Exhibit 1.1
CASCADES INC.
US$450,000,000
7¼% Senior Notes Due 2013
Purchase Agreement
New York, New York
January 31, 2003
Salomon Smith Barney Inc.
Scotia Capital (USA) Inc.
As Representatives of the Initial
Purchasers
c/o Salomon Smith Barney Inc.
388 Greenwich Street
New York, New York 10013
Ladies and Gentlemen:
Cascades Inc., a corporation
organized under the laws of the Province of Québec (the
“Company”), proposes to issue and sell to the several
parties named in Schedule I hereto (the “Initial
Purchasers”), for whom you (the
“Representatives”) are acting as representatives,
US$450,000,000 principal amount of its 7¼% Senior Notes Due
2013 (the “Notes,” and together with the Guarantees (as
defined below), the “Securities”). The Securities
are to be issued under an indenture (the “Indenture”),
to be dated as of the Closing Date (as defined below), among the
Company, the Guarantors (as defined below) and The Bank of New
York, as trustee (the “Trustee”). The sale of the
Securities to the Initial Purchasers will be made without
registration of the Securities under the Act in reliance upon
exemptions from the registration requirements of the Act.
However, the Securities will have the benefit of a registration
rights agreement (the “Registration Rights Agreement”),
to be dated as of the Closing Date (as defined below), among the
Company, the Guarantors and the Initial Purchasers, pursuant to
which the Company and the Guarantors will agree to register a new
series of notes (the “Exchange Notes”) and related
guarantees (the “Exchange Guarantees” and, together
with the Exchange Notes, the “Exchange Securities”)
under the Act, subject to the terms and conditions specified
therein. Pursuant to the Registration Rights Agreement, the
Exchange Securities will be offered in exchange for the
Securities.
The Notes will be unconditionally
guaranteed (the “Guarantees”) by each of the
Company’s Subsidiaries that are set forth on the signature
page hereto (the “Guarantors”). To the extent
there are no additional parties listed on Schedule I other
than you, the term “Representatives” as used herein
shall mean you as the Initial Purchasers, and the terms
Representatives and Initial Purchasers shall mean either the
singular or plural as the context requires. The use of the
neuter in this Agreement shall include the feminine and masculine
wherever appropriate. Certain terms used herein are defined
in Section 22 hereof.
In connection with the offering of
the Securities, the Company, the Guarantors and certain of its
other Subsidiaries will enter into a new senior secured revolving
credit facility in the amount of up to CDN$500,000,000 with CIBC
World Markets Inc., as administrative agent, and the other lenders
thereto (the “Senior Credit Facility”).
In connection with the sale of the
Securities, the Company has prepared a preliminary offering
memorandum, dated January 22, 2003 (as amended or supplemented
at the Execution Time, including any and all exhibits thereto, the
“Preliminary Memorandum”), and a final offering
memorandum, dated January 31, 2003 (as amended or supplemented
at the Execution Time, including any and all exhibits thereto, the
“Final Memorandum”). Each of the Preliminary
Memorandum and the Final Memorandum sets forth certain information
concerning the Company and the Securities. The Company hereby
confirms that it has authorized the use of the Preliminary
Memorandum and the Final Memorandum, and any amendment or
supplement thereto, in connection with the offer and sale of the
Securities by the Initial Purchasers.
1. Representations and
Warranties of the Company and the Guarantors . The
Company and each of the Guarantors, jointly and severally,
represent and warrant to each Initial Purchaser as set forth below
in this Section 1.
(a) The Preliminary Memorandum
(other than pricing terms and other financial and other items
intentionally left blank), at the date thereof, did not contain any
untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading. At
the Execution Time, the Final Memorandum did not, and on the
Closing Date will not (and any amendment or supplement thereto, at
the date thereof, on the Closing Date will not), contain any untrue
statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
provided , however , that neither the Company nor any
of the Guarantors makes any representation or warranty as to the
information contained in or omitted from the Preliminary Memorandum
or the Final Memorandum, or any amendment or supplement thereto, in
reliance upon and in conformity with information furnished to the
Company in writing by or on behalf of the Initial Purchasers
through the Representatives specifically for inclusion
therein. The Company and the Guarantors hereby acknowledge
that the statements set forth in the Preliminary Memorandum and the
Final Memorandum on the front cover page in the last paragraph, and
under the heading “Plan of Distribution” the sixth and
seventh sentences of the ninth paragraph, the entire tenth
paragraph, and the fifth and eighth sentences of the eleventh
paragraph constitute the only information furnished to the Company
in writing by or on behalf of the Initial Purchasers for inclusion
in the Preliminary Memorandum or the Final Memorandum (or in any
amendment or supplement thereto).
(b) None of the Company, the
Guarantors or any of its or their Affiliates, nor any person acting
on its or their behalf (other than the Initial Purchasers and their
Affiliates, as to whom no representation is made) has engaged in
any form of general solicitation or general advertising (within the
meaning of Regulation D) in connection with any offer or sale of
the Securities in the United States or in any manner involving a
public offering within the meaning of Section 4(2) of the
Act.
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(c) The Securities satisfy the
eligibility requirements of Rule 144A(d)(3) under the
Act.
(d) The Company is a foreign issuer
(as defined in Regulation S).
(e) None of the Company, the
Guarantors or any of its or their Affiliates, nor any Person acting
on its or their behalf (other than the Initial Purchasers and their
Affiliates, as to whom no representation is made)
has, directly or indirectly, made offers or sales of any
security, or solicited offers to buy any security, under
circumstances that would require the registration of the Securities
under the Act or has engaged in any directed selling efforts
with respect to the Securities. Terms used in this paragraph
have the meanings given to them by Regulation S.
(f) The Company reasonably believes
that there is no substantial U.S. market interest (as defined in
Regulation S) in the Securities.
(g) It is not necessary in
connection with the offer, sale or delivery of the Securities to
the Initial Purchasers in the manner contemplated by the Final
Memorandum and this Agreement to qualify the Indenture under the
Trust Indenture Act.
(h) None of the Company or the
Guarantors is, and after giving effect to the offering and sale of
the Securities and the application of the proceeds thereof as
described in the Final Memorandum will be, an “investment
company” within the meaning of the Investment Company Act,
without taking account of any exemption arising out of the number
of holders of the Company’s securities.
(i) None of the Company, the
Guarantors or any of its or their Affiliates, nor any person acting
on its or their behalf has paid or agreed to pay to any person any
compensation for soliciting another to purchase any securities of
the Company (except as contemplated by this Agreement and as set
forth in or contemplated in the Final Memorandum (exclusive of any
amendment or supplement thereto)).
(j) None of the Company, the
Guarantors or any of its or their Affiliates, nor any person acting
on its or their behalf (other than the Initial Purchasers and their
Affiliates, as to whom no representation is made) has, directly or
indirectly, taken any action designed to cause or which has
constituted or which might reasonably be expected to cause or
result, under the Exchange Act or otherwise, in the stabilization
or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Securities.
(k) Each of the Company, its
Subsidiaries listed on Schedule II hereto (the
“Significant Subsidiaries”), the Guarantors (the
Significant Subsidiaries and the Guarantors, without duplication,
being collectively referred to as the “Material
Subsidiaries”) and the entities listed on Schedule III
hereto (the “Joint Ventures”) has been duly
incorporated and is validly existing as a corporation or
partnership in good standing under the laws of the jurisdiction in
which it is incorporated or organized with full corporate or other
power and authority to own or lease, as the case may be, and to
operate its properties and conduct its business as described in the
Final Memorandum,
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and is duly qualified to do business
as a foreign corporation or partnership and is in good standing
under the laws of each jurisdiction that requires such
qualification, except where the failure to be so qualified or in
good standing would not individually or in the aggregate have a
Material Adverse Effect.
(l) All the outstanding shares of
capital stock of each of the Company, its Material Subsidiaries and
the Joint Ventures have been duly and validly authorized and issued
and are fully paid and nonassessable where such concepts exist,
and, except as otherwise set forth in the Final Memorandum, all
outstanding shares of capital stock of the Subsidiaries are owned
by the Company either directly or through wholly-owned Subsidiaries
free and clear of any perfected security interest or any other
security interests, claims, liens or encumbrances, except for any
liens securing indebtedness to be refinanced with the proceeds of
the sale of the Securities pursuant hereto and the Senior Credit
Facility (as defined below).
(m) The Significant Subsidiaries are
the only significant subsidiaries of the Company, as defined by
Rule l-02(w) of Regulation S-X under the Act.
(n) The Company’s authorized
equity capitalization is as set forth in the Final
Memorandum.
(o) The Securities conform in all
material respects to the description thereof contained in the Final
Memorandum under the heading “Description of the
Notes.”
(p) This Agreement has been duly
authorized, executed and delivered by the Company and each of the
Guarantors.
(q) The Indenture has been duly
authorized and, assuming due authorization, execution and delivery
thereof by the Trustee, when executed and delivered by the Company
and each of the Guarantors, will constitute a valid, binding and
enforceable instrument of the Company and each of the Guarantors
(subject, as to enforcement, to applicable bankruptcy,
reorganization, insolvency, moratorium or other laws affecting
creditors’ rights generally from time to time in effect and
to general principles of equity).
(r) The Securities and the Exchange
Securities have been duly authorized, and, when executed and
authenticated in accordance with the provisions of the Indenture
and delivered to and (in the case of the Securities) paid for by
the Initial Purchasers or (in the case of the Exchange Securities)
delivered to the holders of the Securities in exchange therefor as
contemplated by the Registration Rights Agreement, will be duly
executed and delivered by the Company and each of the Guarantors
and will constitute valid, binding and enforceable obligations of
the Company and each of the Guarantors entitled to the benefits of
the Indenture (subject, as to enforcement, to applicable
bankruptcy, insolvency, moratorium or other laws affecting
creditors’ rights generally from time to time in effect and
to general principles of equity).
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(s) The Registration Rights
Agreement has been duly authorized and, when executed and delivered
by the Company and each of the Guarantors, will constitute a valid,
binding and enforceable instrument of the Company and each of the
Guarantors (subject, as to enforcement, to applicable bankruptcy,
reorganization, insolvency, moratorium or other laws affecting
creditors’ rights generally from time to time in effect and
to general principles of equity).
(t) Each of the Company and the
Guarantors has all requisite corporate power and authority, and has
taken all requisite corporate action necessary to enter into and
perform this Agreement, the Indenture, the Securities, the Exchange
Securities and the Registration Rights Agreement. No consent,
approval, authorization, filing with or order of any court or
governmental agency or body is required in connection with the
transactions contemplated herein or in the Indenture or the
Registration Rights Agreement, except, to the extent required, (i)
such as will be obtained under the Act and the Trust Indenture Act
and Canadian or provincial securities laws, (ii) such as may be
required under the blue sky laws of any jurisdiction in connection
with the purchase and distribution of the Securities by the Initial
Purchasers and the distribution of the Exchange Securities in the
manner contemplated herein and in the Final Memorandum and the
Registration Rights Agreement, and (iii) notices that may have to
be filed with appropriate Canadian provincial securities
commissions along with the Final Memorandum, accompanied by payment
of the requisite fees.
(u) Each of the Company and the
Subsidiaries party to the Senior Credit Facility (collectively, the
“Credit Parties”) have all requisite corporate power
and authority to enter into (A) the Senior Credit Facility and (B)
any and all other agreements and instruments ancillary to or
entered into in connection with the transactions contemplated by
the Senior Credit Facility (collectively with the Senior Credit
Facility, the “Credit Documents”).
(v) Each of the Credit Documents has
been duly and validly authorized, and, as of the Closing Date, will
be duly executed and delivered by each of the Credit Parties and
(assuming due authorization, execution and delivery by the other
parties thereto) will constitute a valid, binding and enforceable
obligation of such Credit Party (subject, as to enforcement, to
applicable bankruptcy, reorganization, insolvency, moratorium or
other laws affecting creditors’ rights generally from time to
time in effect and to general principles of equity). All
representations and warranties made by each of the Credit Parties
in the Senior Credit Facility are true and correct.
(w) Neither the execution and
delivery of this Agreement, the Indenture, the Registration Rights
Agreement or the Senior Credit Facility, nor the issue and sale of
the Securities or the Exchange Securities, nor the consummation of
any other of the transactions contemplated herein or therein or in
the Final Memorandum, nor the fulfillment of the terms hereof or
thereof will conflict with, result in a breach or violation or
imposition of any lien, charge or encumbrance upon any property or
asset of the Company, any of its Material Subsidiaries or any of
the Joint Ventures pursuant to (i) the articles of association,
certificate of incorporation, by-laws or other organizational
documents of the Company, any of its Material Subsidiaries or any
of the Joint Ventures;
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(ii) the terms of any indenture,
contract, lease, mortgage, deed of trust, note agreement, loan
agreement or other agreement, obligation, condition, covenant or
instrument to which the Company, any of its Material Subsidiaries
or any of the Joint Ventures is a party or bound or to which its or
their property is subject; or (iii) any statute, law, rule,
regulation, judgment, order or decree applicable to the Company,
any of its Material Subsidiaries or any of the Joint Ventures of
any court, regulatory body, administrative agency, governmental
body, arbitrator or other authority having jurisdiction over the
Company, any of its Material Subsidiaries or any of the Joint
Ventures or any of its or their properties, except in the cases of
clauses (ii) and (iii) such as would not have a Material Adverse
Effect, and except to the extent that notices may have to be filed
with appropriate Canadian provincial securities commissions along
with the Final Memorandum, accompanied by payment of the requisite
fees.
(x) The consolidated historical
financial statements and schedules of the Company and its
consolidated Subsidiaries included in the Final Memorandum present
fairly in all material respects the financial condition, results of
operations and cash flows of the Company and its consolidated
Subsidiaries as of the dates and for the periods indicated, comply
as to form with the applicable accounting requirements of the Act
and have been prepared in conformity with generally accepted
accounting principles in Canada (“Canadian GAAP”)
applied on a consistent basis throughout the periods involved with
a note to such financial statements reconciling them to generally
accepted accounting principles in the United States (“US
GAAP”). The historical financial information set forth
under the captions “Summary” and “Selected
Historical Financial Information” included in the Final
Memorandum fairly present, on the basis stated in the Final
Memorandum, the information included therein. The financial
data in the line items entitled “Pro forma interest
expense” and “Pro forma total debt” and the
related footnote thereto, set forth under the caption
“Summary – Summary Historical and Pro Forma Financial
Information” included in the Final Memorandum include
assumptions that provide a reasonable basis for presenting the
significant effects directly attributable to the transactions and
events described therein, the related pro forma adjustments give
appropriate effect to those assumptions, and the pro forma
adjustments reflect the proper application of those adjustments to
the historical financial statement amounts of the
Company.
(y) Except as described in the Final
Memorandum, no action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving
the Company, any of its Material Subsidiaries or any of the Joint
Ventures or its or their directors, officers or property is pending
or, to the best knowledge of the Company, threatened that (i) would
have a material adverse effect on the performance of this
Agreement, the Indenture or the Registration Rights Agreement, or
the consummation of any of the transactions contemplated hereby or
thereby, or (ii) would have a Material Adverse Effect.
(z) Each of the Company, its
Material Subsidiaries and, to the Company’s knowledge, the
Joint Ventures has good and marketable title in fee simple to all
real property and good and marketable title to all personal
property owned by them, in each case, free and clear of all liens,
encumbrances and defects except such as are described in
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the Final Memorandum, such that do
not materially affect the value of such property and do not
materially interfere with the use made and proposed to be made of
such property by the Company and its Material Subsidiaries, and
such that secure the indebtedness to be refinanced with the
proceeds of the sale of the Securities pursuant hereto and the
Senior Credit Facility. All assets held under lease by the
Company and its Subsidiaries are held by them under valid and
enforceable leases, with such exceptions as are not material and do
not interfere with the use made and proposed to be made of such
assets by the Company and its Material Subsidiaries.
(aa)
Set forth in Schedule IV hereto
is a list of all contracts, indentures, mortgages, deeds or trusts,
loan or credit agreements, notes, leases or other agreements or
instruments to which the Company, any of its Subsidiaries or any of
the Joint Ventures is a party or bound or to which its property is
subject, that are material to the Company and its Subsidiaries,
taken as a whole.
(bb)
Neither the Company nor any of its
Material Subsidiaries nor, to the Company’s knowledge, any of
the Joint Ventures is in violation or default of (i) any provision
of its articles of association, certificate of incorporation,
by-laws or other organizational documents; (ii) the terms of any
indenture, contract, lease, mortgage, deed of trust, note
agreement, loan agreement or other agreement, obligation,
condition, covenant or instrument to which the Company, any of its
Material Subsidiaries, or any of the Joint Ventures is a party or
bound or to which its or their property is subject; or (iii) any
statute, law, rule, regulation, judgment, order or decree of any
court, regulatory body, administrative agency, governmental body,
arbitrator or other authority having jurisdiction over the Company,
any of its Material Subsidiaries, or any of the Joint Ventures or
any of its or their properties, as applicable, except, in the cases
of clauses (ii) and (iii), such as would not have a Material
Adverse Effect.
(cc)
PricewaterhouseCoopers LLP, who have
certified certain consolidated financial statements of the Company
and delivered their report with respect to such audited
consolidated financial statements included in the Final Memorandum,
are independent public accountants with respect to the Company
within the meaning of the Act and the applicable published rules
and regulations thereunder.
(dd)
There are no stamp or other issuance
or transfer taxes or duties or other similar fees or charges
required to be paid in connection with the execution, delivery and
performance of this Agreement or the Indenture by the Company or
the Guarantors or the issuance or sale of the Securities or the
Exchange Securities by the Company or the Guarantors.
(ee)
All interest, principal, premium (if
any) and other payments due or made on the Securities or the
Exchange Securities may be paid by the Company to each holder
thereof in U.S. dollars that may be freely transferred out of
Canada, and, except for payments made to a holder with which the
Company does not deal at arm’s length (within the meaning of
the Income Tax Act (Canada)) at the time the payment is
made, all such payments made to holders who are non-residents of
Canada will not be subject to income, withholding or other taxes
under laws and regulations of Canada or any political
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subdivision or taxing authority
thereof or therein and will otherwise be free and clear of any
other tax, duty, withholding or deduction in Canada or any
political subdivision or taxing authority thereof or therein and
without the necessity of obtaining any governmental authorization
in Canada or any political subdivision or taxing authority thereof
or therein.
(ff)
The Company has filed all foreign,
federal, provincial, state and local tax returns that are required
to be filed or has requested extensions thereof, except in any case
in which the failure so to file would not have a Material Adverse
Effect, and has paid all taxes required to be paid by it and any
other assessment, fine or penalty levied against it, to the extent
that any of the foregoing is due and payable, except for any such
assessment, fine or penalty that is currently being contested in
good faith or as would not have a Material Adverse
Effect.
(gg)
Since the date of the most recent
financial statements included in the Final Memorandum (exclusive of
any amendment or supplement thereto), there has been no material
adverse change in the condition (financial or otherwise),
prospects, earnings, business or properties of the Company and its
Subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business, except as set
forth in or contemplated by the Final Memorandum (exclusive of any
amendment or supplement thereto).
(hh)
No labor problem or dispute with the
employees of the Company, any of its Material Subsidiaries or any
of the Joint Ventures exists, except as set forth in or
contemplated in the Final Memorandum (exclusive of any amendment or
supplement thereto), or, to the knowledge of the Company, is
threatened or imminent; there are no amounts owing or promised by
the Company, any of its Material Subsidiaries or, to the
Company’s knowledge, any of the Joint Ventures to any present
or former directors or employees of the Company, any of its
Material Subsidiaries or, to the Company’s knowledge, any of
the Joint Ventures, except as set forth in or contemplated in the
Final Memorandum (exclusive of any amendment or supplement
thereto); no individuals named in the Final Memorandum under the
caption “Management” have given or been given notice
terminating their contracts of employment, except such as would not
have a Material Adverse Effect;
(ii)
Each of the Company, its Material
Subsidiaries and, to the Company’s knowledge, the Joint
Ventures is insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as
are prudent and customary in the businesses in which they are
engaged; and neither the Company nor any of its Material
Subsidiaries nor, to the Company’s knowledge, any of the
Joint Ventures has any reason to believe that it will not be able
to renew its existing insurance coverage as and when such coverage
expires or to obtain similar coverage from similar insurers as may
be necessary to continue its business at a cost that would not have
a Material Adverse Effect.
(jj)
Except as described in or
contemplated by the Final Memorandum, no Material Subsidiary of the
Company is currently prohibited, directly or indirectly,
from
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paying any dividends to the Company
or any other Subsidiary, from making any other distribution on such
Subsidiary’s capital stock, from repaying to the Company or
any other Subsidiary any loans or advances to such Subsidiary from
the Company or from transferring any of such Subsidiary’s
property or assets to the Company or any other Subsidiary, except
that no representation is made regarding prohibitions imposed by
laws and regulations applicable to companies organized outside
Canada, the United States and the United Kingdom.
(kk)
Each of the Company, its Material
Subsidiaries and, to the Company’s knowledge, the Joint
Ventures possesses all licenses, certificates, permits and other
authorizations issued by the appropriate federal, provincial, state
or foreign regulatory authorities necessary to conduct their
respective businesses, except such as would not have a Material
Adverse Effect; and neither the Company nor any of its Subsidiaries
nor, to the Company’s knowledge, any of the Joint Ventures
has received any notice of proceedings relating to the revocation
or modification of any such certificate, authorization or permit
which, singly or in the aggregate, would likely result in an
unfavorable decision, ruling or finding or would have a Material
Adverse Effect.
(ll)
Each of the Company, its Material
Subsidiaries and, to the Company’s knowledge, the Joint
Ventures maintains a system of internal accounting controls
sufficient to provide reasonable assurance that (i) transactions
are executed in accordance with management’s general or
specific authorizations; (ii) transactions are recorded as
necessary to permit preparation of financial statements in
conformity with Canadian GAAP and to maintain asset accountability;
(iii) access to assets is permitted only in accordance with
management’s general or specific authorization; and (iv) the
recorded accountability for assets is compared with the existing
assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(mm)
To the best knowledge of the
Company, each of the Company, its Material Subsidiaries and the
Joint Ventures (i) is in compliance with any and all
applicable U.S., Canadian, foreign, federal, provincial, state and
local laws and regulations relating to the protection of human
health and safety, the environment or hazardous or toxic substances
or wastes, pollutants or contaminants (“Environmental
Laws”); (ii) has received and is in compliance with all
permits, licenses or other approvals required of it under
applicable Environmental Laws to conduct its businesses; and
(iii) has not received notice of any actual or potential
liability for the investigation or remediation of any disposal or
release of hazardous or toxic substances or wastes, pollutants or
contaminants, except, in each ease, where such failure would not,
individually or in the aggregate, have a Material Adverse Effect;
except as set forth in the Final Memorandum, neither the Company
nor any of the Material Subsidiaries nor, to the Company’s
knowledge, any of the Joint Ventures has been named as a
“potentially responsible party” under the U.S.
Comprehensive Environmental Response, Compensation, and Liability
Act of 1980, as amended.
(nn)
In the ordinary course of its
business, the Company periodically reviews the effect of
Environmental Laws on the business, operations and properties of
the Company and its Subsidiaries, in the course of which it
identifies and evaluates
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associated costs and liabilities
(including, without limitation, any capital or operating
expenditures required for clean-up, closure of properties or
compliance with Environmental Laws, or any permit, license or
approval, any related constraints on operating activities and any
potential liabilities to third parties); on the basis of such
review, the Company has reasonably concluded that such associated
costs and liabilities would not, singly or in the aggregate, have a
Material Adverse Effect.
(oo)
The Company, its Material
Subsidiaries and, to the Company’s knowledge, the Joint
Ventures own, possess, license or have other rights to use, on
reasonable terms, all patents, patent applications, trade and
service marks, trade and service mark registrations, trade names,
copyrights, licenses, inventions, trade secrets, technology,
know-how and other intellectual property (collectively, the
“Intellectual Property”) necessary for the conduct of
the Company’s business as now conducted or as proposed in the
Final Memorandum to be conducted, except where the failure to own,
possess, license or have other rights to use such Intellectual
Property would not have a Material Adverse Effect. There is
no pending or, to the Company’s knowledge, threatened action,
suit, proceeding or claim by others challenging the validity or
scope of any of the Intellectual Property, and the Company is
unaware of any facts that would form a reasonable basis for any
such claim. There is no pending or, to the Company’s
knowledge, threatened action, suit, proceeding or claim by others
that the Company or any of its Material Subsidiaries infringes or
otherwise violates any patent, trademark, copyright, trade secret
or other proprietary rights of others, and the Company is unaware
of any other fact that would form a reasonable basis for any such
claim.
(pp)
Each of the Company, its Material
Subsidiaries and, to the Company’s knowledge, the Joint
Ventures has fulfilled its obligations, if any, under the minimum
funding standards of Section 302 of the United States Employee
Retirement Income Security Act of 1974, as amended
(“ERISA”), and the regulations and published
interpretations thereunder with respect to each “plan”
(as defined in Section 3(3) of ERISA and such regulations and
published interpretations) in which employees of the Company, its
Material Subsidiaries and the Joint Ventures are eligible to
participate, and each such plan is in compliance in all material
respects with the presently applicable provisions of ERISA and such
regulations and published interpretations, except for such failures
as would not have a Material Adverse Effect. Neither the
Company, nor any of its Material Subsidiaries, nor, to the
Company’s knowledge, any of the Joint Ventures has incurred
any unpaid liability to the Pension Benefit Guaranty Corporation
(other than for the payment of premiums in the ordinary course) or
to any such plan under Title IV of ERISA or to any other pension
plan on an ongoing or termination basis, except for such failures
as would not have a Material Adverse Effect.
(qq)
Immediately after the consummation
of the transactions contemplated hereby and by the Final
Memorandum, the fair value and present fair saleable value of the
assets of each of the Company and of the Guarantors will exceed the
sum of its stated liabilities and identified contingent
liabilities. Neither the Company nor any of the Guarantors
is, nor will the Company or any of the Guarantors be, after giving
effect to the execution, delivery and performance of this
Agreement, the Indenture, the Securities and the Registration
Rights Agreement and the consummation of any other of
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the transactions contemplated herein
or therein or in the Final Memorandum, (A) left with unreasonably
small capital with which to carry on its business as it is proposed
to be conducted, (B) unable to pay its debts (contingent or
otherwise) as they mature or (C) otherwise insolvent.
(rr)
The Company has no reason to believe
that the statistical and market-related data included in the Final
Memorandum are based on or derived from sources that are not
reliable and accurate.
(ss)
Each of the relationships and
transactions specified in Item 404 of Regulation S-K that would
have been required to be described in a prospectus if this offering
had been registered under the Act has been so described in the
Final Memorandum (exclusive of any amendment or supplement
thereto).
(tt)
Except for the Guarantors, Cascades
Boxboard Group Inc. and its Subsidiaries, the Company has no
Subsidiaries organized under the laws of Canada, any province
thereof, or any state of the United States.
Any certificate signed by any
officer of the Company or any Guarantor and delivered to the
Representatives or counsel for the Initial Purchasers in connection
with the offering of the Securities shall be deemed a
representation and warranty by the Company or such Guarantor, as to
matters covered thereby, to each Initial Purchaser.
2. Purchase and Sale
. Subject to the terms and conditions and in reliance upon
the representations and warranties herein set forth, the Company
and the Guarantors agree to sell to each Initial Purchaser, and
each Initial Purchaser a
