Exhibit 10.6
 Cdn. $750,000,000
AMENDED AND RESTATED CREDIT AGREEMENT




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##### 



-ii- Among
 Cascades Inc.  Cascades USA Inc.  Cascades Europe SAS  as Borrowers
 and
 National Bank Financial Inc.  Scotia Capital  as Co-Lead Arrangers and Joint Bookrunners
 and
 National Bank of Canada  as Administrative Agent
 and
 The Bank of Nova Scotia  as Collateral Agent and Syndication Agent
 and
 Canadian Imperial Bank of Commerce  Caisse centrale Desjardins  Wells Fargo Capital Finance Corporation Canada  as Co-Documentation Agents
 and
 The Lenders  from Time to Time Party Hereto
 McCarthy Tétrault LLP




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##### 



TABLE OF CONTENTS
 PageArticle 1  Interpretation
    
    21.1
    
    
    Amendment and Restatement
    
    
    21.2
    
    
    Definitions
    
    
    21.3
    
    
    Designated Subsidiaries
    
    
    131.4
    
    
    Currency Conversions
    
    
    141.5
    
    
    GAAP, Calculations and Historical Adjustments
    
    
    141.6
    
    
    Time
    
    
    141.7
    
    
    Headings and Table of Contents
    
    
    151.8
    
    
    Governing Law and Jurisdiction
    
    
    151.9
    
    
    Previous Agreements
    
    
    151.10
    
    
    Inconsistency
    
    
    15Article 2  The Facility
    
    152.1
    
    
    The Facility
    
    
    152.2
    
    
    Reallocation among Tranches
    
    
    162.3
    
    
    Purpose and Nature of the Facility
    
    
    162.4
    
    
    Borrowing Options
    
    
    162.5
    
    
    Borrowing Base Limitations
    
    
    172.6
    
    
    Borrowings Proportionate to Commitments
    
    
    172.7
    
    
    Notice of Borrowings
    
    
    172.8
    
    
    Swingline Utilizations
    
    
    182.9
    
    
    Funding
    
    
    192.10
    
    
    Lenders Failure to Fund
    
    
    192.11
    
    
    Conversions and Renewals
    
    
    192.12
    
    
    Limitations on Lenders Obligation to Fund
    
    
    202.13
    
    
    Increase of the Facility
    
    
    202.14
    
    
    One-Year Extension of the Facility Maturity Date
    
    
    21Article 3  Acceptances
    
    223.1
    
    
    Period and Amounts
    
    
    223.2
    
    
    Disbursement
    
    
    223.3
    
    
    Power of Attorney
    
    
    233.4
    
    
    Depository Bills
    
    
    233.5
    
    
    Availability
    
    
    23Article 4  Libor Loans
    
    234.1
    
    
    Amounts and Periods
    
    
    234.2
    
    
    Changed Circumstances
    
    
    244.3
    
    
    Conversion Prior to Maturity
    
    
    24




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##### 



PageArticle 5  Letters of Credit
    
    245.1
    
    
    Availability
    
    
    245.2
    
    
    Maturity of Letters of Credit
    
    
    255.3
    
    
    Borrowings
    
    
    255.4
    
    
    Payments under Letters of Credit
    
    
    255.5
    
    
    Indemnity
    
    
    265.6
    
    
    I.C.C. Rules
    
    
    26Article 6  Fees And Interest
    
    266.1
    
    
    Letter of Credit Fees
    
    
    266.2
    
    
    Administrative Charges with respect to Letters of Credit
    
    
    266.3
    
    
    Standby Fee
    
    
    266.4
    
    
    Acceptance Fees
    
    
    276.5
    
    
    Other Fees
    
    
    276.6
    
    
    Interest on Prime Rate Loans
    
    
    276.7
    
    
    Interest on US Base Rate Loans
    
    
    276.8
    
    
    Interest on European Loans
    
    
    276.9
    
    
    Interest on Libor Loans
    
    
    276.10
    
    
    Calculation of Interest Rates
    
    
    276.11
    
    
    Interest on Arrears
    
    
    28Article 7  Repayment, Prepayment and Reduction
    
    287.1
    
    
    Repayment of the Facility
    
    
    287.2
    
    
    Mandatory Prepayments
    
    
    287.3
    
    
    Optional Prepayments
    
    
    297.4
    
    
    Exchange Rate Fluctuations
    
    
    297.5
    
    
    Reduction of the Facility
    
    
    29Article 8  Place of Payment, Currency and Taxes
    
    298.1
    
    
    Payments to the Administrative Agent
    
    
    298.2
    
    
    Manner of Payments
    
    
    308.3
    
    
    Currency
    
    
    308.4
    
    
    Judgment Currency
    
    
    308.5
    
    
    Payments Net of Taxes
    
    
    30Article 9  Conditions Precedent
    
    319.1
    
    
    Conditions Precedent to the Effectiveness of this Agreement
    
    
    319.2
    
    
    Conditions Precedent to all Borrowings
    
    
    329.3
    
    
    Waiver of Conditions Precedent
    
    
    329.4
    
    
    Early Termination of this Agreement
    
    
    329.5
    
    
    Borrowings under the Initial Credit Agreement
    
    
    32Article 10  Security
    
    3310.1
    
    
    Guarantees
    
    
    3310.2
    
    
    Security over Current Assets
    
    
    3410.3
    
    
    Charged Fixed Assets
    
    
    34




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##### 



Page10.4
    
    
    Insurance
    
    
    3510.5
    
    
    Security for Hedging Agreements
    
    
    3510.6
    
    
    Validity and Contents of Security Documents
    
    
    3610.7
    
    
    Exceptions for certain Credit Parties
    
    
    3610.8
    
    
    Release of the Security
    
    
    37Article 11   Representations and Warranties
    
    3711.1
    
    
    Corporate Existence and Capacity
    
    
    3711.2
    
    
    Authorization and Validity
    
    
    3711.3
    
    
    No Breach
    
    
    3711.4
    
    
    Approvals
    
    
    3811.5
    
    
    Compliance with Laws and Permits
    
    
    3811.6
    
    
    Title to Assets
    
    
    3811.7
    
    
    Litigation
    
    
    3811.8
    
    
    No Default
    
    
    3811.9
    
    
    Solvency
    
    
    3811.10
    
    
    Taxes
    
    
    3811.11
    
    
    ERISA and Pension Plans
    
    
    3911.12
    
    
    Margin Stock Restrictions
    
    
    3911.13
    
    
    Investment Company Act
    
    
    3911.14
    
    
    Restriction on Payments
    
    
    3911.15
    
    
    Corporate Structure and Location of Assets
    
    
    3911.16
    
    
    Financial Statements and Financial Year
    
    
    3911.17
    
    
    No Material Change
    
    
    4011.18
    
    
    True and Complete Disclosure
    
    
    40Article 12   Affirmative Covenants
    
    4012.1
    
    
    General Covenants
    
    
    4012.2
    
    
    Use of Proceeds and Compliance with Indenture Limitations
    
    
    4112.3
    
    
    Know Your Customer Laws
    
    
    4112.4
    
    
    Further Assurances
    
    
    4112.5
    
    
    Representations and Warranties
    
    
    41Article 13   Negative Covenants
    
    4213.1
    
    
    Negative Pledge
    
    
    4213.2
    
    
    Indebtedness
    
    
    4213.3
    
    
    Limitations on Fundamental Changes
    
    
    4213.4
    
    
    Investments
    
    
    4413.5
    
    
    Distributions
    
    
    4513.6
    
    
    Transactions with Related Parties
    
    
    45Article 14   Financial Ratios
    
    4514.1
    
    
    Funded Debt to Capitalization Ratio
    
    
    4514.2
    
    
    Interest Coverage Ratio
    
    
    46Article 15   Reporting Requirements
    
    4615.1
    
    
    Annual Reporting
    
    
    46




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##### 



Page15.2
    
    
    Quarterly Reports
    
    
    4615.3
    
    
    ERISA
    
    
    4715.4
    
    
    Reporting from Time to Time
    
    
    4715.5
    
    
    Hedging Agreements, Securitization and Factoring
    
    
    47Article 16   Events of Default and Remedies
    
    4816.1
    
    
    Events of Default
    
    
    4816.2
    
    
    Remedies
    
    
    49Article 17   Equality Among Lenders
    
    5017.1
    
    
    Distribution among Lenders
    
    
    5017.2
    
    
    Other Security
    
    
    5017.3
    
    
    Direct Payment to a Lender
    
    
    5017.4
    
    
    Adjustments
    
    
    50Article 18   The Agents and The Lenders
    
    5018.1
    
    
    Appointment of the Agents
    
    
    5018.2
    
    
    Restrictions on the Powers of the Lenders
    
    
    5118.3
    
    
    Security Documents
    
    
    5118.4
    
    
    Action by the Agents
    
    
    5118.5
    
    
    Enforcement Measures
    
    
    5118.6
    
    
    Indemnification
    
    
    5118.7
    
    
    Reliance on Reports
    
    
    5118.8
    
    
    Liability of the Agents
    
    
    5218.9
    
    
    Liability of Lenders
    
    
    5218.10
    
    
    Rights of an Agent as Lender
    
    
    5218.11
    
    
    Sharing of Information
    
    
    5218.12
    
    
    Competition
    
    
    5318.13
    
    
    Successor Agent
    
    
    53Article 19   Decisions, Waivers and Amendments
    
    5319.1
    
    
    Amendments and Waivers by the Majority Lenders
    
    
    5319.2
    
    
    Amendments and Waivers by Unanimous Approval
    
    
    5319.3
    
    
    Amendments requiring the consent of the Affected Party
    
    
    5419.4
    
    
    Dissenting and Defaulting Lenders
    
    
    54Article 20   Miscellaneous
    
    5520.1
    
    
    Books and Accounts
    
    
    5520.2
    
    
    Determination
    
    
    5520.3
    
    
    Prohibition on Assignment by Borrowers
    
    
    5520.4
    
    
    Assignments and Participations
    
    
    5520.5
    
    
    Designated Lenders
    
    
    5620.6
    
    
    Notes
    
    
    5720.7
    
    
    No Waiver
    
    
    5720.8
    
    
    Irrevocability of Notices of Borrowings
    
    
    5720.9
    
    
    Set-off
    
    
    5720.10
    
    
    Indemnification
    
    
    57




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##### 



Page20.11
    
    
    Mitigation of costs
    
    
    5820.12
    
    
    Corrections of Errors
    
    
    5920.13
    
    
    Communications
    
    
    5920.14
    
    
    Counterparts
    
    
    5920.15
    
    
    Waiver of Jury Trial
    
    
    59Article 21  Notices
    
    5921.1
    
    
    Sending of Notices
    
    
    5921.2
    
    
    Receipt of Notices
    
    
    60Schedule A
    
    
    67APPLICABLE MARGINS OR RATES
    
    
    67Schedule B
    
    
    69LIST OF DESIGNATED SUBSIDIARIES
    
    
    69Schedule C
    
    
    71NOTICE OF BORROWING [CONVERSION OR RENEWAL]
    
    
    71Schedule D
    
    
    72COMPLIANCE CERTIFICATE
    
    
    72Schedule E
    
    
    73BORROWING BASE REPORT
    
    
    73Schedule F
    
    
    74FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
    
    
    74Schedule G
    
    
    78ADDRESSES FOR NOTICE PURPOSES
    
    
    78




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##### 



AMENDED AND RESTATED CREDIT AGREEMENT
 This Agreement Cascades Inc., Cascades Cascades USA Inc. Cascades US Cascades
Europe SAS Cascades Europe Borrower Borrowers National Bank of Canada The Bank of Nova Scotia
 Recitals
 A.
    
    Pursuant to a credit agreement dated as of December 29, 2006 (as amended prior to the date
hereof, the Initial Credit Agreement), the Lenders agreed to make available (i) to the
Borrowers a 5-year revolving facility in a principal amount of $650,000,000, (ii) to Cascades
a 6-month additional revolving facility in a principal amount of $100,000,000 (which has been
terminated and repaid prior to the date hereof), and (iii) to Cascades a term loan in a
principal amount of $100,000,000.B.
    
    Each of the Borrowers other than Cascades is a Subsidiary of Cascades.C.
    
    The Borrowers and the Lenders wish to amend the Initial Credit Agreement for the purposes of,
among other things, (i) increasing to $750,000,000 the existing $650,000,000 revolving credit
facility and extending its maturity until February 10, 2015, (ii) consolidating the existing
term loan into the revolving credit facility, (iii) changing the pricing applicable to the
revolving credit facility, and (iv) amending certain other provisions of the Initial Credit
Agreement, including in relation to the Security and the negative and financial covenants.D.
    
    The amendments agreed on by the parties also include the replacement of The Bank of Nova
Scotia as administrative agent by National Bank of Canada and the termination of the role of
National Bank of Canada as co-administrative agent, except that The Bank of Nova Scotia will
continue to act as collateral agent for the purposes of the Security.E.
    
    Upon this Agreement becoming effective, (i) the Commitments of the Exiting Lenders (as
defined in Section 1.2) will be reduced to zero and all Borrowings and other amounts owing to
the Exiting Lenders will be repaid, and (ii) the remaining outstanding Borrowings under the
Initial Credit Agreement will be allocated among the remaining Lenders in the proportions of
their Commitments under this Agreement.
 Therefore ,the parties agree as follows :




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##### 



-2- Article 1 Interpretation
 1.1 Amendment and Restatement
  1.2 Definitions
 vice versa
 Acceptance
 (a)
    
    in respect of a Lender who is a bank that customarily accepts bankers
acceptances, at such Lenders discretion, either a depository bill subject to the
Depository Bills and Notes Act(Canada) or a bill of exchange subject to the Bills of
Exchange Act(Canada), in each case, drawn by Cascades on and accepted by such Lender;
and(b)
    
    in respect of any other Lender, a promissory note bearing no interest, made by
Cascades to such Lender;
 Adjusted Consolidated Basis
 Administrative Agent
 Administrative Agents Office
 Affiliate
 Agents
 Applicable Margin (or Rate)
 Borrowing Base




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##### 



-3- (a)
    
    80% of the book value of the trade accounts receivable of the Credit Parties
which are subject to the Security and are owed by customers located in Canada, the
United States and Europe, but excluding accounts that have been outstanding for more
than 90 days, accounts owed by Credit Parties, accounts subject to set-off, accounts in
dispute and doubtful accounts, provided that,
 (i)
    
    such 80% percentage will be increased to 90% for accounts
receivable insured for at least 90% of their amounts by Export Development
Canada or another credit insurer acceptable to the Majority Lenders but on the
condition that the Collateral Agent be named as loss payee under the related
policy,(ii)
    
    if a Securitization or Factoring Program is in effect, the
accounts receivable which are subject (in whole or in part) to such program
will be excluded from the Borrowing Base (as provided in Section
13.3(b)(iv)) and the aggregate of the amounts determined pursuant to
paragraphs (b) and (c) below will be included in the Borrowing Base only up to
300% of the amount determined under paragraph (a);
 (b)
    
    60% of the book value of the inventory of the Credit Parties which is subject
to the Security and is located in Canada, the United States and Europe, but excluding
work in process; and(c)
    
    the lesser of $320,000,000 and 60% (rounded upwards to the next $5,000,000) of
the market value of the Charged Fixed Assets;
 pari
passu
 Borrowings
 Branch of Account
 Business Day




---



##### 



-4-  Cascades Indenture 3 4 3 4 7 8
 CDOR Rate
 Charged Fixed Assets
 Collateral Agent
 Commitment
 Control




---



##### 



-5- Corporate Structure Chart
 Credit Documents
 Credit Parties
 Default
 Designated Subsidiaries
 Discount Rate
 (a)
    
    in respect of any Acceptance accepted by a Lender that is a Canadian Schedule I
bank, the CDOR Rate on such day for the applicable period; and(b)
    
    in respect of any Acceptance to which clause (a) does not apply, the lesser of
(x) the discount rate of such Lender in effect at or about 10:00 a.m. on the relevant
date for bankers acceptances (or equivalent instruments if such Lender does not
customarily accept bankers acceptances) of such Lender for a period comparable to the
period of such Acceptance and (y) the CDOR Rate plus 0.10%, provided that for greater
certainty such latter rate will apply to any Lender that does not have a discount rate
as contemplated in (x);
 Discounted Proceeds
 (a)
    
    the aggregate face amount of such Acceptances; by(b)
    
    the price, where the price is determined by dividing one by the sum of one plus
the product of:




---



##### 



-6- 
 (i)
    
    the Discount Rate applicable to such Acceptances (expressed as
a decimal); and(ii)
    
    a fraction, the numerator of which is the number of days in the
period of such Acceptances and the denominator of which is 365;
  Distribution
 Dollar
 EBITDA
 (a)
    
    Interest Expense;(b)
    
    income taxes;(c)
    
    depreciation;(d)
    
    non-cash compensation expenses for grants of performance shares or stock
options to the extent same are not redeemable for cash;(e)
    
    non-cash restructuring charges or reserves, including in relation to severance
and termination costs, pension settlement, future lease commitments, consolidation of
facilities and employee relocation costs; and(f)
    
    other non-cash items, including resulting from amortization, write-up,
write-down or write-off of any kind of tangible assets (other than inventory) or
intangible assets (including goodwill and deferred financing costs), but to the extent
that they do not represent an accrual of or reserve for cash expenditures in any future
period;
  (g)
    
    cash payments made during such period in respect of non-cash items referred to
above which had been added to net income during a prior period;
  (h)
    
    the equity of Cascades in the net income of any other Person that is not a
Credit Party to the extent same has not been distributed in cash to a Credit Party by
way




---



##### 



-7- of Distributions (it being understood that all cash dividends received by a Credit
Party from non-Credit Parties are included in its net income;
 (i)
    
    gains or losses arising from (i) the translation of any long-term debt payable
in a foreign currency, (ii) Hedging Agreements, (iii) any refinancing, repurchase or
extinguishment of Funded Debt, and (iv) extraordinary, unusual or non-recurring items
not otherwise dealt with in the definition of EBITDA including fees and expenses
relating to any event or transactions giving rise to such items;(j)
    
    non-cash items that will not result in the receipt of cash payments in any
future period; and(k)
    
    the net income of any Subsidiary to the extent that the payment of
Distributions of net income by that Subsidiary is not at the date of determination
permitted (i) without prior governmental approval (that has not been obtained), or (ii)
pursuant to the terms of its constitutive documents or any agreement, order, law or
regulation applicable to such Subsidiary or its shareholders;
 Effective Date
 Environmental Laws
 ERISA Employee Retirement Income Security Act
 ERISA Affiliate
 European Loan
 European Rate




---



##### 



-8-  Exiting Lenders
 Facility
 Facility Maturity Date
 Funded Debt
 Funded Debt to Capitalization 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 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; and(c)
    
    other adjustments in shareholders equity as a result of changes in GAAP coming
into effect on January 1, 2011 will not reduce shareholders equity for the portion
thereof that is not in excess of $225,000,000;
 GAAP




---



##### 



-9- Guarantee
 Hedging Agreement ;
 Hedging Creditor
 Initial Credit Agreement
 Interest Coverage Ratio
 Interest Expense
 Issuing Lender
 Lender
 Letter of Credit
 Libor




---



##### 



-10-  Libor Loan
 Lien
 Majority Lenders
 Material Adverse Change
 Material Adverse Effect
 Net Tangible Assets
 Non-Designated Subsidiaries
 PBGC
 Permitted Liens
 (a)
    
    Liens imposed or arising by operation of law, in each case, in respect of
obligations which have not been enforced or are being contested in good faith and by
appropriate proceedings to the extent that adequate reserves are maintained;(b)
    
    pledges or deposits made in the ordinary course of business in connection with
bids, or tenders or to obtain performance bonds or to comply or ensure




---



##### 



-11- compliance with
the requirements of any law or regulation applicable to a Credit Party or its business
or assets;
 (c)
    
    Liens granted by Credit Parties incorporated in a member state of the European
Union on their accounts receivable and inventory not subject to the Security and
securing credit facilities made available to such Credit Parties in an aggregate
amount at any time not exceeding $25,000,000;(d)
    
    Liens (other than Liens permitted pursuant to paragraph (e) below) securing
obligations incurred in connection with the purchase or the lease of any real or
immovable property, improvement thereto and equipment or securing any renewal,
extension or replacement of such obligations, provided that any such Lien charges only
the property so purchased or leased and for an amount not in excess of the related
obligation and that the aggregate of all outstanding amounts secured by such Liens does
not at any time exceed for all Credit Parties the greater of $125,000,000 and 5% of the
Net Tangible Assets of Cascades and provided further that no such property is part of
Charged Fixed Assets or is material to the operations of such assets;(e)
    
    Liens existing on the date hereof and listed in the Permitted Liens list dated
February 10, 2011 delivered to the Administrative Agent concurrently with the execution
of this Agreement, and any renewal, extension or replacement of any such Lien provided
that no such renewal, extension or replacement may extend to property other than that
initially charged by such Lien and that the aggregate of all outstanding amounts
secured by Liens permitted under this paragraph does not at any time exceed $50,000,000
and provided further that no property charged by such Liens is part of Charged Fixed
Assets or is material to the operation of such assets (except for the Lien in favour of
Investissement Québec on equipment located in the plant mentioned in Section 10.3(d)
to the extent such Lien only secures a loan made prior to the date hereof the
outstanding balance of which is not in excess of $3,750,000);(f)
    
    Liens securing loans and advances made by a Credit Party to another Credit
Party, provided such loans and advances are subject to the Security;(g)
    
    Liens securing obligations under a Securitization or Factoring Program,
provided that such Liens charge only accounts receivable sold pursuant to such program;
and(h)
    
    Liens by way of deposits or pledges of segregated property consisting of cash
and cash equivalent (including marketable securities) to secure obligations under
Hedging Agreements to counterparties other than Hedging Creditors provided that the
aggregate value of the property subject to such Liens does not at any time exceed
$25,000,000;
 Person




---



##### 



-12- Plan
 Prime Rate
 (a)
    
    the annual rate of interest established by the Administrative Agent (or the
Swingline Lender concerned where Section 2.8 applies) as being its reference rate then
in effect for determining interest rates for commercial loans denominated in Dollars
made in Canada; and(b)
    
    the CDOR Rate for bankers acceptances with a period of one month, plus 0.75%;
 Prime Rate Loan
 Securitization or Factoring Program
 Security
 Security Documents
 Solvent
 Subordinated Debt
 Subsidiary
 Swingline Lender
 Tranche Tranche A Tranche B




---



##### 



-13- Tranche C
 US Base Rate
 (a)
    
    the annual rate of interest established by the Administrative Agent (or the
Swingline Lender concerned where Section 2.8 applies) as being its reference rate then
in effect for determining interest rates for commercial loans denominated in US Dollars
made in Canada (in the case of US Base Rate Loans made under Tranche A) or made in New
York City (in the case of US Base Rate Loans made under Tranches B and C);(b)
    
    the federal funds effective rate in effect on such day (and if such day is not
a Business Day, then on the preceding Business Day), plus 0.50%; the term federal
funds effective rate means the rate usually designated as such and as published by the
Federal Reserve Bank of New York for the relevant Business Day, or if such rate is not
available on any Business Day, the rate that the Administrative Agent is prepared to
offer, at approximately 9:00 a.m. on such day, for overnight deposits in US Dollars in
New York; and(c)
    
    but only in the case of US Base Rate Loans made under Tranche B and C, the
Libor that would apply on such day for a period of one month, plus 1.00%;
 US Base Rate Loan
 US Revenue Code
 1.3 Designated Subsidiaries
 (a)
    
    The Subsidiaries of Cascades listed in Schedule B hereof are hereby
designated as Designated Subsidiaries.(b)
    
    Cascades may designate any other of its Subsidiaries that is a Credit Party
(other than a Borrower) as a Designated Subsidiary upon giving prior notice to the
Agents specifying the date of effectiveness of the designation (which must be not less
than 30 days after the date of the notice). Any such designation will be effective on
the date specified in the notice and no such designation may be cancelled or revoked.(c)
    
    Each Designated Subsidiary must be at all times a wholly-owned Subsidiary of
Cascades and must provide Security as and to the extent required by Article 10.(d)
    
    Cascades covenants and agrees that the Non-Designated Subsidiaries will include
no Subsidiary of Cascades who is directly or indirectly liable for the payment of
obligations under the Cascades Indenture or Funded Debt issued thereunder.




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##### 



-14- 
 (e)
    
    Notwithstanding Section 1.3(c), Cascades may designate Cascades Recovery Inc.
(and any Subsidiary thereof) as a Designated Subsidiary once Cascades Recovery
Inc. becomes a Credit Party regardless of the fact that Cascades Recovery Inc. may
not be at such time or thereafter a wholly-owned Subsidiary of Cascades.
 1.4 Currency Conversions
  1.5 GAAP, Calculations and Historical Adjustments
 (a)
    
    Unless otherwise provided, (i) terms and expressions of an accounting or
financial nature have the respective meanings given to such terms and expressions under
GAAP; (ii) calculations must be made and financial statements must be prepared in
accordance with GAAP insofar as applicable, and (iii) financial ratios must be
calculated on an Adjusted Consolidated Basis.(b)
    
    In the event of a change in GAAP having a material effect on the intent or the
application of the provisions of this Agreement which are of a financial nature,
Cascades and the Administrative Agent, at the request of either of them, will use
reasonable efforts to negotiate amendments to the affected provisions in order to
preserve their original intent or to facilitate their application provided that all
such amendments will be subject to Article 19. Should no such amendments be agreed on
by Cascades and the Majority Lenders within 120 days from any such request, then the
affected provisions will be applied as if the change in GAAP giving rise to the request
had not occurred.(c)
    
    If any business is acquired, discontinued or disposed of during any period in
respect of which EBITDA or Interest Expense has to be calculated, the historical
financial results of such business will be included or excluded (as applicable) in the
relevant calculations for that period as if the acquisition, disposition or
discontinuance had occurred on the first day of said calculation period, but with such
adjustments to said historical results as may be made by Cascades and are acceptable to
the Majority Lenders.
 1.6 Time




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##### 



-15- 1.7 Headings and Table of Contents
  1.8 Governing Law and Jurisdiction
 (a)
    
    This Agreement is governed by and construed in accordance with the laws of the
Province of Quebec and the laws of Canada applicable therein.(b)
    
    Any legal proceedings arising out of this Agreement may be instituted in the
Superior Court of the district of Montreal (Quebec) and the parties submit to the
non-exclusive jurisdiction of such Court.
 1.9 Previous Agreements
  1.10 Inconsistency
  Article 2 The Facility
 2.1 The Facility
  (a)
    
    Tranche A, initially in the amount of $550,000,000, will be available to
Cascades in the proportion as to each Lender of its Commitment under Tranche A;(b)
    
    Tranche B, initially in the amount of $100,000,000, will be available to
Cascades US in the proportion as to each Lender of its Commitment under Tranche B; and(c)
    
    Tranche C, initially in the amount of $100,000,000, will be available to
Cascades Europe in the proportion as to each Lender of its Commitment under Tranche C.




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##### 



-16- 
 2.2 Reallocation among Tranches
 (a)
    
    Upon giving not less than ten Business Days prior notice to the Administrative
Agent, Cascades may change the allocations among Tranches set forth in Section 2.1
(and, accordingly, the resulting available amounts of Tranche A, Tranche B and Tranche
C), in multiples of $5,000,000;(b)
    
    Any reallocation will result in a corresponding adjustment in the amounts of
the Commitments of the Lenders under Tranche A, Tranche B and Tranche C, in order that
the percentage of each Lenders Commitment under any Tranche be in the same percentage
as under the Facility;(c)
    
    Reallocations will be effective on the first Business Day of the quarter
following the expiry of said ten-day notice period. Any reallocation will remain in
effect until the effective date of any subsequent reallocation replacing same;(d)
    
    No reallocation will be effective if, after giving effect thereto, the
outstanding Borrowings under any Tranche would exceed on the intended effective date of
such reallocation the intended new amount of such Tranche.
 2.3 Purpose and Nature of the Facility
 (a)
    
    The Borrowers will use the Facility for general corporate purposes.(b)
    
    The Facility will revolve and, accordingly, Borrowings may be obtained, repaid
and re-borrowed by the Borrowers under any Tranche until the Facility Maturity Date.
 2.4 Borrowing Options
 (a)
    
    Borrowings may be obtained by Cascades under Tranche A in the form of:
 (i)
    
    Prime Rate Loans;(ii)
    
    Acceptances;(iii)
    
    US Base Rate Loans;(iv)
    
    Libor Loans in US Dollars or Euros; and(v)
    
    Letters of Credit;
 (b)
    
    Borrowings may be obtained by Cascades US under Tranche B in the form of:
 (i)
    
    US Base Rate Loans;(ii)
    
    Libor Loans in US Dollars; and




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##### 



-17- 
 (iii)
    
    Letters of Credit;
 (c)
    
    Borrowings may be obtained by Cascades Europe under Tranche C in the form of:
 (i)
    
    Libor Loans in US Dollars or Euros;(ii)
    
    US Base Rate Loans;(iii)
    
    Letters of Credit; and(iv)
    
    European Loans, but only with the Swingline Lender under Tranche C.
 2.5 Borrowing Base Limitations
  2.6 Borrowings Proportionate to Commitments
  2.7 Notice of Borrowings
  (a)
    
    the applicable Tranche and the selected form of Borrowing;(b)
    
    the amount of the Borrowing, with a minimum of (i) $5,000,000 (or US$5,000,000
or Euros 5,000,000 as the case may be) per Borrowing (other than Borrowings under
Tranche B and Tranche C) and (ii) $2,000,000 (or US$2,000,000 or Euros 2,000,000 as the
case may be) per Borrowing under Tranche B and Tranche C;(c)
    
    the date of the Borrowing, which must be a Business Day; and(d)
    
    to the extent applicable, the period of the Borrowing.




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##### 



-18-  2.8 Swingline Utilizations
 (a)
    
    The notice and minimum amount requirements otherwise applicable to Borrowings
do not apply to Borrowings in the form of Prime Rate Loans, US Base Rate Loans or
European Loans (as applicable) obtained from any Swingline Lender by way of overdrafts
in accounts opened and pursuant to agreements made
for such purposes with the applicable Swingline Lender, up to a maximum outstanding
amount not exceeding $50,000,000 in Tranche A, $35,000,000 in Tranche B and
$30,000,000 in Tranche C (subject however, in the case of Tranche C, to such
currency sublimits as may be agreed upon between the Borrower concerned and the
Swingline Lender). Any cheque or payment instruction or debit authorization from the
Borrower concerned and resulting in an overdraft in any such account will be deemed
to be a request for such a Borrowing, in an amount that is sufficient to cover the
overdraft.(b)
    
    Such accounts may include accounts of the Borrower concerned and of other
Credit Parties in respect of which set-off and netting arrangements have been made with
the applicable Swingline Lender, including any notional account reflecting any such
arrangements. The outstanding Borrowings owed to any Swingline Lender may be
calculated after giving effect to said arrangements.(c)
    
    The Administrative Agent may permit that Prime Rate Loans, US Base Rate Loans
and European Loans (as applicable) under Tranche A, Tranche B or Tranche C be owing to
the Lenders in proportions other than those of their respective Commitments under
Tranche A, Tranche B or Tranche C, as the case may be. However, the Administrative
Agent may from time to time, and will at the request of the applicable Swingline Lender
(which may be made at any time), make adjustments among the Lenders under any Tranche
so that all Borrowings under such Tranche be approximately in the proportion of the
respective Commitments of the Lenders (including the Swingline Lender) under said
Tranche. In addition, if outstanding Borrowings by way of overdrafts with a Swingline
Lender exceed for three consecutive Business Days US$10,000,000 in the case of Tranche
B or 6,000,000 Euros in the case of Tranche C, the applicable Swingline Lender will so
notify the Administrative Agent and the latter will make adjustments among the Lenders
under the applicable Tranche in amounts sufficient to eliminate the excess.(d)
    
    For greater certainty, (i) this Section 2.8 does not authorize the
Administrative Agent to allow that Borrowings owing to a Lender (other than a Swingline
Lender) under any Tranche exceed the amount of the Commitment of such Lender under such
Tranche, and (ii) the aggregate amount of the Borrowings outstanding under any Tranche
(including Borrowings from the applicable Swingline Lender)




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##### 



-19- may not exceed the amount
of such Tranche, as determined pursuant to Sections 2.1 and 2.2.
 2.9 Funding
 (a)
    
    At the request of the Administrative Agent, (including following a request from
a Swingline Lender), each Lender will promptly pay to the Administrative Agent such
Lenders share of any Borrowing made or to be made by the Administrative Agent on
behalf of the Lenders and of any adjustment payable pursuant to Section 2.8(c). The
Administrative Agent will provide the Lenders with such information
as may be necessary in order for the Lenders to make payments to the Administrative
Agent and fund their respective shares of any Borrowing.(b)
    
    Any amount to be paid by a Lender to the Administrative Agent must be available
to the Administrative Agent at the Administrative Agents Office by 2:00 p.m. on the
applicable day. Any amount to be disbursed by the Administrative Agent to a Borrower
will be made available to the relevant Borrower by crediting such Borrowers account at
the applicable Branch of Account or at any other place to be agreed upon from time to
time between the relevant Borrower and the Administrative Agent.
 2.10 Lenders Failure to Fund
  2.11 Conversions and Renewals
 (a)
    
    A Borrower may convert from one form of permitted Borrowings to another form of
permitted Borrowings the whole or any part of the outstanding Borrowings under the
applicable Tranche and renew Acceptances and Libor Loans, provided that (i) Acceptances
and Libor Loans may not be converted prior to the maturity of their respective periods
and (ii) Letters of Credit may not be converted.(b)
    
    Sections 2.4 to 2.10 apply to a conversion or a renewal with such
modifications as may be required.(c)
    
    Unless they are repaid, converted or renewed upon the maturity date of their
respective periods, (i) Acceptances will then become Prime Rate Loans for the face
amount of such Acceptances, (ii) Libor Loans in US Dollars will then become US Base
Rate Loans, (iii) Libor Loans in Euros under Tranche A will




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##### 



-20- then become Prime Rate Loans, and (iv) Libor Loans in Euros under Tranche C will
then become US Base Rate Loans.
 (d)
    
    When making adjustments among Lenders pursuant to Section 2.8(c), the
Administrative Agent may convert outstanding European Loans into US Base Rate Loans.(e)
    
    Any conversion to Borrowings in another currency will be effected by the
repayment of the Borrowings to be so converted and by the re-borrowing of an equivalent
amount in the other currency.
 2.12 Limitations on Lenders Obligation to Fund
  2.13 Increase of the Facility
 (a)
    
    At any time following the execution of this Agreement but no later than the
180th day preceding the Facility Maturity Date and so long as the amount of
the Facility has not been voluntarily reduced by Cascades pursuant to Section 7.5
solely, Cascades may, by notice to the Administrative Agent, request an increase up to
$200,000,000 in the amount of the Facility (an increase). The notice must specify:
 (i)
    
    the amount of the proposed increase, which must be a multiple
of $10,000,000, provided that the aggregate amount of all increases made
pursuant to this Section 2.13 may not exceed $200,000,000; and(ii)
    
    the allocation of the proposed increase among the Tranches.
 (b)
    
    Upon receipt of such notice, the Administrative Agent will offer to the Lenders
to participate in the increase pro ratato their Commitments. If some but not all of
the Lenders accept the offer, then the Administrative Agent will offer to the Lenders
who have then accepted a portion of the increase to participate in the remaining
unaccepted portion of the increase pro ratato the Commitments of such Lenders. If
after such offers, any portion of the increase remains unaccepted, then Cascades will
have the right to offer such portion to Persons who are not Lenders, provided that any
offer to any such Person would qualify as an assignment of Commitment hereunder, as if
such offer were an assignment.(c)
    
    If offers made pursuant to Section 2.13(b) have been accepted, the
Administrative Agent, the Borrowers and the Lenders and other Persons who have accepted
such offers will execute an amendment to this Agreement:




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##### 



-21- 
 (i)
    
    providing that each Person who has accepted to participate in
the increase will have a Commitment equal to the amount of its participation in
the increase (or an additional Commitment equal to such amount in the case of a
Person who is already a Lender); and(ii)
    
    containing such other provisions as may be necessary to give
effect to the increase including as to the absence of a Default and the
delivery of legal opinions.
 (d)
    
    For greater certainty, (i) nothing in this Section is intended to commit any
Lender to participate or the Administrative Agent to arrange for a participation in an
increase, and (ii) the aggregate amount of all increases made pursuant to this
Section 2.13 may not exceed $200,000,000. Notwithstanding any other provision of
this Agreement, an amendment agreement giving effect to an increase will not require
the consent of Lenders other than those participating in the increase and the
Agents, any Swingline Lender and any Issuing Lender.
 2.14 One-Year Extension of the Facility Maturity Date
 (a)
    
    Cascades may request that the Facility Maturity Date be extended to the fifth
anniversary date of this Agreement by delivering to the Administrative Agent a written
notice to that effect during the period between the 150th day and the
120th day preceding the third anniversary date of this Agreement. If all
Lenders agree to the extension request within 60 days from the receipt of such notice,
the Administrative Agent will notify Cascades of same and the Facility Maturity Date
will be extended to the fifth anniversary date of this Agreement. Subject to Section
2.14(b), unless all Lenders agree in writing to the extension request within said
60-day period, the Facility Maturity Date will not be extended.(b)
    
    If a group of Lenders whose Commitments amount in the aggregate to more than
662/3% (but less than 100%) of the Facility have agreed to an extension of the Facility
Maturity Date within the 60-day period specified in Section 2.14(a), the
Administrative Agent will notify Cascades of same together with specifying the names of
the Lenders who have not provided their consent with such 60-day period (the
dissenting Lenders). After receipt of such notice and for a period of 45 days,
Cascades will be entitled to exercise any of the following options (or a combination of
them):
 (i)
    
    Cascades may require that any dissenting Lender assign its
rights under the Facility to another Person who has agreed to assume the
Commitment of such dissenting Lender and to consent to the extension, provided
that no such assignment and assumption will be effective unless Section 20.4
be complied with and the consideration paid to such dissenting Lender for the
assignment include all amounts owed to such dissenting Lender in respect of the
Facility (plus breakage costs, if any);




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##### 



-22- 
 (ii)
    
    Cascades may cancel in its entirety the Commitment of any
dissenting Lender provided that no such cancellation will be effective unless
all amounts owed to such dissenting Lender in respect of the Facility (plus
breakage costs, if any) be paid to it.
 (c)
    
    If the Commitments of all dissenting Lenders have been assumed or cancelled in
accordance with Section 2.14(b) within the period of time therein specified, the
Administrative Agent will notify the Lenders of same and the Facility Maturity Date
will be extended to the fifth anniversary date of this Agreement. However, if the
Commitments of all dissenting Lenders in respect of the Facility have not been so
assumed or cancelled within such period of time, the Facility Maturity
Date will not be extended and the Administrative Agent will notify Cascades and the
Lenders of same.
 Article 3 Acceptances
 3.1 Period and Amounts
  (a)
    
    are for periods of one, two, three or six months, but must mature on a date
which is a Business Day and which is no later than the Facility Maturity Date;(b)
    
    are denominated in Dollars, in multiples of $100,000 with a minimum of
$5,000,000 per issue, provided that the Administrative Agent may round each Lenders
allocation of such issue to the nearest $100,000 increment;(c)
    
    constitute outstanding Borrowings for their face amount;(d)
    
    do not bear interest nor carry any days of grace; and(e)
    
    may be discounted by the Lenders for their own account or may be sold to third
parties.
 3.2 Disbursement
 (a)
    
    The amount to be disbursed to Cascades with respect to Acceptances discounted
by the Lenders is the Discounted Proceeds of such Acceptances, less the applicable
acceptance fee.(b)
    
    In the case of an issue of Acceptances for the purposes of replacing existing
Borrowings, Cascades must, concurrently with such issue, pay to the Administrative
Agent an amount equal to the aggregate amount of the Borrowings so replaced. The amount
so paid to the Administrative Agent will be applied to the portion of the Borrowings
which have been replaced by such Acceptances.




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##### 



-23- 
 3.3 Power of Attorney
 (a)
    
    Upon any issue of Acceptances, each Lender is authorized to sign, complete,
endorse and deliver on behalf of Cascades the Acceptances to be so issued and to do all
things necessary or useful in order to facilitate such issuance. The Administrative
Agent is also authorized to make the necessary arrangements for the negotiation of
Acceptances intended to be sold on the money market.(b)
    
    In the case of an issue of Acceptances by way of promissory notes to the order
of Lenders who do not customarily accept bankers acceptances (as provided in paragraph
(b) of the definition of Acceptances), Cascades will be deemed to have
issued the corresponding notes to such Lenders, without the necessity of physical
execution and delivery of any note.
 3.4 Depository Bills
 Depository Bills and Notes Act
 3.5 Availability
 (a)
    
    The availability of Acceptances (including by way of conversions or renewals)
is subject (i) to funds being available for such purpose in the Canadian money market
and the CDOR Rate being available, and (ii) with respect to any Lender, such Lender not
having advised the Administrative Agent and Cascades that the Discount Rate is less
than its effective funding cost for Acceptances issued by Cascades to be sold on the
Canadian money market. The Administrative Agent will notify Cascades if Acceptances
cease to be so available (either generally or with any particular Lender) as well as
when availability resumes. For so long as Acceptances are not available with any
particular Lender, Borrowings with such Lender that otherwise would have been made by
way of Acceptances will be made by way of Prime Rate Loans, notwithstanding Section
2.6.(b)
    
    Cascades must ensure that no more than ten different issues of Acceptances be
outstanding at any time, provided that on an occasional basis the Administrative Agent
may permit such limit to be exceeded.
 Article 4  Libor Loans
 4.1 Amounts and Periods
 (a)
    
    Libor Loans may be obtained for periods of one, two, three or six months, but
must mature on a Business Day which is not later than the Facility Maturity Date;




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##### 



-24- 
 (b)
    
    Libor Loans must be in multiples of US$100,000 (or 100,000 Euros), with a
minimum of (i) US$5,000,000 (or 5,000,000 Euros) under Tranche A or (ii) US$2,000,000
(or 2,000,000 Euros) under Tranche B and Tranche C; and(c)
    
    The Borrowers must ensure that no more than ten different Borrowings by way of
Libor Loans be outstanding at any time under the Facility, provided that on an
occasional basis the Administrative Agent may permit such limit to be exceeded.
 4.2 Changed Circumstances
  (a)
    
    it is unable to obtain US Dollars or Euros in the London inter-bank market,(b)
    
    a law, regulation, administrative decision or guideline, or a Court decision
has made it unlawful or prohibits such Lender from making or maintaining Libor Loans in
US Dollars or in Euros, or has imposed costs or constraints on such Lender that do not
exist on the date hereof in respect of Libor Loans in US Dollars or in Euros, or(c)
    
    Libor is less than its effective funding cost for making or maintaining Libor
Loans in the applicable currency,
  4.3 Conversion Prior to Maturity
  Article 5 Letters of
Credit
 5.1 Availability




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##### 



-25-  5.2 Maturity of Letters of Credit
 th
 5.3 Borrowings
 (a)
    
    Any Letter of Credit constitutes from the date of its issue an outstanding
Borrowing under the applicable Tranche in a principal amount equal to the maximum
amount of the obligation of the applicable Issuing Lender. Any Issuing Lender will
notify the Administrative Agent of the issue of any Letter of Credit at least one
Business Day prior to the date of such issue.(b)
    
    For greater certainty, if Letters of Credit under any Tranche are outstanding
on the Facility Maturity Date or on any other date the Borrowings hereunder become due,
the aggregate amount of such outstanding Letters of Credit will be included in the
Borrowings to be repaid on any such date. However, if any such Letter of Credit expires
or is cancelled without having been drawn, the amount repaid in respect of same will be
reimbursed to the Borrower concerned but only after performance of all other
obligations of, and payment of all other amounts payable by, the Credit Parties under
the Credit Documents.
 5.4 Payments under Letters of Credit
 (a)
    
    Each amount paid by an Issuing Lender under a Letter of Credit issued under
Tranche A will constitute, as of the date of payment, a Prime Rate Loan, if the payment
is made in Dollars or in a currency other than the US Dollar, and a US Base Rate Loan
if the payment is made in US Dollars. Each amount paid by an Issuing Lender under a
Letter of Credit issued under Tranche B or Tranche C will constitute, as of the date of
payment, a US Base Rate Loan. Any such Loan will be allocated among the Lenders pro
ratato their respective Commitments under the applicable Tranche. Each Lender must
fund such loan by remitting to the Administrative Agent (for the account of the
applicable Issuing Lender) the amount of its share of such loan. The provisions of
Section 2.10 will apply in the event of non-disbursement by a Lender.(b)
    
    If an Issuing Lender has paid an amount under a Letter of Credit in a currency
other than the currency of the resulting Loan, such amount will be converted into the
applicable currency on the date of payment.




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##### 



-26- 5.5 Indemnity
  5.6 I.C.C. Rules
  Article 6
Fees And
Interest
 6.1 Letter of Credit Fees
 pro rata
 6.2 Administrative Charges with respect to Letters of Credit
  6.3 Standby Fee
 pro rata




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##### 



-27- 6.4 Acceptance Fees
  6.5 Other Fees
  6.6 Interest on Prime Rate Loans
  6.7 Interest on US Base Rate Loans
  6.8 Interest on European Loans
  6.9 Interest on Libor Loans
  6.10 Calculation of Interest Rates
 (a)
    
    Interest rates and fees calculated at the Applicable Margins or Rates are
annual rates and are calculated daily on the basis of a 365-day year, except for (i)
Libor




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##### 



-28- Loans, (ii) US Base Rate Loans under Tranche A when paragraph (b) of the
definition of US Base Rate applies to such loans, (iii) US Base Rate Loans under
Tranche B and Tranche C, and (iv) European Loans, where in each case rates are
calculated on the basis of a 360-day year.(b)
    
    For the purposes of the Interest Act(Canada) only, the annual rate of interest
equivalent to a rate otherwise calculated under this Agreement is equal to the rate so
calculated multiplied by the actual number of days included in a given year and divided
by 365 days (or by 360 days, in the case of a rate calculated on the basis of a 360-day
year).
 6.11 Interest on Arrears
 (a)
    
    Any amount (other than an amount due on account of principal or interest) which
is not paid when due will bear interest at the Prime Rate in effect from time to time,
increased by 2%, in the case of an amount to be paid in Dollars, at the European Rate
in effect from time to time, increased by 3%, in the case of an amount payable in Euros
and at the US Base Rate in effect from time to time, increased by 2%, in the case of an
amount to be paid in US Dollars or any other currency (other than the Dollar or the
Euro).(b)
    
    Any interest which is not paid when due will bear interest at the rate that has
been used to calculate such unpaid interest.(c)
    
    Interest on arrears is compounded monthly and is payable on demand.
 Article 7
Repayment, Prepayment and Reduction
 7.1 Repayment of the Facility
  7.2 Mandatory Prepayments




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##### 



-29- 7.3 Optional Prepayments
 (a)
    
    The Borrower concerned may at any time make prepayments on Borrowings
outstanding under Tranche A, Tranche B or Tranche C (as applicable) without affecting
their right to re-borrow under such Tranche up to its maximum available amount. Any
such prepayment (except for a prepayment applied to overdraft utilizations pursuant to
Section 2.8) must be in an amount of at least $2,000,000, US$2,000,000 or 2,000,000
Euros (as applicable) and is subject to the Borrower concerned giving a one-Business
Day prior notice to the Administrative Agent.(b)
    
    No optional prepayment may be made in respect of Acceptances before the
maturity date of their respective periods. For greater certainty, any prepayment in
respect of Libor Loans subject to Section 20.10(c).
 7.4 Exchange Rate Fluctuations
  7.5 Reduction of the Facility
 pro rata pro rata
 Article 8 Place of Payment,
Currency and Taxes
 8.1 Payments to the Administrative Agent




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##### 



-30-  8.2 Manner of Payments
  8.3 Currency
  8.4 Judgment Currency
 res judicata
 8.5 Payments Net of Taxes




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##### 



-31-  Article 9
 Conditions Precedent
 9.1 Conditions Precedent to the Effectiveness of this Agreement
  (a)
    
    a copy of this Agreement executed by all parties thereto;(b)
    
    a certificate as to the legal existence of the Borrowers, an updated version of
their constitutive documents and by-laws and a resolution of their board of directors
evidencing the authority of the Persons acting on behalf of the Borrowers;(c)
    
    the Corporate Structure Chart;(d)
    
    a compliance certificate in the form of Schedule C based on the financial
statements of Cascades for its quarter ending September 30, 2010;(e)
    
    a Borrowing Base Report in the form of Schedule D, based on the financial
statements of Cascades for its quarter ending December 31, 2010 (but giving effect to
this Agreement);(f)
    
    financial forecasts of Cascades for its 2011, 2012, 2013, 2014 and 2015
financial years (on an Adjusted Consolidated Basis), including financial covenants
projections and, for the 2011 financial year, quarterly financial covenants and
Borrowing Base projections;(g)
    
    an acknowledgement by the Borrowers and the Designated Subsidiaries that the
Security Documents executed pursuant to the Initial Credit Agreement are still in full
force and effect as well as such additional Security Documents as are required to give
effect to Article 10 on the Effective Date;(h)
    
    Valuation reports by Ernst & Young relating to the Charged Fixed Assets;(i)
    
    a certificate evidencing the insurance coverage required to be maintained by
the Credit Parties pursuant to this Agreement;(j)
    
    pay-out letters and release of Security from Exiting Lenders;(k)
    
    legal opinions addressed to the Agents and the Lenders from counsel to the
Agents and counsel to the Borrowers, relating to such matters as the Agents may
reasonably require; and




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##### 



-32- (l)
    
    confirmation that all fees and expenses owing by the Borrowers to the Agents
and the Lenders as at the Effective Date will be paid on such date.
 9.2 Conditions Precedent to all Borrowings
  (a)
    
    if the Administrative Agent has not received timely notice of such Borrowing,
conversion or renewal; or(b)
    
    if a Default has occurred and is continuing or would occur after giving effect
to such Borrowing, conversion or renewal.
  9.3 Waiver of Conditions Precedent
  9.4 Early Termination of this Agreement
  9.5 Borrowings under the Initial Credit Agreement
 (a)
    
    Subject to paragraphs (d) and (e) below, on the Effective Date (i) the
Borrowers will pay in full all outstanding Borrowings and other amounts owing to the
Exiting Lenders, and (ii) the Borrowers will make such Borrowings and the
Administrative Agent will make such adjustments among the Lenders as may be necessary
to ensure that such payment be made and that Borrowings remaining outstanding
thereafter (including Borrowings under the Term Loan of the Initial Credit Agreement)
be owed to the Lenders pro ratato their Commitments under the Facility.(b)
    
    After payment in full of all Borrowings and other amounts owing to it under the
Initial Credit Agreement, each Exiting Lender will cease to be a lender and be released
from its obligations under the Initial Credit Agreement.




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-33- (c)
    
    Any adjustment whereby an amount is paid by a Lender to another Lender under
this Agreement will be deemed to be an assignment to the paying Lender by the other
Lender of the portion of the Borrowings to which such payment relates.(d)
    
    Acceptances issued prior to the Effective Date and then outstanding will be
deemed to be, from such date, Acceptances accepted by the Lenders pro ratato
their Commitments. From such date, the provisions of this Agreement with respect to
acceptance fees will apply to all such Acceptances as if the terms thereof had
commenced on such date. The Lenders acknowledge that the Exiting Lenders are
released from any liability for such Acceptances and accordingly, the Lenders, pro
ratato their Commitments, will indemnify the Exiting Lenders from any such
liability. The Borrowers will make to the Agent all such payments and the Agent will
make among the Lenders and the Exiting Lenders all such adjustments as are necessary
to give effect to the foregoing, including to ensure that the non-accrued portion of
any acceptance fee relating to such Acceptances is paid and received by the Lenders
at the Applicable Rate and pro ratato their Commitments.(e)
    
    (i) Libor Loans made prior to the Effective Date and outstanding on such date
will continue from said date to be owing to the Lenders and the Exiting Lenders in the
proportion of their commitments under the Initial Credit Agreement and Section 2.11 of
this Agreement will apply to such loans on the maturity of their respective period,
subject however to adjustments among the Lenders to give effect to their Commitments
and also to the following paragraph with respect to existing Libor Loans owing to the
Exiting Lenders;(ii)
    
    Existing Libor Loans owing to the Exiting Lenders must be repaid by each
Borrower concerned on the maturity of their respective period. Should any Borrower
concerned fail to pay on such date the principal amount of such existing Libor Loans
together with accrued and unpaid interest thereon, the Lenders (in the proportion of
their Commitments under the applicable Tranche) will make such payments on behalf of
such Borrower as may be necessary to ensure that the said amounts are paid to the
Exiting Lenders. Any such payment made by a Lender will constitute from the date of
payment a US Base Rate Loan;(f)
    
    the Administrative Agent is authorized to confirm to the Exiting Lenders the
indemnification provisions in their favour pursuant to this Section 9.5.
 Article 10  Security
 10.1 Guarantees




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##### 



-34- 10.2 Security over Current Assets
  10.3 Charged Fixed Assets
 (a)
    
    To secure the performance of the obligations of the Borrowers under the
Facility, Cascades Canada Inc. must provide in favour of the Collateral Agent and the
Lenders security over the following plants and related assets: 467 Marie-Victorin
Street, Kingsey Falls, Quebec, 75 Marie-Victorin Street, Candiac, Quebec, 200 Cascades
Street, Cabano, Quebec and 601, 655 and 701 Creditstone Road, Vaughan, Ontario
(together with other fixed assets which may become subject to the Security pursuant to
this Section 10.3, the Charged Fixed Assets).(b)
    
    For Borrowing Base purposes, the market value of the Charged Fixed Assets will
be determined by the Agents initially using a market value amount of $450,000,000,
which amount represents the mid-point of the estimated values determined by Ernst &
Young for the above plants in their valuation report dated January 31, 2011.(c)
    
    After the date hereof, Cascades will have the option, but not the obligation,
to increase the market value of the Charged Fixed Assets component of the Borrowing
Base by providing, or causing Designated Subsidiaries to provide, security over other
fixed assets acceptable to the Majority Lenders by an amount equal to the market value
of such assets as determined by a valuation report to be furnished to the
Administrative Agent prior to the grant of the related security.(d)
    
    Without limiting the option provided to Cascades in Section 10.3(c), the
plant of Cascades Canada Inc. located at 115 de la Princesse, Lachute, Quebec, will be
a fixed asset acceptable to the Lenders and that, if such plant becomes subject to the
Security prior to June 1, 2011, the valuation report referred to in Section 10.3(b)
will determine the market value of such plant for Borrowing Base purposes, namely
$80,000,000.(e)
    
    If, at any time after the date of this Agreement, the Majority Lenders have
reasonable grounds to believe that the market value of the Charged Fixed Assets has
reduced below the most recent value determined pursuant to this Section 10.3 (or below
$530,000,000 if such most recent value is greater than $530,000,000), Cascades will
provide to the Administrative Agent, within 30 days from a request by the
Administrative Agent, a valuation report on such assets.(f)
    
    From the date a valuation report is provided to the Administrative Agent and
until such time a new valuation report is so provided pursuant to this Section 10.3,
the market value of the Charged Fixed Assets will be determined for Borrowing Base
purposes on the basis of the most recent valuation.




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-35- (g)
    
    If there has been a decrease in the market value of the Charged Fixed Assets or
if a Credit Party proposes to sell assets which are part of the Charged Fixed Assets,
Cascades will have the option, but not the obligation, to provide or to cause
Designated Subsidiaries to provide security over other fixed assets acceptable to
the Majority Lenders to increase at a higher level (or to maintain at a certain
level in the event of a proposed sale) the market value of the Charged Fixed Assets
component of the Borrowing Base. The market value of such other fixed assets will be
determined on the basis of a valuation report which Cascades undertakes to provide
to the Administrative Agent at the time of any request made to the Majority Lenders
pursuant to this paragraph. For greater certainty, (i) no such sale may be made
unless same is otherwise permitted by Section 13.3(b) and (ii) from the date of
any such sale, the market value of the fixed assets so sold will no longer be
included in the Charged Fixed Assets component of the Borrowing Base.(h)
    
    Any valuation report to be provided to the Administrative Agent pursuant to
this Section 10.3 must be prepared by an independent firm acceptable to the Majority
Lenders and be accompanied by an environmental review acceptable to the Majority
Lenders.
 10.4 Insurance
  10.5 Security for Hedging Agreements
 (a)
    
    The guarantees, security and loss payee designations provided for under the
other sections of this Article 10 (the Security) will also secure the performance of
the obligations of the Borrowers to the Lenders, their Affiliates and the Exiting
Lenders in their capacity as counterparties under Hedging Agreements (the Hedging
Creditors). The Collateral Agent will act as agent for the Hedging Creditors for all
purposes of the Security Documents, including the enforcement or release thereof. For
such purposes, the provisions of Article 17, Article 18 and Article 19 (adapted
accordingly) will also apply to the Hedging Creditors. However, until termination and
repayment in full of the Facility, the claims of the Hedging Creditors will not be
taken into account in any situation where a decision regarding the Security has to be
made by the Lenders, including any enforcement or release thereof.(b)
    
    The rights of the Lenders and the Hedging Creditors under the Security will
rank pari passu, but only to the extent of an aggregate maximum amount of




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##### 



-36- $150,000,000
in respect of the claims of the Hedging Creditors under Hedging Agreements (such amount
to be calculated as provided in Section 10.5(c)).Any excess will rank after the
rights of the Lenders under the Facility. Any proceeds of realization of the Security
to be distributed to the Hedging Creditors will be
allocated among them pro ratato their claims (irrespective of the dates of the
related agreements or transactions).(c)
    
    Each Hedging Creditor will calculate its claim under any Hedging Agreement in
accordance with normal market practices (using the mark-to-market method whenever
applicable) and after giving effect to any close-out, netting arrangement or right of
set-off provided by contract or permitted by law.(d)
    
    The Hedging Agreements secured by the Security will consist of Hedging
Agreements made from the date of this Agreement with Hedging Creditors who are Lenders
or Affiliates thereof as well as Hedging Agreements made prior to this Agreement with
Hedging Creditors who are Lenders or Exiting Lenders. For greater certainty, the
Security (to the extent not released by the Lenders) will continue to secure the
obligations of any Borrower to any Hedging Creditor (i) after termination and repayment
in full of the Facility, or (ii) after such Hedging Creditor (or the Lender affiliated
with it) has ceased to be a Lender.(e)
    
    The Agents will be entitled at any time to assume that the only Lenders or
Affiliates thereof with a Hedging Creditor status are those who have notified the
Agents of such status before such time. Cascades represents and warrants to the Agents
that the only Exiting Lender with a Hedging Creditor status is Société Générale (Canada
Branch).
 10.6 Validity and Contents of Security Documents
  10.7 Exceptions for certain Credit Parties




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-37- 10.8 Release of the Security
  Article 11 Representations and Warranties
  11.1 Corporate Existence and Capacity
  (a)
    
    is a Person duly constituted and organized, validly existing and in good
standing under the laws of the jurisdiction of its constitution;(b)
    
    has all requisite corporate or other power necessary to own its assets and
carry on its business as now being or as proposed to be conducted; and(c)
    
    is qualified to do business and is in good standing in all jurisdictions in
which the nature of the business conducted by it makes such qualification necessary and
where failure so to qualify could have a Material Adverse Effect.
 11.2 Authorization and Validity
  11.3 No Breach




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##### 



-38- 11.4 Approvals
  11.5 Compliance with Laws and Permits
  11.6 Title to Assets
  11.7 Litigation
  11.8 No Default
  11.9 Solvency
  11.10 Taxes




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##### 



-39- 11.11 ERISA and Pension Plans
  11.12 Margin Stock Restrictions
  11.13 Investment Company Act
 Investment Company Act
 11.14 Restriction on Payments
  11.15 Corporate Structure and Location of Assets
  11.16 Financial Statements and Financial Year




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##### 



-40-  11.17 No Material Change
 th
 11.18 True and Complete Disclosure
  Article 12  Affirmative Covenants
 12.1 General Covenants
  (a)
    
    Legal Existence subject to Section 13.3, preserve and maintain its legal
existence and all of its material rights, privileges, licenses and franchises;(b)
    
    Legal Compliance substantially comply in all material respects with the
requirements of all laws and regulations applicable to it and its business and assets
(including Environmental Laws and anti-money laundering and anti-terrorism laws) and
with all orders of governmental or regulatory authorities;(c)
    
    Payment of Taxes pay and discharge all taxes, assessments and governmental
charges or levies imposed on it or on its income or profits or on any of its property
or assets prior to the date on which penalties or interest attach thereto, except for
any such tax, assessment, charge or levy the payment of which is being contested in
good faith and by proper proceedings and against which adequate reserves are being
maintained;(d)
    
    Maintenance of Property maintain all of its properties and assets used or
useful in its business in good working order and condition, ordinary wear and tear
excepted;(e)
    
    Material Agreements perform its obligations under and preserve and maintain
in force all agreements to which it is a party that are necessary for or material to
its operations and business;




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##### 



-41- (f)
    
    Insurance insure and keep insured its property, assets and business, and
will maintain business interruption and civil liability (including product and
environmental liability) insurance for such coverage as a prudent administrator would
obtain for similar property, assets and businesses, in each case, with financially
sound and reputable insurance companies;(g)
    
    Records keep adequate records and books of account, in which complete
entries will be made in accordance with GAAP; and(h)
    
    Access permit representatives of any Agent and any Lender, upon reasonable
prior notice and during normal business hours, to examine, copy and make extracts from
its books and records, to inspect any of its properties or assets, and to discuss its
business and affairs with its officers and auditors.
 12.2 Use of Proceeds and Compliance with Indenture Limitations
 (a)
    
    The Borrowers will use the proceeds of the Facility only for the purposes
permitted under this Agreement. The Borrowers will not use the Facility to finance any
private or public tender offer for the shares or other securities of a Person whose
governing body has not approved such offer (hostile take-over).(b)
    
    The Borrowers will ensure that the outstanding Borrowings hereunder will not at
any time exceed the maximum amount permitted under the Cascades Indenture.
 12.3 Know Your Customer Laws
  12.4 Further Assurances
  12.5 Representations and Warranties




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-42- Article 13  Negative Covenants
  13.1 Negative Pledge
  13.2 Indebtedness
  (a)
    
    indebtedness to the Agents and the Lenders under the Credit Documents;(b)
    
    indebtedness among the Credit Parties;(c)
    
    indebtedness permitted to be secured by Permitted Liens;(d)
    
    indebtedness under Hedging Agreements, provided that none of the Credit Parties
(including Cascades) will enter into Hedging Agreements for speculative purposes;(e)
    
    indebtedness under the Cascades Indenture;(f)
    
    indebtedness up to an aggregate outstanding amount for all Credit Parties other
than Cascades not exceeding at any time $100,000,000; and(g)
    
    existing indebtedness not exceeding $25,000,000 specified in the list of
permitted indebtedness dated December 31, 2010 that Cascades covenants to deliver to
the Administrative Agent within 30 days from the Effective Date (as extended or
renewed, as the case may be) and any future indebtedness incurred for the purposes of
refinancing any such existing indebtedness but only up to the amount to be refinanced.
 13.3 Limitations on Fundamental Changes
  (a)
    
    enter into any transaction of merger or amalgamation, or liquidate, wind up or
dissolve itself, except that any Credit Party may merge or amalgamate with any other
Credit Party provided that the following conditions are fulfilled:
 (i)
    
    no Default occurs as a result of the merger or amalgamation;




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-43- (ii)
    
    if any of the merging or amalgamating entity is a Borrower or a
Designated Subsidiary, the surviving or amalgamated entity must be a Borrower
or a Designated Subsidiary and must execute and deliver to the applicable Agent
all such documents as may be necessary or advisable to confirm that such entity
is bound as successor of the merging or amalgamating entities by all Credit
Documents to which such entities were parties;(iii)
    
    the Administrative Agent has been provided prior to or
concurrently with the merger or amalgamation with satisfactory evidence of
compliance with the requirements of clauses (i) and (ii) including such
financial information, certificates, documents and legal or other professional
opinions as the Administrative Agent may reasonably request; and(iv)
    
    a seven-day prior notice is given to the Administrative Agent
in the case of an amalgamation or merger involving a Borrower.
 (b)
    
    sell, lease, transfer or otherwise dispose of, in one transaction or a series
of related transactions to any Person (in each case, a disposition), any property
(other than inventory sold in the ordinary course of business), except for the
following dispositions (in each case, provided that no Default occurs as a result of
the disposition):
 (i)
    
    a disposition of property with a market value of less than
$50,000,000;(ii)
    
    a disposition to another Credit Party provided the conditions
of paragraph (a) above are fulfilled (as if the disposition were a merger and
the transferee were the surviving entity) and provided further that if the
disposition relates to substantially all of the property of the transferor, the
latter (if not a Borrower) may wind-up or dissolve itself after completion of
such disposition;(iii)
    
    a disposition to any non-Credit Party (other than pursuant to
a Securitization or Factoring Program), provided that the disposition is made
for a consideration at least equal to the fair market value of the related
property, at least 75% of the consideration is paid in cash or through
assumption of liabilities and the available cash proceeds of the disposition
are used to permanently reduce the Facility by no later than the 360thday following their receipt; for purposes of the foregoing, the available
cash proceeds of a disposition are the cash proceeds of such disposition (net
of related expenses and payments made to repay indebtedness secured by Liens on
the property sold), less the portion of such cash proceeds which has been
reinvested in Credit Parties within 360 days from the date of their receipt or
allocated by Cascades to the funding of an investment made in Credit Parties
within 180 days prior to the date of the disposition;




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##### 



-44- (iv)
    
    dispositions of accounts receivable pursuant to a
Securitization or Factoring Program to the extent such accounts receivable are
not generated by a disposition of inventory subject to the Security made after
the occurrence of an Event of Default specified in Section  16.1 (f) or Section
 16.1 (g)) or after the date the outstanding Borrowings become repayable
pursuant to Section  16.2 and provided that no account receivable subject (in
whole or in part) to a Securitization or Factoring Program will be included in
the Borrowing Base, it being understood however that accounts receivable
permitted to be disposed of pursuant to this clause  (iv) will be excluded from
the Security from the date of any such permitted disposition;(v)
    
    a disposition of property to any non-Credit Party in exchange
for other property to be used in the business of the Credit Parties, provided
that the market value of the property so received in exchange is not less than
that of the property so disposed and that the aggregate market value of all
property so disposed since January 1st, 2011 does not exceed
$25,000,000; and(vi)
    
    dispositions contemplated in the combination and put-call
agreements between certain Credit Parties and Reno de Medici S.p.A. or a
shareholder thereof on May 13, 2007, June 12, 2009 and August 3, 2010, as same
may be in good faith amended in the future.
 (c)
    
    carry on any business, directly or indirectly, other than the businesses
currently carried on by them and activities ancillary or reasonably related thereto
(the core business), or make any investment (other than investments referred to in
clauses (ii) and (iii) of Section  13.4 (b)) in a non-Credit Party who is not in the
same line of business as the core business, provided that businesses other than the
core business may be carried on by Credit Parties and by non-Credit Parties in which
investments are made to the extent that the aggregate of the combined assets of such
Credit Parties and of the value of all such investments in such non-Credit Parties does
not at any time exceed 5% of Cascades Net Tangible Assets, provided however that the
foregoing limitation will not apply to the investments made by Cascades in Boralex Inc.
prior to December 31, 2010.
 13.4 Investments
 (a)
    
    None of the Credit Parties will, directly or indirectly, make any investment in
any Person who is not a Credit Party, if such investment would result in the aggregate
amount of all investments made after January 1st, 2011 in non-Credit Parties
being in excess of $275,000,000.(b)
    
    However, the foregoing limitation will not apply to (i) investments funded from
the proceeds of any issue of equity made by Cascades after January 1st,
2011, (ii) cash or cash equivalent investments made for cash management purposes,




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-45- (iii)
loans and advances to employees in an aggregate amount not exceeding
$5,000,000 at any time, and (iv) investments contemplated in the agreements referred
to in Section  13.3 (b) (vi) except for the cash portion thereof that exceeds
$10,000,000 in the aggregate.
 13.5 Distributions
 (a)
    
    None of the Credit Parties will make any Distribution (other than a direct or
indirect Distribution to a Credit Party) if there is a Default or if such Distribution
could result in a Default or if, after giving effect to the Distribution, the aggregate
amount of all Distributions made from January 1, 2011 to non-Credit Parties were to
exceed 50% of the net income of Cascades (calculated on an Adjusted Consolidated Basis
but with the increases, exclusions or reductions resulting from the application of
paragraphs (d) to (k) of the definition of EBITDA) for the period from January 1, 2011
to the end of its most recent fiscal quarter (treated as one accounting period) plus
the sum of (i) the proceeds of any new issue of equity made by Cascades during the same
period less the portion of same which is used to fund investments in non-Credit Parties
other than investments permitted by Section  13.4(b) (ii), (iii) and (iv), and (ii)
$100,000,000.(b)
    
    However, the foregoing limitation will not apply to (i) Distributions made
pursuant to stock option plans and other plans or agreements with or for the benefit of
employees or directors up to an aggregate amount not exceeding $7,500,000 per fiscal
year and (ii) ordinary course of business Distributions on Cascades shares and open
market purchases of Cascades shares pursuant to stock buyback programs, up to an
aggregate amount of $35,000,000 per fiscal year.
 13.6 Transactions with Related Parties
  Article 14 
Financial Ratios
 14.1 Funded Debt to Capitalization Ratio




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##### 



-46- 14.2 Interest Coverage Ratio
 .
 Article 15 
Reporting Requirements
 15.1 Annual Reporting
  (a)
    
    the unqualified audited annual financial statements of Cascades, on a
consolidated basis and the unaudited annual financial statements of Cascades, on an
Adjusted Consolidated Basis;(b)
    
    the unaudited annual financial statements of each of the other Borrowers on a
consolidated basis;(c)
    
    the annual business plans and annual operating and capital budgets for the
current fiscal year of Cascades, on a consolidated and Adjusted Consolidated Basis; and(d)
    
    the unaudited annual financial statements of each of the businesses operated
with the Charged Fixed Assets.
 15.2 Quarterly Reports
  (a)
    
    the unaudited financial statements of Cascades for the relevant fiscal quarter,
on a consolidated and Adjusted Consolidated Basis;(b)
    
    the unaudited financial statements for the relevant fiscal quarter of each of
the other Borrowers on a consolidated basis;(c)
    
    the unaudited financial statements for the relevant quarter of each of the
businesses operated with the Charged Fixed Assets;(d)
    
    a compliance certificate relating to the covenants herein in the form of
Schedule D (with sufficient details to reconcile the financial statements with the
calculation base of the financial covenants);(e)
    
    a Borrowing Base report in the form of Schedule D; and




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-47- (f)
    
    copy of any filing with securities regulators.
 15.3 ERISA
  (a)
    
    any reportable event, as defined in Section 4043(b) of ERISA and the
regulations issued thereunder, unless the 30-day notice requirement in respect thereof
has been waived by the PBGC;(b)
    
    a notice of intent to terminate any Plan or any action taken by a Credit Party
to terminate any Plan, provided notice of intent to terminate is required pursuant to
Section 4041(a)(2) of ERISA;(c)
    
    the institution by PBGC of proceedings under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Plan; and(d)
    
    the adoption of an amendment to any Plan that, pursuant to Section 401(a)(29)
of the US Revenue Code or Section 307 of ERISA, would result in the loss of tax-exempt
status of the trust of which such Plan is a part if security has not been provided in
accordance with the provisions of these Sections.
 15.4 Reporting from Time to Time
  15.5 Hedging Agreements, Securitization and Factoring
 (a)
    
    The Borrowers will provide to the Administrative Agent, concurrently with the
compliance certificates required to be delivered pursuant to Section 15.2, a report
listing all outstanding Hedging Agreements with Hedging Creditors or secured by a
Permitted Lien, and specifying the counterparties, notional amounts, dates, maturities
and marked-to-market value of all such agreements.(b)
    
    Prior to or concurrently with the coming into effect of any Securitization or
Factoring Program (or any material amendment thereto), Cascades will provide to




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-48- the
Administrative Agent (i) a description of such program (or of such material amendment),
such description to include the criteria permitting the identification of the accounts
receivable subject to the program as well as the amount and term
of any such program, and (ii) an update (giving effect to the program or the
amendment) of the most recent Borrowing Base report delivered pursuant to Section
15.2(e)
 Article 16  Events of Default and Remedies
 16.1 Events of Default
  (a)
    
    a Borrower defaults in the payment when due of any amount owing under any
Facility in respect of principal, interest or acceptance fee, or defaults for more than
five Business Days in the payment of any other amount owing under a Credit Document or
any Hedging Agreement with a Lender or an Affiliate thereof;(b)
    
    anyone or more of the Credit Parties (i) fails or fail to make a payment or
payments exceeding in the aggregate $50,000,000 in respect of any obligation or
obligations (other than the Facility), when and as due, or (ii) is or are in default
under the Cascades Indenture and, in each case, such failure or default continues after
the applicable notice or grace period, if any;(c)
    
    any representation, warranty or certification made or deemed made by a Credit
Party in any Credit Document proves to be false or misleading as of the time made in
any material respect;(d)
    
    any of the provisions of Article 10 is not complied with;(e)
    
    any of the covenants contained in Article 13 and Sections 14.1 and 14.2 is
not complied with;(f)
    
    a Credit Party becomes unable to pay its debts generally as such debts become
due or is adjudicated bankrupt or insolvent;(g)
    
    a Credit Party (i) applies for or consents to or is the subject of an order for
the appointment of a receiver, interim receiver, trustee (or any Person performing
similar functions) in respect of itself or of all or a substantial part of its assets,
(ii) makes a general assignment for the benefit of its creditors, (iii) takes advantage
of any law relating to bankruptcy, insolvency, reorganization, liquidation,
dissolution, arrangement or winding-up, or (iv) takes any action for the purpose of
effecting any of the foregoing;




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-49- (h)
    
    a proceeding is commenced or any similar action is taken against a Credit Party
seeking (i) its bankruptcy, reorganization, liquidation, dissolution, arrangement or
winding-up, or similar relief, (ii) the appointment of a receiver, interim receiver,
trustee (or any Person performing similar functions) in respect of itself or of all or
any substantial part of its assets, or (iii) the seizure or the attachment of, or the
enforcement of remedies on, any part of the assets of the Credit Parties having a
value of more than $50,000,000 and, in each case, such proceeding (or similar
action) is not dismissed or withdrawn after a period of 60 days, provided that such
grace period will apply only if such proceeding (or action) is diligently contested
in good faith and does not disrupt the business or normal operations of the Credit
Party concerned;(i)
    
    a Credit Party defaults in the performance of any of its other obligations
under a Credit Document and such default continues unremedied for a period of 30 days
after notice by the Administrative Agent to the Borrowers;(j)
    
    the Control of Cascades is acquired by any Person (or by a group of Persons
acting in concert) other than Bernard Lemaire, Laurent Lemaire or Alain Lemaire (the
term Control being read for the purposes of this Section 16.1(j) by referring only
to clauses (i) through (iv) of the definition of Control in Section 1.1); or(k)
    
    a Material Adverse Change.
 16.2 Remedies
  (a)
    
    terminate the right of the Borrowers to use the Facility;(b)
    
    declare all indebtedness of the Borrowers under the Credit Documents to be
immediately payable and demand immediate payment of the whole or part thereof;(c)
    
    exercise all of the rights of the Agents and the Lenders under the Security
Documents; and(d)
    
    exercise all of the other rights of the Agents and the Lenders;




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-50- Article 17 
Equality Among Lenders
 17.1 Distribution among Lenders
  17.2 Other Security
  17.3 Direct Payment to a Lender
  17.4 Adjustments
  Article 18 
The Agents and The Lenders
 18.1 Appointment of the Agents




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-51- 18.2 Restrictions on the Powers of the Lenders
  18.3 Security Documents
 fondé de pouvoir Civil Code of Quebe
 18.4 Action by the Agents
  18.5 Enforcement Measures
  18.6 Indemnification
  18.7 Reliance on Reports




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-52- 18.8 Liability of the Agents
  18.9 Liability of Lenders
  18.10 Rights of an Agent as Lender
  18.11 Sharing of Information
 (a)
    
    The Lenders may share with each other any information held by them regarding
the financial condition, business or property of any Credit Party or relating to
matters contemplated in the Credit Documents or the Hedging Agreements. The Lenders
may provide such information on a confidential and need-to-know basis to their
Affiliates, any assignee or prospective assignee of Commitments, any participant in the
Facility and any counterparty or prospective counterparty to any Hedging Agreement.(b)
    
    Any Agent may disclose to any agency or organization that assigns standard
identification numbers to credit facilities such basic information describing the
Facility as is necessary to assign unique identifiers (and, if requested, supply a copy
of this Agreement), it being understood that the Person to whom such disclosure is made
will be informed of the confidential nature of such information and instructed to make
available to the public only such information as such person normally makes available
in the course of its business of assigning identification numbers. In addition, but
after consultation with Cascades, any Agent may provide to Loan Pricing Corporation or
other recognized publishers of information for circulation in the loan market
information of the type customarily provided by financial institutions to Loan Pricing
Corporation.




---



##### 



-53- 
 18.12 Competition
  18.13 Successor Agent
  Article 19 
Decisions, Waivers and Amendments
 19.1 Amendments and Waivers by the Majority Lenders
  19.2 Amendments and Waivers by Unanimous Approval
  (a)
    
    any increase in the amount of the Facility (other than pursuant to Section
2.13) or the extension of the maturity date of the Facility (other than pursuant to
Section 2.14);(b)
    
    any postponement of the due date, any subordination or any reduction of any
amount payable hereunder;(c)
    
    the reduction of any interest rate, discount rate or fee (including an
amendment to Schedule A which would have the same economic effect);(d)
    
    the release or subordination of any portion of the Security; and




---



##### 



-54- (e)
    
    the definition of the Majority Lenders and the provisions of Section 9.1,
Sections 16.1(a), 16.1(f) and 16.1(g), Article 17, Article 18, Article 19 and
Section 20.3.
 19.3 Amendments requiring the consent of the Affected Party
  19.4 Dissenting and Defaulting Lenders
 (a)
    
    Where an amendment or waiver referred to in Section 19.2 has been approved by
the Majority Lenders, but not by all the Lenders, the Administrative Agent will notify
Cascades and each Lender of such fact and will identify the Lenders approving of such
amendment or waiver and the Lenders disapproving of such amendment or waiver (each a
dissenting Lender).(b)
    
    Where a Lender has failed to fund its share of any Borrowing requested
hereunder (each, a defaulting Lender), the Administrative Agent will notify Cascades
and each Lender of that fact.(c)
    
    Where a Lender claims the benefit of Sections 3.5(a) or 4.2 or claims amounts
under Sections 8.5 or 20.10(b) such Lender (the affected Lender) will notify
Cascades of that fact.(d)
    
    At any time following the date of a notification under Section 19.4(a), (b)
or (c), Cascades will be entitled to require that each such dissenting Lender,
defaulting Lender or affected Lender, as applicable, assign its rights under the
Facility to another Lender (or a Person who would be a permitted assignee under Section
20.4) who has agreed to assume the Commitment of such dissenting Lender, defaulting
Lender or affected Lender, and to consent as the case may be to the amendment or
waiver, provided that no such assignment and assumption will be effective unless the
consideration payable to such dissenting Lender, defaulting Lender or affected Lender,
for the assignment includes all amounts owed to such dissenting Lender, defaulting
Lender or affected Lender, in respect of the Facility and is paid to the latter by the
assignee (together with breakage costs if any); Section 20.4 will apply (adapted
accordingly) to the said assignment and assumption.(e)
    
    Notwithstanding Section 19.4(d), Cascades will not be entitled to require the
replacement of a dissenting Lender after the expiry of a 45-day time period following
the date of the notification under Section 19.4(a) relating to such dissenting
Lender.




---



##### 



-55- (f)
    
    Notwithstanding any other provision of this Agreement, for so long as a
defaulting Lender remains in default, it will not be entitled to vote on any issue
(other than its right to approve any increase in the amount of its Commitment) and the
entirety of its Commitment will be disregarded in the calculation of any Majority
Lenders or unanimous Lenders decisions.
 Article 20 
Miscellaneous
 20.1 Books and Accounts
  20.2 Determination
  20.3 Prohibition on Assignment by Borrowers
  20.4 Assignments and Participations
 (a)
    
    A Lender (the assignor) may assign, in whole or in part, its Commitment under
the Facility, including outstanding Borrowings owing to it, to any Person who makes
purchases or otherwise invests in commercial loans in the ordinary course of its
business (the assignee). The assignment must be substantially in the form of
Schedule E. The assignor must pay to the Administrative Agent, for its own account,
an assignment fee of $5,000. When the assignment becomes effective, the assignee will
become a Lender and will benefit from the rights and be liable for the obligations of
the assignor, proportionally to the assigned Commitment, and, to the same extent, the
assignor will be released from its obligations. The assignor and the assignee will be
liable for all expenses incurred by the Administrative Agent in connection with such
assignment.(b)
    
    No partial assignment of a Commitment may be made (i) if the residual amount of
the Commitment of the assignor or if the total Commitment of the assignee is less than
$10,000,000 or (ii) if the assigned portion is not allocated among Tranches A, B and C
in the same proportion as the Commitment of the assignor.(c)
    
    Concurrently with any assignment in favour of an assignee who is not, at the
time of the assignment, party to this Agreement, the Borrowers and the Designated




---



##### 



-56- Subsidiaries (if so required by the Collateral Agent) must acknowledge that the
assignee is entitled to the benefit of the Security.(d)
    
    Each assignment by a Lender is subject to the prior consent of the Agents, of
any Issuing Lender and of any Swingline Lender, and, if made at a time when no Default
is continuing, to the prior consent of the Borrowers (which consents will
not be unreasonably withheld). However, no such consent will be required if the
assignee is another Lender.(e)
    
    Sections 20.4(a) to 20.4(d) do not apply to (i) a participation that a Lender
may grant to another financial institution or to an assignment by way of security to a
Federal Reserve Bank provided that no such participation or assignment will release any
Lender of its obligations under the Credit Documents or confer upon any participant any
right against any Agent, and (ii) an assignment made after Default to effect any
adjustment required to be made pursuant to Section 17.4.(f)
    
    No assignment or participation made at the time when no Default is continuing
may increase for any Borrower the costs of the Borrowings pursuant to Section 8.5.
 20.5 Designated Lenders
 (a)
    
    With the written consent of the Administrative Agent (which will not be
unreasonably withheld), a Lender (the designating Lender) may designate one of its
Affiliates or another Lender or an Affiliate thereof (the designated Lender) for the
purposes of making available its Commitment in respect of Tranche B or Tranche C. Upon
its acceptance of the designation and as long as such designation has not been
terminated, the designated Lender (if not already a Lender) will be deemed to be a
Lender for all purposes of the Credit Documents, with a Commitment (or an additional
Commitment if it is already a Lender) corresponding to the portion of the applicable
Tranche to be made available to it and with the designating Lenders Commitment under
the Facility being reduced accordingly. No such designation will reduce the obligations
of the designating Lender under any Tranche in which it remains a Lender, including as
a result of an increase in its Commitment due to a reallocation made pursuant to
Section 2.2.(b)
    
    A designating Lender may not make an assignment of its Commitment under the
Facility without terminating the designation prior to making the assignment. For
greater certainty, the assignee may also avail itself of the provisions of Section
20.5(a). A designated Lender may not make an assignment in respect of the Tranche
which is the subject of the designation. Any termination of a designation will result
in the outstanding Borrowings owing to the designated Lender in respect of the Tranche
which was the subject of the designation being automatically assigned to its
designating Lender (notwithstanding anything to the contrary in Section 20.4 but
subject to Section 20.4(f)), with the designating




---



##### 



-57- Lender being obligated to pay to the
designated Lender the price of the assignment in accordance with their agreement
relating to the designation.(c)
    
    Each of Canadian Imperial Bank of Commerce, Caisse centrale Desjardins, Wells
Fargo Capital Finance Corporation Canada, BNP Paribas (Canada) and The Toronto-Dominion
Bank designates as its designated Lender its Affiliate specified below its name on the
signature pages of this Agreement for the purposes of making available its Commitment
in respect of Tranche B or Tranche C (as
applicable). Each such designated Lender hereby accepts the designation made by its
designating Lender.(d)
    
    Sections 20.4(c) and 20.4(f) will apply to any designation of a designated
Lender made after the date of this Agreement, as if the designation were an assignment
and the designated Lender were an assignee.
 20.6 Notes
  20.7 No Waiver
  20.8 Irrevocability of Notices of Borrowings
  20.9 Set-off
  20.10 Indemnification
 (a)
    
    The Borrowers must pay on demand the amount of all reasonable costs and
expenses (including legal and other professional fees) incurred by any Agent in
connection with the implementation of the Facility and the preparation, negotiation,
execution, syndication and administration of the Credit Documents,




---



##### 



-58- as well as the
reasonable costs and expenses incurred by any Agent or the Lenders in connection with
the enforcement of, or the preservation of any rights under, any Credit Document.(b)
    
    If any law, regulation, administrative decision or guideline or decision of a
Court (i) increases the cost of the Facility for any Lender or (ii) reduces the income
receivable by any Lender from the Facility (including, without limitation, by reason of
the imposition of reserves, taxes or requirements as to the capital adequacy of such
Lender but in no event by reason of taxes on the overall net
income of a Lender), such Lender may send to the Borrower concerned a statement
indicating the amount of such additional cost or reduction of income; in the absence
of manifest error, this statement shall be conclusive evidence of the amount of such
additional cost or reduction of income and the Borrower concerned must pay forthwith
said amount to such Lender.(c)
    
    The Borrowers must pay on demand the amount of any breakage cost and other loss
suffered by a Lender as a result of the conversion or repayment of a Borrowing before
the maturity date of its period, irrespective of the cause of such conversion or
repayment (including a repayment resulting from a demand for payment after the
occurrence of an Event of Default). In the absence of manifest error, a statement
prepared by the affected Lender indicating the amount of such cost or other loss and
the method by which same was calculated will be binding and conclusive.(d)
    
    The Borrowers must indemnify the Administrative Agent, the Collateral Agent,
the Lenders, their Affiliates and their respective officers, directors, employees and
agents (each, an indemnitee) and hold them harmless from and against all losses,
liabilities, claims, damages or expenses (including costs to defend any claim) suffered
or incurred by or made against any of them in any manner whatsoever arising from or
related to the Credit Documents or the transactions contemplated thereby (including the
use of the proceeds from any Borrowing or as a result of any Default or non-compliance
by any Credit Party with any Environmental Laws or of any claim under Environmental
Laws in connection with the operations of, or any property owned or operated by, any
Credit Party). The foregoing indemnity will not however apply as to any indemnitee to
losses, liabilities, claims, damages or expenses resulting from the gross negligence or
wilful misconduct of such indemnitee or from a breach in bad faith by such indemnitee
of its obligations under a Credit Document.
 20.11 Mitigation of costs




---



##### 



-59-  20.12 Corrections of Errors
  20.13 Communications
  20.14 Counterparts
  20.15 Waiver of Jury Trial
  Article 21 
Notices
 21.1 Sending of Notices




---



##### 



-60- 21.2 Receipt of Notices
 force majeure




---



##### 



IN WITNESS WHEREOF
 Cascades Inc. 
Per: (s) Robert F. Hall
Per: (s) Allan HoggCascades USA Inc.
Per: (s) Robert F. Hall
Per: (s) Allan HoggCascades Europe SAS
Per: (s) Robert F. HallNational Bank of Canada, as Administrative Agent
Per: (s) Dominic Albanese
Per: (s) Roch LedouxThe Bank of Nova Scotia,as Collateral Agent
Per: (s) David Angel
Per: (s) David Loewen(the names and signatures of the Lenders are on the next page) [Signature page  Cascades Credit Agreement]




---



##### 



-62- Commitment Amounts
    
    LendersTranche A: 
Tranche B: 
Tranche C:
    
    $
$
$
    73,333,334
13,333,333
13,333,333
    
    
    National Bank of Canada
per : (s) Roch LedouxTotal:
    
    $
    100,000,000
    
    
    per: (s) Dominic AlbanesePercentage:
    
    
    13.33
    %National Bank of Canada,New York Branch
(in respect of Tranche B)
per : (s) Vincent Lima
per: (s) Monique BaillargeauTranche A: 
Tranche B: 
Tranche C:
    
    $
$
$
    73,333,334
13,333,333
13,333,333
    
    
    The Bank of Nova Scotia
per : (s) David AngelTotal:
    
    $
    100,000,000
    
    
    per: (s) David LoewenPercentage:
    
    
    13.33
    %Tranche A: 
Tranche B: 
Tranche C:
    
    $
$
$
    55,000,000
10,000,000
10,000,000
    
    
    Canadian Imperial Bank of Commerce
per : (s) Peter RawlinsTotal :
    
    $
    75,000,000
    
    
    per: (s) Scott BlackPercentage:
    
    
    10.00
    %CIBC Inc., as designated Lender pursuant to
Section 20.5 with respect to Tranche B
per : (s) Dominic J. Soresso
per: (s) Eoin Roche
 [Signature page  Cascades Credit Agreement]




---



##### 



-63- Commitment Amounts
    
    LendersTranche A: 
Tranche B:
    
    $
$
    55,000,000
10,000,000
    
    
    Caisse centrale DesjardinsTranche C:
    
    $
    10,000,000
    
    
    per : (s) Francine ChampouxTotal :
    
    $
    75,000,000per: (s) Marie-Hélène LacroixPercentage:
    
    
    10.00
    %Caisse centrale Desjardins US Branch, as
designated Lender pursuant to Section 20.5
with respect to Tranche Bper: (s) Michel BrouilletTranche A:
    
    $
    55,000,000
    
    
    Wells Fargo Capital Finance Corporation CanadaTranche B: 
Tranche C:
    
    $
$
    10,000,000
10,000,000per : (s) Raymond EghobamienTotal :
    
    $
    75,000,000Percentage:
    
    
    10.00
    %
    
    Wells Fargo Bank, N.A., as designated Lender
pursuant to Section 20.5 with respect to
Tranche B and Tranche Cper : (s) Thomas J. Vigna
 [Signature page  Cascades Credit Agreement]




---



##### 



-64- Commitment Amounts
    
    LendersTranche A: 
Tranche B: 
Tranche C:
    
    $
$
$
    36,666,666
6,666,667
6,666,667
    
    
    BNP Paribas (Canada)
per : (s) Edouard SinorTotal:
    
    $
    50,000,000
    
    
    per: (s) Jean RolinPercentage:
    
    
    6.67
    %
    
    BNP Paribas, New York Branch, as designated
Lender pursuant to Section 20.5 with respect
to Tranche Bper : (s) Benjamin Sileoper: (s) Melissa BalleyBNP Paribas, as designated Lender pursuant to
Section 20.5 with respect to Tranche Cper : (s) Claude Delaireper: (s) Lucien CharmoisTranche A: 
Tranche B:
    
    $
$
    36,666,666
6,666,667
    
    
    Caisse de dépôt et placement du QuébecTranche C:
    
    $
    6,666,667
    
    
    per : (s) Jean-Pierre JettéTotal:
    
    $
    50,000,000
    
    
    per: (s) James B. McMullanPercentage:
    
    
    6.67
    %Tranche A:
    
    $
    36,666,666
    
    
    Bank of America, N. A., Canada BranchTranche B:
    
    $
    6,666,667Tranche C:
    
    $
    6,666,667per : (s) Clara McGibbonTotal:
    

    $
    50,000,000Percentage:
    
    
    6.67
    %
    
    per : (s) Michael J. Balok
 [Signature page  Cascades Credit Agreement]




---



##### 



-65- Commitment Amounts
    
    LendersTranche A: 
Tranche B: 
Tranche C: 
Total:
    
    $
$
$
$
    25,666,666
4,666,667
4,666,667
35,000,000
    
    
    The Toronto-Dominion Bank
per : (s) Yves Bergeron
per: (s) Serge CloutierPercentage:
    
    
    4.67
    %
    
    Toronto Dominion (Texas) LLC, as designated
Lender pursuant to Section 20.5 with respect
to Tranche Bper : (s) Debbi L. BritoThe Toronto-Dominion Bank, London Office, (in
respect of Tranche C)per : (s) Debbi L. BritoTranche A: 
Tranche B: 
Tranche C:
    
    $
$
$
    25,666,666
4,666,667
4,666,667
    
    
    Royal Bank of Canada
per : (s) Pierre BouffardTotal:
    
    $
    35,000,000Percentage:
    
    
    4.67
    %
    
    Royal Bank of Canada,
(in respect of Tranche B)per: (s) Dustin CravenTranche A: 
Tranche B: 
Tranche C:
    
    $
$
$
    25,666,666
4,666,667
4,666,667
    
    
    Comerica Bank, Canada Branch
per : (s) Omar AlmedTotal:
    
    $35,000,000Percentage:
    
    
    4.67
    %
    
    Comerica Bank,
(in respect of Tranche B and Tranche C)per : (s) James Lentner
 [Signature page  Cascades Credit Agreement]




---



##### 



-66- Commitment Amounts
    
    LendersTranche A: 
Tranche B: 
Tranche C:
    
    $
$
$
    25,666,666
4,666,667
4,666,667
    
    
    Bank of Montreal
per : (s) Bruno JarryTotal:
    
    $
    35,000,000Percentage:
    
    
    4.67
    %Bank of Montreal, Chicago Branch
(in respect of Tranche B)per : (s) Joseph W. LinderTranche A: 
Tranche B: 
Tranche C:
    
    $
$
$
    25,666,666
4,666,667
4,666,667
    
    
    Rabobank Nederland, Canadian Branch
per : (s) Andrew ChewpaTotal:
    
    $35,000,000Percentage:
    
    
    4.67
    %
    
    per: (s) Raj Joshi
 [Signature page  Cascades Credit Agreement]




---



##### 



-67-


SCHEDULE A


APPLICABLE MARGINS OR RATES


Acceptance Fee / LiborRating
    
    Prime, US Base
    
    European Rate/L/C Fee
    
    Stand-By FeeBBB/Baa2 or Higher
    
    87.5 bps
    
    187.5 bps
    
    42.1875 bpsBBB-/Baa3
    
    112.5 bps
    
    212.5 bps
    
    47.8125 bpsBB+/Bal
    
    150 bps
    
    250 bps
    
    56.25 bpsBB/Ba2
    
    200 bps
    
    300 bps
    
    67.50 bpsBB-/Ba3 or Lower
    
    250 bps
    
    350 bps
    
    78.75 bps


DETERMINATION OF APPLICABLE MARGIN OR RATE


1.
    
    The rates of the margins applicable to Prime Rate, US Base Rate, European Rate and Libor and
the rates of the Acceptance Fees, stand-by fees and Letter of Credit fees under the Facility
(the Rates) will be determined as set forth in this Schedule.2.
    
    During any day that Cascades has a senior secured long-term debt rating from S&P or Moodys
without third-party credit enhancement (a Rating), the applicable Rates will be those which
correspond to the Rating in effect at the close of business on such day, as specified in the
above grids. If, on any day, Cascades has a Rating from both of S&P and Moodys but the two
Ratings are not at the same level, then (i) the higher Rating will apply if the Ratings are
not more than one level apart, and (ii) the Rating which is at mid-point will apply if the
Ratings are more than one level apart; if there is no mid-point level, the higher of the two
intermediate Ratings will apply.3.
    
    If, on any day, Cascades has no Rating, then the applicable Rates will be those which
correspond to the Rating that would be one level higher than the S&P or Moodys rating in
effect on such day for the senior unsecured long-term debt rating of Cascades; if on any day,
Cascades has received different senior unsecured long-term debt ratings from both S&P and
Moodys, then the applicable Rates will be determined using the same formula as in paragraph 2
for differentials in Ratings. If there exists any day that Cascades does not have any Rating
or senior unsecured long-term debt rating from S&P and Moodys, the applicable Rates for such
day will be those which correspond to a Rating of lower than BB-/Ba3.4.
    
    Interest, Letter of Credit fees and stand-by fees will be calculated, for any day, using the
applicable Rate in effect on the relevant day. Acceptance fees will be calculated using the
Rate in effect on the date such fees are payable. Any change of Rate (including as a result of
this agreement becoming effective) will give rise to adjustments to Acceptance fees




---



##### 



-68-


previously
calculated if the period of calculation extended beyond the date of the modification. The
adjustments will apply to the number of days remaining to accrue from
the date of the modification. The adjustments will be calculated by the Administrative Agent
and be payable by the Borrower concerned three Business Days after demand from the
Administrative Agent.5.
    
    The Applicable Rate will be
662/3% of the rate otherwise applicable (as specified in the
column governing Letter of Credit fees) for fees payable in respect of Letters of Credit
securing the performance by the Credit Parties of contracts (including bids) for the supply of
goods or services by the Credit Parties to their customers.6.
    
    This Schedule does not apply to the Letter of Credit fee applicable to a documentary Letter
of Credit. As provided in Section 6.2 of the Credit Agreement, the fee payable in
respect of any documentary Letter of Credit will be based on the rate then offered by the
applicable Issuing Lender to its customers for similar documentary letters of credit.




---



##### 



-69-





SCHEDULE B  LIST OF DESIGNATED SUBSIDIARIES


Name
    
    Jurisdiction
    
    Shareholder7251637 Canada Inc.
    
    Canada
    
    Cascades Canada Inc.7678169 Canada Inc.
    
    Canada
    
    Cascades Canada Inc.Cascades Canada Inc.
    
    Canada
    
    Cascades Inc.Cascades Enviropac HPM LLC
    
    Delaware
    
    Cascades Holding US Inc.Cascades SPG Sales Inc.
    
    Delaware
    
    Cascades USA Inc.Cascades GIE Inc.
    
    Canada
    
    Cascades Canada Inc.Cascades Holding US Inc.
    
    Delaware
    
    Cascades USA Inc.Cascades Moulded Pulp, Inc.
    
    North Carolina
    
    Cascades USA Inc.Cascades Paperboard International Inc.
    
    Canada
    
    Cascades Inc.Cascades Plastics Inc.
    
    Delaware
    
    Cascades USA Inc.Cascades Tenderco Inc.
    
    Canada
    
    Cascades Inc.Cascades Tissue LLC
    
    Delaware
    
    Cascades Holding US Inc.Cascades Transport Inc.
    
    Canada
    
    Cascades Inc.Cascades Fine Papers Group Inc.
    
    Canada
    
    Cascades Inc.Kingsey Falls Investments Inc.
    
    Canada
    
    Cascades Inc.Cascades Tissue Group  IFC Disposables Inc.
    
    Tennessee
    
    Cascades Holding US Inc.Cascades Tissue Group  New York Inc.
    
    Delaware
    
    Cascades Holding US Inc.Cascades Boxboard U.S., Inc.
    
    Delaware
    
    Cascades USA Inc.Cascades Boxboard Group  Connecticut LLC
    
    Delaware
    
    Cascades Holding US Inc.Conference Cup Ltd.
    
    Ontario
    
    Garven IncorporatedDopaco Canada, Inc.
    
    Canada
    
    Cascades USA Inc.Dopaco, Inc.
    
    Pennsylvania
    
    Cascades USA Inc.Dopaco Limited Partnership
    
    Delaware
    
    General Partner: Dopaco Pacific LLC
Limited Partner: Dopaco, Inc.Dopaco Pacific LLC
    
    Delaware
    
    Dopaco, Inc.
Cascades USA Inc.Garven Incorporated
    
    Ontario
    
    Dopaco Canada, Inc.




---



##### 



-70-


Name
    
    Jurisdiction
    
    ShareholderCascades Tissue Group  Arizona Inc.
    
    Delaware
    
    Cascades Holding US Inc.Cascades Tissue Group- Sales Inc.
    
    Delaware
    
    Cascades Holding US Inc.Cascades Tissue Group  Tennessee Inc.
    
    Delaware
    
    Cascades Holding US Inc.Cascades Energy Initiative Inc.
    
    Delaware
    
    Cascades USA Inc.Norampac Inc.
    
    Canada
    
    Cascades Inc.Norampac Export Sales Corp.
    
    Nevada
    
    Norampac Holding US Inc.Norampac New England Inc.
    
    Massachusetts
    
    Norampac Holding US Inc.Norampac New York City Inc.
    
    New York
    
    Norampac Holding US Inc.Norampac Finance US Inc.
    
    Delaware
    
    Norampac Holding US Inc.Norampac Industries Inc.
    
    New York
    
    Norampac Finance US Inc.Norampac Holding US Inc.
    
    Delaware
    
    Cascades Canada Inc.Norampac Schenectady Inc.
    
    New York
    
    Norampac Holding US Inc.




---



##### 



-71-


SCHEDULE C


NOTICE OF BORROWING  [CONVERSION OR RENEWAL]


[ Date ]


National Bank of Canada


Attention: Manager


RE: Credit Agreement dated as of February 10, 2011




inter alia


[or for a conversion or renewal] [date]





 [Prime Rate, Acceptances, US Base Rate Loan, Libor Loan in US
Dollars or Libor Loan in Euros]





 [or of conversion or renewal]







[Name of the Borrower concerned]








---



##### 



-72-


SCHEDULE D


COMPLIANCE CERTIFICATE


[ Date ]


National Bank of Canada


Attention: Director


RE: Credit Agreement dated as of February 10, 2011


inter alia




1.
    
    the Funded Debt to Capitalization Ratio of Cascades calculated in accordance with the Credit
Agreement, was  to 1.00;2.
    
    the Interest Coverage Ratio of Cascades, calculated in accordance with the Credit Agreement,
was  to 1.00.3.
    
    The amount of the Net Tangible Assets of Cascades, calculated in accordance with the Credit
Agreement, was $.4.
    
    During such fiscal quarter, there was no disposition of property or assets with a value of
more than $50,000,000 (other than inventory sold in the ordinary course of business) [except
for the dispositions described in the attached annex, which also contains the details of the
consideration received and the use of proceeds].5.
    
    The aggregate amount of the Borrowings outstanding under the Credit Agreement did not exceed
the maximum amount permitted under the Cascades Indenture.






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-73-


SCHEDULE E


BORROWING BASE REPORT


[ Date ]


National Bank of Canada


Attention: Director


RE: Credit Agreement dated as of February 10, 2011


inter alia


1.
    
    As at [date], the Borrowing Base (expressed in Dollars) amounted to $ . The calculation
has been made in accordance with the requirements of the Credit Agreement and the details of
such calculation are set forth in the annex attached hereto.2.
    
    The Borrowing Base has been calculated on the basis of qualifying inventory located in Canada
and []and qualifying accounts receivable due per customers located in Canada, the United
States [and ]. For purposes of such calculation, the location of an account receivable is the
billing address of the relevant customer.3.
    
    The attached annex also contains a breakdown by Credit Party and by country of the inventory
and accounts receivable included in the Borrowing Base. The breakdown also specifies the
accounts receivable included in the Borrowing Base which are insured under a credit insurance
policy which qualifies for Borrowing Base purposes.4.
    
    The inventory of the Credit Parties included in the Borrowing Base is still located in the
jurisdictions specified for such Credit Parties in the Corporate Structure Chart [except for
the following].


[If any Securitization or Factoring Program is outstanding, the annex must also contain
information permitting the Lenders to identify the classes of accounts receivable which are subject
to such program and to distinguish such accounts receivable from those included in the Borrowing
Base.]




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-74-


SCHEDULE F


FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT


ASSIGNMENT AND ASSUMPTION AGREEMENT .


WHEREAS


WHEREAS


WHEREAS


WHEREAS


WHEREAS


NOW, THEREFORE, :


1.
    
    DefinitionsCapitalized terms used but not defined herein have the meanings assigned to them in the
Credit Agreement.2.
    
    AssignmentThe Assignor hereby assigns and sells to the Assignee all of the rights of the Assignor (the
Assigned Rights) under the Credit Agreement to the extent of the Assigned Amounts. This
assignment will not result in a novation of the portion of the Borrowings owed to the
Assignor which is hereby assigned to the Assignee.







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-75-





3.
    
    AssumptionThe Assignee hereby accepts such assignment and assumes all of the obligations of the
Assignor (the Assigned Obligations) under the Credit Agreement to the extent of the
Assigned Amounts, including, for greater certainty, the corresponding portion of the
obligations of the Assignor under the Facility.4.
    
    Effective DateThis Agreement will come into effect on _________________ (the Effective Date).5.
    
    Rights and Obligations of the PartiesUpon the execution and delivery of this Agreement by the Assignor and the Assignee and the
consent hereto by [the Borrowers]and the Agents, any Issuing Lender and any Swingline
Lender:


i)
    
    the Assignee will, as of the Effective Date, have the rights and be obligated
to perform the obligations of a Lender under the Credit Agreement with Commitments in
respect of the Facility in an amount equal to the Assigned Amounts, with $____________
being allocated to Tranche A, with $____________ being allocated to Tranche B, and with
$___________ being allocated to Tranche C;ii)
    
    the Commitment of the Assignor in respect of the Facility will, as of the
Effective Date, be reduced by like amounts and the Assignor will be released from its
obligations under the Credit Agreement to the extent of the Assigned Obligations which
are assumed by the Assignee; andiii)
    
    the Assignee will, as of the Effective Date, be bound by and entitled to the
full benefit of the Credit Agreement and of the other Credit Documents (including the
Security Documents) to the extent of the Assigned Rights and Assigned Obligations as if
it were an original party thereto.


6.
    
    PaymentsFrom the Effective Date, the Administrative Agent will make all payments in respect of the
Assigned Rights to the Assignee, whether such amounts have accrued prior to or after the
Effective Date. The Assignor and the Assignee will make directly between themselves their
own arrangements relating to the payment by the Assignee to the Assignor of the price of
assignment or to the payment of adjustments (if any) on account of interest and fees accrued
prior to or after the Effective Date.7.
    
    Non-Reliance on AssignorThe Assignor makes no representation in connection with, and will have no responsibility
with respect to the solvency or financial condition or statements of any Credit Party or of
any other Person, or the validity and enforceability of the Credit Documents. The




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-76-





Assignee acknowledges that it has, independently and without reliance on the Assignor, and
based on such documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement and will continue to be responsible for
making its own independent appraisal of the financial condition of any Credit Party or of
any other Person.8.
    
    RepresentationsThe Assignee represents and warrants to the Borrowers that this assignment will not increase
for the Borrowers the costs of the Borrowings pursuant to Section 8.5 of the Credit
Agreement. The Assignee and the Assignor represent and warrant to one another, and also to
the Borrowers, the Agents and the other Lenders that they have the capacity, right and power
to execute this Agreement and to perform the obligations resulting therefrom, [that they are
Affiliates]and that they have taken all necessary action to authorize the execution of this
Agreement. The Assignor represents and warrants to the Assignee that the Assignor has not
granted any Lien on and has not assigned the Assigned Rights to any other Person.9.
    
    WarrantySubject to Section 8, this assignment is made without any warranty, express or implied, from
the Assignor.10.
    
    Existing LenderThe rights and obligations of the Assignee resulting form this Agreement are in addition to,
and not in substitution for, the rights and obligations that the Assignee may otherwise have
as Lender under the Credit Agreement.11.
    
    Governing LawThis Agreement will be governed by and construed in accordance with the laws of the Province
of Quebec.




[ASSIGNOR], as Lender
    
    [ASSIGNEE]


By:
    
    
    
    By:Title:
        
    
    Title:




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-77-




| |                                                         |        |  | 
| | ------------------------------------------------------- | ------ |  | 
| | [Names of the Borrowers]                                |       
| | By:                                                     |        | 
| |                                                         | Title: | 
| |                                                         |        | 
|
| | NATIONAL BANK OF CANADA, acting as Administrative Agent |       
| | By:                                                     |        | 
| |                                                         | Title: | 
| |                                                         |        | 
|
| | THE BANK OF NOVA SCOTIA, acting as
Collateral Agent     |       
| | By:                                                     |        | 
| |                                                         | Title: | 
| |                                                         |        | 
|
| | [Names of the Designated Subsidiaries]                  |       
| | By:                                                     |        | 
| |                                                         | Title: | 
| |                                                         |        | 



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-78-


| |  |  |  | 
| |  |  |  | 

SCHEDULE G


ADDRESSES FOR NOTICE PURPOSES


National Bank of Canada, as
Administrative Agent
For purposes of all notices of utilization,
conversion, renewals or repayment and the
delivery of the financial information pursuant
to Article 15:
    
    National Bank of Canada, as Lender 
c/o National Bank Financial
1155 Metcalfe Street
Montreal, Quebec, H3B 4S9Attention: Director
Fax: (514) 390-7840Loan Administration
Customer Service Center
5650 dIberville Street, Suite 603
Montreal, Quebec H2G 2B3
Attention: Manager, Syndication
Fax: (514) 271-5294
e-mail: syndication@fds.bnc.caFor all other purposes:Loan Structuring and Syndication,
Corporate and Investment Banking Group
1155 Metcalfe Street
Bank Finance, 5th Floor
Montreal, Quebec, H3B 4S9Attention: Director
Fax: (514) 390-7850The Bank of Nova Scotia, as Collateral
Agent and Lender 
c/o Scotia Capital
1002 Sherbrooke Street West, 9th Floor
Montreal, Quebec, H3A 3L6
Attention: Director
Fax: (514) 499-5504
    
    Canadian Imperial Bank of Commerce, as
Lender
c/o CIBC World Markets
Credit Capital Markets
BCE Place, 8th Floor
161 Bay Street
Toronto, Ontario, M5J 2S8
Attention: Director
Fax: (416) 956-6680




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-79-


Caisse centrale Desjardins, as Lender
1, Complexe Desjardins, Suite 2822
Montreal, Quebec, H5B 1B3
    
    Wells Fargo Capital finance Corporation
Canada,as LenderAttention: Director
Fax: (514) 281-7083with a copy to :
    
    Caisse centrale Desjardins US Branch
1001 East Hallandale Beach Blvd., suite 200
Hallandale, Florida 33009-4429
    
    Attention: 
Fax: ()Attention: Director
Fax : (954) 457-7927BNP Paribas (Canada), as Lender
1981 McGill College Ave, 4th Floor
Montreal, Quebec, H3A 2W8
Attention: Director
Fax: (514) 285-2906
    
    Caisse de dépôt et placement du Québec,
as Lender
Attention: 
Fax: ()Bank of America, N.A.,Canada
Branch, as Lender
    
    The Toronto-Dominion Bank, as Lender
c/o TD Bank Financial Group
500 rue St-Jacques, 9th Floor
Montreal, Quebec, H2Y 1S1Attention: 
Fax: ()
    
    Attention: Director
Fax: (514) 289-0788Royal Bank of Canada, as Lender
c/o 
    
    Comerica Bank, Canada Branch, as Lender
c/o Comerica Bank
Comerica Tower
1 Detroit Center
500 Woodward Ave.
Mail code: 3328
Detroit, Michigan, 48226
U.S.A.Attention: 
Fax: () 
    
    Attention: Director
Fax: (313) 222-3377




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-80-


Bank of Montreal, as Lender
c/o BMO Capital Markets
Tour McGill College
1501 McGill College Avenue, Suite 3200
Montreal, Quebec, H3A 3M8
    
    Rabobank Nederland, Canadian Branch,
as LenderAttention: Director
Fax: (514) 282-5920
    
    Attention: 
Fax: ()


All notices to the Borrowers
collectively or to anyone of
them may be addressed to:
    
    Cascades Inc.
404 Marie-Victorin Street
Kingsey Falls, Quebec J0A 1B0Attention: Vice President and Chief
Financial Officer (with a copy to the
Vice President and Corporate SecretaryFax: (819) 363-5127