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                                                                    EXHIBIT 10.1

                  AMENDED AND RESTATED 364-DAY CREDIT AGREEMENT

                  AMENDED AND RESTATED 364-DAY CREDIT AGREEMENT dated as of June
23, 1999 between BOWATER INCORPORATED, a corporation duly organized and validly
existing under the laws of the State of Delaware (the "Company"); each of the
Subsidiaries of the Company from time to time designated as "Subsidiary
Borrowers" hereunder pursuant to Section 7.02(a) of the Existing Credit
Agreement as defined below (each, a "Subsidiary Borrower" and, together with the
Company, the "Borrowers"); each of the lenders that is a signatory hereto
identified under the caption "BANKS" on the signature pages hereto or that,
pursuant to Section 12.06(b) of the Existing Credit Agreement (individually, a
"Bank" and, collectively, the "Banks"); and THE CHASE MANHATTAN BANK, as
Administrative Agent for the Banks (in such capacity, together with its
successors in such capacity, the "Administrative Agent").


                              W I T N E S S E T H:

                  WHEREAS, the Company, the Subsidiary Borrowers, the Banks, and
the Administrative Agent are party to a 364-Day Credit Agreement dated as of
June 24, 1998 (as in effect prior to the date hereof, the "Existing Credit
Agreement"), providing for the making of loans by the Banks to the Company and
the Borrowers in an aggregate original principal amount up to $650,000,000; and

                  WHEREAS, the parties hereto desire to amend in certain
respects and to restate in its entirety the Existing Credit Agreement;

                  NOW, THEREFORE, the parties hereto agree to amend the Existing
Credit Agreement as set forth in Section 2 hereof and to restate the Existing
Credit Agreement to read in its entirety as set forth in the Existing Credit
Agreement (which Existing Credit Agreement is incorporated herein by this
reference), as amended by the amendments set forth in Section 2 hereof:

                  Section 1. Definitions. Capitalized terms used but not
otherwise defined herein have the meanings given them in the Existing Credit
Agreement.

                  Section 2. Amendments. Subject to the satisfaction of the
conditions specified in Section 3 hereof (and, in the case of Sections 2.03 and
2.04 below, Section 4 hereof), the Existing Credit Agreement shall be amended as
follows:

                  2.01. General. Each reference to the "Agreement" or to the
         "Existing Credit Agreement" and words of similar import in the Existing
         Credit Agreement, as amended and restated hereby, and in the promissory
         notes (provided for in Section 2.08(d) of the Existing Credit
         Agreement) shall be a reference to the Existing Credit Agreement as


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         amended and restated hereby and as the same may be further amended,
         supplemented and otherwise modified and in effect from time to time.

                  2.02. Definitions. Section 1.01 of the Existing Credit
         Agreement shall be amended by adding and amending and restating the
         following definitions (to the extent already included in said Section
         1.01), as follows:

                           "Amendment and Restatement" shall mean the Amended
                  and Restated 364-Day Credit Agreement dated as of June 23,
                  1999 between the Company, the Subsidiary Borrowers, the Banks
                  and the Administrative Agent.

                           "Commitment" shall mean, for each Bank, the
                  obligation of such Bank to make Syndicated Loans in an
                  aggregate amount at any one time outstanding up to but not
                  exceeding (a) in the case of a Bank that is a party to the
                  Amendment and Restatement on the date thereof, the amount set
                  opposite the name of such Bank on the signature pages to the
                  Amendment and Restatement or (b) in the case of any other
                  Bank, the aggregate amount of the Commitments of other Banks
                  acquired by it pursuant to Section 12.06 hereof (in each case,
                  as the same may be reduced from time to time pursuant to
                  Section 2.04 hereof or increased or reduced pursuant to said
                  Section 12.06(b)).

                           "Revolving Credit Termination Date" shall mean June
                  21, 2000, as such date may from time to time be extended as
                  provided in Section 2.10 of the Existing Credit Agreement.

                  2.03 Utilization Fee. (a) Section 2.05 of the Existing Credit
         Agreement is amended by (i) (for convenience of reference only)
         re-entitling said Section 2.05 "Facility and Utilization Fees", (ii)
         placing the existing text of said Section 2.05 in its entirety and
         without change into a paragraph designated "(a)" under said Section
         2.05 and (iii) adding a new paragraph "(b)" thereto to read in its
         entirety as follows:

                           "(b) The Company shall pay to the Administrative
                  Agent for account of each Bank a utilization fee at a rate per
                  annum equal to 0.25% on the aggregate outstanding principal
                  amount of the Syndicated Loans made by such Bank hereunder for
                  any period (during the period from and including June 23, 1999
                  to but not including the earlier of the date Commitments are
                  terminated and the Revolving Credit Termination Date) that the
                  aggregate principal outstanding amount of all Syndicated Loans
                  hereunder exceeds 50% of the net amount of the Commitments
                  after deducting the aggregate principal outstanding amount of
                  all Money Market Loans hereunder at such time. Accrued
                  utilization fee shall be payable on each Quarterly Date and on
                  the earlier of the date the Commitments are terminated and the
                  Revolving Credit Termination Date."


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                  (b) Sections 4.02 and 11.03 of the Existing Credit Agreement
         are amended by adding the words "or utilization fee" after the term
         "facility fee" appearing therein.

                  (c) Section 4.03 of the Existing Credit Agreement is amended
         by adding the words "and utilization fee" after the term "facility fee"
         appearing therein.

                  2.04. Lien Basket. Section 9.06(j) of the Existing Credit
         Agreement is amended by replacing "10%" with "15%".

                  2.05. Indebtedness Basket. Section 9.11(f) of the Existing
         Credit Agreement is amended by replacing "10%" with "15%".

                  Section 3. Conditions. The amendment and restatement of the
Existing Credit Agreement contemplated hereby shall become effective as of June
23, 1999 (the "Restatement Effective Date") upon the satisfaction prior to such
date of each of the following conditions to effectiveness (including, without
limitation, that each document to be received by the Administrative Agent shall
be in form and substance satisfactory to the Administrative Agent):

                  3.01. Execution. The Administrative Agent (or its counsel)
         shall have received from each party hereto either (a) a counterpart of
         this Amended and Restated 364-Day Credit Agreement signed on behalf of
         such party or (b) written evidence satisfactory to the Administrative
         Agent (which may include telecopy transmission of a signed signature
         page of this Amended and Restated 364-Day Credit Agreement) that such
         party has signed a counterpart of this Amended and Restated 364-Day
         Credit Agreement.

                  3.02. Opinion. The Administrative Agent shall have received a
         favorable written opinion (addressed to the Administrative Agent and
         the Banks and dated the Restatement Effective Date) of Wendy C. Shiba,
         Esq., Vice President, Secretary and Assistant General Counsel of the
         Company, substantially in the form of Exhibit B to the Existing Credit
         Agreement (with appropriate modifications to reflect the amendment and
         restatement thereof contemplated hereby). The Company hereby requests
         such counsel to deliver such opinion.

                  3.03. Certificate as to Incumbency. The Administrative Agent
         shall have received a certificate of the Secretary or an Assistant
         Secretary of the Company in respect of each of the officers (a) who are
         authorized to sign this Amended and Restated 364-Day Credit Agreement
         on the Company's behalf and (b) who will, until replaced by another
         officer or officers duly authorized for that purpose, act as its
         representative for the purposes of signing documents and giving notices
         and other communications in connection with this Amended and Restated
         364-Day Credit Agreement, the promissory notes and the transactions
         contemplated hereby.

                  3.04. Certificate of Authorized Officer. The Administrative
         Agent shall have received a certificate of a duly authorized financial
         officer of the Company, dated the


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         Restatement Effective Date, stating that (a) no Default has occurred
         and is continuing as of such date, and (b) the representations and
         warranties contained in Section 8 of the Existing Credit Agreement, as
         amended and restated hereby, are true and complete on and as of such
         date with the same force and effect as if made on and as of such date
         (or, if any such representation or warranty is expressly stated to have
         been made as of a specific date, as of such specific date).

                  3.05. Aggregate Outstanding Amount. On the Restatement
         Effective Date, the aggregate outstanding principal amount of all Loans
         made by the Banks to the Borrowers shall not be greater than
         $150,000,000.

                  3.06. Fees and Expenses. The Administrative Agent shall have
         received all fees and other amounts due and payable on or prior to the
         Restatement Effective Date, including, to the extent invoiced,
         reimbursement or payment of all out-of-pocket expenses required to be
         reimbursed or paid by the Company hereunder.

The Administrative Agent shall notify the Company and the Banks of the
occurrence of the Restatement Effective Date, and such notice shall be
conclusive and binding.

                  Section 4. Effectiveness of Five-Year Credit Agreement
Amendments. Subject to the conditions precedent set forth in Section 3 hereof,
Sections 2.03 and 2.04 hereof shall become effective as of the Restatement
Effective Date upon the due execution and delivery of an amendment by the
required parties to the Five-Year Credit Agreement dated as of June 24, 1998
(the "Five-Year Agreement"), between the Company, the Subsidiary Borrowers, the
Banks party thereto and The Chase Manhattan Bank, as administrative agent
thereunder, that effects amendments to the Five-Year Agreement corresponding to
those contained in Sections 2.03 and 2.04 hereof.

                  Section 5. Readjustment of Loans. On the Restatement Effective
Date, the Banks shall take such actions, and make such adjustments among
themselves, as shall be necessary so that their outstanding Syndicated Loans are
held hereunder ratably in accordance with their respective Commitments as set
forth on the signature pages hereto under the caption "Commitment".

                  Section 6. Counterparts. This Amended and Restated 364-Day
Credit Agreement may be executed in any number of counterparts, each of which
shall be identical and all of which, when taken together, shall constitute one
and the same instrument, and any of the parties hereto may execute this Amended
and Restated 364-Day Credit Agreement by signing any such counterpart.

                  Section 7. Expenses. Without limiting its obligations under
Section 12.03 of the Existing Credit Agreement, the Company agrees to pay, on
demand, all reasonable out-of-pocket expenses incurred by the Administrative
Agent and its affiliates, including the reasonable fees, charges and
disbursements of counsel for the Administrative Agent, in connection with the

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preparation and administration of this Amended and Restated 364-Day Credit
Agreement and the transactions contemplated hereby.

                  Section 8. Binding Effect. This Amended and Restated 364-Day
Credit Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns.

                  Section 9. Governing Law. This Amended and Restated 364-Day
Credit Agreement shall be governed by, and construed in accordance with, the law
of the State of New York.


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                  IN WITNESS WHEREOF, the parties hereto have caused this
Amended and Restated 364-Day Credit Agreement to be duly executed as of the date
first above written.

                              COMPANY

                                   BOWATER INCORPORATED

Witness:   /s/ Duane A. Owens      By: /s/ William Harvey
         --------------------          -----------------------------------------
                                       Name:  William Harvey
                                       Title:  Vice President & Treasurer



                              ADMINISTRATIVE AGENT

                                   THE CHASE MANHATTAN BANK,
                                   as Administrative Agent


                                   By: /s/ Robert Anastasio
                                       -----------------------------------------
                                       Name:  Robert Anastasio
                                       Title:  Vice President


                              BANKS
         Commitment

$16,500,000                        THE CHASE MANHATTAN BANK


                                   By: /s/ Robert Anastasio
                                       -----------------------------------------
                                       Name:  Robert Anastasio
                                       Title:  Vice President


$15,000,000                        THE BANK OF NEW YORK


                                   By: /s/ Ann Marie Hughes
                                       -----------------------------------------
                                       Name:  Ann Marie Hughes
                                       Title:  Vice President




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$15,000,000                        NATIONSBANK, N.A


                                   By: /s/ Michael W. Colon
                                       -----------------------------------------
                                        Name:  Michael W. Colon
                                        Title:  Vice President


$15,000,000                        FIRST UNION NATIONAL BANK


                                   By: /s/ J. Andrew Phelps
                                       -----------------------------------------
                                       Name:  J. Andrew Phelps
                                       Title: AVP


$15,000,000                        TORONTO DOMINION (TEXAS), INC.


                                   By: /s/ Alva J. Jones
                                       -----------------------------------------
                                       Name: Alva J. Jones
                                       Title:  Vice President

$15,000,000                        WACHOVIA BANK, N.A.


                                   By: /s/ Suzanne Morrison
                                       -----------------------------------------
                                       Name:  Suzanne Morrison
                                       Title:  Vice President


$12,000,000                        MORGAN GUARANTY TRUST
                                    COMPANY OF NEW YORK


                                   By: /s/ Robert Bottamedi
                                       -----------------------------------------
                                       Name:  Robert Bottamedi
                                       Title:  Vice President



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$12,000,000                        THE BANK OF NOVA SCOTIA

                                   By: /s/ Patrick J. Hawes
                                       -----------------------------------------
                                       Name:  Patrick J. Hawes
                                       Title: Comptroller


$12,000,000                        SUNTRUST BANK, NASHVILLE, N.A.


                                   By: /s/ J. Lee Lamprecht
                                       -----------------------------------------
                                       Name:  J. Lee Lamprecht
                                       Title: S.V.P.


$7,500,000                         WESTDEUTSCHE LANDESBANK
                                      GIROZENTRALE
                                      NEW YORK BRANCH


                                   By: /s/ Cynthia M. Niesen
                                       -----------------------------------------
                                       Name:  Cynthia M. Niesen
                                       Title:  Managing Director


                                   By: /s/ Walter T. Duffy
                                       -----------------------------------------
                                       Name:  Walter T. Duffy III
                                       Title:  Vice President


$7,500,000                         BANK OF MONTREAL

                                   By: /s/ Brian L. Banke
                                       -----------------------------------------
                                       Name:  Brian L. Banke
                                       Title: Director



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$7,500,000                         DG BANK, DEUTSCHE
                                      GENOSSENSCHAFTSBANK, AG
                                      CAYMAN ISLANDS BRANCH

                                   By: /s/ Eric K. Zimmerman
                                       -----------------------------------------
                                       Name:  Eric K. Zimmerman
                                       Title:  Assistant Vice President


                                   By: /s/ Kurt A. Morris
                                       -----------------------------------------
                                       Name:  Kurt A. Morris
                                       Title:  Vice President