Exhibit 10.1

SECOND AMENDMENT

This Amendment (the “Amendment”) to the Credit Agreement referred to below is
dated as of October 31, 2007, by and among BOWATER INCORPORATED, a corporation
organized under the laws of Delaware, in its capacity as Borrower under the
Credit Agreement referred to below (the “Borrower”), certain Subsidiaries of the
Borrower party hereto (the “Subsidiary Grantors”), the lenders party hereto (the
“Lenders”) pursuant to an authorization (in the form attached hereto as Exhibit
A, each a “Lender Authorization”) and WACHOVIA BANK, NATIONAL ASSOCIATION, as
administrative agent (the “Administrative Agent”) for the lenders party to the
Credit Agreement referred to below.

STATEMENT OF PURPOSE:

The Borrower, the Lenders, certain other financial institutions and the
Administrative Agent are parties to the Credit Agreement dated as of May 31,
2006 (as amended by that certain First Amendment dated as of July 20, 2007, as
amended hereby and as further amended, restated, supplemented or otherwise
modified from time to time, the “Credit Agreement”).

The Borrower has requested that the Administrative Agent and the Lenders agree
to amend the Credit Agreement as more specifically set forth herein. Subject to
the terms and conditions set forth herein, the Administrative Agent and each of
the Lenders have agreed to grant such requests of the Borrower.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto hereby agree as follows:

1. Capitalized Terms. All capitalized undefined terms used in this Amendment
(including, without limitation, in the introductory paragraph and the statement
of purpose hereto) shall have the meanings assigned thereto in the Credit
Agreement (as amended by this Amendment).

2. Credit Agreement Amendments. The Credit Agreement is hereby amended as
follows:

(a) Amendment to Section 1.1 of the Credit Agreement (“Definitions”).
Section 1.1 of the Credit Agreement is hereby amended by adding the following
new definition in correct alphabetical order:

““Specified Non-Recurring Charges” means the non-recurring charges against
income taken by the Borrower during the following periods in the following
amounts:

(a) with respect to the fiscal quarter ended March 31, 2007, non-recurring
charges in the amount of $9,500,000;

(b) with respect to the fiscal quarter ended June 30, 2007, non-recurring
charges in the amount of $20,000,000;

(c) with respect to the fiscal quarter ended September 30, 2007, non-recurring
charges in an amount to be determined in accordance with GAAP but not to exceed
$50,000,000; and

(d) with respect to the fiscal quarter ending December 31, 2007, non-recurring
charges consisting of (i) severance expenses of the Borrower taken in such
quarter in an amount not to exceed $50,000,000 and (ii) merger costs incurred
with respect to the Combination in an amount to be determined in accordance with
GAAP;

 

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provided that, notwithstanding anything to the contrary contained in this
Agreement or any other Loan Document, for purposes of calculating the
Consolidated Senior Secured Leverage Ratio and the interest coverage ratio as
set forth in Section 9.2, such non-recurring charges shall be excluded from the
non-recurring charges included in clause (b)(v) of the definition of
Consolidated EBITDA.”

(b) Amendment to Section 1.1 of the Credit Agreement (“Definitions”).
Section 1.1 of the Credit Agreement is hereby amended by:

(i) deleting the definition of “Asset Coverage Amount” in its entirety and
replacing it with the following:

““Asset Coverage Amount” means, as of any date of determination, an amount equal
to eighty-five percent (85%) of the net book value of the Coverage Assets as set
forth on the Consolidated balance sheet of the Borrower and its Consolidated
Subsidiaries most recently delivered pursuant to Sections 5.2 or 7.1 hereof;
provided, however that such percentage shall be reduced to seventy-five percent
(75%) during the period from October 1, 2007 through and including September 30,
2008.”

(ii) deleting the definition of “Consolidated Senior Secured Leverage Ratio” in
its entirety and replacing it with the following:

““Consolidated Senior Secured Leverage Ratio” means, as of any date of
determination, the ratio of (a) Consolidated Total Senior Secured Indebtedness
on such date to (b) the sum of (i) Consolidated EBITDA for the period of four
(4) consecutive fiscal quarters ending on or immediately prior to such date plus
(ii) the amount of Specified Non-Recurring Charges taken during the period of
four (4) consecutive fiscal quarters ending on or immediately prior to such
date.”

(c) Amendment to Section 9.2 of the Credit Agreement (“Interest Coverage
Ratio”). Section 9.2 of the Credit Agreement is hereby amended by deleting such
Section in its entirety and replacing it with the following:

SECTION 9.2 Interest Coverage Ratio. As of any fiscal quarter ending during the
periods specified below, permit the ratio of (a) the sum of (i) Consolidated
Adjusted EBITDA for the period of four (4) consecutive fiscal quarters ending on
or immediately prior to such date, plus (ii) the amount of Specified
Non-Recurring Charges taken during the period of four (4) consecutive fiscal
quarters ending on or immediately prior to such date, to (b) Consolidated
Interest Expense paid or payable in cash for the period of four (4) consecutive
fiscal quarters ending on or immediately prior to such date, to be less than the
corresponding ratio set forth below.

 

Applicable Period

  

Minimum Ratio

On or prior to September 30, 2007    2.00 to 1.00 October 1, 2007 through and
including December 31, 2007    1.50 to 1.00 January 1, 2008 through and
including June 30, 2008    1.60 to 1.00 July 1, 2008 through and including
September 30, 2008    1.80 to 1.00 October 1, 2008 and thereafter    2.00 to
1.00

 

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3. Conditions to Effectiveness. Upon the satisfaction of each of the following
conditions, this Amendment shall be deemed to be effective as of the date
hereof:

(a) the Administrative Agent shall have received counterparts of this Amendment
executed by the Administrative Agent (on behalf of the Lenders by virtue of each
Lender’s execution of a Lender Authorization), the Borrower and the Subsidiary
Grantors;

(b) the Administrative Agent shall have received executed Lender Authorizations
from the requisite Lenders;

(c) the Administrative Agent shall have been reimbursed for all fees and
out-of-pocket charges and other expenses incurred in connection with this
Amendment, including, without limitation, the reasonable fees and disbursements
of counsel for the Administrative Agent;

(d) the Administrative Agent shall have received a corresponding amendment to
the Canadian Credit Agreement, in form and substance substantially consistent
with this Amendment (with such changes as are applicable only to the Canadian
Credit Agreement), duly executed by the Canadian Administrative Agent, the
Canadian Borrower, each Canadian Guarantor and the requisite Canadian Lenders
(whether directly or through a lender authorization);

(e) the Borrower shall have paid to the Administrative Agent (or its applicable
affiliates), for the account of each Lender (including the Administrative Agent)
that executes and delivers this Amendment or a Lender Authorization to the
Administrative Agent (or its counsel) on or prior to 5 p.m. (Eastern Time) on
October 31, 2007, an amendment fee in an amount equal to 5 basis points times
the principal amount of such Lender’s Commitment; and

(f) the Administrative Agent shall have received such other instruments,
documents and certificates as the Administrative Agent shall reasonably request
in connection with the execution of this Amendment.

4. Effect of the Amendment. Except as expressly provided herein, the Credit
Agreement and the other Loan Documents shall remain unmodified and in full force
and effect. Except as expressly set forth herein, this Amendment shall not be
deemed (a) to be a waiver of, or consent to, a modification or amendment of, any
other term or condition of the Credit Agreement or any other Loan Document,
(b) to prejudice any other right or rights which the Administrative Agent or the
Lenders may now have or may have in the future under or in connection with the
Credit Agreement or the other Loan Documents or any of the instruments or
agreements referred to therein, as the same may be amended, restated,
supplemented or otherwise modified from time to time, (c) to be a commitment or
any other undertaking or expression of any willingness to engage in any further
discussion with the Borrower or any other Person with respect to any waiver,
amendment, modification or any other change to the Credit Agreement or the Loan
Documents or any rights or remedies arising in favor of the Lenders or the
Administrative Agent, or any of them, under or with respect to any such
documents or (d) to be a waiver of, or consent to or a modification or amendment
of, any other term or condition of any other agreement by and among the
Borrower, on the one hand, and the Administrative Agent or any other Lender, on
the other hand. References in the Credit Agreement to “this Agreement” (and
indirect references such as “hereunder”, “hereby”, “herein”, and “hereof”) and
in any Loan Document to the Credit Agreement shall be deemed to be references to
the Credit Agreement as modified hereby.

 

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5. Representations and Warranties/No Default. By its execution hereof, the
Borrower hereby certifies, represents and warrants to the Administrative Agent
and the Lenders that:

(a) after giving effect to the amendments set forth in Section 2 above, each of
the representations and warranties set forth in the Credit Agreement and the
other Loan Documents is true and correct in all material respects as of the date
hereof (except to the extent that (i) any such representation or warranty that
is qualified by materiality or by reference to Material Adverse Effect, in which
case such representation or warranty is true and correct in all respects as of
the date hereof or (ii) any such representation or warranty relates only to an
earlier date, in which case such representation or warranty shall remain true
and correct as of such earlier date) and that no Default or Event of Default has
occurred or is continuing;

(b) the Borrower and each of the Subsidiary Grantors has the right, power and
authority and has taken all necessary corporate and other action to authorize
the execution, delivery and performance of this Amendment and each of the other
documents executed in connection herewith to which it is a party in accordance
with their respective terms and the transactions contemplated hereby; and

(c) this Amendment and each other document executed in connection herewith has
been duly executed and delivered by the duly authorized officers of the Borrower
and each of the Subsidiary Grantors, and each such document constitutes the
legal, valid and binding obligation of the Borrower and each of the Subsidiary
Grantors, enforceable in accordance with its terms, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar state or federal
debtor relief laws from time to time in effect which affect the enforcement of
creditors’ rights in general and the availability of equitable remedies.

6. Reaffirmations. The Borrower and each of the Subsidiary Grantors as
applicable (a) agrees that the transactions contemplated by this Amendment shall
not limit or diminish the obligations of the Borrower and such Subsidiary
Grantor under, or release the Borrower or such Subsidiary Grantor from any
obligations under, the Subsidiary Guaranty Agreement, the Collateral Agreement
and each other Security Document to which it is a party, (b) confirms and
reaffirms its obligations under the Subsidiary Guaranty Agreement, the
Collateral Agreement and each other Security Document to which it is a party and
(c) agrees that the Subsidiary Guaranty Agreement, the Collateral Agreement and
each other Security Document to which it is a party remain in full force and
effect and are hereby ratified and confirmed. In furtherance of the
reaffirmations set forth in this Section 6, the Borrower and the Subsidiary
Grantors hereby grant to the Administrative Agent, for the ratable benefit of
itself and the Lenders, a security interest in, all Collateral and all proceeds
thereof as security for the Obligations, in each case subject to any applicable
terms and conditions set forth in the Subsidiary Guaranty Agreement, the
Collateral Agreement and each other Security Document to which it is a party.

7. Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO THE
CONFLICTS OF LAW PRINCIPLES THEREOF.

8. Counterparts. This Amendment may be executed by one or more of the parties
hereto in any number of separate counterparts and all of said counterparts taken
together shall be deemed to constitute one and the same instrument.

 

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9. Electronic Transmission. A facsimile, telecopy, pdf or other reproduction of
this Amendment may be executed by one or more parties hereto, and an executed
copy of this Amendment may be delivered by one or more parties hereto by
facsimile or similar instantaneous electronic transmission device pursuant to
which the signature of or on behalf of such party can be seen, and such
execution and delivery shall be considered valid, binding and effective for all
purposes. At the request of any party hereto, all parties hereto agree to
execute an original of this Amendment as well as any facsimile, telecopy, pdf or
other reproduction hereof.

[Signature Pages Follow]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed as of the date and year first above written.

 

BORROWER:

BOWATER INCORPORATED

By:

 

/s/ Duane A. Owens

Name:

  Duane A. Owens

Title:

  Vice President and Treasurer

SUBSIDIARY GRANTORS:

BOWATER MISSISSIPPI HOLDINGS INC.

By:

 

/s/ William G. Harvey

Name:

  William G. Harvey

Title:

  Vice President and Treasurer

BOWATER MISSISSIPPI LLC

By:

 

/s/ William G. Harvey

Name:

  William G. Harvey

Title:

  Vice President and Treasurer

BOWATER AMERICA INC.

By:

 

/s/ William G. Harvey

Name:

  William G. Harvey

Title:

  President

BOWATER NUWAY INC.

By:

 

/s/ William G. Harvey

Name:

  William G. Harvey

Title:

  Vice President

[Signature Pages Continue]

 

[Second Amendment – Bowater]

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BOWATER NUWAY MID-STATES INC.

By:

 

/s/ William A. McCormick

Name:

 

William A. McCormick

Title:

 

Assistant Secretary

BOWATER ALABAMA INC.

By:

 

/s/ William G. Harvey

Name:

  William G. Harvey

Title:

  Vice President and Treasurer

[Signature Pages Continue]

 

[Second Amendment – Bowater]

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WACHOVIA BANK, NATIONAL ASSOCIATION, as Administrative Agent (on behalf of
itself and the Lenders who have executed a Lender Authorization) and as Issuing
Lender, Swingline Lender and a Lender

By:

 

/s/ James Travagline

Name:

 

James Travagline

Title:

 

Vice President

 

[Second Amendment – Bowater]

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Exhibit A

Form of Lender Authorization

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LENDER AUTHORIZATION

Bowater Incorporated

Second Amendment

October     , 2007

Wachovia Bank, National Association

Charlotte Plaza, CP-8

201 South College Street

Charlotte, North Carolina 28288-0680

Attention: Syndication Agency Services

 

Re:   (a) the Second Amendment dated as of October     , 2007 (the “Amendment”)
to that certain Credit Agreement dated as of May 31, 2006 (as amended, the
“Credit Agreement”) among Bowater Incorporated (the “Borrower”), the lenders
party thereto (the “Lenders”), and Wachovia Bank, National Association, as
administrative agent (the “Administrative Agent”) for the Lenders and (b) the
Second Amendment dated as of October     , 2007 (the “Canadian Amendment” and,
together with the Amendment, the “Amendments”) to that certain Credit Agreement
dated as of May 31, 2006 (as amended, the “Canadian Credit Agreement”) among
Bowater Canadian Forest Products Inc. (the “Canadian Borrower”), the Borrower,
the lenders party thereto (the “Canadian Lenders”), and The Bank of Nova Scotia,
as administrative agent (the “Canadian Administrative Agent”) for the Canadian
Lenders.

This Lender Authorization acknowledges our receipt and review of the execution
copy of the Amendments, each in the form posted on SyndTrak Online or otherwise
distributed to us by the Administrative Agent or the Canadian Administrative
Agent. By executing this Lender Authorization, we hereby approve the Amendments
and authorize the Administrative Agent or the Canadian Administrative Agent (as
applicable) to execute and deliver the Amendments on our behalf.

Each financial institution executing this Lender Authorization agrees or
reaffirms that it shall be a party to the Amendments and the other Loan
Documents (as defined in the Credit Agreement) to which Lenders are parties and
shall have the rights and obligations of a Lender (as defined in the Credit
Agreement), and agrees to be bound by the terms and provisions applicable to a
“Lender”, under each such agreement. In furtherance of the foregoing, each
financial institution executing this Lender Authorization agrees to execute any
additional documents reasonably requested by the Administrative Agent to
evidence such financial institution’s rights and obligations under the Credit
Agreement.

 

 

[Insert name of applicable financial institution]

By:

 

 

Name:

 

Title: