EXHIBIT 10.33
ENGLISH TRANSLATION OF FRENCH LANGUAGE ORIGINAL
AGREEMENT CONCERNING THE
PULP AND PAPER OPERATIONS OF ABITIBIBOW CANADA IN QUEBEC

     
BETWEEN:
  BOWATER CANADIAN FOREST PRODUCTS INC., a legal person duly constituted under
the laws of Nova Scotia, having its registered office in Halifax, Nova Scotia,
and ABITIBI- CONSOLIDATED COMPANY OF CANADA, a legal person duly constituted
under the laws of Quebec, having its head office in Montreal, Quebec, both
acting and duly represented for the purposes hereof by Mr David J. Paterson,
President, on their own behalf and on behalf of any Canadian successor upon
emergence from the current restructuring process described herein
 
   
 
  (hereinafter collectively called “AbiBow Canada”);
 
   
AND:
  THE GOVERNMENT OF QUEBEC, acting and duly represented for the purposes hereof
by Mr. Clément Gignac, Minister of Economic Development, Innovation and Export
Trade

(hereinafter called the “Government”).

Recitals
Whereas the pulp and paper industry is experiencing a very difficult period;
Whereas AbiBow Canada, as well as the group formed with its holding company
AbitibiBowater Inc. (hereafter referred to as “AbiBow”), is affected as is the
entire industry, notably as a result of the significant reduction in the demand
for newsprint and of the economic context;
Whereas the Canadian subsidiaries of AbiBow sought the protection of the
Companies’ Creditors Arrangement Act (R.S.C. 1985, c. C-36) (hereinafter called
the “CCAA”), on April 17, 2009;
Whereas the Minister of Finance, the Minister of Economic Development,
Innovation and Export Trade and the Minister of Natural Resources and Wildlife
announced, on April 17, 2009, an exceptional intervention by authorizing
Investissement Quebec to grant a guarantee of a loan for a maximum of
US$100 million to certain members of the AbiBow group, which loan has since been
repaid;
Whereas AbiBow, in cooperation with its creditors, its stakeholders, the CCAA
Monitor and its financial advisors, has developed a 5-year business plan based
on its current outlook that provides for improved profit margins and cash flow,
and these improvements will be possible in part because of the efforts of AbiBow
and its employees to concentrate on the manufacturing operations of highly
competitive facilities;
Whereas AbiBow currently has two primary operating companies in Canada,
Abitibi-Consolidated Company of Canada and Bowater Canadian Forest Products
Inc., the combination of which to form AbiBow Canada is planned upon emergence
from the current restructuring process, and these two companies have significant
solvency deficits in their pension plans;
Whereas, since the start of its restructuring process AbiBow Canada has
initiated discussions and actively worked with the Government and competent
authorities, in the interest of its business and of all its stakeholders,
including in order to (i) identify measures to protect its employees and
retirees, and (ii) promote its emergence from the restructuring process as a
stronger and more sustainable company, including so as to resume contributions
to these plans;
Whereas a significant proportion of the Canadian activities of AbiBow are in
Quebec;

 

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Whereas pursuant to the business plan established by AbiBow, AbiBow Canada
intends to (i) keep all its Quebec pulp and paper mills active, which mills have
a theoretical capacity of approximately two million metric tons, and (ii) make
or take every reasonably required effort and measure to ensure the viability of
its Quebec pulp and paper mills, in the same way it does for mills of the AbiBow
group located outside Quebec having similar delivered costs for similar
products;
Whereas in connection with its emergence from the restructuring process, AbiBow
Canada has been discussing with the competent authorities with respect to relief
measures in order for the registered pension plans in Quebec for its pulp and
paper operations (“pension plans”) to continue to pay 100% of the pensions to
their retirees and beneficiaries;
Whereas in order to ensure the completion of AbiBow Canada’s restructuring the
Government’s support in various forms is required;
CONSEQUENTLY, THE PARTIES AGREE TO THE FOLLOWING:

1.   AbiBow Canada Covenants   1.1.   Governance

AbiBow Canada agrees:

1.1.1.   not to pay any dividend while the weighted average solvency ratio of
its pension plans is less than 80%;

1.1.2.   to abide by the AbiBow compensation plan with respect to salaries,
bonuses and severance, which description was filed with the Court and its
creditors in the context of its restructuring process is attached hereto as
Schedule I;   1.1.3.   to present to the Government the annual financial results
of AbiBow as soon as they are made public; and   1.1.4.   to report annually to
the Government on the implementation of its business plan, which description was
filed with the Court and its creditors in the context of its restructuring
process is attached hereto as Schedule II;   1.2.   Pension Plans

AbiBow Canada agrees, subject to the arrangements made with the competent
authorities:

1.2.1.   that it will not voluntarily terminate any of its pension plans in
Quebec before it emerges from the Court protection under the CCAA;

1.2.2.   that it will continue its discussions with the Régie des rentes du
Québec to examine solutions in order to avoid termination of pension plans; and

1.2.3.   that the undertakings set forth in this Section 1.2 will also be
complied with by its subsidiaries that participate in a supplemental pension
plan governed by the Supplemental Pension Plans Act (R.S.Q., c. R-15.1);

1.3.   Investments

AbiBow Canada agrees:

1.3.1.   in its pulp and paper operations, that at least 60% of its maintenance
and value-creation investments shall be made in Quebec, such that, for example,
investments of $60 million per year would result in a minimum investment of
$180 million during a 5-year period for Quebec;

1.3.2.   to make investments in strategic projects in Quebec in a minimum amount
of $75 million over a 5-year period, to which an amount of $10 million may be
added in the event no amount becomes payable in

 

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connection with the maintenance of AbiBow Canada production capacity in Quebec,
as provided in Section 1.4.4.

1.4.   Business Continuity

AbiBow Canada agrees:

1.4.1.   that the head office of AbiBow and all its actual related functions
shall remain in Quebec;   1.4.2.   that if a pulp and paper mill is permanently
shut down in Quebec, it shall give the Government and the affected communities
the opportunity to find recovery alternatives;   1.4.3.   that it shall offer
favourable conditions to enable potential buyers to purchase its pulp and paper
assets at market value, in the event of a sale of such assets located in Quebec,
such favourable conditions including the analysis on a case-by-case basis of the
need to have non-competition provisions;   1.4.4.   that, having regard to its
intent described in the recital to maintain the production capacity of the
Quebec pulp and paper mills, it shall pay to one or more pension plans, as
additional solvency special payments, a total compensation of $75 for every
metric ton reduction in such production capacity resulting from a definitive
shutdown of at least one machine, including a temporary shutdown for more than 6
consecutive months or 9 cumulative months over a period of 18 months, without
any duplication in the capacity levels of pulp and of paper or otherwise, such
compensation being payable over 4 years and only once for any given
circumstance; it being understood that no payment shall be made in respect of
any pension plan having an excess surplus under applicable tax laws;   1.4.5.  
that, where delivered costs are equivalent to those of its mills located outside
Quebec, not to transfer outside Quebec any pulp and paper production (or part
thereof) located in its mills located in Quebec at the time all of the terms of
this letter become effective; and   1.4.6.   to create a diversification fund by
contributing 2 million dollars per year for 5 years for the benefit of the
municipalities and the workers where the Company’s Quebec mills are located.  
2.   Term   2.1.   The present letter will become effective as of the time of
AbiBow Canada’s emergence from Court protection under the CCAA and will expire
5 years after such emergence, except Section 1.2.1 that becomes effective upon
its signing.   2.2.   The parties agree to re-evaluate, after the 5 year term,
the covenants of this letter, in light of AbiBow Canada’s situation, the
conditions affecting the pulp and paper industry as a whole and the solvency of
its pension plans.   3.   Assignment   3.1.   The rights and obligations
provided herein shall not, under penalty of being null and void, be assigned, in
whole or in part, without consent of the Government and of AbiBow Canada.   4.  
Notice   4.1.   A notice and other communication must be in writing and sent to
the parties to their respective addresses by recommended or certified mail, or
by fax or messenger. Such notice and communication is deemed to have been
received the same day it was sent by fax or messenger, and if it was sent by
mail, on the fifth business day following.       In all cases, the party giving
notice must be able to evidence the sending of the notice if required to do so
by the other party, absent which the notice is deemed null and void.

 

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TO:   Government
Minister of Economic Development, Innovation and Export Trade
710 Place D’Youville, 9th floor
Québec (Québec) G1R 4Y4

Fax: 418 643-0221
Attention: Mr. Mario Bouchard

TO:   AbiBow Canada
1155 Metcalfe Street, Suite 800
Montréal (Québec) H3B 5H2 Canada

Fax: 514 394-3644
Attention: Senior Vice-President, Corporate Affairs and Chief Legal Officer

5.   General provisions   5.1.   The present letter (except the schedules) can
only be modified by an amendment duly signed by the parties. The plans described
in the schedules herein may be modified by AbiBow from time to time, AbiBow
Canada agrees to notify the Government promptly of any important changes to
these, including for all information that the Government considers reasonably
necessary on this subject, and to report annually to the Government all the
changes made to the said plans. The recitals to the present letter do not confer
rights or obligations in respect of either one of the parties.   5.2.   Time is
of the essence of this letter.   5.3.   Each party to this letter represents and
warrants to the other party (i) that it has the required authorizations and full
powers to sign this letter and execute all its obligations contemplated herein,
(ii) that by the signing and performance of this letter it is not violating its
constituting act, as applicable, nor any law or regulation, and (iii) that
following its signing this letter will create contractual obligations as
described herein, will have full effect and will be fully enforceable against it
pursuant to its terms, subject, except as otherwise provided, in the case of
AbiBow Canada, to the insolvency laws of general application, to its emergence
from the restructuring process under the CCAA, and any required authorizations.
  5.4.   Any covenant or condition in favour of a party may only be waived by
this party. If one or several provisions herein, or arrangements entered into in
connection with this letter, were found to be invalid by a Court for any reason
whatsoever, the other provisions contained therein would continue to have their
full effect between the parties and, if an invalidated provision had a
significant negative impact on either one of the parties, they will negotiate in
good faith the relevant terms in order to compensate the affected party in an
equivalent manner.   5.5.   This letter is governed by and must be interpreted
pursuant to the laws applicable in Quebec.   5.6.   No party is authorized to
bind the other party towards a third party without first obtaining the other
party’s written consent. The covenants contained herein only benefit the parties
and their respective subsidiaries. Nothing herein shall be construed as a
stipulation for another.   5.7.   Except as otherwise provided, all references
herein to dollars must be understood as a reference to Canadian dollars.   5.8.
  This letter can be signed in several counterparts, each one deemed to be an
original counterpart, but all the counterparts constitute one and the same
agreement.

 

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5.9.   The representatives and signatories for AbiBow Canada and the Government
declare that they have read this letter and its schedules and that they accept
its terms, conditions and modalities and sign it in good faith in the name of
AbiBow Canada and the Government, respectively.   5.10.   The necessary
arrangements in respect of AbiBow Canada’s pensions plans and their continued
existence are for AbiBow Canada essential conditions to this letter and related
arrangements taken in connection with it, without which AbiBow Canada would not
have entered into them.   5.11.   In the event of a disagreement or conflict
resulting from or in connection with this letter, including with its
interpretation and application, the parties will first try to resolve it
amicably through informal negotiations.   5.12.   If AbiBow Canada is subject to
an event of force majeure (as defined hereunder):

  5.12.1.1.   it must promptly give notice to the Government and indicate, as
correctly as possible, the effect on its obligations under this letter and any
arrangements relating thereto, and any foreseeable delays resulting therefrom;  
  5.12.1.2.   the parties will review in good faith the terms of this letter and
of the arrangements relating thereto in order to take any such circumstance into
account ;and     5.12.1.3.   (i) its obligations will be suspended as long as it
acts with reasonable diligence in order to eliminate or correct, in the case
where it is reasonably possible, the causes and effects of this force majeure,
it being understood however that the resolution of any labour dispute will be
left to its entire discretion, and (ii) the non-performance of an obligation is
not considered a default, and does not lead to a right of action of any nature
whatsoever; as applicable, there is a deferral of the delays resulting from a
suspended obligation.

    For these purposes, the expression “force majeure” means any event which is
unforeseeable, irresistible and beyond the control of AbiBow Canada and delays,
interrupts or prevents complete or partial performance of its obligations
pursuant to this letter, including any one of the following events: war,
embargo, insurrection, invasion, riot, rebellion, social problems, epidemic,
flood, fire, explosion, thunder, earthquake, ice storm, storm, sabotage or
labour dispute, as well as any act, omission or constraint by a government,
court or public authority.   5.13.   This letter, as well as any document,
communication or other information relating directly or indirectly to it, are
confidential and may not be communicated to anybody, unless to the extent it is
required by any applicable law. If a party believes that it is held by law to
disclose information or receives a request to that effect, it must immediately
notify the other party so that it may have the opportunity to take all
appropriate recourse and, in any event, take all reasonable steps in order to
maintain confidentiality. These obligations apply to any information whether
communicated in writing, verbally or by electronic means and whether it was
communicated prior or subsequent to the date of this letter. AbiBow Canada
confirms that this letter and the arrangements with the competent authorities
are disclosed in the context of its restructuring process and with the Court,
creditor committees and competent authorities in Quebec or otherwise.

 

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IN WITNESS WHEREOF, the Parties have executed this letter as of September 13,
2010.
BOWATER CANADIAN FOREST PRODUCTS INC.
ABITIBI-CONSOLIDATED COMPANY OF CANADA

     
By :
  (Signed)
 
   
Name :
  David J. Paterson
 
   
Title :
  President
 
    THE GOVERNMENT OF QUEBEC
 
   
By :
  (Signed)
 
   
Name :
  Clément Gignac
 
   
Title :
  Minister of Economic Development, Innovation and Export Trade

 

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LETTER AGREEMENT CONCERNING THE
PULP AND PAPER OPERATIONS OF ABITIBIBOW CANADA IN QUEBEC
SCHEDULES
Schedule I Business Plan

–   Notice of Meeting and Information Circular dated August 2, 2010, at pages
G-1 — G-11.   –   Disclosure Statement dated August 2, 2010, at pages 116-119.

Schedule II Compensation Plan

–   Notice of meeting and Information Circular dated August 2, 2010, at pages
11-116.   –   Disclosure Statement dated August 2, 2010, Exhibit B, at pages
1-12.