Exhibit 10.6


 


EXECUTION COPY


 


 


FOURTH AMENDMENT


TO THE CREDIT AGREEMENT


dated as of
February 13, 2009


 


Among


 


CASCADES INC.

CASCADES USA INC.

CASCADES EUROPE SAS

(as
Borrowers)


 


— and —


 


SCOTIA CAPITAL

(as Lead
Arranger for the extension

of the Unsecured Revolving Facility)


 


— and —


 


NATIONAL BANK FINANCIAL

(as Lead
Arranger for the amendments

to the financial covenant)


 


 


NATIONAL BANK OF CANADA

THE BANK OF NOVA SCOTIA

(as
Co-Administrative Agents)


 


— and —


 


THE LENDERS

FROM TIME TO TIME PARTY HERETO


 


 


MCCARTHY TÉTRAULT LLP


 

















 


FOURTH AMENDMENT  TO THE DECEMBER 29, 2006 CASCADES CREDIT AGREEMENT
made as of February 13, 2009.


 


	
  BETWEEN:

  	
   

  	
  CASCADES INC. (“Cascades”)

  
	
   

  	
   

  	
   

  
	
  AND : 

  	
   

  	
  CASCADES USA INC. 

  
	
   

  	
   

  	
   

  
	
  AND :

  	
   

  	
  CASCADES EUROPE SAS

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (each a
  “Borrower” and collectively, the “Borrowers”)

  
	
   

  	
   

  	
   

  
	
  AND:

  	
   

  	
  THE BANK OF NOVA SCOTIA

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (as “Agent”)

  
	
   

  	
   

  	
   

  
	
  AND:

  	
   

  	
  NATIONAL BANK OF CANADA

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (as
  “Co-Agent”)

  



 


RECITALS


 


A.                                   The
Borrowers, the Agent, the Co-Agent and the Lenders are party to a credit
agreement dated as of December 29, 2006, as amended as of June 27,
2007, March 28, 2008 and May 22, 2008 (the “Credit Agreement”).


 


B.                                     The
Lenders have been requested by a request for amendments dated January 27,
2009 (as revised on February 3, 2009) to agree to amendments described
below to the Credit Agreement.


 


C.                                     The
foregoing request has been agreed on by the Majority Lenders, and the
Borrowers, the Agent and the Co-Agent wish to amend the Credit Agreement to
give effect to the amendments contemplated in the request.


 


NOW, THEREFORE, THE PARTIES AGREE AS FOLLOWS:


 


1.                                      Interpretation


 


1.1                                 Capitalized
terms used herein and defined in the Credit Agreement have the meanings
assigned to them in the Credit Agreement unless otherwise defined herein.


 


1.2                                 This
Agreement may be referred to as the Fourth Amendment to the December 29,
2006 Cascades Credit Agreement.


 


1.3                                 Any
reference to the Credit Agreement in any Credit Document refers to the Credit
Agreement as amended hereby.


 


2

















 


2.                                      Amendments to the Credit Agreement


 


2.1                                 Section 1.1
of the Credit Agreement is amended by deleting clause (ii) in the
definition of Credit Parties and replacing it with the following:


 


“(ii) Metro
Waste Paper Recovery Inc. and its Subsidiaries until such time when all of the
outstanding shares of Metro Waste Paper Recovery Inc. carrying voting rights in
all circumstances are directly or indirectly held by Cascades;”


 


2.2                                 Section 1.1
of the Credit Agreement is amended by the addition of the following at the end
of the current text of the definition of “Funded Debt to Capitalization Ratio”:


 


“provided
that for the purposes of the calculation of this ratio,


 


(a)                                  the mark-to-market value of Hedging Agreements relating to
obligations for monies borrowed or raised in US Dollars (i) if
positive, will be deducted from Funded Debt and (ii) if negative, will be
included in Funded Debt;


 


(b)                                 preferred shares redeemable in cash at the option of the issuer with
no possibility of redemption prior to the Revolving Facility Maturity Date and
the Term Facility Maturity Date or convertible in shares of another class at
the option of the issuer or holder thereof may be included in shareholders’
equity (and excluded from Funded Debt) even if they are treated as liabilities
under GAAP.”


 


2.3                                 The
Unsecured Revolving Facility is terminated and cancelled and all provisions of
the Credit Agreement relating thereto are to be read and are amended
accordingly.


 


2.4                                 A new
Section 1.2(e) is added to the Credit Agreement as follows:


 


“Notwithstanding
Section 1.2(c), Cascades will designate Metro Waste Paper Recovery Inc.
(and may designate any Subsidiary thereof) as a Designated Subsidiary once
Metro Waste Paper Recovery Inc. becomes a Credit Party regardless of the fact
that Metro Waste Paper Recovery Inc. may not be at such time or thereafter a
wholly-owned Subsidiary of Cascades.”


 


2.5                                 Sections
14.1 and 14.2 of the Credit Agreement is deleted and replaced by the following:


 


“14.1       Funded
Debt to Capitalization Ratio


 


Cascades
must maintain at all times, on an adjusted consolidated basis, a Funded Debt to
Capitalization Ratio of not more than 65 %.


 


14.2         Interest
Coverage Ratio


 


Cascades
must maintain at all times, on an adjusted consolidated basis, an Interest
Coverage Ratio not less than 2.25:1.00.”


 


3

















 


2.6                                 Schedule
“A” to the Credit Agreement is amended by replacing the pricing grids therein
by the pricing grids in the attached Annex. Modifications of Rates resulting
from such replacement will give rise to adjustments to Acceptance and Letter of
Credit fees previously calculated in the same manner as provided in
paragraph 4 of Schedule “A” for modifications resulting from a change
in a Rating.


 


3.                                      Effectiveness


 


This
Agreement will become effective on the date hereof.


 


4.                                      Cost and Expenses


 


4.1                                 Cascades
must pay to each Lender who has consented to the amendments described in
Section 2 hereof no later than at 5:00 p.m. on February 12, 2009
an amendment fee equal to 25 bps on such Lender’s total Commitment under
the Facilities at such time (excluding however its Commitment under the
Unsecured Revolving Facility).


 


4.2                                 The
Borrowers agree to pay on demand all reasonable costs and expenses of the Agent
in connection with the preparation, execution, delivery and implementation and
administration of this Agreement including the reasonable fees and expenses of
counsel for the Agent and the Co-Agent.


 


5.                                      Confirmation


 


5.1                                 Each
of the Borrowers represents to the Agent and the Lenders that the
representations and warranties set forth in the Credit Agreement are still true
and correct in all material respects and that this Agreement (i) has been
duly authorized by all necessary corporate actions, (ii) constitutes a
valid and binding obligation of the Borrowers and (iii) will not result in
any Default or Event of Default.


 


5.2                                 The
Agent and the Co-Agent confirm that the Majority Lenders have consented to the
amendments described in Section 2.


 


6.                                      Counterparts


 


This
Agreement may be executed in any number of counterparts and by different
parties hereto in separate counterparts, each of which when so executed and
delivered will be deemed to be an original and all of which taken together will
constitute but one and the same agreement. Delivery of an executed counterpart
of a signature page to this Agreement by telecopier or by electronic
mail will be effective as delivery of a manually executed counterpart of this
Agreement.


 


4

















 


7.                                      Governing Law


 


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


 


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


 


 


	
   

  	
   

  	
  Cascades Inc.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  per:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (s) Robert
  F. Hall

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Cascades USA Inc.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  per:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (s) Robert
  F. Hall

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Cascades Europe SAS

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  per:

  
	
   

  	
   

  	
   

  	
  (s) Robert
  F. Hall

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  The Bank of Nova Scotia, as Agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  per:

  
	
   

  	
   

  	
   

  	
  (s) Robert
  Boomhour 

  
	
   

  	
   

  	
   

  	
  Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  National Bank of Canada, as Co-Agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  per:

  
	
   

  	
   

  	
   

  	
  (s) Dominic
  Albanese 

  
	
   

  	
   

  	
   

  	
  Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  per:

  
	
   

  	
   

  	
   

  	
  (s) Roch
  Ledoux 

  
	
   

  	
   

  	
   

  	
  Director

  



 


5

















 


We, the
undersigned, as Designated Subsidiaries and guarantors under the Credit
Agreement, hereby agree with the terms of this Fourth Amending Agreement.


 


CASCADES BOXBOARD U.S., INC.

CASCADES CANADA INC. 

CASCADES PAPERBOARD INTERNATIONAL INC.

6265642 CANADA INC.

SCIERIE LEMAY INC.

RABOTAGE LEMAY INC.

DOPACO, INC.

DOPACO PACIFIC LLC

DOPACO LIMITED PARTNERSHIP

DOPACO CANADA, INC.

GARVEN INCORPORATED

CONFERENCE CUP LTD.

CASCADES BOXBOARD GROUP — CONNECTICUT LLC

CASCADES AUBURN FIBER INC.

CASCADES MOULDED PULP, INC.

CASCADES PLASTICS INC.

CASCADES FINE PAPERS GROUP INC.

CASCADES FINE PAPERS GROUP (SALES) INC.

CASCADES FINE PAPERS GROUP (USA) INC.

W.H. SMITH PAPER CORPORATION 

CASCADES TISSUE GROUP — ARIZONA INC.

CASCADES TISSUE GROUP — IFC DISPOSABLES INC.

CASCADES TISSUE GROUP — NEW YORK INC.

CASCADES TISSUE GROUP — NORTH CAROLINA INC.

CASCADES TISSUE GROUP — OREGON INC.

CASCADES TISSUE GROUP — PENNSYLVANIA INC.

CASCADES TISSUE GROUP — WISCONSIN INC.

CASCADES TISSUE GROUP — TENNESSEE INC.

CASCADES TISSUE GROUP — SALES INC.

CASCADES TISSUE GROUP — PICKERING INC.

CASCADES TISSUE GROUP — MARYLAND LLC

NORAMPAC HOLDING US INC.

NORAMPAC NEW YORK CITY INC.

NORAMPAC LEOMINSTER INC.

NORAMPAC FINANCE US INC.

NORAMPAC INDUSTRIES INC.

NORAMPAC DELAWARE LLC


 


6

















 


NORAMPAC THOMPSON INC.

NORAMPAC SCHENECTADY INC.

CASCADES TRANSPORT INC.

KINGSEY FALLS INVESTMENTS INC.

CASCADES ENERGY INITIATIVE INC.

CASCADES DELAWARE LLC

NORAMPAC INC.

CASCADES ENVIROPAC HPM LLC


6806813 CANADA INC.


6806805 CANADA INC.


6806783 CANADA INC.


 


each of the foregoing entities being represented by Robert F. Hall,
duly authorized as he so declares:


 


	
  (s) Robert
  F. Hall

  	
   

  



 


7

















 


A N N E X


 


APPLICABLE MARGINS OR RATES


 


Revolving
Facility


 


	
  Rating

  	
   

  	
  Prime, US Base

  	
   

  	
  Acceptance Fee / Libor 

  European Rate/L/C Fee

  	
   

  	
  Stand-By Fee

  
	
  BBB/Baa2 or Higher

  	
   

  	
  165 bps

  	
   

  	
  265 bps

  	
   

  	
  65 bps

  
	
  BBB-/Baa3

  	
   

  	
  175 bps

  	
   

  	
  275 bps

  	
   

  	
  70 bps

  
	
  BB+/Bal

  	
   

  	
  195 bps

  	
   

  	
  295 bps

  	
   

  	
  75 bps

  
	
  BB/Ba2

  	
   

  	
  225 bps

  	
   

  	
  325 bps

  	
   

  	
  80 bps

  
	
  BB-/Ba3 or Lower

  	
   

  	
  250 bps

  	
   

  	
  350 bps

  	
   

  	
  87.5 bps

  



 


Term
Loan


 


	
  Rating

  	
   

  	
  Prime, US Base

  	
   

  	
  Acceptance Fee / Libor

  
	
  BBB-/Baa3 or Higher

  	
   

  	
  187.5 bps

  	
   

  	
  287.5 bps

  
	
  BB+/Bal

  	
   

  	
  207.5 bps

  	
   

  	
  307.5 bps

  
	
  BB/Ba2

  	
   

  	
  237.5 bps

  	
   

  	
  337.5 bps

  
	
  BB-/Ba3 or Lower

  	
   

  	
  262.5 bps

  	
   

  	
  362.5 bps

  



 


8