##### 



EXHIBIT 4.2
 Published CUSIP Number: 10218JAA3  Revolving Credit CUSIP Number 10218JAB1
   CREDIT AGREEMENT
  BOWATER INCORPORATED
  WACHOVIA BANK, NATIONAL ASSOCIATION
 JPMORGAN CHASE BANK, N.A. UBS SECURITIES LLC
  WELLS FARGO FOOTHILL, LLC
 WACHOVIA CAPITAL MARKETS, LLC
 WACHOVIA CAPITAL MARKETS, LLC,
   i




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##### 



Table of Contents
 PageARTICLE I DEFINITIONS
    
    
    1SECTION 1.1
    
    Definitions
    
    
    1SECTION 1.2
    
    Other Definitions and Provisions
    
    
    29SECTION 1.3
    
    Accounting Terms
    
    
    29SECTION 1.4
    
    UCC Terms
    
    
    30SECTION 1.5
    
    Rounding
    
    
    30SECTION 1.6
    
    References to Agreement and Laws
    
    
    30SECTION 1.7
    
    Times of Day
    
    
    30SECTION 1.8
    
    Letter of Credit Amounts
    
    
    30SECTION 1.9
    
    Amount of Obligations
    
    
    30ARTICLE II REVOLVING CREDIT FACILITY
    
    
    31SECTION 2.1
    
    Revolving Credit Loans
    
    
    31SECTION 2.2
    
    Swingline Loans
    
    
    31SECTION 2.3
    
    Procedure for Advances of Revolving Credit Loans and Swingline Loans
    
    
    32SECTION 2.4
    
    Repayment and Prepayment of Revolving Credit and Swingline Loans
    
    
    33SECTION 2.5
    
    Permanent Reduction of the Commitment
    
    
    34SECTION 2.6
    
    Termination of Credit Facility
    
    
    35ARTICLE III LETTER OF CREDIT FACILITY
    
    
    35SECTION 3.1
    
    L/C Commitment
    
    
    35SECTION 3.2
    
    Procedure for Issuance of Letters of Credit
    
    
    35SECTION 3.3
    
    Commissions and Other Charges
    
    
    36SECTION 3.4
    
    L/C Participations
    
    
    36SECTION 3.5
    
    Reimbursement Obligation of the Borrower
    
    
    37SECTION 3.6
    
    Obligations Absolute
    
    
    38SECTION 3.7
    
    Effect of Letter of Credit Application
    
    
    39ARTICLE IV GENERAL LOAN PROVISIONS
    
    
    39SECTION 4.1
    
    Interest
    
    
    39SECTION 4.2
    
    Notice and Manner of Conversion or Continuation of Loans
    
    
    40SECTION 4.3
    
    Fees
    
    
    41SECTION 4.4
    
    Manner of Payment
    
    
    41SECTION 4.5
    
    Evidence of Indebtedness
    
    
    42SECTION 4.6
    
    Adjustments
    
    
    42SECTION 4.7
    
    Nature of Obligations of Lenders
Regarding Extensions of Credit;Assumption by the Administrative Agent
    
    
    43SECTION 4.8
    
    Changed Circumstances
    
    
    44SECTION 4.9
    
    Indemnity
    
    
    44
 ii




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##### 



PageSECTION 4.10
    
    Increased Costs
    
    
    45SECTION 4.11
    
    Taxes
    
    
    46SECTION 4.12
    
    Mitigation Obligations; Replacement of Lenders
    
    
    48SECTION 4.13
    
    Security
    
    
    49SECTION 4.14
    
    Additional Subsidiary Borrowers
    
    
    49ARTICLE V CLOSING; CONDITIONS OF CLOSING AND BORROWING
    
    
    51SECTION 5.1
    
    Closing
    
    
    51SECTION 5.2
    
    Conditions to Closing and Initial Extensions of Credit
    
    
    51SECTION 5.3
    
    Conditions to All Extensions of Credit
    
    
    54SECTION 5.4
    
    Post-Closing Conditions
    
    
    55ARTICLE VI REPRESENTATIONS AND WARRANTIES OF THE BORROWER
    
    
    56SECTION 6.1
    
    Representations and Warranties
    
    
    56SECTION 6.2
    
    Survival of Representations and Warranties, Etc
    
    
    64ARTICLE VII FINANCIAL INFORMATION AND NOTICES
    
    
    64SECTION 7.1
    
    Financial Statements and Projections
    
    
    64SECTION 7.2
    
    Officers Compliance Certificate
    
    
    65SECTION 7.3
    
    Accountants Certificate
    
    
    65SECTION 7.4
    
    Other Reports
    
    
    65SECTION 7.5
    
    Notice of Litigation and Other Matters
    
    
    66SECTION 7.6
    
    Accuracy of Information
    
    
    67ARTICLE VIII AFFIRMATIVE COVENANTS
    
    
    67SECTION 8.1
    
    Preservation of Corporate Existence and Related Matters
    
    
    67SECTION 8.2
    
    Maintenance of Property; Reinvestment
    
    
    67SECTION 8.3
    
    Insurance
    
    
    68SECTION 8.4
    
    Accounting Methods and Financial Records
    
    
    68SECTION 8.5
    
    Payment of Taxes
    
    
    69SECTION 8.6
    
    Compliance With Laws and Approvals
    
    
    69SECTION 8.7
    
    Environmental Laws
    
    
    69SECTION 8.8
    
    Compliance with ERISA
    
    
    69SECTION 8.9
    
    Visits and Inspections
    
    
    70SECTION 8.10
    
    Additional Subsidiaries
    
    
    70SECTION 8.11
    
    Use of Proceeds
    
    
    71SECTION 8.12
    
    Further Assurances
    
    
    71ARTICLE IX FINANCIAL COVENANTS
    
    
    71SECTION 9.1
    
    Consolidated Senior Secured Leverage Ratio
    
    
    72SECTION 9.2
    
    Interest Coverage Ratio
    
    
    72ARTICLE X NEGATIVE COVENANTS
    
    
    72SECTION 10.1
    
    Limitations on Indebtedness
    
    
    72SECTION 10.2
    
    Limitations on Liens
    
    
    75
 iii




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##### 



PageSECTION 10.3
    
    Limitations on Loans, Advances, Investments and Acquisitions
    
    
    76SECTION 10.4
    
    Limitations on Mergers and Liquidation
    
    
    77SECTION 10.5
    
    Limitations on Asset Dispositions
    
    
    78SECTION 10.6
    
    Limitations on Dividends and Distributions
    
    
    79SECTION 10.7
    
    Limitations on Exchange and Issuance of Capital Stock
    
    
    80SECTION 10.8
    
    Transactions with Affiliates
    
    
    80SECTION 10.9
    
    Certain Accounting Changes; Organizational Documents
    
    
    80SECTION 10.10
    
    Amendments; Payments and Prepayments of Indebtedness
    
    
    80SECTION 10.11
    
    Restrictive Agreements
    
    
    82SECTION 10.12
    
    Nature of Business
    
    
    82SECTION 10.13
    
    Impairment of Security Interests
    
    
    82ARTICLE XI DEFAULT AND REMEDIES
    
    
    83SECTION 11.1
    
    Events of Default
    
    
    83SECTION 11.2
    
    Remedies
    
    
    85SECTION 11.3
    
    Rights and Remedies Cumulative; Non-Waiver; etc
    
    
    86SECTION 11.4
    
    Crediting of Payments and Proceeds
    
    
    87SECTION 11.5
    
    Administrative Agent May File Proofs of Claim
    
    
    87ARTICLE XII THE ADMINISTRATIVE AGENT
    
    
    88SECTION 12.1
    
    Appointment and Authority
    
    
    88SECTION 12.2
    
    Rights as a Lender
    
    
    88SECTION 12.3
    
    Exculpatory Provisions
    
    
    89SECTION 12.4
    
    Reliance by the Administrative Agent
    
    
    89SECTION 12.5
    
    Delegation of Duties
    
    
    90SECTION 12.6
    
    Resignation of Administrative Agent
    
    
    90SECTION 12.7
    
    Non-Reliance on Administrative Agent and Other Lenders
    
    
    91SECTION 12.8
    
    No Other Duties, etc
    
    
    91SECTION 12.9
    
    Collateral and Guaranty Matters
    
    
    91ARTICLE XIII MISCELLANEOUS
    
    
    92SECTION 13.1
    
    Notices
    
    
    92SECTION 13.2
    
    Amendments, Waivers and Consents
    
    
    93SECTION 13.3
    
    Expenses; Indemnity
    
    
    95SECTION 13.4
    
    Right of Set-off
    
    
    97SECTION 13.5
    
    Governing Law
    
    
    97SECTION 13.6
    
    Waiver of Jury Trial
    
    
    98SECTION 13.7
    
    Reversal of Payments
    
    
    98SECTION 13.8
    
    Injunctive Relief; Punitive Damages
    
    
    98SECTION 13.9
    
    Accounting Matters
    
    
    99SECTION 13.10
    
    Successors and Assigns; Participations
    
    
    99SECTION 13.11
    
    Confidentiality
    
    
    102SECTION 13.12
    
    Performance of Duties
    
    
    103SECTION 13.13
    
    All Powers Coupled with Interest
    
    
    103SECTION 13.14
    
    Survival of Indemnities
    
    
    103SECTION 13.15
    
    Titles and Captions
    
    
    103
 iv




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##### 



PageSECTION 13.16
    
    Severability of Provisions
    
    
    103SECTION 13.17
    
    Counterparts
    
    
    103SECTION 13.18
    
    Integration
    
    
    103SECTION 13.19
    
    Term of Agreement
    
    
    103SECTION 13.20
    
    Advice of Counsel, No Strict Construction
    
    
    104SECTION 13.21
    
    USA Patriot Act
    
    
    104SECTION 13.22
    
    Inconsistencies with Other Documents; Independent Effect of Covenants
    
    
    104
 v




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##### 



EXHIBITS
 Exhibit A-1
    
    -
    
    Form of Revolving Credit NoteExhibit A-2
    
    -
    
    Form of Swingline NoteExhibit B
    
    -
    
    Form of Notice of BorrowingExhibit C
    
    -
    
    Form of Notice of Account DesignationExhibit D
    
    -
    
    Form of Notice of PrepaymentExhibit E
    
    -
    
    Form of Notice of Conversion/ContinuationExhibit F
    
    -
    
    Form of Officers Compliance CertificateExhibit G
    
    -
    
    Form of Assignment and AssumptionExhibit H
    
    -
    
    Form of Subsidiary Guaranty AgreementExhibit I
    
    -
    
    Form of Collateral AgreementExhibit J
    
    -
    
    Form of Intercompany Subordination Agreement
 SCHEDULES
 Schedule 1.1(a)
    
    -
    
    Existing Letters of CreditSchedule 1.1(b)
    
    -
    
    Specified Existing NotesSchedule 6.1(b)
    
    -
    
    Subsidiaries and CapitalizationSchedule 6.1(i-1)
    
    -
    
    ERISA PlansSchedule 6.1(i-2)
    
    -
    
    Canadian PlansSchedule 6.1(l)
    
    -
    
    Significant IndebtednessSchedule 6.1(n)
    
    -
    
    Burdensome ProvisionsSchedule 6.1(t)
    
    -
    
    LitigationSchedule 10.1
    
    -
    
    Permitted IndebtednessSchedule 10.2
    
    -
    
    Existing LiensSchedule 10.3
    
    -
    
    Existing Loans, Advances and InvestmentsSchedule 10.8
    
    -
    
    Transactions with Affiliates
 vi




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##### 



Borrower Lender Authorization Annex
A Section 13.10
 STATEMENT OF PURPOSE
     Definitions
 Administrative Agent Section 12.6
 Administrative Agents Office Section 13.1(c)
 Administrative Questionnaire
 Affiliate
 Aggregate Credit Exposure
 1




---



##### 



Agreement
 Applicable Law
 Applicable Margin
 PricingLevel
    
    Average Utilization Percentage
    
    LIBOR +
    
    Base Rate +I
    
    Greater than 75%
    
    
    2.25
    %
    
    
    1.00
    %II
    
    Greater than 35%, but less than or equal to 75%
    
    
    2.00
    %
    
    
    0.75
    %III
    
    Less than or equal to 35%
    
    
    1.75
    %
    
    
    0.50
    %
 Calculation Date provided
 Approved Fund provided
 Asset Coverage Amount Sections 5.2 7.1
 Asset Disposition
 2




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##### 



Assignment and Assumption Section 13.10 Exhibit G
 Attributable Indebtedness
 Average Utilization
 Base Rate plus
 Base Rate Loan Section 4.1(a)
 BCFC Notes
 Borrower
 Borrowing Limit
 less Sections 2.4(b) 5.2(e)(iii)
     Bowater-Calhoun Arrangement
 3




---



##### 



Business Day
 Calculation Date
 Canadian Administrative Agent
 Canadian Borrower
 Canadian Collateral
 Canadian Credit Agreement
 Canadian Credit Facility
 Canadian Credit Party
 Canadian Employee Benefit Plan
 Canadian Extensions of Credit
 4




---



##### 



Canadian Guarantors
 Canadian Lender
 Canadian Loans
 Canadian Multiemployer Plan
 Canadian Obligations
 Canadian Pension Plan
 Canadian Required Agreement Lenders
 Canadian Secured Parties
 Canadian Subsidiary
 Capital Asset
 Capital Expenditures
 Capital Lease
 Capital Stock
 5




---



##### 



Cash Equivalents
   provided
   ,
  Change in Control
 6




---



##### 



provided provided
 Change in Law
 Closing Date Section 5.2
 Code
 Collateral
 Collateral Agreement Exhibit I
 Commitment
 7




---



##### 



Commitment Percentage
 Consolidated
 Consolidated Adjusted EBITDA plus minus provided pro forma Section 10.5(a)-(g)
 Consolidated EBITDA
  plus
  minus
      8




---



##### 



less
      provided pro forma Section 10.5(a)-(g)
 Consolidated Interest Expense plus minus
 Consolidated Net Income
 Consolidated Senior Secured Leverage Ratio
 Consolidated Subsidiary
 9




---



##### 



Consolidated Total Indebtedness
 Consolidated Total Leverage Ratio
 Consolidated Total Senior Secured Indebtedness
 plus plus
 plus
 Coverage Assets
 Credit Facility
 Credit Parties
 DBRS
 Default Section 11.1
 Defaulting Lender
 10




---



##### 



Disputes
 Dollars or $
 Domestic Subsidiary
 Eligible Assignee provided
 Employee Benefit Plan
 Environmental Claims
 Environmental Laws
 11




---



##### 



ERISA
 ERISA Affiliate
 Eurodollar Reserve Percentage
 Event of Default Section 11.1 provided
 Exchangeable Shares
 Excluded Taxes Section
4.12(b) Section 4.11(e) Section 4.11(a)
 Existing Facilities
 12




---



##### 



Existing Letters of Credit Schedule 1.1(a)
 Existing Notes Schedule 10.1
 Extensions of Credit
 FDIC
 Federal Funds Rate provided
 Fee Letter
 Fiscal Year
 Foreign Lender
 Foreign Pledge Documents
 Foreign Subsidiary
 GAAP
 13




---



##### 



Governmental Approvals
 Governmental Authority
 Guaranty Obligation provided
 Hazardous Materials
 Hedging Agreement
 14




---



##### 



Hedging Obligations
 Immaterial Subsidiary
    Indebtedness
      15




---



##### 



Indemnified Taxes
 Insurance and Condemnation Event
 Intercompany Subordination Agreement Exhibit J
 Interest Period Section 4.1(b)
 Interest Rate Contract
 ISP98
 Issuing Lender Schedule 1.1(a)
 16




---



##### 



ITA
 L/C Commitment
 L/C Facility Article
III
 L/C Obligations Section
3.5
 L/C Participants
 L/C Supporting Documentation Section
3.2
 Lender Section 13.10
 Lender Authorization
 Lending Office
 Letter of Credit Application
 Letters of Credit Section 3.1
 LIBOR th
 17




---



##### 



LIBOR Rate
 LIBOR Rate =
    
    LIBOR1.00-Eurodollar Reserve Percentage
 LIBOR Rate Loan Section 4.1(a)
 Lien
 Loan Documents
 Loans
 Material Adverse Effect
 Material Subsidiary
  Section 8.10(b)
 Section 10.1(d)
 Maturity Date
 18




---



##### 



provided ;
 Section 2.5;
 Section 11.2(a)
 Moodys
 Multiemployer Plan
 Net Cash Proceeds
 less provided provided
 19




---



##### 



less
 Net Hedging Obligations
 New Material Subsidiary Section 8.10
 Notes
 Notice of Account Designation Section
2.3(b)
 Notice of Borrowing Section 2.3(a)
 Notice of Conversion/Continuation Section
4.2
 Notice of Prepayment Section 2.4(c)
 Obligations
 OFAC
 Officers Compliance Certificate Exhibit F
 Operating Lease
 Other Taxes
 20




---



##### 



Participant Section 13.10(d)
 PBGC
 Pension Plan
 Permitted Acquisition
   Section
10.12
  Section 8.10
    21




---



##### 



pro forma Article IX pro forma
     22




---



##### 



Permitted Acquisition Consideration
 Permitted Acquisition Diligence Information
 Permitted Acquisition Documents
 23




---



##### 



Permitted Liens Section 10.2
 Person
 Prime Rate
 QSPE Section 10.5(g) provided
    Register Section 13.10(c)
 Reimbursement Obligation Section 3.5
 Related Parties
 24




---



##### 



Required Agreement Lenders
 Required Lenders plus
 Responsible Officer
 Restricted Subsidiary
 Revolving Credit Facility Article II
 Revolving Credit Loan Section 2.1
 Revolving Credit Note Exhibit A-1
 S&P
 SEC
 Sanctioned Entity
 25




---



##### 



http://www.treas.gov/offices/enforcement/ofac/sanctions/index.html
 Sanctioned Person http://www.treas.gov/offices/ enforcement/ofac/sdn/index.html
 Secured Parties
 Security Documents
 Significant Indebtedness
 Solvent
 Specified Existing Notes Schedule 1.1(b)
 Standard Securitization Undertakings
 Subordinated Indebtedness
 26




---



##### 



Subsidiary provided
 Subsidiary Borrower Section 4.14
 Subsidiary Guarantors Section 8.10
 Subsidiary Guaranty Agreement Exhibit H
 Swingline Commitment
 Swingline Facility Section
2.2
 Swingline Lender
 Swingline Loan Section 2.2
 Swingline Note Exhibit A-2
 Swingline Termination Date Section 12.6
 27




---



##### 



Synthetic Lease
 Taxes
 Termination Event
 Termination Value
 28




---



##### 



UCC
 United States
 Wachovia
 Wholly-Owned
 Other Definitions and Provisions documents
 Accounting Terms
 29




---



##### 



Section 7.1(b) except
 UCC Terms UCC
 Rounding
 References to Agreement and Laws
 Times of Day
 Letter of Credit Amounts
 Amount of Obligations Section 1.9 Canadian Dollar
 30




---



##### 



REVOLVING CREDIT FACILITY
 Revolving Credit Loans Section 2.3 provided less
 Swingline Loans
 Availability provided
 Refunding
   31




---



##### 



Section
12.3
 Article V Section 11.1(i) (j)
 Procedure for Advances of Revolving Credit Loans and Swingline Loans
 Requests for Borrowing Exhibit B Notice of
Borrowing
 32




---



##### 



Disbursement of Revolving Credit and Swingline Loans Exhibit C Notice of Account Designation Section 4.7 Section
2.2(b)
 Repayment and Prepayment of Revolving Credit and Swingline Loans
 Repayment on Maturity Date Section 2.2(b)
 Mandatory Prepayments
 Borrowing Limit plus first second third Section 11.2(b)
 33




---



##### 



Excess L/C Obligations Section 11.2(b)
 Optional Prepayments Exhibit D Notice of
Prepayment
 Limitation on Prepayment of LIBOR Rate Loans Section
4.9
 Hedging Agreements
 Permanent Reduction of the Commitment
 Voluntary Reduction
 Corresponding Payment
 34




---



##### 



Section 11.2(b) Section 11.2(b) Section 4.9
 Termination of Credit Facility
  LETTER OF CREDIT FACILITY
 L/C Commitment Section 3.4(a) Letters of Credit th provided th
 Procedure for Issuance of Letters of Credit
 35




---



##### 



L/C Supporting Documentation Section 3.1 Article V
 Commissions and Other Charges
 Letter of Credit Commissions multiplied
 Issuance Fee multiplied
 Other Costs
 L/C Participations
 36




---



##### 



Section 3.4(a) multiplied multiplied
 pro rata provided
 Reimbursement Obligation of the Borrower
 37




---



##### 



Section 3.3(c) Section 3.3(c) Section 2.3(a) Article V
 Obligations Absolute Article
III Section 3.5
 38




---



##### 



Effect of Letter of Credit Application Article III Article
III
  GENERAL LOAN PROVISIONS
 Interest
 Interest Rate Options plus plus provided Section 4.9 plus Section 2.3 Section 4.2
 Interest Periods Section 2.3 4.2 Interest Period provided
  provided
  39




---



##### 



Default Rate Section 11.3 Section 11.1(a) (b) (i) (j)
 Interest Payment and Computation
 Maximum Rate
 Notice and Manner of Conversion or Continuation of Loans rd
 40




---



##### 



Section 4.1(a) Exhibit E Notice of Conversion/Continuation
 Fees
 Commitment Fee provided pro rata
 Other Fees
 Manner of Payment pro rata Section 11.1
 41




---



##### 



pro rata Sections 4.9 4.10 4.11 13.3 Section 4.1(b)(ii)
 Evidence of Indebtedness
 Extensions of Credit
 Participations
 Adjustments Sections 4.9 4.10 4.11 13.3 pro rata
 42




---



##### 



provided
    Nature of Obligations of Lenders Regarding Extensions of Credit; Assumption by
the Administrative Agent Sections 2.3(b) multiplied multiplied
 43




---



##### 



Changed Circumstances
 Circumstances Affecting LIBOR Rate Availability
 Laws Affecting LIBOR Rate Availability
 Indemnity
 44




---



##### 



Increased Costs
 Increased Costs Generally
  Section 4.11
   Capital Requirements
 45




---



##### 



Certificates for Reimbursement
 Delay in Requests provided
 Taxes
 Payments Free of Taxes provided
 46




---



##### 



Payment of Other Taxes by the Borrower
 Indemnification by the Borrower
 Evidence of Payments
 Status of Lenders
   47




---



##### 



Treatment of Certain Refunds provided plus
 Survival
 Mitigation Obligations; Replacement of Lenders
 Designation of a Different Lending Office Section 4.10 Section 4.11 Section 4.10 Section
4.11
 48




---



##### 



Replacement of Lenders Section
4.10 Section 4.11 Section 13.10 provided
 Section 13.10
 Section 4.9
 Section 4.10 Section 4.11
   Security
 Additional Subsidiary Borrowers
  49




---



##### 



Articles V VI VII VIII IX X
  Section 5.2
      50




---



##### 



CLOSING; CONDITIONS OF CLOSING AND BORROWING
 Closing
 Conditions to Closing and Initial Extensions of Credit
 Executed Loan Documents
 Closing Certificates; Etc.
 Officers Certificate of the Borrower provided Section 5.2 Section 5.3
 Certificate of Secretary of each Credit Party Section 5.2(b)(iii)
 51




---



##### 



Certificates of Good Standing
 Opinions of Counsel
 Tax Forms Section 4.11(e)
 Personal Property Collateral
 Filings and Recordings
 Pledged Collateral
 Lien Search
 Hazard and Liability Insurance
 Consents; Defaults
 Governmental and Third Party Approvals
 52




---



##### 



No Injunction, Etc.
 Financial Matters
 Financial Statements Section
5.2
 Financial Projections
 Financial Condition Certificate pro forma Article IX
 53




---



##### 



Payment at Closing; Fee Letters Section 4.3
 Miscellaneous
 Notice of Borrowing Section 2.3(a)
 Existing Facilities
 Closing of the Canadian Credit Facility
 Other Documents
 Conditions to All Extensions of Credit
 Continuation of Representations and Warranties Article VI
 54




---



##### 



provided
 No Existing Default
 Notices Section
2.3(a) Section 4.2
 Post-Closing Conditions
 Section 5.2 Section 12.3 Section 5.4
   55




---



##### 



Section
4.6(b) Section 4.6(b)
  REPRESENTATIONS AND WARRANTIES OF THE BORROWER
 Representations and Warranties
 Organization; Power; Qualification
 Ownership Schedule 6.1(b)
 56




---



##### 



Schedule 6.1(b) Schedule 6.1(b)
 Authorization of Agreement, Loan Documents and Borrowing
 Compliance of Agreement, Loan Documents and Borrowing with Laws, Etc.
 Compliance with Law; Governmental Approvals
 57




---



##### 



Tax Returns and Payments
 Intellectual Property Matters
 58




---



##### 



Environmental Matters
       59




---



##### 



ERISA
 Schedule 6.1(i-1) Schedule 6.1(i-2)
  Schedule 6.1(i-1) Schedule 6.1(i-2)
  60




---



##### 



Margin Stock
 Government Regulation
 Significant Indebtedness Schedule 6.1(l) Schedule 6.1(l) Schedule 6.1(l)
 61




---



##### 



Employee Relations
 Burdensome Provisions Schedule 6.1(n) Schedule 6.1(n)
 Financial Statements Section 5.2(e)(i) Section 5.2(e)(ii)
 No Material Adverse Change
 Solvency
 Titles to Properties Sections 5.2(e)(i) 7.1(a) (b)
 62




---



##### 



Liens
 Litigation Schedule 6.1(t)
 Senior Indebtedness Status
 OFAC
 Disclosure provided pro forma
 63




---



##### 



Survival of Representations and Warranties, Etc Article VI
  FINANCIAL INFORMATION AND NOTICES
 Section 13.2 Section 13.1
 Financial Statements and Projections
 Quarterly Financial Statements Section 7.1(a) www.sec.gov www.Bowater.com
 Annual Financial Statements
 64




---



##### 



Section 7.1(b) www.sec.gov www.Bowater.com
 Annual Business Plan and Financial Projections
 Financial Statements of the Canadian Borrower and its Subsidiaries Section 7.1
 Officers Compliance Certificate Sections 7.1(a) (b)
 Accountants Certificate Section 7.1(b) Articles IX
 Other Reports
 65




---



##### 



www.sec.gov www.sedar.com www.Bowater.com
 www.sec.gov www.sedar.com www.Bowater.com
  Notice of Litigation and Other Matters
      66




---



##### 



Section 6.1 Section 6.1
  Accuracy of Information Article VII Section 6.1(w)
  AFFIRMATIVE COVENANTS
 Section 13.2
 Preservation of Corporate Existence and Related Matters Section 10.4
 Maintenance of Property; Reinvestment
 67




---



##### 



Section 10.5 Section 13.2 provided Section 10.10
 Section 10.5 Section
13.2
 Insurance
 Accounting Methods and Financial Records
 68




---



##### 



Payment of Taxes
 Compliance With Laws and Approvals
 Environmental Laws Section 8.6
 Compliance with ERISA Section 8.6
 69




---



##### 



Visits and Inspections
 Additional Subsidiaries
 Section 8.10(b) New Material Subsidiary Schedules 6.1(a) 6.1(b) Section 5.2
  70




---



##### 



Schedules 6.1(a) 6.1(b) Section
5.2
  Use of Proceeds
 Further Assurances
  FINANCIAL COVENANTS
 Section 13.2
 71




---



##### 



Consolidated Senior Secured Leverage Ratio
 Interest Coverage Ratio
  NEGATIVE COVENANTS
 Section 13.2
 Limitations on Indebtedness
 Section
10.1(c)
 Section 10.1(c)
 provided
 Schedule 10.1 provided pro forma
 72




---



##### 



pro forma Schedule 10.1
  (c) (e) (h) (l) (m) provided (h) (m)
 provided provided
 provided provided
  provided
 73




---



##### 



provided provided Section 10.3(g) provided further
 provided pro forma pro forma
 provided
 provided
 74




---



##### 



provided pro forma
   Limitations on Liens
  Schedule
10.2 Section 10.1(d) Schedule 10.2 provided
     75




---



##### 



Sections 10.1(e) provided
 Section 11.1(m)
 provided
   Limitations on Loans, Advances, Investments and Acquisitions Investments
   Section 8.10 Section 8.10
 Schedule 10.3
 76




---



##### 



Section 10.1
  Section
10.1(g) Section 10.1(g)
 Section 10.1(g) provided provided further
  Limitations on Mergers and Liquidation
  provided
 provided
 77




---



##### 



provided further
  Section 10.5
  Limitations on Asset Dispositions
   provided
    78




---



##### 



Section 8.2(b)
  Limitations on Dividends and Distributions provided
   provided
 provided
  pro forma Article IX
 provided
  pro forma Article IX
 79




---



##### 



pro forma
  Limitations on Exchange and Issuance of Capital Stock Section 10.1 Section 10.1
 Transactions with Affiliates
 Section 10.3 10.4 10.6 10.7
 Schedule 10.8
   Certain Accounting Changes; Organizational Documents
   Amendments; Payments and Prepayments of Indebtedness
 80




---



##### 



Section
13.2 Section 14.2
  Section 10.1(d)
 Section 10.1(h)
 Section 10.1(d)
 Section 10.1(d) provided plus
 pro forma
  81




---



##### 



, Section 5.2 7.1
 Section 5.2 7.1 .
 Restrictive Agreements
  Articles
VIII IX X
 provided Section 10.1(d) provided provided
 Section 6.1(n) provided
 Nature of Business
 Impairment of Security Interests
 82




---



##### 



Section 10.5
  DEFAULT AND REMEDIES
 Events of Default
 Default in Payment of Principal of Loans and Reimbursement Obligations
 Other Payment Default
 Misrepresentation
 Default in Performance of Certain Covenants Sections 5.4 7.1 7.2 7.5(e)(i) Articles IX X
 Default in Performance of Other Covenants and Conditions
 Hedging Agreement
 83




---



##### 



Indebtedness Cross-Default
    Change in Control
 Voluntary Bankruptcy Proceeding
 Involuntary Bankruptcy Proceeding
 84




---



##### 



Failure of Agreements
 Termination Event
 Judgment
 Environmental
 Remedies
 85




---



##### 



Acceleration; Termination of Facilities provided Section 11.1(i) (j)
 Letters of Credit
 Rights of Collection
 Rights and Remedies Cumulative; Non-Waiver; etc
 86




---



##### 



Crediting of Payments and Proceeds Section 11.2
 First First
 Second Second
 Third Third
 Fourth Fourth
 Fifth Fifth
 Sixth Sixth
 Last
 Administrative Agent May File Proofs of Claim
  87




---



##### 



Sections 3.3, 4.3 13.3
  Sections 3.3 4.3 13.3
   THE ADMINISTRATIVE AGENT
 Appointment and Authority
 Rights as a Lender
 88




---



##### 



Exculpatory Provisions
  provided
  Section 13.2 Section 11.2 Section 13.1
 Article V
 Reliance by the Administrative Agent
 89




---



##### 



Delegation of Duties
 Resignation of Administrative Agent
  90




---



##### 



Section
13.3
  Non-Reliance on Administrative Agent and Other Lenders
 No Other Duties, etc
 Collateral and Guaranty Matters
  91




---



##### 



Section
13.2
     MISCELLANEOUS
 Notices
 Method of Communication rd
 Addresses for Notices
 If to the Borrower:

    
    Bowater Incorporated55 East Camperdown WayGreenville, SC 29602-1028Attention: TreasurerTelephone No.: (864) 282-9413Telecopy No.: (864) 282-9219With copies to:

    
    Pepper Hamilton LLP
 92




---



##### 



3000 Two Logan SquarePhiladelphia, Pennsylvania 19103Attention: J. Bradley BoerickeTelephone No.: (215) 981-4790Telecopy No.: (215) 689-4615If to Wachovia as
    
    Wachovia Bank, National AssociationAdministrative Agent:
    
    Charlotte Plaza, CP-8201 South College StreetCharlotte, North Carolina 28288-0680Attention: Syndication Agency ServicesTelephone No.: (704) 374-2698Telecopy No.: (704) 383-0288If to any Lender:
    
    To the address set forth on the Register
 Administrative Agents Office
 Amendments, Waivers and Consents provided
 Section 5.2
 Section 11.2
  93




---



##### 



provided Section 8.2(b)
 provided Section 4.1(c)
 Section 4.4 Section 11.4 pro rata
   Section 12.9
 Section 12.9
 Article XI
  94




---



##### 



provided further
 Expenses; Indemnity
 Costs and Expenses
 Indemnification Indemnitee
 95




---



##### 



provided
 Reimbursement by Lenders provided Section 4.7
 Waiver of Consequential Damages, Etc.
 96




---



##### 



Payments
 Right of Set-off provided
 Governing Law
 Governing Law
 Submission to Jurisdiction
 97




---



##### 



Waiver of Venue
 Service of Process Section 13.1
 Waiver of Jury Trial
 Reversal of Payments
 Injunctive Relief; Punitive Damages
 98




---



##### 



Accounting Matters provided
 Successors and Assigns; Participations
 Successors and Assigns Generally
 Assignments by Lenders provided
 99




---



##### 



,
 Sections 4.8 4.9 4.10 4.11 13.3
 100




---



##### 



Register Register
 Participations Participant provided
 provided Section 13.2 Sections 4.8 4.9 4.10 4.11 Section
13.4 Section
4.6
 Limitations upon Participant Rights Sections 4.10 4.11 Section 4.11 Section 4.11(e)
 101




---



##### 



Certain Pledges provided
 Confidentiality Gold
Sheets Information provided
 102




---



##### 



Performance of Duties
 All Powers Coupled with Interest
 Survival of Indemnities Article XIII
 Titles and Captions
 Severability of Provisions
 Counterparts
 Integration provided
 Term of Agreement
 103




---



##### 



Advice of Counsel, No Strict Construction
 USA Patriot Act Act
 Inconsistencies with Other Documents; Independent Effect of Covenants
 provided
 Articles VIII IX X Articles VIII IX X Articles VIII IX X
  104




---



##### 



BOWATER INCORPORATED, as BorrowerBy:
    /s/ William G. HarveyWilliam G. HarveySenior Vice President and
Chief Financial Officer




---



##### 



AGENTS AND LENDERS:
WACHOVIA BANK, NATIONAL ASSOCIATION,
as Administrative Agent, Swingline Lender, Issuing
Lender and LenderBy:
    /s/ Scott JoyceName:
    Scott JoyceTitle:
    Vice President




---



##### 



JPMORGAN CHASE BANK, N.A, as LenderBy:
    /s/ Peter S. PredunName:
    Peter S. PredunTitle:
    Vice President




---



##### 



UBS LOAN FINANCE LLC, as LenderBy:
    /s/ Richard L. TavrowName:
    Richard L. TavrowTitle:
    Director, Bank Products Services, US By:
    /s/ Irja R. OtsaName:
    Irja R. OtsaTitle:
    Associate Director,
Bank Products Services, US




---



##### 



WELLS FARGO FOOTHILL, LLC,as LenderBy:
    /s/ Dennis KingName:
    Dennis KingTitle:
    Vice President




---



##### 



Annex A
 LENDER AUTHORIZATION
 Bowater Incorporated
Credit Agreement
  
 Re:
    
    Credit Agreement dated as of May 31, 2006 (as amended, the Credit
Agreement) by and among Bowater Incorporated (the Borrower), the banks
and financial institutions party thereto, as lenders, and Wachovia Bank, National
Association, as administrative agent (the Administrative Agent)
   [Insert name of applicable financial institution]By:Name:Title: