Securities Law & Instruments

Headnote

MRRS - Relief from the registration and prospectusrequirements for issuance of securities pursuant to a settlementagreement where the "statutory arrangement" exemptionis not available for technical reasons. First trade deemed adistribution unless made in accordance with provisions of MultilateralInstrument 45-102: Resale of Securities.

Applicable Ontario Statutory Provisions

Securities Act, R.S.O. 1990, c. S.5, as am.,ss. 25, 53, and 74(1).

Applicable Ontario Rules

Ontario Securities Rule 45-501 - Exempt Distributions- s. 2.8.

Applicable Instrument

Multilateral Instrument 45-502 - Resale of Securities- s. 2.6.

IN THE MATTER OF
THE SECURITIES LEGISLATION OF ONTARIO AND QUÉBEC

AND

IN THE MATTER OF
THE MUTUAL RELIANCE REVIEW SYSTEM
FOR EXEMPTIVE RELIEF APPLICATIONS

AND

IN THE MATTER OF
CASCADES INC.

MRRS DECISION DOCUMENT

WHEREAS the Canadian securities regulatoryauthority (the "Decision Makers") in each of the provincesof Québec and Ontario (the "Jurisdictions")has received an application from Cascades Inc. ("Cascades"or the "Company") for a decision under the securitieslegislation of the Jurisdictions (the "Legislation")that, in connection with a settlement with former shareholdersof Perkins Papers Ltd. ("Perkins"), having exercisedtheir dissent right (the "Former Dissenting Shareholders")regarding the Amalgamation of Perkins with 3715973 Canada Inc.,(the "Amalgamation") to which Cascades intervened(the "Settlement"):

(i) the requirements contained in the securitieslegislation of the Jurisdictions to be registered to trade ina security (the "Registration Requirement") shallnot apply to the issuance of common shares by the Company andany first trade in common shares of the Company;

(ii) the requirements contained in the securitieslegislation of the Jurisdictions to file and obtain a receiptfor a prospectus (the "Prospectus Requirement") shallnot apply to the issuance of common shares by the Company andany first trade in common shares of the Company; and

(iii) applicable hold periods shall not applyto any resale of the Company's common shares in Québec.

AND WHEREAS under the Mutual RelianceReview System for Exemptive Relief Applications (the "System"),the Commission des valeurs mobilières du Québecis the principal regulator for this application;

AND WHEREAS the Company has representedto the Decision Makers that:

1. The Company is a company governed by theCompanies Act (Québec) and a reporting issuer in eachof the Jurisdictions.

2. The head office of the Company is locatedin Kinsey Falls, Québec.

3. Perkins amalgamated with 3715973 Canada Inc.effected as part of a combination of Paperboard Industries Inc.,Perkins and Rolland Inc. as wholly-owned subsidiaries of theCompany, completed as at December 31, 2000, to which the Companyintervened.

4. Pursuant to the terms of the Amalgamation,holders of common shares of Perkins, other than the Companyand the Former Dissenting Shareholders, received 0.64 commonshare of the Company for each common share of Perkins.

5. At the time of the Amalgamation, the FormerDissenting Shareholders exercised their dissent right pursuantto the Canada Business Corporations Act.
6. The Settlement reached with the Former Dissenting Shareholdersgranted an option to the Former Dissenting Shareholders wherebythey could elect either to receive a cash consideration forthe common shares of Perkins held at the time of the Amalgamationor to receive common shares of Cascades representing a ratioof 0.64 common shares of Cascades for each common share of Perkinsheld at the time of the Amalgamation.

7. At the time of the Amalgamation, the FormerDissenting Shareholders were not accounted for in the Amalgamationrelief granted under the Legislation.

8. Under the Settlement, the Former DissentingShareholders will receive the same exchange ratio that was usedfor the Amalgamation, as if they had not exercised their dissentright.

9. The Company is not in default of any of therequirements under the Legislation.

10. With respect to Ontario, as of the datehereof, Cascades would be considered a "qualifying issuer"for the purposes of Multilateral Instrument 45-102 - Resaleof Securities.

AND WHEREAS under the System, this MRRSDecision Document evidences the decision of each Decision Maker(collectively the "Decision");

AND WHEREAS each of the Decision Makersis satisfied that the test contained in the Legislation thatprovides the Decision Maker with the jurisdiction to make theDecision has been met.

THE DECISION of the Decision Makersin the Jurisdictions pursuant to the Legislation is that, theRegistration Requirements and the Prospectus Requirements shallnot apply to the Settlements provided that:

(a) in Ontario, the first trade in common sharesacquired pursuant to the Decision will be deemed a distributionto the public unless:

1. Cascades is and has been a reporting issuerin Ontario for the four months immediately preceding the trade,

2. the trade is not a control distribution,

3. no unusual effort is made to prepare themarket or to create a demand for the securities that are thesubject of the trade,

4. no extraordinary commission or considerationis paid to a person or company in respect of the trade, and

5. if the selling security holder is an insideror officer of the issuer, the selling security holder has noreasonable grounds to believe that the issuer is in defaultof securities legislation.

(b) in Québec, Cascades is and has beena reporting issuer in good standing for the twelve months immediatelypreceding the Settlement and no unusual effort is made to preparethe market or to create a demand for the common shares.

May 17 2002.

"Jean-François Bernier"