GUARANTY AND UNDERTAKING AGREEMENT

Exhibit 10.6

GUARANTY AND UNDERTAKING AGREEMENT

Dated as of June 16, 2009

among

THE GUARANTORS PARTY HERETO,

each a debtor and debtor-in-possession Chapter 11 of the Bankruptcy Code,

and

ABITIBI-CONSOLIDATED INC.,

a company operating pursuant to a proceeding under the Canadian CCAA,

in favor of

CITIBANK, N.A.,

as Agent for the Banks

TABLE OF CONTENTS

     GUARANTY AND UNDERTAKING AGREEMENT dated as of June 16, 2009 (this “ Agreement ”), by and among THE GUARANTORS PARTY HERETO, each a debtor and debtor-in-possession under chapter 11 of the Bankruptcy Code (the “ Guarantors ”), ABITIBI-CONSOLIDATED INC., a Canadian corporation and a company operating pursuant to a proceeding under the CCAA (“ ACI ” and together with the Guarantors, the “ Obligors ”), and CITIBANK, N.A., as agent for the Banks (the “ Agent ”).

INTRODUCTORY STATEMENT

     WHEREAS, ACI and each of the Guarantors is an Affiliate of Abitibi-Consolidated U.S. Funding Corp., a Delaware corporation (the “ Seller ”); and

     WHEREAS, the Seller has entered into that certain Second Amended and Restated Receivables Purchase Agreement dated as of June 16, 2009 (the “ ARRPA ”) among the Seller, Abitibi Consolidated Sales Corporation, a Delaware corporation, as Servicer (“ ACSC ”), ACI, as Subservicer, the Agent and the banks party thereto (the “ Banks ”).

     WHEREAS, in consideration of the financial and other support that the Seller has provided, and such financial and other support as the Seller may in the future provide, to each Guarantor and to ACI, each Guarantor and ACI is willing to enter into this Agreement;

     NOW, THEREFORE, in consideration of the premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Obligors agree as follows:

ARTICLE 1

Definitions

      SECTION 1.01 . Definitions .

      (a)  Terms Defined Herein . As used in this Agreement, the following terms shall have the meanings specified below:

     “ 13-Week Projection ” shall mean a cash flow forecast setting forth the projected combined cash receipts and cash disbursements of the Abitibi Entities (other than Augusta Newsprint) and the Seller on a weekly basis for the following 13 calendar weeks, in substantially the form previously delivered to the Agent. As used herein, “ 13-Week Projection ” shall refer to the most recent 13-Week Projection delivered by the Obligors in accordance with Section 4.04.

     “ ABH ” shall mean AbitibiBowater Inc., a Delaware corporation.

     “ Abitibi DIP Term Facility ” shall mean any debtor in possession term loan facility provided to ACI or Donohue; provided that neither the Seller nor any Guarantor shall be liable in respect of any portion thereof.

      “Abitibi Entity” shall mean each of ACI, Donohue and their respective Subsidiaries, other than the Seller.

     “ Abitibi Petitioner ” shall have the meaning specified in the Canadian Initial Order.

     “ ACI ” shall have the meaning specified in the Preamble hereto.

     “ ACSC ” shall have the meaning specified in the Introductory Statement hereto.

     “ Adverse Proceeding ” shall mean any action, claim (including any environmental claims), suit, charge, order, direction, proceeding, hearing (in each case, whether administrative, judicial or otherwise), governmental investigation or arbitration (whether or not purportedly on behalf of any Abitibi Entity) at law or in equity, or before or by any Governmental Authority, domestic or foreign, whether pending or, to the knowledge of ACI or Donohue, threatened against or affecting any Abitibi Entity or any property of any Abitibi Entity.

     “ Affiliate ” shall mean, with respect to any specified Person, any other Person that directly or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, such specified Person. The term “ control ” shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise; provided that, for purposes of Section 5.07, “ control ” shall also include the possession, directly or indirectly, of the power to vote 10% or more of the securities having ordinary voting power for the election of directors (or persons performing similar functions) of a Person, whether through the ownership of voting securities, by contract or otherwise; “ controlling ” and “ controlled ” have meanings correlative of the foregoing.

     “ Agent ” shall have the meaning specified in the Preamble hereto.

     “ Applicable Date ” shall have the meaning specified in Section 5.14.

     “ ARRPA ” shall have the meaning specified in the Introductory Statement hereto.

     “ Asset Sale ” shall mean a sale, lease or sub-lease (as lessor or sublessor), sale and leaseback, assignment, conveyance, exclusive license (as licensor or sublicensor), transfer or other disposition to, or any exchange of property with, any Person (other than the Seller or any Guarantor), in one transaction or a series of transactions, of all or any part of any Abitibi Entity’s businesses, assets or properties of any kind, whether real, personal, or mixed and whether tangible or intangible, whether now owned or hereafter acquired, leased or licensed, including the Equity Interests of any of ACI’s or Donohue’s Subsidiaries, other than inventory (or other assets) sold, leased or licensed in the ordinary course of business. Notwithstanding the foregoing, none of the following shall be deemed to be an Asset Sale:

     (1) any single transaction or series of related transactions that involves assets having a fair market value of less than $5,000,000;

     (2) dispositions of leasehold improvements or leased assets in connection with the termination of an operating lease;

     (3) transfers of assets between or among the Abitibi Entities;

     (4) sales or other dispositions of Cash Equivalents or obligations in settlement of Hedge Agreements;

     (5) sales, transfers or other dispositions of the assets of Bridgewater or any of its Subsidiaries in satisfaction of all or any portion of their respective obligations;

     (6) the creation of a Lien to the extent that the creation thereof is permitted under Section 5.01;

     (7) sales or other dispositions of assets constituting collateral under the Abitibi DIP Term Facility pursuant to the exercise of remedies under the documents governing the Abitibi DIP Term Facility;

     (8) dispositions of accounts receivable and other payment obligations in connection with the compromise, settlement or collection thereof in the ordinary course of business or in bankruptcy or similar proceedings, and transfers of accounts receivable, other payment obligations and related assets in connection with credit insurance; and

     (9) sales or other dispositions of assets of any Subsidiary that is not a wholly-owned Subsidiary.

     “ Augusta Newsprint ” shall mean Augusta Newsprint Company, a Georgia corporation.

     “ Authorized Officer ” shall mean, as applied to any Person, any individual holding the position of chairman of the board (if an officer), chief executive officer, president or one of its vice presidents (or the equivalent thereof), and such Person’s chief financial officer or treasurer.

     “ Authorized Officer Certification ” shall mean, with respect to the financial statements for which such certification is required, the certification of the chief financial officer, treasurer or assistant treasurer of ACI and the chief financial officer, treasurer or assistant treasurer of Donohue that (i) such financial statements fairly present, in all material respects, the financial condition of the Abitibi Entities, as at the dates indicated and the results of their operations and their cash flows for the periods indicated, except, in the case of unaudited financial statements, for the absence of footnotes and for normal year-end audit adjustments and (ii) no Default or Event of Default has occurred and is continuing ( provided , that each Authorized Officer Certification delivered pursuant to Section 4.01(b) or 4.01(c) shall also include the computation of Cumulative Consolidated EBITDAR for the applicable Fiscal Quarter or Fiscal Year).

     “ Bankruptcy Code ” shall mean the U.S. Bankruptcy Code (11 U.S.C. §§ 101 et seq.).

     “ Bankruptcy Courts ” shall mean, collectively, the Bankruptcy Court and the Canadian Court.

     “ Banks ” shall have the meaning specified in the Introductory Statement hereto.

     “ Bowater Entities ” shall mean, collectively, (a) ABH, (b) Bowater Incorporated and its Subsidiaries and (c) Bowater Newsprint South LLC and its Subsidiaries.

     “ Bridgewater ” shall mean Bridgewater Paper Company Limited, a U.K. company limited by shares.

     “ Canada Pension Plan ” shall mean the public pension plan created pursuant to the Canada Pension Plan, R.S. 1985, c. C-8.

     “ Canadian Case ” shall mean the case commenced on April 17, 2009 by ACI and certain of its Subsidiaries pursuant to the CCAA in the Canadian Court.

     “ Canadian GAAP ” shall mean generally accepted accounting principles in Canada as in effect from time to time.

     “ Canadian Initial Order ” means the Second Amended Initial Order made by the Canadian Court in the Canadian Case on May 6, 2009 as amended on or prior to the date hereof.

     “ Canadian Person ” shall mean any Person that is organized under the laws of Canada or any province or territory thereof.

     “ Capital Expenditures ” shall mean expenditures of a Person that are or should be included in “ purchase of property and equipment ” or similar items reflected in the statement of cash flows of such Person.

     “ Capital Lease ” shall mean, as applied to any Person, any lease of any property (whether real, personal or mixed) by that Person as lessee that, in conformity with GAAP, is or should be accounted for as a capital lease on the balance sheet of that Person.

     “ Carve-Out ” shall mean (a) all allowed professional fees and disbursements incurred by the professionals retained, pursuant to sections 327, 328 or 1103(a) of the Bankruptcy Code, by the Obligors and any statutory committee appointed in the US Cases and any disbursements of any member of such committee in an aggregate amount not to exceed (i) $7,500,000 in the aggregate in respect of professional fees and disbursements incurred following the occurrence and during the pendency of an Event of Default or an event of default under any such other post-petition facility of any of the Obligors (each a “ Carve-Out Event ”) plus (ii) professional fees and disbursements incurred prior to the occurrence of a Carve-Out Event to the extent subsequently allowed plus (iii) professional fees and disbursements incurred from and after the date on which the Carve-Out Event is no longer continuing to the extent subsequently allowed and (b) quarterly fees required to be paid pursuant to 28 U.S.C. § 1930(a)(6) and any fees payable to the Clerk of the Bankruptcy Court; provided , however , that no portion of the Carve-Out shall be used to pay professional fees and disbursements incurred in connection with (i) asserting any claims or causes of action against the Agent, the Banks, the Syndication Agent or

the Seller or any of their respective successors and assigns and/or challenging or raising any defense to the Guaranteed Obligations, the Superpriority Guaranty Claims or the Superpriority Receivables Claims, (ii) asserting or prosecuting any action for preferences, fraudulent conveyances, or other avoidance power claims against the Agent, the Banks, the Syndication Agent or the Seller or any of their respective successors and assigns, (iii) objecting to or contesting the true sale nature of the sale and/or contribution of the Transferred Receivables or (iv) objecting to or contesting in any manner, or raising any defenses to, the validity, perfection, priority, extent or enforceability of the Guaranteed Obligations under or in connection with the Transaction Documents, provided further , however , that the Carve-Out may include professional fees and disbursements for investigation of such claims, causes of action or defenses in an aggregate amount not to exceed $50,000.

     “ Cases ” shall mean, collectively, the US Cases and the Canadian Case.

      “Cash Equivalents” shall mean, as at any date of determination, any of the following to the extent readily monetized: (i) readily marketable securities (a) issued or directly and unconditionally guaranteed as to interest and principal by the government of the United States of America or the government of Canada or (b) issued by any agency or instrumentality of the government of the United States of America or the government of Canada, the obligations of which are backed by the full faith and credit of such government, in each case maturing within one year after the date of acquisition thereof; (ii) readily marketable direct obligations issued by any state of the United States of America or any province of Canada, or any political subdivision of any such state or province or any public instrumentality thereof, in each case maturing within one year after such date and having a rating of at least A-1 from S&P or P-1 from Moody’s; (iii) insured demand deposits, time deposits or certificates of deposit maturing within one year after the date of acquisition thereof (in the case of time deposits or certificates of deposit) of (1) any commercial bank that (A) is a member of the Federal Reserve System, (B) issues (or the parent of which issues) commercial paper rated as described in clause (v), (C) is organized under the laws of the United States of America or any state thereof and (D) has combined capital and surplus of at least $500,000,000 or (2) any bank listed on Schedule I of the Bank Act (Canada) that has Tier 1 capital (as defined in OSFI Guideline A-1 on Capital Adequacy Requirements) of not less than $500,000,000; (iv) repurchase obligations, having a term of not more than ten days, with respect to underlying securities of the types described in clauses (i) entered into with any commercial bank satisfying the requirements of clause (iii); (v) commercial paper issued by a Person organized under the laws of any state of the United States of America or Canada maturing no later than the Business Day prior to the first Settlement Date (Yield and Fees) following the date of purchase and having a rating of at least A-1 from S&P and at least P-1 from Moody’s; and (vi) shares of any no load money market mutual fund (A) having a rating from each rating agency rating such fund in its highest investment category and (B) having substantially all of its assets invested continuously in the types of investments referred to in clauses (i), (ii) and (iii) above (including such funds for which the Agent or any of its Affiliates is investment manager or advisor).

      “Change of Control” shall mean, at any time, (a) any Person or “group” (within the meaning of Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934) (i) shall have acquired beneficial ownership of 35% or more on a fully diluted basis of the voting and/or economic interest in the Equity Interests of ABH or (ii) shall have obtained the power (whether

or not exercised) to elect a majority of the members of the board of directors (or similar governing body) of ABH; (b) ABH shall cease to beneficially own and control directly 100% on a fully diluted basis of the economic and voting interest in the Equity Interests of ACI; provided that for purposes of this clause (b), the exchangeable shares issued by AbitibiBowater Canada Inc. (f/k/a Bowater Canada, Inc.) outstanding on April 1, 2008 shall be deemed to have been exchanged for Equity Interests of ABH; (c) ACI shall cease to beneficially own and control directly 100% on a fully diluted basis of the economic and voting interest in the Equity Interests of Abitibi-Consolidated Company of Canada; (d) ABH (or any wholly owned Subsidiary of ABH that is organized under the laws of any state of the United States but is not Bowater Incorporated or any Subsidiary thereof) shall cease to collectively and beneficially own and control directly 100% on a fully diluted basis of the economic and voting interest in the Equity Interests of Donohue; (e) Donohue shall cease to beneficially own and control, directly or indirectly, 100% on a fully diluted basis of the economic and voting interest in the Equity Interests of each of its Subsidiaries that is a Guarantor; or (f) the majority of the seats (other than vacant seats) on the board of directors (or similar governing body) of ABH cease to be occupied by Persons who either (i) were members of the board of directors of ABH on the Effective Date or (ii) were nominated for election by the board of directors of ABH, a majority of whom were directors on the Effective Date or whose election or nomination for election was previously approved by a majority of such directors.

     “ Chapter 11 Cases ” shall mean the proceedings under chapter 11 of the Bankruptcy Code commenced by the Guarantors on the Petition Date.

     “ Chapter 15 Case ” shall mean the case filed on April 19, 2009 by ACI and certain of its Subsidiaries in the Bankruptcy Court under chapter 15 of the Bankruptcy Code.

     “ Combined Capital Expenditures ” shall mean an amount equal to the sum, without duplication, of (a) Consolidated Capital Expenditures of ACI and its Subsidiaries plus (b) Consolidated Capital Expenditures of Donohue and its Subsidiaries.

      “Commodity Agreement” shall mean any commodity exchange contract, commodity swap agreement, futures contract, option contract, synthetic cap or other similar agreement or arrangement, each of which is for the purpose of hedging the commodity risk associated with the Abitibi Entities’ operations and not for speculative purposes.

      “Consolidated Capital Expenditures” shall mean, for any period, the aggregate of all expenditures of a Person and its Subsidiaries during such period determined on a consolidated basis that, in accordance with GAAP, are or should be included in “purchase of property and equipment” or similar items reflected in the consolidated statement of cash flows of such Person and its Subsidiaries.

     “ Consolidated EBITDAR ” shall mean, with respect to the Abitibi Entities for any period, the sum, without duplication, of:

     (a) Consolidated Net Income for such period (after giving effect to the proviso to the definition of “Consolidated Non-Cash Charges”), plus

     (b) to the extent such Consolidated Net Income for such period has been reduced thereby,

     (i) all income taxes paid or accrued during such period,

     (ii) Consolidated Interest Expense for such period,

     (iii) Consolidated Non-Cash Charges for such period,

     (iv) the amount of any minority interest expense consisting of Subsidiary income attributable to minority equity interests of third parties in any non-wholly owned Subsidiary,

     (v) (A) any costs, fees, expenses or disbursements of attorneys, consultants or advisors to the Abitibi Entities, in each case, incurred in connection with the ongoing administration of the Cases and the negotiation, execution and documentation of the Transaction Documents, together with any such costs, fees, expenses or disbursements paid to the attorneys, consultants and advisors of the agents and lenders in connection therewith and (B) any upfront, arrangement or other fees paid by the Obligors in connection with the Facility, in each case for such period, minus

     (c) to the extent such Consolidated Net Income for such period has been increased thereby, Consolidated Non-Cash Gains for such period.

      “Consolidated Interest Expense ” shall mean, with respect to the Abitibi Entities and for any period, the sum, without duplication, of (a) the interest expense (including (i) imputed interest expense in respect of Capital Leases and (ii) “yield” expense and fee expense incurred as a result of the transactions pursuant to the ARRPA) of the Abitibi Entities for such period, determined on a combined basis and otherwise in accordance with GAAP and (b) any interest accrued during such period, in respect of Indebtedness of any Abitibi Entity, that is required under GAAP to be capitalized rather than included in consolidated (or combined) interest expense for such period.

     “ Consolidated Net Income ” shall mean, with respect to the Abitibi Entities, for any period, net income (or loss) determined on a combined basis in accordance with GAAP for such period; provided that there shall be excluded therefrom (but only to the extent included in the calculation of the foregoing):

     (a) gains or losses from disposals, asset impairments or reversal of impairments or abandonments or reserves relating thereto;

     (b) gains or losses on foreign currency translation in connection with the remeasurement of balance sheet assets and liabilities;

     (c) items classified as extraordinary gains or losses; and

     (d) the net income or loss of any Person that is not a Subsidiary of ACI or Donohue, except to the extent of cash dividends or distributions paid to ACI, Donohue or to a Subsidiary.

     “ Consolidated Non-Cash Charges ” shall mean, with respect to the Abitibi Entities, for any period, the aggregate depreciation, amortization and other non-recurring non-cash expenses reducing Consolidated Net Income for such period ( provided that if any such other non-recurring non-cash expense represents a reserve or similar provision for cash expenditures in a future period, such cash expenditures shall be deducted from Consolidated Net Income in the determination of Consolidated EBITDAR for the period in which such cash expenditures are made).

     “ Consolidated Non-Cash Gains ” shall mean, with respect to the Abitibi Entities, for any period, the aggregate non-recurring non-cash items increasing Consolidated Net Income for such period (excluding (i) the accrual of revenue consistent with past practice and (ii) the reversal in such period of an accrual of, or cash reserve for, cash expenses in a prior period, to the extent such accrual or reserve did not increase Consolidated EBITDAR in a prior period).

     “ Contractual Obligation ” shall mean, as applied to any Person, any obligation of such Person under any Security issued by that Person or any indenture, mortgage, deed of trust, lease, contract, undertaking, agreement or other instrument to which that Person is a party or by which it or any of its properties is bound or to which it or any of its properties is subject.

      “Currency Agreement” shall mean any foreign exchange contract, currency swap agreement, futures contract, option contract, synthetic cap or other similar agreement or arrangement, each of which is for the purpose of hedging the foreign currency risk associated with the Abitibi Entities’ operations and not for speculative purposes.

     “ Default ” shall mean a condition or event that constitutes an Event of Default or which, after notice or lapse of time or both, would become, unless cured or waived, an Event of Default.

     “ Disqualified Equity Interests ” shall mean any Equity Interest which, by its terms (or by the terms of any security or other Equity Interests into which it is convertible or for which it is exchangeable) or upon the happening of any event or condition, (a) matures or is mandatorily redeemable (other than solely for Equity Interests which are not otherwise Disqualified Equity Interests), pursuant to a sinking fund obligation or otherwise, (b) is redeemable at the option of the holder thereof (other than solely for Equity Interests which are not otherwise Disqualified Equity Interests), in whole or in part, (c) provides for the scheduled payments or dividends in cash or (d) is or becomes convertible into or exchangeable for Indebtedness or any other Equity Interests that would constitute Disqualified Equity Interests, except, in the case of clauses (a) and (b), if as a result of a change of control or asset sale, so long as any rights of the holders thereof upon the occurrence of such a change of control or asset sale event are subject to the prior payment in full of all Guaranteed Obligations.

     “ Donohue ” shall mean Donohue Corp., a Delaware corporation.

     “ Effective Date ” shall mean June 16, 2009.

     “ Employee Benefit Plan ” shall mean (a) in respect of any Abitibi Entity that is a US Person, any “ employee benefit plan ” as defined in Section 3(3) of ERISA which is or was sponsored, maintained or contributed to by, or required to be contributed by any Abitibi Entity or any of their respective ERISA Affiliates in the preceding six calendar years, and (b) in respect of any Abitibi Entity that is a Canadian Person, any employee benefit plan of any nature or kind that is not a Pension Plan and is maintained by or contributed to, or required to be maintained by or contributed to, by any Abitibi Entity that is a Canadian Person.

     “ Environmental Claim ” shall mean any written notice of investigation, notice of violation, claim, action, suit, charge, proceeding, demand, abatement order or other order or directive (conditional or otherwise), by any Governmental Authority or any other Person, arising (a) pursuant to or in connection with any Environmental Law or any actual or alleged violation of any Environmental Law; (b) in connection with any Hazardous Material or any actual or alleged Hazardous Materials Activity; or (c) in connection with any actual or alleged damage, injury, threat or harm to worker health and safety, natural resources or the environment.

     “ Environmental Laws ” shall mean any and all foreign or domestic, federal (U.S. or Canadian), state, provincial or municipal or any subdivision of any of them laws (including the common law), statutes, ordinances, orders, rules, regulations, judgments, Governmental Authorizations, and any other Laws or any other requirements of Governmental Authorities relating to: (a) environmental matters, including those relating to any Hazardous Materials Activity and endangered or threatened species; (b) the use, manufacture, possession, storage, holding, presence, existence, location, Release, threatened Release, discharge, placement, generation, transportation, processing, construction, treatment, abatement, removal, remediation, management, control, containment, disposal, disposition or handling of any Hazardous Materials, and any corrective action or response action with respect to any of the foregoing; (c) any actual or alleged damage, injury, threat or harm to worker health and safety, natural resources or the environment or the preservation or reclamation of natural resources or the environment; (d) forestation; or (e) occupational safety and health, industrial hygiene, land use or the protection of human, plant or animal health or welfare; in each case, in any manner applicable to any Abitibi Entity or any Property.

     “ Equity Interests ” shall mean any and all shares, interests, participations or other equivalents (however designated) of capital stock of a corporation, any and all equivalent ownership interests in a Person (other than a corporation), including partnership interests and membership interests, and any and all warrants, rights or options to purchase or other arrangements or rights to acquire any of the foregoing.

     “ ERISA ” shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time, and any successor thereto.

     “ ERISA Affiliate ” shall mean, as applied to any Person, (a) any corporation which is a member of a controlled group of corporations within the meaning of Section 414(b) of the Internal Revenue Code of which that Person is a member; (b) any trade or business (whether or not incorporated) which is a member of a group of trades or businesses under common control within the meaning of Section 414(c) of the Internal Revenue Code of which that Person is a member; and (c) any member of an affiliated service group within the meaning of Section

414(m) or (o) of the Internal Revenue Code of which that Person, any corporation described in clause (a) above or any trade or business described in clause (b) above is a member. Any former ERISA Affiliate of any Abitibi Entity shall continue to be considered an ERISA Affiliate of such Abitibi Entity within the meaning of this definition with respect to the period such entity was an ERISA Affiliate of such Abitibi Entity and with respect to liabilities arising after such period for which such Abitibi Entity could be liable under the Internal Revenue Code or ERISA.

     “ ERISA Event ” shall mean, with respect to any Abitibi Entity that is a US Person, (a) a “ reportable event ” within the meaning of Section 4043 of ERISA and the regulations issued thereunder with respect to any Pension Plan (excluding those for which the provision for 30-day notice to the PBGC has been waived by regulation); (b) the failure to meet the minimum funding standard of Section 412 or Section 430, as applicable, of the Internal Revenue Code with respect to any Pension Plan (whether or not waived in accordance with Section 412(c) of the Internal Revenue Code) or the failure to make by its due date a required installment under Section 430(j) of the Internal Revenue Code with respect to any Pension Plan or the failure to make any required contribution to a Multiemployer Plan; (c) the provision by the administrator of any Pension Plan pursuant to Section 4041(a)(2) of ERISA of a notice of intent to terminate such plan in a distress termination described in Section 4041(c) of ERISA; (d) the withdrawal by any Abitibi Entity or any of their respective ERISA Affiliates from any Pension Plan with two or more contributing sponsors or the termination of any such Pension Plan resulting in either case in liability to any Abitibi Entity or any of their respective Affiliates pursuant to Section 4063 or 4064 of ERISA; (e) the institution by the PBGC of proceedings to terminate any Pension Plan under Section 4042(a)(1)-(3) of ERISA; (f) the imposition of liability on any Abitibi Entity or any of their respective ERISA Affiliates pursuant to Section 4062(e) or 4069 of ERISA or by reason of the application of Section 4212(c) of ERISA; (g) the withdrawal of any Abitibi Entity or any of their respective ERISA Affiliates in a complete or partial withdrawal (within the meaning of Sections 4203 and 4205 of ERISA) from any Multiemployer Plan if there is any potential liability therefor, or the receipt by any Abitibi Entity or any of their respective ERISA Affiliates of notice from any Multiemployer Plan that it is in reorganization or insolvency pursuant to Section 4241 or 4245 of ERISA, or that it intends to terminate or has terminated under Section 4041A or 4042 of ERISA; (h) the occurrence of an act or omission which could give rise to the imposition on any Abitibi Entity or any of their respective ERISA Affiliates of fines, penalties, taxes or related charges under Chapter 43 of the Internal Revenue Code or under Section 409, Section 502(c), (i) or (l), or Section 4071 of ERISA in respect of any Employee Benefit Plan; (i) the assertion of a material claim (other than routine claims for benefits) against any Employee Benefit Plan other than a Multiemployer Plan or the assets thereof, or against any Abitibi Entity or any of their respective ERISA Affiliates in connection with any Employee Benefit Plan; (j) receipt from the Internal Revenue Service of notice of the failure of any Pension Plan (or any other Employee Benefit Plan intended to be qualified under Section 401(a) of the Internal Revenue Code) to qualify under Section 401(a) of the Internal Revenue Code, or the failure of any trust forming part of any Pension Plan to qualify for exemption from taxation under Section 501(a) of the Internal Revenue Code; or (k) the imposition of a lien pursuant to Section 430(k) of the Internal Revenue Code or ERISA or a violation of Section 436 of the Internal Revenue Code.

     “ Event of Default ” shall have the meaning set forth in Article 6.

     “ Facility ” shall mean the accounts receivable purchase facility made available to the Seller pursuant to the Transaction Documents.

     “ Fiscal Quarter ” shall mean a fiscal quarter of any Fiscal Year.

     “ Fiscal Year ” shall mean the fiscal year of the Abitibi Entities ending on December 31 of each calendar year.

     “ GAAP ” shall mean, for any period prior to January 1, 2009, Canadian GAAP and, for any period commencing on or after January 1, 2009, US GAAP.

     “ Governmental Authority ” shall mean any nation or government, any state or other political subdivision thereof, any agency, authority, instrumentality, regulatory body, court, administrative tribunal, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.

     “ Governmental Authorization ” shall mean any permit, license, approval, authorization, plan, directive, consent order or consent decree or other like instrument of or from or required by any Governmental Authority.

     “ Guarantee ” by any Person (the “ guarantor ”) shall mean any obligation, contingent or otherwise, of the guarantor guaranteeing or having the economic effect of guaranteeing any Indebtedness of any other Person (the “ primary obligor ”) in any manner, whether directly or indirectly, and including any obligation of the guarantor, direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation or to purchase (or advance or supply funds for the purchase of) any security for the payment thereof, (b) to purchase or lease property, securities or services for the purpose of assuring the owner of such Indebtedness or other obligation of the payment thereof, (c) to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation or (d) as an account party in respect of any letter of credit or letter of guaranty issued to support such Indebtedness or other obligation; provided that the term “ Guarantee ” shall not include endorsements for collection or deposit in the ordinary course of business.

     “ Guaranteed Obligations ” shall mean all payment obligations of the Seller under the Transaction Documents, including without limitation, payment of the Termination Amount and all Indemnified Amounts.

     “ Guarantors ” shall have the meaning specified in the Preamble hereto.

     “ Hazardous Materials ” shall mean any chemical, material, substance or waste, exposure to which is prohibited, limited or regulated by any Governmental Authority or which may or could pose a hazard or cause an adverse effect to the health and safety of the owners, occupants or any Persons or property in the vicinity of any Property or to the indoor or outdoor environment, including asbestos, petroleum (or any breakdown constituents), dioxin, pentachlorophenol and polychlorinated biphenyls.

     “ Hazardous Materials Activity ” shall mean any past, current, proposed or threatened activity, event or occurrence involving any Hazardous Materials, including the use, manufacture, possession, storage, holding, presence, existence, location, Release, threatened Release, discharge, placement, generation, transportation, processing, construction, treatment, abatement, removal, remediation, disposal, disposition or handling of any Hazardous Materials, and any corrective action or response action with respect to any of the foregoing.

      “Hedge Agreement” shall mean an Interest Rate Agreement, a Commodity Agreement or a Currency Agreement.

      “Historical Financial Statements” shall mean (x) the consolidated financial statements of ACI and its Subsidiaries for Fiscal Year 2007 and Fiscal Year 2006 and (y) the combined financial statements of the Abitibi Entities for Fiscal Year 2008, in each case certified by an Authorized Officer that they fairly present, in all material respects, the financial condition of ACI and its Subsidiaries or the Abitibi Entities, as the case may be, as at the dates indicated and the results of their operations and their cash flows for the periods indicated.

      “Indebtedness” shall mean, as applied to any Person, without duplication, (a) all indebtedness for borrowed money; (b) that portion of obligations with respect to Capital Leases that is properly classified as a liability on a balance sheet in conformity with GAAP; (c) notes payable and drafts accepted representing extensions of credit whether or not representing obligations for borrowed money; (d) any obligation owed for all or any part of the deferred purchase price of property or services, including any earn-out obligations (excluding any such obligations incurred under ERISA), which purchase price is (i) due more than six months from the date of incurrence of the obligation in respect thereof or (ii) evidenced by a note or similar written instrument; (e) all indebtedness secured by any Lien (other than Liens permitted under Section 5.01(u)) on any property or asset owned or held by that Person regardless of whether the indebtedness secured thereby shall have been assumed by that Person or is nonrecourse to the credit of that Person, provided that the amount of any such Indebtedness that is nonrecourse to the credit of that Person shall be determined to be the lesser of (i) the amount of such Indebtedness and (ii) the value of the property or assets subject to such Lien; (f) the undrawn amount of any letter of credit or banker’s acceptance issued or accepted, as the case may be, for the account of that Person or as to which that Person is otherwise liable for reimbursement of drawings or otherwise; (g) Disqualified Equity Interests; (h) the direct or indirect guaranty, endorsement (otherwise than for collection or deposit in the ordinary course of business), co-making, discounting with recourse or sale with recourse by such Person of the obligation of another; (i) any obligation of such Person the primary purpose or intent of which is to provide assurance to an obligee that the obligation of the obligor thereof will be paid or discharged, or any agreement relating thereto will be complied with, or the holders thereof will be protected (in whole or in part) against loss in respect thereof; (j) any liability of such Person for an obligation of another through any agreement (contingent or otherwise) (A) to purchase, repurchase or otherwise acquire such obligation or any security therefor, or to provide funds for the payment or discharge of such obligation (whether in the form of loans, advances, stock purchases, capital contributions or otherwise) or (B) to maintain the solvency or any balance sheet item, level of income or financial condition of another if, in the case of any agreement described under subclauses (A) or (B) of this clause (j), the primary purpose or intent thereof is as described in clause (i) above; and (k) all obligations of such Person in respect of any exchange traded or over

the counter derivative transaction, including any Hedge Agreement, in each case, whether entered into for hedging or speculative purposes.

      “Interest Rate Agreement” shall mean any interest rate swap agreement, interest rate cap agreement, interest rate collar agreement, interest rate hedging agreement or other similar agreement or arrangement, each of which is for the purpose of hedging the interest rate exposure associated with the Abitibi Entities’ operations and not for speculative purposes.

     “ Internal Revenue Code ” shall mean the U.S. Internal Revenue Code of 1986, as amended to the date hereof and from time to time hereafter, and any successor statute.

     “ Investment ” means, as to any Person, any direct or indirect acquisition or investment by such Person, whether by means of (a) the purchase or other acquisition of Securities of another Person, (b) a loan, advance or capital contribution to, Guarantee or assumption of debt of, or purchase or other acquisition of any other debt or equity participation or interest in, another Person, including any partnership or joint venture interest in such other Person and any arrangement pursuant to which the investor Guarantees Indebtedness of such other Person, or (c) the purchase or other acquisition (in one transaction or a series of transactions) of assets of another Person that constitute a business unit. For purposes of covenant compliance, the amount of any Investment shall be the amount actually invested, without adjustment for subsequent increases or decreases in the value of such Investment.

     “ Laws ” shall mean, as to any Person, collectively, all applicable international, foreign, federal (U.S. or Canadian), state, provincial and local statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative or judicial precedents or authorities, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, directed duties, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authority, in each case binding on such Person or to which such Person or any of its property or assets is subject.

      “Lien” shall mean any lien, mortgage, hypothec, pledge, assignment, security interest, charge or encumbrance of any kind (including any agreement to give any of the foregoing, any conditional sale or other title retention agreement, and any lease or license in the nature thereof) and any option, trust or other preferential arrangement having the practical effect of any of the foregoing.

     “ Liquidity ” shall mean, on any date of determination, the sum of (a) the Dollar Equivalent of the combined amount of Unrestricted Cash of the Abitibi Entities on such date (excluding, however, any such Unrestricted Cash of the Abitibi Entities that are not Canadian Persons or US Persons) plus (b) the Securitization Availability on such date plus (c) the principal amount of loans available to be borrowed under the Abitibi DIP Term Facility on such date.

     “ Material Adverse Effect ” shall mean (A) a material adverse effect on (i) the financial condition, business, operations, assets, liabilities or prospects of the Abitibi Entities taken as a whole, (ii) the ability of ACI or any Guarantor to perform any of its obligations under any of the Transaction Documents to which it is a party or (iii) the legality, validity or enforceability of the

Transaction Documents (including, without limitation, the validity, enforceability or priority of the ownership or security interests granted thereunder) or (B) a material impairment of the rights or remedies of the Agent or the Banks under any of the Transaction Documents; provided that a Material Adverse Effect shall not be deemed to exist as a result of the Bankruptcy Case and the Canadian Case or the effect thereof or the circumstances and events leading up thereto.

      “Moody’s” shall mean Moody’s Investors Service, Inc. and any successor thereto.

     “ Multiemployer Plan ” shall mean any Employee Benefit Plan which is a “ multiemployer plan ” as defined in Section 3(37) of ERISA.

     “ Narrative Report ” shall mean, with respect to the financial statements for which such narrative report is required, a narrative report describing the operations of the Abitibi Entities in the form prepared for presentation to senior management thereof for the applicable Fiscal Year.

     “ Non-Public Information ” shall mean information which has not been disseminated in a manner making it available to investors generally, within the meaning of Regulation FD.

     “ Obligors ” shall have the meaning specified in the Preamble hereto.

     “ Organizational Documents ” shall mean (a) with respect to any corporation or company, its certificate, articles or memorandum of incorporation, organization, association or amalgamation, its letters patent or other constating documents, in each case, as amended, and its by-laws, if any, as amended, (b) with respect to any limited partnership, its certificate or declaration of limited partnership, as amended, and its partnership agreement, as amended, (c) with respect to any general partnership, its partnership agreement, as amended and (d) with respect to any limited liability company, its articles of organization, as amended, and its operating or incorporation agreement, as amended. In the event any term or condition of this Agreement or any other Transaction Document requires any Organizational Document to be certified by a secretary of state or similar governmental official, the reference to any such “ Organizational Document ” shall only be to a document of a type customarily certified by such governmental official.

     “ PATRIOT Act ” shall mean the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001).

     “ PBGC ” shall mean the Pension Benefit Guaranty Corporation or any successor thereto.

     “ PCTFA ” the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada).

     “ Pension Plan ” shall mean, (a) in respect of any Abitibi Entity that is a US Person, any Employee Benefit Plan, other than a Multiemployer Plan, which is subject to Title IV of ERISA and is subject to Section 412 of the Internal Revenue Code or Section 302 of ERISA, and (b) in respect of any Abitibi Entity that is a Canadian Person, each pension, supplementary pension, retirement savings or other retirement income plan or arrangement of any kind, registered or

non-registered, established, maintained or contributed to by such Abitibi Entity in respect of its employees or former employees, but does not include the Canada Pension Plan or the Québec Pension Plan.

     “ Person ” shall mean any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.

     “ Pre-Petition Payment ” shall mean a payment by an Abitibi Entity that is a party to any of the Cases (by way of adequate protection or otherwise) of principal or interest on, or otherwise on account of, any Indebtedness of any Abitibi Entity that is a party to any of the Cases existing on the Petition Date.

     “ Projections ” shall have the meaning specified in Section 3.06(a).

      “Property” shall mean any real property (including all buildings, fixtures or other improvements located thereon) now, hereafter or heretofore owned, leased, operated or used by any Abitibi Entity or any of their respective predecessors or Affiliates.

     “ Québec Pension Plan ” shall mean the public pension plan created pursuant to An Act respecting the Québec Pension Plan, R.S.Q. C.R-9.

     “ RCRA ” shall mean the Resource Conservation and Recovery Act (42 U.S.C. § 6901 et. seq.).

     “ Release ” shall mean any release, spill, emission, leaking, pumping, pouring, injection, escaping, deposit, disposal, discharge, dispersal, dumping, leaching or migration of any Hazardous Material into the indoor or outdoor environment (including the abandonment or disposal of any barrels, containers or other closed receptacles containing any Hazardous Material) or the movement of any Hazardous Material through the air, soil, surface water or groundwater.

     “ Reorganization Plan ” shall mean a plan of reorganization in any of the US Cases or a plan of compromise or arrangement in the Canadian Case.

     “ Restricted Junior Payment ” shall mean (a) any dividend or other distribution, direct or indirect, on account of any shares of any class of stock of ACI or Donohue now or hereafter outstanding, except a dividend payable solely in shares of that class of stock to the holders of that class; (b) any redemption, retirement, sinking fund or similar payment, purchase or other acquisition for value, direct or indirect, of any shares of any class of stock of ACI or Donohue now or hereafter outstanding; (c) any payment made to retire, or to obtain the surrender of, any outstanding warrants, options or other rights to acquire shares of any class of stock of ACI or Donohue (or any direct or indirect parent thereof) now or hereafter outstanding; and (d) any payment or prepayment of principal of, premium, if any, or interest on, or redemption, purchase, retirement, defeasance (including in-substance or legal defeasance), sinking fund or similar payment with respect to, (i) any pre-petition Indebtedness or (ii) any Indebtedness that is subordinated to (or that is required to be subordinated to) the Guaranteed Obligations.

      “S&P” shall mean Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc. and any successor thereto.

     “ Securities ” shall mean any stock, shares, partnership interests, voting trust certificates, certificates of interest or participation in any profit-sharing agreement or arrangement, options, warrants, bonds, debentures, notes, or other evidences of indebtedness, secured or unsecured, convertible, subordinated or otherwise, or in general any instruments commonly known as “ securities ” or any certificates of interest, shares or participations in temporary or interim certificates for the purchase or acquisition of, or any right to subscribe to, purchase or acquire, any of the foregoing.

     “ Securitization Availability ” shall mean, on any date of determination, (a) the lesser of (i) Collateral Availability and (ii) the Purchase Limit, minus (b) the aggregate outstanding Capital of Receivable Interests.

     “ Subsidiary ” shall mean with respect to any Person, (a) a corporation a majority of the voting Equity Interests of which are at the time, directly or indirectly, owned by such Person; or (b) any other Person (other than a corporation), including, a partnership, limited liability company, business trust or joint venture, in which such Person, at the time thereof, directly or indirectly, has at least a majority ownership interest entitled to vote in the election of directors, managers or trustees thereof (or other Person performing similar functions). Unless otherwise qualified, all references to a “ Subsidiary ” or to “ Subsidiaries ” in this Agreement shall refer to a Subsidiary or Subsidiaries of ACI or Donohue.

     “ Superpriority Claim ” shall mean a claim against any Guarantor or any of their Subsidiaries in any of the US Cases which is an administrative expense claim having priority over any or all administrative expenses of the kind specified in Sections 503(b) or 507(b) of the Bankruptcy Code.

     “ Tax ” shall mean any present or future tax, levy, impost, duty, assessment, charge, fee, deduction or withholding of any nature and whatever called (including any GST or PST), including any interest, additions to tax or penalties thereto, by whomsoever, on whomsoever and wherever imposed, levied, collected, withheld or assessed; provided that, “ Tax on the overall net income ” of a Person shall be construed as a reference to a tax imposed by the jurisdiction in which that Person is organized or in which that Person’s applicable principal office is located or in which that Person is deemed to be doing business on all or part of the net income, profits or gains (whether worldwide, or only insofar as such income, profits or gains are considered to arise in or to relate to a particular jurisdiction, or otherwise) of that Person.

     “ Transferred Receivables ” shall have the meaning specified in the Originator Purchase Agreement.

     “ UCC ” shall mean the personal property security laws as from time to time in effect in any applicable United States jurisdiction which govern the validity, perfection (or opposability), effect of perfection or of non-perfection or priority of security interests.

     “ Unrestricted Cash ” shall mean cash and Cash Equivalents that would not appear in the combined financial statements of the Abitibi Entities, prepared on a combined basis and otherwise in accordance with GAAP, as a line item on the balance sheet as “restricted cash” or similar caption.

     “ US Cases ” shall mean, collectively, the Chapter 11 Cases and the Chapter 15 Case.

     “ US GAAP ” shall mean generally accepted accounting principles in the United States of America as in effect from time to time.

     “ US Person ” shall mean any Person that is organized under the laws of the United States or any state thereof.

     “ US Subsidiary ” shall mean each Subsidiary that is a US Person.

      (b)  Terms Defined in the ARRPA . As used in this Agreement, the following terms shall have the meanings set forth in the ARRPA:

Adequate Protection Claims
Bankruptcy Code
Bankruptcy Court
Business Day
CAD
Canadian Amended Order
Canadian Court
Canadian Dollar Equivalent
Capital
CCAA
Collateral
Collateral Availability
Collections
Dollars
Dollar Equivalent
Eligible Assignee
GST
Indemnified Amounts
Indemnified Party
Insurance Policy
Insurance Policy Event
Majority Banks
Originator
Originator Purchase Agreement
Originator Receivable
Petition Date
PPSA
PST
Purchase Limit

Receivable
Receivable Interest
Related Security
Securitization Provisions
Settlement Date (Yield and Fees)
Superpriority Guaranty Claims
Superpriority Receivables Claims
Syndication Agent
Termination Amount
Transaction Documents
US Final Order
US Interim Order
Yield

      SECTION 1.02 . Terms Generally. Except where the context requires otherwise, the definitions in Section 1.01 shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “ include ”, “ includes ” and “ including ” shall be deemed to be followed by the phrase “ without limitation ”. Unless otherwise stated, references to Sections, Articles, Schedules and Exhibits made herein are to Sections, Articles, Schedules or Exhibits, as the case may be, of this Agreement. “ Writing ”, “ written ” and comparable terms refer to printing, typing and other means of reproducing words in a visible form. References to any agreement or contract are to such agreement or contract as amended, modified or supplemented from time to time in accordance with the terms hereof and thereof. References to any Person include the successors and permitted assigns of such Person. References “ from ” or “ through ” any date mean, unless otherwise specified, “ from and including ” or “ through and including ”, respectively. Unless otherwise stated, references herein to any Dollar amount shall include a reference to the Canadian Dollar Equivalent thereof.

ARTICLE 2

Guarantees

      SECTION 2.01 . The Guarantees. Each Guarantor hereby unconditionally guarantees the full and punctual payment (whether at stated maturity, upon acceleration or otherwise) of the Guaranteed Obligations. Upon failure by the Seller to pay punctually any amounts in respect of the Guaranteed Obligations, the Guarantors shall forthwith on demand pay the amount not so paid at the place and in the manner specified in the ARRPA.

      SECTION 2.02 . Guarantee Unconditional. The obligations of each Guarantor hereunder shall be unconditional and absolute and, without limiting the generality of the foregoing, shall not be released, discharged or otherwise affected by:

      (a)  any extension, renewal, settlement, compromise, waiver or release in respect of any obligation of the Seller under any Transaction Document, by operation of law or otherwise;

      (b)  any modification or amendment of or supplement to any Transaction Document;

      (c)  any release, impairment, non-perfection or invalidity of any direct or indirect security for any obligation of the Seller, any Guarantor or any other Person under any Transaction Document;

      (d)  any change in the corporate existence, structure or ownership of the Seller, any Guarantor or any other Person or any of their respective subsidiaries, or any insolvency, bankruptcy, reorganization or other similar proceeding affecting the Seller, any Guarantor or any other Person or any of their assets or any resulting release or discharge of any obligation of the Seller, any Guarantor or any other Person under any Transaction Document;

      (e)  the existence of any claim, set off or other right that such Guarantor may have at any time against the Seller, any Guarantor, any Bank or any other Person, whether in connection with the Transaction Documents or any unrelated transactions; provided that nothing herein shall prevent the assertion of any such claim by separate suit or compulsory counterclaim;

      (f)  any invalidity or unenforceability relating to or against the Seller, any Guarantor or any other Person for any reason of any Transaction Document, or any provision of applicable law or regulation purporting to prohibit the payment of the Guaranteed Obligations by the Seller, any Guarantor or any other Person; or

      (g)  any other act or omission to act or delay of any kind by the Seller, any Guarantor, any other party to any Transaction Document, any Bank or any other Person, or any other circumstance whatsoever that might, but for the provisions of this clause (g), constitute a legal or equitable discharge of or defense to any obligation of any Guarantor hereunder.

      SECTION 2.03 . Discharge Only Upon Payment In Full; Reinstatement In Certain Circumstances.

      (a)  Each Guarantor’s obligations hereunder shall remain in full force and effect until all Guaranteed Obligations shall have been paid in full. If at any time any payment of any Guaranteed Obligation is rescinded or must be otherwise restored or returned upon the insolvency, bankruptcy or reorganization of the Seller or otherwise, the Guarantors’ obligations hereunder with respect to such payment shall be reinstated as though such payment had been due but not made at such time.

      (b)  Each Guarantor agrees that (i) its obligations under this Agreement shall not be discharged by the entry of an order confirming a Reorganization Plan (and each of the Guarantors, pursuant to Section 1141(d)(4) of the Bankruptcy Code, hereby waives any such discharge) and (ii) the Superpriority Guaranty Claims granted to the Agent and the Banks pursuant to the US Interim Order (or the US Final Order, as applicable) shall not be affected in any manner by the entry of an order confirming a Reorganization Plan in any of the Cases.

      SECTION 2.04 . Waiver By Guarantors. Each Guarantor irrevocably waives acceptance hereof, diligence, presentment, demand, protest and any notice not provided for herein, as well as

any requirement that at any time any action be taken by any Person or entity against the Guarantor, the Seller, any Guarantor or any other Person or entity.

      SECTION 2.05 . Subrogation. A Guarantor that makes a payment with respect to a Guaranteed Obligation or by reason of contribution against any other guarantor of such Guaranteed Obligation hereunder shall be subrogated to the rights of the payee against the Seller with respect to such payment; provided that no Guarantor shall enforce any payment by way of subrogation against the Seller so long as any Guaranteed Obligation remains unpaid.

      SECTION 2.06 . Stay Of Acceleration. If acceleration of the time for payment of any Guaranteed Obligation is stayed upon the insolvency, bankruptcy or reorganization of the Seller, all such Guaranteed Obligations otherwise subject to acceleration under the terms of the Transaction Documents shall nonetheless be payable by the Guarantors hereunder forthwith on demand by the Banks.

      SECTION 2.07 . Payments. All payments made by any Guarantor pursuant to this Article 2 shall be made to the Agent for the ratable benefit of the Banks.

ARTICLE 3

Representations And Warranties Of The Obligors

     Each Obligor represents and warrants, to the Agent and the Banks that:

      SECTION 3.01 . Existence, Qualification And Power; Compliance With Laws. Each Abitibi Entity (a) is a Person duly organized or formed, validly existing and in good standing, in each case where such concept exists, under the Laws of the jurisdiction of its incorporation or organization, except, in the case of an Abitibi Entity that is not the Seller or an Obligor, to the extent failure to be duly organized or formed and in good standing would not be reasonably expected to have a Material Adverse Effect, (b) subject to the entry by the Bankruptcy Court of (x) the US Interim Order at any time prior to the entry of the US Final Order and (y) the US Final Order thereafter, and subject to the entry by the Canadian Court of the Canadian Amended Order, and in each such case, subject to the terms thereof, has all requisite constitutional, corporate or other similar power and authority to (i) own or lease its material assets and carry on its business substantially as currently conducted and (ii) execute, deliver and perform its obligations under the Transaction Documents to which it is a party, except, in the case of clause (b)(i), to the extent that failure to have any requisite power or authority would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, (c) subject to the entry by the Bankruptcy Court of (x) the US Interim Order at any time prior to the entry of the US Final Order and (y) the US Final Order thereafter, and subject to the entry by the Canadian Court of the Canadian Amended Order, and in each such case, subject to the terms thereof, is duly qualified and in good standing, in each case where such concept exists, under the Laws of each jurisdiction where its ownership, lease or operation of properties or the conduct of its business requires such qualification; except to the extent that failure to be duly qualified and in good standing would not, individually or in the aggregate, be reasonably expected to have a Material Adverse Effect, (d) is in compliance with all Laws, orders, writs and injunctions except

to the extent failure to comply therewith is permitted by the Bankruptcy Code or the CCAA or the Canadian Amended Order and except to the extent failure to comply therewith would not, individually or in the aggregate, reasonably be expected to cause a Material Adverse Effect and (e) subject to the entry by the Bankruptcy Court of (x) the US Interim Order at any time prior to the entry of the US Final Order and (y) the US Final Order thereafter, and subject to the entry by the Canadian Court of the Canadian Amended Order, has all requisite governmental licenses, authorizations, consents and approvals to operate its business as currently conducted except to the extent that failure to have any requisite governmental license, authorization, consent and approval would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

      SECTION 3.02 . Authorization; No Contravention. Subject to the entry by the Bankruptcy Court of (x) the US Interim Order at any time prior to the entry of the US Final Order and (y) the US Final Order thereafter, and subject to the entry by the Canadian Court of the Canadian Amended Order, and in each such case, subject to the terms thereof, the execution, delivery and performance by each Obligor of each Transaction Document to which such Person is a party, and the consummation of the transactions contemplated thereby, are within such Person’s corporate or other powers, have been duly authorized by all necessary corporate or other organizational action, and do not and will not (a) contravene the terms of any of such Person’s Organizational Documents; (b) conflict with or result in any breach or contravention of, or the creation of any Lien on any of the properties or assets of any Abitibi Entity (other than Liens created under the Transaction Documents), or require any payment to be made under (i) any Contractual Obligation to which such Person is a party or affecting such Person or the properties of such Person or any of its Subsidiaries or (ii) any order, injunction, writ or decree of any Governmental Authority or any arbitral award to which such Person or its property is subject; or (iii) any Law; except with respect to any conflict, breach or contravention or payment (but not creation of Liens) referred to in this clause (b), to the extent that such conflict, breach, contravention or payment could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

      SECTION 3.03 . Governmental Authorization; Other Consents. No approval, consent, exemption, authorization, or other action by, or notice to, or filing with, any Governmental Authority (except as required under the Bankruptcy Code and the CCAA and applicable state, federal (U.S. or Canadian) and provincial bankruptcy rules) or any other Person is necessary for or required of an Obligor as a condition to the execution, delivery or performance by such Obligor, or enforcement against such Obligor, of any Transaction Document other than the filings necessary to perfect the interest of the Seller, the Agent (for the benefit of the Banks) in the Receivables Interests.

      SECTION 3.04 . Binding Effect. Subject to the entry by the Bankruptcy Court of (x) the US Interim Order at any time prior to the entry of the US Final Order and (y) the US Final Order thereafter, and subject to the entry by the Canadian Court of the Canadian Amended Order, and in each such case, subject to the terms thereof, this Agreement and each other Transaction Document has been duly executed and delivered by each Obligor that is a party thereto. Subject to the entry by the Bankruptcy Court of (x) the US Interim Order at any time prior to the entry of the US Final Order and (y) the US Final Order thereafter, and subject to the entry by the Canadian Court of the Canadian Amended Order, and in each such case, subject to the terms

thereof, this Agreement and each other Transaction Document constitutes a legal, valid and binding obligation of each Obligor that is a party thereto, enforceable against such Obligor in accordance with its terms.

      SECTION 3.05 . Historical Financial Statements. The Historical Financial Statements were prepared in conformity with GAAP (except, with respect to the financial statements for Fiscal Year 2008, to the extent that the combination of the financial statements of ACI and Donohue is not in accordance with GAAP) and fairly present, in all material respects, the financial position, on a consolidated or combined basis, as applicable, of the Persons described in such financial statements as at the respective dates thereof and the results of operations and cash flows, on a combined basis, of the Persons described therein for each of the periods then ended, subject, in the case of any such unaudited financial statements, to changes resulting from normal year-end audit adjustments. Except as otherwise publicly disclosed by ABH and its Affiliates prior to the Effective Date, as of the Effective Date no Abitibi Entity has any contingent liability or liability for taxes, long-term lease or unusual forward or long-term commitment that is not reflected in the Historical Financial Statements or the notes thereto and which in any such case is material in relation to the bu