Document:

EXHIBIT 10.5

 

MODIFICATION TO

REPUBLIC BANCORP, INC.

REPUBLIC BANK & TRUST COMPANY

 

OFFICER COMPENSATION CONTINUATION AGREEMENT

 

FOR IRC SECTION 409A

 

THIS MODIFICATION to the Officer Compensation
Continuation Agreement dated as of the 15th day of June, 2001 (“Agreement”)
by and between REPUBLIC BANCORP, INC. (“Company”),
REPUBLIC BANK & TRUST COMPANY (“Bank”)
and KEVIN SIPES (“Executive”) revises the
Agreement so as to conform to section 409A of the Internal Revenue Code of
1986, as amended. The parties agree to modify the Agreement as follows:

 

A.

 

Effective January 1, 2005, the introductory paragraph (and only the
introductory paragraph) of Section 3.4 of the Agreement is hereby deleted and
the following inserted in lieu thereof:

 

3.4           Compensation Upon Termination.
If during a Contract Period the Executive’s employment shall be terminated by
the Bank other than pursuant to death or for Cause, or if the Executive shall
terminate his employment for Good Reason, then the Company shall pay, or the
Company shall cause the Bank to pay, to the Executive as severance compensation
in a lump sum (discounted to present value using the interest rate applicable
to a three year certificate of deposit at Republic Bank & Trust Company) on
the fifth day following the Date of Termination; provided,  however,
that if the Executive is a “key employee” within the meaning of Section 416(i)
(but without regard to Section 416(i)(5)) of the Internal Revenue Code of 1986,
as amended, at any time during the calendar year in which occurs the Executive’s
separation from service from the Bank (and the Company), and stock of the
Company is publicly traded on an established securities market or otherwise as
of the date of the Executive’s separation from service from the Bank (and the
Company), such severance compensation payable in a lump sum to the Executive shall
not be paid earlier than six months following the date of the Executive’s separation
from service from the Bank (and the Company) and shall be discounted to present
value using the interest rate applicable to a three year certificate of deposit
at Republic Bank & Trust Company on the delayed payment date:

 

 

B.

 

Except as specifically modified above, the Agreement shall remain
unchanged and, as modified herein, shall continue in full force and effect. This
Modification shall inure to the benefit of and be enforceable by the Executive’s
personal or legal representatives, executors, administrators, successors,
heirs, distributes, devisees and legatees. The validity, interpretation, construction
and performance of this Modification shall be governed by the laws of the
Commonwealth of Kentucky.

 

IN WITNESS WHEREOF, the Company and the Bank,
by their duly authorized officers, and the Executive have caused this
Modification to the Agreement to be executed this 15th day of
February, 2006, but to be effective as of January 1, 2005.

 

	
   

  	
  REPUBLIC
  BANCORP, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  REPUBLIC
  BANK & TRUST COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  KEVIN
  SIPES

  
					

 

2Exhibit 10.1

 

EXECUTION COPY

 

Cdn.$550,000,000

AMENDED AND RESTATED
CREDIT AGREEMENT

dated as of
October 31, 2005

 

Among

 

Cascades Inc.

Cascades USA Inc.

Cascades Europe SAS

Cascades Arnsberg GmbH

(as Borrowers)

 

- and –

 

NATIONAL BANK FINANCIAL INC.

CAISSE DE DÉPÔT ET PLACEMENT DU QUÉBEC

SCOTIA CAPITAL

(as Co-Lead Arrangers and
Joint Bookrunners)

 

- and –

 

THE BANK OF NOVA
SCOTIA

NATIONAL BANK OF CANADA

(as Co-Administrative Agents)

 

- and –

 

CAISSE
DE DÉPÔT ET PLACEMENT DU QUÉBEC

(as Syndication Agent)

 

- and –

 

CANADIAN IMPERIAL BANK OF
COMMERCE

CAISSE CENTRALE DESJARDINS

(as Co-Documentation Agents)

 

- and –

 

THE FINANCIAL
INSTITUTIONS

FROM TIME TO TIME PARTY HERETO

(as Lenders)

 

 

MCCARTHY Tétrault LLP

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  1 - INTERPRETATION

  	
   

  	
  2

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.1

  	
  Amendment
  and Restatement

  	
   

  	
  2

  
	
   

  	
  1.2

  	
  Definitions

  	
   

  	
  2

  
	
   

  	
  1.3

  	
  Designated
  Subsidiaries

  	
   

  	
  12

  
	
   

  	
  1.4

  	
  Currency
  Conversions

  	
   

  	
  12

  
	
   

  	
  1.5

  	
  Accounting
  Terms, Calculations and Adjustments to Consolidation

  	
   

  	
  12

  
	
   

  	
  1.6

  	
  Time

  	
   

  	
  13

  
	
   

  	
  1.7

  	
  Headings and
  Table of Contents

  	
   

  	
  13

  
	
   

  	
  1.8

  	
  Governing
  Law

  	
   

  	
  13

  
	
   

  	
  1.9

  	
  Previous
  Agreements

  	
   

  	
  13

  
	
   

  	
  1.10

  	
  Inconsistency

  	
   

  	
  13

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2 - THE
  FACILITIES

  	
   

  	
  13

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.1

  	
  The
  Revolving Facility

  	
   

  	
  13

  
	
   

  	
  2.2

  	
  Reallocation
  among Tranches

  	
   

  	
  14

  
	
   

  	
  2.3

  	
  The Term
  Facility

  	
   

  	
  14

  
	
   

  	
  2.4

  	
  Purpose and
  Nature of the Facilities

  	
   

  	
  14

  
	
   

  	
  2.5

  	
  Borrowing
  Options under the Revolving Facility

  	
   

  	
  15

  
	
   

  	
  2.6

  	
  Borrowing
  Options under the Term Facility

  	
   

  	
  16

  
	
   

  	
  2.7

  	
  Borrowing
  Base Limitations

  	
   

  	
  16

  
	
   

  	
  2.8

  	
  Borrowings
  Proportionate to Commitments

  	
   

  	
  16

  
	
   

  	
  2.9

  	
  Notice of
  Borrowings

  	
   

  	
  16

  
	
   

  	
  2.10

  	
  Swingline Utilizations

  	
   

  	
  17

  
	
   

  	
  2.11

  	
  Funding

  	
   

  	
  18

  
	
   

  	
  2.12

  	
  Lender’s
  Failure to Fund

  	
   

  	
  18

  
	
   

  	
  2.13

  	
  Conversions
  and Renewals

  	
   

  	
  18

  
	
   

  	
  2.14

  	
  Limitations
  on Lender’s Obligation to Fund

  	
   

  	
  19

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3 - ACCEPTANCES

  	
   

  	
  19

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.1

  	
  Period and
  Amounts

  	
   

  	
  19

  
	
   

  	
  3.2

  	
  Disbursement

  	
   

  	
  20

  
	
   

  	
  3.3

  	
  Power of
  Attorney

  	
   

  	
  20

  
	
   

  	
  3.4

  	
  Depository
  Bills

  	
   

  	
  20

  
	
   

  	
  3.5

  	
  Availability

  	
   

  	
  20

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4 - LIBOR LOANS

  	
   

  	
  21

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.1

  	
  Amounts and
  Periods

  	
   

  	
  21

  
	
   

  	
  4.2

  	
  Changed
  Circumstances

  	
   

  	
  21

  
	
   

  	
  4.3

  	
  Conversion
  Prior to Maturity

  	
   

  	
  22

  

 

 

	
  5 - LETTERS OF
  CREDIT

  	
   

  	
  22

  
	
   

  	
   

  	
   

  
	
   

  	
  5.1

  	
  Availability

  	
  22

  
	
   

  	
  5.2

  	
  Maturity of
  Letters of Credit

  	
  22

  
	
   

  	
  5.3

  	
  Borrowings

  	
  22

  
	
   

  	
  5.4

  	
  Payments
  under Letters of Credit

  	
  23

  
	
   

  	
  5.5

  	
  Currency
  Conversion

  	
  23

  
	
   

  	
  5.6

  	
  Indemnity

  	
  23

  
	
   

  	
  5.7

  	
  I.C.C. Rules

  	
  23

  
	
   

  	
   

  	
   

  	
   

  
	
  6 - FEES AND
  INTEREST

  	
  23

  
	
   

  	
   

  
	
   

  	
  6.1

  	
  Commitment
  and Structuring Fees

  	
  23

  
	
   

  	
  6.2

  	
  Letter of
  Credit Fees

  	
  24

  
	
   

  	
  6.3

  	
  Administrative
  Charges with respect to Letters of Credit

  	
  24

  
	
   

  	
  6.4

  	
  Standby Fee

  	
  24

  
	
   

  	
  6.5

  	
  Acceptance
  Fees

  	
  24

  
	
   

  	
  6.6

  	
  Interest on
  Prime Rate Loans

  	
  24

  
	
   

  	
  6.7

  	
  Interest on
  US Base Rate Loans

  	
  25

  
	
   

  	
  6.8

  	
  Interest on
  European Loans

  	
  25

  
	
   

  	
  6.9

  	
  Interest on
  Libor Loans

  	
  25

  
	
   

  	
  6.10

  	
  Calculation
  of Interest Rates

  	
  25

  
	
   

  	
  6.11

  	
  Interest on
  Arrears

  	
  25

  
	
   

  	
   

  	
   

  	
   

  
	
  7 - REPAYMENT,
  PREPAYMENT AND REDUCTION

  	
  26

  
	
   

  	
   

  
	
   

  	
  7.1

  	
  Repayment of
  the Facilities

  	
  26

  
	
   

  	
  7.2

  	
  Mandatory
  Prepayments

  	
  26

  
	
   

  	
  7.3

  	
  Optional
  Prepayments

  	
  26

  
	
   

  	
  7.4

  	
  Exchange
  Rate Fluctuations

  	
  27

  
	
   

  	
  7.5

  	
  Reduction of
  the Revolving Facility

  	
  27

  
	
   

  	
   

  	
   

  	
   

  
	
  8 - PLACE OF
  PAYMENT, CURRENCY AND TAXES

  	
  27

  
	
   

  	
   

  
	
   

  	
  8.1

  	
  Payments to
  the Agent

  	
  27

  
	
   

  	
  8.2

  	
  Time of
  Payments

  	
  28

  
	
   

  	
  8.3

  	
  Currency

  	
  28

  
	
   

  	
  8.4

  	
  Judgment
  Currency

  	
  28

  
	
   

  	
  8.5

  	
  Payments Net
  of Taxes

  	
  28

  
	
   

  	
  8.6

  	
  Obligations
  of Lenders in respect of Taxes

  	
  29

  
	
   

  	
   

  	
   

  	
   

  
	
  9 - CONDITIONS
  PRECEDENT TO BORROWINGS

  	
  29

  
	
   

  	
   

  
	
   

  	
  9.1

  	
  Conditions
  Precedent to the Effectiveness of this Agreement

  	
  29

  
	
   

  	
  9.2

  	
  Conditions
  Precedent to All Borrowings

  	
  30

  
	
   

  	
  9.3

  	
  Waiver of
  Conditions Precedent

  	
  30

  
	
   

  	
  9.4

  	
  Termination
  of this Agreement

  	
  30

  
	
   

  	
  9.5

  	
  Borrowings
  under the Initial Credit Agreement

  	
  30

  
	
   

  	
   

  	
   

  	
   

  
	
  10 - SECURITY

  	
  31

  
	
   

  	
   

  
	
   

  	
  10.1

  	
  Guarantees

  	
  31

  
	
   

  	
  10.2

  	
  Security
  over Current Assets

  	
  31

  
	
   

  	
  10.3

  	
  Fixed Assets

  	
  31

  
					

 

ii

 

	
   

  	
  10.4

  	
  Insurance

  	
  32

  
	
   

  	
  10.5

  	
  Security for
  Hedging Agreements

  	
  32

  
	
   

  	
  10.6

  	
  Validity and
  Contents of Security Documents

  	
  33

  
	
   

  	
  10.7

  	
  Exceptions
  for certain Credit Parties

  	
  33

  
	
   

  	
  10.8

  	
  Release of
  the Security

  	
  33

  
	
   

  	
   

  	
   

  	
   

  
	
  11 - REPRESENTATIONS
  AND WARRANTIES

  	
  33

  
	
   

  	
   

  
	
   

  	
  11.1

  	
  Corporate
  Existence and Capacity

  	
  33

  
	
   

  	
  11.2

  	
  Authorization
  and Validity

  	
  34

  
	
   

  	
  11.3

  	
  No Breach

  	
  34

  
	
   

  	
  11.4

  	
  Approvals

  	
  34

  
	
   

  	
  11.5

  	
  Compliance
  with Laws and Permits

  	
  34

  
	
   

  	
  11.6

  	
  Title to
  Assets

  	
  34

  
	
   

  	
  11.7

  	
  Litigation

  	
  35

  
	
   

  	
  11.8

  	
  No Default

  	
  35

  
	
   

  	
  11.9

  	
  Solvency

  	
  35

  
	
   

  	
  11.10

  	
  Taxes

  	
  35

  
	
   

  	
  11.11

  	
  ERISA and
  Pension Plans

  	
  35

  
	
   

  	
  11.12

  	
  Margin Stock
  Restrictions

  	
  35

  
	
   

  	
  11.13

  	
  Investment
  Company Act

  	
  36

  
	
   

  	
  11.14

  	
  Public
  Utility Holding Company Act

  	
  36

  
	
   

  	
  11.15

  	
  Restriction
  on Payments

  	
  36

  
	
   

  	
  11.16

  	
  Corporate
  Structure and Location of Assets

  	
  36

  
	
   

  	
  11.17

  	
  Financial
  Statements and Fiscal Year

  	
  36

  
	
   

  	
  11.18

  	
  No Material
  Change

  	
  37

  
	
   

  	
  11.19

  	
  True and
  Complete Disclosure

  	
  37

  
	
   

  	
   

  	
   

  	
   

  
	
  12 - AFFIRMATIVE
  COVENANTS

  	
  37

  
	
   

  	
   

  
	
   

  	
  12.1

  	
  General
  Covenants

  	
  37

  
	
   

  	
  12.2

  	
  Use of
  Proceeds and Cascades Indenture Limitation

  	
  38

  
	
   

  	
  12.3

  	
  U.S.
  Patriot Act

  	
  38

  
	
   

  	
  12.4

  	
  Further
  Assurances

  	
  38

  
	
   

  	
  12.5

  	
  Representations
  and Warranties

  	
  38

  
	
   

  	
   

  	
   

  	
   

  
	
  13 - NEGATIVE
  COVENANTS

  	
  39

  
	
   

  	
   

  
	
   

  	
  13.1

  	
  Negative
  Pledge

  	
  39

  
	
   

  	
  13.2

  	
  Indebtedness

  	
  39

  
	
   

  	
  13.3

  	
  Limitations
  on Fundamental Changes

  	
  39

  
	
   

  	
  13.4

  	
  Investments

  	
  41

  
	
   

  	
  13.5

  	
  Distributions

  	
  41

  
	
   

  	
  13.6

  	
  Transactions
  with Related Parties

  	
  42

  
	
   

  	
   

  	
   

  	
   

  
	
  14 - FINANCIAL
  RATIOS

  	
  42

  
	
   

  	
   

  
	
   

  	
  14.1

  	
  Funded Debt
  to Capitalization Ratio

  	
  42

  
	
   

  	
  14.2

  	
  Interest
  Coverage Ratio

  	
  42

  

 

iii

 

	
  15 - REPORTING
  REQUIREMENTS

  	
  42

  
	
   

  	
   

  
	
   

  	
  15.1

  	
  Annual Reporting

  	
  42

  
	
   

  	
  15.2

  	
  Quarterly
  Reports

  	
  43

  
	
   

  	
  15.3

  	
  ERISA

  	
  43

  
	
   

  	
  15.4

  	
  Reporting
  from Time to Time

  	
  44

  
	
   

  	
  15.5

  	
  Hedging
  Agreements, Securitization and Factoring

  	
  44

  
	
   

  	
   

  	
   

  	
   

  
	
  16 - EVENTS OF
  DEFAULT AND REMEDIES

  	
  45

  
	
   

  	
   

  
	
   

  	
  16.1

  	
  Events of
  Default

  	
  45

  
	
   

  	
  16.2

  	
  Remedies

  	
  46

  
	
   

  	
   

  	
   

  	
   

  
	
  17 - EQUALITY
  AMONG LENDERS

  	
  46

  
	
   

  	
   

  
	
   

  	
  17.1

  	
  Distribution
  among Lenders

  	
  46

  
	
   

  	
  17.2

  	
  Other
  Security

  	
  47

  
	
   

  	
  17.3

  	
  Direct
  Payment to a Lender

  	
  47

  
	
   

  	
  17.4

  	
  Adjustments

  	
  47

  
	
   

  	
   

  	
   

  	
   

  
	
  18 - THE AGENT,
  THE CO-AGENT AND THE LENDERS

  	
  47

  
	
   

  	
   

  
	
   

  	
  18.1

  	
  Appointment
  of the Agent and the Co-Agent

  	
  47

  
	
   

  	
  18.2

  	
  Restrictions
  on the Powers of the Lenders

  	
  47

  
	
   

  	
  18.3

  	
  Security
  Documents

  	
  48

  
	
   

  	
  18.4

  	
  Action by
  the Agent or Co-Agent

  	
  48

  
	
   

  	
  18.5

  	
  Enforcement
  Measures

  	
  48

  
	
   

  	
  18.6

  	
  Indemnification

  	
  48

  
	
   

  	
  18.7

  	
  Reliance on
  Reports

  	
  48

  
	
   

  	
  18.8

  	
  Liability of
  the Agent or the Co-Agent

  	
  49

  
	
   

  	
  18.9

  	
  Liability of
  Lenders

  	
  49

  
	
   

  	
  18.10

  	
  Rights of
  the Agent or Co-Agent as Lender

  	
  49

  
	
   

  	
  18.11

  	
  Sharing of
  Information

  	
  49

  
	
   

  	
  18.12

  	
  Competition

  	
  50

  
	
   

  	
  18.13

  	
  Successor
  Agent or Co-Agent

  	
  50

  
	
   

  	
   

  	
   

  	
   

  
	
  19 - DECISIONS,
  WAIVERS AND AMENDMENTS

  	
  50

  
	
   

  	
   

  
	
   

  	
  19.1

  	
  Amendments
  and Waivers by the Majority Lenders

  	
  50

  
	
   

  	
  19.2

  	
  Amendments
  and Waivers by Unanimous Approval

  	
  50

  
	
   

  	
  19.3

  	
  Amendments
  relating to the Agent or an Issuing Lender

  	
  51

  
	
   

  	
   

  	
   

  	
   

  
	
  20 - MISCELLANEOUS

  	
  51

  
	
   

  	
   

  
	
   

  	
  20.1

  	
  Books and
  Accounts

  	
  51

  
	
   

  	
  20.2

  	
  Determination

  	
  51

  
	
   

  	
  20.3

  	
  Prohibition
  on Assignment by Borrowers

  	
  51

  
	
   

  	
  20.4

  	
  Assignments
  and Participations

  	
  51

  
	
   

  	
  20.5

  	
  Affiliated
  Lenders’ Commitment

  	
  52

  
	
   

  	
  20.6

  	
  Notes

  	
  53

  
	
   

  	
  20.7

  	
  Costs and
  Expenses

  	
  53

  
	
   

  	
  20.8

  	
  No Waiver

  	
  53

  
	
   

  	
  20.9

  	
  Irrevocability
  of Notices of Borrowings

  	
  54

  
	
   

  	
  20.10

  	
  Set-off

  	
  54

  

 

iv

 

	
   

  	
  20.11

  	
  Indemnification

  	
  54

  
	
   

  	
  20.12

  	
  Mitigation
  of costs

  	
  55

  
	
   

  	
  20.13

  	
  Corrections
  of Errors

  	
  55

  
	
   

  	
  20.14

  	
  Communications

  	
  55

  
	
   

  	
  20.15

  	
  Counterparts

  	
  55

  
	
   

  	
  20.16

  	
  Waiver of
  Jury Trial

  	
  56

  
	
   

  	
   

  	
   

  	
   

  
	
  21 - NOTICES

  	
  56

  
	
   

  	
   

  	
   

  
	
   

  	
  21.1

  	
  Sending of
  Notices

  	
  56

  
	
   

  	
  21.2

  	
  Receipt of
  Notices

  	
  56

  
	
   

  	
   

  	
   

  	
   

  
	
  SCHEDULE “ A “

  	
  1

  
	
   

  	
   

  
	
   

  	
  APPLICABLE
  MARGINS OR RATES

  	
  1

  
	
   

  	
   

  	
   

  
	
  SCHEDULE “ B “

  	
  3

  
	
   

  	
   

  
	
   

  	
  LIST OF
  DESIGNATED SUBSIDIARIES

  	
  3

  
	
   

  	
   

  	
   

  
	
  SCHEDULE “ C “

  	
  5

  
	
   

  	
   

  
	
   

  	
  NOTICE OF
  BORROWING [CONVERSION OR RENEWAL]

  	
  5

  
	
   

  	
   

  	
   

  
	
  SCHEDULE “ D “

  	
  6

  
	
   

  	
   

  
	
   

  	
  COMPLIANCE
  CERTIFICATE

  	
  6

  
	
   

  	
   

  	
   

  
	
  SCHEDULE “ E “

  	
  7

  
	
   

  	
   

  
	
   

  	
  BORROWING
  BASE REPORT

  	
  7

  
	
   

  	
   

  	
   

  
	
  SCHEDULE “ F “

  	
  8

  
	
   

  	
   

  
	
   

  	
  FORM OF
  ASSIGNMENT AND ASSUMPTION AGREEMENT

  	
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  SCHEDULE “ G “

  	
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  ADDRESSES
  FOR NOTICE PURPOSES

  	
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v

 

AMENDED AND RESTATED CREDIT AGREEMENT

 

This Agreement is made as of October 31, 2005 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.            Pursuant to a credit agreement dated February 5, 2003 (as amended on
March 31, 2003, December 17, 2003,
January 22, 2004, March 26, 2004 and
December 27, 2004, the “Initial Credit Agreement”), the Lenders party
thereto made available to the Borrowers a 4-year revolving facility in a
principal amount of $500,000,000 for the purpose of refinancing existing
indebtedness and for general corporate purposes.

 

B.            Each of the Borrowers other than Cascades is a Subsidiary of
Cascades.

 

C.            The Lenders party to the Initial Credit Agreement (the “Initial
Lenders”) were comprised of the financial institutions having executed this
Agreement as Lenders other than Caisse de dépôt et placement du Québec (“CDP”).

 

D.            With the agreement of the Borrowers, (i) the Initial Lenders
have agreed to reduce to $450,000,000 the $500,000,000 revolving facility made
available to the Borrowers pursuant to the Initial Credit Agreement,
(ii) CDP has agreed to become a Lender, and (iii) CDP and The Bank of
Nova Scotia (who was one of the Initial Lenders) have agreed to make available
to Cascades a $100,000,000 term facility.

 

E.             The Borrowers, the Agent, the Initial Lenders and CDP wish to amend
and restate in its entirety the Initial Credit Agreement, for the purpose of,
among other things, giving effect to paragraph D, making the necessary
consequential amendments and making other miscellaneous amendments.

 

F.             As at the date of this Agreement, the outstanding Borrowings under
the Initial Credit Agreement do not exceed $450,000,000. Such Borrowings will
be Borrowings owing hereunder to the Lenders under the Revolving Facility (such
Lenders being as at the date hereof the Initial Lenders) in the proportions of
their Commitments under the Revolving Facility.

 

Therefore, the parties agree as follows:

 

 

1
- INTERPRETATION

 

1.1          Amendment
and Restatement

 

The Initial Credit Agreement, as defined in the
Recitals hereto, is hereby amended and restated in its entirety, without
novation of the Initial Credit Agreement and without derogation of the rights
and obligations of the parties thereunder (save as amended hereunder). However,
from the date hereof, this Agreement will evidence the agreement of the parties
with respect to the matters which are the subject of the Initial Credit
Agreement and this Agreement.

 

1.2          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;

 

“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

 

2

 

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) and (c) 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; and

 

(c)           the lesser of $205,000,000 and 50% (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 as provided in Section 10.3;

 

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 Tranche or the Term Facility, a branch of a bank
where the Agent has established an account for such Tranche or the Term
Facility, 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, the Branch of Account for such Tranche
will be located outside of France;

 

“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 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;

 

3

 

“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 of Tranche A, Tranche B or
Tranche C or of the Term 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 or from an assignment of Commitment made pursuant to this
Agreement;

 

“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, 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 Persons in
which investments are classified under GAAP as joint ventures or minority
investments;

 

“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;

 

4

 

“Designated Subsidiaries”
means the Subsidiaries of Cascades (other than a Borrower) designated as
Designated Subsidiaries pursuant to Section 1.3;

 

“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 0.05%;

 

“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)           taxes;

 

(c)           amortization and depreciation;

 

5

 

(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);

 

(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 (other than the Cascades Indenture), 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;

 

6

 

“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;

 

“Facilities”
means the Revolving Facility and the Term Facility;

 

“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, 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;

 

“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 (i) with respect to the financial ratios referred to
in Article 14, are in effect on the date hereof, and (ii) for all
other purposes, 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;

 

“Initial Credit Agreement”
has the meaning given to such expression in the Recitals;

 

“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)

 

7

 

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;

 

“Lender”
means each of the financial institutions having executed this Agreement as
Lender and any other financial institution that 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;

 

8

 

“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;

 

“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;

 

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

 

“Permitted Lien”
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 $15,000,000;

 

(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;

 

(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

 

9

 

(f)            Liens existing on the date hereof and listed in the Permitted Liens
list dated February 5, 2003 delivered to the Agent concurrently with
the execution of the Initial Credit 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 this
Agreement, 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;

 

“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;

 

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 Facility”
means the term facility made available to Cascades as provided in
Section 2.3

 

“Term Facility Maturity
Date” means the seventh anniversary date of this Agreement;

 

“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;

 

“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 Facility) 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 

 

11

 

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;

 

1.3          Designated
Subsidiaries

 

(a)           The Subsidiaries of Cascades listed in Schedule ”B” hereof are
hereby designated as Designated Subsidiaries.

 

(b)           Cascades may designate any other of its Subsidiaries that is a
Credit Party (other than a Borrower) as a Designated Subsidiary upon giving 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 the Cascades Indenture or notes issued thereunder.

 

1.4          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).

 

1.5          Accounting
Terms, Calculations and Adjustments to Consolidation

 

(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

 

12

 

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 consolidation basis of Cascades refers to a consolidation that
excludes all Persons who are not Credit Parties.

 

1.6          Time

 

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

 

1.7          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.

 

1.8          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.

 

1.9          Previous
Agreements

 

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

 

1.10        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 

 

13

 

Agreement and the collective Commitments of
the Lenders with respect to the Revolving Facility aggregate to $450,000,000. 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 $350,000,000, 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 $60,000,000, 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 $40,000,000, 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;

 

(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 Term Facility

 

The Lenders, individually and not solidarily (i.e. not
jointly and severally) agree to make available to Cascades a term facility (the
“Term Facility”) in an aggregate maximum amount at any time not exceeding the
total of the Commitments at such time with respect to the Term Facility. As of
the date hereof, the Commitment of each Lender under the Term 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 Term Facility
aggregate to $100,000,000.

 

2.4          Purpose
and Nature of the Facilities

 

(a)           The Borrowers will use the Facilities for general corporate
purposes;

 

14

 

(b)           The Revolving Facility will revolve and, accordingly, Borrowings may
be obtained, repaid and re-borrowed by the Borrowers until the Revolving
Facility Maturity Date;

 

(c)           The Term Facility will be drawn down by means of one single drawing
on the date the initial conditions precedent have been met or waived but not
later than October 31, 2005. After such date, any unused portion of the Term
Facility will cease to be available. The Term Facility will not revolve and any
amount repaid or prepaid may not be re-borrowed.

 

2.5          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

 

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

 

15

 

2.6          Borrowing
Options under the Term Facility

 

Borrowings may be obtained by Cascades under the Term
Facility in the form of:

 

(i)            Prime Rate Loans;

 

(ii)           Acceptances;

 

(iii)          US Base Rate Loans; and

 

(iv)          Libor Loans in US Dollars.

 

2.7          Borrowing
Base Limitations

 

The Borrowers must ensure that the aggregate amount of
all outstanding Borrowings (expressed in Dollars) under the Facilities will not
at any time exceed the lesser of (i) the amount of the Facilities, 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.

 

2.8          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 or under the Term Facility (as applicable) subject however to
the provisions of Section 2.10 (Swingline Utilizations) and of
Article 5 (Letters of Credit).

 

2.9          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) and the selected form of
Borrowing;

 

(b)           the amount of the Borrowing, with a minimum of $5,000,000 (or
US $5,000,000 or Euros 5,000,000 as the case may be) per Borrowing under
Tranche A or under the Term Facility and with a minimum of $1,000,000 (or US
$1,000,000 or Euros 1,000,000 as the case may be) per Borrowing under Tranche B
or Tranche C;

 

(c)           the date of the Borrowing, which must be a Business Day; and

 

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

 

16

 

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.

 

2.10        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 $30,000,000 in Tranche A, $30,000,000 in
Tranche B and $16,500,000 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 2.10 does not authorize
the Agent to allow that Borrowings owing to a Lender (other than a Swingline
Lender) under any Tranche exceed the amount of the Commitment of such Lender
under such 

 

17

 

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 and 2.2.

 

2.11        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 2.10(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.

 

2.12        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.

 

2.13        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 2.5 to 2.12 apply to a conversion or a renewal with
such modifications as may be required.

 

18

 

(c)           Unless they are repaid, converted or renewed upon the maturity date
of their respective periods, (i) Acceptances will then become Prime Rate
Loans for the face amount of such Acceptances, (ii) Libor Loans in US
Dollars will then become US Base Rate Loans, (iii) Libor Loans in Euros
under Tranche A will 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 2.10(c), the Agent may convert outstanding European Loans into US
Base Rate Loans.

 

(e)           Any conversion to Borrowings in another currency is effected by the
repayment of the Borrowings to be so converted and by the re-borrowing of an
equivalent amount in the other currency.

 

2.14        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 2.10(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.

 

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.

 

19

 

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.

 

(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.

 

20

 

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 under the Revolving Facility must be in multiples of
US $100,000 (or 100,000 Euros), with a minimum of US $5,000,000 (or
5,000,000 Euros) per Borrowing under Tranche A and US 1,000,000 (or
1,000,000 Euros) per Borrowing under Tranche B or Tranche C; Libor
Loans under the Term Facility must be in multiples of US$100,000, with a minimum
of US$5,000,000; 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 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 2.8.

 

21

 

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.

 

(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.

 

22

 

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 2.11 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).

 

6
- FEES AND INTEREST

 

6.1          Commitment
and Structuring Fees

 

Cascades must pay, concurrently with the execution of
this Agreement, the commitment and structuring fees specified in the agreement
providing for such fees executed by Cascades prior to the date of this
Agreement.

 

23

 

6.2          Letter
of Credit Fees

 

The Borrower concerned must pay a fee for each Letter
of Credit issued under the Facility. The fee for each Letter of Credit which is
either a standby 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 a standby fee on the unused portion of the 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.

 

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.

 

24

 

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
90 days, at 90-day 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 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).

 

25

 

(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 Term Facility on the Term Facility 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 Facilities will not at
any time exceed the lesser of (i) the amount of the Facilities, 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 Facility; in the latter case, the amount of the Term
Facility 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) without affecting their right to re-borrow under such Tranche
up to its maximum available amount. Any such prepayment (except for a
prepayment applied to overdraft utilizations pursuant to Section 2.10)
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 Facility and amounts prepaid will permanently reduce the amount
of the Term Facility. Any such prepayment must be in an amount of at least
$2,000,000 

 

26

 

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.
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 2.10 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 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.

 

27

 

8.2          Time
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 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.

 

28

 

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 Effectiveness of this Agreement

 

This Agreement will become effective upon confirmation
by the Agent to the Borrowers that the following conditions precedent have been
fulfilled to the satisfaction of the Agent and the Lenders (provided same are
fulfilled no later than October 31, 2005):

 

(a)           no facts, events or circumstances, now existing or hereafter
arising, have come to the attention of the Agent and the Lenders which, in
their good faith determination, could have a Material Adverse Effect;

 

(b)           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;

 

(c)           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)          a confirmation by each Borrower and Designated Subsidiary that the
Security Documents to which it is a party secure the obligations arising from
this Agreement;

 

(v)           a compliance certificate in the form of Schedule ”D”, showing
compliance with the financial covenants herein as of June 30, 2005;

 

29

 

(vi)          financial forecasts for the operations of the Credit Parties for
each of their next five fiscal years, on an adjusted consolidated basis;

 

(vii)         a Borrowing Base report in the form of Schedule ”E”, as of June
30, 2005, but giving effect to the definition of Borrowing Base contained in
this Agreement; and

 

(viii)        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.

 

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 or future 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 previously fulfilled or waived, this Agreement
will terminate on November 1, 2005.

 

9.5          Borrowings
under the Initial Credit Agreement

 

The Borrowings under the Initial Credit Agreement that
will be outstanding on the date when this Agreement becomes effective will be
Borrowings owing to the Lenders under the Revolving Facility in the proportions
of their Commitments under the Revolving Facility. The Agent will make among
the Lenders all such adjustments (and the Lenders will make all corresponding
payments) as are necessary to give effect to the foregoing.

 

30

 

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 and the Hedging Agreements, each of the
Borrowers and the Designated Subsidiaries that own 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        Fixed
Assets

 

(a)           To secure the performance of the obligations of the Borrowers under
the Facilities and the Hedging Agreements, Cascades Tissue Group Inc. and
Cascades Fine Paper Inc. must provide in favour of the Agent and the Lenders
security over the tissue plants of Cascades Canada Inc. (formerly known as
Cascades Tissue Group 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.

 

(b)           For Borrowing Base purposes, the market value of such fixed assets
will be determined by the Agent based on the Ernst & Young valuation report
delivered pursuant to Section 9.1(d)(viii) of the Initial Credit Agreement
or the most recent update of such report (in each case, using the mid-point of
the “high” and “low” estimates, excluding cash). Cascades will provide to the
Agent an update of such report within 60 days from the date of this Agreement
and, thereafter, further updates as and when requested by the Majority Lenders
if they have reasonable grounds to believe that the market value of such assets
has reduced below $405,000,000 since the date of this Agreement or the most
recent valuation report update. As long as such valuation report has not been
updated (or the most recent update has not been further updated), the market
value of such assets will be deemed to be at least $405,000,000 (or the amount
determined pursuant to the most recent update).

 

(c)           If an update concludes to a market value lower than $405,000,000, or
if a Credit Party wishes to sell fixed assets covered by the Security, Cascades
will have the 

 

31

 

option to provide (or to cause other Credit
Parties to provide) security over other fixed assets acceptable to the Majority
Lenders to restore or maintain at $405,000,000 the market value of the fixed
assets component of the Borrowing Base. 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 fixed assets component of the Borrowing Base.

 

10.4        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”.

 

10.5        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 10.5(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)           For greater certainty, (i) the Hedging Agreements secured by
the Security consist of Hedging Agreements made with a hedging lender who is
(or was) a Lender at the time of the entering into of such Hedging Agreement,
and (ii) the Security will continue to secure the obligations of any
Borrower to any Lender under Hedging Agreements after termination and repayment
in full of the Facilities.

 

32

 

10.6        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.

 

10.7        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.

 

10.8        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.

 

33

 

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.

 

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) 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 property and 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.

 

34

 

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.

 

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.

 

35

 

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      Public Utility Holding Company Act

 

None of the Credit Parties is a “holding
company”, or an “affiliate” of a “holding company” or a “subsidiary company” of
a “holding company”, within the meaning of the Public
Utility Holding Company Act of 1935 of the United States, as
amended.

 

11.15      Restriction on Payments

 

Except as provided in the Cascades
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.

 

11.16      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 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.

 

11.17      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.

 

36

 

11.18      No
Material Change

 

There has been no Material Adverse Change
since December 31, 2004.

 

11.19      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 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

 

37

 

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 Cascades Indenture Limitation

 

(a)           The Borrowers will use the
proceeds of the Facilities only for the
purposes permitted under this Agreement. The Borrowers will not use the
Facility to finance any private or public tender offer for the shares or other
securities of a Person whose governing body has not approved such offer (“hostile
take-over”).

 

(b)           The Borrowers will ensure
that the outstanding Borrowings hereunder will not at any time exceed the
maximum amount permitted under the Cascades Indenture.

 

12.3        U.S.
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 U.S. Patriot Act (Title III
of Pub. L. 107-56). The Borrowers also authorize any Lender to request and
obtain such information from any Person.

 

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.

 

38

 

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 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;

 

(f)            indebtedness up to
aggregate outstanding amount for all Credit Parties other than Cascades not exceeding
at any time $35,000,000; and

 

(g)           existing indebtedness
specified in the list of permitted indebtedness dated February 5, 2003 and
delivered to the Lenders pursuant to the Initial Credit 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.

 

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;

 

39

 

(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 $10,000,000;

 

(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 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 (or 720 days in the case of 

 

40

 

proceeds of
disposition of all of the interest of Cascades in Norampac Inc.) 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 business currently carried on by it and
activities ancillary or reasonably related thereto, provided that Credit
Parties whose combined total assets do not represent more than 5% of Cascades’
Net Tangible Assets may carry on other businesses.

 

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 the date of the Initial Credit Agreement 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 the date of the Initial Credit Agreement,
(ii) temporary cash or cash equivalent investments made for cash
management 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, 2003 to non-Credit Parties were to
exceed 50% of the adjusted consolidated net income of Cascades for the period
from January 1, 2003 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 

 

41

 

used to fund
investments in non-Credit Parties as permitted by Section 13.4, 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 $20,000,000 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 60%.

 

14.2        Interest
Coverage Ratio

 

Cascades must maintain at all times, on an
adjusted consolidated basis, an Interest Coverage Ratio not less than 2.00:1.00
from the date of this Agreement through December 31, 2006, not less than
2.25:1.00 from January 1, 2007 though December 31, 2007 and not less than
2.50:1.00 thereafter.

 

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:

 

42

 

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

 

43

 

(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).

 

44

 

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 than one 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 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 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 

 

45

 

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 1.2); 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.

 

46

 

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.

 

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.

 

47

 

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.

 

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.

 

48

 

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 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)           The 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, the 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 

 

49

 

to Loan
Pricing Corporation. Any action by the Agent under this Section 18.11(b)
will be taken after consultation with Cascades and the approval of National
Bank of Canada, The Bank of Nova Scotia and Caisse de dépôt et placement du
Québec, as Lenders.

 

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 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;

 

50

 

(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 Agent or an Issuing Lender

 

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

 

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 

 

51

 

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 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        Affiliated
Lenders’ Commitment

 

(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 (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 revoked, the designated Lender will be deemed to be a
Lender for all purposes of the Credit Documents, with a Commitment
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. However, no such designation will 

 

52

 

reduce the
obligations of the designating Lender under the Tranche(s) 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 and
its designated Lender may not make an assignment of their Commitments otherwise
than through assignments made concurrently by each of them to the same
assignee; such assignments will be considered as one single assignment for the
purposes of Section 20.4. For greater certainty, the assignee may also
avail itself of the provisions of Section 20.5(a). Any revocation of a
designation will result in the outstanding Borrowings owing to the designated
Lender being automatically assigned to its designating Lender, notwithstanding
anything to the contrary in Section 20.4 but subject to
Section 20.4(f).

 

(c)           Each of Canadian Imperial
Bank of Commerce, Caisse centrale Desjardins, Citibank, N.A., Canadian
Branch, BNP Paribas (Canada), The Toronto-Dominion Bank and Société Générale
(Canada) hereby designates as its designated Lender its Affiliate specified
below its name on the signature pages of this Agreement for the purposes of
making available its Commitment in respect of Tranche B or Tranche C
(as applicable). Each such designated Lender hereby accepts the designation
made by its designating Lender.

 

(d)           Sections 20.4(c) and
20.4(f) will apply to any designation of a designated Lender made after the
date of this Agreement, as if the designation were an assignment and the
designated Lender were an assignee.

 

20.6        Notes

 

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 

 

53

 

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.

 

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 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 

 

54

 

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 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.

 

55

 

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 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.

 

56

 

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

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Cascades USA Inc.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Per:

  	
  (s)
  Christian Dubé

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Cascades Europe SAS

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Per:

  	
  (s)
  Christian Dubé

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Cascades Arnsberg GmbH

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Per:

  	
  (s)
  Christian Dubé

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  The Bank of Nova Scotia, as Agent

  
	
   

  	
   

  	
  Per:

  	
  (s)
  François de Broux

  	
   

  
	
   

  	
   

  	
   

  	
  (s)
  John Santillo

  	
   

  
	
   

  	
   

  	
   

  	
  (s)
  Robert Boomhoor

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  National Bank of Canada, as Co-Agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Per:

  	
  (s)
  Réjean Guèvremont 

  	
   

  
	
   

  	
   

  	
   

  	
  (s)
  Dominic Albanese

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (the
  names and signatures of the Lenders

  are on the next page)

  
							

 

57

 

[Signature page – Amended
and Restated Credit Agreement]

 

	
  Commitment Amounts

  under the Revolving Facility

  (Tranche amounts are subject to reallocations

  pursuant to Section 2.2)

  	
   

  	
   

  	
  Lenders

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  National Bank of Canada

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  per :

  	
  (s) Roch Ledoux

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  (s) Réjean Guèvremont

  	
   

  	
   

  
	
  Tranche A:

  	
  $

  	
  66,111,000

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Tranche B:

  	
  $

  	
  11,333,000

  	
   

  	
   

  	
  National Bank of Canada, New York Branch

  	
   

  
	
  Tranche C:

  	
  $

  	
  7,556,000

  	
   

  	
   

  	
  (in respect of Tranche B)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total: 

  	
  $

  	
  85,000,000

  	
   

  	
   

  	
  per :

  	
  (s) Jeffrey Forgach

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  (s) Vincent Lima

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  The Bank of Nova Scotia

  	
   

  
	
  Tranche A:

  	
  $

  	
  46,667,000

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Tranche B:

  	
  $

  	
  8,000,000

  	
   

  	
   

  	
  per :

  	
  (s) John Santillo

  	
   

  	
   

  
	
  Tranche C:

  	
  $

  	
  5,333,000

  	
   

  	
   

  	
   

  	
  (s) François De Broux

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total:

  	
  $

  	
  60,000,000

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Canadian Imperial Bank of
  Commerce

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  per :

  	
  (s) Mark Chandler

  	
   

  	
   

  
	
  Tranche A:

  	
  $

  	
  46,667,000

  	
   

  	
   

  	
   

  	
  (s) Peter Rawlins

  	
   

  	
   

  
	
  Tranche B:

  	
  $

  	
  8,000,000

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Tranche C:

  	
  $

  	
  5,333,000

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  CIBC Inc., as designated Lender pursuant to

  	
   

  
	
  Total:

  	
  $

  	
  60,000,000

  	
   

  	
   

  	
  Section 20.5 with respect to
  Tranche B

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  per :

  	
   (s) Dominic Sorresso

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Caisse centrale
  Desjardins

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Tranche A:

  	
  $

  	
  46,667,000

  	
   

  	
   

  	
  per :

  	
   (s) Raymond Trempe

  	
   

  	
   

  
	
  Tranche B:

  	
  $

  	
  8,000,000

  	
   

  	
   

  	
   

  	
  (s) Pierre Tremblay

  	
   

  	
   

  
	
  Tranche C:

  	
  $

  	
  5,333,000

  	
   

  	
   

  	
  Desjardins Commercial Lending
  USA Corp., as
  designated 

  	
   

  
	
  Total:

  	
  $

  	
  60,000,000

  	
   

  	
   

  	
  Lender pursuant to Section
  20.5 with respect to Tranche B

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  per:

  	
   (s) André Bellefeuille

  	
   

  	
   

  

 

58

 

[Signature page – Amended
and Restated Credit Agreement]

 

	
   Commitment Amounts

   under the Revolving Facility

   (Tranche amounts are subject to reallocations

   pursuant to Section 2.2)

   	
    

   	
    

   	
   Lenders

   	
    

   
	
    

   	
    

   	
    

   	
    

   	
    

   	
    

   	
    

   
	
    

   	
    

   	
    

   	
    

   	
    

   	
   Citibank, N.A., Canadian branch

   	
    

   
	
    

   	
    

   	
    

   	
    

   	
    

   	
    

   	
    

   
	
    

   	
    

   	
    

   	
    

   	
    

   	
   per :

   	
   (s) J. Hastings

   	
    

   	
    

   
	
    

   	
    

   	
    

   	
    

   	
    

   	
    

   	
    

   
	
   Tranche A:

   	
   $

   	
   38,889,000

   	
    

   	
    

   	
    

   	
    

   
	
   Tranche B:

   	
   $

   	
   6,667,000

   	
    

   	
    

   	
    

   	
    

   
	
   Tranche C:

   	
   $

   	
   4,444,000

   	
    

   	
    

   	
   Citicorp North America, Inc., as designated 

   	
    

   
	
    

   	
    

   	
    

   	
    

   	
    

   	
   Lender pursuant to Section
   20.5 with respect to 

   	
    

   
	
   Total :

   	
   $

   	
   50,000,000

   	
    

   	
    

   	
   Tranche B

   	
    

   
	
    

   	
    

   	
    

   	
    

   	
    

   	
    

   	
    

   
	
    

   	
    

   	
    

   	
    

   	
    

   	
   per :

   	
   (s) Jeffrey Stern

   	
    

   	
    

   
	
    

   	
    

   	
    

   	
    

   	
    

   	
    

   	
    

   
	
    

   	
    

   	
    

   	
    

   	
    

   	
    

   	
    

   
	
    

   	
    

   	
    

   	
    

   	
    

   	
   BNP Paribas (Canada)

   	
    

   
	
    

   	
    

   	
    

   	
    

   	
    

   	
    

   	
    

   
	
    

   	
    

   	
    

   	
    

   	
    

   	
   per :

   	
   (s) Frank L. Shaw

   	
    

   	
    

   
	
    

   	
    

   	
    

   	
    

   	
    

   	
    

   	
   (s) Edouard Sinor

   	
    

   	
    

   
	
   Tranche A:

   	
   $

   	
   27,222,000

   	
    

   	
    

   	
    

   	
    

   
	
   Tranche B:

   	
   $

   	
   4,667,000

   	
    

   	
    

   	
   BNP Paribas, as designated Lender pursuant to 

   	
    

   
	
   Tranche C:

   	
   $

   	
   3,111,000

   	
    

   	
    

   	
   Section 20.5 with respect
   to Tranche B and

   	
    

   
	
    

   	
    

   	
    

   	
    

   	
    

   	
   Tranche C

   	
    

   
	
   Total:

   	
   $

   	
   35,000,000

   	
    

   	
    

   	
    

   	
    

   
	
    

   	
    

   	
    

   	
    

   	
    

   	
   per :

   	
   (s) Benjamin Silco

   	
    

   	
    

   
	
    

   	
    

   	
    

   	
    

   	
    

   	
    

   	
   (s) Nanette Baudon

   	
    

   	
    

   
	
    

   	
    

   	
    

   	
    

   	
    

   	
    

   	
    

   
	
    

   	
    

   	
    

   	
    

   	
    

   	
    

   	
    

   
	
    

   	
    

   	
    

   	
    

   	
    

   	
   Comerica Bank, Canada Branch

   	
    

   
	
    

   	
    

   	
    

   	
    

   	
    

   	
    

   	
    

   
	
    

   	
    

   	
    

   	
    

   	
    

   	
   per :

   	
   (s) Robert Rosen

   	
    

   	
    

   
	
    

   	
    

   	
    

   	
    

   	
    

   	
    

   	
    

   
	
   Tranche A:

   	
   $

   	
   27,222,000

   	
    

   	
    

   	
    

   	
    

   
	
   Tranche B:

   	
   $

   	
   4,667,000

   	
    

   	
    

   	
   Comerica Bank 

   	
    

   
	
   Tranche C:

   	
   $

   	
   3,111,000

   	
    

   	
    

   	
   (in respect of Tranche B
   and Tranche C)

   	
    

   
	
    

   	
    

   	
    

   	
    

   	
    

   	
    

   	
    

   
	
   Total

   	
   $

   	
   35,000,000

   	
    

   	
    

   	
   per :

   	
   (s) Monica Lewis

   	
    

   	
    

   

 

[Signature page – Amended
and Restated Credit Agreement]

 

59

 

	
   Commitment Amounts

   under the Revolving Facility

   (Tranche amounts are subject to reallocations

   pursuant to Section 2.2)

   	
    

   	
    

   	
   Lenders

   
	
    

   	
    

   	
    

   	
    

   	
    

   	
    

   
	
    

   	
    

   	
    

   	
    

   	
    

   	
   Bank of Montreal

   
	
    

   	
    

   	
    

   	
    

   	
    

   	
    

   
	
    

   	
    

   	
    

   	
    

   	
    

   	
   per :

   	
   (s) Bruno Jarry

   	
    

   
	
    

   	
    

   	
    

   	
    

   	
    

   	
    

   
	
   Tranche A:

   	
   $

   	
   19,444,000

   	
    

   	
    

   	
    

   
	
   Tranche B:

   	
   $

   	
   3,333,000

   	
    

   	
    

   	
   Bank of Montreal, Chicago Branch

   
	
   Tranche C:

   	
   $

   	
   2,223,000

   	
    

   	
    

   	
   (in respect of Tranche B)

   
	
    

   	
    

   	
    

   	
    

   	
    

   	
    

   
	
   Total:

   	
   $

   	
   25,000,000

   	
    

   	
    

   	
    

   
	
    

   	
    

   	
    

   	
    

   	
    

   	
   per :

   	
   (s) Bruce A. Pietka

   	
    

   
	
    

   	
    

   	
    

   	
    

   	
    

   	
    

   
	
    

   	
    

   	
    

   	
    

   	
    

   	
    

   
	
    

   	
    

   	
    

   	
    

   	
    

   	
   The Toronto-Dominion Bank

   
	
    

   	
    

   	
    

   	
    

   	
    

   	
    

   
	
    

   	
    

   	
    

   	
    

   	
    

   	
   per :

   	
   (s) Yves Bergeron

   	
    

   
	
    

   	
    

   	
    

   	
    

   	
    

   	
    

   	
   (s) Serge Cloutier

   	
    

   
	
    

   	
    

   	
    

   	
    

   	
    

   	
    

   
	
   Tranche A:

   	
   $

   	
   19,444,000

   	
    

   	
    

   	
   Toronto Dominion (Texas) LLC, as designated

   
	
   Tranche B:

   	
   $

   	
   3,333,000

   	
    

   	
    

   	
   Lender pursuant to Section
   20.5 with respect to

   
	
   Tranche C:

   	
   $

   	
   2,223,000

   	
    

   	
    

   	
   Tranche B

   
	
    

   	
    

   	
    

   	
    

   	
    

   	
    

   
	
   Total:

   	
   $

   	
   25,000,000

   	
    

   	
    

   	
   per :

   	
   (s) Masood Fikree

   	
    

   
	
    

   	
    

   	
    

   	
    

   	
    

   	
    

   
	
    

   	
    

   	
    

   	
    

   	
    

   	
    

   
	
    

   	
    

   	
    

   	
    

   	
    

   	
   Société Générale
   (Canada)

   
	
    

   	
    

   	
    

   	
    

   	
    

   	
    

   
	
    

   	
    

   	
    

   	
    

   	
    

   	
   per :

   	
   (s) David Baldoni

   	
    

   
	
   Tranche A:

   	
   $

   	
   11,667,000

   	
    

   	
    

   	
    

   	
   (s) Vincent
   Gonzalez

   	
    

   
	
   Tranche B:

   	
   $

   	
   2,000,000

   	
    

   	
    

   	
    

   
	
   Tranche C:

   	
   $

   	
   1,333,000

   	
    

   	
    

   	
    

   
	
    

   	
    

   	
    

   	
    

   	
    

   	
   Société Générale, as designated Lender pursuant

   
	
   Total: 

   	
   $

   	
   15,000,000

   	
    

   	
    

   	
   to Section 20.5 with
   respect to Tranche B

   
	
    

   	
    

   	
    

   	
    

   	
    

   	
    

   
	
    

   	
    

   	
    

   	
    

   	
    

   	
   per :

   	
   (s) Maria Iarriccio

   	
    

   

 

[Signature page – Amended
and Restated Credit Agreement]

 

60

 

	
   Commitment Amounts

   under the Term Facility

   	
    

   	
    

   	
   Lenders

   
	
    

   	
    

   	
    

   	
    

   	
    

   	
    

   
	
    

   	
    

   	
    

   	
    

   	
    

   	
   Caisse de dépôt et
   placement du Québec

   
	
    

   	
    

   	
    

   	
    

   	
    

   	
    

   
	
    

   	
   $

   	
   75,000,000

   	
    

   	
    

   	
   per :

   	
   (s) Jean-Pierre Jetté

   	
    

   
	
    

   	
    

   	
    

   	
    

   	
    

   	
    

   	
   (s) Diane C. Fravreau

   	
    

   
	
    

   	
    

   	
    

   	
    

   	
    

   	
    

   
	
    

   	
    

   	
    

   	
    

   	
    

   	
    

   
	
    

   	
    

   	
    

   	
    

   	
    

   	
   The Bank of Nova Scotia

   
	
    

   	
    

   	
    

   	
    

   	
    

   	
    

   
	
    

   	
   $

   	
   25,000,000

   	
    

   	
    

   	
   per :

   	
   (s) François De Broux

   	
    

   
	
    

   	
    

   	
    

   	
    

   	
    

   	
    

   	
   (s) John Santillo

   	
    

   

 

[Signature page – Amended
and Restated Credit Agreement]

 

61

 

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

  	
   

  	
  75 bps

  	
   

  	
  15 bps

  
	
  BBB-/Baa3

  	
   

  	
  0 bps

  	
   

  	
  87.5 bps

  	
   

  	
  17.5 bps

  
	
  BB+/Bal

  	
   

  	
  0 bps

  	
   

  	
  100 bps

  	
   

  	
  20 bps

  
	
  BB/Ba2

  	
   

  	
  25 bps

  	
   

  	
  125 bps

  	
   

  	
  25 bps

  
	
  BB-/Ba3 or Lower

  	
   

  	
  50 bps

  	
   

  	
  150 bps

  	
   

  	
  37.5 bps

  

 

Term Facility

 

	
  Rating

  	
   

  	
  Prime, US Base

  	
   

  	
  Acceptance Fee /
  Libor

  
	
  BB+/Bal or Higher

  	
   

  	
  25 bps

  	
   

  	
  125 bps

  
	
  BB/Ba2

  	
   

  	
  50 bps

  	
   

  	
  150 bps

  
	
  BB-/Ba3 or Lower

  	
   

  	
  75 bps

  	
   

  	
  175 bps

  

 

DETERMINATION
OF APPLICABLE MARGIN OR RATE

 

1.             The rates of the margins applicable to Prime Rate, US Base
Rate, European Rate and Libor and the rates of the Acceptance Fees, stand-by
fees and Letter of Credit fees under the 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 grid.  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.             This Schedule does not apply to the Letter of Credit fee applicable
to a documentary Letter of Credit applies. As provided in Section 6.3 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 Agent to its customers for
similar documentary letters of credit.

 

2

 

SCHEDULE “ B ”

 

LIST OF DESIGNATED SUBSIDIARIES

 

	
  Name

  	
   

  	
  Jurisdiction

  	
   

  	
  Shareholder

  
	
  Cascades Auburn Fiber Inc.

  	
   

  	
  Delaware

  	
   

  	
  Cascades SPG Holding Inc.

  
	
  Cascades Canada Inc.

  	
   

  	
  Canada

  	
   

  	
  Cascades Inc.

  
	
  Cascades Delaware LLC

  	
   

  	
  Delaware

  	
   

  	
  Cascades USA Inc.

  
	
  Cascades Diamond, Inc.

  	
   

  	
  Massachusetts

  	
   

  	
  Cascades SPG Holding Inc.

  
	
  Cascades Moulded Pulp, Inc.

  	
   

  	
  North Carolina

  	
   

  	
  Cascades SPG Holding Inc.

  
	
  Cascades Nova Scotia Company

  	
   

  	
  Nova Scotia

  	
   

  	
  3815315 Canada Inc.

  
	
  Cascades Plastics Inc.

  	
   

  	
  Delaware

  	
   

  	
  Cascades SPG Holding 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 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.

  

 

 

	
  Name

  	
   

  	
  Jurisdiction

  	
   

  	
  Shareholder

  
	
  Conference Cup Ltd.

  	
   

  	
  Ontario

  	
   

  	
  Garven Incorporated

  
	
  Dopaco Canada, Inc.

  	
   

  	
  Canada

  	
   

  	
  Dopaco, Inc.

  
	
  Dopaco, Inc.

  	
   

  	
  Pennsylvania

  	
   

  	
  Cascades USA Inc. (50%)

  Cascades Boxboard U.S. Holdings, Inc. (33.334%)

  Cascades SPG Holding Inc. (16.66%)

  
	
  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

  	
   

  	
  Cascades Canada Inc.

  
	
  W.H. Smith Paper Corporation

  	
   

  	
  New York

  	
   

  	
  Cascades Fines 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.

  

 

4

 

SCHEDULE
“ C ”

 

NOTICE OF BORROWING

[CONVERSION OR RENEWAL]

[ 
Date  ]

 

[Name and address of Agent]

 

RE: Credit
Agreement dated as of • •, 2005

 

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.

 

 

SCHEDULE “ D ”

 

COMPLIANCE CERTIFICATE

[ 
Date  ]

 

[Name and address of Agent]

 

RE: Credit
Agreement dated • •, 2005

 

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 $10,000,000 (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.

 

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.

 

 

SCHEDULE “ E ”

 

BORROWING BASE REPORT

[ 
Date  ]

 

[Name and address of Agent]

 

RE: Credit
Agreement dated as of • •, 2005

 

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.]

 

7

 

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 an
amended and restated credit agreement has been entered into as of
October •, 2005 among Cascades Inc., Cascades USA Inc., Cascades
Europe SAS and Cascades Arnsberg GMBH, as Borrowers, The Bank of Nova Scotia,
as 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 and with $                     
being allocated to the Term 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 and in the amount of $                     
in respect of the Term 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.

 

8

 

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 and with $                     
being allocated to the Term 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

 

9

 

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.

 

10

 

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:

  	
   

  
							

 

 

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:

  	
   

  

 

11

 

SCHEDULE “ G ”

 

ADDRESSES FOR NOTICE PURPOSES

 

	
  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

  
	
  720 King Street West, 4th
  Floor

  	
   

  	
  Toronto, Ontario M5W 2X6

  
	
  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

  c/o National Bank Financial

  1155 Metcalfe Street

  Montreal, Quebec, H3B 4S9

  	
   

  	
  National Bank of Canada, as Lender

  c/o National Bank Financial

  1155 Metcalfe Street

  Montreal, Quebec, H3B 4S9

  
	
   

  	
   

  	
   

  
	
  Attention:

  	
  Director

  	
   

  	
  Attention:

  	
  Director

  
	
  Fax:

  	
  (514) 390-7840

  	
   

  	
  Fax:

  	
  (514) 390-7840

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  The Bank of Nova
  Scotia, as Lender

  c/o Scotia Capital

  1002 Sherbrooke Street West, 9th Floor

  Montreal, Quebec, H3A 3L6

   

  	
   

  	
  Caisse
  de dépôt et placement du Québec, as Lender

  Centre CDP Capital

  1000, Place Jean-Paul-Riopelle

  Montréal, Québec H2Z 2B3

  
	
   

  	
   

  	
   

  
	
  Attention:

  	
  Director

  	
   

  	
  Attention:

  	
  Vice President,

  
	
  Fax:

  	
  (514) 499-5504

  	
   

  	
   

  	
  Corporate Debt

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Fax:

  	
  (514) 847-2493

  
	
   

  	
   

  	
   

  
	
  Canadian Imperial Bank of Commerce, as Lender

  c/o CIBC World Markets

  Credit Capital Markets

  	
   

  	
  Caisse centrale Desjardins, as Lender

  1, Complexe Desjardins, Suite 2822

  Montreal, Quebec, H5B 1B3

  
	
  BCE Place, 8th Floor

  	
   

  	
   

  
	
  161 Bay Street

  	
   

  	
  Attention:

  	
  Director

  
	
  Toronto, Ontario, M5J 2S8

  	
   

  	
  Fax:

  	
  (514) 281-7083

  
	
   

  	
   

  	
   

  
	
  Attention:

  	
  Director

  	
   

  	
  with a copy to :

  
	
  Fax:

  	
  (416) 956-6680

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Desjardins Commercial Lending USA Corp.

  1001 East Hallandale Beach Blvd., suite 200

  Hallandale, Florida 33009-4429

   

  
	
   

  	
   

  	
   

  	
  Attention:

  	
  Director

  
	
   

  	
   

  	
   

  	
  Fax :

  	
  (954) 457-7927

  
								

 

 

	
  Citibank, N.A., Canadian branch

  c/o Citibank Canada

  630 Rene-Levesque Blvd. West, Suite 2450

  	
   

  	
  BNP Paribas (Canada), as Lender

  1981 McGill College Ave, 4th Floor

  Montreal, Quebec, H3A 2W8

  
	
  Montreal, Quebec H3B 1S6

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Attention: 

  	
  Director

  	
   

  	
  Attention:

  	
  Director

  
	
  Fax:

  	
  (514) 393-7545

  	
   

  	
  Fax:

  	
  (514) 285-2906

  
	
   

  	
   

  	
   

  
	
  Comerica Bank, as Lender

  Comerica Tower

  1 Detroit Center

  500 Woodward Ave.

  Mail code: 3328

  Detroit, Michigan, 48226

  U.S.A.

  	
   

  	
  Bank of Montreal, as Lender

  c/o BMO Nesbitt Burns

  Tour McGill College

  1501 McGill College Avenue, Suite 3200

  Montreal, Quebec, H3A 3M8

  
	
   

  	
   

  	
   

  
	
  Attention:

  	
  Director

  	
   

  	
  Attention:

  	
  Director

  
	
  Fax:

  	
  (313) 222-3377

  	
   

  	
  Fax:

  	
  (514) 282-5920

  
	
   

  	
   

  	
   

  
	
  The Toronto-Dominion Bank, as Lender

  c/o TD Bank Financial Group

  500 rue St-Jacques, 9th Floor

  Montreal, Quebec, H2Y 1S1

  	
   

  	
  Société Générale (Canada), as Lender

  1501 McGill College Avenue, Suite 1800

  Montreal, Quebec, H3A 3M8

  
	
   

  	
   

  	
   

  
	
  Attention:

  	
  Director

  	
   

  	
  Attention:

  	
  Director

  
	
  Fax:

  	
  (514) 289-0788

  	
   

  	
  Fax:

  	
  (514) 841-6259

  
	
   

  	
   

  	
   

  
	
  All
  notices to the Borrowers collectively or to

  anyone of them may be addressed to:

  	
   

  	
  Cascades Inc.

  404 Marie-Victorin Street

  Kingsey Falls, Quebec J0A 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

  
						

 

13

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