Document:

Exhibit 4.2

 

EXHIBIT 4.2

FIRST AMENDMENT

     This Amendment to the Credit Agreement referred to below is dated as of July 20, 2007 (the
“Amendment”), by and among BOWATER INCORPORATED, a corporation organized under the laws of
Delaware, in its capacity as Borrower under the Credit Agreement referred to below (the
“Borrower”), certain Subsidiaries of the Borrower party hereto (the “Subsidiary
Grantors”), the lenders party hereto (the “Lenders”) pursuant to an authorization
(in the form attached hereto as Exhibit A, each a “Lender Authorization”) and
WACHOVIA BANK, NATIONAL ASSOCIATION, as administrative agent (the “Administrative Agent”)
for the Lenders.

STATEMENT OF PURPOSE:

     The Borrower, the Lenders and the Administrative Agent are parties to the Credit Agreement
dated as of May 31, 2006 (as amended hereby and as further amended, restated, supplemented or
otherwise modified from time to time, the “Credit Agreement”).

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

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

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

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

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

     ““Combination” means the combination of the Borrower with Abitibi-Consolidated
Inc., with the Parent as a common holding company, pursuant to the terms of the Combination
Agreement.”

     ““Combination Agreement” means that certain Combination Agreement and Agreement
and Plan of Merger dated as of January 29, 2007 among the Parent, Abitibi-Consolidated Inc.,
the Borrower, Alpha-Bravo Merger Sub Inc., a Delaware corporation, and Bowater Canada, Inc.,
as the same may be amended, modified or supplemented from time to time.”

     ““Parent” means AbitibiBowater, Inc., a Delaware corporation f/k/a Alpha-Bravo
Holdings, Inc.”

     ““Parent Overhead Expenses” means (a) accounting and auditing costs and
expenses incurred by the Parent in the ordinary course of its business in connection with
preparing financial reports and tax filings; (b) customary fees and expenses payable to the
SEC and other reasonable and customary costs and expenses payable in connection with the
Parent being a publicly traded company (including, without limitation, reasonable and
customary fees and

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expenses required to be paid for professional and regulatory compliance); (c) reasonable and
customary legal fees and expenses required for the corporate maintenance of the Parent and
its Subsidiaries; (d) reasonable and customary director fees; (e) reasonable and customary
costs and expenses payable for director and officer insurance; (f) transfer agent fees
payable in connection with Capital Stock of the Parent; and (g) franchise taxes and other
fees payable to the jurisdiction of incorporation or qualification of the Parent incurred in
the ordinary course of conducting its business; provided that in no event shall
Parent Overhead Expenses include management fees, salaries, bonuses, debt service or
dividends or other distributions in respect of the Capital Stock of the Parent.”

          (b) Amendment to Section 1.1 of the Credit Agreement (“Definitions”).
Section 1.1 of the Credit Agreement is hereby amended by deleting the definitions of
“Change of Control” and “Exchangeable Shares” in their entireties and replacing them with
the following:

     ““Change in Control” means:

     (a) prior to the completion of the Combination, an event or series of
events by which (i) any person or group of persons (within the meaning of
Section 13(d) of the Securities Exchange Act of 1934, as amended) shall
obtain ownership or control in one or more series of transactions of more
than thirty-five percent (35%) of the Capital Stock or thirty-five percent
(35%) of the voting power of the Borrower entitled to vote in the election
of members of the board of directors of the Borrower, (ii) during any period
of twenty-five (25) consecutive calendar months, a majority of the members
of the board of directors of the Borrower cease to be composed of Continuing
Directors, or (iii) there shall have occurred under any indenture or other
instrument evidencing any Indebtedness of the Borrower or any of its
Subsidiaries in excess of $25,000,000 any “change in control” or similar
provision (as set forth in the indenture, agreement or other evidence of
such Indebtedness) obligating the Borrower to repurchase, redeem or repay
all or any part of such Indebtedness or Capital Stock provided for therein
(provided that if such obligation is contingent on any other event
or circumstance, then such “change in control” shall not constitute a Change
in Control hereunder unless such other event or circumstance also has
occurred or exists); and

     (b) after the completion of the Combination, an event or series of
events by which (i) any person or group of persons (within the meaning of
Section 13(d) of the Securities Exchange Act of 1934, as amended) shall
obtain ownership or control in one or more series of transactions of more
than thirty-five percent (35%) of the Capital Stock or thirty-five percent
(35%) of the voting power of the Parent entitled to vote in the election of
members of the board of directors of the Parent, (ii) during any period of
twenty-five (25) consecutive calendar months, a majority of the members of
the board of directors of the Parent cease to be composed of Continuing
Directors, (iii) there shall have occurred under any indenture or other
instrument evidencing any Indebtedness of the Borrower or any of its
Subsidiaries in excess of $25,000,000 any “change in control” or similar
provision (as set forth in the indenture, agreement or other evidence of
such Indebtedness) obligating the Borrower to repurchase, redeem or repay
all or any part of such Indebtedness or Capital Stock provided for therein
(provided that if such obligation is contingent on any other event
or circumstance, then such “change in control” shall not constitute a Change
in

2

 

Control hereunder unless such other event or circumstance also has occurred
or exists) or (iv) the Parent shall cease to own one hundred percent (100%)
of the Capital Stock of the Borrower.

     For the purposes hereof, “Continuing Directors” means, during any period of
twenty-five (25) consecutive calendar months, individuals (i) who were members of
the board of directors on the first day of such period, (ii) whose election or
nomination to the board of directors was approved by individuals who comprised a
majority of the board of directors on the first day of such period or (iii) whose
election or nomination to the board of directors was approved by (A) individuals who
were members of the board of directors on the first day of such period or (B)
individuals whose election or nomination to the board of directors was approved by a
majority of the board of directors on the first day of such period; provided
that in each case such individuals referenced in clause (A) and clause (B)
constituted a majority of the board of directors at the time of such election or
nomination.”

     ““Exchangeable Shares” means those shares of Capital Stock issued by
Bowater Canada, Inc. and listed on the Toronto Stock Exchange (under stock symbol
BWX) which are exchangeable at any time at the option of the holder of such shares
into (a) common stock of the Borrower, prior to the completion of the Combination,
and (b) common stock of the Parent, after the completion of the Combination, and
which, in each case, entitle the holders thereof to similar voting rights and
dividend payments (on a per share basis) as those granted to holders of the common
stock of the Borrower or of the Parent, as the case may be.”

          (c) Amendment to Section 10.4 of the Credit Agreement (“Limitations on Mergers and
Liquidations”). Section 10.4 of the Credit Agreement is hereby amended by:

     (i) deleting the word “and” at the end of subsection (c) thereof;

     (ii) changing the period at the end of subsection (d) thereof to “; and”; and

     (iii) adding a new subsection (e) thereto to read as follows:

     “(e) the Borrower may merge with Alpha-Bravo Merger Sub, Inc. in order
to consummate the Combination; provided that the Borrower is the
surviving corporation in such merger.”

          (d) Amendment to Section 10.6 of the Credit Agreement (“Limitations on Dividends
and Distributions”). Section 10.6 of the Credit Agreement is hereby amended by:

     (i) deleting subsections (d), (e) and (f) in their entireties and replacing
them with the following:

     “(d) (i) prior to the completion of the Combination, the Borrower may
pay cash dividends to holders of its Capital Stock, (ii) after the
completion of Combination, the Borrower may pay cash dividends to the Parent
to allow the Parent to pay cash dividends to holders of the Parent’s Capital
Stock and (iii) Bowater Canada, Inc. may pay cash dividends to holders of
the Exchangeable Shares; provided that in each case (A) any such
dividend is paid as promptly as possible but in no event later than
seventy-five (75) days after the date of

3

 

declaration of such dividend, (B) such dividends do not exceed
$75,000,000 in the aggregate during each Fiscal Year and (C) on each date
that a dividend is declared and after giving effect thereto:

     (1) no Default or Event of Default shall have occurred and be
continuing; and

     (2) the Borrower shall be in pro forma compliance with each of
the covenants set forth in Article IX;

     (e) (i) prior to the completion of the Combination, the Borrower may
repurchase shares of the Borrower’s Capital Stock and (ii) after the
completion of the Combination, the Borrower may pay dividends to the Parent
to allow the Parent to repurchase shares of the Parent’s Capital Stock, in
an aggregate amount for all such repurchases by the Borrower or dividends
paid by the Borrower of up to $100,000,000 during the term of this
Agreement; provided that on each date that Capital Stock is
repurchased or such dividend is paid and after giving effect thereto:

     (A) no Default or Event of Default shall have occurred and be
continuing;

     (B) the Borrower shall be in pro forma
compliance with each of the covenants set forth in Article
IX;

     (C) the Aggregate Credit Exposure shall not exceed $100,000,000;
and

     (D) the pro forma Consolidated Total Leverage
Ratio shall not exceed 4.50 to 1.00;”

     (f) Bowater Canada, Inc. or Bowater Canadian Holdings Incorporated may
repurchase all or a portion of the Exchangeable Shares solely through an
exchange of (i) common stock of the Borrower, prior to the completion of the
Combination, or (ii) common stock of the Parent, after the completion of the
Combination, in each case, for the Exchangeable Shares being repurchased;
and”; and

     (ii) adding a new subsection (g) thereto to read as follows:

     “(g) after, or concurrently with, the completion of the Combination,
the Borrower may make dividends and distributions to the Parent to pay:

     (i) taxes attributable to the consolidated operations of the
Borrower and its Subsidiaries;

     (ii) the Parent Overhead Expenses in an aggregate amount per
Fiscal Year not to exceed fifty percent (50%) of the aggregate amount
of Parent Overhead Expenses during such Fiscal Year;

4

 

     (iii) an amount necessary to pay cash for fractional shares of
the Borrower to be purchased in connection with the Combination as
contemplated by the Combination Agreement; and

     (iv) so long as no Default or Event of Default has occurred and
is continuing or would result after giving effect to such dividends
or distributions, an additional amount of Parent Overhead Expenses in
an aggregate amount not to exceed $10,000,000 per Fiscal Year.”

          (e) Amendment to Section 11.1 of the Credit Agreement (“Events of Default”).
Section 11.1 of the Credit Agreement is hereby amended by adding the following new
subsection (o):

     “(o) Activities of Parent. The Parent shall engage in any business,
operations or activities other than:

     (i) holding all of the Capital Stock of the Borrower and Abitibi
Consolidated Inc., the employment of management and activities reasonably
complimentary and related thereto;

     (ii) guaranteeing the Indebtedness of any other Person, so long as, on
or prior to the date of such guarantee, the Parent guarantees the
Obligations on a pari passu basis with such other guarantee;

     (iii) granting a security interest in its assets and properties (other
than the Capital Stock of the Borrower or Abitbi Consolidated Inc.);

     (iv) granting a security interest in the Capital Stock of Abitibi
Consolidated Inc. so long as, on or prior to the date such security interest
is granted, the Parent has granted a security interest in the Capital Stock
of the Borrower in favor of the Administrative Agent, for the ratable
benefit of itself and the other Secured Parties, to secure the Obligations;

     (v) granting a security interest in the Capital Stock of the Borrower
in favor of the Administrative Agent, for the ratable benefit of itself and
the other Secured Parties, to secure the Obligations; and

     (vi) engaging in non-revenue generating activities reasonably related
to restructurings of the Subsidiaries of the Parent.”

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

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

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

5

 

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

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

     (e) the Administrative Agent shall have received a fully executed, true, correct and
complete copy of the Combination Agreement and all amendments, restatements, supplements or
modifications thereof;

     (f) the Administrative Agent and Lenders shall have received a true, correct and
complete copy of the amendment to the charter of Bowater Canada, Inc., certified to be true
and correct by the applicable Governmental Authority as of a recent date (such amendment,
the “BCI Charter Amendment”); and

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

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

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

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

6

 

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

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

     (d) Alpha-Bravo Merger Sub, Inc. has no assets or liabilities and does not engage in
any business, operations or activities.

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

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

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

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

     10. Acknowledgment Regarding BCI Charter Amendment. By its execution hereof or its
execution of a Lender Authorization, as applicable, the Administrative Agent and each Lender
acknowledges its receipt of the BCI Charter Amendment and acknowledges that the modifications

7

 

contemplated by the BCI Charter Amendment do not have a material adverse effect on the rights
and interests of the Lenders.

[Signature Pages Follow]

8

 

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

	 	 	 	 	 
	 

	 	BORROWER:
	 
	 	 	 	 
	 

	 	BOWATER INCORPORATED
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Duane A. Owens
	 

	 	 	 	 
	 

	 	 	 	Name: Duane A. Owens

Title:   VP and Treasurer
	 
	 	 	 	 
	 

	 	SUBSIDIARY GRANTORS:
	 
	 	 	 	 
	 

	 	BOWATER MISSISSIPPI HOLDINGS INC.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ W. G. Harvey
	 

	 	 	 	 
	 

	 	 	 	Name: William G. Harvey

Title:   VP and Treasurer
	 
	 	 	 	 
	 

	 	BOWATER MISSISSIPPI LLC
	 
	 	 	 	 
	 

	 	By:
	 	/s/ W. G. Harvey
	 

	 	 	 	 
	 

	 	 	 	Name: William G. Harvey

Title:   VP and Treasurer
	 
	 	 	 	 
	 

	 	BOWATER AMERICA INC.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ W. G. Harvey
	 

	 	 	 	 
	 

	 	 	 	Name: William G. Harvey

Title:   President
	 
	 	 	 	 
	 

	 	BOWATER NUWAY INC.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Ronald T. Lindsay
	 

	 	 	 	 
	 

	 	 	 	Name: Ronald T. Lindsay

Title:   VP and Secretary

[Signature Pages Continue]

[First Amendment — Bowater]

 

 

	 	 	 	 	 
	 

	 	BOWATER NUWAY MID-STATES INC.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Ronald T. Lindsay
	 

	 	 	 	 
	 

	 	 	 	Name: Ronald T. Lindsay

Title:   VP and Secretary
	 
	 	 	 	 
	 

	 	BOWATER ALABAMA INC.
	 
	 	 	 	 
	 

	 	 	 	By: /s/ W. G. Harvey
	 

	 	 	 	 
	 

	 	 	 	Name: William G. Harvey

Title:   VP and Treasurer

[Signature Pages Continue]

[First Amendment — Bowater]

 

 

	 	 	 	 	 
	 

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

	 	By:
	 	/s/ James Travagline
	 

	 	 	 	 
	 

	 	 	 	Name: James Travagline

Title:   Vice President
	 
	 	 	 	 

[First Amendment — Bowater]

 

 

Exhibit A

Form of Lender Authorization

 

 

LENDER AUTHORIZATION

Bowater Incorporated

First Amendment

July __, 2007

Wachovia Bank, National Association

Charlotte Plaza, CP-8

201 South College Street

Charlotte, North Carolina 28288-0680

Attention: Syndication Agency Services

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

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

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

	 	 	 	 	 
	 

	 	 	 	 
	 

	 	 	 	 
	 

	 	 
	 

	 	[Insert name of applicable financial institution]
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	 	 	 
	 

	 	Title:Exhibit 10.1

 

EXHIBIT 10.1

FIRST AMENDMENT

TO

AGREEMENT

     This First Amendment (this “First Amendment”), is made and entered into as of the 11th
day of May, 2007, by and between BOWATER INCORPORATED, a Delaware corporation (the
“Company”), and ARNOLD M. NEMIROW (the “Executive”).

W I T N E S S E T H:

     WHEREAS, the parties have previously entered into that certain Agreement, effective as of May
1, 2006 (the “Agreement”), whereby the Executive agreed to, among other things, serve the Company
as a consultant; and

     WHEREAS, the parties now desire to amend the Agreement on the terms and conditions set forth
herein;

     NOW, THEREFORE, in consideration of the above and the mutual warranties, representations,
covenants and agreements set forth herein, the parties hereby agree as follows:

     1. Section 2(a) of the Agreement is hereby amended by deleting such Section in its entirety
and substituting the following in lieu thereof:

     “(a) The Company shall pay the Executive $50,000 per month for his services during the Board
Service Period and the Consulting Period. These fees shall be in lieu of all other compensation
and fees otherwise payable by the Company to its non-employee directors. The fees shall be paid on
a monthly basis until May 31, 2007, at which time the Executive shall be paid a lump sum of $1
million, in full settlement of all amounts that may be due the Executive pursuant to the terms of
this Agreement.”

     2. Section 2(c) of the Agreement is hereby deleted in its entirety.* /s/AMN /s/TDW

     3. Section 6 of the Agreement is hereby amended by deleting such Section in its entirety and
substituting the following in lieu thereof:

	 	 	“6. Release of the Company. The Executive covenants and agrees that the Executive
hereby irrevocably and unconditionally releases, acquits and forever discharges the Company,
as well as each of the Company’s officers, directors, employees, subsidiaries, successors
and agents being collectively referred to herein as the “Releasees”), or any of
them, from any and all charges, complaints, claims, liabilities, obligations, promises,
demands, costs, losses, debts, and expenses (including attorneys’ fees and costs actually
incurred), of any nature whatsoever, in law or equity, arising out of the Executive’s
employment with the Company or his retirement from such employment or this Agreement,
including, without limitation, all claims asserted or that could be asserted by the
Executive against the Company in any litigation arising from summonses and complaints filed
in federal, state or municipal court asserting any claim arising from any

 

	
	* Based on the representation by the Company
that there is an authoritative opinion of outside counsel for the Company that
no Change of Control has or will occur upon the Merger of the Company with
Abitibi. /s/AMN /s/TDW

 

 

	 	 	alleged violation by the Releasees of any federal, state, or local statutes, ordinances, or
common law or this Agreement, which the Executive now has, owns, or holds, or claims to
have, own or hold, or which the Executive had, owned, or held, or claimed to have, own or
hold at any time before execution of this Agreement, against any or all of the Releasees.
Notwithstanding the foregoing, the Executive specifically does not release any claims for
the payment or provision of any benefits or payments under the Company’s tax-qualified
pension plan and to post-retirement medical and life insurance benefits under the Company’s
Supplemental Benefit Plan (the “SERP”).”

     Except as provided in this Amendment, the provisions in the Agreement continue in full force
and effect.

     4. All terms that are capitalized herein, but which are not defined herein, shall have the
meanings ascribed to them in the Agreement.

     5. All provisions of the Agreement that have not been amended by this First Amendment shall
remain in full force and effect. Notwithstanding the foregoing, to the extent that there is any
inconsistency between the provisions of the Agreement and the provisions of this First Amendment,
the provisions of this First Amendment shall control.

     6. This First Amendment may be executed in two or more counterparts, all of which when taken
together, shall constitute one and the same agreement and shall become effective when one or more
counterparts have been signed by each party and delivered to the other party.

     IN WITNESS WHEREOF, the parties have executed this Amendment as of May 11, 2007.

	 	 	 	 	 
	 

	 	EXECUTIVE
	 
	 	 	 	 
	 

	 	/s/ Arnold M. Nemirow
	 

	 	 
	 

	 	Arnold M. Nemirow

Date signed: 5-21-07
	 
	 	 	 	 
	 

	 	BOWATER INCORPORATED
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Togo D. West, Jr.
	 

	 	 	 	 
	 

	 	Name:Togo D. West, Jr.

Title:Chairman, Human Resources and

Compensation Committee

Date Signed: 5/21/07

2

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