credit Agreement and to permanently repay, on a pro rata basis, Extensions of Credit under this Agreement and U.S. Extensions of Credit under the U.S. Credit Agreement or for such other use approved in writing by the Required Lenders (it being understood that any use that involves the reduction of the commitments or repayment of the extensions of credit under this Credit Facility or the U.S. Credit Facility shall continue to be applied to this Credit Facility and the U.S. Credit Facility on a pro rata basis unless otherwise agreed to by the Required Agreement Lenders and the U.S. Required Agreement Lenders); and (B) such Guaranty Obligations shall be unsecured and shall not exceed $350,000,000 in an aggregate principal amount (plus any paid-in-kind interest thereon) on any date of determination; (g) (i) (A) Indebtedness owed by any U.S. Credit Party to any other U.S. Credit Party, including, without limitation, Indebtedness evidenced by the New U.S. Borrower Notes (provided that, if requested by the U.S. Administrative Agent, such Indebtedness shall be subordinated to the U.S. Obligations on terms and conditions reasonably satisfactory to the Agent U.S. Administrative Agent) and (B) Indebtedness owed by any Credit Party (other than the Required Lenders U.S. Borrower) to any other Credit Party (other than the “Subordinated Debt”U.S. Borrower) (provided that, if requested by the Administrative Agent, such Indebtedness shall be subordinated to the Obligations on terms and conditions reasonably satisfactory to the Administrative Agent); (c) Purchase money financing not to exceed in the aggregate outstanding at any time 3.5% of the Borrower’s consolidated Net Worth; (dA) Indebtedness owed by any Credit Party (other than the U.S. Borrower) to any U.S. Credit Party (provided that constitutes a renewal, refinancing or extension of any such Indebtedness referred to in this Section 10.3; provided, that (i) no Lien existing at the time of such renewal reflecting an extension shall be extended to cover any property not already subject to payable by such Lien Credit Party on demand by the applicable U.S. Credit Party) and (iiB) the principal amount of Indebtedness owed by any Indebtedness renewed, refinanced or extended shall not exceed the amount of U.S. Credit Party to any Credit Party (provided that such Indebtedness outstanding immediately prior to shall be payable by such renewal, refinancing or extensionU.S. Credit Party (other than the U.S. Borrower) on demand by the applicable Credit Party); (e) Capital Lease Obligations not to exceed $500,000 in the aggregate outstanding at any time; (f) Indebtedness owing by H. ▇. ▇▇▇▇▇▇▇ Canada, Ltd. not to exceed one million Dollars (US $1,000,000) in the aggregate outstanding at any time; and (g) Indebtedness incurred by Borrower under a Hedge Agreement. (h) Indebtedness with respect to letters of credit (not subject to the terms and conditions of this Agreement), issued by a Bank, such letters of credit not to exceed $20,000,000 in amounts available to be drawn thereunder at any time.