Document:

Exhibit 4.15

THIRD SUPPLEMENTAL
INDENTURE

dated as of
December 28, 2006

to the

INDENTURE

dated as of May
28, 2003

among

CASCADES INC.,

as the Company,

THE SUBSIDIARY
GUARANTORS named therein, and

THE BANK OF NOVA
SCOTIA TRUST COMPANY OF NEW YORK,

as Trustee,

as amended

 

THIRD SUPPLEMENTAL
INDENTURE (this “Third Supplemental Indenture”),
dated as of December 28, 2006, among CASCADES INC., a Quebec corporation (“Cascades”), CASCADES AUBURN FIBER INC., a
Delaware corporation, CASCADES BOXBOARD GROUP INC., a Canadian corporation,
CASCADES BOXBOARD GROUP — CONNECTICUT LLC, a Delaware limited liability
company, CASCADES BOXBOARD U.S., INC., a Delaware corporation, CASCADES
DELAWARE LLC, a Delaware limited liability company, CASCADES DIAMOND, INC., a
Massachusetts corporation, CASCADES FINE PAPERS GROUP (SALES) INC., a Delaware
corporation, CASCADES FINE PAPERS GROUP (USA) INC., a New York corporation,
CASCADES FINE PAPERS GROUP INC., a Canadian corporation, CASCADES FINE PAPERS
GROUP THUNDER BAY INC., a Canadian corporation, CASCADES MOULDED PULP, INC., a
North Carolina corporation, CASCADES NOVA SCOTIA COMPANY, a Nova Scotia
corporation, CASCADES PLASTICS INC., a Delaware corporation, CASCADES TISSUE
GROUP — NORTH CAROLINA INC., a North Carolina corporation, CASCADES TISSUE
GROUP — NEW YORK INC., a Delaware corporation, CASCADES TISSUE GROUP — OREGON
INC., a Delaware corporation, CASCADES TISSUE GROUP — PENNSYLVANIA, INC. a
Delaware corporation, CASCADES TISSUE GROUP — IFC DISPOSABLES INC., a Tennessee
corporation, CASCADES TISSUE GROUP — WISCONSIN INC., a Delaware corporation,
CASCADES TISSUE GROUP — ARIZONA INC., a Delaware corporation, CASCADES TISSUE
GROUP — MARYLAND LLC, a Delaware limited liability company, CASCADES TISSUE
GROUP — SALES INC., a Delaware corporation, CASCADES TISSUE GROUP — TENNESSEE
INC., a Tennessee corporation, CASCADES TRANSPORT INC., a Canadian corporation,
CASCADES USA INC., a Delaware corporation, CASCADES CANADA INC., a Canadian
corporation, CONFERENCE CUP LTD., an Ontario limited liability company, DOPACO,
INC., a Pennsylvania corporation, DOPACO CANADA, INC., a Canadian corporation,
DOPACO LIMITED PARTNERSHIP, a Delaware limited partnership, DOPACO PACIFIC LLC,
a Delaware limited liability company, GARVEN INCORPORATED, an Ontario
corporation, KINGSEY FALLS INVESTMENTS INC., a Canadian corporation, RABOTAGE
LEMAY INC., a Quebec corporation, SCIERIE LEMAY INC., a Quebec corporation, W.
H. SMITH PAPER CORPORATION, a New York corporation, CASCADES TISSUE GROUP —
PICKERING INC., a Canadian corporation, 3815285 CANADA INC., a Canadian
corporation, 3815315 CANADA INC., a Canadian corporation, 6265642 CANADA INC.,
a Canadian corporation and CASCADES ENERGY INITIATIVE INC., a Delaware
corporation (collectively, the “New Subsidiary Guarantors”),
the existing Subsidiary Guarantors under the Indenture referred to below (the “Existing Subsidiary Guarantors”), and THE BANK OF NOVA
SCOTIA TRUST COMPANY OF NEW YORK, a New York trust company, as trustee under
the Indenture referred to below (the “Trustee”).

W I T N E S S E T
H :

WHEREAS, Norampac
Inc., a Canadian corporation (“Norampac”),
as predecessor issuer, has heretofore executed and delivered to the Trustee an
indenture, dated as of May 28, 2003, amended by the First Supplemental
Indenture, dated as of July 30, 2004, and the Second Supplemental Indenture,
dated as of December 28, 2006 (the “Indenture”),
among Norampac, the Subsidiary Guarantors party thereto and Trustee, providing
for the issuance of Norampac’s 63⁄4% Senior Notes due 2013 (the “Notes”);

WHEREAS, Norampac
has issued an outstanding $250,000,000 aggregate principal amount of Notes
under the Indenture;

WHEREAS, on the
date hereof Cascades and Norampac entered into a Memorandum of Agreement
pursuant to which, in connection with the winding up of Norampac into Cascades,
Norampac assigned and transferred all of its assets to Cascades and Cascades
assumed all of Norampac’s liabilities (the “Combination”);

WHEREAS, Section
5.01 of the Indenture permits Norampac to merge, consolidate or amalgamate with
or into any other person or sell, transfer, assign, lease, convey or otherwise
dispose of all or substantially all its property in any one transaction or
series of transactions if  certain
conditions are met;

WHEREAS, Section
4.19 of the Indenture provides that Cascades, as the Surviving Person in the
Combination, shall cause each person that becomes a Canadian or U.S. Restricted
Subsidiaries to execute and deliver to the Trustee a Subsidiary Guarantee at
the time such person becomes a Canadian or U.S. Restricted Subsidiary;

WHEREAS, the New
Subsidiary Guarantors are all of the Canadian or U.S. Restricted Subsidiaries
of Cascades;

WHEREAS, Section
9.01 of the Indenture provides that Cascades, as the Surviving Person, and the
Trustee may amend or supplement the Indenture without the consent of any holder
of a Note to (i) add additional Subsidiary Guarantees with respect to the Notes
as provided or permitted under the Indenture and (ii) provide for the
assumption by the Surviving Person of the obligations of Norampac under the
Indenture; and

WHEREAS, pursuant
to Sections 4.19, 5.01, 9.01, 9.06 and 10.03 of the Indenture, the Trustee,
Cascades, the Existing Subsidiary Guarantors and the New Subsidiary Guarantors
are authorized to execute and deliver this Supplemental Indenture;

NOW THEREFORE, in
consideration of the foregoing and for other good and valuable consideration,
the receipt of which is hereby acknowledged, Cascades, the Existing Subsidiary
Guarantors, the New Subsidiary Guarantors, and the Trustee mutually covenant
and agree for the equal and ratable benefit of the Holders of the Notes as
follows:

1.                                       Definitions.
(a) Capitalized terms used herein without definition shall have the meanings
assigned to them in the Indenture.

(b)  For
all purposes of this Third Supplemental Indenture, except as otherwise herein
expressly provided or unless the context otherwise requires:  (i) the terms and expressions used herein
shall have the same meanings as corresponding terms and expressions used in the
Indenture; and (ii) the words “herein,” “hereof” and “hereby” and other words
of similar import used in this Third Supplemental Indenture refer to this Third
Supplemental Indenture as a whole and not to any particular section hereof.

2.                                       Assumption
of Obligations.  Pursuant to Section
5.01(a)(ii) of the Indenture, Cascades hereby agrees to assume the due and
punctual payment of the principal of, 

 2
 

and premium, if any, and
accrued and unpaid interest and Special Interest, if any, on all the Notes,
according to their tenor, and the due and punctual performance and observance
of all the covenants and conditions of the Indenture to be performed by
Norampac as required by Section 5.01 of the Indenture.  All references in the Indenture, as amended
hereby, to the “Company” shall be deemed to be references to Cascades, as the
Surviving Person and pursuant to Section 5.02 of the Indenture Cascades shall
succeed to and be substituted for, and may exercise every right and power
previously provided to Norampac under the Indenture and Norampac shall be
released from all obligations and covenants under the Indenture.

3.                                       Agreement
to Guarantee.  Pursuant to Section
4.19, the New Subsidiary Guarantors hereby agree, jointly and severally with
all Existing Subsidiary Guarantors, to guarantee the Surviving Person’s
obligations under the Notes on the terms and subject to the conditions set
forth in Article 10 of the Indenture and to be bound by all other applicable
provisions of the Indenture.  From and
after the date hereof, each of the New Subsidiary Guarantors shall be a
Subsidiary Guarantor for all purposes under the Indenture and the Notes.

4.                                       Ratification
of Indenture; Third Supplemental Indenture Part of Indenture.  Except as expressly amended hereby, the
Indenture is, in all respects, ratified and confirmed and all the terms,
conditions and provisions thereof shall remain in full force and effect.  This Third Supplemental Indenture shall form
a part of the Indenture for all purposes, and every Holder of Notes heretofore
or hereafter authenticated and delivered shall be bound hereby.

5.                                       Miscellaneous.

5.1                                 Governing
Law.  THIS THIRD SUPPLEMENTAL
INDENTURE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF
CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER
JURISDICTION WOULD BE REQUIRED THEREBY.

5.2                                 Trustee
Makes No Representation.  The Trustee
makes no representation as to the validity or sufficiency of this Third
Supplemental Indenture, or for or in respect of the recitals contained herein.

5.3                                 Counterparts.  The parties may sign any number of copies of
this Third Supplemental Indenture.  Each
signed copy shall be an original, but all of them together represent the same
agreement.

5.4                                 Effect
of Headings.  The Article and Section
headings herein are for convenience only and shall not affect the construction
thereof.

5.5                                 Conflict
with TIA.  If any provision of this
Third Supplemental Indenture limits, qualifies or conflicts with any provision
of the TIA, that is required under the TIA to be part of and govern any
provision of this Third Supplemental Indenture, the provision of the TIA shall
control.  If any provision of this Third
Supplemental Indenture modifies or excludes any provision of the TIA that may
be so modified or excluded, the provisions of the TIA shall be deemed to apply
to the Indenture as so modified or to be excluded by this Third Supplemental
Indenture, as the case may be.

 3
 

5.6                                 Severability.  In case any provision of this Third Supplemental
Indenture shall be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.

5.7                                 No
Third Party Beneficiaries.  Nothing
in this Third Supplemental Indenture, the Indenture, or the Notes, express or
implied, shall give to any Person, other than the parties hereto and thereto
and their successors hereunder and thereunder, and the Holders of the Notes,
any benefit of any legal or equitable right, remedy or claim under the
Indenture, this Third Supplemental Indenture or the Notes.

[remainder of page left intentionally blank]

 4
 

IN WITNESS
WHEREOF, the parties hereto have caused this Third Supplemental Indenture to be
duly executed as of the date first above written.

	
  

   

  	
  Company:

  
	
   

  	
   

  
	
   

  	
  CASCADES INC.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert F. Hall

  
	
   

  	
   

  	
  Name:

  	
  Robert F. Hall

  
	
   

  	
   

  	
  Title:

  	
  Vice President, Legal Affairs and 

  
	
   

  	
   

  	
   

  	
  Corporate Secretary 

  

 

	
  

  	
  New Subsidiary Guarantors:

  
	
   

  	
   

  

 

	
  

  	
  CASCADES BOXBOARD GROUP INC.

  
	
   

  	
  CASCADES CANADA INC.

  
	
   

  	
  CASCADES DIAMOND, INC.

  
	
   

  	
  CASCADES FINE PAPERS GROUP INC.

  
	
   

  	
  CASCADES FINE PAPERS GROUP THUNDER BAY INC.

  
	
   

  	
  CASCADES NOVA SCOTIA COMPANY

  
	
   

  	
  CASCADES TRANSPORT INC.

  
	
   

  	
  CONFERENCE CUP LTD.

  
	
   

  	
  DOPACO, INC.

  
	
   

  	
  DOPACO CANADA, INC.

  
	
   

  	
  GARVEN INCORPORATED

  
	
   

  	
  KINGSEY FALLS INVESTMENTS INC.

  
	
   

  	
  RABOTAGE LEMAY INC.

  
	
   

  	
  SCIERIE LEMAY INC.

  
	
   

  	
  CASCADES TISSUE GROUP — PICKERING INC.

  
	
   

  	
  3815285 CANADA INC.

  
	
   

  	
  3815315 CANADA INC.

  
	
   

  	
  6265642 CANADA INC.

  

 

	
  

  	
  By:

  	
  /s/ Robert F. Hall

  
	
   

  	
   

  	
  Name:

  	
  Robert F. Hall

  
	
   

  	
   

  	
  Title:

  	
  Secretary or Assistant Secretary

  

 

	
  

  	
  CASCADES AUBURN FIBER INC.

  
	
   

  	
  CASCADES DELAWARE LLC

  
	
   

  	
  CASCADES FINE PAPERS GROUP (SALES) INC.

  
	
   

  	
  CASCADES FINE PAPERS GROUP (USA) INC.

  

 

 5
 

 

	
  

  	
  CASCADES MOULDED PULP, INC.

  
	
   

  	
  CASCADES PLASTICS INC.

  
	
   

  	
  CASCADES TISSUE GROUP - ARIZONA INC.

  
	
   

  	
  CASCADES TISSUE GROUP - IFC DISPOSABLES INC.

  
	
   

  	
  CASCADES TISSUE GROUP - NEW YORK INC.

  
	
   

  	
  CASCADES TISSUE GROUP - NORTH CAROLINA INC.

  
	
   

  	
  CASCADES TISSUE GROUP - OREGON INC.

  
	
   

  	
  CASCADES TISSUE GROUP - PENNSYLVANIA INC.

  
	
   

  	
  CASCADES TISSUE GROUP - SALES INC.

  
	
   

  	
  CASCADES TISSUE GROUP - TENNESSEE INC.

  
	
   

  	
  CASCADES TISSUE GROUP - WISCONSIN INC.

  
	
   

  	
  CASCADES TISSUE GROUP MARYLAND LLC

  
	
   

  	
  CASCADES USA INC.

  
	
   

  	
  W.H. SMITH PAPER CORPORATION

  
	
   

  	
  CASCADES ENERGY INITIATIVE INC.

  
	
   

  	
  CASCADES BOXBOARD U.S., INC.

  
	
   

  	
  CASCADES BOXBOARD GROUP — CONNECTICUT LLC

  

 

	
  

  	
  By:

  	
  /s/ Nathalie Théberge

  
	
   

  	
   

  	
  Name:

  	
  Nathalie Théberge

  
	
   

  	
   

  	
  Title:

  	
  Assistant Secretary Assistant Secretary for the Existing
  Subsidiary Guarantors

  

 

	
  

  	
  DOPACO LIMITED PARTNERSHIP

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Dopaco Pacific LLC

  
	
   

  	
   

  	
  Its General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Nathalie Théberge

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Nathalie Théberge

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Authorized Signatory

  

 

	
  

  	
  DOPACO PACIFIC LLC

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Nathalie Théberge

  
	
   

  	
   

  	
  Name:

  	
  Nathalie Théberge

  
	
   

  	
   

  	
  Title:

  	
  Authorized Signatory

  
						

 

 6
 

 

	
  

  	
  Existing Subsidiary Guarantors:

  
	
   

  	
   

  

 

	
  

  	
  NORAMPAC NOVA SCOTIA COMPANY

  
	
   

  	
  NORAMPAC DELAWARE LLC 

  
	
   

  	
  NORAMPAC THOMPSON INC.

  
	
   

  	
  NORAMPAC FINANCE US INC.

  
	
   

  	
  NORAMPAC HOLDING US INC.

  
	
   

  	
  NORAMPAC LEOMINSTER INC.

  
	
   

  	
  NORAMPAC NEW YORK CITY INC.

  
	
   

  	
  NORAMPAC SCHENECTADY INC.

  
	
   

  	
  NEWFOUNDLAND CONTAINERS LIMITED

  
	
   

  	
  NORAMPAC INDUSTRIES INC.

  
	
   

  	
  4341384 CANADA INC. (F/K/A 3815400 USA INC.)

  
	
   

  	
  6671225 CANADA INC.

  

 

	
  

  	
  By:

  	
  /s/ Lucie-Claude Lalonde

  
	
   

  	
   

  	
  Name:

  	
  Lucie-Claude Lalonde

  
	
   

  	
   

  	
  Title:

  	
  Secretary, Assistant Secretary or Assistant Clerk

  

 

 7
 

 

	
  

  	
  Trustee:

  
	
   

  	
   

  
	
   

  	
  THE BANK OF NOVA
  SCOTIA TRUST COMPANY OF NEW YORK, as Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Warren A. Goshine

  
	
   

  	
   

  	
  Name:

  	
  Warren A. Goshine

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  

 

 8Exhibit
10.2

EXECUTION COPY

Cdn.$850,000,000

CREDIT
AGREEMENT

dated as of
December 29, 2006

Among

CASCADES INC.

CASCADES USA INC.

CASCADES EUROPE SAS

CASCADES ARNSBERG GMBH

(as Borrowers)

- and —

NATIONAL BANK
FINANCIAL INC.

SCOTIA CAPITAL

CIBC WORLD MARKETS

(as Co-Lead Arrangers and
Joint Bookrunners)

- and —

NATIONAL BANK OF
CANADA

THE BANK OF NOVA SCOTIA

(as Co-Administrative
Agents)

- and —

CIBC WORLD MARKETS

(as Syndication Agent)

- and —

CAISSE CENTRALE
DESJARDINS

(as Documentation Agent)

- and —

THE LENDERS

FROM TIME TO TIME PARTY HERETO

MCCARTHY TÉTRAULT
LLP

TABLE
OF CONTENTS

	
  

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1 - Interpretation

  	
   

  	
  1

  
	
   

  	
   

  	
   

  
	
  1.1

  	
   

  	
  Definitions

  	
   

  	
  1

  
	
  1.2

  	
   

  	
  Designated Subsidiaries

  	
   

  	
  12

  
	
  1.3

  	
   

  	
  Currency Conversions

  	
   

  	
  13

  
	
  1.4

  	
   

  	
  Accounting Terms, Calculations and Adjustments

  	
   

  	
  13

  
	
  1.5

  	
   

  	
  Time

  	
   

  	
  13

  
	
  1.6

  	
   

  	
  Headings and Table of Contents

  	
   

  	
  13

  
	
  1.7

  	
   

  	
  Governing Law

  	
   

  	
  13

  
	
  1.8

  	
   

  	
  Previous Agreements

  	
   

  	
  14

  
	
  1.9

  	
   

  	
  Inconsistency

  	
   

  	
  14

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2 - The
  Facilities

  	
   

  	
  14

  
	
   

  	
   

  	
   

  
	
  2.1

  	
   

  	
  The Revolving Facility

  	
   

  	
  14

  
	
  2.2

  	
   

  	
  Reallocation among Tranches

  	
   

  	
  14

  
	
  2.3

  	
   

  	
  The Additional Revolving Facility

  	
   

  	
  15

  
	
  2.4

  	
   

  	
  The Term Loan

  	
   

  	
  15

  
	
  2.5

  	
   

  	
  Purpose and Nature of the Facilities

  	
   

  	
  16

  
	
  2.6

  	
   

  	
  Borrowing Options under the Revolving Facility

  	
   

  	
  16

  
	
  2.7

  	
   

  	
  Borrowing Options under the Facilities other than
  the Revolving Facility

  	
   

  	
  17

  
	
  2.8

  	
   

  	
  Borrowing Base Limitations

  	
   

  	
  17

  
	
  2.9

  	
   

  	
  Borrowings Proportionate to Commitments

  	
   

  	
  17

  
	
  2.10

  	
   

  	
  Notice of Borrowings

  	
   

  	
  17

  
	
  2.11

  	
   

  	
  Swingline Utilizations

  	
   

  	
  18

  
	
  2.12

  	
   

  	
  Funding

  	
   

  	
  19

  
	
  2.13

  	
   

  	
  Lender’s Failure to Fund

  	
   

  	
  19

  
	
  2.14

  	
   

  	
  Conversions and Renewals

  	
   

  	
  19

  
	
  2.15

  	
   

  	
  Limitations on Lender’s Obligation to Fund

  	
   

  	
  20

  
	
  2.16

  	
   

  	
  Increase of Revolving Facility

  	
   

  	
  20

  
	
  2.17

  	
   

  	
  Deemed Utilizations

  	
   

  	
  21

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3 - Acceptances

  	
   

  	
  22

  
	
   

  	
   

  	
   

  
	
  3.1

  	
   

  	
  Period and Amounts

  	
   

  	
  22

  
	
  3.2

  	
   

  	
  Disbursement

  	
   

  	
  22

  
	
  3.3

  	
   

  	
  Power of Attorney

  	
   

  	
  22

  
	
  3.4

  	
   

  	
  Depository Bills

  	
   

  	
  23

  
	
  3.5

  	
   

  	
  Availability

  	
   

  	
  23

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4 - Libor
  Loans

  	
   

  	
  23

  
	
   

  	
   

  	
   

  
	
  4.1

  	
   

  	
  Amounts and Periods

  	
   

  	
  23

  
	
  4.2

  	
   

  	
  Changed Circumstances

  	
   

  	
  23

  
	
  4.3

  	
   

  	
  Conversion Prior to Maturity

  	
   

  	
  24

  

 

 

	
  5 - Letters
  of Credit

  	
   

  	
  24

  
	
   

  	
   

  	
   

  
	
  5.1

  	
   

  	
  Availability

  	
   

  	
  24

  
	
  5.2

  	
   

  	
  Maturity of Letters of Credit

  	
   

  	
  24

  
	
  5.3

  	
   

  	
  Borrowings

  	
   

  	
  24

  
	
  5.4

  	
   

  	
  Payments under Letters of Credit

  	
   

  	
  25

  
	
  5.5

  	
   

  	
  Currency Conversion

  	
   

  	
  25

  
	
  5.6

  	
   

  	
  Indemnity

  	
   

  	
  25

  
	
  5.7

  	
   

  	
  I.C.C. Rules

  	
   

  	
  25

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6 - Fees
  And Interest

  	
   

  	
  26

  
	
   

  	
   

  	
   

  
	
  6.1

  	
   

  	
  Commitment and Agency Fees

  	
   

  	
  26

  
	
  6.2

  	
   

  	
  Letter of Credit Fees

  	
   

  	
  26

  
	
  6.3

  	
   

  	
  Administrative Charges with respect to Letters of
  Credit

  	
   

  	
  26

  
	
  6.4

  	
   

  	
  Standby Fee

  	
   

  	
  26

  
	
  6.5

  	
   

  	
  Acceptance Fees

  	
   

  	
  26

  
	
  6.6

  	
   

  	
  Interest on Prime Rate Loans

  	
   

  	
  27

  
	
  6.7

  	
   

  	
  Interest on US Base Rate Loans

  	
   

  	
  27

  
	
  6.8

  	
   

  	
  Interest on European Loans

  	
   

  	
  27

  
	
  6.9

  	
   

  	
  Interest on Libor Loans

  	
   

  	
  27

  
	
  6.10

  	
   

  	
  Calculation of Interest Rates

  	
   

  	
  27

  
	
  6.11

  	
   

  	
  Interest on Arrears

  	
   

  	
  27

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7 - Repayment,
  Prepayment and Reduction

  	
   

  	
  28

  
	
   

  	
   

  	
   

  
	
  7.1

  	
   

  	
  Repayment of the Facilities

  	
   

  	
  28

  
	
  7.2

  	
   

  	
  Mandatory Prepayments

  	
   

  	
  28

  
	
  7.3

  	
   

  	
  Optional Prepayments

  	
   

  	
  28

  
	
  7.4

  	
   

  	
  Exchange Rate Fluctuations

  	
   

  	
  29

  
	
  7.5

  	
   

  	
  Reduction of the Revolving Facility

  	
   

  	
  29

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8 – Place
  of Payment, Currency and Taxes

  	
   

  	
  29

  
	
   

  	
   

  	
   

  
	
  8.1

  	
   

  	
  Payments to the Agent

  	
   

  	
  29

  
	
  8.2

  	
   

  	
  Manner of Payments

  	
   

  	
  30

  
	
  8.3

  	
   

  	
  Currency

  	
   

  	
  30

  
	
  8.4

  	
   

  	
  Judgment Currency

  	
   

  	
  30

  
	
  8.5

  	
   

  	
  Payments Net of Taxes

  	
   

  	
  30

  
	
  8.6

  	
   

  	
  Obligations of Lenders in respect of Taxes

  	
   

  	
  31

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9 - Conditions
  Precedent to Borrowings

  	
   

  	
  31

  
	
   

  	
   

  	
   

  
	
  9.1

  	
   

  	
  Conditions Precedent to the Initial Borrowing

  	
   

  	
  31

  
	
  9.2

  	
   

  	
  Conditions Precedent to all Borrowings

  	
   

  	
  32

  
	
  9.3

  	
   

  	
  Waiver of Conditions Precedent

  	
   

  	
  33

  
	
  9.4

  	
   

  	
  Termination of this Agreement

  	
   

  	
  33

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10 – Security

  	
   

  	
  33

  
	
   

  	
   

  	
   

  
	
  10.1

  	
   

  	
  Guarantees

  	
   

  	
  33

  
	
  10.2

  	
   

  	
  Security over Current Assets

  	
   

  	
  33

  

 

 ii
 

 

	
  10.3

  	
   

  	
  Series 1 Charged Fixed Assets

  	
   

  	
  33

  
	
  10.4

  	
   

  	
  Series 2 Charged Fixed Assets

  	
   

  	
  34

  
	
  10.5

  	
   

  	
  Fixed Assets Valuation Report

  	
   

  	
  35

  
	
  10.6

  	
   

  	
  Insurance

  	
   

  	
  36

  
	
  10.7

  	
   

  	
  Security for Hedging Agreements

  	
   

  	
  36

  
	
  10.8

  	
   

  	
  Validity and Contents of Security Documents

  	
   

  	
  36

  
	
  10.9

  	
   

  	
  Exceptions for certain Credit Parties

  	
   

  	
  37

  
	
  10.10

  	
   

  	
  Release of the Security

  	
   

  	
  37

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  11 - Representations
  and Warranties

  	
   

  	
  37

  
	
   

  	
   

  	
   

  
	
  11.1

  	
   

  	
  Corporate Existence and Capacity

  	
   

  	
  37

  
	
  11.2

  	
   

  	
  Authorization and Validity

  	
   

  	
  37

  
	
  11.3

  	
   

  	
  No Breach

  	
   

  	
  38

  
	
  11.4

  	
   

  	
  Approvals

  	
   

  	
  38

  
	
  11.5

  	
   

  	
  Compliance with Laws and Permits

  	
   

  	
  38

  
	
  11.6

  	
   

  	
  Title to Assets

  	
   

  	
  38

  
	
  11.7

  	
   

  	
  Litigation

  	
   

  	
  38

  
	
  11.8

  	
   

  	
  No Default

  	
   

  	
  38

  
	
  11.9

  	
   

  	
  Solvency

  	
   

  	
  39

  
	
  11.10

  	
   

  	
  Taxes

  	
   

  	
  39

  
	
  11.11

  	
   

  	
  ERISA and Pension Plans

  	
   

  	
  39

  
	
  11.12

  	
   

  	
  Margin Stock Restrictions

  	
   

  	
  39

  
	
  11.13

  	
   

  	
  Investment Company Act

  	
   

  	
  39

  
	
  11.14

  	
   

  	
  Restriction on Payments

  	
   

  	
  39

  
	
  11.15

  	
   

  	
  Corporate Structure and Location of Assets

  	
   

  	
  39

  
	
  11.16

  	
   

  	
  Financial Statements and Fiscal Year

  	
   

  	
  40

  
	
  11.17

  	
   

  	
  No Material Change

  	
   

  	
  40

  
	
  11.18

  	
   

  	
  True and Complete Disclosure

  	
   

  	
  40

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  12 - Affirmative
  Covenants

  	
   

  	
  40

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  12.1

  	
   

  	
  General Covenants

  	
   

  	
  40

  
	
  12.2

  	
   

  	
  Use of Proceeds and Compliance with Indenture
  Limitations

  	
   

  	
  41

  
	
  12.3

  	
   

  	
  USA Patriot Act

  	
   

  	
  41

  
	
  12.4

  	
   

  	
  Further Assurances

  	
   

  	
  42

  
	
  12.5

  	
   

  	
  Representations and Warranties

  	
   

  	
  42

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  13 - Negative
  Covenants

  	
   

  	
  42

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  13.1

  	
   

  	
  Negative Pledge

  	
   

  	
  42

  
	
  13.2

  	
   

  	
  Indebtedness

  	
   

  	
  42

  
	
  13.3

  	
   

  	
  Limitations on Fundamental Changes

  	
   

  	
  43

  
	
  13.4

  	
   

  	
  Investments

  	
   

  	
  44

  
	
  13.5

  	
   

  	
  Distributions

  	
   

  	
  45

  
	
  13.6

  	
   

  	
  Transactions with Related Parties

  	
   

  	
  45

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  14 - Financial
  Ratios

  	
   

  	
  45

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  14.1

  	
   

  	
  Funded Debt to Capitalization Ratio

  	
   

  	
  45

  
	
  14.2

  	
   

  	
  Interest Coverage Ratio

  	
   

  	
  45

  

 

 iii
 

 

	
  15 - Reporting
  Requirements

  	
   

  	
  46

  
	
   

  	
   

  	
   

  
	
  15.1

  	
   

  	
  Annual Reporting

  	
   

  	
  46

  
	
  15.2

  	
   

  	
  Quarterly Reports

  	
   

  	
  46

  
	
  15.3

  	
   

  	
  ERISA

  	
   

  	
  46

  
	
  15.4

  	
   

  	
  Reporting from Time to Time

  	
   

  	
  47

  
	
  15.5

  	
   

  	
  Hedging Agreements, Securitization and Factoring

  	
   

  	
  47

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  16 - Events
  of Default and Remedies

  	
   

  	
  48

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  16.1

  	
   

  	
  Events of Default

  	
   

  	
  48

  
	
  16.2

  	
   

  	
  Remedies

  	
   

  	
  49

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  17 - Equality
  Among Lenders

  	
   

  	
  49

  
	
   

  	
   

  	
   

  
	
  17.1

  	
   

  	
  Distribution among Lenders

  	
   

  	
  49

  
	
  17.2

  	
   

  	
  Other Security

  	
   

  	
  49

  
	
  17.3

  	
   

  	
  Direct Payment to a Lender

  	
   

  	
  50

  
	
  17.4

  	
   

  	
  Adjustments

  	
   

  	
  50

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  18 - The
  Agent, the Co-Agent and The Lenders

  	
   

  	
  50

  
	
   

  	
   

  	
   

  
	
  18.1

  	
   

  	
  Appointment of the Agent and the Co-Agent

  	
   

  	
  50

  
	
  18.2

  	
   

  	
  Restrictions on the Powers of the Lenders

  	
   

  	
  50

  
	
  18.3

  	
   

  	
  Security Documents

  	
   

  	
  50

  
	
  18.4

  	
   

  	
  Action by the Agent or Co-Agent

  	
   

  	
  51

  
	
  18.5

  	
   

  	
  Enforcement Measures

  	
   

  	
  51

  
	
  18.6

  	
   

  	
  Indemnification

  	
   

  	
  51

  
	
  18.7

  	
   

  	
  Reliance on Reports

  	
   

  	
  51

  
	
  18.8

  	
   

  	
  Liability of the Agent or the Co-Agent

  	
   

  	
  51

  
	
  18.9

  	
   

  	
  Liability of Lenders

  	
   

  	
  51

  
	
  18.10

  	
   

  	
  Rights of the Agent or Co-Agent as Lender

  	
   

  	
  52

  
	
  18.11

  	
   

  	
  Sharing of Information

  	
   

  	
  52

  
	
  18.12

  	
   

  	
  Competition

  	
   

  	
  52

  
	
  18.13

  	
   

  	
  Successor Agent or Co-Agent

  	
   

  	
  52

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  19 - Decisions,
  Waivers and Amendments

  	
   

  	
  53

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  19.1

  	
   

  	
  Amendments and Waivers by the Majority Lenders

  	
   

  	
  53

  
	
  19.2

  	
   

  	
  Amendments and Waivers by Unanimous Approval

  	
   

  	
  53

  
	
  19.3

  	
   

  	
  Amendments relating to the Agents or an Issuing or
  Swingline Lender

  	
   

  	
  53

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  20 - Miscellaneous

  	
   

  	
  54

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  20.1

  	
   

  	
  Books and Accounts

  	
   

  	
  54

  
	
  20.2

  	
   

  	
  Determination

  	
   

  	
  54

  
	
  20.3

  	
   

  	
  Prohibition on Assignment by Borrowers

  	
   

  	
  54

  
	
  20.4

  	
   

  	
  Assignments and Participations

  	
   

  	
  54

  
	
  20.5

  	
   

  	
  Designated Lenders

  	
   

  	
  55

  
	
  20.6

  	
   

  	
  Notes

  	
   

  	
  56

  
	
  20.7

  	
   

  	
  Costs and Expenses

  	
   

  	
  56

  
	
  20.8

  	
   

  	
  No Waiver

  	
   

  	
  56

  

 

 iv
 

 

	
  20.9

  	
   

  	
  Irrevocability of Notices of Borrowings

  	
   

  	
  56

  
	
  20.10

  	
   

  	
  Set-off

  	
   

  	
  56

  
	
  20.11

  	
   

  	
  Indemnification

  	
   

  	
  57

  
	
  20.12

  	
   

  	
  Mitigation of costs

  	
   

  	
  57

  
	
  20.13

  	
   

  	
  Corrections of Errors

  	
   

  	
  58

  
	
  20.14

  	
   

  	
  Communications

  	
   

  	
  58

  
	
  20.15

  	
   

  	
  Counterparts

  	
   

  	
  58

  
	
  20.16

  	
   

  	
  Waiver of Jury Trial

  	
   

  	
  58

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  21 - Notices

  	
   

  	
  58

  
	
   

  	
   

  	
   

  
	
  21.1

  	
   

  	
  Sending of Notices

  	
   

  	
  58

  
	
  21.2

  	
   

  	
  Receipt of Notices

  	
   

  	
  58

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SCHEDULE “ A ”

  	
   

  	
  70

  
	
   

  	
   

  	
   

  
	
  APPLICABLE
  MARGINS OR RATES

  	
   

  	
  70

  
	
   

  	
   

  	
   

  
	
  SCHEDULE “ B ”

  	
   

  	
  72

  
	
   

  	
   

  	
   

  
	
  LIST OF
  DESIGNATED SUBSIDIARIES

  	
   

  	
  72

  
	
   

  	
   

  	
   

  
	
  SCHEDULE “ C ”

  	
   

  	
  74

  
	
   

  	
   

  	
   

  
	
  NOTICE OF
  BORROWING [CONVERSION OR RENEWAL]

  	
   

  	
  74

  
	
   

  	
   

  	
   

  
	
  SCHEDULE “ D ”

  	
   

  	
  75

  
	
   

  	
   

  	
   

  
	
  COMPLIANCE
  CERTIFICATE

  	
   

  	
  75

  
	
   

  	
   

  	
   

  
	
  SCHEDULE “ E ”

  	
   

  	
  76

  
	
   

  	
   

  	
   

  
	
  BORROWING BASE
  REPORT

  	
   

  	
  76

  
	
   

  	
   

  	
   

  
	
  SCHEDULE “ F ”

  	
   

  	
  77

  
	
   

  	
   

  	
   

  
	
  FORM OF
  ASSIGNMENT AND ASSUMPTION AGREEMENT

  	
   

  	
  77

  
	
   

  	
   

  	
   

  
	
  SCHEDULE “ G ”

  	
   

  	
  81

  
	
   

  	
   

  	
   

  
	
  ADDRESSES FOR
  NOTICE PURPOSES

  	
   

  	
  81

  

 

 v

CREDIT AGREEMENT

THIS
AGREEMENT is made as of December 29, 2006 among CASCADES INC., a corporation
incorporated under the laws of the province of Quebec (“Cascades”), CASCADES USA  INC., a
corporation incorporated under the laws of the State of Delaware (“Cascades US”),
CASCADES EUROPE SAS, a
corporation incorporated under the laws of France (“Cascades Europe”) and CASCADES ARNSBERG GMBH, a corporation
incorporated under the laws of Germany (“Cascades Germany”) (each a “Borrower”
and, collectively the “Borrowers”), THE
BANK OF NOVA SCOTIA,
a Canadian bank, as administrative agent and collateral agent (in such
capacity, the “Agent”), National Bank of Canada, as co-administrative agent (in
such capacity, the “Co-Agent”) and each of the financial institutions having
executed this Agreement as a Lender.

Recitals

A.                                   The Borrowers have
requested the Lenders 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,
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 Lenders are
willing to make such credit facilities available to the Borrowers on the terms
and subject to the conditions of this Agreement.

THEREFORE,  THE PARTIES AGREE AS
FOLLOWS:

1 - Interpretation

1.1          Definitions

In this Agreement, unless
the context otherwise requires, the following terms have the respective meanings
set out below (and all such terms that are defined in the singular have the
corresponding meaning in the plural and vice versa).

“Acceptance”
means: 

(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;

“Additional
Revolving Facility” means the credit facility made available to
Cascades pursuant to Section 2.3;

“Additional Revolving
Facility Maturity Date” means, June 29, 2007;

“Affiliate”
means, with respect to a Person, any other Person that directly or indirectly
Controls, or is Controlled by, or is under common Control with, that Person;

“Agent” means
The Bank of Nova Scotia or any successor agent appointed pursuant to
Section 18.13;

“Agent’s Office”
means the administrative office of the Agent designated by the Agent from time
to time as its administrative office for the purposes hereof, after notice to
the Lenders; 

“Applicable Margin (or
Rate)” means a margin (or rate) determined in accordance with
Schedule ”A”;

“Borrowing Base”
means the amount (expressed in Dollars) determined by the Agent as being the
sum of:

(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 fully insured
by Export Development Canada or another credit insurer acceptable to the
Majority Lenders but on the condition that the Agent will be loss payee under
the related policy,

(ii)                                  if
a Securitization or Factoring Program is in effect, the aggregate of the
amounts determined pursuant to paragraphs (b), (c) and (d) below will be
included in the Borrowing Base only up to 300% 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;

(c)                                  the
lesser of $245,000,000 and 60% (rounded upwards to the next $5,000,000) of the
market value of the fixed assets of the Credit Parties which are subject to the
Security in accordance with Section 10.3; and

(d)                                 60%
(rounded upwards to the next $5,000,000) of the lesser of 5% of Cascades’ Net
Tangible Assets and the market value of the fixed assets of the Credit Parties
which are subject to the Security in accordance with Section 10.4;

 2
 

less the excess of (i) a reasonable estimate of the aggregate of
all amounts owing to creditors (including governments) whose claims are secured
or protected by a Lien capable of ranking pari passu
with or prior to the Security with respect to such accounts receivables and
inventory, over (ii) $10,000,000;

“Borrowings”
means the Prime Rate Loans, the US Base Rate Loans, the Acceptances, the Libor
Loans, the European Loans and the Letters of Credit;

“Branch of Account”
means, with respect to any Facility or any Tranche of the Revolving Facility, a
branch of a bank where the Agent has established an account for such Facility
or such Tranche or the Term Loan, in each case as may be designated by the
Agent from time to time as the applicable branch of account, after consultation
with the applicable Borrowers, it being understood that unless otherwise agreed
between the Agent and the Borrowers under Tranche C of the Revolving
Facility, the Branch of Account for such Tranche will be located in Canada;

“Business Day”
means a day on which banks are open for business in Montreal and in Toronto,
excluding Saturday and Sunday; where such term is used in the context of a
US Base Rate Loan, such day must also be a day on which banks are open for
business in New York City (and in Paris in the case of a US Base Rate Loan
under Tranche C) and where such term is used in the context of a Libor
Loan or an European Loan, such day must also be a day on which banks are open
for business in London, England, in Paris and in the city where the applicable
Branch of Account is located;

“Cascades Indenture”
means the indenture dated February 5, 2003 for the 7 1/4% notes due
February 15, 2013 of Cascades, as amended and supplemented from time to
time;

“CDOR Rate” means, for
any day, the arithmetic average of the bankers’ acceptances discount rates of
the Canadian banks for the applicable period which appear on the Reuter’s
Screen CDOR Page at 10:00 a.m., or if such day is not a Business Day, then on
the immediately preceding Business Day; provided however, that if such rates
are not available, then the CDOR Rate for any day will be the bankers’
acceptances discount rate of the Agent for the applicable period as of 10:00
a.m. on such day, or if said day is not a Business Day, then on the immediately
preceding Business Day;

“Co-Agent” means National Bank
of Canada or any successor co-agent appointed pursuant to Section 18.13;

“Commitment”
means, with respect to each Lender, its proportion (expressed as a percentage
or as an amount, as the case may be) of the aggregate amount of the Facilities
or, as the case may be, of any Facility or of any of Tranche A,
Tranche B or Tranche C of the Revolving Facility, as specified
opposite its name on the signature pages of this Agreement, subject however to
any readjustment resulting from a reduction in the amount of any Facility, a
change in the amount of any Tranche of the Revolving Facility or from an
assignment of Commitment made pursuant to this Agreement;

 3
 

“Control”
(including any correlative term) means the possession, directly or indirectly,
of the power to direct or cause the direction of the management or policies of
a Person (whether through ownership of securities or partnership or trust
interests, by contract or otherwise); without limiting the generality of the
foregoing (i) a Person is deemed to Control a corporation if such
Person (or such Person and its Affiliates) holds outstanding shares of the
corporation carrying votes in sufficient number to elect a majority of the
board of directors of the corporation, (ii) a Person is deemed to Control
a partnership if such Person (or such Person and its Affiliates) holds more than
50% in value of the equity of the partnership, (iii) a Person is deemed to
Control a trust if such Person (or such Person and its Affiliates) holds more
than 50% in value of the beneficial interests in the trust, and (iv) a
Person that controls another Person is deemed to Control any Person controlled
by that other Person;

“Corporate Structure Chart”
means the description of the corporate and capital structure of Cascades and
its Subsidiaries as at the date hereof (but giving effect to the Transaction),
as described in the chart dated as of the date of this Agreement delivered to
the Agent and the Lenders prior to the execution of this Agreement; 

“Credit Documents”
means this Agreement, the Security Documents, any note issued pursuant to
Section 20.6 and any other present and future document relating to any of
the foregoing, in each case, as amended, supplemented or restated;

“Credit Parties”
means each of the Borrowers and their Subsidiaries, but excluding
(i) Persons in which investments are classified under GAAP as joint
ventures or minority investments, and (ii) Metro Waste Paper Recovery Inc.
and its Subsidiaries;

“Default” means
any event or circumstance which constitutes an Event of Default or which, with
the passage of time, the giving of a notice or both, would constitute an Event
of Default;

“Designated Subsidiaries”
means the Subsidiaries of Cascades (other than a Borrower) designated as
Designated Subsidiaries pursuant to Section 1.2;

“Discount
Rate” means on any day,

(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);

 4
 

“Discounted Proceeds”
means, with respect to any issue of Acceptances, an amount (rounded to the
nearest whole cent and with one-half of one cent being rounded up) calculated
by multiplying:

(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:

(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;

with the price as so determined being rounded up or
down to the fifth decimal place and .000005 being rounded up;

“Distribution”
means any payment in cash or in kind that provides an income (including
interest or dividend) or a return on, or constitutes a distribution or
redemption of, the equity or capital of a Person (other than by way of the
issuance of new equity interests);

“Dollar” and the
symbol $ mean lawful money of Canada;

“EBITDA” means,
with respect to a Person, the net income of such Person for the rolling
four-quarter period ending on the date that EBITDA is determined, plus the
following items, to the extent such items have been deducted in calculating net
income: 

(a)                                  Interest
Expense;

(b)                                 income
taxes;

(c)                                  amortization
and depreciation; 

(d)                                 non-cash
compensation expenses for grants of performance shares or stock options to the
extent same are not redeemable for cash;

(e)                                  other
non-cash items that do not represent an accrual of or reserve for cash
expenditures in any future period;

provided that net income is calculated excluding:

(f)                                    the
equity of such Person 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 such Person
by way of Distributions; (it being understood that cash dividends received by
such Person from non-Credit Parties in each case are included in the net income
of such Person);

 5
 

(g)                                 gains
or losses arising from extraordinary, unusual or non-recurring items (including
non-recurring items referred to in financial statements as “specific items”) or
from the translation of any long-term debt payable in a foreign currency as
well as unrealized gains or losses arising from Hedging Agreements;

(h)                                 non-cash
items that will not result in the receipt of cash payments in any future
period; and

(i)                                     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;

“Environmental Laws”
shall mean all laws, rules and regulations, and any orders or legally binding
policies, in each case as now or hereafter in effect, relating to the
regulation or protection of human health, safety or the environment or to
emissions, discharges, releases or threatened releases of pollutants,
contaminants, chemicals or toxic or hazardous substances or wastes into the
indoor or outdoor environment, including, without limitation, ambient air,
soil, surface water, ground water, wetlands, land or subsurface strata, or
otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of pollutants,
contaminants, chemicals or toxic or hazardous substances or wastes;

“ERISA” means the Employee Retirement Income Security Act of 1974 of the
United States, as amended from time to time;

“ERISA Affiliate” means any corporation or trade
or business that is a member of any group of organizations (i) described
in Section 414(b) or (c) of the US Revenue Code of which any Credit Party
is a member and (ii) solely for purposes of potential liability under
Section 302(c)(11) of ERISA and Section 412(c)(11) of the US Revenue
Code and the lien created under Section 302(f) of ERISA and
Section 412(n) of the US Revenue Code, described in Section 414(m) or
(o) of the US Revenue Code of which any Credit Party is a member;

“European Loan” means a
Loan denominated in Euros, Swedish Kronor or British Pounds and bearing
interest at the European Rate, plus the Applicable Margin;

“European Rate”
means, for any day, the annual rate of interest for deposits in Euros, Swedish
Kronor or British Pounds (as applicable) 
with a term of 30 days in the Paris, London or Stockholm (respectively)
interbank market which is shown on the applicable Telerate page of the Telerate
Service as of 11:00 a.m. (Paris, London or Stockholm time, as applicable)
on such day, or if such day is not a Business Day, then on the immediately
preceding Business Day; provided however that if such rate is not available,
then the European Rate for any day will be the rate announced by the Swingline
Lender under Tranche C as being its rate for similar deposits then in
effect on the relevant day, provided further that the Swingline Lender under
Tranche C and the Borrowers concerned may agree on an alternate reference
rate for the determination of the European Rate;

 6
 

“Facilities”
means the Revolving Facility, the Additional Revolving Facility and the Term
Loan;

“Funded Debt”
means, with respect to a Person, and without duplication, all obligations that
under GAAP should be classified on such Person’s balance sheet as liabilities
or to which reference should be made by footnotes thereto, (i) including,
whether or not so classified, Guarantees and Liens granted in respect of Funded
Debt of another Person, but (ii) excluding deferred taxes, minority interests,
the settlement relating to Cascades Fine Papers, employees future benefits, the
fair market value of and transitional deferred unrealized gains on financial
derivative instruments, assets retirement obligations, deferred revenues, as
well as trade accounts payable, obligations under operating leases and other
accrued obligations incurred in the ordinary course of business, and also
excluding Subordinated Debt;

“Funded Debt to
Capitalization Ratio” means the ratio of Funded Debt to the sum of
Funded Debt and shareholders’ equity (with shareholders’ equity being
calculated excluding the impact of adjustments relating to pension fund
liabilities resulting from any change in GAAP after the date hereof);

“GAAP” means
generally accepted accounting principles in Canada or, where reference must be
made to GAAP in relation to any Credit Party organized under the laws of the
United States, generally accepted accounting principles in the United States,
in each case, which are in effect from time to time;

“Guarantee”
means any obligation, contingent or not, directly or indirectly guaranteeing
any liability or indebtedness of any Person or protecting a creditor of such
Person from a loss in respect of any such liability or indebtedness or having
the same economic effect;

“Hedging Agreement”
means any foreign exchange contract, interest rate hedging contract and any
other financial contract or arrangement designed to protect a Credit Party
against fluctuations in currencies, interest rates or commodities;

“Interest Coverage Ratio”
means the ratio of EBITDA to Interest Expense for the period EBITDA has been
calculated;

“Interest Expense”
means, for any period, the aggregate amount of interest and other financing
expenses during such period in each case determined in accordance with GAAP,
but (i) including interest and other financing charges which have been
capitalized, and (ii) excluding amortization of financing expenses, deferred
gains or losses on the translation of any long-term debt payable in foreign
currency or non-recurrent up front and financing costs, and (iii) also
excluding unrealized gains or losses arising from Hedging Agreements;

“Issuing Lender”
means, in respect of any Tranche, the Lender who is the Swingline Lender under
such Tranche, provided that the Borrowers concerned will be entitled with the
consent of the Agent and the Co-Agent to replace an Issuing Lender by another
Lender who has a Commitment under the applicable Tranche and is willing to
issue Letters of Credit;

 7
 

“Lender” means each of
the Persons having executed this Agreement as Lender and any other Person who
becomes a Lender pursuant to an assignment or a designation made in accordance
with Section 20.4 or Section 20.5;

“Letter of Credit”
means a documentary or standby letter of credit or a letter of guarantee issued
pursuant to this Agreement; 

“Libor” means,
with respect to any Libor Loan, the annual rate of interest determined by the
Agent as being the rate (rounded upwards to the nearest multiple of 1/16%) for
deposits in US Dollars or in Euros (as applicable) in the London interbank
market which is shown on the applicable Telerate page of the Telerate Service
as of 11:00 a.m. (London, England time) on the second Business Day prior
to the commencement of the applicable Libor Loan and for a comparable period,
or if such rate is not available, the average (rounded up to the nearest 1/16%)
of the rates per annum which leading banks in the London interbank market offer
to the Agent for placing deposits in U.S. Dollars or Euros (as applicable)
at approximately 11:00 a.m. (London time) on the second Business Day prior
to the commencement of the applicable Libor Loan and for a comparable period;

“Libor Loan”
means a loan denominated in US Dollars or in Euros bearing interest at Libor
for US Dollars or Euros, as applicable, plus the Applicable Margin; 

“Lien” means any
hypothec, security interest, mortgage, lien, right of preference, pledge,
assignment by way of security or any other agreement or encumbrance of any
nature that secures the performance of an obligation, and a Person is deemed to
own subject to a Lien any property or assets that it has acquired or holds
subject to the right of a vendor or lessor under any conditional sale
agreement, capital or synthetic lease or similar agreement (other than an
operating lease) relating to such property or assets;

“Majority Lenders”
means any group of Lenders whose Commitments amount in the aggregate to
at least 51% of the aggregate amount of the Facilities, provided that with
respect to a matter which adversely affects the Lenders under a Facility
differently from the Lenders generally, the Majority Lenders must also include
Lenders whose Commitments amount in the aggregate to at least 51% of such
Facility;

“Material Adverse Change”
means any change, condition, event or occurrence which, when considered
individually or together with other changes, conditions, events or occurrences,
could reasonably be expected to have a Material Adverse Effect;

“Material Adverse Effect”
means (i) a material adverse effect on the condition (financial or
otherwise), business, operations, assets, liabilities (absolute or contingent)
or prospects of the Credit Parties taken as a whole, (ii) a material
adverse effect on the ability of Cascades or of the Credit Parties taken as a
whole to perform their obligations under any Credit Document, or, (iii) a
material impairment of the rights or remedies of the Lenders under any Credit
Document;

“Material Contracts”
means (i) the share purchase agreement dated December 29, 2006
entered into between Cascades, Domtar Inc. and Norampac Inc. relating to the
purchase of the

 8
 

shares of Norampac Inc.
held by Domtar Inc.; (ii) the winding-up agreement dated December 29,
2006 between Norampac Inc. and Cascades; and (iii) all agreements
evidencing that Cascades has become the successor of Norampac Inc. under the Norampac
Indenture;

“Net Tangible Assets”
means, in respect of Cascades, total assets, after deducting current
liabilities and non-controlling interests, and less, to the extent otherwise
included in total assets, the amounts of (without duplication)
(i) reevaluations and other write-ups of assets subsequent to
December 31, 2002, and (ii) goodwill and other intangible assets, in
each case calculated on an adjusted consolidated basis;

“Non-Designated
Subsidiaries” means the Subsidiaries of Cascades (other than Borrowers
and non-Credit Parties) that are not Designated Subsidiaries;

“Norampac Indenture”
means the indenture dated as of May 28, 2003 for the 63⁄4 notes due
June 1, 2013, as amended and supplemented from time to time;

“PBGC” shall
mean the Pension Benefit Guaranty Corporation or any entity succeeding to any
or all of its functions under ERISA;

“Permitted
Liens” means:

(a)                                  Liens
imposed or arising by operation of law, in each case, in respect of obligations
not yet due or which have been postponed 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 comply with the requirements of any legislation or regulation
applicable to the Person concerned or its business or assets;

(c)                                  Liens
granted by Credit Parties incorporated in a member country 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
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 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 (excluding amounts secured by Liens permitted
pursuant to paragraph (f) below) does not at any time exceed for all Credit
Parties 5% of the Net Tangible Assets of Cascades and provided further that no
such property is part of the fixed assets subject to the Security or is
material to the operations of such assets;

 9
 

(e)                                  Liens
securing loans and advances made by a Credit Party to another Credit Party,
provided such loans and advances are subject to the Security; and

(f)                                    Liens
existing on the date hereof and listed in the Permitted Liens list dated
December 29, 2006 delivered to the Agent concurrently with the execution of
this Agreement, or 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;

(g)                                 Liens
securing obligations under a Securitization or Factoring Program, provided that
such Liens charge only accounts receivable sold pursuant to such program and
provided further that an intercreditor agreement in form and substance
satisfactory to the Majority Lenders is entered into between the Agent and the
applicable securitization provider or factor prior to the grant of such Liens
for the purposes of determining the respective rights and priorities of the
parties over the accounts receivable of the relevant Credit Parties;

“Person” means
any natural person, legal person, corporation, company, partnership, joint
venture, unincorporated organization, business trust or any other entity;

“Plan” means an
employee benefit or other plan established or maintained by a Credit Party or
any ERISA Affiliate and that is covered by Title IV of ERISA;

“Prime Rate”
means, for any day, the greater of:

(a)                                  the
annual rate of interest established by the Agent 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”
means a loan denominated in Dollars bearing interest at the Prime Rate, plus
the Applicable Margin;

“Revolving Facility”
means the revolving facility made available to the Borrowers pursuant to
Section 2.1, by way of Tranche A, Tranche B and Tranche C;

“Revolving Facility
Maturity Date” means the fifth anniversary date of this Agreement;

“Securitization or
Factoring Program” means any securitization or factoring program
providing for the sale of accounts receivable of any Credit Party, provided for
greater certainty that no such program may permit borrowing against the value
of accounts receivable or otherwise;

 10
 

“Security” means
the security and subordinations granted and the guarantees, undertakings and
acknowledgments provided to or for the benefit of the Lenders and the Agent
pursuant to Article 10;

“Security Documents”
means any document or agreement evidencing or relating to the Security,
including any intercreditor agreement referred to in the definition of
Permitted Lien;

“Solvent” means,
with respect to any Person, that as of the date of determination such Person is
“solvent” within the meaning given to that term and similar terms under
applicable corporations laws or laws relating to voidable transactions or
fraudulent transfers or conveyances; for such purpose, the amount of any
contingent liability at any time will be computed as the amount that, in light
of all of the facts and circumstances existing at such time, represents the
amount that can reasonably be expected to become an actual or matured liability
(irrespective of whether such contingent liabilities meet the criteria for
accrual under GAAP);

“Subordinated Debt”
means any debt of Cascades which is fully subordinated and postponed to the
obligations of the Credit Parties under the Facilities and the Hedging
Agreements, and that the Agent, acting with the consent of the Majority Lenders,
has agreed in writing to consider as such for the purposes of this Agreement;

“Subsidiary”
means a Person that is under the Control of another Person;

“Swingline Lender”
means, in respect of Tranche A, The Bank of Nova Scotia as Lender, in
respect of Tranche B, Comerica Bank as Lender, and in respect of
Tranche C, BNP Paribas as Lender, provided that the Borrowers concerned
will be entitled with the consent of the Agent and the Co-Agent to replace a
Swingline Lender by another Lender who agrees to become a Swingline Lender and
has a Commitment under the applicable Tranche;

“Term Loan”
means the Term Loan made available to Cascades pursuant to Section 2.4;

“Term Loan Maturity Date”
means October 31, 2012;

“Tranche A”
means the portion of the Revolving Facility made available to Cascades as
provided in Section 2.1;

“Tranche B”
means the portion of the Revolving Facility made available to Cascades US as
provided in Section 2.1;

“Tranche C”
means the portion of the Revolving Facility made available to Cascades Europe,
and Cascades Germany as provided in Section 2.1;

“Transaction”
means the acquisition by Cascades of all outstanding shares of Norampac Inc.
held by Domtar Inc. and the transfer of all assets and liabilities of Norampac
Inc. to Cascades and Cascades Canada Inc., as described in the Corporate
Structure Chart;

 11
 

“US Base Rate”
means, for any day, the greater of:

(a)                                  the
annual rate of interest established by the Agent 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 and the Term Loan) or made in New York City (in the
case of US Base Rate Loans made under Tranches B and C); and

(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 Agent is prepared to offer, at approximately 9:00 a.m. on such
day, for overnight deposits in US Dollars in New York;

“US Base Rate
Loan” means a loan denominated in US Dollars and bearing
interest at the US Base Rate, plus the Applicable Margin;

“US Revenue Code”
shall mean the Internal Revenue Code of 1986 of the United States, as amended
from time to time;

“2005 Cascades Credit
Agreement” means the amended and restated credit agreement dated as
of October 31, 2005 among (i) The Bank of Nova Scotia and National Bank of
Canada as agents, (ii) Cascades and the other borrowers party thereto, and
(iii) the lenders party thereto;

“2006 Norampac Credit
Agreement” means the amended and restated credit agreement dated as
of March 15, 2006 among (i) Canadian Imperial Bank of Commerce as agent
(ii) Norampac Inc. and the other borrowers party thereto, and
(iii) the lenders party thereto.

1.2                               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 not less than 30 days’
prior notice to the Agent. Any such designation will be effective on the first
day of the fiscal quarter of Cascades following the expiry of the notice period
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 that has provided a Guarantee of the obligations of Cascades under

 12
 

the Cascades Indenture or
of Norampac Inc. (or Cascades as successor thereof) under the Norampac
Indenture or notes issued thereunder.

1.3                               Currency
Conversions

Where any amount expressed in any currency has to be converted
or expressed in another currency, or where its equivalent in another currency
has to be determined (or vice versa),
the calculation is made at the exchange rate announced or quoted by the Agent
or the Lender concerned (as applicable) in accordance with its normal practices
at or around noon on the relevant date for the relevant currency against the
other currency (or vice versa).

1.4                               Accounting
Terms, Calculations and 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 in accordance with
GAAP insofar as applicable, and (iii) financial ratios must be calculated
on an adjusted consolidated basis of Cascades.

(b)                                 Any
reference to calculations made or financial statements prepared on an adjusted
consolidated basis of Cascades refers to a consolidation that excludes all
Persons who are not Credit Parties.

(c)                                  The
financial results of the business acquired pursuant to the Transaction will be
included in the calculation of Cascades’ EBITDA and Interest Expense for any
four-quarter period ending prior to December 31, 2007 as if such business had
been acquired on the first day of such four-quarter period.

1.5                               Time

Except where otherwise indicated in this Agreement,
any reference to time means local time in Montreal.

1.6                               Headings
and Table of Contents

The headings and the Table of Contents are inserted
for convenience of reference only and do not affect the construction or
interpretation of this Agreement.

1.7                               Governing
Law

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

 13
 

1.8                               Previous
Agreements

This Agreement supersedes any previous agreement in
connection with the Facilities.

1.9                               Inconsistency

In the event of inconsistency between this Agreement
and any other Credit Document, the provisions of this Agreement must be
accorded precedence.

2 - THE
FACILITIES

2.1                               The
Revolving Facility

The Lenders, individually, and not solidarily (i.e.
not jointly and severally), agree to make available to the Borrowers a
revolving facility (the “Revolving Facility”) in an aggregate maximum amount at
any time not exceeding the total of the Commitments in effect at such time with
respect to the Revolving Facility. As of the date hereof, the Commitment of
each Lender under the Revolving Facility is as specified opposite its name on
the signature pages of this Agreement and the collective Commitments of the
Lenders with respect to the Revolving Facility aggregate to  $650,000,000.  The Revolving Facility will be available in three tranches,
Tranche A, Tranche B and Tranche C, as follows:

(a)                                  Tranche A,
initially in the amount of $500,000,000, 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 $75,000,000, 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 $75,000,000, will be available to Cascades Europe
and Cascades Germany in the proportion as to each Lender of its Commitment
under Tranche C.

2.2                               Reallocation
among Tranches

(a)                                  Upon
giving not less than ten Business Days prior notice to the 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.

 14
 

(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.

2.3                               The
Additional Revolving Facility

(a)                                  The
Lenders, individually and not solidarily (i.e. not jointly and severally) agree
to make available to Cascades an additional revolving facility (the “Additional
Revolving Facility”) in an aggregate amount at any time not exceeding the total
of the Commitments at such time with respect to the Additional Revolving
Facility. As of the date hereof, the Commitment of each Lender under the
Additional Revolving Facility is as specified opposite its name on the
signature page of this Agreement and the collective Commitments of the Lenders
with respect to the Additional Revolving Facility aggregate to $100,000,000.

(b)                                 Borrowings
under the Additional Revolving Facility may be obtained only to the extent that
there is no availability (taking into account Borrowing Base requirements)
under the Revolving Facility at the time such Borrowings are requested.

(c)                                  Until
the Additional Revolving Facility Maturity Date, upon giving not less than five
Business Days prior notice to the Agent (the “transfer notice”), Cascades may
transfer to Tranche A the Commitments and the outstanding Borrowings under the
Additional Revolving Facility. On the date of the transfer, the Revolving
Facility will be increased by the aggregate amount of the Commitments so
transferred (with Tranche A being increased in a corresponding amount),
the outstanding Borrowings under the Additional Revolving Facility will become
outstanding Borrowings under Tranche A and the Additional Revolving
Facility will terminate.

(d)                                 For
greater certainty (i) all Borrowings so transferred to Tranche A will
become secured by the Security and the Borrowing Base provisions of this
Agreement will apply to such Borrowings from the date of the transfer, and
(ii) the transfer contemplated in Section 2.3(c) will not occur if
the intended transfer date (as specified in the transfer notice) is later than
the Additional Revolving Facility Maturity Date.

2.4                               The
Term Loan

The Lenders, individually and not solidarily (i.e. not
jointly and severally) agree to make available to Cascades a Term Loan (the “Term
Loan”) in an aggregate maximum amount at any time not exceeding the total of
the Commitments at such time with respect to the Term Loan. As of the date
hereof, the Commitment of each Lender under the Term Loan is as specified
opposite its name on the signature pages of this Agreement and the collective
Commitments of the Lenders with respect to the Term Loan aggregate to
$100,000,000.

 15
 

2.5                               Purpose
and Nature of the Facilities

(a)                                  The
Borrowers will use the Facilities for general corporate purposes including to
finance the Transaction and to refinance the indebtedness under the 2005
Cascades Credit Agreement and the 2006 Norampac Credit Agreement.

(b)                                 The
Revolving Facility and the Additional Revolving Facility will revolve and,
accordingly, Borrowings may be obtained, repaid and re-borrowed by the
Borrowers under such Facilities until their respective maturity dates.

(c)                                  The
Term Loan may be drawn down by means of one single drawing on the date the conditions
precedent set out in Section 9.1 have been met or waived but no later than
January 31, 2007. After such date, the Term Loan will cease to be available.
The Term Loan will not revolve and any amount repaid or prepaid may not be
re-borrowed.

2.6                               Borrowing
Options under the Revolving Facility

(a)                                  Tranche 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)                                 Tranche 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

(iii)                               Letters
of Credit;

(c)                                  Tranche C – Borrowings may be obtained by Cascades Europe or
Cascades Germany 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

 16
 

(iv)                              European
Loans, but only with the Swingline Lender under Tranche C.

2.7                               Borrowing
Options under the Facilities other than the Revolving Facility

Borrowings may be obtained by Cascades under the
Additional Revolving Facility and the Term Loan in the form of:

(i)                                     Prime
Rate Loans;

(ii)                                  Acceptances;

(iii)                               US Base Rate Loans; and

(iv)                              Libor
Loans in US Dollars.

2.8                               Borrowing
Base Limitations

The Borrowers must ensure that the aggregate amount of
all outstanding Borrowings (expressed in Dollars) under the Revolving Facility
and the Term Loan will not at any time exceed the lesser of (i) the
aggregate amount at such time of the Revolving Facility and the Term Loan, and
(ii) the Borrowing Base. Accordingly, no Borrower may request a Borrowing
if the making of such Borrowing would result in such limit being exceeded.

2.9                               Borrowings
Proportionate to Commitments

Each Borrowing will be made through the Agent at the
applicable Branch of Account and will be allocated by the Agent among the
Lenders approximately in the proportion of their respective Commitments under
the relevant Tranche of the Revolving Facility, the Additional Revolving
Facility or the Term Loan (as applicable) subject however to the provisions of
Section 2.11 (Swingline Utilizations) and of Article 5 (Letters of
Credit).

2.10                        Notice
of Borrowings

To obtain a Borrowing (other than a Letter of Credit),
the Borrower concerned must give a notice to the Agent specifying:

(a)                                  the
applicable Facility (and Tranche where applicable) 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

 17
 

(d)                                 to
the extent applicable, the period of the Borrowing.

The notice must be given by telephone not later than 11:00 a.m.
two Business Days prior to the Borrowing, except in the case of a Libor Loan
where the notice must be given not later than 10:00 a.m. three Business
Days prior to the date of such Libor Loan. Each telephone notice must be
followed by a written confirmation on the same date, in the form of
Schedule ”C” or in any other manner as may be agreed between the Agent and
the relevant Borrower.

2.11                        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 under the Revolving Facility
from any Swingline Lender by way of overdrafts in accounts opened for such
purpose with such 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
Borrowers 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)                                 The
said accounts may include accounts of the Borrower concerned and of its
Affiliates 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
Lenders acknowledge that the 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
Agent may from time to time, and will upon the request of the applicable
Swingline Lender, 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 Agent and
the Agent will make adjustments among the Lenders under the applicable Tranche
in amounts sufficient to eliminate the excess.

(d)                                 For
greater certainty, (i) this Section 2.11 does not authorize the Agent to
allow that Borrowings owing to a Lender (other than a Swingline Lender) under
any

 18
 

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) may not exceed the amount of such
Tranche, as determined pursuant to Sections 2.1, 2.2 and 2.3(c).

2.12                        Funding

(a)                                  At
the request of the Agent, (including following a request from a Swingline
Lender where applicable), each Lender will promptly pay to the Agent such
Lender’s share of any Borrowing made or to be made by the Agent on behalf of
the Lenders and of any adjustment payable pursuant to Section 2.11(c). The
Agent will provide the Lenders with such information as may be necessary in
order for the Lenders to make payments to the Agent and fund their respective
shares of any Borrowing.

(b)                                 Any
amount to be paid by a Lender to the Agent must be available to the Agent at
the Agent’s Office by 2:00 p.m. on the applicable day. Any amount to be
disbursed by the 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 Agent.

2.13                        Lender’s
Failure to Fund

If a Lender fails to advance its share of any
Borrowing and, despite such failure, the Agent advances such amount to a
Borrower, the Agent may recover such amount from such Lender or, if it is
unable to do so, from such Borrower, with interest from the date of
disbursement at the rate applicable to Borrowings in the same form under the
relevant Facility. Nothing in this Section obliges the Agent to fund any
Borrowing or advance any sums on behalf of a Lender who has failed to comply
with its obligations.

2.14                        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 or Facility 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 2.6
to 2.13 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

 19
 

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 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 2.11(c), the 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.

2.15                        Limitations
on Lender’s Obligation to Fund

Each Lender’s obligation under this Agreement to fund
Borrowings is limited to such Lender’s Commitment under the relevant Tranche or
Facility (as applicable), subject however to the obligations of the Swingline
Lenders pursuant to Section 2.11(a). The obligations of the Lenders
hereunder are not solidary and are not joint and several, and no Lender is
responsible for the obligations of any other Lender.

2.16                        Increase
of Revolving Facility

(a)                                  At
any time following the execution of this Agreement but no later than the fifth
anniversary date of this Agreement and so long as the aggregate amount of the
Revolving Facility has not been reduced, Cascades may, by notice to the Agent
and the Co-Agent, request an increase up to $150,000,000 in the aggregate
amount of the Revolving Facility (an “Increase”). The notice must specify:

(i)                                     the
amount of the proposed Increase, which must be a multiple of $5,000,000,
provided that the aggregate amount of all Increases made pursuant to this
Section 2.16 may not exceed $150,000,000;

(ii)                                  the
allocation of the Increase among the Tranches;

(iii)                               the
proposed date of the Increase; and

(iv)                              that
no Default has occurred and is continuing.

(b)                                 Upon
receipt of such notice, the Agent and the Co-Agent will offer to the Lenders to participate in the Increase pro rata to their Commitments. If some but not all of
the Lenders accept the offer, then the Agent and the Co-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 rata
to 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).

 20

(c)                                  If
offers made pursuant to Section (b)
have been accepted, the Agent, the Co-Agent,
the Borrowers and the Lenders
and other Persons who have accepted such offers will execute an amendment to
this Agreement providing that:

(i)                                     each
Person who has accepted to participate in the Increase will have a Commitment
under the Revolving Facility 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)                                  the
amount of the Increase, when drawn, will become Borrowings under the Revolving
Facility and all such Borrowings will be governed by all provisions (including
pricing and repayment provisions) of the Revolving Facility.

(d)                                 For
greater certainty, (i) nothing
in this Section is intended to commit any Lender to participate or the Agent or the Co-Agent to arrange
for a participation in an Increase, and
(ii) the aggregate amount of all Increases made pursuant to this Section 2.16
may not exceed $150,000,000. 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.

2.17        Deemed Utilizations

(a)                                  Concurrently
with the initial Borrowing hereunder, the borrowings (including acceptances and
letters of credit) then outstanding and owing by Cascades and Norampac Inc.
under the 2005 Cascades Credit Agreement and the 2006 Norampac Credit Agreement
respectively will be deemed to be Borrowings hereunder under Tranche A
(except that borrowings under the Term Facility referred to in the 2005
Cascades Credit Agreement will be deemed to be Borrowings under the Term Loan).
Such Borrowings will be allocated by the Agent among the Lenders pro rata to their Commitments under Tranche A and
the Term Loan (as applicable). Canadian Imperial Bank of Commerce will be an
Issuing Lender hereunder with respect to the letters of credit issued by it
under the 2006 Norampac Credit Agreement which will be deemed to have been
issued hereunder. The Bank of Nova Scotia was the issuing lender of the letters
of credit issued under the 2005 Cascades Credit Agreement which will be deemed
to have been issued by it as an Issuing Lender hereunder. From the date of the
initial Borrowing hereunder, the provisions of this Agreement with respect to
interest and fees will apply to borrowings under the 2005 Cascades Credit
Agreement and the 2006 Norampac Credit Agreement which will be deemed to be
Borrowings hereunder and the Applicable Margin (or Rate) will apply to said
Borrowings from such date.

(b)                                 The
Agent will make among the Lenders such adjustments as are necessary to give
effect to the foregoing, including to ensure that the non-accrued portion of
any Acceptance fee paid prior to the date hereof with respect to acceptances
that

 21
 

will be deemed to be
Acceptances hereunder is received by the Lenders at the Applicable Rate and pro rata to their Commitments. Any amount due by a
Lender as a result of such adjustments will be paid by it forthwith to the
Agent and the Agent will forthwith remit to the applicable Lenders the amounts
received by it as a result of such adjustments.

3 - Acceptances

3.1                               Period
and Amounts

Acceptances

(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 maturity date of the
applicable Facility;

(b)                                 are
denominated in Dollars, with a minimum of $5,000,000 per issue, provided that
the 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 Agent an
amount equal to the aggregate amount of the Borrowings so replaced. The amount
so paid to the Agent will be applied to the portion of the Borrowings which
have been replaced by such Acceptances.

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 Agent is
also authorized to make the necessary arrangements for the negotiation and
delivery of Acceptances intended to be sold on the money market.

 22
 

(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

A Lender who accepts Acceptances that are “depository
bills” within the meaning of the Depository Bills and Notes
Act (Canada) may deposit same with the Canadian Depository for
Securities Limited (“CDS”) and such Acceptances may be dealt with in accordance
with the rules and procedures of CDS.

3.5                               Availability

The availability of Acceptances is subject to funds
being available for such purpose in the Canadian money market; the Agent will
notify Cascades if Acceptances cease to be so available as well as when
availability resumes. Cascades must ensure that no more than ten different
issues of Acceptances are outstanding at any time, provided that on an
occasional basis the Agent may permit such limit to be exceeded.

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 maturity date of the
applicable Facility;

(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 each Facility
(other than Tranche B or Tranche C) or (ii) US $2,000,000 (or
2,000,000 Euros) under Tranche B and Tranche C; and

(c)                                  The
Borrower must ensure that no more than ten different Borrowings by way of
Libor Loans are outstanding at any time under the Facilities, provided that on
an occasional basis the Agent may permit such limit to be exceeded.

4.2                               Changed
Circumstances

If a Lender determines that:

(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

 23
 

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,

the Lender may so notify the Agent and the Borrower concerned and no
new Borrowing by way of Libor Loans in the applicable currency, no conversion
into Libor Loans in the applicable currency and no renewal of Libor Loans in
the applicable currency may be made with such Lender from the date of the
notice until the cause of such determination has ceased to exist. In any such
case, Borrowings with such Lender that otherwise would have been made by way of
Libor Loans in the applicable currency will be made by way of US Base Rate
Loans notwithstanding Section 2.9.

4.3                               Conversion
Prior to Maturity

If it becomes unlawful or prohibited for a Lender to
maintain Libor Loans in US Dollars or in Euros, all Libor Loans owed to such
Lender (in US Dollars or Euros, as applicable) will become US Base
Rate Loans on the date of the notice given pursuant to Section 4.2.

5 - Letters
of Credit

5.1                               Availability

Letters of Credit will be issued by the applicable
Issuing Lender in Dollars, US Dollars, Euros or any other freely tradable
currency acceptable to such Issuing Lender, for such transactions and on such
terms and conditions as are mutually agreed upon between the Borrower concerned
and the applicable Issuing Lender and are not inconsistent with the provisions
of this Article 5. Letters of Credit are available only under the Revolving
Facility and only up to an aggregate outstanding amount (expressed in Dollars)
at any time not exceeding, in respect of any Tranche, 20% of the amount of such
Tranche.

5.2                               Maturity
of Letters of Credit

No Letter of Credit may have at any time a remaining
term exceeding 365 days from such time or extending beyond the Revolving
Facility Maturity Date.

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 Agent of the issue of any Letter of Credit at least one
Business Day prior to the date of such issue.

 24
 

(b)                                 For
greater certainty, if Letters of Credit under any Tranche are outstanding on
the Revolving Facility Maturity Date or on the date the indebtedness of the
Borrowers becomes repayable pursuant to Section 16.2, 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

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 rata to their respective
Commitments under the applicable Tranche. Each Lender must fund such loan by
remitting to the Agent (for the account of the applicable Issuing Lender) the
amount of its share of such loan. The provisions of Section 2.12 will apply in
the event of non-disbursement by a Lender.

5.5                               Currency
Conversion

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 (as specified in Section 5.4)
on the date of payment.

5.6                               Indemnity

The Borrower concerned will pay all reasonable costs
incurred and indemnify the Agent, any Issuing Lender and the Lenders in respect
of any loss or damage suffered by them in connection with Letters of Credit,
including legal fees and other costs of litigation, except for any loss, damage
or cost resulting from wilful malfeasance of the Agent, the applicable Issuing
Lender or the Lenders.

5.7                               I.C.C.
Rules

Unless otherwise provided in this Agreement or in any
agreement relating to their issue, Letters of Credit are governed by the
Uniform Customs and Practice for Documentary Credits
(I.C.C. Publication 500, 1993 revision).

 25
 

6 - Fees And
Interest

6.1                               Commitment
and Agency Fees

Cascades must pay, concurrently with the execution of
this Agreement, the commitment fees specified in the fee letter and the agency
fee letter executed by Cascades prior to the date of this Agreement.

6.2                               Letter
of Credit Fees

The Borrower concerned must pay a fee for each Letter
of Credit issued under the Revolving Facility. The fee for each Letter of
Credit which is either a non-documentary letter of credit or a letter of
guarantee will be at an annual rate equal to the Applicable Rate. The fee for
each documentary Letter of Credit will be determined on the basis of the rate
then offered by the applicable Issuing Lender to its customers for similar
documentary letters of credit. Fees are calculated on the face amount of each
Letter of Credit for the number of days included in the period of same. Any
such fee must be paid to the applicable Issuing Lender quarterly in arrears on
the first Business Day of each quarter (commencing with the quarter following
the issue of the relevant Letter of Credit), for distribution to the Lenders pro rata to their Commitments under the relevant
Tranche. Concurrently with the payment of any such fee, the Borrower concerned
must also pay to the applicable Issuing Lender, for its own account, a fronting
fee at an annual rate equal to 0.125%, calculated as aforesaid.

6.3                               Administrative
Charges with respect to Letters of Credit

The Borrower concerned must pay to the applicable
Issuing Lender administrative charges in connection with Letters of Credit at
the rates and on the terms generally applicable to the other customers of the
Agent.

6.4                               Standby
Fee

Cascades must pay to the Agent, for distribution to
the Lenders pro rata to their Commitments under
the Revolving Facility and the Additional Revolving Facility a standby fee on
the unused portion of the Revolving Facility and the Additional Revolving
Facility. The standby fee will be calculated daily from the date of this
Agreement at an annual rate equal to the Applicable Rate and will be payable
quarterly in arrears on the first Business Day of the following quarter.

6.5                               Acceptance
Fees

Upon the issue of any Acceptance, Cascades must pay to
the relevant Lender (or to the Agent for the account of such Lender) an
acceptance fee at an annual rate equal to the Applicable Rate. The acceptance
fee will be calculated on the face amount of the applicable Acceptance and for
the number of days included in the period of same. Any such payment may be made
in the manner provided in Section 3.2(a).

 26
 

6.6                               Interest
on Prime Rate Loans

Prime Rate Loans bear interest until they are converted
or repaid in full (both before and after any Event of Default or judgment) at
the Prime Rate in effect from time to time, plus the Applicable Margin. The
interest is payable monthly in arrears on the first Business Day of the
following month.

6.7                               Interest
on US Base Rate Loans

US Base Rate Loans bear interest until they are
converted or repaid in full (both before and after an Event of Default or
judgment) at the US Base Rate in effect from time to time, plus the Applicable
Margin. The interest is payable monthly in arrears on the first Business Day of
the following month.

6.8                               Interest
on European Loans

European Loans bear interest until they are converted
or repaid in full (both before and after an Event of Default or judgment) at
the European Rate in effect from time to time, plus the Applicable Margin. The
interest is payable monthly in arrears on the first Business Day of the
following month.

6.9                               Interest
on Libor Loans

Each Libor Loan bears interest at the Libor applicable
to each such loan, plus the Applicable Margin. The interest is payable at the
maturity of the period of the loan or, if the period of such loan is more than
three months, at three-month intervals during the period of the loan.

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 Loans, (ii) US Base Rate Loans under Tranche B and
Tranche C, and (iii) European Loans, where 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 Loan).

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

 27
 

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.

7 - Repayment, Prepayment and Reduction

7.1                               Repayment
of the Facilities

(a)                                  Cascades
must repay in full the outstanding Borrowings and pay all other amounts owing
under Tranche A on the Revolving Facility Maturity Date. Cascades US
must repay in full all outstanding Borrowings and pay all other amounts owing
under Tranche B on the Revolving Facility Maturity Date. Each of Cascades
Europe and Cascades Germany must repay in full its outstanding Borrowings and
pay all other amounts owing by it under Tranche C on the Revolving
Facility Maturity Date.

(b)                                 Cascades
must repay in full the outstanding Borrowings and pay all other amounts owing
under the Additional Revolving Facility on the Additional Revolving Facility
Maturity Date (unless such outstanding Borrowing have been transferred to the
Revolving Facility in accordance with Section 2.3(c)).

(c)                                  Cascades
must repay in full the outstanding Borrowings and pay all other amounts owing
under the Term Loan on the Term Loan Maturity Date.

7.2                               Mandatory
Prepayments

Cascades must make (or cause other Borrowers to make)
such prepayments as may be necessary to ensure that the aggregate amount of the
outstanding Borrowings (expressed in Dollars) under the Revolving Facility and
the Term Loan will not at any time exceed the lesser of (i) the aggregate
amount of the Revolving Facility and the Term Loan, and (ii) the Borrowing
Base. Any such prepayment must be applied first on outstanding Borrowings under
the Revolving Facility and second to outstanding Borrowings under the Term
Loan; in the latter case, the amount of the Term Loan will be permanently
reduced by the amount prepaid.

7.3                               Optional
Prepayments

(a)                                  The
Borrowers concerned may at any time make prepayments on Borrowings outstanding
under Tranche A, Tranche B or Tranche C (as applicable) or under
the Additional Revolving Facility without affecting their right to re-borrow
under

 28
 

such Tranche or Facility
up to its maximum available amount. Any such prepayment (except for a
prepayment applied to overdraft utilizations pursuant to Section 2.11) 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 Agent.

(b)                                 Cascades
may at any time make prepayments on Borrowings outstanding under the Term Loan
and amounts prepaid will permanently reduce the amount of the Term Loan. Any such
prepayment must be in an amount of at least $2,000,000 or US$2,000,000 and is
subject to Cascades giving a three-Business Day prior notice to the Agent.

(c)                                  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 will be subject to Section 20.11(b).

7.4                               Exchange
Rate Fluctuations

If, at any time, due to fluctuations in the rate of
exchange of a currency against another currency, the outstanding amount of the
Borrowings under any Facility, expressed in Dollars, exceeds the amount of such
Facility, Cascades must pay to the Agent, three Business Days following a
demand to that effect, the amount of such excess. However, no such demand will
be made as long as the excess is not more than 5% and the Borrowing Base is not
exceeded.

7.5                               Reduction
of the Revolving Facility

Cascades may, on giving not less than ten Business
Days prior notice to the Agent, permanently reduce the aggregate amount of the
Revolving Facility by amounts of not less than $5,000,000. Any such reduction
will result in a corresponding reduction of each of Tranche A,
Tranche B and Tranche C, on a pro rata
basis (such reduction to also apply on a pro rata
basis as to each Lender). The notice of reduction must specify the amount of
the reduction, and the Business Day when the reduction will be become
effective. On such date, the Borrowers must make repayments in amounts
sufficient for the outstanding Borrowings under any Tranche not to exceed the
new amount of such Tranche.

8 – Place of
Payment, Currency and Taxes

8.1                               Payments
to the Agent

Unless otherwise provided or agreed between the
Borrower concerned and the Agent, (i) all payments to be made by a
Borrower must be made to the Agent at the applicable Branch of Account, except
that interest payments on outstanding Borrowings owing to a Swingline Lender
pursuant to Section 2.11 must be made to such Swingline Lender and interest
payments to Lenders under Tranche C whose lending offices are in France
must be made directly to such Lenders, and (ii) all payments made to the
Agent will be deemed to have been made to the Agent

 29
 

for the rateable benefit
of the applicable Lenders. Any payment due by a Borrower may be charged to an
account maintained by such Borrower with the Agent or the applicable Lender.

8.2                               Manner
of Payments

Any payment that is due on a day that is not a
Business Day may be made on the next Business Day but will bear interest until
received in full. All payments must be made free of any set-off or other
deduction and in funds which are immediately available on the date on which
payment is due.

8.3                               Currency

Unless otherwise provided, (i) all amounts owing
under any Borrowing are payable in the currency of such Borrowing,
(ii) Letter of Credit fees under Tranche A are payable in Dollars,
except that any such fee owing as a result of a Letter of Credit issued in
US Dollars is payable in US Dollars, (iii) Letter of Credit fees
under Tranche B are payable in US Dollars, (iv) Letter of Credit
fees under Tranche C are payable in Euros, (v) standby fees are payable in
Dollars, and (vi) all other amounts are payable in Dollars,
US Dollars or Euros, as may be specified by the Agent.

8.4                               Judgment
Currency

If a judgment is rendered against a Borrower for an
amount owed hereunder and if the judgment is rendered in a currency (“other
currency”) other than that in which such amount is owed under this Agreement (“currency
of the Agreement”), such Borrower will pay, if applicable, at the date of
payment of the judgment, an additional amount equal to the excess (i) of
the said amount owed under this Agreement, expressed into the other currency as
at the date of payment of the judgment, over (ii) the amount of the
judgment. For the purposes of obtaining the judgment and making the calculation
referred to in (i), the exchange rate will be the spot rate at which the Agent,
on the relevant date, may in Toronto, sell the currency of the Agreement to
obtain the other currency. Any additional amount owed under this Section will
constitute a cause of action distinct from the cause of action which gave rise
to the judgment, and said judgment shall not constitute res judicata
in that respect.

8.5                               Payments
Net of Taxes

If a Borrower, the Agent or any Lender is compelled by
law to make any withholding or deduction due to any tax or if a Lender is
liable to pay tax in respect of any payment due or made by a Borrower, the
Borrower concerned must pay to the Agent or such Lender such additional amount
as may be necessary in order that the payment actually received be equal to the
payment which otherwise would have been received in the absence of such
withholding or deduction or tax (including in the absence of any additional
withholding or deduction or tax in respect of any additional amount payable
pursuant to this Section). However, this Section 8.5 will not apply in respect
of a tax on the overall net income or capital of a Lender.

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8.6                               Obligations
of Lenders in respect of Taxes

Each Lender under Tranche B who is not
incorporated under the laws of the United States of America or a state thereof
but who is entitled to receive payments hereunder without deduction or
withholding of any United States federal income taxes must deliver to the
Borrowers and the Agent two duly completed copies of the United States Internal
Revenue Service Form W8BEN or W8ECI or otherwise successor applicable form, as
the case may be, certifying that it is entitled to receive payments under this
Agreement without any such deduction or withholding. Any such Lender who fails
to deliver such forms will not be entitled to benefit from Section 8.5 to the
extent that the applicable withholding or deductions would not have been
necessary if such forms had been delivered.

9 - Conditions
Precedent to Borrowings

9.1                               Conditions
Precedent to the Initial Borrowing

The Borrowers may not obtain any Borrowing under the
Facilities until the following conditions precedent have been fulfilled to the
satisfaction of the Agent, the Co-Agent and the Lenders:

(a)                                  each
of the material conditions precedent set out in share purchase agreement
referred to in the definition of Material Contracts must have been fulfilled
and not waived;

(b)                                 the
Transaction must have been completed (except for the payment of the purchase
price payable to Domtar Inc.);

(c)                                  all
fees and expenses owing by the Borrowers to the Agent and the Lenders at the
time of execution of this Agreement must have been paid in full;

(d)                                 the
Agent and the Lenders must have received, in form and substance satisfactory to
them, each of the following documents:

(i)                                     a
copy of the constitutive documents of each of the Borrowers and the Designated
Subsidiaries;

(ii)                                  a
certificate as to the legal existence of each of the Borrowers and the
Designated Subsidiaries;

(iii)                               a
copy of the documents evidencing the authority and attesting to the
authenticity of the signatures of the Persons acting on behalf of each of the
Borrowers and the Designated Subsidiaries;

(iv)                              the
Security Documents required to be provided pursuant to Article 10;

(v)                                 a
copy of each of the Material Contracts;

 31
 

(vi)                              a
compliance certificate in the form of Schedule ”D”, showing compliance
with the financial covenants herein, as of September 30, 2006, but giving
effect to the Transaction;

(vii)                           financial
forecasts for the operations of Cascades for its next five fiscal years, on an
adjusted consolidated basis;

(viii)                        a
Borrowing Base report in the form of Schedule ”E”, as of
September 30, 2006, but giving effect to the Transaction;

(ix)                                a
certificate of the Chief Financial Officer of Cascades confirming that there is
no Default hereunder and setting out the sources and uses of the funds required
to complete the Transaction (including the amount of the purchase price payable
thereunder);

(x)                                   the
documents evidencing the cancellation of the facilities provided for under the
2005 Cascades Credit Agreement and the 2006 Norampac Credit Agreement, and
authorizing the agents under such agreements to release the security granted
pursuant thereto;

(xi)                                a
certificate evidencing the insurance coverage required to be maintained by the
Credit Parties pursuant to this Agreement;

(xii)                             a
certificate of the secretary of Cascades with respect to the governmental and
regulatory approvals and third party consents required to be obtained for the
Transaction; and

(xiii)                          legal
opinions addressed to the Agent and the Lenders from counsel to the Credit
Parties and counsel to the Agent, relating to such matters as the Agent and the
Lenders may reasonably require.

9.2                               Conditions
Precedent to all Borrowings

The Borrowers may not obtain any Borrowing or convert
or renew any Borrowing:

(a)                                  if
the 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.

Each notice of Borrowing or of the renewal or conversion of a Borrowing
constitutes a certification by the Borrowers that no Default has occurred and
is continuing or would occur after giving effect thereto.

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9.3                               Waiver
of Conditions Precedent

The conditions precedent provided for in this
Article 9 are for the sole benefit of the Agent and the Lenders. The Agent
and the Lenders may waive such conditions precedent, in whole or in part, with
or without conditions, without prejudice to any other rights that they might
have against the Borrowers and any other Person.

9.4                               Termination
of this Agreement

If all of the conditions precedent provided for in
Section 9.1 have not been fulfilled or waived on or before January 31st, 2007, this Agreement will
then terminate.

10 – Security

10.1                        Guarantees

Each Borrower must guarantee in favour of the Agent
and the Lenders the performance of all obligations of the other Borrowers under
the Facilities and the Hedging Agreements and each Designated Subsidiary must
guarantee in favour of the Agent and the Lenders the performance of all
obligations of the Borrowers under the Facilities and the Hedging Agreements.

10.2                        Security
over Current Assets

To secure the performance of the obligations of the
Borrowers under the Facilities (other than the Additional Revolving Facility)
and the Hedging Agreements, each of the Borrowers and the Designated
Subsidiaries that owns material inventory and accounts receivable must provide
in favour of the Agent and the Lenders security over all of its present and
future inventory and accounts receivable (including related assets), present
and future.

10.3                        Series 1
Charged Fixed Assets

(a)                                  To
secure the performance of the obligations of the Borrowers under the Facilities
(other than the Additional Revolving Facility) and the Hedging Agreements,
Cascades Canada Inc. and Cascades Fine Papers Group Inc. must provide in favour
of the Agent and the Lenders security over the tissue plants of Cascades Canada
Inc. located at 467 Marie-Victorin, Kingsey Falls, Quebec and 75
Marie-Victorin, Candiac, Quebec as well as the fine paper plant of Cascades
Fine Papers Group Inc. located at 455 Rolland, St-Jérôme, Quebec,
including related assets (together with other fixed assets which may become
subject to the Security pursuant to this Section 10.3, the “Series 1
Charged Fixed Assets”).

(b)                                 For
Borrowing Base purposes, the market value of the Series 1 Charged Fixed
Assets will be determined by the Agent and the Co-Agent initially using a
market value amount of $282,500,000, which amount represents the mid-point of
the

 33
 

estimated values
determined by Ernst & Young Orenda Corporate Finance Inc. in their
valuation report dated December 15, 2005.

(c)                                  After
the date hereof, Cascades will have the option, but not the obligation, to
increase the Series 1 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 Agent and the Co-Agent
prior to the grant of the related security.

(d)                                 If,
at any time after the date of this Agreement, the Majority Lenders have
reasonable grounds to believe that the market value of the Series 1
Charged Fixed Assets has reduced below the most recent amount determined
pursuant to this Section 10.3 (or below $405,000,000 if such most recent amount
is greater than $405,000,000), Cascades will provide to the Agent and the
Co-Agent, within 30 days from a request by the Agent and the Co-Agent, a
valuation report on such assets.

(e)                                  From
the date a valuation report is provided to the Agent and the Co-Agent and until
such time a new valuation report is so provided pursuant to this Section 10.3,
the market value of the Series 1 Charged Fixed Assets will be determined
for Borrowing Base purposes on the basis of the most recent valuation.

(f)                                    If
there has been a decrease in the market value of the Series 1 Charged
Fixed Assets or if a Credit Party proposes to sell assets which are part of the
Series 1 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 its current level in the event of a proposed
sale) the market value of the Series 1 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
Agent and the Co-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 Series 1 Charged Fixed Assets component of the
Borrowing Base.

10.4                        Series 2
Charged Fixed Assets

(a)                                  After
the date hereof, Cascades will have the option, but not the obligation, to use
(and, thereafter, to increase) the fixed assets component of paragraph (d)
of the definition of Borrowing Base by providing or causing Designated
Subsidiaries to provide security over fixed assets (other than Series 1
Charged Fixed Assets) acceptable to the Majority Lenders (together with other
fixed assets which may become subject to the Security pursuant to this Section 10.4,
the “Series 2

 34
 

Charged Fixed Assets”).
The Security over the Series 2 Charged Fixed Assets will secure the
performance of the obligations of the Borrowers under the Facilities (other
than the Additional Revolving Facility) and the Hedging Agreements.

(b)                                 For
Borrowing Base purposes, the market value of Series 2 Charged Fixed Assets
will be determined by the Agent and the Co-Agent initially using a valuation
report to be furnished by Cascades to the Agent and the Co-Agent prior to the
grant of the related security.

(c)                                  If
at any time after Series 2 Charged Fixed Assets have become subject to the
Security, the Majority Lenders have reasonable grounds to believe that the
market value of the Series 2 Charged Fixed Assets has reduced below the
most recent amount determined pursuant to this Section 10.4, Cascades will
provide to the Agent and the Co-Agent, within 30 days from a request by the
Agent and the Co-Agent, a valuation report on such assets.

(d)                                 From
the date a valuation report is provided to the Agent and the Co-Agent and until
such time a new valuation report is so provided pursuant to this Section 10.4,
the market value of the Series 2 Charged Fixed Assets will be determined
for Borrowing Base purposes on the basis of the most recent valuation.

(e)                                  If
there has been a decrease in the market value of the Series 2 Charged
Fixed Assets or if a Credit Party proposes to sell assets which are part of the
Series 2 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 its current level in the event of a proposed
sale) the market value of the Series 2 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 Agent and the Co-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 Series 2 Charged Fixed Assets
component of the Borrowing Base.

10.5                        Fixed
Assets Valuation Report

Any valuation report to be provided to the Agent and
the Co-Agent pursuant to Sections 10.3 and 10.4 must be prepared by an independent
appraiser acceptable to the Majority Lenders and be accompanied by (and take
into account the contents of) an environmental review by a consultant
acceptable to the Majority Lenders.

 35
 

10.6                        Insurance

The Borrowers will cause the Agent (or its representative)
to be named as loss payee on all insurance policies relating to the property
and assets covered by the Security. Each policy covering immovable property and
equipment must contain a “mortgage clause”.

10.7                        Security
for Hedging Agreements

(a)                                  The
Agent will act as agent for the Lenders in their capacity as counterparties
under Hedging Agreements (hereafter, the “hedging lenders”) for all purposes of
the Security Documents, including the enforcement thereof. For such purposes,
the provisions of Articles 17, 18 and 19 (adapted accordingly) will also
apply to the hedging lenders. However, until termination and repayment in full
of the Facilities, the claims of the hedging lenders will not be taken into
account in the calculation of the Majority Lenders, including in any situation
where a decision regarding the Security has to be made by the Majority Lenders.

(b)                                 The
rights of the Lenders and the hedging lenders under the Security will rank pari passu, but only to the extent of an aggregate
maximum amount of $100,000,000 in respect of the claims of the hedging lenders
under Hedging Agreements (such amount to be calculated as provided in Section 10.7(c)). Any excess will rank after the rights of the Lenders under
the Facilities. Any proceeds of realization of the Security to be distributed
to the hedging lenders will be allocated among them pro rata
to their claims (irrespective of the dates of the related agreements or
transactions).

(c)                                  Each
hedging lender 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 include Hedging Agreements made
with a hedging lender who is (or was) a Lender at the time of the entering into
of such Hedging Agreement as well as Hedging Agreements made prior to this
Agreement with counterparties that are Lenders as at the date hereof. For
greater certainty, the Security will continue to secure the obligations of any
Borrower to any hedging lender under Hedging Agreements after termination and
repayment in full of the Facilities.

10.8                        Validity
and Contents of Security Documents

The Security must be valid, perfected and
first-ranking at all times with respect to all property intended to be covered
thereby, subject however to Permitted Liens. Each Security Document must be in
form and substance satisfactory to the Agent and remain valid and in force at
all times. The Security Documents will include such legal opinions, Lien
searches and certificates of location or surveys as the Agent may reasonably
require.

 36
 

10.9                        Exceptions
for certain Credit Parties

Notwithstanding any other provision of the Credit
Documents, but except as otherwise provided in agreements subsequent to the
date hereof, (i) the obligations of each of Cascades Europe and Cascades
Germany under the Credit Documents will exclude any obligation of any other
Credit Party, and (ii) none of Cascades Europe and Cascades Germany will be
required to guarantee the performance of any obligation of the other Borrowers
or to provide security over its inventory and accounts receivable.

10.10                 Release of the
Security

In the event of a disposition to a non-Credit Party
permitted by and complying with Section 13.3(b) of property subject to the
Security, the Agent will be authorized to release the Security with respect to
such property and to execute on behalf of the Lenders any instrument evidencing
such release.

11 - Representations and Warranties

Each of the Borrowers
represents and warrants that:

11.1                        Corporate
Existence and Capacity

Each of the Credit Parties

(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

Each Credit Party has all necessary power, authority
and legal right to execute, deliver and perform its obligations under the
Credit Documents to which it is a party, has duly authorized by all necessary
action the execution, delivery and performance of its obligations under such
Credit Documents and has duly and validly executed and delivered the Credit
Documents to which it is a party. The obligations of each Credit Party under
the Credit Documents to which it is a party constitute legal, valid and binding
obligations, enforceable against such Credit Party in accordance with their
terms.

 37
 

11.3                        No
Breach

The execution and delivery of the Credit Documents and
the performance by the Credit Parties of their respective obligations
thereunder will not conflict with, result in a breach of or require any consent
under, the constitutive documents or by-laws of any Credit Party, or any
applicable law or regulation in any material respect, or any order or decision
of any court or governmental authority or agency, or any agreement (including
the Cascades Indenture and the Norampac Indenture) to which any Credit Party is
a party or by which it or any of its property is bound.

11.4                        Approvals

Except for filings or registrations required to
perfect the Security, no authorization, approval or consent of, nor any filing
or registration with, any governmental or regulatory authority or agency, is
necessary for the execution, delivery or performance by each Credit Party of
the Credit Documents to which it is a party or to ensure the legality, validity
or enforceability thereof.

11.5                        Compliance
with Laws and Permits

Each of the Credit Parties is in substantial
compliance in all material respects with all laws and regulations applicable to
it and its business and assets, including Environmental Laws. Each of the
Credit Parties holds all material permits, licenses, approvals, consents and
other authorizations required under all such laws and regulations to own its
assets and to carry on its business as now being or as proposed to be conducted.

11.6                        Title
to Assets

The assets of the Credit Parties, taken as a whole,
are not subject to title defects or restrictions which could materially and
adversely impair their value or normal use. The Credit Parties own or have
rights of use for all property and assets (including intellectual property)
necessary to carry on their businesses.

11.7                        Litigation

There are no legal or arbitration proceedings at law
or in equity, or any proceedings by or before any governmental or regulatory
authority or agency, or, to the best of its knowledge, any claim or
investigation by any such authority or agency or under Environmental Laws, or
any labor disputes, now pending or, to the best of its knowledge, threatened
against any of the Credit Parties or any of their properties or rights that, if
adversely determined, could have a Material Adverse Effect.

11.8                        No
Default

No Default has occurred and is continuing.

 38
 

11.9                        Solvency

Each of the Credit Parties is Solvent.

11.10                 Taxes

Each of the Credit Parties has filed all income tax
returns and all other material tax returns and paid all taxes material in their
amount that are required to be filed or paid by them. The charges, accruals and
reserves on the books of the Credit Parties in respect of taxes and other
governmental charges are adequate.

11.11                 ERISA and
Pension Plans

Each Plan and each other pension or employee benefit
plan of any Credit Party is in compliance in all material respects with the
applicable provisions of ERISA, the US Revenue Code and any other applicable
law. No Credit Party has any material unfunded liability under any pension plan
on an ongoing or termination basis.

11.12                 Margin Stock
Restrictions

None of the Credit Parties is engaged principally, or
as one of its important activities, in the business of extending credit for the
purpose, of buying or carrying margin stock, and no part of the proceeds of any
extension of credit hereunder will be used to buy or carry any margin stock. “Margin
stock” herein has the meaning specified in Regulations U and X of the Board
of Governors of the Federal Reserve System of the United States.

11.13                 Investment
Company Act

None of the Credit Parties is an “investment company”,
or a company “controlled” by an “investment company”, within the meaning of the
Investment Company Act of 1940 of the
United States, as amended.

11.14                 Restriction on
Payments

Except as provided in the Cascades Indenture and the
Norampac Indenture, none of the Credit Parties is subject to any law,
regulation, agreement or legal impediment that prohibits, restricts or imposes
any condition upon the ability of a Credit Party to pay Distributions or to
make or repay loans or advances.

11.15                 Corporate
Structure and Location of Assets

The Corporate Structure Chart contains a complete and
correct list of all of the Subsidiaries of Cascades and indicates (i) the
jurisdiction of formation of each such entity, (ii) each Person holding
ownership interests in each such entity, (iii) the nature of the ownership
interests held by each such Person and the percentage of ownership represented
by such

 39
 

ownership interests,
(iv) the location of the registered and chief executive offices of each
Credit Party that must provide Security, (v) any prior name (including any
pre-merger corporate name) of each such Credit Party and (vi) the
jurisdictions where the material inventory and accounts receivable of each such
Credit Party are located.

11.16                 Financial
Statements and Fiscal Year

The last audited financial statements of Cascades are
complete and correct and fairly present the consolidated financial condition
and results of operation of Cascades as at their stated date, all in accordance
with GAAP. Except as reflected or disclosed in such financial statements, none
of the Credit Parties has on the date hereof any material contingent
liabilities, liabilities for taxes, unusual forward or long-term
commitments or unrealized or anticipated losses from any unfavorable
commitments that have not been disclosed in writing to the Agent and the
Lenders. The fiscal year of each of the Credit Parties ends on December 31
of each year.

11.17                 No Material
Change

There has been no Material Adverse Change since
September 30th,
2006.

11.18                 True and
Complete Disclosure

The information, reports, financial statements and
documents furnished or to be furnished by or on behalf of the Credit Parties to
the Agent or any Lender in connection with the negotiation, preparation,
execution, delivery or performance of the Credit Documents, when taken as a
whole, do not and will not contain any untrue statement of material fact or
omit to state any material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading.

12 - Affirmative Covenants

12.1                        General
Covenants

Each of the Borrowers will, and will cause each of the
other Credit Parties to:

(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 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

 40
 

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;

(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 the 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 Facilities  only
for the purposes permitted under this Agreement. The Borrowers will not use any
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 and the
Norampac Indenture.

12.3                        USA
Patriot Act

Promptly, following a request by any Lender, the
Borrowers will provide all documentation and other information which such
Lender may reasonably request in order to comply with its ongoing obligations
under applicable “know your customer” and anti-money laundering laws and
regulations, including the USA Patriot Act (Title III
of Pub. L. 107-56) (the “Act”). The Borrowers authorize any Lender to
request and obtain such information from any Person. The Borrowers also
acknowledge that they have been notified that each Lender is required under the
Act to obtain, verify and record information which allows such Lender to
identify each Borrower in accordance with the Act.

 41
 

12.4                        Further
Assurances

Each of the Borrowers will, and will cause each of the
other Credit Parties to, cooperate with the Lenders and the Agent and execute
such further instruments and documents as the Agent may reasonably request to
carry out to its satisfaction the transactions contemplated by the Credit
Documents.

12.5                        Representations
and Warranties

Each of the Borrowers will ensure that all
representations made in this Agreement are true and correct at all times,
except for representations made as of a date expressly stated therein.

13 - Negative Covenants

Each of the Borrowers
covenants and agrees that:

13.1                        Negative
Pledge

None of the Credit Parties will create, incur, assume
or suffer to exist any Lien on their present and future property or assets
except for the Security and Permitted Liens.

13.2                        Indebtedness

None of the Credit Parties other than Cascades will
create, incur, assume or permit to exist any Funded Debt other than:

(a)                                  indebtedness
to the Agent 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 same are not made for speculative purposes;

(e)                                  indebtedness
under the  Cascades Indenture and the Norampac Indenture;

(f)                                    indebtedness
up to aggregate outstanding amount for all Credit Parties other than Cascades
not exceeding at any time $45,000,000; and

(g)                                 existing
indebtedness not exceeding $25,000,000 specified in the list of permitted
indebtedness dated December 29, 2006 and delivered to the Lenders concurrently
with the execution of this Agreement (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.

 42

13.3                        Limitations
on Fundamental Changes

None of the Credit Parties will:

(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 a
Borrower or any other Credit Party provided that the following conditions are
fulfilled:

(i)                                     no
Default occurs as a result of the merger or amalgamation;

(ii)                                  if
any of the merging or amalgamating entity is a Borrower or a Designated
Subsidiary, the surviving or amalgamated entity executes and delivers to the
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)                               if
the surviving or amalgamated entity is a Credit Party other than a Borrower,
such Credit Party must be a Designated Subsidiary, if any of the merging or
amalgamating entities includes a Designated Subsidiary;

(iv)                              the
Agent has been provided prior to or concurrently with the merger or
amalgamation with satisfactory evidence of compliance with the requirements of
clauses (i), (ii) and (iii) including such financial information,
certificates, documents and legal or other professional opinions as the Agent
may reasonably request; and

(v)                                 a
seven-day prior notice is given to the 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 value of less than $15,000,000;

(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 other Person (other than pursuant to a Securitization or
Factoring Program), provided that the disposition is made for a

 43
  
 

consideration at least
equal to the fair market value of the related property, at least 75% of the
consideration is paid in cash and the available cash proceeds of the
disposition are used to permanently reduce the Facilities on a pro rata basis; 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 (or segregated for reinvestments pursuant to binding
commitments) in Credit Parties within 360 days from the date of the
disposition; and

(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
indebtedness of the Borrowers hereunder becomes repayable pursuant to a notice
given under Section 16.2 and provided that no account receivable subject
to a Securitization or Factoring Program (in whole or in part) will be included
in the Borrowing Base, it being understood however that accounts receivable
permitted to be disposed pursuant to this clause (iv) will be excluded
from the Security from the date of any such permitted disposition;

(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 the
date of this Agreement.

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 February 5, 2003 in non-Credit
Parties being in excess of 5% of Cascades’ Net Tangible Assets.

(b)                                 However,
the foregoing limitation will not apply to (i) investments funded from the
proceeds of any issue of equity made by Cascades after February 5, 2003,
(ii) temporary cash or cash equivalent investments made for cash
management

 44
  
 

purposes, and
(iii) loans and advances to employees in an aggregate amount not exceeding
$5,000,000 at any time.

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,
2007 to non-Credit Parties were to exceed 50% of the adjusted consolidated net
income of Cascades for the period from January 1, 2007 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 up to the portion of same which is not used to finance the
Transaction or fund investments in non-Credit Parties, and (ii) $25,000,000.

(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 $25,000,000 per fiscal year.

13.6                        Transactions
with Related Parties

None of the Credit
Parties will engage in any material transactions with any related party on
terms and conditions not less favourable in any material respect to the
relevant Credit Party than those that could be obtained on an arm’s length
basis from unrelated third parties, provided that the foregoing requirement
will not apply to transactions among the Credit Parties.  For the purposes of this Section 13.6,
(i) related party means, with respect to a Person, another Person that
Controls or is Controlled by or is under common Control with the relevant
Person, and (ii) the definition of Control must be read replacing 50% by
20%.

14 - Financial Ratios

14.1                        Funded
Debt to Capitalization Ratio

Cascades must maintain at all times, on an adjusted
consolidated basis, a Funded Debt to Capitalization Ratio of not more than
(i) 65% until June 30, 2008; and (ii) 60% thereafter.

14.2                        Interest
Coverage Ratio

Cascades must maintain at all times,  on an adjusted consolidated basis, an Interest Coverage
Ratio not less than (i) 2.25:1.00 until December 31, 2007 and (ii) 2.50:1.00
thereafter.

 45
  
 

15 - Reporting Requirements

15.1                        Annual
Reporting  

The Borrowers will deliver to the Agent, for
distribution to the Lenders, as soon as possible and, in any event, within
90 days after the end of each fiscal year of the Borrowers:

(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 fixed assets subject to the Security.

15.2                        Quarterly
Reports

The Borrowers will deliver to the Agent, for
distribution to the Lenders, as soon as possible and, in any event within
60 days after the end of each fiscal quarter (including the fourth
quarter):

(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 fixed assets subject to the Security;

(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 ”E”; and

(f)                                    copy
of any filing with securities regulators.

15.3                        ERISA

Cascades US will inform the Agent as soon as
possible, and in any event within 10 days after it knows or has reason to
believe that any of the events or conditions specified below has

 46
  
 

occurred or exists (and
will provide a copy of any report or notice required to be filed with or given
to PBGC:

(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

The Borrowers will promptly notify the Agent of any
Default and deliver to the Agent any auditor letter highlighting issues or
deficiencies that, if not addressed or corrected, could reasonably result in a
Material Adverse Change. The Borrowers will also furnish the Agent all
information, documents and records and allow any enquiry, study, audit or
inspection that the Agent may reasonably request in connection with the
business, financial condition, property, assets or prospects of the Credit
Parties, or to verify compliance with the obligations of any of the Credit
Parties under any Credit Document.

15.5                        Hedging
Agreements, Securitization and Factoring

(a)                                  The
Borrowers will provide to the Agent, concurrently with the compliance
certificates required to be delivered pursuant to Section 15.2, a report
listing all outstanding Hedging Agreements 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
the 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).

 47
  
 

16 - Events of Default and Remedies

16.1                        Events
of Default

The occurrence of one or more of the following events
constitutes an event of default (“Event of Default”) under the Credit
Documents:

(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 an Hedging Agreement with a Lender;

(b)                                 anyone
or more of the Credit Parties (i) fails or fail to make a payment or payments
exceeding in the aggregate $30,000,000 in respect of any obligation or
obligations (other than the Facilities), when and as due, or (ii) is or
are in default under the Cascades Indenture or the Norampac 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 14 and Sections 15.1 and 15.2
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;

(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 $30,000,000 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

 48
  
 

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 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

If an Event of Default occurs and is continuing, the
Agent may, on giving a notice to the Borrowers take any one or more of the
following actions:

(a)                                  terminate
the right of the Borrowers to use the Facilities;

(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; and

(c)                                  exercise
all of the rights and remedies of the Agent and the Lenders including their
rights and remedies under any Credit Document;

provided that all indebtedness of the Borrowers under the Credit
Documents will automatically become due and payable without any notice upon the
occurrence of any Event of Default specified in Section 16.1(f) or
Section 16.1(g).

17 - Equality Among Lenders

17.1                        Distribution
among Lenders

Any payment received by the Agent on account of the
Facilities, including any amount received through the exercise of any right of
set-off and the enforcement of any Security, must be distributed among
the Lenders proportionately to the amount of the indebtedness owing to them
hereunder and which is then payable. Any such distribution must be made
forthwith but no later than the Business Day following the date of receipt of
the payment.

17.2                        Other
Security

No Lender may take any Security or Lien in connection
with the Facilities or Hedging Agreements except in accordance with
Article 10.

 49
  
 

17.3                        Direct
Payment to a Lender

Subject to the other provisions of this Agreement
permitting direct payment to Lenders, if a Lender receives, otherwise than
through the Agent, a payment on account of the Facility (including any payment
received through the exercise of any right of set-off), such Lender will
remit the payment to the Agent, for distribution among all Lenders.

17.4                        Adjustments

If, at any time, the amount of Borrowings owing to a
Lender under any Facility compared to the aggregate amount of all outstanding
Borrowings under such Facility is not proportional to such Lender’s Commitment
under the Facility, expressed as a percentage, the Agent may (and will, after
termination of the Facilities) make from time to time such adjustments as may
be necessary in order that the outstanding Borrowings under the applicable
Facility are in the proportions of the Commitments of the Lenders under such
Facility and the Lenders will make all such payments as the Agent may direct to
give full effect to such adjustments. The Borrowers will be bound by such
adjustments.

18 - The Agent, the Co-Agent and The Lenders

18.1                        Appointment
of the Agent and the Co-Agent

Each Lender irrevocably appoints the Agent and the
Co-Agent to exercise on its behalf the rights and powers delegated to the Agent
or the Co-Agent (as applicable) hereunder and authorizes each of the Agent and
the Co-Agent to take any action necessary for the performance of its duties.
Whenever acting in such capacity, the Agent or the Co-Agent (as applicable)
represents and binds all Lenders.

18.2                        Restrictions
on the Powers of the Lenders

No Lender may exercise individually the rights and
powers delegated to the Agent or the Co-Agent, including the enforcement of
remedies after the occurrence of an Event of Default.

18.3                        Security
Documents

The Agent is authorized to hold any Security on behalf
of the Lenders and to execute in their name any Security Document. For greater
certainty, the Agent is authorized to act as representative (fondé de pouvoir) of the Lenders (notwithstanding that the
Agent is also a Lender) for the purposes of any hypothec granted by any Credit
Party pursuant to article 2692 of the Civil Code of Quebec
to secure debentures or similar instruments issued for the benefit of the
Lenders pursuant to the Security.

 50
  
 

18.4                        Action
by the Agent or Co-Agent

The duties of each of the Agent and the Co-Agent are
limited to those specifically conferred upon it in the Credit Documents. Except
as otherwise provided, the Agent or the Co-Agent is not required to
exercise any discretion or to take any action under the Credit Documents,
unless it has been so required by the Majority Lenders (or by all Lenders where
the consent of all Lenders is required). In no event, will the Agent or the
Co-Agent be required to exercise any right or power, if in its judgment, doing
so would contravene any Credit Document or applicable law or where the Agent or
the Co-Agent determines that the indemnity provided in Section 18.6 may
not be available or adequate.

18.5                        Enforcement
Measures

Any legal proceedings and enforcement measures on
behalf of the Lenders will be taken by the Agent; at the Agent’s request, all
Lenders must join the Agent in such proceedings or enforcement measures.

18.6                        Indemnification

Each Lender will indemnify each of the Agent and the
Co-Agent (and their directors, officers, employees and agents), proportionately
to its respective Commitment, from and against all losses suffered or
liabilities or expenses incurred by the Agent or the Co-Agent of any kind or
nature when exercising its rights and powers, save any losses, liabilities or
expenses resulting from the wilful misconduct or gross negligence of the Agent
or the Co-Agent (or their directors, officers, employees or agents).

18.7                        Reliance
on Reports

The Agent will be entitled to make any determination
of the Borrowing Base and of any Applicable Margin or Rate based on the most
recent reports or certificates furnished by any Borrower in relation to such
matters.

18.8                        Liability
of the Agent or the Co-Agent

The Agent or the Co-Agent (as applicable) will only be
liable to the Lenders for willful misconduct or gross negligence, and will have
no liability as a consequence of a failure of any Person to fulfil its
obligations or any action authorized by the Majority Lenders (or by all Lenders
where the consent of all Lenders is required). The Agent or the Co-Agent (as
applicable) will be entitled to assume that there exists no Default, unless the
Agent has been notified in writing of the existence of a Default.

18.9                        Liability
of Lenders

Each Lender acknowledges that it has been and will
continue to be solely responsible for making its own independent appraisal and
investigation of the financial condition of the

 51
  
 

Borrowers and any other
Credit Party, and for the assessment of the risks arising from the Facilities.
No Lender may rely on the Agent or the Co-Agent in this regard nor will the
Agent or the Co-Agent be responsible for ensuring the validity or enforceability
of any Credit Document.

18.10                 Rights
of the Agent or Co-Agent as Lender

In its capacity as Lender, each of the Agent and the
Co-Agent has the same rights as the other Lenders and may exercise such rights
independently of its role as Agent or Co-Agent; unless the context otherwise
requires, the expression “Lender” also refers to the Lender which is the Agent
or Co-Agent.

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 by the Credit Documents or the Hedging Agreements.  The Lenders may provide such information on a
confidential and need-to-know basis to any financial institution which is an
assignee or a prospective assignee of Commitments or a participant in the
Facilities.

(b)                                 Each
of the Agent and the Co-Agent may disclose to any agency or organization that
assigns standard identification numbers to credit facilities such basic information
describing the Facilities 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, each of the Agent and the Co-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.

18.12                 Competition

Subject to the other provisions of this Agreement, the
Agent, the Co-Agent and each of the Lenders may enter into other transactions
with any Credit Party and they are not required to notify each other of such
transactions.

18.13                 Successor
Agent or Co-Agent

Each of the Agent and the Co-Agent may resign by
giving notice thereof to the Borrowers and to the Lenders. Each of the Agent
and the Co-Agent may also be replaced by the Majority Lenders following its
failure to perform its obligations under this Agreement. The resignation or
replacement of the Agent or the Co-Agent will be effective 30 days after
the appointment by the Majority Lenders of a successor Agent or the Co-Agent
from among the

 52
  
 

Lenders. Promptly after
being so appointed, any successor Agent or the Co-Agent must give notice
thereof to the Borrowers and the Lenders. From the effective date of its
appointment, any successor Agent or Co-Agent will be vested with all the
rights, powers and duties of the Agent or Co-Agent under the Credit Documents.

19 - Decisions, Waivers and Amendments

19.1                        Amendments
and Waivers by the Majority Lenders

Subject to Section 19.2, the provisions of the Credit
Documents may be amended or waived, and consents thereunder may be given, only
by an instrument signed by the Agent and the Co-Agent, with the approval of the
Majority Lenders, and in the case of an amendment, also signed by the relevant
Credit Party.

19.2                        Amendments
and Waivers by Unanimous Approval

Except as otherwise expressly provided in this
Agreement, an amendment, waiver or consent that relates to any of the following
matters must be made or given by an instrument signed by the Agent and the
Co-Agent, with the prior consent of all Lenders, and in the case of an
amendment, also signed by the relevant Credit Party:

(a)                                  the
extension of the maturity date of any Facility;

(b)                                 any
increase in the amount of any Facility or in the Commitment of any Lender;

(c)                                  any
postponement of the due date, any subordination or any reduction of any amount
payable hereunder;

(d)                                 the
reduction of any interest rate, discount rate or fee;

(e)                                  the
release or subordination of any portion of the Security; and

(f)                                    the
definition of the “Majority Lenders” and the provisions of Section 9.1,
Section 13.1, Sections 16.1(a), 16.1(f) and 16.1(g), Article 17,
Article 18, Article 19 and Section 20.3.

19.3                        Amendments
relating to the Agents or an Issuing or Swingline Lender

No amendment affecting the rights and obligations of
the Agent, the Co-Agent or an Issuing Lender or a Swingline Lender may be made
without the consent of the Agent, the Co-Agent or such Issuing Lender or a
Swingline Lender (as applicable).

 53
  
 

20 - Miscellaneous

20.1                        Books
and Accounts

The Agent will keep books and accounts evidencing the
transactions made pursuant to this Agreement. Absent manifest error, such books
and accounts will be deemed to represent accurately such transactions and the
indebtedness of the Borrowers.

20.2                        Determination

In the absence of manifest error, any determination
made by the Agent of the amounts payable hereunder will be conclusive and
binding upon the Lenders and the Borrowers.

20.3                        Prohibition
on Assignment by Borrowers

No Borrower may assign its rights under this
Agreement.

20.4                        Assignments
and Participations

(a)                                  A
Lender (the “assignor”) may assign, in whole or in part, its Commitment under
the Facilities, 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 made in an instrument
substantially in the form of Schedule ”F”. The assignor must pay to the
Agent, for its own account, an assignment fee of $3,500. 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 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) in the case of the assignment of a Commitment
under the Revolving Facility, 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
Subsidiaries 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 Agent, 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

 54
  
 

not be unreasonably
withheld). However, no such consent will be required if the assignee is another
Lender or an Affiliate of the assignor.

(e)                                  Sections 20.4(a)
to (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 the 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 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 Revolving 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
Revolving 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 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,
Citibank, N.A., Canadian Branch, BNP Paribas (Canada), The
Toronto-Dominion Bank, JPMorgan Chase Bank, N.A., Rabobank
Nederland, Canadian Branch and Wachovia Capital Finance Corporation
(Canada) designates as its designated

 55
  
 

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

At the request of a Lender, any Borrower will execute
in favour of such Lender a note evidencing its indebtedness to such Lender
under this Agreement.

20.7                        Costs
and Expenses

The Borrowers must pay on demand the amount of all
reasonable costs and expenses (including legal and other professional fees)
incurred by the Agent and the Co-Agent in connection with the implementation of
the Facilities and the preparation, negotiation, execution, syndication and
administration of the Credit Documents, as well as the reasonable costs and
expenses incurred by the Agent or the Lenders in connection with the
enforcement of, or the preservation of any rights under, any Credit Document.

20.8                        No
Waiver

The omission by the Agent or any Lender to exercise
any of its rights will not be deemed to be a waiver of the exercise of any such
right subsequently. The omission by the Agent or any Lender to notify any
Credit Party of the occurrence of a Default will not be deemed to be a waiver
of the right of the Agent or of such Lender to avail itself of such Default.

20.9                        Irrevocability
of Notices of Borrowings

No Borrower may cancel a notice of Borrowing,
conversion, renewal, reduction or prepayment. The Borrower concerned must
indemnify the Lenders in respect of any loss resulting from its failure to act
in accordance with such notice.

20.10                 Set-off

If an Event of Default occurs and is continuing, the
Agent and each Lender are authorized to set off and to apply any and all
deposits held for any Credit Party against any amount due and payable by any
Credit Party under the Credit Documents.

 56
  
 

20.11                 Indemnification

(a)                                  If
any law, regulation, administrative decision or guideline or decision of a
Court (i) increases the cost of the Facilities for any Lender or
(ii) reduces the income receivable by any Lender from the Facilities
(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.

(b)                                 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.

(c)                                  The
Borrowers must indemnify the Agent, the Co-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 wilfull misconduct of such indemnitee or
from a breach in bad faith by such indemnitee of its obligations under a Credit
Document.

20.12                 Mitigation
of costs

Each Lender will use its best efforts to avoid any
additional cost or reduction of income for which a Borrower is required to
indemnify such Lender pursuant to Section 20.11(a). However, nothing
herein will require any Lender to take any action which would cause such Lender
to incur any expense which would not materially reduce any amount to be
received pursuant to Section 20.11(a) or which the Lender determines in
its sole judgment to be inadvisable for regulatory, competitive or internal
management reasons. The Borrowers will

 57
  
 

reimburse any Lender for
any expense incurred by such Lender in taking any action pursuant to this
Section 20.12.

20.13                 Corrections
of Errors

The Agent is authorized to correct any typographical
error or other error of an editorial nature in this Agreement and to substitute
such corrected text in the counterparts of this Agreement, provided that such
corrections do not modify the meaning or the interpretation of this Agreement
and provided that copies of the corrected texts are remitted to each party.

20.14                 Communications

The Agent is entitled to rely in its dealings with any
Borrower upon any instruction or notice which the Agent believes in good faith
to have been given by a Person authorized to give such instruction or notice or
to make the applicable transaction.

20.15                 Counterparts

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

20.16                 Waiver
of Jury Trial

EACH OF THE BORROWERS, THE AGENT AND THE LENDERS
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND
ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR THE OTHER CREDIT DOCUMENTS.

21 - Notices

21.1                        Sending
of Notices

Unless otherwise provided, any notice to be given to a
party in connection with this Agreement will be given in writing and will be
given by personal delivery, by a reputable delivery service, by telecopier or
(except for any notice pursuant to Article 16) by electronic mail,
addressed to the recipient at its address specified in Schedule ”G” hereof
or at such other address as may be notified by such party to the others
pursuant to this Article.

21.2                        Receipt
of Notices

Any notice given by personal delivery or by a delivery
service will be conclusively deemed to have been given at the time of such
delivery and, if given by telecopier or by electronic mail, on the day of
transmittal if before 3:00 p.m. on a Business Day, or on the following
Business Day if such transmission occurs on a day which is not a Business Day
or

 58
  
 

after 3:00 p.m. on a
Business Day. If the telecopy or electronic transmission system suffers any
interruptions by way of a strike, slow-down, a force
majeure, or any other cause, a party giving a notice must do so
using another means of communication not affected by the disruption.

 59
  

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

	
  

  	
   

  	
   

  	
   

  	
   

  	
  CASCADES INC.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Per:

  	
  (s) Christian Dubé

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Per:

  	
  (s) Allan Hogg

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  CASCADES USA INC.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Per:

  	
  (s) Christian Dubé

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Per:

  	
  (s) Allan Hogg

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  CASCADES EUROPE SAS

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Per:

  	
  (s) Christian Dubé

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  CASCADES ARNSBERG GMBH

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Per:

  	
  (s) Christian Dubé

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Per:

  	
  (s) Allan Hogg

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  THE BANK OF NOVA
  SCOTIA, as Agent

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Per:

  	
  (s) David Angel

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  NATIONAL BANK OF CANADA, as
  Co-Agent

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Per:

  	
  (s) Dominic Albanese

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Per:

  	
  (s) Roch Ledoux

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  (the names and signatures of
  the Lenders are on the next page)

  

 

[Signature
page – Credit Agreement]

 60
 

 

	
  Commitment Amounts

  	
   

  	
  Lenders

  
	
  

  	
   

  	
   

  
	
  1) Revolving Facility:

  	
   

  	
  National Bank of Canada

  
	
  Tranche A:

  	
  $70,000,000

  	
   

  	
   

  	
   

  
	
  Tranche B:

  	
  $10,500,000

  	
   

  	
   

  	
  per :

  	
  (s) Dominic Albanese

  
	
  Tranche C:

  	
  $10,500,000

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
  per:

  	
  (s) Roch Ledoux

  
	
  2) Additional Revolving

  	
   

  	
   

  
	
  Facility:

  	
  $13,999,999

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
  National Bank of Canada, New
  York Branch

  
	
  3) Term Loan:

  	
  $75,000,000

  	
   

  	
   

  	
  (in respect of Tranche B)

   

  
	
  

  	
   

  	
  per :

  	
  (s) Jeffrey Forgach

  
	
  Total:

  	
  $180,000,000

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
  per:

  	
  (s) Vincent Lima

  
	
   

  	
   

  	
   

  
	
  

  	
   

  	
   

  
	
  1) Revolving Facility:

  	
   

  	
  The Bank of Nova Scotia

  
	
  Tranche A:

  	
  $50,000,000

  	
   

  	
   

  	
   

  
	
  Tranche B:

  	
  $7,500,000

  	
   

  	
   

  	
  per :

  	
  (s) David Angel

  
	
  Tranche C:

  	
  $7,500,000

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
  per:

  	
  (s) David Loewen

  
	
  2) Additional Revolving

  	
   

  	
   

  
	
  Facility:

  	
  $10,000,000

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
  The Bank of Nova Scotia,
  Atlanta Agency (in respect of Tranche B)

  
	
  3) Term Loan:

  	
  $25,000,000

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
  per:

  	
  (s) Chris J. Allen

  
	
  Total:

  	
  $100,000,000

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  1) Revolving Facility:

  	
   

  	
   

  
	
  Tranche A:

  	
  $66,666,668

  	
   

  	
   

  	
   

  
	
  Tranche B:

  	
  $10,000,000

  	
   

  	
   

  	
  Canadian Imperial Bank of Commerce

  
	
  Tranche C:

  	
  $10,000,000

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
  per :

  	
  (s) Jens Paterson

  
	
  2) Additional Revolving

  	
   

  	
   

  
	
  Facility:

  	
  $13,333,332

  	
   

  	
   

  	
  per:

  	
  (s) Steve Nishimura

   

  
	
  3) Term Loan:

  	
  $0

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
   

  
	
  

  	
   

  	
  CIBC Inc., as designated
  Lender pursuant to

  
	
  Total:

  	
  $100,000,000

  	
   

  	
   

  	
  Section 20.5 with respect to Tranche B

   

  
	
  

  	
   

  	
  per :

  	
  (s) Kathryn G. Casparian

  
							

 

[Signature
page – Credit Agreement]

 61
 

 

	
  Commitment Amounts

  	
   

  	
  Lenders

  
	
  1) Revolving Facility:

  	
   

  	
  Caisse centrale Desjardins

  
	
  Tranche A:

  	
  $53,333,333

  	
   

  	
   

  	
   

  
	
  Tranche B:

  	
  $8,000,000

  	
   

  	
   

  	
  per :

  	
  (s) France Joyal

  
	
  Tranche C:

  	
  $8,000,000

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
  per:

  	
  (s) Raymond Trempe

  
	
  2) Additional Revolving

  	
   

  	
   

  
	
  Facility:

  	
  $10,666,667

   

  	
   

  	
   

  	
   

  
	
  3) Term Loan:

  	
  $0

  	
   

  	
   

  	
  Caisse centrale Desjardins US Branch,
  as

  
	
  

  	
   

  	
  designated Lender pursuant to Section 20.5 with

  
	
  Total:

  	
  $80,000,000

  	
   

  	
   

  	
  respect to Tranche B

   

  
	
  

  	
   

  	
  per:

  	
  (s) Christian Roy

  
	
   

  	
   

  	
   

  
	
  1) Revolving Facility:

  	
   

  	
  Bank of Montreal

  
	
  Tranche A:

  	
  $33,333,333

  	
   

  	
   

  	
   

  
	
  Tranche B:

  	
  $5,000,000

  	
   

  	
   

  	
  per :

  	
  (s) Bruno Lemay

  
	
  Tranche C:

  	
  $5,000,000

   

  	
   

  	
   

  	
   

  
	
  2) Additional Revolving

  	
   

  	
   

  
	
  Facility:

  	
  $6,666,667

   

  	
   

  	
   

  	
   

  
	
  3) Term Loan:

  	
  $0

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
  Bank of Montreal, Chicago
  Branch

  
	
  Total:

  	
  $50,000,000

  	
   

  	
   

  	
  (in respect of Tranche B)

   

  
	
  

  	
   

  	
  per :

  	
  (s) Christina Burden

  

 

[Signature
page – Credit Agreement]

 62
 

 

	
  Commitment Amounts

  	
   

  	
  Lenders

  
	
  1) Revolving Facility:

  	
   

  	
  BNP Paribas (Canada)

  
	
  Tranche A:

  	
  $33,333,333

  	
   

  	
   

  	
   

  
	
  Tranche B:

  	
  $5,000,000

  	
   

  	
   

  	
  per :

  	
  (s) Enrico Lamorte

  
	
  Tranche C:

  	
  $5,000,000

  	
   

  	
   

  	
     

  
	
  

  	
   

  	
  per:

  	
  (s) Edouard Sinor

  
	
  2) Additional Revolving

  	
   

  	
   

  
	
  Facility:

  	
  $6,666,667

  	
   

  	
   

  	
  BNP Paribas, as designated
  Lender pursuant to

  
	
  

  	
   

  	
  Section 20.5 with respect to Tranche B and
  Tranche  C

  
	
  3) Term Loan:

  	
  $0

  	
   

  	
   

  	
  

  
	
  Total:

  	
  $50,000,000

  	
   

  	
   

  	
  per :

  	
  (s) Nanette Baudon

  
	
  

  	
   

  	
   

  
	
  

  	
   

  	
  per:

  	
  (s) Angela B. Arnold

  
	
   

  	
   

  	
   

  
	
  1) Revolving Facility:

  	
   

  	
  Comerica Bank, Canada Branch

  
	
  Tranche A:

  	
  $33,333,333

  	
   

  	
   

  	
   

  
	
  Tranche B:

  	
  $5,000,000

  	
   

  	
   

  	
  per :

  	
  (s) Omer Ahmed

  
	
  Tranche C:

  	
  $5,000,000

   

  	
   

  	
   

  	
   

  
	
  2) Additional Revolving

  	
   

  	
   

  
	
  Facility:

  	
  $6,666,667

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
  Comerica Bank

  
	
  3) Term Loan:

  	
  $0

  	
   

  	
   

  	
  (in respect of Tranche B and Tranche C)

   

  
	
  Total:

  	
  $50,000,000

  	
   

  	
   

  	
  per:

  	
  (s) James Lentner

  
	
   

  	
   

  	
   

  
	
  1) Revolving Facility:

  	
   

  	
  The Toronto-Dominion Bank

  
	
  Tranche A:

  	
  $33,333,333

  	
   

  	
   

  	
   

  
	
  Tranche B:

  	
  $5,000,000

  	
   

  	
   

  	
  per :

  	
  (s) Yves Bergeron

  
	
  Tranche C:

  	
  $5,000,000

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
  per:

  	
  (s) Serge Cloutier

  
	
  2) Additional Revolving

  	
   

  	
   

  
	
  Facility:

  	
  $6,666,667

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
  Toronto Dominion (Texas) LLC,
  as designated

  
	
  3) Term Loan:

  	
  $0

  	
   

  	
   

  	
  Lender pursuant to Section 20.5 with respect to

  
	
  

  	
   

  	
  Tranche B

  
	
  Total:

  	
  $50,000,000

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
  per :

  	
  (s) Debbi L. Brito

  
								

 

[Signature page – Credit Agreement]

 63
 

 

	
  Commitment Amounts

  	
   

  	
  Lenders

  
	
  1) Revolving Facility:

  	
   

  	
  Royal Bank of Canada

  
	
  Tranche A:

  	
  $23,333,333

  	
   

  	
   

  	
   

  
	
  Tranche B:

  	
  $3,500,000

  	
   

  	
   

  	
  per :

  	
  (s) Rod Smith

  
	
  Tranche C:

  	
  $3,500,000

  	
   

  	
   

  	
   

  
	
     

  	
   

  	
   

  
	
  2) Additional Revolving

  	
   

  	
   

  
	
  Facility:

  	
  $4,666,667

  	
   

  	
   

  	
   

  
	
     

  	
   

  	
   

  
	
  3) Term Loan:

  	
  $0

  	
   

  	
   

  	
  per:

  	
  (s) Dustin Craven

  
	
     

  	
   

  	
   

  
	
  Total:

  	
  $35,000,000

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  1) Revolving Facility:

  	
   

  	
  Deutsche Bank AG, Canada Branch

  
	
  Tranche A:

  	
  $16,666,667

  	
   

  	
   

  	
  per :

  	
  (s) Robert A. Johnston

  
	
  Tranche B:

  	
  $2,500,000

  	
   

  	
   

  	
   

  
	
  Tranche C:

  	
  $2,500,000

  	
   

  	
   

  	
  per:

  	
  (s) Marcellus Leung

  
	
     

  	
   

  	
   

  
	
  2) Additional Revolving

  	
   

  	
   

  
	
  Facility:

  	
  $3,333,333

  	
   

  	
   

  	
  Deutsche Bank AG, New York
  Branch, with

  
	
  

  	
   

  	
  respect to Tranche B and Tranche C

  
	
  3) Term Loan:

  	
  $0

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
  per :

  	
  (s) Carin Keegan

  
	
  Total:

  	
  $25,000,000

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
  per:

  	
  (s) Omayra Laucella

  
	
   

  	
   

  	
   

  
	
  1) Revolving Facility:

  	
   

  	
  JPMorgan Chase Bank, N.A., Toronto Branch

  
	
  Tranche A:

  	
  $16,666,667

  	
   

  	
   

  	
   

  
	
  Tranche B:

  	
  $2,500,000

  	
   

  	
   

  	
  per :

  	
  (s) Drew McDonald

  
	
  Tranche C:

  	
  $2,500,000

  	
   

  	
   

  	
   

  
	
     

  	
   

  	
   

  
	
  2) Additional Revolving

  	
   

  	
  JPMorgan Chase Bank, N.A.,
  with respect to

  
	
  Facility:

  	
  $3,333,333

  	
   

  	
   

  	
  Tranche B

  
	
     

  	
   

  	
   

  
	
  3) Term Loan:

  	
  $0

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
  per :

  	
  (s) Drew McDonald

  
	
  Total:

  	
  $25,000,000

  	
   

  	
   

  	
   

  
									

 

[Signature page – Credit
Agreement]

 64
 

 

	
  Commitment Amounts

  	
   

  	
  Lenders

  
	
  1) Revolving Facility:

  	
   

  	
  Société Générale (Canada Branch)

  
	
  Tranche A:

  	
  $16,666,667

  	
   

  	
   

  	
   

  
	
  Tranche B:

  	
  $2,500,000

  	
   

  	
   

  	
  per :

  	
  (s) Pierre Matuszewski

  
	
  Tranche C:

  	
  $2,500,000

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
  per;

  	
  (s) Vincent Gonzalez

  
	
  2) Additional Revolving

  	
   

  	
   

  
	
  Facility:

  	
  $3,333,333

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
  Société Générale, New York
  Branch, with respect

  
	
  3) Term Loan:

  	
  $0

  	
   

  	
   

  	
  to Tranche B

  
	
     

  	
   

  	
     

  
	
  Total:

  	
  $25,000,000

  	
   

  	
   

  	
  per :

  	
  (s) Nigel Elvey

  
	
   

  	
   

  	
   

  
	
  1) Revolving Facility:

  	
   

  	
  Bank of America, N. A., Canada
  Branch

  
	
  Tranche A:

  	
  $13,333,333

  	
   

  	
   

  	
   

  
	
  Tranche B:

  	
  $2,000,000

  	
   

  	
   

  	
  per :

  	
  (s) Medina Sales de Andrade

  
	
  Tranche C:

  	
  $2,000,000

  	
   

  	
   

  	
     

  
	
     

  	
   

  	
     

  
	
  2) Additional Revolving

  	
   

  	
  Bank of America, N. A., with
  respect to Tranche B

  
	
  Facility:

  	
  $2,666,667

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
  per :

  	
  (s) Michael L. Letson, Jr.

  
	
  3) Term Loan:

  	
  $0

  	
   

  	
   

  	
   

   

  
	
  Total:

  	
  $20,000,000

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  1) Revolving Facility:

  	
   

  	
  Citibank, N.A., Canadian branch

  
	
  Tranche A:

  	
  $13,333,333

  	
   

  	
   

  	
   

  
	
  Tranche B:

  	
  $2,000,000

  	
   

  	
   

  	
  per :

  	
  (s) Isabelle Côté

  
	
  Tranche C:

  	
  $2,000,000

  	
   

  	
   

  	
     

  
	
     

  	
   

  	
     

  
	
  2) Additional Revolving

  	
   

  	
  Citicorp North America, Inc.,
  as designated

  
	
  Facility:

  	
  $2,666,667

  	
   

  	
   

  	
  Lender pursuant to Section 20.5 with respect to

  
	
  

  	
   

  	
  Tranche B

  
	
  3) Term Loan:

  	
  $0

  	
   

  	
   

  	
  

  
	
  Total:

  	
  $20,000,000

  	
   

  	
   

  	
  per :

  	
  (s) John W. Coons

  
									

 

[Signature page – Credit
Agreement]

 65
 

 

	
  Commitment Amounts

  	
   

  	
  Lenders

  
	
  

  	
   

  	
   

  
	
  1) Revolving Facility:

  	
   

  	
  Rabobank Nederland, Canadian
  Branch

  
	
  Tranche A:

  	
  $13,333,333

  	
   

  	
   

  	
   

  
	
  Tranche B:

  	
  $2,000,000

  	
   

  	
   

  	
  per :

  	
  (s) Rommel J. Domingo

  
	
  Tranche C:

  	
  $2,000,000

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
  per:

  	
  (s) Anthony H. Liang

  
	
  2) Additional Revolving

  	
   

  	
   

  
	
  Facility:

  	
  $2,666,667

  	
   

  	
   

  	
  Cooperatieve Centrale Raiffeissen-

  
	
  

  	
   

  	
  Boerenleenbank B. A. “Rabobank Nederland”

  
	
  3) Term Loan:

  	
  $0

  	
   

  	
   

  	
  New York Branch, as designated
  Lender pursuant

  
	
  

  	
   

  	
  to Section 20.5 with respect to Tranche B

  
	
  Total:

  	
  $20,000,000

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
  per :

  	
  (s) Rebecca O. Morrow

   

  
	
  

  	
   

  	
  per:

  	
  (s) Ian Reece

  
	
   

  	
   

  	
   

  
	
  1) Revolving Facility:

  	
   

  	
  Wachovia Capital Finance Corporation (Canada)

  
	
  Tranche A:

  	
  $13,333,333

  	
   

  	
   

  	
   

  
	
  Tranche B:

  	
  $2,000,000

  	
   

  	
   

  	
   

  
	
  Tranche C:

  	
  $2,000,000

  	
   

  	
   

  	
  per :

  	
  (s) Carmela Massari

  
	
     

  	
   

  	
   

  
	
  2) Additional Revolving

  	
   

  	
   

  
	
  Facility:

  	
  $2,666,667

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
  Wachovia Bank, National Association,
  as

  
	
  3) Term Loan:

  	
  $0

  	
   

  	
   

  	
  designated Lender pursuant to Section 20.5 with

  
	
  

  	
   

  	
  respect to Tranche B and Tranche C.

  
	
  Total:

  	
  $20,000,000

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
  per :

  	
  (s) John M. Seckel

  
							

 

[Signature page – Credit
Agreement]

 66
 

SCHEDULE
“ A ”

APPLICABLE MARGINS OR
RATES

Revolving
Facility

	
  Rating

  	
   

  	
  Prime, US Base

  	
   

  	
  Acceptance Fee / Libor

  European Rate/L/C Fee

  	
   

  	
  Stand-By Fee

  
	
  BBB/Baa2 or Higher

  	
   

  	
  0 bps

  	
   

  	
  65 bps

  	
   

  	
  13 bps

  
	
  BBB-/Baa3

  	
   

  	
  0 bps

  	
   

  	
  75 bps

  	
   

  	
  15 bps

  
	
  BB+/Bal

  	
   

  	
  0 bps

  	
   

  	
  95 bps

  	
   

  	
  20 bps

  
	
  BB/Ba2

  	
   

  	
  25 bps

  	
   

  	
  125 bps

  	
   

  	
  25 bps

  
	
  BB-/Ba3 or Lower

  	
   

  	
  50 bps

  	
   

  	
  150 bps

  	
   

  	
  35 bps

  

 

Term
Loan

	
  Rating

  	
   

  	
  Prime, US Base

  	
   

  	
  Acceptance Fee / Libor

  
	
  BBB-/Baa3 or Higher

  	
   

  	
  0 bps

  	
   

  	
  87.5 bps

  
	
  BB+/Bal

  	
   

  	
  7.5 bps

  	
   

  	
  107.5 bps

  
	
  BB/Ba2

  	
   

  	
  37.5 bps

  	
   

  	
  137.5 bps

  
	
  BB-/Ba3 or Lower

  	
   

  	
  62.5 bps

  	
   

  	
  162.5 bps

  

 

Additional
Revolving Facility

	
  Prime, US Base

  	
   

  	
  Acceptance Fee

  /Libor

  	
   

  	
  Stand-By Fee

  
	
  0 bps

  	
   

  	
  100 bps

  	
   

  	
  25 bps

  

 

 67
 

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 Facilities (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 and stand-by fees will be
calculated, for any day, using the applicable Rate in effect on the relevant
day. Acceptance and Letter of Credit fees will be calculated using the Rate in
effect on the date such fees are payable. Any change in a Rating resulting in a
modification of Rate will give rise to adjustments to Acceptance and Letter of
Credit fees 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 Agent and be payable by the Borrower concerned or the Lenders (as
applicable) three Business Days after demand from the Agent.

5.                                       The Applicable Rate will be 66 2/3% of
the rate otherwise applicable (as specified in the column governing Letter of
Credit fees in the Revolving Facility grid) 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.                                       Rates under the Additional Revolving Facility
are as set forth in the grid applicable to such Facility and paragraphs 2,
3 and 4 do not apply to the Additional Revolving Facility.

7.                                       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.

 68

SCHEDULE
“ B ”

LIST OF DESIGNATED
SUBSIDIARIES

	
  Name

  	
   

  	
  Jurisdiction

  	
   

  	
  Shareholder

  
	
  Cascades Auburn Fiber Inc.

  	
   

  	
  Delaware

  	
   

  	
  Cascades USA Inc.

  
	
  Cascades Canada Inc.

  	
   

  	
  Canada

  	
   

  	
  Cascades Inc.

  
	
  Cascades Delaware LLC

  	
   

  	
  Delaware

  	
   

  	
  Cascades USA Inc.

  
	
  Cascades Diamond, Inc.

  	
   

  	
  Massachusetts

  	
   

  	
  Cascades USA Inc.

  
	
  Cascades Moulded Pulp, Inc.

  	
   

  	
  North Carolina

  	
   

  	
  Cascades USA Inc.

  
	
  Cascades Nova Scotia Company

  	
   

  	
  Nova Scotia

  	
   

  	
  3815315 Canada Inc.

  
	
  Cascades Plastics Inc.

  	
   

  	
  Delaware

  	
   

  	
  Cascades USA Inc.

  
	
  Cascades Transport Inc.

  	
   

  	
  Canada

  	
   

  	
  Cascades Inc.

  
	
  Cascades Fine Papers Group Inc.

  	
   

  	
  Canada

  	
   

  	
  Cascades Inc.

  
	
  Cascades Fine Papers Group Thunder Bay Inc.

  	
   

  	
  Canada

  	
   

  	
  Cascades Fine Papers Group Inc.

  
	
  Kingsey Falls Investments Inc.

  	
   

  	
  Canada

  	
   

  	
  Cascades Inc.

  
	
  6265462 Canada Inc.

  	
   

  	
  Canada

  	
   

  	
  Cascades Canada Inc.

  
	
  Cascades Tissue Group – IFC Disposables Inc.

  	
   

  	
  Tennessee

  	
   

  	
  Cascades Tissue Group – North Carolina Inc.

  
	
  Cascades Tissue Group – New York Inc.

  	
   

  	
  Delaware

  	
   

  	
  Cascades Tissue Group – North Carolina Inc.

  
	
  Cascades Tissue Group – North Carolina Inc.

  	
   

  	
  North Carolina

  	
   

  	
  Cascades USA Inc.

  
	
  Cascades Tissue Group – Oregon Inc.

  	
   

  	
  Delaware

  	
   

  	
  Cascades Tissue Group – North Carolina Inc.

  
	
  Cascades Tissue Group – Pennsylvania Inc.

  	
   

  	
  Delaware

  	
   

  	
  Cascades Tissue Group – North Carolina Inc.

  
	
  Cascades Tissue Group – Wisconsin Inc.

  	
   

  	
  Delaware

  	
   

  	
  Cascades Tissue Group – North Carolina Inc.

  
	
  Cascades Boxboard U.S., Inc.

  	
   

  	
  Delaware

  	
   

  	
  Cascades USA Inc.

  
	
  Cascades Boxboard Group – Connecticut LLC

  	
   

  	
  Connecticut

  	
   

  	
  Cascades Auburn Fiber Inc.

  
	
  Cascades Groupe
  Carton Plat Inc. / Cascades Boxboard Group Inc.

  	
   

  	
  Canada

  	
   

  	
  Cascades Inc.

  
	
  Cascades Fine Papers Group (Sales) Inc.

  	
   

  	
  Delaware

  	
   

  	
  Cascades Fine Papers Group (USA) Inc.

  
	
  Cascades Fine Papers Group (USA) Inc.

  	
   

  	
  New York

  	
   

  	
  Cascades USA Inc.

  
	
  3815285 Canada Inc.

  	
   

  	
  Canada

  	
   

  	
  Cascades Canada Inc.

  
	
  3815315 Canada Inc.

  	
   

  	
  Canada

  	
   

  	
  Cascades Canada Inc.

  3815285 Canada Inc.

  
	
  Conference Cup Ltd.

  	
   

  	
  Ontario

  	
   

  	
  Garven Incorporated

  

 

 69
 

 

	
  Name

  	
   

  	
  Jurisdiction

  	
   

  	
  Shareholder

  
	
  Dopaco 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.

  
	
  Rabotage Lemay
  Inc.

  	
   

  	
  Québec

  	
   

  	
  Scierie Lemay Inc.

  
	
  Scierie Lemay
  Inc.

  	
   

  	
  Québec

  	
   

  	
  6265462 Canada Inc.

  
	
  W.H. Smith Paper
  Corporation

  	
   

  	
  New York

  	
   

  	
  Cascades Fine Papers Group (USA) Inc.

  
	
  Cascades Tissue
  Group – Arizona Inc.

  	
   

  	
  Delaware

  	
   

  	
  Cascades Tissue Group – North Carolina Inc.

  
	
  Cascades Tissue
  Group – Sales Inc.

  	
   

  	
  Delaware

  	
   

  	
  Cascades Tissue Group – North Carolina Inc.

  
	
  Cascades Tissue
  Group – Tennessee Inc.

  	
   

  	
  Delaware

  	
   

  	
  Cascades Tissue Group – North Carolina Inc.

  
	
  Cascades Tissue
  Group – Pickering Inc.

  	
   

  	
  Canada

  	
   

  	
  Cascades Canada Inc. 

  Holders of preferred shares: Wyant & Company Inc.

  
	
  Cascades Tissue
  Group – Maryland LLC

  	
   

  	
  Delaware

  	
   

  	
  Cascades Auburn Fiber Inc.

  
	
  Cascades Energy
  Initiative Inc.

  	
   

  	
  Delaware

  	
   

  	
  Cascades USA Inc.

  
	
  Norampac Inc.

  	
   

  	
  Canada

  	
   

  	
  Cascades Inc.

  
	
  Norampac New
  York City Inc.

  	
   

  	
  New York

  	
   

  	
  Norampac Holding US Inc.

  
	
  Norampac
  Leominster Inc.

  	
   

  	
  Massachusetts

  	
   

  	
  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 USA Inc.

  
	
  3815251 Canada
  Inc.

  	
   

  	
  Canada

  	
   

  	
  Cascades Inc.

  
	
  Norampac
  Schenectady Inc.

  	
   

  	
  New York

  	
   

  	
  Norampac Holding US Inc.

  
	
  Norampac Nova
  Scotia Company

  	
   

  	
  Nova Scotia

  	
   

  	
  3815251 Canada Inc.

  
	
  Norampac
  Delaware LLC

  	
   

  	
  Delaware

  	
   

  	
  Cascades Inc.

  
	
  Norampac
  Thompson Inc.

  	
   

  	
  Connecticut

  	
   

  	
  Norampac Holding US Inc.

  
	
  New C-Corp

  	
   

  	
  Canada

  	
   

  	
  Cascades Inc.

  

 

 70
 

SCHEDULE
“ C ”

NOTICE OF BORROWING

[CONVERSION OR RENEWAL]

[  Date  ]

The Bank of Nova Scotia
 720 King Street West, 4th Floor

Toronto, Ontario  M5V 2T3

Attention:  Director

RE:
Credit Agreement dated as of December 29, 2006

Sirs:

Reference is made to the above-mentioned Credit Agreement entered into
between, inter alia, the undersigned and the
Lenders mentioned therein.

We confirm our request for a Borrowing [or for a conversion or renewal]
to be made on [date], the details of which are as follows:

·              Applicable Tranche
or Facility:

·              Form of Borrowing:
[Prime Rate, Acceptances, US Base Rate Loan, Libor Loan in US Dollars
or Libor Loan in Euros]

·              Amount:

·              Date of Borrowing:
[or of conversion or renewal]

·              Period:

On the date hereof, we certify that the representations and warranties
set forth in the Credit Agreement are still true and correct in all material
respects and that no Default has occurred and is continuing.

	
  

  	
   

  	
  [Name of the Borrower concerned]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Per:

  	
   

  	
   

  

 

Note:      This form (adapted
accordingly) may also be used for a notice of repayment.

 71
 

SCHEDULE
“ D ”

COMPLIANCE CERTIFICATE

[  Date  ]

The
Bank of Nova Scotia

40 King Street West

Scotia Plaza, 62nd Floor

Toronto, Ontario  M5W 2X6

Attention:  Managing Director

RE:
Credit Agreement dated December 29, 2006

Reference is made to the above-mentioned Credit Agreement entered into
between, inter alia, Cascades Inc. (“Cascades”)
and the Lenders mentioned therein. I am the Chief Financial Officer of Cascades
and I hereby certify in such capacity that, to the best of my knowledge, but
after reasonable enquiry, the representations and warranties set forth in the
Credit Agreement are still true and correct in all material respects and that
no Default has occurred and is continuing.

I also certify that, on the last day of the last fiscal quarter of
Cascades:

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 $15,000,000 (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 and the
Norampac Indenture.

The details of all calculations supporting the above statements are set
forth in the attached annex which also contains a list of all Subsidiaries of
Cascades which have become Designated Subsidiaries after the date of the Credit
Agreement.

 72
 

SCHEDULE
“ E ”

BORROWING BASE REPORT

[  Date  ]

The
Bank of Nova Scotia

40 King Street West

Scotia Plaza, 62nd Floor

Toronto, Ontario  M5W 2X6

Attention:  Managing Director

RE:
Credit Agreement dated as of December 29, 2006

Reference is made to the above-mentioned Credit Agreement entered into
between, inter alia, Cascades Inc. (“Cascades”)
and the Lenders mentioned therein. I am the Chief Financial Officer of Cascades
and I hereby certify in such capacity that:

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.]

 73
 

SCHEDULE
“ F ”

FORM OF ASSIGNMENT AND
ASSUMPTION AGREEMENT

ASSIGNMENT AND ASSUMPTION AGREEMENT
entered into in                           ,
on this            day of                ,
between                                                            
(the “Assignor”) and                                                            
(the “Assignee”).

WHEREAS a credit agreement has
been entered into as of December 29, 2006 among Cascades Inc., Cascades
USA Inc., Cascades Europe SAS and Cascades Arnsberg GMBH, as Borrowers, The
Bank of Nova Scotia, as Agent, National Bank of Canada, as Co-Agent, and the
Lenders (as amended and supplemented from time to time, the “Credit Agreement”);

WHEREAS the Assignor is a Lender
under the Credit Agreement;

WHEREAS, as provided in the
Credit Agreement, the Assignor has Commitments in respect of the Facilities,
with $                    
being allocated to Tranche A, with $                    
being allocated to Tranche B, and with $                    
being allocated to Tranche C, with $                    
being allocated to the Term Loan and with $                    
being allocated to the Additional Revolving Facility;

WHEREAS a Lender may assign, in
whole or in part, its Commitments with respect to the Facilities to any other
financial institution pursuant to Section 20.4 of the Credit Agreement;

WHEREAS the Assignor proposes to
assign to the Assignee all of its rights under the Credit Agreement in respect
of a portion of the Assignor’s Commitments, such assigned portion to be in the
amount of $                    
in respect of Tranche A, in the amount of $                    
in respect of Tranche B, in the amount of $                    
in respect of Tranche C, in the amount of $                    
in respect of the Term Loan and in the amount of $                    
in respect of the Additional Revolving Facility (the “Assigned Amounts”),
together with a corresponding portion of the Borrowings owed to the Assignor,
and the Assignee proposes to accept such assignment and assume the
corresponding obligations of the Assignor;

NOW, THEREFORE, the parties
hereto agree as follows:

1.                                      Definitions

Capitalized terms used but not defined herein have the
meanings assigned to them in the Credit Agreement.

2.                                      Assignment

The 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.

 74
 

3.                                      Assumption

The 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 Facilities.

4.                                      Effective  Date

This Agreement will come into effect on                           
(the “Effective Date”).

5.                                      Rights and
Obligations of the Parties

Upon the execution and delivery of this Agreement by
the Assignor and the Assignee and the consent hereto by [the Borrowers] and the
Agent:

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 Facilities in an amount equal to the Assigned Amounts, with $                    
being allocated to Tranche A, with $                    
being allocated to Tranche B, with $                    
being allocated to Tranche C, with $                    
being allocated to the Term Loan and with $                    
being allocated to the Additional Revolving Facility;

ii)                                      the
Commitment of the Assignor in respect of the Facilities 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; and

iii)                                   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.                                      Payments

From the Effective Date, the 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 Assignor

The 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

 75
 

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.                                      Representations

The 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 Agent 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.                                      Warranty

Subject to Section 8, this assignment is made
without any warranty, express or implied, from the Assignor.

10.                               Existing
Lender

The 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
Law

This Agreement will be governed by and construed in
accordance with the laws of the Province of Quebec.

IN WITNESS WHEREOF, the
parties have caused this Agreement to be executed in the place and on the date
mentioned on the first page hereof.

	
  [ASSIGNOR], as Lender

  	
   

  	
  [ASSIGNEE]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
	
  Title:

  	
   

  	
  Title:

  
					

 

 76
 

The Agent and the
Borrowers consent to this Agreement. Each of the Borrowers and the Designated
Subsidiaries acknowledges and agrees that the Security granted by it in favour
of the Agent and the Lenders will also benefit the Assignee.

	
  

  	
   

  	
  [Names of the Borrowers]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  THE BANK OF NOVA SCOTIA, acting
  as

  Agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  [Names of the Designated Subsidiaries]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  

 

 77
 

SCHEDULE
“ G ”

ADDRESSES FOR NOTICE
PURPOSES

[NTD:  TO BE UPDATED ONCE LIST OF LENDERS HAS BEEN
DETERMINED.]

	
  The Bank of Nova Scotia,
  as Agent

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  For purposes of
  all notices of utilization,

  conversion, renewals or repayment and the

  delivery of the financial information pursuant to

  Article 15:

  	
   

  	
  For all other purposes:

  

  40 King Street West

  Scotia Plaza, 62nd Floor

  Toronto, Ontario M5W 2X6

  
	
  720 King Street
  West, 4th Floor

  	
   

  	
   

  
	
  Toronto, Ontario
  M5V 2T3

  	
   

  	
  Attention:

  	
  Corporate
  Banking – Loan Syndication

  
	
   

  	
   

  	
  Fax:

  	
  (416) 866-3329

  
	
  Attention:

  	
  IBD Loan
  Administrative and

  	
   

  	
   

  
	
   

  	
  Agency Services

  	
   

  	
   

  
	
  Fax:

  	
  (416) 866-5991

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  National Bank of
  Canada, as Co-Agent

  	
   

  	
  National Bank of
  Canada, as Lender

  
	
  c/o National
  Bank Financial

  	
   

  	
  c/o National
  Bank Financial

  
	
  1155 Metcalfe
  Street

  	
   

  	
  1155 Metcalfe
  Street

  
	
  Montreal,
  Quebec, H3B 4S9

  	
   

  	
  Montreal,
  Quebec, H3B 4S9

  
	
   

  	
   

  	
   

  
	
  Attention:

  	
  Director

  	
   

  	
  Attention:

  	
  Director

  
	
  Fax:

  	
  (514) 390-7840

  	
   

  	
  Fax:

  	
  (514) 390-7840

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  The Bank of Nova
  Scotia, as Lender

  	
   

  	
  Canadian Imperial Bank of Commerce, as

  
	
  c/o Scotia
  Capital

  	
   

  	
  Lender

  
	
  1002 Sherbrooke
  Street West, 9th Floor

  	
   

  	
  c/o CIBC World
  Markets

  
	
  Montreal, Quebec,
  H3A 3L6

  	
   

  	
  Credit Capital
  Markets

  
	
   

  	
   

  	
  BCE Place, 8th Floor

  
	
  Attention:

  	
  Director

  	
   

  	
  161 Bay Street

  
	
  Fax:

  	
  (514) 499-5504

  	
   

  	
  Toronto,
  Ontario, M5J 2S8

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Attention:

  	
  Director

  
	
   

  	
   

  	
  Fax:

  	
  (416) 956-6680

  

 

 78
 

 

	
  Caisse centrale Desjardins,
  as Lender

  	
   

  	
  Bank of Montreal,
  as Lender

  
	
  1, Complexe
  Desjardins, Suite 2822

  	
   

  	
  c/o BMO Capital
  Markets

  
	
  Montreal, Quebec,
  H5B 1B3

  	
   

  	
  Tour McGill
  College

  
	
   

  	
   

  	
  1501 McGill
  College Avenue, Suite 3200

  
	
  Attention:

  	
  Director

  	
   

  	
  Montreal, Quebec, H3A 3M8

  
	
  Fax:

  	
  (514) 281-7083

  	
   

  	
   

  
	
   

  	
   

  	
  Attention:

  	
  Director

  
	
  with a copy
  to :

  	
   

  	
  Fax:

  	
  (514) 282-5920

  
	
   

  	
   

  	
   

  
	
  Caisse centrale
  Desjardins US Branch

  	
   

  	
   

  
	
  1001 East
  Hallandale Beach Blvd., Suite 200

  	
   

  	
   

  
	
  Hallandale,
  Florida 33009-4429

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Attention:

  	
  Director

  	
   

  	
   

  
	
  Fax : (954) 457-7927

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  BNP Paribas (Canada),
  as Lender

  	
   

  	
  Comerica Bank,
  as Lender

  
	
  1981 McGill
  College Ave, 4th Floor

  	
   

  	
  Comerica Tower

  
	
  Montreal,
  Quebec, H3A 2W8

  	
   

  	
  1 Detroit Center

  
	
   

  	
   

  	
  500 Woodward
  Ave.

  
	
  Attention:

  	
  Director

  	
   

  	
  Mail code: 3328

  
	
  Fax:

  	
  (514) 285-2906

  	
   

  	
  Detroit, Michigan, 48226

  
	
   

  	
   

  	
  U.S.A.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Attention:

  	
  Director

  
	
   

  	
   

  	
  Fax:

  	
  (313) 222-3377

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  The Toronto-Dominion
  Bank, as Lender

  	
   

  	
  Royal Bank of Canada

  
	
  c/o TD Bank
  Financial Group

  	
   

  	
  c/o •

  
	
  500 rue
  St-Jacques, 9th Floor

  	
   

  	
  •

  
	
  Montreal,
  Quebec, H2Y 1S1

  	
   

  	
  •

  
	
   

  	
   

  	
   

  
	
  Attention:

  	
  Director

  	
   

  	
  Attention:    •

  
	
  Fax:      (514)
  289-0788

  	
   

  	
  Fax:      (•)•

  
	
   

  	
   

  	
   

  
	
  Deutsche Bank AG

  	
   

  	
  J.P. Morgan Canada

  
	
  c/o •

  	
   

  	
  c/o •

  
	
  •

  	
   

  	
  •

  
	
  •

  	
   

  	
  •

  
	
   

  	
   

  	
   

  
	
  Attention:    •

  	
   

  	
  Attention:    •

  
	
  Fax:      (•)•

  	
   

  	
  Fax:      (•)•

  
	
   

  	
   

  	
   

  
	
  Société Générale
  (Canada), as Lender

  	
   

  	
  Bank of America

  
	
  1501 McGill
  College Avenue, Suite 1800

  	
   

  	
  c/o •

  
	
  Montreal,
  Quebec, H3A 3M8

  	
   

  	
  •

  
	
   

  	
   

  	
  •

  
	
  Attention:

  	
  Director

  	
   

  	
   

  
	
  Fax:

  	
  (514) 841-6259

  	
   

  	
  Attention:    •

  
	
   

  	
   

  	
  Fax:            
  (•)•

  

 

 79
 

 

	
  Citibank, N.A. Canadian branch

  	
   

  	
  Rabobank Nederland,
  Canadian Branch

  
	
  c/o •

  	
   

  	
  c/o •

  
	
  •

  	
   

  	
  •

  
	
  •

  	
   

  	
  •

  
	
   

  	
   

  	
   

  
	
  Attention:    •

  	
   

  	
  Attention:    •

  
	
  Fax:      (•)•

  	
   

  	
  Fax:            
  (•)•

  
	
   

  	
   

  	
   

  
	
  Wachovia Capital
  Finance

  	
   

  	
   

  
	
  Corporation (Canada)

  	
   

  	
   

  
	
  c/o •

  	
   

  	
   

  
	
  •

  	
   

  	
   

  
	
  •

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Attention:    •

  	
   

  	
   

  
	
  Fax:            
  (•)•

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

[NOTE:   TO BE UPDATED BY
LENDERS]

	
  All notices to the Borrowers collectively or to

  	
   

  	
  Cascades Inc.

  
	
  anyone of them may be addressed to:

  	
   

  	
  404 Marie-Victorin Street

  
	
   

  	
   

  	
  Kingsey Falls, Quebec J0A 1B0

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Attention:

  	
  Vice President and Chief Financial

  
	
   

  	
   

  	
   

  	
  Officer (with a copy to the Vice

  
	
   

  	
   

  	
   

  	
  President and Corporate Secretary and

  
	
   

  	
   

  	
   

  	
  to the Treasurer)

  
	
   

  	
   

  	
  Fax:

  	
  (819) 363-5127

  

 

 80

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00120-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00120-of-00352.parquet"}]]