Document:

<PAGE>

                                CREDIT AGREEMENT

                          DATED AS OF OCTOBER 26, 2001

                                    Between:

                     BOWATER CANADIAN FOREST PRODUCTS INC.
                                  (as Borrower)

                              BOWATER INCORPORATED
                                 (as Guarantor)

                             THE BANK OF NOVA SCOTIA
                            (as Administrative Agent)

                                      -and-

                           THE BANKS FROM TIME TO TIME
                                PARTIES THERETO

                       ===================================

                            SECOND AMENDING AGREEMENT
                           DATED AS OF OCTOBER 7, 2003

                      ===================================

                              MCCARTHY TETRAULT LLP
                                   (Montreal)

<PAGE>

                            SECOND AMENDING AGREEMENT
                (Credit Agreement dated as of October 26, 2001)

                  THIS AGREEMENT is made as of October 7, 2003, between BOWATER
CANADIAN FOREST PRODUCTS INC. (formerly Bowater Pulp and Paper Canada Inc.), a
corporation duly amalgamated and validly existing under the Canada Business
Corporations Act (the "Borrower"), BOWATER INCORPORATED, a corporation duly
organized and validly existing under the General Corporation Law of the State of
Delaware (the "Guarantor") and THE BANK OF NOVA SCOTIA ("ScotiaBank"), as
administrative agent, and each of the Banks (as defined in the Credit Agreement
referred to below) party hereto.

                                    RECITALS

         A.       The Borrower, the Guarantor, various financial institutions,
as lenders, and ScotiaBank, as administrative agent, entered into a credit
agreement dated as of October 26, 2001, as amended from time to time (the
"Canadian Credit Agreement") providing for a 364-day revolving credit facility
in the principal amount of US $100,000,000.

         B.       Pursuant to the Canadian Credit Agreement, the Guarantor has
guaranteed the prompt payment in full when due of the Guaranteed Obligations (as
defined in the Canadian Credit Agreement).

         C.       The Borrower and the Guarantor, together with various
subsidiaries of the Guarantor, each as a borrower, various financial
institutions, as lenders, and JPMorgan Chase Bank, as administrative agent,
entered into a credit agreement dated as of May 22, 2002, as amended from time
to time (the "US Credit Agreement") providing for a revolving credit facility
and term loans in an aggregate principal amount of US $800,000,000.

         D.       On October 18, 2002, the parties entered into a First Amending
Agreement (the "First Amending Agreement") to amend the Canadian Credit
Agreement.

         E.       The parties wish to further amend the Canadian Credit
Agreement in order to (i) provide for an extension of the Revolving Credit
Termination Date, (ii) revise the margins for the calculation of interest rates
and the rates at which facility fees are calculated, (iii) conform the
definition of Consolidated Net Worth to the provisions of the US Credit
Agreement, and (iv) add a covenant to the effect that if any change is made to
the terms and conditions of the US Credit Agreement that is favourable or
beneficial to the lenders thereunder, then conforming changes will be made to
the Canadian Credit Agreement.

                  NOW, THEREFORE, the parties have made and entered into this
Agreement.

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                                      - 2 -

                                   ARTICLE 1
                                 INTERPRETATION

1.1               DEFINED TERMS AND EXPRESSIONS

                  Unless such terms or expressions are defined differently,
capitalized terms and expressions used in this Agreement and defined in the
Canadian Credit Agreement have the respective meanings given to them in the
Canadian Credit Agreement.

                                   ARTICLE 2
                                   AMENDMENTS

2.1               EXTENSION OF REVOLVING CREDIT TERMINATION DATE

                  The definition of the term "Revolving Credit Termination Date"
in section 1.01 of the Canadian Credit Agreement is amended as follows:

                  ""Revolving Credit Termination Date" shall mean October 22,
         2004, as such date may from time to time be extended as provided in
         Section 2.09 hereof".

2.2               APPLICABLE MARGIN WITH RESPECT TO US BASE RATE LOANS AND CDN
                  PRIME RATE LOANS

                  The Applicable Margin for any Level V Period with respect to
US Base Rate Loans and Cdn Prime Rate Loans shall be 0.750%.

2.3               APPLICABLE MARGIN WITH RESPECT TO OTHER LOANS

                  The Applicable Margin for any Level V Period with respect to
Loans other than US Base Rate Loans and Cdn Prime Rate Loans shall be 1.750%.

2.4               FACILITY FEES

                  The facility fee payable under Section 2.04(a) of the Canadian
Credit Agreement during any Level V Period shall be 0.500%.

2.5               CONSOLIDATED NET WORTH

                  The definition of the term "Consolidated Net Worth" in section
1.01 of the Canadian Credit Agreement is amended as follows:

                  ""Consolidated Net Worth" means, as at any date, the sum, for
         the Guarantor and its Consolidated Subsidiaries (determined on a
         consolidated basis without duplication in accordance with GAAP), of the
         following:

                  (a)      the amount of common stock, plus
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                                      - 3 -

                  (b)      the amount of any Preferred Stock, plus

                  (c)      the amount of additional paid-in capital and retained
                           earnings (or, in the case of an additional paid-in
                           capital or retained earnings deficit, minus the
                           amount of such deficit), plus

                  (d)      equity adjustments from (i) foreign currency
                           translations, (ii) unrealized gain/(loss) on hedged
                           transactions and (iii) any other items of accumulated
                           other comprehensive income (or loss), other than
                           minimum pension liability adjustments (in each case
                           of the foregoing clauses (i) through (iii), in the
                           case of negative adjustments, minus the amount of
                           such adjustments), it being understood that these
                           adjustments will be reflected in accordance with FASB
                           Statement No. 130 as accumulated other comprehensive
                           income (or loss), minus

                  (e)      the unpaid principal amount of the loan (if any) to
                           the Guarantor's Employee Stock Ownership Plan (ESOP),
                           minus

                  (f)      the cost of treasury stock."

2.6               CONFORMING AMENDMENTS

                  The following clause is added after section 9.13 of the
Canadian Credit Agreement:

                  "9.14 Conforming Amendments. If the Guarantor negotiates any
amendment to the terms and conditions of the US Credit Agreement (including any
changes to interest or fees payable thereunder), the Guarantor shall forthwith
notify the Administrative Agent and, if a similar amendment is deemed by the
Administrative Agent, acting on behalf of the Majority Banks, to be more
favourable or beneficial to the Banks than the existing terms of this Agreement,
the Borrower and the Guarantor shall, at the request of the Administrative
Agent, take such steps as may be necessary to amend this Agreement accordingly
and concurrently with the US Credit Agreement."

                                    ARTICLE 3
                                    GENERAL

3.1               CONFIRMATION OF CREDIT AGREEMENT

                  The parties acknowledge and agree that, except as amended
pursuant to this Agreement and to the First Amending Agreement, the provisions
of the Canadian Credit Agreement, including the guarantee granted by the
Guarantor, remain in full force and effect, unamended.

<PAGE>

                                      - 4 -

3.2               AMENDMENT AND RENEWAL FEES

                  In consideration of the extension of the Revolving Credit
Termination Date and the amendments provided for herein, the Borrower shall pay
to each Bank a fee in an amount equal to 15 basis points of such Bank's
Commitment.

3.3               COUNTERPARTS

                  This Agreement may be executed in separate counterparts, all
of which taken together shall constitute one and the same instrument, and a
party may execute this Agreement by signing any such counterpart.

3.4               GOVERNING LAW

                  This Agreement shall be governed by and construed in
accordance with the laws of the Province of Quebec and the laws of Canada
applicable therein.

3.5               EFFECTIVE DATE

                  This Agreement and the amendments to the Canadian Credit
Agreement provided for herein shall become effective on October 25, 2003.

                            [Signature Pages Follow]

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                                     - 5 -

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

                                        BOWATER CANADIAN FOREST PRODUCTS INC.,
                                        as Borrower

                                        By: /s/ William G. Harvey
                                            ------------------------------------
                                            William G. Harvey
                                            Vice President and Treasurer

                                        BOWATER INCORPORATED, as Guarantor

                                        By: /s/ David G. Maffucci
                                            ------------------------------------
                                            David G.Maffucci
                                            Senior Vice President and
                                            Chief Financial Officer

                 [Signatures of the Agent and the Banks Follow]

<PAGE>

                                     - 6 -

                                        THE BANK OF NOVA SCOTIA,
                                        as Administrative Agent

                                        By: /s/ David Maddocks
                                            ------------------------------------
                                            David Maddocks
                                            Director

                                        By: /s/ Anuj Dhawan
                                            ------------------------------------
                                            Anuj Dhawan
                                            Associate Director

                  This is a counterpart signature page to the Second Amending
Agreement dated as of October 7, 2003 between Bowater Canadian Forest Products
Inc., as borrower, Bowater Incorporated, as guarantor, The Bank of Nova Scotia
as administrative agent and each of the lenders parties hereto as a Bank.

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                                     - 7 -

                                        THE BANK OF NOVA SCOTIA, as a Bank

                                        By: /s/ David Angel
                                            ------------------------------------
                                            David Angel
                                            Director

                                        By: /s/ John Santillo
                                            ------------------------------------
                                            John Santillo
                                            Associate Director

                  This is a counterpart signature page to the Second Amending
Agreement dated as of October 7, 2003 between Bowater Canadian Forest Products
Inc., as borrower, Bowater Incorporated, as guarantor, The Bank of Nova Scotia
as administrative agent and each of the lenders parties hereto as a Bank.

<PAGE>

                                     - 8 -

                                        THE TORONTO-DOMINION BANK,
                                        as a Bank

                                        Per:

                                        By: /s/ Debbi Brito
                                            ------------------------------------
                                            Asst. Mgr. Corporate
                                            Credit & Compliance

                  This is a counterpart signature page to the Second Amending
Agreement dated as of October 7, 2003 between Bowater Canadian Forest Products
Inc., as borrower, Bowater Incorporated, as guarantor, The Bank of Nova Scotia
as administrative agent and each of the lenders parties hereto as a Bank.

<PAGE>

                                     - 9 -

                                        CANADIAN IMPERIAL BANK OF COMMERCE,
                                        as a Bank

                                        By: /s/ Mark Chandler
                                            ------------------------------------
                                            Mark Chandler
                                            Executive Director

                                        By: /s/ Bill Wolfe
                                            ------------------------------------
                                            Bill Wolfe
                                            Executive Director

                  This is a counterpart signature page to the Second Amending
Agreement dated as of October 7, 2003 between Bowater Canadian Forest Products
Inc., as borrower, Bowater Incorporated, as guarantor, The Bank of Nova Scotia
as administrative agent and each of the lenders parties hereto as a Bank.

<PAGE>

                                     - 10 -

                                        BANK OF MONTREAL,
                                        as a Bank

                                        By: /s/ Bruno Jarry
                                            ------------------------------------
                                            Bruno Jarry
                                            Director

                                        BY:_____________________________________

                  This is a counterpart signature page to the Second Amending
Agreement dated as of October 7, 2003 between Bowater Canadian Forest Products
Inc., as borrower, Bowater Incorporated, as guarantor, The Bank of Nova Scotia
as administrative agent and each of the lenders parties hereto as a Bank.<PAGE>

                                 AMENDMENT NO. 1

                  AMENDMENT NO. 1 dated as of September 12, 2003, between
BOWATER INCORPORATED, a Delaware corporation (the "Company"), each of the
Subsidiaries of the Company from time to time designated as "Subsidiary
Borrowers" pursuant to the Credit Agreement (each, a "Subsidiary Borrower" and,
together with the Company, the "Borrowers"), the LENDERS party hereto, and
JPMORGAN CHASE BANK, as Administrative Agent.

                  The Borrowers, the Lenders and the Administrative Agent are
parties to a Credit Agreement dated as of May 22, 2002 (as heretofore modified
and supplemented and in effect on the date hereof, the "Credit Agreement"),
providing, subject to the terms and conditions thereof, for loans and extensions
of credit to be made by said Lenders to the Borrowers in an aggregate principal
or face amount not exceeding $800,000,000 at any one time outstanding.

                  The Borrowers wish to amend the Credit Agreement in certain
respects. Accordingly, the parties hereto hereby agree as follows:

                  Section 1. Definitions. Except as otherwise defined in this
Amendment No. 1, terms defined in the Credit Agreement are used herein as
defined therein.

                  Section 2. Amendments. Subject to the satisfaction of the
conditions precedent specified in Section 4 below, but effective as of the date
hereof, the Credit Agreement shall be amended as follows:

                  2.01. References in the Credit Agreement (including references
to the Credit Agreement as amended hereby) to "this Agreement" (and indirect
references such as "hereunder", "hereby", "herein" and "hereof) shall be deemed
to be references to the Credit Agreement as amended hereby.

                  2.02. Definitions. Section 1.01 of the Credit Agreement is
hereby amended by amending the following definition to read as follows:

                  "Consolidated Net Worth" means, as at any date, the sum, for
         the Company and its Consolidated Subsidiaries (determined on a
         consolidated basis without duplication in accordance with GAAP), of the
         following:

                  (a) the amount of common stock, plus

                  (b) the amount of any Preferred Stock, plus

                  (c) the amount of additional paid-in capital and retained
         earnings (or, in the case of an additional paid-in capital or retained
         earnings deficit, minus the amount of such deficit), plus

                                 Amendment No. 1

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                                      - 2 -

                  (d) equity adjustments from (i) foreign currency translations,
         (ii) unrealized gain/(loss) on hedged transactions and (iii) any other
         items of accumulated other comprehensive income (or loss), other than
         minimum pension liability adjustments (in each case of the foregoing
         clauses (i) through (iii), in the case of negative adjustments, minus
         the amount of such adjustments), [it being understood that these
         adjustments will be reflected in accordance with FASB Statement No. 130
         as accumulated other comprehensive income (or loss)], minus

                  (e) the unpaid principal amount of the loan (if any) to the
         Company's Employee Stock Ownership Plan (ESOP), minus

                  (f) the cost of treasury stock.

                  Section 3. Representations and Warranties. The Borrowers
represent and warrant to the Lenders that the representations and warranties set
forth in Article IV of the Credit Agreement are true and complete on the date
hereof as if made on and as of the date hereof (or, if any such representation
or warranty is expressly stated to have been made as of a specific date, as of
such specific date) and as if each reference in said Article IV to "this
Agreement" included reference to this Amendment No. 1.

                  Section 4. Condition Precedent. The amendments set forth in
Section 2 hereof shall become effective, as of the date hereof, upon (i) the
execution and delivery of counterparts of this Amendment No. 1 by the Borrowers
and the Required Lenders and (ii) the receipt by the Administrative Agent, for
the account of each Lender that has executed and delivered this Amendment No. 1
not later than 5:00 p.m. New York City time on September 12, 2003, an amendment
fee in an amount equal to 5 bps of the aggregate amount of such Lender's
Revolving Credit Exposure and outstanding Term Loans.

                  Section 5. Miscellaneous. Except as provided herein, the
Credit Agreement shall remain unchanged and in full force and effect. This
Amendment No. 1 may be executed in any number of counterparts, all of which
taken together shall constitute one and the same amendatory instrument and any
of the parties hereto may execute this Amendment No. 1 by signing any such
counterpart. This Amendment No. 1 shall be governed by, and construed in
accordance with, the law of the State of New York.

                                 Amendment No. 1

<PAGE>

                                      - 3 -

                  IN WITNESS WHEREOF, this Amendment No. 1 has been duly
executed as of the date first written above.

                                        BOWATER INCORPORATED

                                        By /s/ William G. Harvey
                                           -------------------------------------
                                           Name:  William G. Harvey
                                           Title: Vice President and Treasurer

                                        JPMORGAN CHASE BANK

                                        By /s/ Peter S. Predun
                                           -------------------------------------
                                          Name:
                                          Title:

                                        SUNTRUST BANK

                                        By /s/ Kelly Gunter
                                           -------------------------------------
                                          Name:  Kelly Gunter
                                          Title: Vice President

                                        WACHOVIA BANK,N.A.

                                        By /s/ Shawn Janko
                                           -------------------------------------
                                           Name:  Shawn Janko
                                           Title: VP

                                        By______________________________________
                                          Name:
                                          Title:

                                 Amendment No. 1

<PAGE>

                                      - 4 -

                                        BANK OF AMERICA, N.A.

                                        By /s/ MICHAEL BALOK
                                           -------------------------------------
                                           Name:  MICHEAL BALOK
                                           Title: Managing Director

                                        BANK OF MONTREAL

                                        By /s/ Bruno Jarry
                                           -------------------------------------
                                           Name:  Bruno Jarry
                                           Title: Director

                                        By______________________________________
                                          Name:
                                          Title:

                                        THE BANK OF NEW YORK

                                        By /s/ David C. Siegel
                                           -------------------------------------
                                           Name:  David C. Siegel
                                           Title: Vice President

                                        THE BANK OF NOVA SCOTIA

                                        By /s/ Chris J. Allen
                                           -------------------------------------
                                           Name:  Chris J. Allen
                                           Title: Managing Director & Office
                                                  Head

                                 Amendment No. 1

<PAGE>

                                      - 5 -

                                UBS AG, STAMFORD BRANCH

                                By /s/ Wilfred V. Saint
                                   --------------------------------------------
                                   Name:  Wilfred V. Saint
                                   Title: Associate Director
                                          Banking Products Services US

                                By /s/ Jennifer L. Poccia
                                   --------------------------------------------
                                   Name:  Jennifer L. Poccia
                                   Title: Associate Director
                                          Banking Products Services, US

                                CIBC INC.

                                By /s/ Geraldine Kerr
                                   --------------------------------------------
                                   Name:  Geraldine Kerr
                                   Title: Executive Director
                                          CIBC World Markets Corp. As Agent

                                TORONTO DOMINION (TEXAS), INC.

                                By /s/ RACHEL SUITER
                                   --------------------------------------------
                                   Name:  RACHEL SUITER
                                   Title: VICE PRESIDENT

                                NATIONAL BANK OF CANADA

                                By /s/ Yvon LaPlante
                                   --------------------------------------------
                                   Name:  Yvon LaPlante
                                   Title: Vice President and Manager
                                          Cross Border Financing Group

                                By /s/ Jeffrey Forgach
                                   --------------------------------------------
                                   Name:  Jeffrey Forgach
                                   Title: Assistant Vice President
                                          Cross Border Financing Group

                                 Amendment No. 1

<PAGE>

                                      - 6 -

                                      BRANCH BANKING AND TRUST
                                      COMPANY OF SOUTH CAROLINA

                                      By /s/ Troy R. Weaver
                                         ---------------------------------------
                                         Name:  Troy R. Weaver
                                         Title: Vice President

                                      ING CAPITAL LLC

                                      By _______________________________________
                                         Name:
                                         Title:

                                      REGIONS BANK

                                      By /s/ David Waller
                                         ---------------------------------------
                                         Name:  David Waller
                                         Title: Vice President,
                                                Corporate Banking Regions Bank

                                      PB CAPITAL CORPORATION

                                      By /s/ STEVEN ALEXANDER & MARIA C. LEVY
                                         ---------------------------------------
                                         Name:  STEVEN ALEXANDER   MARIA C. LEVY
                                         Title:  VICE PRESIDENT   VICE PRESIDENT

                                      ARES LEVERAGED INVESTMENT
                                      FUND II, L.P.
                                      By:  ARES Management II, L.P.
                                      Its: General Partner

                                      By /s/ Seth J. Brufsky
                                         ---------------------------------------
                                         Name:  Seth J. Brufsky
                                         Title: Vice President

                                 Amendment No. 1

<PAGE>

                                      - 7 -

                                       OCTAGON INVESTMENT PARTNERS II, LLC

                                       By: Octagon Credit Investors, LLC
                                           as sub-investment manager

                                       By /s/ Michael B. Nechamkin
                                          --------------------------------------
                                          Name:  Michael B. Nechamkin
                                          Title: Portfolio Manager

                                       OCTAGON INVESTMENT PARTNERS III, LTD.
                                       By: Octagon Credit Investors, LLC
                                           as Portfolio Manager

                                       By /s/ Michael B. Nechamkin
                                          --------------------------------------
                                          Name:  Michael B. Nechamkin
                                          Title: Portfolio Manager

                                       OCTAGON INVESTMENT PARTNERS IV, LTD.
                                       By: Octagon Credit Investors, LLC
                                           as collateral manager

                                       By /s/ Michael B. Nechamkin
                                          --------------------------------------
                                          Name:  Michael B. Nechamkin
                                          Title: Portfolio Manager

                                Amendment No. 1

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