exv4w2



 






Exhibit 4.2




QUEBECOR MEDIA INC.




as Borrower




- and -




THE FINANCIAL INSTITUTIONS IDENTIFIED

ON THE SIGNATURE PAGES HERETO




as Lenders




- and -




BANC OF AMERICA SECURITIES LLC




as Joint Lead Arranger and Sole Bookmanager




- and -




BANK OF AMERICA, N.A.




as Administrative Agent




- and -




THE TORONTO-DOMINION BANK




as Joint Lead Arranger and Syndication Agent




- and -




THE BANK OF NOVA SCOTIA




- and -




BANK OF MONTREAL




- and -




HSBC BANK CANADA




as Documentation Agent (s)




 





Revolving
Facility — C$100,000,000

Facility A — C$125,000,000




Facility B — US$350,000,000




CREDIT AGREEMENT




January 17, 2006




 





 









 








TABLE OF CONTENTS




	 	 	 	 	 	 	 
	ARTICLE 1 INTERPRETATION	 	 	1	 
	Section 1.01

	 	Defined Terms
	 	 	1	 
	Section 1.02

	 	Gender and Number
	 	 	32	 
	Section 1.03

	 	Interpretation not Affected by Headings, etc.
	 	 	32	 
	Section 1.04

	 	Currency
	 	 	32	 
	Section 1.05

	 	Certain Phrases, etc.
	 	 	32	 
	Section 1.06

	 	Accounting Terms
	 	 	32	 
	Section 1.07

	 	Non-Business Days
	 	 	33	 
	Section 1.08

	 	Ratable Portion of Accommodations
	 	 	33	 
	Section 1.09

	 	Incorporation of Schedules
	 	 	33	 
	Section 1.10
	 	Rounding	 	 	33	 
	Section 1.11

	 	Times of Day
	 	 	33	 
	Section 1.12

	 	Letter of Credit Amounts
	 	 	33	 
	 
	 	 	 	 	 	 
	ARTICLE 2 CREDIT FACILITIES	 	 	34	 
	Section 2.01

	 	Availability
	 	 	34	 
	Section 2.02

	 	Commitments and Facility Limits
	 	 	34	 
	Section 2.03

	 	Use of Proceeds
	 	 	35	 
	Section 2.04

	 	Mandatory Repayments and Reductions of Commitments
	 	 	35	 
	Section 2.05

	 	Mandatory Prepayments
	 	 	36	 
	Section 2.06

	 	Optional Prepayments and Reductions of Commitments
	 	 	37	 
	Section 2.07

	 	Fees.
	 	 	37	 
	Section 2.08

	 	Payments under this Agreement
	 	 	38	 
	Section 2.09

	 	Application of Payments and Prepayments
	 	 	38	 
	Section 2.10

	 	Cash Collateralization of Certain Payments and Prepayments
	 	 	39	 
	Section 2.11

	 	Computations of Interest and Fees
	 	 	39	 
	Section 2.12

	 	Increase of Facility B and Creation of a New Credit Facility
	 	 	39	 
	Section 2.13

	 	Excess.
	 	 	41	 
	 
	 	 	 	 	 	 
	ARTICLE 3 ADVANCES	 	 	41	 
	Section 3.01

	 	The Advances
	 	 	41	 
	Section 3.02

	 	Procedure for Advances
	 	 	42	 
	Section 3.03

	 	LIBOR Advances
	 	 	42	 
	Section 3.04

	 	Market for Libor Advances
	 	 	42	 
	Section 3.05

	 	Suspension of Libor Advance Option
	 	 	42	 
	Section 3.06

	 	Limits on Libor Advances
	 	 	43	 
	Section 3.07

	 	Conversions of Advances
	 	 	43	 
	Section 3.08

	 	Interest on Prime Rate Advances
	 	 	43	 
	Section 3.09

	 	Interest on US Prime Rate Advances
	 	 	43	 
	Section 3.10

	 	Interest on Libor Advances
	 	 	43	 
	 
	 	 	 	 	 	 
	ARTICLE 4 BANKERS’ ACCEPTANCES	 	 	44	 
	Section 4.01

	 	Acceptances and Drafts
	 	 	44	 
	Section 4.02

	 	Form of Drafts
	 	 	45	 
	Section 4.03

	 	Procedure for Drawing
	 	 	45	 






 









 



3





	 	 	 	 	 	 	 
	Section 4.04

	 	Signatures of Draft Forms
	 	 	46	 
	Section 4.05

	 	Payment, Conversion or Renewal of BA Instruments
	 	 	46	 
	Section 4.06

	 	Circumstances Making Bankers’ Acceptances Unavailable
	 	 	46	 
	Section 4.07

	 	Depository Bills and Notes Act
	 	 	47	 
	 
	 	 	 	 	 	 
	ARTICLE 5 LETTERS OF CREDIT	 	 	47	 
	Section 5.01

	 	Letters of Credit
	 	 	47	 
	Section 5.02

	 	Reimbursements of Amounts Drawn
	 	 	48	 
	Section 5.03

	 	Risk of Letters of Credit
	 	 	49	 
	Section 5.04

	 	Repayments
	 	 	50	 
	Section 5.05

	 	Applicability of ISP
	 	 	51	 
	Section 5.06

	 	Conflict with Letter of Credit Application Form
	 	 	51	 
	 
	 	 	 	 	 	 
	ARTICLE 6 CONDITIONS OF LENDING	 	 	51	 
	Section 6.01

	 	Conditions Precedent to the Initial Accommodation
	 	 	51	 
	Section 6.02

	 	Conditions Precedent to All Accommodations and Conversions
	 	 	53	 
	Section 6.03

	 	No Waiver
	 	 	54	 
	 
	 	 	 	 	 	 
	ARTICLE 7 REPRESENTATIONS AND WARRANTIES	 	 	54	 
	Section 7.01

	 	Representations and Warranties
	 	 	54	 
	Section 7.02

	 	Survival of Representations and Warranties
	 	 	59	 
	 
	 	 	 	 	 	 
	ARTICLE 8 COVENANTS OF THE BORROWER	 	 	60	 
	Section 8.01

	 	Affirmative Covenants
	 	 	60	 
	Section 8.02

	 	Negative Covenants
	 	 	64	 
	Section 8.03

	 	Financial Covenants
	 	 	67	 
	 
	ARTICLE 9 EVENTS OF DEFAULT	 	 	68	 
	Section 9.01

	 	Events of Default
	 	 	68	 
	Section 9.02

	 	Remedies Upon Demand and Default
	 	 	71	 
	Section 9.03

	 	Bankruptcy and Insolvency
	 	 	72	 
	Section 9.04

	 	Relations with the Borrower
	 	 	72	 
	Section 9.05

	 	Application of Proceeds
	 	 	72	 
	 
	 	 	 	 	 	 
	ARTICLE 10 THE ADMINISTRATIVE AGENT AND THE LENDERS	 	 	72	 
	Section 10.01

	 	Appointment and Authority
	 	 	72	 
	Section 10.02

	 	Rights as a Lender
	 	 	73	 
	Section 10.03

	 	Exculpatory Provisions
	 	 	73	 
	Section 10.04

	 	Reliance by Administrative Agent
	 	 	74	 
	Section 10.05

	 	Delegation of Duties
	 	 	74	 
	Section 10.06

	 	Resignation of Administrative Agent
	 	 	75	 
	Section 10.07

	 	Non-Reliance on Administrative Agent and Other Lenders
	 	 	76	 
	Section 10.08

	 	No Other Duties, Etc.
	 	 	76	 
	Section 10.09

	 	Administrative Agent May File Proofs of Claim
	 	 	76	 
	Section 10.10

	 	Collateral and Guaranty Matters
	 	 	77	 
	Section 10.11

	 	Replacement of Non-Schedule I Reference Banks
	 	 	77	 
	Section 10.12

	 	Irrevocable Power of Attorney (fondé de pouvoir)
	 	 	78	 
	Section 10.13

	 	Issuing Lender
	 	 	78	 






 









 



4





	 	 	 	 	 	 	 
	Section 10.14

	 	Borrower Materials
	 	 	78	 
	 
	 	 	 	 	 	 
	ARTICLE 11 CURRENCY AND EXCHANGE	 	 	79	 
	Section 11.01

	 	Rules of Conversion
	 	 	79	 
	Section 11.02

	 	Determination of an Equivalent Currency
	 	 	79	 
	 
	 	 	 	 	 	 
	ARTICLE 12 MISCELLANEOUS	 	 	79	 
	Section 12.01

	 	Amendment Etc.
	 	 	79	 
	Section 12.02

	 	Waiver
	 	 	81	 
	Section 12.03

	 	Evidence of Debt and Accommodation Notices
	 	 	81	 
	Section 12.04

	 	Notices, etc.
	 	 	82	 
	Section 12.05

	 	Confidentiality
	 	 	82	 
	Section 12.06

	 	Costs, Expenses and Indemnity
	 	 	82	 
	Section 12.07

	 	Taxes
	 	 	84	 
	Section 12.08

	 	Successors and Assigns
	 	 	85	 
	Section 12.09

	 	Non-Cdn Qualified Lenders
	 	 	87	 
	Section 12.10

	 	Right of Set-off
	 	 	88	 
	Section 12.11

	 	Accommodations by Lenders
	 	 	88	 
	Section 12.12

	 	Rateable Payments
	 	 	88	 
	Section 12.13

	 	Interest on Accounts
	 	 	89	 
	Section 12.14

	 	Governing Law
	 	 	89	 
	Section 12.15

	 	Consent to Jurisdiction
	 	 	89	 
	Section 12.16

	 	Counterparts
	 	 	89	 
	Section 12.17

	 	Severability
	 	 	89	 
	Section 12.18

	 	Assignment to Federal Reserve Bank
	 	 	89	 
	Section 12.19

	 	Good Faith and Fair Consideration
	 	 	90	 
	Section 12.20

	 	Superior Force
	 	 	90	 
	Section 12.21

	 	Sharing of Payments Among Lenders
	 	 	90	 
	Section 12.22

	 	Language
	 	 	91	 






	 	 	 	 
	Schedules
	 	 	 
	 
	 	 	 
	Schedule A

	—
	 	Agency Branch Account
	Schedule B

	—
	 	Commitments
	Schedule 1

	—
	 	Form of Accommodation Notice
	Schedule 2

	—
	 	Form of Notice of Repayment
	Schedule 3

	—
	 	Offer to Lenders
	Schedule 4

	—
	 	Applicable margins
	Schedule 5

	—
	 	Security and Security Documents
	Schedule 6

	—
	 	Assignment and Assumption Agreement
	Schedule 7

	—
	 	Subordination Agreement for back-to-back securities
	Schedule 8

	—
	 	Form of Note






	 	 	 
	Disclosure Schedules
	 
	 	 
	Schedule 1.01(a)

	 	Existing Back-To-Back Debt
	Schedule 1.01(B)

	 	Existing Back-To-Back Preferred Shares






 










 



5





	 	 	 
	Schedule 1.01(C)

	 	Existing Tax Benefit Transactions
	Schedule 7.01(a)

	 	Subsidiaries and Jurisdiction of Incorporation or continuation
	Schedule 7.01(g)

	 	Location of Business and of minute books 
	Schedule 7.01(L)

	 	Corporate chart of the Borrower
	Schedule 7.01(P)

	 	Material Agreements
	Schedule 7.01(V)

	 	Corporate Structure







 









 







CREDIT AGREEMENT entered into in the City of Montreal, Province of Quebec, as of January 17,
2006




	 	 	 
	AMONG:

	 	QUEBECOR MEDIA INC., a company constituted and existing under the
laws of Quebec, Canada, having its registered office, head office
and chief executive office at 612 St-Jacques St., Montreal, Quebec,
H3C 4M8
	 
	 	 
	 

	 	PARTY OF THE FIRST PART
	 
	 	 
	AND:

	 	THE FINANCIAL INSTITUTIONS NAMED ON THE SIGNATURE PAGES HEREOF OR

FROM TIME TO TIME PARTIES HERETO PARTIES OF THE SECOND PART
	 
	 	 
	AND:

	 	BANK OF AMERICA, N.A., AS ADMINISTRATIVE AGENT FOR THE LENDERS, a
duly constituted bank, having a place of business at 1850 Gateway
Blvd. 5th Floor, Concord, California, 94520-3282,
CA4-706-05-13 and at 200 Front Street West, Suite 2700, Toronto,
Ontario, M5V 3L2
	 
	 	 
	 

	 	PARTY OF THE THIRD PART






     WHEREAS the Borrower wishes to borrow certain amounts from the Lenders and the Lenders have
agreed to lend such amounts to the Borrower, subject to and in accordance with the provisions
hereof;



     NOW THEREFORE the parties hereto, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, hereby covenant and agree as follows.



ARTICLE 1


INTERPRETATION




          Section 1.01 Defined Terms. As used in this Agreement, the following terms have the following
meanings:




          “Accommodation” means (i) an Advance made by a Lender; (ii) the creation and purchase of
Bankers’ Acceptances or the purchase of completed Drafts by a Lender or by any other Person on the
occasion of any Drawing; and (iii) the creation, issue, extension of expiry date, renewal or
increase of Letters of Credit by an Issuing Lender (each of which is a “Type” of Accommodation).




          “Accommodation Notice” means a Borrowing Notice or a Drawing Notice, as the case may be.










 



2




          “Accommodations Outstanding” means, at any time, the principal amount owed to the Lenders
under the Credit Facilities, and, more specifically, means (i) under the Revolving Facility, in
relation to (a) the Borrower and all Revolving Lenders, the amount of all Accommodations
outstanding thereunder at such time made to the Borrower by the Revolving Lenders, and (b) the
Borrower and each Revolving Lender, the amount of all Accommodations outstanding at such time made
by such Revolving Lender under its Commitment under the Revolving Facility; (ii) under Facility A,
in relation to (a) the Borrower and all Facility A Lenders, the amount of all Accommodations
outstanding thereunder at such time made to the Borrower by the Facility A Lenders, and (b) the
Borrower and each Facility A Lender, the amount of all Accommodations outstanding at such time made
by such Facility A Lender under its Commitment under Facility A; (iii) under Facility B, in
relation to (a) the Borrower and all Facility B Lenders, the amount of all Accommodations
outstanding thereunder at such time made to the Borrower by the Facility B Lenders, and (b) the
Borrower and each Facility B Lender, the amount of all Accommodations outstanding at such time made
by such Facility B Lender under its Commitment under Facility B; and (iv) in respect of Letters of
Credit, in relation to the Borrower and the Issuing Lender, the Aggregate Face Amount of Letters of
Credit Outstanding at such time issued by the Issuing Lender to the Borrower. In determining
Accommodations Outstanding under the Revolving Facility, the aggregate amount thereof shall be
determined on the basis of (i) the aggregate principal amount of all Advances in Canadian Dollars,
(ii) the Equivalent Amount in Canadian Dollars of the aggregate principal amount of all Advances in
US Dollars, (iii) an amount equal to the Aggregate Face Amount of Letters of Credit Outstanding for
which the Revolving Lenders are contingently liable pursuant to
Section 3.01(1)
and Section 5.02(2), as the case may be, and
(iv) the aggregate Face Amount of all outstanding BA Instruments which any applicable Lender has
purchased or arranged to have purchased (and in respect of each Revolving Lender, a ratable part of
such amounts). In determining Accommodations Outstanding under Facility A, the aggregate amount
thereof shall be determined on the basis of (i) the aggregate principal amount of all Advances in
Canadian Dollars, (ii) the Equivalent Amount in Canadian Dollars of the aggregate principal amount
of all Advances in US Dollars and (iii) the aggregate Face Amount of all outstanding BA Instruments
which any applicable Lender has purchased or arranged to have purchased (and in respect of each
Facility A Lender, a ratable portion of such amounts). In determining Accommodations Outstanding
under the Facility B-1 Tranche, the aggregate amount thereof shall be determined on the basis of
the aggregate principal amount of all Advances in US Dollars (and in respect of each Facility B-1
Lender, a ratable portion of such amounts). In determining Accommodations Outstanding under the
Facility B-2 Tranche, the aggregate amount thereof shall be determined on the basis of (i) the
aggregate principal amount of all Advances in Canadian Dollars and (ii) the aggregate Face Amount
of all outstanding BA Instruments which any applicable Lender has purchased or arranged to have
purchased (and in respect of each Facility B-2 Lender, a ratable part of such amounts). For all
purposes of this Agreement, if on any date of determination a Letter of Credit has expired by its
terms but any amount may still be drawn thereunder by reason of the operation of Rule 3.14 of the
ISP, such Letter of Credit shall be
deemed to be “outstanding” in the amount so remaining available
to be drawn.




          “Acquisition” means, with respect to any Person, any transaction or series of related
transactions for the direct or indirect (i) acquisition of all or substantially all of the Assets
or a business or division of any other Person; (ii) acquisition of any shares, interests,
participations or other equivalents (including partnership interests); or (iii) reconstruction,
reorganization, consolidation, amalgamation, winding-up, merger, transfer, sale, lease or other combination
with










 



3



any other Person other than with a subsidiary of such Person; and “Acquire” and “Acquired”
have meanings correlative thereto.




          “Administrative Agent” means, Bank of America, N.A. as administrative agent for the Lenders
under this Agreement, with assistance from Bank of America, N.A., Canada Branch, and any successor
appointed pursuant to Section 10.06.




          “Advances” means advances of funds in Canadian Dollars by way of Prime Rate Advances made by a
Lender under the Credit Facilities and advances in US$ by way of Libor Advances and US Prime Rate
Advances made by a Lender under the Credit Facilities, all in
accordance with Article 3 and “Advance” means any one of such advances.




          “Affiliate” has the meaning specified in the Canada Business Corporations Act on the date of
this Agreement, and, with respect to any Lender that is a fund that invests in bank loans, means
any other fund that invests in bank loans and is advised or managed by the same investment advisor
as such Lender or by an Affiliate of such investment advisor.




          “Agency Branch Account” means the accounts listed in Schedule A attached hereto.




          “Agent-Related Persons” means the Administrative Agent, together with its Affiliates
(including, in the case of Bank of America, N.A. in its capacity as the Administrative Agent, Banc
of America Securities LLC as, inter alia, joint lead arranger), and the officers, directors,
employees, agents and attorneys-in-fact of such Persons and Affiliates.




          “Aggregate Face Amount of Letters of Credit Outstanding” means the sum, expressed in Canadian
Dollars, of (i) the aggregate Face Amount of all Letters of Credit issued in C$ and (ii) the
Equivalent Amount in C$ of the aggregate Face Amount of all Letters of Credit issued in US$.




          “Agreement” means this credit agreement and all schedules attached hereto, as amended,
restated, modified, supplemented or extended from time to time; and the expressions “Article” and
“Section” followed by a number mean and refer to the specified Article or Section of this
Agreement.




          “Annual Business Plan” means, for any Financial Year, (i) detailed pro-forma balance sheets,
income statements and statements of changes in the Borrower’s and its Subsidiaries’ financial
position, prepared in accordance with GAAP (to the extent applicable), in respect of such Financial
Year for the Borrower and its Subsidiaries’ consolidated operations and supported by appropriate
explanations, notes and information; (ii) detailed pro-forma balance sheets, income statements and
statements of changes in the Borrower’s and its Subsidiaries’ financial position in respect of, and
as at the last day of, each of the next two following Financial Years, prepared in accordance with
GAAP (to the extent applicable) for the Borrower’s and its Subsidiaries’ consolidated operations.




          “Applicable Commitment Fee” means, in respect of the Revolving Facility, the Commitment Fee
set out in Schedule 4 corresponding to the applicable Leverage Ratio at such time. The Applicable Commitment Fee shall be adjusted on the date the Administrative Agent
receives the relevant Compliance Certificate calculating the Leverage Ratio. If at any time any











 



4



Compliance Certificate is not delivered on the applicable due date, without prejudice to the rights
of the Lenders in respect of such Default, the Borrower shall pay Commitment Fees set out in Tier V
of the table in Schedule 4 from the date such Compliance Certificate was due until it is delivered.




          “Applicable Margins” means, at any time, subject to the next following sentence, the margins
set forth in the relevant table in Schedule 4 and corresponding, with respect to the Revolving
Facility and Facility A, to the Leverage Ratio at such time. In respect of (i) Prime Rate Advances,
the Applicable Margin shall be the margin referred to in the column “C$ Prime Rate”; (ii) Drawings
and Letters of Credit, the Applicable Margin shall be the margin referred to in the column “Drawing
Fee and L/C Fee”, subject, with respect to Letters of Credit, to the fee payable to the Issuing
Lender as contemplated by Section 5.01, (iii) Libor Advances, the Applicable
Margin shall be the margin referred to in the column “LIBOR”, and (iv) US Prime Rate Advances, the
Applicable Margin shall be the margin referred to in the column “US$ Prime Rate”. With respect to
the Revolving Facility and Facility A, from the Closing Date until the delivery of the Compliance
Certificate with respect to the Fiscal Quarter of the Borrower ending on March 31, 2006, each
Applicable Margin and the Applicable Commitment Fee shall be deemed to be that set out in Tier IV
of the relevant table in Schedule 4. With respect to the Revolving Facility and Facility A, if at
any time any Compliance Certificate is not delivered on the applicable due date, without prejudice
to the rights of the Lenders in respect of such Default, the Applicable Margin shall be that set
out in Tier V of the relevant table in Schedule 4 from the date such Compliance Certificate was due
until the date on which it is delivered.




          If at the time of a change in the Drawing Fee or LC Fee, there exist any outstanding Drawings or
Letters of Credit of the Borrower under any Credit Facility, the Borrower shall pay to the
Administrative Agent, for the ratable benefit of the applicable Lenders under the applicable Credit
Facility (in the case of an increase in the Drawing Fee or LC Fee) or receive repayment or credit
from the applicable Lenders (in the case of a decrease in the Drawing Fee or LC Fee) for, an amount
in respect of each such Drawing or Letter of Credit equal to the product obtained by multiplying
(i) the product obtained by multiplying (w) the difference between the Drawing Fee or LC Fee in
effect prior to such change and the Drawing Fee or LC Fee in effect immediately after such change,
by (x) the aggregate face amount of such Drawing or Letter of Credit, by (ii) the quotient obtained
by dividing (y) the number of days to maturity remaining in respect of such Drawing or Letter of
Credit, by (z) 365 days. Any payment as a result of a change in the Applicable Margin shall be
made, in respect of Drawings, on the next maturity date thereof in
accordance with Article 4 or, in respect of Letters of Credit, on the next date of payment of such LC Fee
in accordance with

 Article 5.




          “Approved Fund” means any Fund that is administered or managed by (a) a Lender, (b) an
Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a
Lender.




          “Arm’s Length” has the meaning ascribed thereto for the purposes of the Income Tax Act
(Canada), as in effect as of the date hereof.




          “Assets” means, with respect to any Person, all property, rights, assets and undertakings of
such Person of every kind, tangible and intangible, and wheresoever situate, whether now owned or
hereafter acquired.










 



5




          “Assignee”
has the meaning ascribed thereto in Section 12.08.




          “Assignee Group” means two or more Eligible Assignees that are Affiliates of one another or
two or more Approved Funds managed by the same investment advisor.




          “Assignment Fee” means the processing and recordation fee in the amount of US$2,500 for each
assignment made in compliance with Section 12.08, provided, however, that in
the event of two or more concurrent assignments to members of the same Assignee Group (which may be
effected by a sub-allocation of an assigned amount among members of such Assignee Group) or two or
more concurrent assignments by members of the same Assignee Group to a single Eligible Assignee
(or to an Eligible Assignee and member of its Assignee Group), the Assignment Fee will be US$2,500
plus an amount of: (i) US$0 for the first four concurrent assignments or sub-allocations to members
of an Assignee Group (or from members of an Assignee Group, as applicable); and (ii) US$500 per
additional concurrent assignment or sub-allocation to a member of such Assignee Group (or from a
member of such Assignee Group, as applicable).




          “Assignment and Assumption” means an assignment and assumption entered into by a Lender and an
Eligible Assignee (with the consent of any party whose consent is required) and accepted by the
Administrative Agent in substantially the form of Schedule 6 or any other form approved by the
Administrative Agent.




          “Authorization” means, with respect to any Person, any authorization, order, permit, approval,
grant, licence, consent, right, franchise, privilege, certificate, judgment, writ, injunction,
award, determination, direction, decree, by-law, rule or regulation of any Governmental Entity
having jurisdiction over such Person.




          “Back-to-Back Debt” means any loans made or debt instruments issued as part of a Back-to-Back
Transaction and in which each party to such Back-to-Back Transaction, other than the Borrower,
executes a subordination agreement in favor of the Administrative Agent in substantially the form
attached hereto as Schedule 7.




          “Back-to-Back Preferred Shares” means preferred shares issued:





(a) to a Loan Party by an Affiliate of the Borrower in circumstances where, immediately
prior to the issuance of such preferred shares, an Affiliate of such Loan Party has loaned
on an unsecured basis to such Loan Party, or an Affiliate of such Loan Party has subscribed
for preferred shares of such Loan Party in an amount equal to, the requisite subscription
price for such preferred shares;




(b) by a Loan Party to one of its Affiliates in circumstances where, immediately prior to or
immediately after, as the case may be, the issuance of such preferred shares, such Loan
Party has loaned an amount equal to the proceeds of such issuance to an Affiliate on an
unsecured basis; or




(c) by a Loan Party to one of its Affiliates in circumstances where, immediately after the
issuance of such preferred shares, such Loan Party has used all of the proceeds of such
issuance to subscribe for preferred shares issued by such Affiliate;









 





6



in each case on terms whereby:




(i) the aggregate redemption amount applicable to the preferred shares issued to or by such
Loan Party is identical:




(A) in the case of (a) above, to the principal amount of the loan made or the
aggregate redemption amount of the preferred shares subscribed for by such Affiliate
prior to the issuance thereof;




(B) in the case of (b) above, to the principal amount of the loan made to such
Affiliate with the proceeds of the issuance thereof; or




(C) in the case of (c) above, to the aggregate redemption amount of the preferred
shares issued by such Affiliate with the proceeds of the issuance thereof;



     (ii) the dividend payment date applicable to the preferred shares issued to or by such Loan
Party will:




(A) in the case of (a) above, be immediately prior to the interest payment date
relevant to the loan made or the dividend payment date on the preferred shares
subscribed for by such Affiliate immediately prior to the issuance thereof;




(B) in the case of (b) above, be immediately after the interest payment date
relevant to the loan made to such Affiliate with the proceeds of the issuance
thereof; or




(C) in the case of (c) above, be immediately after the dividend payment date on the
preferred shares issued by such Affiliate with the proceeds of the issuance thereof;




(iii) the amount of dividends provided for on any payment date in the share conditions
attaching to the preferred shares issued:




(A) to a Loan Party in the case of (a) above, will be equal to or in excess of the
amount of interest payable in respect of the loan made or the amount of dividends
provided for in respect of the preferred shares subscribed for by such Affiliate
prior to the issuance thereof;




(B) by a Loan Party in the case of (b) above, will be equal to or less than the
amount of interest payable in respect of the loan made to such Affiliate with the
proceeds of the issuance thereof; or




(C) by a Loan Party in the case of (c) above, will be equal to the amount of
dividends in respect of the preferred shares issued by such Affiliate with the
proceeds of the issuance thereof.




Provided, for greater certainty, that in all cases, (I) the redemption of any preferred
shares by a Loan Party, (II) the repayment of any Back-to-Back Debt by a Loan Party, (III)
the payment of any dividends by a Loan Party in respect of its preferred shares, and (IV)
the payment of any interest on Back-to-Back Debt of a Loan Party, may, in each case, be made
by a Loan Party solely by delivering the relevant Back-to-Back Securities to the Affiliate in question, or by paying to the Affiliate an amount in cash not in excess
of the amount already received in cash from such Affiliate. Notwithstanding the foregoing,
the requirement set out above with respect to the timing and order of events or to the
effect that certain amounts stipulated in (ii) and (iii) above must be equal to or









 





7



not in excess of or not less than certain other amounts stipulated thereunder shall not apply to
Back-to-Back Transactions between QMI Entities provided the exchange of payments relating
to such transactions are completed on the same day absent administrative, technical or
technological constraints.



          “Back-to-Back Securities” means the Back-to-Back Preferred Shares or the Back-to-Back Debt or
both, as the context requires.




          “Back-to-Back Transactions” means any of the transactions described under the definition of
Back-to-Back Preferred Shares.




          “BA Equivalent Note” has the meaning specified in Section 4.03(3).




          “BA Instruments” means, collectively, Bankers’ Acceptances, Drafts and BA Equivalent Notes,
and, in the singular, any one of them.




          “Bankers’
Acceptance” has the meaning specified in
Section 4.01.




          “Banking Day” means any day which is at the same time a Business Day and a day on which
dealings in US Dollar deposits are conducted by and between banks in the London interbank
eurodollar market.




          “Beneficiary”
has the meaning ascribed thereto in Section 5.01(3).




          “Benefit Plan” of any Person, means, at any time, any employee benefit plan as defined in
Section 3 (3) of ERISA (including a Multiemployer Plan), the funding requirements of which (under
Section 302 of ERISA or Section 412 of the Internal Revenue Code) are, or at any time within six
years immediately preceding the time in question were, in whole or in part, the responsibility of
such Person.




          “Borrower” means Quebecor Media Inc. and its successors and permitted assigns.




          “Borrower’s Equity” means, without duplication, the sum of shareholders’ equity of the
Borrower and non-controlling interests of the Borrower, in each case determined on a consolidated
basis, in accordance with GAAP.




          “Borrowing
Notice” has the meaning specified in Section 3.02.




          “Building and Fixtures” means all plants, buildings, structures, erections, improvements,
appurtenances and fixtures (including fixed machinery and fixed equipment) situate on the Owned
Properties and Leased Properties.




          “Business” means, with respect to the Borrower and its Subsidiaries on a consolidated basis,
the business currently conducted by the Borrower and its Subsidiaries on the date hereof and any
business complementary thereto or an extension thereof.




          “Business Day” means any day of the year, other than a Saturday, Sunday or other day on which
banks are required or authorized to close in, or are in fact closed in, (a) with










 



8



respect to matters pertaining exclusively to Accommodations and repayments under the Revolving Facility, Facility A
and Facility B-2, Toronto, Ontario, or (b) with respect to all other matters, (i) Toronto, Ontario,
(ii) New York, New York, and (iii) California, U.S.A. or such other State in which the
Administrative Agent’s office is located from time to time.




          “Canadian Dollars” and “C$” each means lawful money of Canada.




          “Canadian Prime Rate” means, at any time, the rate of interest per annum equal to the greater
of (i) the rate which the principal office of the Administrative Agent in Toronto, Ontario quotes,
publishes and refers to as its “prime rate” and which is its reference rate of interest for demand
commercial loans in Canadian Dollars to Canadian borrowers; and (ii) the average rate for Canadian
Dollar bankers’ acceptances having a term of one month that appears on the Reuters Screen CDOR Page
(or such other page as is a replacement page for such bankers’ acceptances) as of 10:00 a.m.
(Toronto time) on the date of determination, as reported by the Administrative Agent, plus 1.00%,
adjusted automatically with each quoted, published or displayed change in such rate, all without
necessity of any notice to the Borrower or any other Person.




          “Capital Expenditures” means expenditures made for the purchase, lease or acquisition of
assets (other than current assets) required to be capitalized in accordance with GAAP. For greater
certainty, “Capital Expenditures” shall not include Acquisitions and Investments.




          “Carlyle Agreement” means the share purchase agreement dated December 22, 2003, as amended,
among Carlyle VTL Holdings, LP, Carlyle Partners III (Vidéotron), LP, the Borrower and 9101-0827
Quebec Inc.




          “Carlyle Debt” means the deferred purchase price owed by the Borrower pursuant to the Carlyle
Agreement.




          “Cash Equivalents” means





	 	(1)	 	US Dollars or Canadian Dollars;
	 
	 	(2)	 	investments in securities with maturities of one year or less
from the date of acquisition issued or fully guaranteed by any state,
commonwealth, territory or province of the United States of America or Canada,
or by any political subdivision or taxing authority thereof, and rated in the
“R-1” category by the Dominion Bond Rating Service Limited;
	 
	 	(3)	 	certificates of deposit and eurodollar time deposits with
maturities of one year or less from the date of acquisition, bankers’
acceptances with maturities not exceeding one year and overnight bank deposits,
in each case, with any domestic commercial bank having capital and surplus in
excess of US$500 million;
	 
	 	(4)	 	repurchase obligations with a term of not more than sixty days
for underlying securities of the types described in clauses (2) and (3) above










 





9


	 	 	 	entered into with any financial institution meeting the qualifications
specified in clause (3) above;
	 
	 	(5)	 	commercial paper having a rating of at least P-1 from Moody’s
Investors Service, Inc. or A-1 from Standard & Poor’s Rating Services and in
each case maturing within one year after the date of acquisition or with
respect to commercial paper in Canada, a rating in the “R-1” category from the
Dominion Bond Rating Service Limited; and
	 
	 	(6)	 	money market funds at least 90% of the assets of which
constitute Cash Equivalents of the kinds described in clauses (1) through (5)
of this definition.





          “Cdn Qualified Lender” means a Lender which (i) is not a non-resident within the meaning of
the ITA or (ii) is an authorized foreign bank within the meaning of the ITA and all amounts payable
to it with respect to the applicable Credit Facility are paid or credited in respect of its
“Canadian banking business” within the meaning of the ITA.




          “Change of Control” means the occurrence of one or more of the following events (whether or
not approved by the board of directors of any such Person): (i) any Person or related group of
Persons acting in concert shall at any time be, directly or indirectly, the beneficial owner of a
greater percentage of the votes attaching to the Borrower’s securities entitled to vote generally
in an election of the Borrower’s directors than the percentage of such votes beneficially owned by
Quebecor or the Péladeau Group at such time or (ii) the designees of Quebecor or the Péladeau Group
shall cease to represent the largest group of designees of any Person or group of Persons acting in
concert on the board of directors of the Borrower, or the said board is or becomes controlled by
any other shareholder.




          “Change in Law” means the occurrence, after the date of this Agreement, of any of the
following: (a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any change
in any law, rule, regulation or treaty or in the administration, interpretation or application
thereof by any Governmental Entity or (c) the making or issuance of any request, guideline or
directive (whether or not having the force of law) by any Governmental Entity.




          “Claim” means any claim of any nature whatsoever, including any demand, liability, obligation,
cause of action, suit, proceeding, judgment, award, assessment and reassessment.




          “Closing Date” means January 17, 2006.




          “Collateral” means the Assets of the Borrower or any of the Pledgors in respect of which any
Lender has or will have a Security Interest pursuant to a Security Document.




          “Commitment” means, at any time, in respect of any Lender, its portion of the Revolving
Commitment, Facility A Commitment or Facility B Commitment as applicable, as indicated in Schedule
B hereto and “Commitments” means collectively all the Commitments of all Lenders under all Credit
Facilities.





 










 




10



          “Compliance Certificate” means a certificate of the Borrower signed on its behalf by its
chief financial officer, controller, treasurer, or any other officer acceptable to the
Administrative Agent, (i) stating that any financial statements delivered by it pursuant to Section
8.01(a) present fairly the financial position, results of operations and changes in financial
position of the Borrower in accordance with GAAP; (ii) stating that the representations and
warranties in Article 7 are true and correct in all material respects on and as of such date,
except where expressly stated to be made at a particular date; (iii) stating that the Borrower is
not in breach of any of the covenants contained in Article 8 as at the date thereof (or describing
the details of any subsisting breach); (iv) stating that no Default has occurred and is continuing
and that no Event of Default has occurred (or describing the details of any subsisting Default and
the action which the Borrower proposes to take or has taken with respect thereto or any Event of
Default); and (v) providing, in reasonable detail, evidence of compliance, at the end of each
Financial Quarter, with Section 8.03 and evidencing the calculation of the financial covenants in
Section 8.03 applicable at such time.




          “Consolidated Debt” means, for any Person, at any time, the aggregate of all Debt of such
Person and its subsidiaries on a consolidated basis, determined in accordance with GAAP.




          “Consolidated EBITDA” means, for any Person, for any period and without duplication, earnings
of such Person on a consolidated basis before non-controlling interests, earnings from equity
accounted investments, extraordinary items, non-recurring gains or losses on debt extinguishment
and asset sales, Consolidated Interest Charges, foreign exchange translation gains or losses not
involving the payment of cash, amortization of deferred financing costs and other non-cash
financial charges, taxes, depreciation, amortization (including write-down of assets), without
taking into account any goodwill adjustments, calculated on a consolidated basis, and otherwise
calculated in accordance with GAAP; for greater certainty, there shall be excluded from the
calculation of “Consolidated EBITDA” to the extent included in such calculation, the amount of any
income or expense relating to Back-to-Back Securities.




          “Consolidated Interest Charges” means, for any Person, for any period for the Person and its
subsidiaries, the sum of, without duplication, on a consolidated basis, (i) all items properly
classified as interest expense in accordance with GAAP (other than amounts paid in respect of (A)
the Back-to-Back Transactions, including under the Existing Back-to-Back Securities, (B) any
non-cash foreign exchange gains or losses recognized in relation to foreign currency denominated
Debt and (C) the amortization of deferred financing cost), (ii) the imputed interest component of
any element of Consolidated Debt (such as capital leases) which would not be classified as interest
expense pursuant to (i), and (iii) the aggregate of all purchase discounts relating to the sale of
(a) bankers acceptances or other instruments sold at a discount, and (b) accounts receivable in
connection with any asset securitization program, all as determined at such time in accordance with
GAAP.




          “Consolidated Senior Debt” means, at any time, the Consolidated Debt less Subordinated Debt of
the Borrower and all other unsecured Debt of the Borrower (i.e. Debt not secured by a Lien)
determined in accordance with GAAP.




          “Consolidated Senior Leverage Ratio” means, at any time, the ratio of the Consolidated Senior
Debt of the Borrower to Consolidated EBITDA calculated in the manner prescribed in Section Section
8.02(g) at such time.










 



11




          “Contingent Obligations” of any Person means all contingent liabilities required to be
included in the financial statements of such Person in accordance with GAAP, excluding any notes
thereto.




          “Control” 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 the ability to exercise voting
power, by contract or otherwise. “Controlling” has a meaning correlative thereto.




          “Credit Documents” means this Agreement, the BA Instruments, the Letters of Credit, the
Security Documents, the Hedging Agreements (excluding the Hedging Agreements referred to in
paragraph (ii) of the definition of Hedging Agreements), the subordination agreements in respect of
Back-to-Back Securities and all other documents (including guarantees) to be executed and delivered
to the Administrative Agent, the Issuing Lender, the Lenders, their Affiliates, to any Person on
their behalf, or all of them, by the Borrower or any Pledgor or any other Person in connection with
the Credit Facilities, as such documents or instruments may be amended, restated, modified,
supplemented or extended from time to time.




          “Credit Facilities” means, collectively, the Revolving Facility, Facility A, Facility B and
any new credit facility created pursuant to Section 2.12, and, in the singular any one of them.




          “Debentures” has the meaning attributed to it in Schedule 5.




          “Debt” of any Person means, at any time, without duplication, (i) all indebtedness for
borrowed money including bankers’ acceptances, letters of credit or letters of guarantee; for the
purposes of calculating the amount of Debt denominated in US$, the Borrower shall use the exchange
rate contemplated in the hedging agreements entered into by it up to the extent to which such US$
denominated Debt is covered by such hedging agreements , (ii) obligations in respect of the
Negative Value of Hedging Agreement relating to all hedging agreements, but without duplication of
any underlying Debt that may be hedged by same, and without taking into account the currency
hedging in respect of the US$ denominated Debt referred to in paragraph (i) above, (iii) all
indebtedness for the deferred purchase price of property or services, whether or not represented by
a note or other evidence of indebtedness, other than such obligations incurred in the ordinary
course of the Person’s business, and payable within a period not exceeding 150 days from the date
of their incurrence, (iv) all indebtedness created or arising under any conditional sale or other
title retention agreement with respect to property acquired by the Person (even though the rights
and remedies of the seller or lender under such agreement in the event of default are limited to
repossession or sale of such property), (v) all indebtedness of another Person secured by a Lien
created or assumed by the Person on any properties or assets of the Person, (vi) Contingent
Obligations, (vii) all obligations under leases which have been or should be, in accordance with
GAAP, recorded as capital leases or Synthetic Leases in respect of which the Person is liable as
lessee, (viii) the aggregate amount at which any shares in the capital of the Person which are
redeemable or retractable at the option of the holder may be retracted or redeemed for cash or Debt
(provided all conditions precedent for such retraction or redemption have been satisfied), and (ix)
all Debt Guaranteed by the Person; but shall not include (a) the Back-to-Back Securities and the
Existing Back-to-Back Securities, and (b) the Existing Credit Agreement provided it is fully paid
on the Closing Date.










 



12




          “Debt Distribution” means, in respect of any Person, any payment made on, under, or in respect
of any Debt (other than Debt under this Agreement or payments required to be made pursuant to the
provisions of any pension plan of such Person in effect from time to time), including interest,
sinking fund or any like payment.




          “Debt Guaranteed” by any Person means the maximum amount which may be outstanding at any time
of all Debt of the kinds referred to in (i) through (viii) of the definition of Debt which is
directly or indirectly guaranteed by the Person or which the Person has agreed (contingently or
otherwise) to purchase or otherwise acquire, or in respect of which the Person has otherwise
assured a creditor or other Person against loss.




          “Default” means an event which, with the giving of notice or passage of time, or both, would
constitute an Event of Default.




          “Defaulting Lender” means any Lender that (a) has failed to fund any portion of or participate
in any Accommodations required to be funded or participated by it hereunder within one Business Day
of the date required to be funded or participated by it hereunder, (b) has otherwise failed to pay
over to the Administrative Agent or any other Lender any other amount required to be paid by it
hereunder within one Business Day of the date when due, unless the subject of a good faith dispute,
or (c) has been deemed insolvent or become the subject of a bankruptcy or insolvency proceeding.




          “Designated Period” means, with respect to a Libor Advance, a period designated by the
Borrower in accordance with Section 3.03.




          “Disposition” means with respect to any Asset of any Person, any direct or indirect sale,
assignment, cession, transfer (including any transfer of title or possession), exchange,
conveyance, release, gift, including by means of a sale-leaseback transaction, reorganization,
consolidation, amalgamation or merger; and “Dispose” and “Disposed” have meanings correlative
thereto.




          “Distribution” means a Debt Distribution or an Equity Distribution.




          “Draft” means, at any time, (i) a bill of exchange, within the meaning of the Bills of
Exchange Act (Canada), drawn by the Borrower on a Lender or any other Person and bearing such
distinguishing letters and numbers as the Lender or the Person may determine, but which at such
time has not been completed as to the payee by the Lender or the Person; or (ii) a depository bill
within the meaning of the Depository Bills and Notes Act (Canada).




          “Drawing” means (i) the creation and purchase of Bankers’ Acceptances by a Lender or by any
other Person pursuant to Article 4; or (ii) the purchase of completed Drafts by a Lender or by any
other Person pursuant to Article 4.




          “Drawing Date” means any Business Day fixed for a Drawing pursuant to Section 4.03.




          “Drawing Fee” means, with respect to each Bankers’ Acceptance or Draft drawn by the Borrower
and purchased by any Person on any Drawing Date, an amount equal to the










 



13

Applicable Margin, multiplied by the product of (i) a fraction, the numerator of which is the
number of days, inclusive of the first day and exclusive of the last day, in the term of maturity
of such Bankers’ Acceptance or Draft, and the denominator of which is 365 or 366 (in the case of a
leap year), as the case may be, and (ii) the aggregate Face Amount of the Bankers’ Acceptance or
Draft.




          “Drawing Notice” has the meaning specified in Section 4.03(1).




          “Drawing Price” means, in respect of Bankers’ Acceptances or Drafts purchased by a Revolving
Lender, a Facility A Lender or a Facility B-2 Lender or any other Person, the result obtained by
multiplying (a) the aggregate Face Amount of the Bankers’ Acceptances or Drafts by (b) the amount
(rounded up or down to the fifth decimal place with .000005 being rounded up) determined by
dividing one by the sum of one plus the product of (x) the Reference Discount Rate, and (y) a
fraction the numerator of which is the number of days to maturity of the Bankers’ Acceptances or
Drafts and the denominator of which is 365.




          “Drawing Proceeds” means, in respect of any Bankers’ Acceptance or Draft purchased by a Lender
or any other Person, an amount equal to (i) the Drawing Price in respect of such Bankers’
Acceptance or Draft; minus (ii) the applicable Drawing Fee in respect of such Bankers’ Acceptance
or Draft.




          “Eligible Assignee” means (a) a Lender; (b) an Affiliate of a Lender; (c) an Approved Fund;
and (d) any other Person (other than a natural person) approved by (i) the Administrative Agent,
(ii) in the case of any assignment of a Commitment under the Revolving Facility, the Issuing
Lender, and (iii) unless an Event of Default has occurred and is continuing, the Borrower (each
such approval not to be unreasonably withheld or delayed); provided that notwithstanding
the foregoing, “Eligible Assignee” shall (i) not include the Borrower or any of the Borrower’s
Affiliates or Subsidiaries and (ii) be a Cdn Qualified Lender in the case of Facility A or the
Revolving Facility.




          “Environmental Laws” means all applicable Laws relating to the environment, health and safety
matters or conditions, Hazardous Substances, pollution or protection of the environment, including
Laws relating to (i) on site or off-site contamination; (ii) occupational health and safety
relating to Hazardous Substances; (iii) chemical substances or products; (iv) Releases of
pollutants, contaminants, chemicals or other industrial, toxic or radioactive substances or
Hazardous Substances into the environment; and (v) the manufacture, processing, distribution, use,
treatment, storage, transport or handling of Hazardous Substance.




          “Environmental Liabilities and Costs” means all Losses and Claims under applicable
Environmental Laws, whether known or unknown, current or potential, past, present or future,
imposed by, under or pursuant to Environmental Laws or otherwise relating to any Environmental Law,
including all Losses and Claims related to Remedial Actions and all reasonable fees, disbursements
and expenses of counsel, experts, personnel and consultants, where such Losses and Claims are based
on, arise out of or are otherwise in respect of (i) the ownership or operation of the Business or
any Assets related to the Business; (ii) the conditions on, under, above or about any real
property, assets, equipment or facilities currently or previously owned, leased or operated by the
Borrower or any of its Subsidiaries; (iii) expenditures necessary to cause the operations of the
Business or Assets either related to the Business or owned, leased or operated by










 



14

the Borrower or any of its Subsidiaries to comply materially with any and all environmental
requirements, including expenditures in connection with obtaining all Environmental Permits; (iv)
expenditures necessary to effect the environmental closure, environmental decommissioning or
environmental rehabilitation of any of the operations of the Business or Assets either related to
the Business or owned, leased or operated by the Borrower or any of its Subsidiaries; (v) liability
for personal injury or property damage, including damages assessed for the maintenance of a public
or private nuisance; and (vi) any other matter affecting the Owned Properties, the Leased
Properties or other Assets of the Borrower or any of its Subsidiaries relating to any Environmental
Law or otherwise within the jurisdiction of any Governmental Entity administering any Environmental
Law.




          “Environmental Notice” means any claim, citation, directive, request for information,
statement of claim, notice of investigation, letter or other communication, written or oral, actual
or threatened, from any Person to the Borrower or any of its Subsidiaries relating to any
Environmental Laws.




          “Environmental Permits” includes all permits, certificates, approvals, registrations and
licences issued by any Governmental Entity to the Borrower or any of its Subsidiaries or to the
Business pursuant to Environmental Laws and required for the operation of the Business or the use
of the Owned Properties, Leased Properties or other Assets of the Borrower or any of its
Subsidiaries.




          “Equity Distributions” means, in respect of any Person, (i) any dividend or other distribution
on issued shares of such Person and (ii) the purchase, redemption or retirement amount of any
issued shares, warrants or any other options or rights to acquire shares of the Person redeemed or
purchased by the Person.




          “Equivalent Amount” means on any given day, as applicable, the amount of a currency (the
“First Currency”, being US Dollars or Canadian Dollars) into which another currency (the “Other
Currency”, being US Dollars or Canadian Dollars) may be converted using for the purposes of such
conversion the rate and method set forth in Article 11 at which such Other Currency may be
converted into the First Currency.




          “ERISA” means the Employee Retirement Income Security Act of 1974 of the United States of
America, as amended from time to time, and the regulations promulgated and rulings issued
thereunder.




          “ERISA Affiliate” means any Person that, for purposes of Title IV of ERISA, is a member of (a)
a controlled group of corporations, group of trades or businesses under common control, or an
affiliated service group, within the meaning of Section 414(b), (c) or (m) of the Internal Revenue
Code, of which the Borrower or any Subsidiary is a member, or (b) any group treated as a single
employer under Section 414(o) of the Internal Revenue Code of which the Borrower or any Subsidiary
is a member.




          “Event of Default” has the meaning specified in Section 9.01.




          “ERISA Event” means:










 



15


     (a)




(i) the occurrence of a reportable event, within the meaning of Section 4043 of
ERISA, with respect to any Plan unless the 30-day notice requirement with respect to
such event has been waived by the PBGC, or




(ii) the requirements of subsection (1) of Section 4043(b) of ERISA
(without regard to subsection (2) of such Section) are met with respect to a
Plan of a contributing sponsor, as defined in Section 4001(a)(13) of ERISA, and
an event described in paragraph (9), (10), (11), (12) or (13) of Section
4043(c) of ERISA is reasonably expected to occur with respect to such Plan
within the following 30 days,



     (b) the application for a minimum funding waiver with respect to a Plan is submitted under
Section 303 of ERISA or Section 412 of the Internal Revenue Code,



     (c) the provision by the administrator of any Plan of a notice of intent to terminate such
Plan, pursuant to Section 4041(a)(2) of ERISA (including any such notice with respect to a plan
amendment referred to in Section 4041(e) of ERISA),



     (d) the cessation of operations at a facility of the Borrower or any Subsidiary or any
ERISA Affiliate in the circumstances described in Section 4062(e) of ERISA,



     (e) the withdrawal by the Borrower or any Subsidiary or any ERISA Affiliate from a Multiple
Employer Plan during a plan year for which it was a substantial employer, as defined in Section
4001(a)(2) of ERISA,



     (f) the conditions for imposition of a lien under Section 302(f) of ERISA shall have been met
with respect to any Plan,



     (g) the adoption of an amendment to a Plan requiring the provision of security to such Plan
pursuant to Section 307 of ERISA, or



     (h) the institution by the PBGC of proceedings to terminate a Plan pursuant to Section 4042 of
ERISA, or the occurrence of any event or condition described in Section 4042 of ERISA that
constitutes grounds for the termination of, or the appointment of a trustee to administer,
such Plan.



          “Existing Back-to-Back Debt” means the transactions set forth in Schedule 1.01-A, in each case
in aggregate principal amount outstanding on the Closing Date, with respect to which each party
thereto, other than the Borrower, has executed a subordination agreement in favour of the
Administrative Agent for the Lenders in substantially the form attached as Schedule 7.




          “Existing Back-to-Back Preferred Shares” means the Preferred Shares and related transactions
described in Schedule 1.01-B.




          “Existing Back-to-Back Securities” means the Existing Back-to-Back Debt and the Existing
Back-to-Back Preferred Shares.










 



16




          “Existing Credit Agreement” means the credit agreement among the Borrower and, inter
alia,Royal Bank of Canada as Administrative Agent dated as of June 29, 2001, as amended, which is
to be repaid at Closing.




          “Existing Senior Notes” means (i) the existing senior notes issued by the Borrower and
designated as “11 1/8% Senior Notes due 2011, created pursuant to a trust indenture
dated July 6 2001 as amended by a First Supplemental Indenture dated as of December 30, 2005 and
(ii) the existing senior discount notes issued by the Borrower and designated as “13 3/4
Senior Discount Notes due 2011”, created pursuant to a trust indenture dated July 6, 2001 as
amended by a First Supplemental Indenture dated as of December 30, 2005.




          “Existing Tax Benefit Transactions” means the transactions described in Schedule 1.01-C.




          “Face Amount” means (i) in respect of a BA Instrument, the amount payable to the holder on its
maturity; and (ii) in respect of a Letter of Credit, the maximum amount which the Issuing Lender is
contingently liable to pay to the Beneficiary thereof.




          “Facility A” means the term credit facility in an amount of up to C$125,000,000 to be made
available to the Borrower in accordance with Article 2.




          “Facility A Commitment” means C$125,000,000, as such amount may be decreased pursuant to
Article 2.




          “Facility A Lender” means a Lender which has a Commitment under Facility A and which must be a
Cdn Qualified Lender.




          “Facility B” means the term credit facility in an amount of US$350,000,000 made available to
the Borrower in accordance with Article 2, and is comprised of the Facility B-1 Tranche and, if
applicable, the Facility B-2 Tranche.




          “Facility B Commitment” refers collectively to the Facility B-1 Commitment and the Facility
B-2 Commitment.




          “Facility B Lenders” refers collectively to the Facility B-1 Lenders and the Facility B -2
Lenders and “Facility B Lender” refers individually to any such Lender.




          “Facility B-1 Commitment” means US$350,000,000 as such amount may be decreased pursuant to
Article 2.




          “Facility B-1 Lender” means a Lender which has a Facility B-1 Commitment.




          “Facility B-1 Tranche” means a portion of Facility B in an amount of up to US$350,000,000
made available to the Borrower by Facility B-1 Lenders.




          “Facility B-2 Commitment” means C$0 as such amount may be decreased pursuant to Article 2.










 



17




          “Facility B-2 Lender” means a Lender which has a Facility B-2 Commitment and which is able and
willing to make Accommodations to the Borrower in Canadian Dollars.




          “Facility B-2 Tranche” means a portion of Facility B in an amount of up to C$0 made available
to the Borrower by Facility B-2 Lenders, if any.




          “Federal Funds Effective Rate” means, for any period, a fluctuating interest rate per annum
equal, for each day during such period, to the weighted average of the rates on overnight federal
funds transactions with members of the Federal Reserve System arranged by Federal Funds brokers as
published for such day (or, if such day is not a Business Day, for the immediately preceding
Business Day) by the Federal Reserve Bank of New York or, for any day on which such rate is not so
published for such day by the Federal Reserve Bank of New York, the average of the quotations for
such day for such transactions received by the Administrative Agent from three Federal Funds
brokers of recognized standing selected by the Administrative Agent. If for any reason the
Administrative Agent shall have determined (which determination shall be conclusive, absent
manifest error) that it is unable to ascertain the Federal Funds Effective Rate for any reason,
including without limitation, the inability or failure of the Administrative Agent to obtain
sufficient bids or publications in accordance with the terms hereof, Bank of America N.A.’s
announced US Prime Rate will apply.




          “Fees” means the fees payable by the Borrower under this Agreement.




          “Financial Quarter” means, in respect of any Person, a period of three consecutive months in
each Financial Year of such Person ending on March 31, June 30, September 30, and December 31, as
the case may be, of such year.




          “Financial Year” means, in respect of any Person, its financial year commencing on January 1
of each calendar year and ending on December 31 of the same calendar year.




          “Fund” means any Person (other than a natural person) that is (or will be) engaged in making,
purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in
the ordinary course of its business.




          “GAAP” means, at any time, accounting principles generally accepted in Canada as recommended
in the Handbook of the Canadian Institute of Chartered Accountants at the relevant time applied on
a consistent basis (except for changes approved by the Borrower’s independent auditors in
accordance with promulgations of the Canadian Institute of Chartered Accountants).




          “Governmental Entity” means any (i) multinational, federal, provincial, state, municipal,
local or other government, governmental or public department, central bank, court, commission,
board, bureau, agency or instrumentality, domestic or foreign, (ii) any subdivision or authority of
any of the foregoing, or (iii) any quasi-governmental or private body exercising any regulatory,
expropriation or taxing authority under or for the account of any of the above.




          “Hazardous Substance” means any substance, waste, liquid, gaseous or solid matter, fuel,
micro-organism, sound, vibration, ray, heat, odour, radiation, energy, plasma and organic or
inorganic matter, alone or in any combination which is regulated under any applicable










 



18

Environmental Laws, hazardous, hazardous waste, toxic, a pollutant, a deleterious substance, a
contaminant or a source of pollution or contamination under any Environmental Law.




          “Hedging Agreements” means: (i) one or more agreements between the Borrower and one or more of
the Lenders or their Affiliates evidencing (A) any interest rate hedge (including any interest rate
swap, cap or collars), (B) any commodities hedge or (c) any foreign exchange hedge; and (ii) one
or more agreements between the Borrower and Société Générale (Canada) (or any Affiliate thereof)
evidencing (A) any interest rate hedge (including any interest rate swap, cap or collars) (B) any
commodities hedge or (C) any foreign exchange hedge.




          “Hedging Requirements” means Hedging Agreements implemented by the Borrower hedging its
interest rate risk relating to its Consolidated Debt in a notional principal amount necessary to
ensure that at least 40% of its Consolidated Debt is fixed rate Debt for a minimum period of three
years from the Closing Date.




          “Impermissible Qualification” means, relative to the opinion or report of any independent
auditors as to any financial statement, any qualification or exception to such opinion or report
which (i) is of a “going concern” or similar nature; (ii) relates to any limited scope of
examination of material matters relevant to such financial statement, if such limitation results
from the refusal or failure of the Borrower to grant access to necessary information therefor; or
(iii) relates to the treatment or classification of any item in such financial statement and which,
as a condition to its removal, would require an adjustment to such item the effect of which could
reasonably be expected to have a Material Adverse Effect.




          “Indemnified Person” has the meaning specified in Section 12.06(1).




          “Interest Charges” means for any Person, for any period for the Person, the sum of, without
duplication, (i) all items properly classified as interest expense in accordance with GAAP (other
than amounts paid in respect of (A) the Back-to-Back Transactions, including under the Existing
Back-to-Back Securities, (B) any non-cash foreign exchange gains or losses recognized in relation
to foreign currency denominated Debt and (C) the amortization of deferred financing cost), (ii) the
imputed interest component of any element of Debt (such as capital leases) which would not be
classified as interest expense pursuant to (i), and (iii) the aggregate of all purchase discounts
relating to the sale of (a) bankers acceptances or other instruments sold at a discount, and (b)
accounts receivable in connection with any asset securitization program, all as determined at such
time in accordance with GAAP.




          “Interest Coverage Ratio” means the ratio of Consolidated EBITDA to Consolidated Interest
Charges, calculated in the manner prescribed in Section 8.03(b) at such time.




          “Internal Revenue Code” means the Internal Revenue Code of 1986 of the United States, as
amended from time to time, and the regulations promulgated and rulings issued thereunder.




          “Investments” means all investments, in cash or by delivery of property, made directly or
indirectly in any Person, whether by acquisition of shares of capital stock, or other obligations
or securities or by loan, advance, capital contribution, guarantees or otherwise, and includes any
Acquisition; provided, however, that “Investments” shall not mean or include










 



19

investments in cash or Cash Equivalents or routine investments in inventory, equipment and
supplies to be used or consumed, or trade credit granted, in the ordinary course of the Business.




          “Issuing Lender” has the meaning attributed to it in the definition of “Letter of Credit”. For
the purposes hereof, the Issuing Lender shall be Bank of America N.A., Canada Branch, unless such
Issuing Lender no longer wishes to act as such, in which case the provisions of Section 10.06
hereof shall apply, mutatis mutandis, except that only the Revolving Lenders (and not the Facility
A Lenders and the Facility B Lenders) shall appoint such replacement Issuing Lender.




          “ISDA Master Agreement” means the 1992 ISDA Master Agreement (Multi-Currency — Cross Border)
as published by the International Swaps and Derivatives Association, Inc. and, where the context
permits or requires, includes all schedules, supplements, annexes and confirmations attached
thereto or incorporated therein, as such agreement may be amended, supplemented or replaced from
time to time.




          “ISP” means, with respect to any Letter of Credit, the “International Standby Practices 1998”
published by the Institute of International Banking Law and Practice (or such later version thereof
as may be in effect at the time of issuance).




          “ITA” means the Income Tax Act (Canada) and the regulations promulgated thereunder, as
amended, supplemented or re-enacted from time to time.




          “Laws” means all legally enforceable statutes, codes, ordinances, decrees, rules, regulations,
municipal by-laws, judicial or arbitral or administrative or ministerial or departmental or
regulatory judgments, orders, decisions, rulings or awards, policies, voluntary restraints,
guidelines, or any provisions of the foregoing, including general principles of common and civil
law and equity, binding on or affecting the Person referred to in the context in which such word is
used; and “Law” means any one of the foregoing.




          “Leased Properties” means the real and immoveable properties forming the subject matter of the
Leases to which the Borrower or any of its Subsidiaries is a party.




          “Leases” means the leases and subleases of real or immoveable property to which the Borrower
or any of its Subsidiaries is a party providing, in each case, for annual rental payments in
respect thereof of an amount greater than C$500,000.




          “Lenders” means, collectively, the financial institutions and other Persons set forth on the
signature pages hereof as Lenders, and any Eligible Assignee thereof upon such Eligible Assignee
executing and delivering an Assignment and Assumption to the Borrower and the Administrative Agent,
and, in the singular, any one of such Lenders. When used in connection with “Hedging Agreements”,
the term “Lender” shall include any Affiliate of a Lender. When used in connection with the
Security, the term “Lender” shall include any counterparty to a Hedging Agreement, provided that
the counterparty was a Lender or an Affiliate of a Lender, at the time any such Hedging Agreement
was entered into. As the context requires, the term “Lender” also includes the Issuing Lender.




          “Letter of Credit” means a C$ or US$ denominated standby letter of credit issued or to be
issued by an Issuing Lender (an “Issuing Lender”) under the Revolving Facility for the










 



20

account of the Borrower, issued in the name of the Borrower or any of its Subsidiaries
pursuant to Article 5.




          “Letter of Credit Application Form” has the meaning ascribed thereto in Section 5.01(3).




          “Leverage Ratio” means, at any time, the ratio of Consolidated Debt of the Borrower and its
Subsidiaries to Consolidated EBITDA, calculated in the manner prescribed in Section 8.03(a) at such
time.




          “LIBOR” means, with respect to any Designated Period relating to a Libor Advance:





(a) the rate per annum equal to the rate determined by the Administrative Agent to be the
offered rate that appears on LIBOR01 Reuters Monitor Screen (or any successor thereto) that
displays an average British Bankers Association Interest Settlement Rate for deposits in US
Dollars (for delivery on the first day of such Designated Period) with a term equivalent to
such Designated Period, determined as of approximately 11:00 a.m. (London time) two Banking
Days prior to the first day of such Designated Period, or




(b) if the rate referenced in the preceding clause (a) does not appear on such page or
service or such page or service shall not be available, the rate per annum equal to the rate
determined by the Administrative Agent to be the offered rate on such other page or other
service that displays an average British Bankers Association Interest Settlement Rate for
deposits in US Dollars (for delivery on the first day of such Designated Period) with a term
equivalent to such Designated Period, determined as of approximately 11:00 a.m. (London
time) two Banking Days prior to the first day of such Designated Period, or




(c) if the rates referenced in the preceding clauses (a) and (b) are not available, the rate
per annum determined by the Administrative Agent as the rate of interest at which deposits
in US Dollars for delivery on the first day of such Designated Period in same day funds in
the approximate amount of the Libor Advance being made, continued or converted by the Lender
that is the Administrative Agent and with a term equivalent to such Designated Period as
would be offered by the Lender that is the Administrative Agent’s London Branch (or, if it
has none, Bank of America’s London Branch) to major banks in the London interbank eurodollar
market at their request at approximately 4:00 p.m. (London time) two Banking Days prior to
the first day of such Designated Period.


With respect to a Libor Advance to be made by a Lender which is subject to the regulations issued
from time to time by the Board of Governors of the Federal Reserve System in the USA in respect of
such Libor Advances, the rate determined in paragraphs (a), (b) or (c) above (the “Quoted Rate”)
shall be adjusted for reserve requirements in accordance with the following formula to obtain the
applicable LIBOR:




	 	 	 	 	 
	LIBOR=

	 	Quoted Rate	 	 
	 

	 	 

1.00 — Reserve Percentage
	 	 












 



21

where “Reserve Percentage” means the rate (expressed as a decimal) applicable to the relevant
Lender, during the relevant Designated Period under regulations, directives or guidelines issued
from time to time by the Board of Governors of the Federal Reserve System (in the USA) or any
successor thereof, for determining the reserve requirement applicable to the applicable Credit
Facility or to facilities similar thereto (including any basic, supplemental, emergency or marginal
reserve requirement) of such Lender, respectively, with respect to “Eurocurrency liabilities”, as
that term is defined under such regulations or for the purposes of complying with such directives
or guidelines. All adjustments to the Quoted Rate shall occur and be effective as of the effective
date of any change in the Reserve Percentage, and the Administrative Agent will use reasonable
efforts to advise the Borrower of any such change as soon as practicable (provided that the
Administrative Agent shall not be liable if it fails to do so).




          “Libor Advance” means, at any time, the part of the Advances in US$ under any Credit Facility
with respect to which the Borrower has chosen to pay interest on the Libor Basis.




          “Libor Basis” means the basis of calculation of interest on Libor Advances, or any part
thereof, made in accordance with the provisions of Section 3.10.




          “Lien” means Security Interests, adverse claims, defects of title, restrictions, deposit
arrangements, voting trusts, any other rights of third parties relating to any property and any
other lien of any kind.




          “Loan Parties” means the Borrower and the Pledgors and “Loan Party” means anyone of them.




          “Loss” means any loss whatsoever, whether direct or indirect, including expenses, costs,
damages, judgments, penalties, fines, charges, claims, demands, liabilities and any and all legal
fees and disbursements, except any such loss representing loss of profit.




          “Majority Lenders” means, at any time, Lenders whose Commitments under a Credit Facility or
all Credit Facilities, as applicable, taken together, are more than 50% of the aggregate amount of
the Commitments under a particular Credit Facility or under all Credit Facilities, as applicable.




          “Mandatory Prepayment” has the meaning specified in Section 2.05.




          “Material Adverse Effect” means, with respect to any event or occurrence of whatever nature
(including any adverse determination in any litigation, arbitration or governmental investigation
or proceeding), (a) a material adverse effect on the Business, properties, prospects, condition
(financial or otherwise), assets, operations, liabilities (actual and contingent) or income of the
Borrower and its Subsidiaries, taken as a whole, (b) a material adverse effect on the ability of
the Borrower or any of the Pledgors to perform any of their respective material obligations under
any of the Credit Documents to which they are a party, or (c) any material impairment of the
rights, remedies or benefits available to the Administrative Agent or any Lender under any Credit
Document.




          “Material Agreements” means the agreements to which any of the Borrower or the Pledgors is a
party described in Schedule 7.01(p) and such other agreements of which the










 



22

Administrative Agent may, from time to time, be notified by the Borrower, in each case where
such agreements are necessary to the business of each Borrower or Pledgor, as applicable, and the
absence of which would reasonably be expected to have a Material Adverse Effect.




          “Multiemployer Plan” means a multiemployer plan, as defined in Section 4001(a)(3) of ERISA, to
which the Borrower or any Subsidiary or any ERISA Affiliate is obligated to make, or is accruing an
obligation to make, contributions at the time in question, or has, within any of the preceding five
plan years made or accrued an obligation to make, contributions.




          “Multiple Employer Plan” means a single employer plan, as defined in Section 4001(a)(15) of
ERISA, that:




     (a) at the time in question is maintained for employees of the Borrower or any Subsidiary or
any ERISA Affiliate and at least one Person other than the Borrower or any such Subsidiary or ERISA
Affiliates, or



     (b) was so maintained and in respect of which the Borrower or any Subsidiary or ERISA
Affiliate could have liability under Section 4064 or 4069 of ERISA in the event such plan has been
or were to be terminated.



          “Negative Value of Hedging Agreement” means, in respect of any hedging agreement, the
aggregate amount that would be payable to a counterparty by the Borrower on the date of
determination pursuant to Section 6(e)(ii)(2)(A) of the ISDA Master Agreement governing such
hedging agreement if said ISDA Master Agreements was being terminated on that day; provided that,
with respect to any Hedging Agreement between a Lender and the Borrower, each Lender will determine
Market Quotation (as such term is defined in the ISDA Master Agreement) using its estimates at
mid-market of the amounts that would be paid for Replacement Transactions (as such term is defined
in the ISDA Master Agreement).




          “Net Proceeds” means any one or more of the following:





     (i) with respect to any Disposition of Assets by the Borrower, the net amount equal to
the aggregate amount received in cash (including any cash received by way of deferred
payment pursuant to a note, receivable, other non-cash consideration or otherwise, but only
as and when such cash is so received) in connection with such Disposition, less the sum of
(x) amounts payable to any Person other than an Affiliate of the Borrower to discharge or
radiate Permitted Liens on the Assets being Disposed, (y) reasonable fees (including,
without limitation, reasonable legal fees), commissions and other out-of-pocket expenses
incurred or paid for by the Borrower to any Person other than an Affiliate of the Borrower
in connection with such Disposition, and (z) taxes incurred in connection with such
Disposition, whether payable at such time or thereafter; and




     (ii) with respect to the issuance of any securities by the Borrower or of any capital
contributions by any Person in the Borrower, the net amount equal to the aggregate amount
received in cash in connection with such issuance or contribution by any Person in the
Borrower less the reasonable fees (including without limitation,









 



23



reasonable legal fees), commissions and other out-of-pocket expenses owed or paid to
any Person other than an Affiliate of the Borrower.



          “Non-Schedule I Reference Banks” means Bank of America, N.A, Canada Branch and Credit Suisse,
Toronto Branch.




          “Participant” has the meaning specified in Section 12.08.




          “Owned Properties” means collectively the lands and premises owned by the Borrower or any of
its Subsidiaries and the Buildings and Fixtures thereon.




          “Overdraft Facility” means the overdraft facility made available to the Borrower by Canadian
Imperial Bank of Commerce (or any successor and assigns) in an amount not exceeding C$10,000,000,
as same may be replaced or refinanced at any time.




          “PBGC” means the Pension Benefit Guaranty Corporation of the United States (or any successor
thereto).




          “Péladeau Group” means any (i) individual who is related by blood, adoption or marriage to the
late Pierre Péladeau, (ii) any trust (whether testamentary or otherwise) the beneficiaries of which
are all individuals described in (i); or (iii) any corporation or partnership which is controlled,
directly or indirectly, by one or more individuals referred to in (i) or a trust referred to in
(ii), or any combination thereof.




          “Permitted Debt” means (i) Debt under this Agreement and under the Overdraft Facility; (ii)
Debt of the Pledgors under the limited recourse pledges or hypothecs referred to in Schedule 5;
(iii) the Senior Notes; (iv) Subordinated Debt; (v) the Back-to-Back Securities and Existing
Back-to-Back Securities; (vi) obligations pursuant to the Hedging Agreements or other hedging
arrangements permitted hereunder; (vii) the Debt of the Borrower secured by Purchase Money
Mortgages permitted hereunder; (viii) the Press Investment Debt; (ix) the Carlyle Debt; (x)
unsecured Debt (including without limitation that portion of the Existing Senior Notes which is not
repaid on the Closing Date (the “Balance of Notes”)); and (xi) any indebtedness incurred to
refinance or replace any of the foregoing; provided that with respect to the Permitted Debt
referred to in clauses (iv), (v), (vi), (vii), (viii), (x) and (xi), no Default shall have occurred
and be continuing and no Event of Default shall have occurred and not been waived at the time of
the incurrence of such Debt.




          “Permitted Debt Distribution” means (i) the redemption or repayment on or about the Closing
Date of up to C$1,425,000,000 of Existing Senior Notes, the Existing Credit Agreement, and related
premiums and obligations, penalties, fees and other obligations relating to such redemption of
repayment and to the termination of related hedging agreements on or about the Closing Date; (ii)
Debt Distributions by the Pledgors to the Borrower; (iii) payments (other than voluntary early
repayments or defeasance payments) on account of Permitted Debt (including a premium and fees, if
any, thereon), other than the Senior Notes, any Subordinated Debt, the Press Investment Debt, the
Carlyle Debt, the Overdraft Facility, the Back-to-Back Securities and the Existing Back-to-Back
Securities; (iv) regularly scheduled payments of interest on the Senior Notes and on Subordinated
Debt; (v) any payment on account of the Press Investment Debt, and related hedging agreements; (vi)
any payment on account of the Carlyle Debt; (vii) any payment on










 



24

account of the Overdraft Facility; (viii) payments made in connection with or in respect of
the Back-to-Back Securities or the Existing Back-to-Back Securities; provided, however,
that to the extent such payments are made to any Affiliates of the Borrower other than QMI
Entities, all corresponding payments required to be paid by such Affiliates pursuant to the related
Back-to-Back Securities or Existing Back-to-Back Securities are received, immediately prior to,
concurrently with or immediately subsequent to any such payments, by the Borrower, and each such
payment by the Borrower shall be conditional upon receipt of an equal or greater amount from such
Affiliate; (ix) any Tax Benefit Transaction; (x) the redemption or repayment on or after July 15,
2006 of the Balance of Notes and related premiums and obligations, penalties, fees and other
obligations relating to such redemption or repayment and to the termination of related hedging
agreements, if any, and (xi) any payments on account of the refinancing of Senior Notes, other
unsecured Debt and Subordinated Debt if the funds used for such payments are obtained by the
Borrower from Subordinated Debt or unsecured Debt having a term expiring after the term of the Debt
being repaid and refinanced with such funds; provided that with respect to the Permitted Debt
Distributions referred to in clauses (iii), (viii) and (x), no Default shall have occurred and be
continuing and no Event of Default shall have occurred and not been waived at the time of such
payment; notwithstanding the foregoing, the repayment of the principal of any unsecured Debt or
Subordinated Debt (other than the Permitted Debt Distributions referred to in clauses (vi), (ix)
and (x) and, to the extent such Debt has become unsecured, clauses (v) and (vii)) shall not
constitute a Permitted Debt Distribution to the extent that such repayment is made out of the
proceeds of an increase of Facility B or of any new Credit Facility contemplated by Section 2.12.




          “Permitted Distributions” means the Equity Distributions permitted pursuant to Section 8.02(g)
and the Permitted Debt Distributions.




          “Permitted Liens” means, in respect of any Person, any one or more of the following:





(a) Liens for taxes, assessments or governmental charges or levies which are not delinquent
or the validity of which is being contested at the time by the Person in good faith by
proper legal proceedings if, in the Administrative Agent’s opinion, either (i) adequate
provision has been made for their payment, or (ii) the Liens are not in the aggregate
materially prejudicial to the security constituted by the Security Documents;




(b) inchoate or statutory Liens of contractors, subcontractors, mechanics, workers,
suppliers, materialmen, carriers and others in respect of construction, maintenance, repair
or operation of assets of the Person, provided that such Liens are related to obligations
not due or delinquent, are not registered against title to any Assets of the Person and in
respect of which adequate holdbacks are being maintained as required by applicable law or
such Liens are being contested in good faith by appropriate proceedings and in respect of
which there has been set aside a reserve (segregated to the extent required by GAAP) in an
adequate amount and provided further that such Liens do not, in the Administrative Agent’s
opinion, materially reduce the value of the Assets of the Person or materially interfere
with the use of such Assets in the operation of the business of the Person;




(c) easements, rights-of-way, servitudes, restrictions and similar rights in real property
comprised in the Assets of the Person or interests therein granted or reserved









 



25



to other Persons, provided that such rights do not, in the Administrative Agent’s opinion,
materially reduce the value of the Assets of the Person or materially interfere with the use
of such Assets in the operation of the business of the Person;




(d) title defects or irregularities which are of a minor nature and which, in the
Administrative Agent’s opinion, do not materially reduce the value of the Assets of the
Person or materially interfere with their use in the operation of the business of the
Person;




(e) Liens securing appeal bonds and other similar Liens arising in connection with court
proceedings (including, without limitation, surety bonds, security for costs of litigation
where required by law and letters of credit) or any other instruments serving a similar
purpose, which do not, in the Administrative Agent’s opinion, materially reduce the value of
the Assets of the Person or materially interfere with their use in the operations of the
business of the Person;




(f) attachments, judgments and other similar Liens arising in connection with court
proceedings; provided, however, that the Liens are in existence for less than 10 days after
their creation or the execution or other enforcement of the Liens is effectively stayed or
the claims so secured are being actively contested in good faith and by proper legal
proceedings;




(g) the reservations, limitations, provisos and conditions, if any, expressed in any
original grant from the Crown of any real property or any interest therein or in any
comparable grant in jurisdictions other than Canada, provided they do not, in the
Administrative Agent’s opinion, materially reduce the value of the Assets of the Person or
materially interfere with the use of such Assets in the operation of the business of the
Person;




(h) Liens given to a public utility or any municipality or governmental or other public
authority when required by such utility or other authority in connection with the operation
of the business or the ownership of the Assets of the Person, provided that such Liens do
not, in the Administrative Agent’s opinion, materially reduce the value of the Assets of the
Person or materially interfere with their use in the operation of the business of the
Person;




(i) servicing agreements, development agreements, site plan agreements, and other agreements
with Governmental Entities pertaining to the use or development of any of the Assets of the
Person, provided same are complied with and do not in the Administrative Agent’s opinion,
materially reduce the value of the Assets of the Person or materially interfere with their
use in the operation of the business of the Person including, without limitation, any
obligations to deliver letters of credit and other security as required;




(j) applicable municipal and other governmental restrictions, including municipal by-laws
and regulations, affecting the use of land or the nature of any structures which may be
erected thereon, provided such restrictions have been complied with and do not in the
Administrative Agent’s opinion, materially reduce the value of the Assets of the









 



26



Person or materially interfere with their use in the operation of the business of the
Person;




(k) the right reserved to or vested in any Governmental Entity by any statutory provision or
by the terms of any lease, licence, franchise, grant or permit of the Person, to terminate
any such lease, licence, franchise, grant or permit, or to require annual or other payments
as a condition to the continuance thereof;




(l) Liens in favour or for the benefit of the Administrative Agent and the Lenders created
by the Security Documents;




(m) Liens in favour of a Lender or an Affiliate of a Lender or Société Générale (Canada) (or
any Affiliate thereof) or for their benefit securing obligations under the Hedging
Agreements including the Hedging Agreements entered into in accordance with the provisions
of Section 8.01(r) which rank, as to priority, pari passu with the Accommodations
Outstanding and any other amounts owing hereunder;




(n) Liens granted by a Loan Party (other than the Borrower) in favour of the Borrower;




(o) a Lien (other than a Security Interest) on the interest of such Person in any non-wholly
owned partnership or corporation that is granted under the terms of the partnership or
shareholders agreement to secure the obligations of such Person to the other partners or
shareholders under that agreement;




(p) Purchase Money Mortgages in an aggregate amount outstanding at any time not exceeding
C$25,000,000;




(q) any rights of a landlord or sub-landlord under applicable Law or the rights of a lessor
or sub-lessor under an operating lease;




(r) deposits to secure the performance of leases of property in the ordinary course of
business;




(s) the Liens granted to secure the obligations under the Existing Credit Agreement provided
such Liens are discharged at the appropriate registries within 30 days of the Closing Date;




(t) the Liens in favor of the lenders of Vidéotron Ltée on the shares that the Borrower
holds in the capital stock of 9101-0827 Quebec Inc. and on the shares that the latter holds
in the capital stock of Vidéotron Ltée both granted in connection with the credit agreement
dated as of November 28, 2000 entered into among inter alia Vidéotron Ltée, as borrower, and
Royal Bank of Canada, as administrative agent, as amended, provided such Liens rank after
the Security Documents;




(u) The Liens granted by the Borrower on the universality of its movable property, Liens
granted by 3535991 Canada Inc. on its shares in Sun Media Corporation and Liens granted by
9101-0827 Quebec Inc. on its shares in Vidéotron Ltée in connection with the









 



27



Press Investment Debt, provided however that such Liens are pari passu with the Liens
created under the Security Documents and are created pursuant to security documents
containing terms and conditions substantially similar to the terms and conditions of the
Security Documents or terms and conditions satisfactory to the Administrative Agent;




(v) Any renewal, extension, substitution, replacement or refinancing of the foregoing,
provided that such renewal, extension, substitution, replacement or refinancing Lien shall
not cover any property other than the property that was subject to such Lien prior to such
renewal, extension, substitution, replacement or refinancing; and provided, further that the
Debt and other obligations secured by such renewal, extension, substitution, replacement or
refinancing Lien are permitted by this Agreement;




(w) Liens on any specific Asset acquired through a Tax Benefit Transaction provided such
Liens do not extend to any Assets other than such specific Asset and provided further that
such Liens are fully discharged or such specific Assets is sold within 5 Business Days of
such transaction; and




(x) Liens granted by the Borrower on the universality of its movable property, Liens granted
by 3535991 Canada Inc. on its shares in Sun Media Corporation and Liens granted by 9101-0827
Quebec Inc. on its shares in Vidéotron Ltd. to secure the payment and performance of the
obligations of the Borrower under the Overdraft Facility provided such Liens are pari passu
with the Liens created under the Security Documents and are created pursuant to security
documents containing terms and conditions substantially similar to the terms and conditions
of the Security Documents or terms and conditions satisfactory to the Administrative Agent.



          “Person” means a natural person, partnership, corporation, joint stock company, trust,
unincorporated association, joint venture or other entity or Governmental Entity, and pronouns that
have a similarly extended meaning.




          “Plan” means a Single Employer Plan or a Multiple Employer Plan.




          “Pledgors” means 3535991 Canada Inc. as the grantor of the limited recourse pledge referred to
in paragraph 2 of Schedule 5 and 9101-0827 Quebec Inc. as the grantor of the limited recourse
Pledge referred to in paragraph 3 of Schedule 5.




          “Press Investment” means the investment of the Borrower, directly or indirectly, in the
construction of the new printing plant north of Montreal and the new printing facility in the
Greater Toronto area.




          “Press Investment Debt” means the financing put in place by Société Générale (Canada) in
connection with the Press Investment in an amount not exceeding € 60,000,000 or the equivalent in
Canadian Dollars.




          “Prime Rate Advance” means, at any time, the portion of the Advances in Canadian Dollars with
respect to which the Borrower has chosen, or, in accordance with the provisions hereof, is obliged,
to pay interest calculated in accordance with the provisions of Section 3.08.










 



28




          “Purchase Money Mortgage” means, in respect of any Person, any Security Interest charging
property acquired by such Person, which is granted or assumed by such Person in connection with the
acquisition of such property and within not more than 60 days following such acquisition, reserved
by the transferor (including any reservation of title in respect of any lease recorded as a capital
lease) or which arises by operation of Law in favour of the transferor concurrently with and for
the purpose of the acquisition of such property, in each case where (i) the principal amount
secured by such Security Interest is not in excess of the cost to such Person of the property
acquired; and (ii) such Security Interest extends only to the property acquired.




          “QMI Entities” means the Borrower and its Subsidiaries and “QMI Entity” means any one of them.




          “Quebecor” means Quebecor Inc., a corporation incorporated and subsisting under the laws of
Quebec.




          “Reference Discount Rate” means, for any Drawing Date, in respect of any Bankers’ Acceptances
or Drafts to be purchased pursuant to Article 4 by (i) a Schedule I chartered bank, the average
Bankers’ Acceptance discount rate for the appropriate term as quoted on Reuters Screen CDOR Page
(or such other page as is a replacement page for such Bankers’ Acceptances) at 10:00 a.m. (Toronto
time); and (ii) by any other Lender or Person, the lesser of (y) the arithmetic average of the
actual discount rate quoted by at least one, but not more than two, non-Schedule I Reference Banks;
and (z) the rate specified in (i) plus 0.10%. If such rate is not available as of such time, then
the discount rate in respect of such Banker’s Acceptances and Drafts shall mean the arithmetic
average of the discount rates (calculated on an annual basis and rounded to the nearest
one-hundredth of 1%, with five-thousandths of 1% being rounded up) quoted by Bank of America N.A.,
Canada Branch, by Royal Bank of Canada and by The Toronto-Dominion Bank at 10:00 a.m. (Toronto
time) as the discount rate at which each such Lender would purchase, on the relevant Drawing Date,
its own Bankers’ Acceptances or Drafts having an aggregate Face Amount equal to and with a term to
maturity the same as the Bankers’ Acceptances or Drafts to be acquired by such Lender or other
Person on such Drawing Date.




          “Related Parties” means, with respect to any Person, such Person’s Affiliates and the
partners, directors, officers, employees, agents and advisors of such Person and of such Person’s
Affiliates.




          “Release” when used as a verb includes release, spill, leak, emit, deposit, discharge, leach,
migrate or dispose into the environment and the term “Release” when used as a noun has a
correlative meaning, but does not include any emission or discharge pursuant to a valid
Environmental Permit.




          “Remedial Action” means any action required under any applicable Environmental Law to (i)
clean up, remove, treat or in any other way deal with Hazardous Substances in the environment; (ii)
prevent any Release of Hazardous Substances where such Release would violate any Environmental Laws
or would endanger or threaten to endanger public health or welfare or the environment; or (iii)
perform remedial studies, investigations, restoration and post-remedial studies, investigations and
monitoring on, about or in connection with any of the Owned Properties, the Leased Properties or
other Assets of the Borrower and its Subsidiaries.










 



29




          “Reportable Event” means, with respect to any Benefit Plan of any Person, (a) the occurrence
of any of the events set forth in ERISA Section 4043(b) (other than a Reportable Event as to which
the provision of 30 days’ notice to the PBGC is waived under applicable regulations), 4068(e) or
4063(a) or the regulations thereunder with respect to such Benefit Plan, (b) any event requiring
such Person or any of its ERISA Affiliates to provide security to such Benefit Plan under Internal
Revenue Code Section 401(a)(29) or (c) any failure to make a payment required by Internal Revenue
Code Section 412(m) with respect to such Benefit Plan.




          “Revolving Commitment” means C$100,000,000, as such amount may be decreased pursuant to
Article 2.




          “Revolving Facility” means the revolving credit facility in an amount of up to C$100,000,000
to be made available to the Borrower pursuant to Article 2.




          “Revolving Lender” means a Lender which has a Commitment under the Revolving Facility and
which must be a Cdn Qualified Lender.




          “Security” means, at any time, the Security Interests in favour of the Administrative Agent or
the Lenders, or both, or for their benefit, in the Assets and properties of the Borrower and the
Pledgors (save for Assets excluded under the Security Documents) securing their obligations under
this Agreement and the other Credit Documents (excluding the subordination agreements referred to
in that definition), including for greater certainty the obligations under the Hedging Agreements.




          “Security Documents” means the agreements described in Schedule 5 and any other Security
granted to the Administrative Agent or the Lenders, or both, or for their benefit, as security for
the obligations of the Borrower and the Pledgors under this Agreement and the other Credit
Documents (excluding the subordination agreements referred to in that definition), as such
agreements may be amended, restated, modified, supplemented or extended from time to time.




          “Security Interest” means any hypothec, mortgage, pledge, security interest, encumbrance,
lien, charge or deposit arrangement or any other arrangement or condition that in substance secures
payment or performance of an obligation and includes the interest of a vendor or lessor under any
conditional sale agreement, capitalized lease or other title retention agreement.




          “Selected Amount” means, with respect to a Libor Advance, the amount in respect of which the
Borrower has asked, in accordance with Section 3.02, that the interest payable thereon be
calculated on the Libor Basis.




          “Senior Notes” means the notes created under the Senior Note Indenture and dated as of January
17, 2006, designated as “73/4% Senior Notes due 2016”, and maturing on March 15, 2016, as same may be
amended, modified or supplemented from time to time, provided that no such amendment shall affect
the unsecured nature of the Senior Notes, nor shall it shorten the maturity of the Senior Notes to
any period which is less than one year following the expiry of the Term of the last to expire of
the Revolving Facility, Facility A or Facility B.




          “Senior Note Indenture” means the trust indenture dated as of January 17, 2006 between U.S.
Bank National Association and the Borrower under which the Senior Notes were





 









 




30




issued, as same may be amended, modified or supplemented from time to time, provided that no
such amendment shall affect the unsecured nature of the Senior Notes, nor shall it shorten the
maturity of the Senior Notes to any period which is less than one year following the expiry of the
Term of the last to expire of the Revolving Facility, Facility A or Facility B.




          “Single Employer Plan” means a single employer plan, as defined in Section 4001 (a) (15) of
ERISA, that




     (a) at the time in question is maintained for employees of the Borrower or any Subsidiary or
ERISA Affiliate and no Person other than the Borrower or any Subsidiary and its ERISA Affiliates,
or



     (b) was so maintained and in respect of which the Borrower or any Subsidiary or ERISA
Affiliate could have liability under Section 4069 of ERISA in the event such plan has been or were
to be terminated.



          “Subsidiary” means any Person in respect of which the majority of the issued and outstanding
capital stock (including securities convertible into voting shares and options to purchase voting
shares) granting a right to vote in all circumstances is at the relevant time owned by the Borrower
and/or one or more of its Subsidiaries, and includes a partnership and limited partnership that
would be an Affiliate if it were a corporation. The Subsidiaries of the Borrower are listed in
Schedule 7.01(a).




          “Subordinated Debt” means, in respect of any Person, unsecured Debt of such Person that has no
required redemption provisions and matures at least 6 months after the later of the expiry of the
Term of the Revolving Facility, Facility A or Facility B and that has been subordinated in right of
payment to the obligations of the Loan Parties hereunder and under the Security Documents in form
and substance acceptable to the Lenders and their counsel.




          “Sun Media Credit Agreement” means the Credit Agreement dated February 7, 2003 entered into
among, inter alia, Sun Media Corporation, as borrower, and Bank of America, N.A., as administrative
agent, as amended.




          “Synthetic Lease” means any synthetic lease or similar off-balance sheet financing product
where such transaction is considered borrowed money for tax purposes but is classified as an
operating lease in accordance with GAAP.




          “Tax Benefit Transaction” means any Existing Tax Benefit Transaction and, for so long as the
Borrower is a direct or indirect subsidiary of Quebecor, any transaction between a QMI Entity and
Quebecor or any of its Affiliates, the primary purpose of which is to create tax benefits for any
QMI Entity or for Quebecor or any of its Affiliates; provided, however, that (1) the QMI Entity
involved in the transaction obtains, or has obtained in respect of a similar previous transaction
to the extent same remains applicable as certified by the Vice President, Taxation of the Borrower
(or any officer having similar functions), a favorable tax ruling from a competent tax authority or
a favorable tax opinion from a nationally recognized Canadian law or accounting firm having a tax
practice of national standing as to the tax efficiency of the transaction for such QMI Entity; (2)
the Borrower delivers to the Administrative Agent (a) a resolution of the board of directors of the
Borrower to the effect the transaction will not prejudice the Lenders and certifying that such









 



31




transaction has been approved by a majority of the disinterested members of such board of
directors and (b) an opinion as to the fairness to such Loan Party of such transaction from a
financial point of view issued by an accounting, appraisal or investment banking firm of national
standing in the United States of America or Canada; (3) such transaction is set forth in writing;
and (4) the Consolidated EBITDA of the Borrower is not reduced after giving pro forma effect to the
transaction as if the same had occurred at the beginning of the most recently ended four fiscal
quarter period of the Borrower for which internal financial statements are available; provided,
however, that if such transaction shall thereafter cease to satisfy the preceding requirements as a
Tax Benefit Transaction, it shall thereafter cease to be a Tax Benefit Transaction for purposes of
this Agreement and shall be deemed to have been effected as of such date and, if the transaction is
not otherwise permitted by this Agreement as of such date, the Borrower will be in Default
hereunder if such transaction does not comply with the preceding requirements or is not otherwise
unwound within 30 days of that date. Notwithstanding the foregoing, it is agreed and understood
that (i) the abovementioned tax ruling or tax opinion, resolution and fairness opinion shall not be
required for any Tax Benefit Transaction in respect of which the net consideration payable to or by
a QMI Entity does not exceed, singly, C$10,000,000 and, in the aggregate C$25,000,000 for the
preceding twelve month period and (ii) the abovementioned resolution and fairness opinion shall not
be required for any Tax Benefit Transaction conducted among QMI Entities.




          “Taxes” has the meaning specified in Section 12.07(1).




          “Term” means the period commencing on the Closing Date and terminating with respect to (i) the
Revolving Facility, five years therefrom, (ii) Facility A, five years therefrom and (iii) Facility
B, seven years therefrom.




          “Termination Event” means, with respect to any Benefit Plan, (a) any Reportable Event with
respect to such Benefit Plan, (b) the termination of such Benefit Plan, or the filing of a notice
of intent to terminate such Benefit Plan, or the treatment of any amendment to such Benefit Plan as
a termination under ERISA Section 4041(c), (c) the institution of proceedings to terminate such
Benefit Plan under ERISA Section 4042 or (d) the appointment of a trustee to administer such
Benefit Plan under ERISA Section 4042.




          “Unconsolidated Coverage Ratio” means, at any time, for any period the ratio, on an
unconsolidated basis, of the aggregate amount of Equity Distributions received in cash by the
Borrower (other than advances made to the Borrower by its Subsidiaries) to Interest Charges paid in
cash by the Borrower, calculated in the manner prescribed in Section 8.03(c) at such time.




          “USA Patriot Act” means the Uniting and Strengthening America by Providing Appropriate Tools
Required to Intercept and Obstruct Terrorism (USA Patriot Act) Act of 2001, as the same may be
amended from time to time.




          “US Prime Rate” means, for any day, a fluctuating rate per annum (expressed as an annual rate
calculated based on a 365 or 366 day year, as the case may be) equal to the higher of (a) the
Federal Funds Effective Rate plus 1/2 of 1% and (b) the rate of interest in effect for such day as
publicly announced from time to time by Bank of America, N.A. as its “prime rate” for US$ demand
commercial loans in US$ to Canadian borrowers. The “prime rate” is a rate set by Bank of America,
N.A. based upon various factors including Bank of America, N.A.’s costs and desired return, general
economic conditions and other factors, and is used as a reference point for pricing









 



32


some loans, which may be priced at, above, or below such announced rate. Any change in such
rate announced by Bank of America, N.A. shall take effect at the opening of business on the day
specified in the public announcement of such change.




          “US Prime Rate Advance” means, at any time, the part of the Advances in US$ with respect to
which the Borrower has chosen, or, in accordance with the provisions hereof, is obliged to pay,
interest calculated in accordance with the provisions of Section 3.09.




          “US Dollars” or “US$” means the lawful currency of the United States of America in same day
immediately available funds or, if such funds are not available, the currency of the United States
of America which is ordinarily used in the settlement of international banking operations on the
day on which any payment or any calculation must be made pursuant to this Agreement.




          “Vidéotron Credit Agreement” means the Credit Agreement dated as of November 28, 2000 entered
into among, inter alia, Vidéotron Ltée, as borrower, and Royal Bank of Canada, as administrative
agent, as amended.




          Section 1.02 Gender and Number. Any reference in the Credit Documents to gender includes all
genders, and words importing the singular number only include the plural and vice versa.




          Section 1.03 Interpretation not Affected by Headings, etc. The provisions of a Table of Contents,
the division of this Agreement into Articles and Sections and the insertion of headings are for
convenience of reference only and shall not affect the interpretation of this Agreement.




          Section 1.04 Currency. All references in the Credit Documents to dollars, unless otherwise
specifically indicated, are expressed in Canadian currency.




          Section 1.05 Certain Phrases, etc. In any Credit Document (i) (y) the words “including” and
“includes” mean “including (or includes) without limitation” and (z) the phrase “the aggregate of”,
“the total of”, “the sum of”, or a phrase of similar meaning means “the aggregate (or total or
sum), without duplication, of”, and (ii) in the computation of periods of time from a specified
date to a later specified date, unless otherwise expressly stated, the word “from” means “from and
including” and the words “to” and “until” each mean “to but excluding”.




          Section 1.06 Accounting Terms.




          (1) All accounting terms not specifically or completely defined herein shall be construed in
conformity with GAAP applied on a consistent basis, as in effect from time to time. However, all financial data (including financial ratios and other financial
calculations) required to be submitted pursuant to this Agreement shall be prepared in conformity
with GAAP, applied in a manner consistent with that used in preparing the audited consolidated
financial statements of the Borrower for the period ended December 31, 2004, except as otherwise
specifically prescribed herein.









 



33


          (2) If at any time any change in GAAP would affect the computation of any financial ratio or
requirement set forth in any Credit Document, and either the Borrower or the Majority Lenders shall
so request, the Administrative Agent, the Lenders and the Borrower shall negotiate in good faith to
amend such ratio or requirement to preserve the original intent thereof in light of such change in
GAAP (subject to the approval of the Majority Lenders); provided that, until so amended,
(i) such ratio or requirement shall continue to be computed in accordance with GAAP prior to such
change therein and (ii) the Borrower shall provide to the Administrative Agent and the Lenders a
reconciliation between calculations of such ratio or requirement made before and after giving
effect to such change in GAAP.




          Section 1.07 Non-Business Days. Whenever any payment is stated to be due on a day which is not a
Business Day (other than payments, due on the maturity date of each Credit Facility), such payment
shall be made on the next succeeding Business Day, and such extension of time shall be included in
the computation of interest or Fees, as the case may be. Whenever a particular maturity date falls
on a day which is not a Business Day, all payments relating thereto shall be made on the last
preceding Business Day.




          Section 1.08 Ratable Portion of Accommodations. References in this Agreement to a Lender’s ratable
portion of Advances, Drawings, Letters of Credit, Drafts and Banker’s Acceptances or ratable share
of payments of principal, interest, Fees or any other amount, shall mean and refer to a ratable
portion or share as nearly as may be ratable in the circumstances, as determined in good faith by
the Administrative Agent. Each such determination by the Administrative Agent shall be prima facie
evidence of such ratable share.




          Section 1.09 Incorporation of Schedules. The schedules attached to this Agreement shall, for all
purposes of this Agreement, form an integral part of it.




          Section 1.10 Rounding. Any financial ratios required to be maintained by the Borrower pursuant
to this Agreement shall be calculated by dividing the appropriate component by the other component,
carrying the result to one place more than the number of places by which such ratio is expressed
herein and rounding the result up or down to the nearest number (with a rounding-up if there is no
nearest number).




          Section 1.11 Times of Day. Unless otherwise specified, all references herein to times of day
shall be references to Eastern time (daylight or standard, as applicable).




          Section 1.12 Letter of Credit Amounts. Unless otherwise specified herein, the Face Amount of
a Letter of Credit at any time shall be deemed to be the stated amount of such Letter of Credit in
effect at such time; provided, however, that with respect to any Letter of Credit
that, by its terms or the terms of any Letter of Credit Application Form related thereto, provides
for one or more automatic increases in the stated amount thereof, the Face Amount of such Letter of
Credit shall be deemed to be the maximum stated amount of such Letter of Credit after giving effect
to all such increases, whether or not such maximum stated amount is in effect at such time.









 



34




ARTICLE 2




CREDIT FACILITIES




          Section 2.01 Availability. (1) Each Lender individually and not jointly and severally (or
solidarily) agrees, on the terms and conditions of this Agreement, to make Accommodations ratably
to the Borrower in accordance with such Lender’s Commitment under the Revolving Facility, Facility
A and/or Facility B, as applicable. Accommodations under the Revolving Facility may be made
available as (i) Prime Rate Advances or US Prime Rate Advances pursuant to Article 3; (ii) Bankers’
Acceptances pursuant to Article 4; (iii) Libor Advances pursuant to Article 3 or (iv) Letters of
Credit pursuant to Article 5. Accommodations under Facility A may be made available as (i) Prime
Rate Advances or US Prime Rate Advances pursuant to Article 3; (ii) Bankers’ Acceptances pursuant
to Article 4; or (iii) Libor Advances pursuant to Article 3. Accommodations under the Facility B-1
Tranche may be made available (i) as US Prime Rate Advances pursuant to Article 3 or (ii) as Libor
Advances pursuant to Article 3 and, under the Facility B-2 Tranche, (i) as Prime Rate Advances
pursuant to Article 3 or (ii) as Bankers’ Acceptances pursuant to Article 4. The Issuing Lender
agrees, on the terms and conditions of this Agreement, to make Letters of Credit available to the
Borrower in accordance with the provisions thereof.




          (1) The failure of any Lender to make an Accommodation shall not relieve any other Lender of
its obligation, if any, in connection with any such Accommodation, but no Lender is responsible for
any other Lender’s failure in respect of such Accommodation.




          (2) The Administrative Agent shall give each Lender prompt notice of any (i) Accommodation
Notice received from the Borrower and of each Lender’s ratable portion of any Accommodation; and
(ii) other notice received by it from the Borrower under this Agreement.




          Section 2.02 Commitments and Facility Limits. (1) The Accommodations Outstanding (i) to all
Revolving Lenders under the Revolving Facility shall not at any time exceed the Revolving
Commitment; and (ii) to each Revolving Lender under the Revolving Facility shall not at any time
exceed such Lender’s Commitment under the Revolving Facility (provided, for greater certainty, that
the Issuing Lender’s Commitment under the Revolving Facility shall not be reduced by more than its
ratable portion of the Accommodations Outstanding by Letters of Credit made or to be made by it in its capacity as Issuing
Lender). The Accommodations Outstanding (i) to all Facility A Lenders under Facility A shall not at
any time exceed the Facility A Commitment, and (ii) to each Facility A Lender under Facility A
shall not at any time exceed such Lender’s Commitment under Facility A. The Accommodations
Outstanding (i) to all Facility B Lenders under Facility B shall not at any time exceed the
Facility B Commitment; and (ii) to each Facility B Lender under Facility B shall not at any time
exceed such Lender’s Commitment under Facility B. The Accommodations Outstanding (i) to all
Facility B-1 Lenders under the Facility B-1 Tranche shall not at any time exceed the Facility B-1
Commitment; and (ii) to each Facility B-1 Lender under the Facility B-1 Tranche shall not at any
time exceed such Lender’s Commitment under the Facility B-1 Tranche. The Accommodations Outstanding
(i) to all Facility B-2 Lenders under the Facility B-2 Tranche shall not at any time exceed the
Facility B-2 Commitment; and (ii) to each Facility B-2 Lender under the Facility B-2









 



35



Tranche shall not at any time exceed such Lender’s Commitment under the Facility B-2 Tranche. The Aggregate Face
Amount of Letters of Credit Outstanding shall not at any time exceed C$5,000,000.




          (2) The Revolving Facility shall revolve and, except as otherwise provided herein, no payment
under the Revolving Facility shall reduce the Revolving Commitment or any Lender’s Commitment under
the Revolving Facility. Facility A and Facility B shall not revolve and any amount repaid or
prepaid, as the case may be, under Facility A or Facility B cannot be reborrowed and shall reduce
the Facility A Commitment or the Facility B Commitment by the amount repaid or prepaid, as the case
may be.




          (3) A conversion from one Type of Accommodation to another Type of Accommodation shall not
constitute a repayment or prepayment.




          Section 2.03 Use of Proceeds. (1) The Borrower may use the proceeds of any Accommodations under the
Credit Facilities (i) for general corporate purposes (including Permitted Distributions) and (ii)
to refinance the Debt under the Existing Credit Agreement and under the Existing Senior Notes
provided that no more than C$25,000,000 of proceeds of the Revolving Facility may be used for such
refinancing.




          (2) No proceeds of any Advance will be used to purchase or carry any equity security of a
class which is registered pursuant to Section 12 of the U.S. Securities Exchange Act of 1934, as
amended, or any “margin stock”, as defined in Federal Reserve System Board of Governors Regulation
U, or for a purpose which violates, or would be inconsistent with, Federal Reserve System Board of
Governors Regulation T, U or X. Terms used in this Section for which meanings are provided in
Federal Reserve System Board of Governors Regulation T, U or X or any regulations substituted
therefor, as from time to time in effect, have the meaning so provided.




          Section 2.04 Mandatory Repayments and Reductions of Commitments. (1)Subject to Section 9.01, the
Borrower shall repay the Accommodations Outstanding under the Revolving Facility on the last day of
the Term of the Revolving Facility.




          (2) Subject to Section 9.01, the Borrower shall repay the Accommodations Outstanding under
Facility A in quarterly installments equal to the applicable percentage set forth below of the full
amount of Facility A, being C$125,000,000, each such installment being payable on the
15th of April, 15th of July, 15th of October and 15th of January
of each year until October 15, 2010, and shall repay the balance of the Accommodations Outstanding
under Facility A on the last day of the Term of Facility A.




	 	 	 	 	 
	Year of Term	 	Quarterly Percentage
	1 to 3 inclusive
	 	 	2.50	%
	4
	 	 	5.00	%
	5
	 	 	12.50	%






          (3) Subject to Section 9.01, the Borrower shall repay the Accommodations Outstanding under
Facility B in quarterly installments equal to 0.25% of the full amount of









 



36


Facility B, being US$350,000,000, each such installment being payable on the 15th of April (it being
understood that, for 2006 only, such installment shall be payable on April 18, 2006),
15th of July, 15th of October and 15th of January of each year
until October 15, 2012, and shall repay the balance of the Accommodations Outstanding under
Facility B on the last day of the Term of Facility B.




          Section 2.05 Mandatory Prepayments. (1) Subject to subsection (4) hereof, the Borrower agrees to
make the following mandatory prepayments (“Mandatory Prepayments”).




          (2) An amount equal to the Net Proceeds from any Disposition of any Assets in excess of
C$10,000,000 by the Borrower (other than any Disposition of Assets permitted pursuant to clauses
(i) and (ii) of Section 8.02(d) or any Disposition of Assets previously acquired as part of a Tax
Benefit Transaction) shall be applied within 365 days of receipt to the prepayment and permanent
reduction of Accommodations Outstanding under (i) firstly, Facility A and Facility B, on a pro rata
basis, and (ii) secondly, the Revolving Facility (provided that the Revolving Commitment shall not
be reduced as a result of such payment), in each case, in accordance with Section 2.09 hereof,
except (i) to the extent that the Net Proceeds from such Disposition of Assets are reinvested in a
manner permitted hereunder (other than in cash or Cash Equivalents) in the Business within twelve
months of the date of the Disposition and (ii) that the Borrower shall be entitled to keep Net
Proceeds which should have been applied in accordance with the foregoing up to an aggregate amount
which does not exceed C$100,000,000 for the Term of the Credit Facilities.




          (3) An amount equal to 50% of the Net Proceeds from the issuance of any securities (other than
the Back-to-Back Securities, the Existing Back-to-Back Securities and Debt securities, but
including Debt securities of the nature described in clause (viii) of the definition of “Debt”
(other than Back-to-Back Securities)) by the Borrower shall be applied within 365 days of receipt
to the prepayment and permanent reduction of the Accommodations Outstanding under (i) firstly,
Facility A and Facility B, on a pro rata basis, and (ii) secondly, the Revolving Facility (provided
that the Revolving Commitment shall not be reduced as a result of such payment), in each case in
accordance with Section 2.09 hereof, except to the extent that within 12 months of such issuance, the Net Proceeds are invested, directly or indirectly, by way of
equity contribution or loans or advances in Sun Media Corporation or Videotron Ltée or are used to
purchase Assets that will form part of the Collateral.




          (4) The Borrower shall advise the Administrative Agent of its intention to make any such
Mandatory Prepayment by notice in writing substantially in the form of Schedule 2, at least 10 and
not more than 20 Business Days before the Mandatory Prepayment is due, and shall pay the amount of
such Mandatory Prepayment to the Administrative Agent when it is due. In addition, the Borrower
shall, at the same time, make a written offer (an “Offer”) to the Facility A Lenders and Facility B
Lenders (collectively the “Term Lenders” and individually a “Term Lender”), by sending such Offer,
substantially in the form of Schedule 3, to the Administrative Agent for distribution to the Term
Lenders, setting out the entitlement of each such Lender to such Mandatory Prepayment (other than
any Unacceptable Payment, as defined below). Each Term Lender shall irrevocably respond to the
Offer, with a copy to the Administrative Agent, at least 3 Business Days’ before the Mandatory
Prepayment is due. Failure on the part of any Term Lender to so respond shall be deemed an
acceptance of the









 



37



Offer by such Term Lender. All proceeds of each Mandatory Prepayment shall be
applied ratably amongst the Term Lenders to repay and permanently reduce Facility A and Facility B
in inverse order of maturity. However, the Borrower shall not be obliged to make an Offer and the
Facility B Lenders shall not accept any Mandatory Repayment if, as a result thereof, the Facility B
Lenders would receive, within 5 years and 10 days from the date of the first Advance under Facility
B, an amount that, when added to the scheduled repayments contemplated by Section 2.04 and to all
other Mandatory Prepayments made prior to that date, would be equal to or would exceed 25% of the
amount of the initial Accommodation under Facility B (an “Unacceptable Payment”). If any Term
Lender does not accept any such Mandatory Repayment, the amount of such Mandatory Repayment that
would have been paid to such Term Lender shall be paid to the Facility A Lenders (or the other
Facility B Lenders, as applicable) to reduce the Commitments under Facility A (or Facility B, as
applicable) and then to the Revolving Lenders to reduce the Accommodations Outstanding (but not the
Commitments) under the Revolving Facility; provided that if there are no Accommodations Outstanding
under the Revolving Facility at such time, such amount may be retained by the Borrower.



No such Mandatory Prepayment may be made on a date that would require a Libor Advance or a BA
Instrument to be prepaid, except in accordance with the provisions of Section 12.06(4), provided
that the Borrower may cash collateralize such Libor Advances (and BA Instruments) in accordance
with the provisions of Section 2.10.




          Section 2.06 Optional Prepayments and Reductions of Commitments. (1) The Borrower may, subject to
the provisions of this Agreement, (i) prepay without penalty or bonus Accommodations Outstanding
under any Credit Facility; or (ii) reduce the Revolving Commitment, Facility A Commitment and/or
Facility B Commitment, and, if required as a result of such reduction, the Accommodations
Outstanding under the Revolving Facility, Facility A and/or Facility B, in each case in whole or in
part, subject to providing five (5) Business Days’ notice to the Administrative Agent stating the
proposed date and aggregate principal amount of the prepayment or reduction. Each partial
prepayment or reduction shall be in a minimum aggregate principal amount of US$3,000,000 in respect of Facility B and C$1,000,000
in respect of the Revolving Facility and Facility A and in an integral multiple of C$1,000,000 or
US$1,000,000, as the case may be. Any reduction in respect of Facility B shall be made on a pro
rata basis between Facility B-1 and Facility B-2.




          (2) The Borrower may not in any event prepay a Libor Advance or the amount of any BA
Instrument on any date other than the maturity date for the relevant Libor Advance or BA
Instrument, provided that the Borrower may cash collateralize such Libor Advance or BA Instrument
in accordance with the provisions of Section 2.10.




          Section 2.07 Fees. (1) The Borrower shall pay to the Administrative Agent, for the account of the
Revolving Lenders, a fee calculated at a rate per annum equal to the Applicable Commitment Fee
calculated on the unused and uncancelled portion of the Revolving Facility calculated daily and
payable in arrears on the last Business Day of each calendar quarter and on the last day of the
Term of the Revolving Facility.









 



38




          (2) The Borrower shall pay to Banc of America Securities LLC a fee determined in accordance
with the Commitment Letter accepted by the Borrower and dated December 19, 2005, payable in
accordance with its terms.




          Section 2.08 Payments under this Agreement. (1) Unless otherwise expressly provided in this
Agreement, the Borrower shall make any payment required to be made by it to the Administrative
Agent or any Lender by depositing the amount of the payment to the appropriate Agency Branch
Account not later than 10:00 a.m. (Toronto time) on the date the payment is due. The Administrative
Agent shall distribute to each Lender, promptly on the date of receipt by the Administrative Agent
of any payment, an amount equal to the amount then due to each Lender. Any amount received by the
Administrative Agent for the account of the Lenders shall be held as mandatary for the Lenders
until distributed.




          (2) Unless otherwise expressly provided in this Agreement, the Administrative Agent shall make
Accommodations and other payments to the Borrower under this Agreement by transferring the amount
of the payment in the relevant currency to the Borrower’s account as may be instructed by the
Borrower in writing on the date the payment is to be made.




          (3) The Borrower hereby authorizes each Lender, if and to the extent payment owed to such
Lender by the Borrower is not made to the Administrative Agent when due, to charge from time to
time any amount due against any or all accounts of the Borrower with such Lender.




          (4) All payments by the Borrower under the Credit Facilities shall be in Canadian Dollars or
in US Dollars, as applicable.




          Section 2.09 Application of Payments and Prepayments.(1) Subject to paragraph (2) hereof, each prepayment pursuant to Section 2.05 and Section 2.06
in respect of Facility A or Facility B shall be applied to the instalments pursuant to Section 2.04
in the inverse order of their maturity, subject to paying the applicable breakage costs (as
contemplated by Section 12.06) if any Libor Advance or BA Instrument is prepaid.




          (2) All amounts received by the Administrative Agent from or on behalf of the Borrower and not
previously applied pursuant to this Agreement shall be applied by the Administrative Agent as
follows (i) first, in reduction of the Borrower’s obligation to pay any amounts owing to the
Administrative Agent; (ii) second, in reduction of the Borrower’s obligation to pay any unpaid
interest and any Fees which are due and owing; (iii) third, in reduction of the Borrower’s
obligation to pay any Claims or Losses referred to in Section 12.06; (iv) fourth, in reduction of
the Borrower’s obligation to pay any amounts due and owing on account of any unpaid principal
amount of Accommodations Outstanding or amounts under Hedging Agreements (other than the Hedging
Agreements referred to in paragraph (ii) of the definition of Hedging Agreements) which are due
and owing; (v) fifth, in reduction of the Borrower’s obligation to pay any other unpaid amounts
which are due and owing to the Lenders; (vi) sixth, in reduction of any other obligation of the
Borrower under this Agreement and the other Credit Documents; and (vii) seventh, to the Borrower or
such other Persons as may lawfully be entitled to or directed to receive the remainder.










 



39




          Section 2.10 Cash Collateralization of Certain Payments and Prepayments. If a payment or Mandatory
Prepayment to be made would require the repayment of outstanding BA Instruments, Letters of Credit
or Libor Advances prior to their maturity, the Borrower shall provide to the Administrative Agent
cash collateral in an amount equal to the Face Amount of such BA Instruments or Letters of Credit
or the principal amount of such Libor Advances, as the case may be, which cash collateral shall be
held by the Administrative Agent in an interest bearing account, or invested, in accordance with
the instructions of the Borrower (provided no Default has occurred and is continuing and no Event
of Default has occurred), in Cash Equivalents (in either case, with interest for the benefit of the
Borrower), and used to repay same at maturity. However, in the case where the payment or Mandatory
Prepayment would require the actual prepayment of a Libor Advance, the Borrower may elect to prepay
same and pay to the Administrative Agent for the Lenders the amount of the losses, costs and
expenses suffered or incurred by the Lenders with respect thereto which are referred to in Section
12.06(4).




          Section 2.11 Computations of Interest and Fees. (1) All computations of interest shall be made by
the Administrative Agent taking into account the actual number of days occurring in the period for
which such interest is payable, and a year of 365/366 days, or, in the case of a Libor Advance, 360
days.




          (2) All computations of Fees shall be made by the Administrative Agent on the basis of a year
of 365 or 366 days, as the case may be, taking into account the actual number of days (including
the first day but excluding the last day) occurring in the period for which such fees are payable.




          (3) For purposes of the Interest Act (Canada), (i) whenever any interest or Fee under this
Agreement is calculated using a rate based on a number of days less than a full year, such rate
determined pursuant to such calculation, when expressed as an annual rate, is equivalent to (x) the
applicable rate, (y) multiplied by the actual number of days in the calendar year in which the
period for which such interest or fee is payable (or compounded) ends, and (z) divided by the
number of days comprising such calculation basis; (ii) the principle of deemed reinvestment of
interest does not apply to any interest calculation under this Agreement; and (iii) the rates of
interest stipulated in this Agreement are intended to be nominal rates and not effective rates or
yields.




          (4) No provision of this Agreement shall have the effect of requiring any Borrower to pay
interest (as such term is defined in section 347 of the Criminal Code (Canada)) at a rate per annum
in excess of the maximum rate authorized under such Section 347, taking into account all other
amounts which must be taken into account for the purpose thereof and, to such extent, the
Borrower’s obligation to pay interest hereunder shall be so limited.




          Section 2.12 Increase of Facility B and Creation of a New Credit Facility. (1) Provided there
exists no Default, upon notice to the Administrative Agent, which shall promptly notify the
applicable existing Lenders, the Borrower may from time to time, request an increase in Facility B
by an amount (for all such requests) not exceeding C$350,000,000; provided that (i) any
such request for an increase shall be in a minimum amount of C$5,000,000, and (ii) the Borrower may
make a maximum of seven such requests. At the time of sending such notice, the Borrower (in
consultation with the Administrative Agent) shall specify the time









 



40



period within which each applicable Lender is requested to respond (which shall in no event be less than ten Business Days
from the date of delivery of such notice to the applicable Lenders).




          (2) Each applicable Lender shall notify the Administrative Agent within such time period
whether or not it agrees to increase its Commitment under Facility B and, if so, whether by an
amount equal to, greater than, or less than its ratable portion (based on such Lender’s proportion
in respect of Facility B) of such requested increase. Any applicable Lender not responding within
such time period shall be deemed to have declined to increase its Commitment.




          (3) The Administrative Agent shall notify the Borrower and each applicable Lender of the
Lenders’ responses to each request made hereunder. To achieve the full amount of a requested
increase, and subject to the approval of the Administrative Agent (which approval shall not be
unreasonably withheld), the Borrower may also invite additional Eligible Assignees which respect
the requirements hereunder to become Lenders under the increased Facility B pursuant to a joinder
agreement in form and substance satisfactory by the Administrative Agent and its counsel.




          (4) If Facility B is increased in accordance with this Section, the Administrative Agent and
the Borrower shall determine the effective date (the “Increase Effective Date”) and the final
allocation of such increase. The Administrative Agent shall promptly notify the Borrower and the
applicable Lenders of the final allocation of such increase and the Increase Effective Date of the
increased Facility B. As of the Increase Effective Date, the amortization schedule set forth in
Section 2.04 shall be amended to increase the then-remaining unpaid installments of principal by an aggregate amount equal to the additional Accommodations
being made on such date, such aggregate amount to be applied to increase such installments ratably
in accordance with the amounts in effect immediately prior to the Increase Effective Date. Such
amendment may be signed by the Administrative Agent on behalf of the Lenders.




          (5) Notwithstanding the foregoing, the Borrower may elect to create a new Credit Facility in
lieu of increasing Facility B and may invite lenders selected by it (with the prior consent of the
Administrative Agent, which consent shall not be unreasonably withheld) to participate in such new
Credit Facility, provided that (i) at such time, no Default exists, (ii) the aggregate amount of
all increases of Facility B and creation of a new Credit Facility does not exceed the C$350,000,000
limit set forth under Section 2.12(1),(iii) the new Credit Facility shall have a weighted average
life equivalent or longer than the one of Facility B; (iv) the terms and conditions applicable to
such new Credit Facility (other than the pricing of such new Credit Facility) are not more
restrictive to the Borrower and its Subsidiaries than those applicable to the other Credit
Facilities hereunder, and (v) the Borrower, the applicable lenders and the Administrative Agent
shall enter into an amendment to this Agreement to reflect all changes necessary further to the
creation of such new Credit Facility it being understood and agreed that all other Lenders shall be
bound by such amendment. If a new Credit Facility is created in accordance with this section, the
Borrower shall promptly notify the Administrative Agent and the Lenders of the identity of any new
Lenders, of the final allocation of the new Credit Facility among the applicable Lenders, of the
effective date (the “Creation Effective Date”) of the new Credit Facility, and the particular terms
and conditions applicable to such new Credit Facility.










 



41




          (6) As a condition precedent to such increase or new Credit Facility, the Borrower shall
deliver to the Administrative Agent all documents required by the Administrative Agent or its
counsel, including a certificate of each Loan Party dated as of the Increase Effective Date or
Creation Effective Date, as the case may be, (in sufficient copies for each Lender) signed by an
acceptable officer of such Loan Party (i) certifying and attaching the resolutions adopted by such
Loan Party approving or consenting to such increase or new Credit Facility, and (ii) in the case of
the Borrower, certifying that, before and after giving effect to such increase or new Credit
Facility, (A) the representations and warranties contained in Article 7 and the other Credit
Documents are true and correct on and as of the Increase Effective Date or the Creation Effective
Date, as the case may be, except to the extent that such representations and warranties
specifically refer to an earlier date, in which case they are true and correct as of such earlier
date, and except that for purposes of this Section, the representations and warranties contained in
Section 7.01(q) shall be deemed to refer to the most recent statements furnished pursuant to
Section 8.01, and (B) no Default exists. The additional Accommodations shall be made by the
applicable Lenders participating therein pursuant to the procedures set forth herein or in the
amendment referred to above, as applicable.




          Section 2.13 Excess.Section 2.14 If the Accommodations Outstanding under a the Revolving
Facility or Facility A exceed the Revolving Commitment or the Facility A Commitment, as
applicable, solely as a result of exchange rate fluctuations, mandatory prepayments will be
required to reimburse such excess if the Accommodations Outstanding under that particular Credit Facility exceed 105% of the Revolving Commitment or the Facility A Commitment, as the
case may be, based on the closing balance for any day calculated on the basis of the spot rate
referred to in Article 11 for that day. The Administrative Agent shall request repayment of any
such excess forthwith upon request therefore by any Lender, but the Administrative Agent is not
otherwise required to monitor excess amount levels or to request repayment thereof.




ARTICLE 3




ADVANCES




          Section 3.01 The Advances. (1) Each Revolving Lender individually, and not jointly and severally
(or solidarily) agrees, on the terms and conditions of this Agreement, and from time to time prior
to the date which is one Business Day prior to the last Business Day of the Term of the Revolving
Facility, to make Prime Rate Advances, Accommodations by way of BA Instruments, Accommodations by
way of Letters of Credit, Libor Advances and US Prime Rate Advances to the Borrower on any Business
Day. Each Advance shall be made ratably by the applicable Lenders.




          (2) Each Facility A and Facility B Lender (as applicable, each Facility B-1 Lender and
Facility B-2 Lender) individually, and not jointly and severally (or solidarily) agrees, on the
terms and conditions of this Agreement, to make Prime Rate Advances, Accommodations by way of BA
Instruments, Libor Advances and US Prime Rate Advances to the Borrower on any Business Day. Each
Advance shall be made ratably by the applicable Lenders. All Advances under Facility A and Facility
B shall be in US Dollars or in Canadian Dollars, as applicable. The initial Advance under Facility
A and Facility B shall be for the full









 



42


amount available thereunder and shall be made on the Closing
Date. Any portion of the Advances available to the Borrower under Facility A and Facility B that is
not borrowed as part of such initial Advance or that is repaid shall not again be available for
borrowing, although Libor Advances may be rolled over into new Libor Advances or converted into US
Prime Rate Advances, and US Prime Rate Advances may be converted into Libor Advances.




          Section 3.02 Procedure for Advances. (1) Each Advance shall be in a minimum amount of C$1,000,000
for Prime Rate Advances and US$1,000,000 for US Prime Rate Advances, and US$3,000,000 for Libor
Advances, and in an integral multiple of $1,000,000 in each case, and shall be subject to the
Borrower providing the appropriate number of days’ prior notice specified in this Agreement (being
one Business Day’s notice for Prime Rate Advances and US Prime Rate Advances and three Banking
Days’ notice for Libor Advances), given not later than 10:00 a.m. (Toronto time) by the Borrower to
the Administrative Agent. Each notice of an Advance (a “Borrowing Notice”) shall be in
substantially the form of Schedule 1, shall be irrevocable and binding on the Borrower and shall
specify (i) the requested date of the Advance; (ii) the aggregate amount of the Advance; and (iii)
the Credit Facility under which such Advance is requested. Upon receipt by the Administrative Agent
of funds from the Lenders and fulfillment of the applicable conditions set forth in Article 6, the Administrative Agent will make such funds available to the Borrower in accordance
with Article 2.




          Section 3.03 LIBOR Advances. If the Advance requested is a Libor Advance, the Administrative Agent
shall determine the LIBOR which will be in effect on the date of the Advance (which must be a
Banking Day), with respect to the Selected Amount or to each of the Selected Amounts, as the case
may be, having a maturity of 1, 2, 3 or 6 months (subject to availability, or such other period of
10 to 180 days which may be available and is acceptable to the Administrative Agent) from the date
of the Advance (a “Designated Period”). However, if the Borrower has not delivered a notice to the
Administrative Agent in a timely manner in accordance with the provisions of Section 3.02, the
Borrower shall be deemed to have requested a US Prime Rate Advance. In addition, the Borrower may
not have more than 15 different Libor Advances outstanding at any time under all the Credit
Facilities.




          Section 3.04 Market for Libor Advances. If, at any time or from time to time, as a result of market
conditions, (i) there exists no appropriate or reasonable method to establish LIBOR, for a Selected
Amount or a Designated Period, or (ii) US Dollar deposits are not available to the Lenders in such
market in the ordinary course of business in amounts sufficient to permit them to make the Libor
Advance, for a Selected Amount or a Designated Period, such Lenders shall so advise the
Administrative Agent and, any such Lenders shall not be obliged to honour any Borrowing Notice in
connection with any Libor Advances, and the Borrower’s option to request Libor Advances shall
thereupon be suspended upon notice by the Administrative Agent to the Borrower.




          Section 3.05 Suspension of Libor Advance Option. If a notice has been given by the Administrative
Agent in accordance with Section 3.04, Libor Advances, or any part thereof, shall not be made
(whether as an Advance, a conversion or an extension) by the Lenders affected by the circumstances
referred to in Section 3.04 and the right of the Borrower to choose that Libor Advances from such
Lenders be made or, once made, be converted or extended into a Libor Advance shall be suspended
until such time as the Administrative Agent









 



43



has determined that the circumstances having given rise
to such suspension no longer exist, in respect of which determination the Administrative Agent
shall advise the Borrower within a reasonable delay.




          Section 3.06 Limits on Libor Advances. Nothing in this Agreement shall be interpreted as
authorizing the Borrower to borrow by way of Libor Advances for a Designated Period expiring on a
date which results in a situation where the applicable Credit Facility cannot be reduced as
required by this Agreement, or on a date which is after the expiry of the applicable Term.




          Section 3.07 Conversions of Advances.The Borrower may elect to convert an Advance, or any portion thereof, to another type of
Accommodation in the same currency upon the number of days notice specified in Section 3.02 by
sending an Accommodation Notice on any Business Day.




          Section 3.08 Interest on Prime Rate Advances. Subject to the next following sentence, the Borrower
shall pay interest on the unpaid principal amount of each Prime Rate Advance from the date of such
Advance until the date on which the principal amount of the Prime Rate Advance is repaid in full at
a rate per annum equal at all times to the Canadian Prime Rate in effect from time to time plus the
Applicable Margin, calculated daily, and payable in arrears (i) on the last day of each month in
each year; and (ii) when such Advance becomes due and payable in full pursuant to the provisions
hereof. Any amount of principal of or interest on any such Advance which is not paid when due
(whether at stated maturity, by acceleration or otherwise) shall (to the extent permitted by Law)
bear interest (both before and after judgment), from the date on which such amount is due until
such amount is paid in full, payable on demand, at a rate per annum equal to the sum of (i) the
Canadian Prime Rate in effect from time to time; (ii) the Applicable Margin; and (iii) 2%.




          Section 3.09 Interest on US Prime Rate Advances. Subject to the next following sentence, the
Borrower shall pay interest on the unpaid principal amount of each US Prime Rate Advance from the
date of such Advance until the date on which the principal amount of the US Prime Rate Advance is
repaid in full at a rate per annum equal at all times to the US Prime Rate in effect from time to
time plus the Applicable Margin, calculated daily, and payable in arrears (i) on the last day of
each month in each year; and (ii) when such Advance becomes due and payable in full pursuant to the
provisions hereof. Any amount of principal of or interest on any such Advance which is not paid
when due (whether at stated maturity, by acceleration or otherwise) shall (to the extent permitted
by Law) bear interest (both before and after judgment), from the date on which such amount is due
until such amount is paid in full, payable on demand, at a rate per annum equal to the sum of (i)
the US Prime Rate in effect from time to time; (ii) the Applicable Margin; and (iii) 2%.




          Section 3.10 Interest on Libor Advances. The principal amount of the Libor Advances which at any
time and from time to time remains outstanding shall bear interest, calculated daily, on the daily
balance of such Libor Advances, from the date of each Libor Advance, at the annual rate (calculated
based on a 360-day year) applicable to each of such days which corresponds to the LIBOR applicable
to each Selected Amount, plus the Applicable Margin, and shall be effective as and from the date of
each Libor Advance up to but not including the last day of the applicable Designated Period. LIBOR
shall be promptly




















 








44



transmitted to the Borrower two Banking Days prior to the date on
which the Libor Advance is to be made. Such interest shall be payable to the Administrative Agent,
in arrears, on the last day of the Designated Period when the Designated Period is 1 to 3 months,
and when the Designated Period exceeds 3 months, on the last Business Day of each period of 3
months during such Designated Period, and on the last day of the Designated Period. Any amount of
principal of or interest on any such Libor Advance which is not paid when due (whether at stated
maturity, by acceleration or otherwise) shall (to the extent permitted by Law) bear interest (both
before and after judgment), from the date on which such
amount is due until such amount is paid in full, payable on demand, at a rate per annum equal to
the sum of (i) the LIBOR in effect from time to time; (ii) the Applicable Margin; and (iii) 2%.




ARTICLE 4




BANKERS’ ACCEPTANCES




          Section 4.01 Acceptances and Drafts. (1) Each Revolving Lender, Facility A Lender and Facility B-2
Lender individually, and not jointly and severally (or solidarily) agrees, on the terms and
conditions of this Agreement and from time to time on any Business Day prior to the expiry of the
applicable Term (i) in the case of a Revolving Lender, Facility A Lender or Facility B-2 Lender
which is willing and able to accept Drafts, to create acceptances (“Bankers’ Acceptances”) by
accepting Drafts and to purchase such Bankers’ Acceptances in accordance with Section 4.03(2), (ii)
in the case of a Revolving Lender, Facility A Lender or Facility B-2 Lender which is unable to
accept Drafts, to purchase completed Drafts (which have not and will not be accepted by such Lender
or any other Lender) in accordance with Section 4.03(2), (iii) in the case of a Revolving Lender,
Facility A Lender or Facility B-2 Lender which has participated or assigned all or any part of its
interest in the Credit Facilities to a Participant which is willing and able to accept Drafts, to
arrange for the creation of Bankers’ Acceptances by such Participant and for their purchase by such
Participant, to the extent of the participation or assignment, in accordance with Section 4.03(2),
and (iv) in the case of a Revolving Lender, Facility A Lender or Facility B-2 Lender which has
participated or assigned all or any part of its interest in the Credit Facilities to a Participant
which is unwilling or unable to accept Drafts, to arrange for the purchase by the Participant of
completed Drafts (which have not and will not be accepted by such Lender or any other Lender), to
the extent of the participation or assignment, in accordance with Section 4.03(2).




          (2) Each Drawing shall be in a minimum amount of C$3,000,000 and in an integral multiple of
C$1,000,000 and shall consist of the creation and purchase of Bankers’ Acceptances or the purchase
of Drafts on the same day, in each case for the Drawing Price, effected or arranged by the
applicable Lenders in accordance with Section 4.03 and their respective Commitment under the
applicable Credit Facility.




          (3) If the Administrative Agent determines that the Bankers’ Acceptances to be created and
purchased or Drafts to be purchased on any Drawing (upon a conversion or otherwise) will not be
created and purchased ratably by the Revolving Lenders, Facility A Lenders and Facility B-2
Lenders, as applicable (or any of their respective Participants) in accordance with Section 4.01(2)
and Section 4.03, then the requested Face Amount of Bankers’ Acceptances and Drafts shall be
reduced to such lesser amount as the Administrative Agent







 



45




determines will permit ratable sharing
and the amount by which the requested Face Amount shall have been so reduced shall be converted or
continued, as the case may be, as a Prime Rate Advance under the applicable Credit Facility, to be
made contemporaneously with the Drawing.




          (4) The Administrative Agent is authorized by the Borrower and each Lender to allocate amongst
the applicable Lenders the Bankers’ Acceptances to be issued and purchased in such manner and
amounts as the Administrative Agent may, in its sole discretion, but acting reasonably, consider
necessary, so as to ensure that no Lender is required to accept and purchase a Bankers’ Acceptance
for a fraction of C$100,000, and in such event, the Lenders’ respective share in any such Bankers’
Acceptances and repayments thereof shall be altered accordingly. Further, the Administrative Agent
is authorized by the Borrower and each Lender to cause the proportionate share of one or more
Lender’s Accommodations (calculated based on its Commitment under the applicable Credit Facility)
to be exceeded by no more than C$100,000 each as a result of such allocations provided that the
principal amount of Accommodations Outstanding, including Bankers’ Acceptances, shall not thereby
exceed the maximum amount of the respective Commitment of each applicable Lender under the
applicable Credit Facility.




          Section 4.02 Form of Drafts. Each Draft presented by the Borrower shall (i) be in a minimum amount
of C$100,000 and in an integral multiple of C$100,000; (ii) be dated the date of the Drawing, and
(iii) mature and be payable by the Borrower (in common with all other Drafts presented in
connection with such Drawing) on a Business Day which occurs (subject to availability)
approximately 1, 2, 3, or 6 months after the Drawing Date (or such other period of 10 to 180 days
as may be available and acceptable to the Administrative Agent), at the election of the Borrower,
and on or prior to the last day of the Term of the applicable Credit Facility.




          Section 4.03 Procedure for Drawing. (1) Each Drawing shall be made on notice (a “Drawing Notice”)
given by the Borrower to the Administrative Agent not later than 10:00 a.m. (Toronto time) not less
than two Business Days prior to the date on which the Drawing is to occur. Each Drawing Notice
shall be in substantially the form of Schedule 1, shall be irrevocable and binding on the Borrower
and shall specify (i) the Drawing Date; (ii) the Credit Facility under which the Drawing is to be
made; (iii) the aggregate Face Amount of Drafts to be accepted and purchased (or purchased, as the
case may be); and (iv) the contract maturity date for the Drafts.




          (2) Not later than 1:00 p.m. (Toronto time) on an applicable Drawing Date, each Revolving
Lender, Facility A Lender or Facility B-2 Lender, as applicable, shall complete one or more Drafts
in accordance with the Drawing Notice and either (i) accept the Drafts and purchase the Bankers’
Acceptances thereby created for the Drawing Price; or (ii) purchase such Drafts for the Drawing
Price, and, in each case, pay to the Administrative Agent the Drawing Proceeds in respect of such
Bankers’ Acceptance or Draft, as the case may be. Upon receipt of the Drawing Proceeds and upon
fulfillment of the applicable conditions set forth in Article 6, the Administrative Agent shall
make funds available to the Borrower in accordance with Article 2.




          (3) The Borrower shall, at the request of any applicable Lender, issue one or more
non-interest bearing promissory notes (each a “BA Equivalent Note”) payable on the date of maturity
of the unaccepted Draft referred to below, in such form as the applicable Lender







 



46




may specify and in a principal amount equal to the Face Amount of, and in exchange for, any
unaccepted Drafts which such Lender has purchased or has arranged to have purchased in
accordance with Section 4.03(2).




          (4) Bankers’ Acceptances purchased by a Revolving Lender, Facility A Lender or Facility B-2
Lender, as applicable, or Participant may be held by it for its own account until the contract
maturity date or sold by it at any time prior to that date in any relevant Canadian market in such
Person’s sole discretion.




          Section 4.04 Signatures of Draft Forms. The Borrower hereby irrevocably appoints each Revolving
Lender, Facility A Lender and Facility B-2 Lender as its lawful attorney to sign and endorse on its
behalf, manually or by facsimile or mechanical signature, any BA Instrument necessary to enable
such Lender to make Drawings in the manner specified in this Article 4. All BA Instruments signed
or endorsed on the Borrower’s behalf and in accordance with its instructions by a Lender shall be
binding on the Borrower, all as if duly executed and issued by the Borrower. No Lender shall be
liable for any Claim or Loss arising by reason of any loss or improper use of any such BA
Instruments, except arising out of the gross or intentional fault of such Lender. Each Revolving
Lender, Facility A Lender and Facility B-2 Lender shall (i) maintain a record with respect to any
BA Instrument completed in accordance herewith, voided by it for any reason, accepted and purchased
by it hereunder, and canceled at their respective maturities; and (ii) retain such records in the
manner and for the statutory periods provided in the various provincial or federal statutes and
regulations which apply to such Lender. On request by the Borrower, a Lender shall cancel all BA
Instruments which have been pre-signed or pre-endorsed on behalf of such Borrower and which are
held by such Lender and are not required to make Drawings in accordance with this Article 4.




          Section 4.05 Payment, Conversion or Renewal of BA Instruments. (1) Upon the maturity of a BA
Instrument, the Borrower may (i) elect to issue a replacement BA Instrument by giving a Drawing
Notice in accordance with Section 4.03(1); (ii) elect to have all or a portion of the Face Amount
of the BA Instrument converted to an Advance by giving a Accommodation Notice in accordance with
Section 3.02; or (iii) pay, on or before 10:00 a.m. (Toronto time) on the maturity date for the BA
Instrument, an amount in Canadian Dollars equal to the Face Amount of the BA Instrument
(notwithstanding that a Lender may be the holder of it at maturity). Any such payment shall satisfy
the Borrower’s obligations under the BA Instrument to which it relates and the relevant Lender or
Participant shall then be solely responsible for the payment of the BA Instrument.




          (2) If the Borrower fails to pay any BA Instrument when due or issue a replacement in the Face
Amount of such BA Instrument pursuant to Section 4.05(1), the unpaid amount due and payable shall
be converted to a Prime Rate Advance made by the Revolving Lenders, Facility A Lenders or Facility
B-2 Lenders, as applicable, ratably under the applicable Credit Facility and shall bear interest
calculated and payable as provided in Article 3. This conversion shall occur as of the due date and
without any necessity for the Borrower to give a Borrowing Notice.




          Section 4.06 Circumstances Making Bankers’ Acceptances Unavailable.
(1) If, by reason of circumstances affecting the money market generally, there is no market
for Bankers’ Acceptances, (i) the right of the Borrower to request a Drawing shall be suspended







 



47




until the circumstances causing a suspension no longer exist; and (ii) any Drawing Notice which is
outstanding shall be deemed to be an Accommodation Notice requesting an Advance comprised of Prime
Rate Advances.




          (2) The Administrative Agent shall promptly notify the Borrower of the suspension of the
Borrower’s right to request a Drawing and of the termination of any suspension.




          Section 4.07 Depository Bills and Notes Act. Bankers’ Acceptances may be issued in the form of a
depository bill and deposited with a clearing house, both terms as defined in the Depository Bills
and Notes Act. The Administrative Agent and the Borrower shall agree on the procedures to be
followed, acting reasonably. The Revolving Lenders, Facility A Lenders and Facility B-2 Lenders are
also authorized to issue depository bills as replacements for previously issued Bankers’
Acceptances, on the same terms as those replaced, and deposit them with a clearing house against
cancellation of the previously issued Bankers’ Acceptances.




ARTICLE 5




LETTERS OF CREDIT




          Section 5.01 Letters of Credit. (1) The Issuing Lender agrees, in reliance upon the terms and
subject to the conditions of this Agreement (and in accordance with the standard terms and
conditions represented by any agreement (including the Issuing Lender’s standard Letter of Credit
Application Form) that may be entered into between the Borrower and the Issuing Lender from time to
time, including the payment of administrative fees and costs), to issue Letters of Credit for the
account of the Borrower from time to time on any Business Day prior to the eighth-to-last day of
the Term of the Revolving Facility, which Letter of Credit shall expire on the earlier of (a) one
year from issuance, or (b) 7 days prior to the expiry of the Term of the Revolving Facility. The
issuance of any such Letter of Credit shall require two (2) Business Days’ prior notice to the
Administrative Agent and the Issuing Lender, which notice shall be accompanied by the Issuing
Lender’s standard Letter of Credit Application Form, duly completed and executed by the Borrower.
The Borrower shall pay, in respect of any such Letter of Credit, fees equal to the aggregate of:
(i) for the Revolving Lenders, the Applicable Margin multiplied by the Face Amount thereof (and
taking into account the number of days until the expiry date thereof), and (ii) for the Issuing
Lender, 1/8% per annum of the Face Amount thereof (taking into account the number of days until the
expiry date thereof), payable quarterly in arrears on the last Business Day of each Fiscal Quarter,
or on such other date as the Administrative Agent and the Issuing Lender may determine from time to
time.




          (2) For greater certainty, the Issuing Lender shall not be obliged to issue any Letter of
Credit if as a result (a) the Accommodations Outstanding under the Revolving Facility
would exceed the Revolving Commitment, (b) the Issuing Lender’s (after taking into account the
allocation of risk pursuant to Section 5.01(4)) or any other Lender’s Commitment under the
Revolving Facility would be exceeded, (c) the Aggregate Face Amount of Letters of Credit
Outstanding would exceed C$5,000,000, (d) a Law or an order, judgment or decree of a Governmental
Entity would be breached or would prohibit such issuance, (e) the Issuing Lender or other Revolving
Lenders would incur increased costs of the nature referred to in







 



48




Section 12.06(4) in respect of which they would not be indemnified by the Borrower, or (f) the policies of the Issuing Lender
would be breached.




          (3) The Issuing Lender’s Letter of Credit Application Form and any form pertaining to
amendments of any Letter of Credit (collectively, the “Letter of Credit Application Form”) shall
require, inter alia, (A) the proposed issuance date of the requested Letter of Credit (which shall
be a Business Day); (B) the amount thereof; (C) the expiry date thereof; (D) the name and address
of the beneficiary thereof (a “Beneficiary”); (E) the documents to be presented by such Beneficiary
in case of any drawing thereunder; (F) the full text of any certificate to be presented by such
Beneficiary in case of any drawing thereunder; and (G) such other matters as the Issuing Lender may
require.




          (4) Promptly after receipt of any Letter of Credit Application Form, the Issuing Lender will
confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent
has received a copy of such Letter of Credit Application Form from the Borrower and, if not, the
Issuing Lender will provide the Administrative Agent with a copy thereof. Upon receipt by the
Issuing Lender of confirmation from the Administrative Agent that the requested issuance or
amendment is permitted in accordance with the terms hereof, then, subject to the terms and
conditions hereof, the Issuing Lender shall, on the requested date, issue a Letter of Credit for
the account of the Borrower in accordance with the Issuing Lender’s usual and customary business
practices, and immediately thereupon, each Revolving Lender shall be deemed to, and irrevocably and
unconditionally agrees to, purchase from the Issuing Lender a risk participation in such Letter of
Credit in an amount equal to its ratable share of same.




          Section 5.02 Reimbursements of Amounts Drawn. (1) At or before 10:00 a.m. (Toronto time) on the
earlier of (i) the date of any payment by the Issuing Lender under a Letter of Credit; and (ii) the
last day of the Term of the Revolving Facility, the Borrower shall pay to the Issuing Lender,
through the Administrative Agent, an amount in same day funds equal to the amount to be drawn by
the Beneficiary in Canadian Dollars or US Dollars.




          (2) If the Borrower fails to pay to the Issuing Lender an amount, in same day funds, equal to
the amount of such drawing, then (i) the Borrower shall be deemed to have given a Borrowing Notice
to the Administrative Agent, requesting a Prime Rate Advance (if the applicable Letter of Credit is
denominated in C$) or a US Prime Rate Advance (if the applicable Letter of Credit is denominated in
US$) under the Revolving Facility in an amount equal to the amount of such drawing; (ii) the
Revolving Lenders shall, on the date of such drawing, make such Prime Rate Advance or US Prime Rate
Advance, ratably under the Revolving Facility; and (iii) the Administrative Agent shall pay the
proceeds thereof to the Issuing Lender as reimbursement for the amount of such drawing.




          (3) Each Revolving Lender shall be required to make the Prime Rate Advances referred to in
Section 5.02(2) notwithstanding (i) the amount of the Prime Rate Advance in question may not comply
with the minimum amount required for Advances hereunder; (ii) whether any conditions specified in
Article 6 are then satisfied; (iii) whether a Default has occurred and is continuing or whether an
Event of Default has occurred; (iv) the date of such Prime Rate Advance; (v) any reduction in the
Revolving Commitment; (vi) any set-off, counterclaim, recoupment, defense or other right which such
Lender may have against the Issuing Lender, the Borrower or any other Person for any reason
whatsoever; (vii) whether the







 



49




Revolving Commitment has been, or, after the making of such Prime
Rate Advance, will be, exceeded; and (viii) any other occurrence, event or condition, whether or
not similar to any of the foregoing.




          Section 5.03 Risk of Letters of Credit. (1) In determining whether to pay under a Letter of Credit,
the Issuing Lender shall be responsible only to determine that the documents and certificates
required to be delivered under the Letter of Credit have been delivered and that they comply on
their face with the requirements of the Letter of Credit.




          (2) The reimbursement obligation of the Borrower under any Letter of Credit shall be
unconditional and irrevocable and shall be paid strictly in accordance with the terms of this
Agreement under all circumstances, including (i) any lack of validity or enforceability of a Letter
of Credit or any Credit Document; (ii) the existence of any claim, set-off, defence or other right
which the Borrower may have at any time against a Beneficiary, the Issuing Lender or any other
Person, whether in connection with the Credit Documents and the transactions contemplated therein
or any other transaction (including any underlying transaction between such Borrower and the
Beneficiary); (iii) any certificate or other document presented with a Letter of Credit proving to
be forged, fraudulent or invalid or any statement in it being untrue or inaccurate, or any loss or
delay in the transmission or otherwise of any document required in order to make a drawing under
such Letter of Credit; (iv) the existence of any act or omission or any misuse of, a Letter of
Credit or misapplication of proceeds by the Beneficiary, including any fraud in any certificate or
other document presented with a Letter of Credit; (v) payment by the Issuing Lender under the
Letter of Credit against presentation of a certificate or other document which does not comply with
the terms of the Letter of Credit unless such payment constitutes gross or intentional fault of the
Issuing Lender; (vi) any payment made by the Issuing Lender under such Letter of Credit to any
Person purporting to be a trustee in bankruptcy, debtor-in-possession, assignee for the benefit of
creditors, liquidator, receiver or other representative of or successor to any beneficiary or any
transferee of such Letter of Credit, including any arising in connection with any proceeding under
any Law dealing with bankruptcy, insolvency or arrangements with creditors; (vii) any other
circumstance or happening whatsoever, whether or not similar to any of the foregoing, including any
other circumstance that might otherwise constitute a defense available to, or a discharge of, the
Borrower; or (viii) the existence of a Default or Event of Default.




          (3) The Borrower shall promptly examine a copy of each Letter of Credit and each amendment
thereto that is delivered to it and, in the event of any claim of noncompliance with the Borrower’s
instructions or other irregularity, the Borrower will immediately notify the
Issuing Lender. The Borrower shall be conclusively deemed to have waived any such claim
against the Issuing Lender and its correspondents unless such notice is given as aforesaid.




          (4) The Issuing Lender shall not be responsible for (i) the validity or sufficiency of any
instrument transferring or assigning or purporting to transfer or assign a Letter of Credit or the
rights or benefits under it or proceeds of it, in whole or in part, which may prove to be invalid
or ineffective for any reason; (ii) errors, omissions, interruptions or delays in transmission or
delivery of any messages by mail, telecopy or otherwise; (iii) errors in interpretation of
technical terms; (iv) any loss or delay in the transmission of any document required in order to
make a drawing; and (v) any consequences arising from causes beyond the







 



50




control of the Issuing Lender, including the acts or omissions, whether rightful or wrongful, of any Governmental Entity.
None of the above shall affect, impair, or prevent the vesting of any of the Issuing Lenders’
rights or powers under this Agreement. Each Lender and the Borrower agree that, in paying any
drawing under a Letter of Credit, the Issuing Lender shall not have any responsibility to obtain
any document (other than any sight draft, certificates and documents expressly required by the
Letter of Credit) or to ascertain or inquire as to the validity or accuracy of any such document or
the authority of the Person executing or delivering any such document. None of the Issuing Lender,
any Agent-Related Person nor any of the respective correspondents, participants or assignees of the
Issuing Lender shall be liable to any Lender for (i) any action taken or omitted in connection
herewith at the request or with the approval of the Lenders or the Majority Lenders, as applicable;
(ii) any action taken or omitted in the absence of gross or intentional fault; or (iii) the due
execution, effectiveness, validity or enforceability of any document or instrument related to any
Letter of Credit or Letter of Credit Application Form. The Borrower hereby assumes all risks of the
acts or omissions of any Beneficiary or transferee with respect to its use of any Letter of Credit;
provided, however, that this assumption is not intended to, and shall not, preclude
the Borrower’s pursuing such rights and remedies as it may have against the Beneficiary or
transferee at Law or under any other agreement. None of the Issuing Lender, any Agent-Related
Person, nor any of the respective correspondents, participants or assignees of the Issuing Lender,
shall be liable or responsible for any of the matters described in Section 5.03(2);
provided, however, that anything in such clauses to the contrary notwithstanding,
the Borrower may have a claim against the Issuing Lender, and the Issuing Lender may be liable to
the Borrower, to the extent, but only to the extent, of any direct, as opposed to consequential or
exemplary, damages suffered by the Borrower which the Borrower proves were caused by the Issuing
Lender’s gross or intentional fault or the Issuing Lender’s willful failure to pay under any Letter
of Credit after the presentation to it by the Beneficiary of a sight draft and certificate(s)
strictly complying with the terms and conditions of a Letter of Credit. In furtherance and not in
limitation of the foregoing, the Issuing Lender may accept documents that appear on their face to
be in order, without responsibility for further investigation, regardless of any notice or
information to the contrary, and the Issuing Lender shall not be responsible for the validity or
sufficiency of any instrument transferring or assigning or purporting to transfer or assign a
Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part,
which may prove to be invalid or ineffective for any reason.




          Section 5.04 Repayments.(1) If the Borrower is required to repay the Accommodations Outstanding pursuant to Article 9,
then the Borrower shall pay to the Administrative Agent an amount equal to the Issuing Lender’s
contingent liability in respect of (i) any outstanding Letter of Credit; and (ii) any Letter of
Credit which is the subject matter of any order, judgment, injunction or other such determination
restricting payment under and in accordance with such Letter of Credit or extending the Issuing
Lender’s liability under such Letter of Credit beyond its stated expiration date.




          (2) Subject to any right of compensation or set-off provided for by Law or hereunder, the
Issuing Lender shall, with respect to any Letter of Credit, pay to the Borrower an amount equal to
the difference between the amount paid to the Administrative Agent pursuant to Section 5.04(1) and
the amounts paid by the Issuing Lender under the Letter of Credit, upon the earlier of:










 



51




     (a) the date on which any final and non-appealable order, judgment or other such determination
has been rendered or issued either confirming that the Issuing Lender is prohibited permanently
from making any payment under the relevant Letter of Credit or terminating permanently the Letter
of Credit;



     (b) the date on which either (x) the original counterpart of the Letter of Credit is returned
to the Issuing Lender for cancellation, or (y) the Issuing Lender is released by the Beneficiary in
writing from any further obligations in respect thereof; or



     (c) the expiry (to the extent permitted by any applicable Law) of the Letter of Credit.



          Section 5.05 Applicability of ISP. Unless otherwise expressly agreed by the Issuing Lender and the
Borrower when a Letter of Credit is issued, the rules of ISP shall apply to each standby Letter of
Credit.




          Section 5.06 Conflict with Letter of Credit Application Form. In the event of any conflict between
the terms hereof and the terms of any Letter of Credit Application Form, the terms hereof shall
control.




ARTICLE 6




CONDITIONS OF LENDING




          Section 6.01 Conditions Precedent to the Initial Accommodation. The obligation of each Lender to
make its initial Accommodation under the Credit Facilities on or after the date hereof is subject
to (i) the applicable conditions precedent in Section 6.02; and (ii) the condition precedent that
the Administrative Agent and each Lender shall be satisfied with, or the Borrower or the Pledgors,
shall have delivered to the Administrative Agent, as the case may be, on or before the day of such
initial Accommodation, the following, in form, substance and dated as of a date satisfactory to the
Lenders and their counsel and in sufficient quantities for each Lender:




     (a) certified copies of all of the constating documents, borrowing by-laws and resolutions of
the boards of directors (or any duly authorized committee thereof) of the Borrower and the Pledgors
approving the borrowing and other matters contemplated by this Agreement and approving the entering
into of all other Credit Documents to which it is a party and the completion of all transactions
contemplated thereunder, together with all other instruments evidencing necessary corporate action
of the Borrower and the Pledgors and of any required Authorization, with respect to such matters;



     (b) a certificate of the secretary or an assistant secretary of each of the Borrower and the
Pledgors certifying the names and true signatures of its officers authorized to sign this Agreement
and the other Credit Documents;



     (c) a certificate of status, compliance, good standing or like certificate with respect to
each of the Borrower and the Pledgors issued by the government officials of the jurisdiction of









 



52

its incorporation and of each jurisdiction in which it owns any material assets or carries on any
material business;




     (d) certification as to the financial condition and solvency of, and the absence of Default
and compliance with laws and obligations in all material respects by, the Borrower and the
Pledgors, from the chief financial officer or a senior financial officer of the relevant Person;



     (e) there shall not exist (i) any order, decree, judgment, ruling or injunction which
restrains the consummation of the financing contemplated hereby or (ii) any pending or threatened
action, suit, investigation or proceeding which, if adversely determined, could reasonably be
expected to have a Material Adverse Effect;



     (f) all insurance certificates and such other reports, audits or certifications as it may
reasonably request;



     (g) the Borrower shall have provided an irrevocable direction of payment to the Administrative
Agent pursuant to which the Borrower instructs the Administrative Agent, contemporaneously with the
first Accommodation hereunder and using the proceeds thereof, as well as additional funds to be
provided by the Borrower, if applicable, to cause the repayment and cancellation of the Existing
Credit Agreement and the repayment of part of the Existing Senior Notes;



     (h) all material Liens on the property of the Borrower and the Pledgors, other than Permitted
Liens, shall have been discharged or, in the case of subsection (g) above, shall be subject to a
binding undertaking to release same immediately following the repayment thereof, in form and
substance satisfactory to the Administrative Agent and its counsel;



     (i) each of this Agreement and each of the Security Documents listed in Schedule 5, shall have
been executed, delivered, issued or assigned and registered or published, as the case may be;



     (j) all of the issued and outstanding shares of Sun Media Corporation and of Vidéotron Ltée
shall have been pledged in accordance with the pledges described in
Schedule 5, and all of the pledged shares shall have been remitted to the Administrative Agent duly
endorsed in blank for transfer;




     (k) the Borrower shall have delivered to the Administrative Agent a certificate signed by an
officer stipulating and certifying that:




     (i) such officer has taken cognizance of all the terms and conditions of this Agreement
and of all contracts, agreements and deeds pertaining hereto;




     (ii) no Default has occurred or exists hereunder which is continuing, and no Event of
Default has occurred;




     (iii) all Collateral is located in the jurisdictions described in a schedule thereto;









 



53



     (iv) the corporate structure of the Borrower and its Subsidiaries is as set out in the
diagram attached to the certificate; and




     (v) each of the Borrower and its Subsidiaries holds the material Authorizations
required in order to permit it to possess its property and its real estate and to carry on
the Business in the manner in which it is being carried on at present (except any
Authorization the absence of which would not reasonably be expected to have a Material
Adverse Effect);



     (l) nothing shall have occurred since December 31, 2004 which would reasonably be expected to
have a Material Adverse Effect;



     (m) all Fees and expenses (including the legal fees and disbursements of counsel to the
Administrative Agent and the Lenders) then payable under the Credit Documents shall have been paid
in full in the currency specified in the invoice therefor, and the Borrower shall have complied
with all of its obligations to Banc of America Securities LLC under the Commitment Letter and the
Fee Letter accepted by the Borrower dated December 19, 2005, and each such letter shall be in full
force and effect;



     (n) the Commitments under each Credit Facility shall have been fully subscribed;



     (o) favourable opinions of counsel to the Borrower and the Pledgors in form and substance
acceptable to the Administrative Agent and its counsel;



     (p) favourable opinions of counsel to the Lenders; and



     (q) such other certificates and documentation as the Administrative Agent may reasonably
request.



     For purposes of determining compliance with the conditions specified in Section 6.01, each
Lender that has signed this Agreement shall be deemed to have consented to, approved or accepted or
to be satisfied with, each document or other matter required thereunder to be consented to or
approved by or acceptable or satisfactory to a Lender unless the Administrative
Agent shall have received notice from such Lender prior to the proposed Closing Date
specifying its objection thereto.



          Section 6.02 Conditions Precedent to All Accommodations and Conversions. (1) The obligation of each
Lender to make Accommodations or otherwise give effect to any Accommodation Notice hereunder in
respect of any Credit Facility shall be subject to the conditions precedent that on the date of
such Accommodation Notice and Accommodation, and after giving effect thereto and to the application
of any proceeds therefrom, (a) the representations and warranties contained in Article 7 are true
and correct in all material respects on and as of such date (except where expressly stated to be
made at a particular date), all as though made on and as of such date; (b) no event or condition
has occurred and is continuing, or would result from such Accommodation or giving effect to such
Accommodation Notice, which constitutes a Default or an Event of Default; and (c) nothing has
occurred which would reasonably be expected to have a Material Adverse Effect.











 



54




          (2) Each of the giving of any Accommodation Notice by the Borrower and the acceptance by the
Borrower of any Accommodation shall be deemed to constitute a representation and warranty by the
Borrower that, on the date of such Accommodation Notice or Accommodation, as the case may be, and
after giving effect thereto and to the application of any proceeds therefrom, the statements set
forth in Section 6.02(1) are true and correct.




          Section 6.03 No Waiver. The making of an Accommodation or otherwise giving effect to any
Accommodation Notice hereunder, without the fulfillment of one or more conditions set forth in
Section 6.01 or Section 6.02, shall not constitute a waiver of any such condition, and the
Administrative Agent and the Lenders reserve the right to require fulfillment of such condition in
connection with any subsequent Accommodation Notice or Accommodation.




ARTICLE 7




REPRESENTATIONS AND WARRANTIES




          Section 7.01 Representations and Warranties. The Borrower represents and warrants to each Lender,
acknowledging and confirming that each Lender is relying thereon without independent inquiry in
entering into this Agreement and providing Accommodations hereunder, that:




     (a) Incorporation and Qualification. The Borrower and each of the Pledgors is a corporation
duly incorporated, continued or amalgamated as the case may be, and, as at the date hereof, validly
existing under the laws of the jurisdiction referred to in Schedule 7.01(a). Each of the Borrower
and its Subsidiaries is duly qualified, licensed or registered to carry on business under the Laws
applicable to it in all jurisdictions in which the nature of its Assets or business makes such
qualification necessary and where failure to be so qualified would reasonably be expected to have a
Material Adverse Effect.



     (b) Corporate Power. The Borrower and each of its Subsidiaries has all requisite corporate
power and authority to own and operate its properties and Assets and to carry on its business and
any other business as now being conducted by it and where the failure to so hold such power and
authority would reasonably be expected to have a Material Adverse Effect; each of the Borrower and
each of the Pledgors has all requisite corporate power and authority to enter into and perform its
obligations under this Agreement and the other Credit Documents to which it is a party.



     (c) Conflict With Other Instruments. The execution and delivery of the Credit Documents by
each of the Borrower and the Pledgors which is a party thereto and the performance by each of the
Borrower and the Pledgors of their respective obligations thereunder and compliance with the terms,
conditions and provisions thereof, will not (i) conflict with or result in a breach of any of the
terms, conditions or provisions of (A) its constating documents or by-laws, (B) any applicable Law
to a material extent, (C) any material contractual restriction binding on or affecting it or its
properties, or (D) any material judgment, injunction, determination or award which is binding on
it; or (ii) result in, require or permit (A) the imposition of any Lien in, on or with respect to
the Assets now owned or hereafter acquired by it (other than pursuant to the Security Documents or
which is a Permitted Lien), (B) the









 



55

acceleration of the maturity of any material Debt of the
Borrower or any of its Subsidiaries binding on or affecting it, or (C) any third party to terminate
or acquire any rights materially adverse to the Borrower or the Pledgors under any Material
Agreement.




     (d) Authorization, Governmental Approvals, etc. The execution and delivery of each of the
Credit Documents by each of the Borrower and each of the Pledgors which is a party thereto and the
performance by each such Person of its respective obligations hereunder and thereunder have been
duly authorized by all necessary corporate action and no Authorization (except any Authorization
the absence of which would not reasonably be expected to have a Material Adverse Effect) under any
applicable Law, no approval or consent of any third party and no registration, qualification,
designation, declaration or filing with any Governmental Entity (except for registrations or
publications in respect of the Security Documents), is or was necessary therefor or to perfect the
same, except as are in full force and effect, unamended, at the date hereof (or as may become
necessary subsequent to the date hereof and notice of which has been given to the Administrative
Agent).



     (e) Execution and Binding Obligation. This Agreement and the other Credit Documents have been
duly executed and delivered by each of the Borrower and each of the Pledgors which is a party
thereto and constitute legal, valid and binding obligations of such Person, enforceable against it
in accordance with their respective terms, subject only to any limitation under applicable Laws
relating to (i) bankruptcy, insolvency, reorganization, moratorium or creditors’ rights generally;
(ii) the discretion that a court may exercise in the granting of equitable remedies; and (iii) the
qualifications contained in the opinion of the Borrower’s legal counsel delivered at the Closing
Date.



     (f) Conduct of Business. Since December 31, 2004 and up to the Closing Date, the Business has
been carried on in the ordinary course. The Borrower and its Subsidiaries are not engaged in the
business of purchasing, carrying or extending credit for the purpose of purchasing or carrying
“margin stock”, as defined in Federal Reserve System Board of Governors Regulation U, and no
proceeds of any Accommodations will be used to purchase or carry any equity security of a class
which is registered pursuant to Section 12 of the U.S. Securities Exchange Act of 1934, as amended,
or any such margin stock, or for a purpose which violates, or would be inconsistent with, Federal
Reserve System Board of Governors Regulation T, U or X, except, but only with respect to
Subsidiaries, where the engagement in such business or such use of the proceeds could not
reasonably be expected to have a Material Adverse Effect. Terms used in this Section and in Section
2.03(2) for which meanings are provided in Federal Reserve System Board of Governors Regulation T,
U or X or any regulations substituted therefore, as from time to time in effect, have the meaning
so provided. None of the Borrower, any Person Controlling the Borrower, and the Subsidiaries of the
Borrower is or is required to be registered as an “investment company” under the Investment Company
Act of 1940, as amended (15 U.S.C. § 80a-1 et seq.), except, with respect to the
Person Controlling the Borrower or the Subsidiaries only, if such registration or requirement for
registration could not reasonably be expected to have a Material Adverse Effect. The application of
the proceeds of the Accommodations and repayment of the Accommodations Outstanding by the Borrower
and the performance by the Borrower of its obligations hereunder and under the other Credit
Documents and by each Pledgor under the Credit Documents provided by it will not violate any
provision of the said Act, or any rule, regulation or order issued by the United States















 








  56




     Securities and Exchange Commission thereunder. Neither the Borrower, any Person Controlling the Borrower, nor
any of its Subsidiaries is subject to regulation or any Law which may limit its ability to incur
Debt or which may otherwise render its obligations hereunder or under the other Credit Documents
unenforceable, except, with respect to the Person Controlling the Borrower or the Subsidiaries
only, where such limit or unenforceability could not reasonably be expected to have a Material
Adverse Effect. Neither the Borrower, nor any Affiliates of the Borrower (i) is a Person whose
property or interest in property is blocked pursuant to section 1 of Executive Order no. 13224
(September 23, 2001), (ii) engages in any dealings or transactions prohibited by section 2 of such
Executive Order, or is otherwise associated with any such Person in any manner violative of section
2 of such Executive Order, or (iii) is a Person named on the list of Specially Designated Nationals
and Blocked Persons maintained by the Office of Foreign Assets Control (“OFAC”) or any other
similar lists maintained by OFAC pursuant to any authorizing statute, Executive Order or
regulation, except, with respect to such Affiliates only, where such blocking of property,
engagement, association or naming could not reasonably be expected to have a Material Adverse
Effect. The Borrower is in compliance, in all material respects, with (i) the Trading with the
Enemy Act, as amended, and each of the foreign assets control regulations of the United States
Treasury Department (31 CFR, Subtitle B, Chapter V as amended) and any other enabling legislation
or executive order relating thereto, and (ii) the USA Patriot Act. No part of the proceeds of any
Accommodation will be used, directly or indirectly, for any payments to any governmental official
or employee, political party, official of a political party, candidate for political office, or any
one else acting in an official capacity, in order to obtain, retain or direct business or obtain
any improper advantage, in violation of the United States Foreign Corrupt Practices Act of 1977, as
amended.



     (g) Location of Business. As of the date hereof, the only jurisdictions (or registration
districts within such jurisdictions) in which the Borrower and the Pledgors have any place of
business or store any material tangible personal property are as set forth in Schedule 7.01(g). The
minute books of the Borrower and the Pledgors are located at the addresses set out in part II of
Schedule 7.01(g).



     (h) Authorizations, etc. The Borrower and each of its Subsidiaries possesses all material
Authorizations of federal, provincial, state and local governments and regulatory authorities as
may be necessary to properly conduct its business, the failure of which to possess would reasonably
be expected to have a Material Adverse Effect.



     (i) Trademarks, Patents, etc. The Borrower and each of its Subsidiaries possesses all material
trademarks, trade names, copyrights, patents, licences, or rights in any thereof, reasonably
necessary for the conduct of its business as now conducted and presently proposed to be conducted,
other than any trademarks, tradenames, copyrights, patents, licences or rights which, if not
possessed by any such QMI Entity, would not reasonably be expected to have a Material Adverse
Effect. To the best knowledge of the Borrower, neither it nor any of its Subsidiaries is, as of the
Closing Date, infringing or is alleged to be infringing on the rights of any Person with respect to
any patent, trademark, trade name, copyright (or any application or registration respecting any
thereof), discovery, improvement, process, formula, know-how, data, plan, specification, drawing or
the like, except where such infringement could not reasonably be expected to have a Material
Adverse Effect.









 



57


     (j) Ownership of Property. The Borrower and each of the Pledgors owns its Assets with good
(and, with respect to any immovable or real property, marketable) title thereto, free and clear of
all Liens, except for Permitted Liens.



     (k) Compliance with Laws. As of the Closing Date, subject to the next following sentence, the
Borrower and each of its Subsidiaries is in compliance with all applicable Laws, non-compliance
with which would reasonably be expected to have a Material Adverse Effect. Except as would not
reasonably be expected to have a Material Adverse Effect, the Borrower’s and its Subsidiaries’
Business and Assets (i) are in material compliance with all Environmental Laws; (ii) possess and
are operated in compliance with all Environmental Permits which are required for the operation of
its business; and (iii) are not subject to any past or present fact, condition or circumstance that
could result in any material liability under any Environmental Laws.



     (l) Subsidiaries, etc. The Borrower is the beneficial owner, directly or indirectly, of all of
the issued and outstanding shares of the Pledgors, Sun Media Corporation and Vidéotron Ltée. No
Person (other than the Borrower) has any right or option to purchase or otherwise acquire any of
the issued and outstanding shares of the Pledgors, Sun Media Corporation and Vidéotron Ltée. Except
as set forth in the corporate chart attached to Schedule 7.01(l), the Borrower does not own or hold
as of the date hereof any shares of, or any other interest in, any other Person.



     (m) No Burdensome Agreements. Neither the Borrower nor any of the Pledgors, Sun Media
Corporation, Vidéotron Ltée and their Subsidiaries is a party to any agreement or instrument or
subject to any restriction (including any restriction set forth in its constating documents or
by-laws) which would reasonably be expected to have a Material Adverse Effect.



     (n) No Litigation. There are no investigations, actions, suits or proceedings pending, taken
or, to the Borrower’s knowledge, threatened, before or by any Governmental Entity or by any other
Person, in Canada or elsewhere involving the Borrower or a Subsidiary, which would reasonably be
expected to have a Material Adverse Effect.



     (o) Pension Plans and Employment Liabilities. All contributions required under applicable law
under all registered pension plans in respect of which the Borrower could be liable have been made,
except for amounts not material to the Borrower on a consolidated basis and except for any unfunded
liability that is being amortized in accordance with applicable laws. Each such plan was fully
funded as of the most recent actuarial valuation on a going concern and solvency basis in
accordance with the terms of such pension plan, except for amounts not material to the Borrower on
a consolidated basis and except for any such plan that does not need to be fully funded in
accordance with applicable laws. All obligations (including wages, salaries, commissions and
vacation pay) to current employees and to former employees have been paid in full or duly provided
for, except for amounts not material to the Borrower on a consolidated basis.



     (p) Material Agreements. Neither the Borrower nor any of the Pledgors is a party or otherwise
subject to or bound or affected by any Material Agreement as of the date hereof (other than
collective agreements), except as set out in Schedule 7.01(p). Except as contemplated hereunder,
all Material Agreements are in full force and effect, unamended, and neither the









 



58



Borrower nor any Pledgor, or to the best of the Borrower’s knowledge after due enquiry, any other party to any such
agreement, is in material default with respect thereto.



     (q) Financial Statements. The audited consolidated financial statements of the Borrower dated
December 31, 2004 and the other financial statements delivered to the Administrative Agent pursuant
to Section 8.01 have been prepared in accordance with GAAP applied on a consistent basis throughout
the periods specified (except as noted thereon) and are an accurate representation of the
consolidated financial position of the Borrower and its Subsidiaries as of the respective dates
specified and the results of their operations and changes in financial position for the respective
periods specified, all in accordance with GAAP. No material adverse change in the financial results
of the Borrower and its Subsidiaries, considered on a consolidated basis, has occurred since
December 31, 2004.



     (r) Books and Records. All books and records of the Borrower and each of its Subsidiaries have
been fully, properly and accurately kept and completed in accordance with GAAP (to the extent
applicable) and there are no material inaccuracies or discrepancies of any kind contained or
reflected therein. The Borrower’s and each of its Subsidiaries’ records, systems, controls, data or information are not recorded,
stored, maintained, operated or otherwise wholly or partly dependent upon or held by any means
(including any electronic, mechanical or photographic process, whether computerized or not) which
(including all means of access thereto and therefrom) are not under the direct control of the
Borrower or of an Affiliate of the Borrower, unless such means do not prevent the Borrower from
having access to same at all times (for example, in the context of an outsourcing agreement).



     (s) Insurance. Each of the Borrower and its Subsidiaries has contracted the insurance coverage
required pursuant to Section 8.01(m).



     (t) Solvency. The Borrower and each of the Pledgors, both before giving effect to the
transactions contemplated by this Credit Agreement and the other Credit Documents and after giving
effect to same, including the provisions of all contribution agreements among the Borrower and the
Pledgors (a) is solvent, (b) the fair value of the Assets of each such Person exceeds its total
liabilities (including Contingent Obligations but without duplication of any underlying liability
related thereto), (c) does not intend to, and does not believe that it will, incur debts or
liabilities beyond its ability to pay as such debts and liabilities mature; and (d) is not engaged,
and is not about to engage, in business or transactions for which its property would constitute
unreasonably small capital.



     (u) Tax Liability. Each of the Borrower and its Subsidiaries has filed within the prescribed
delays all tax returns which are required to be filed, and all taxes, Claims, assessments and other
duties, interest and penalties levied by the various Governmental Entities with respect to the
Borrower and its Subsidiaries have been paid when due, except for any such assessment, tax or Claim
(i) in an amount of up to C$2,500,000 in the aggregate outstanding at any time; or (ii) (A) which
is being contested in good faith by proper legal proceedings, for which adequate reserves have been
established in the books of the Borrower or the relevant Subsidiary, and (B) the failure to effect
such filings or outcome of the contestation of which would not reasonably be expected to have a
Material Adverse Effect.









 



59


     (v) Corporate Structure. Except as notified to the Lenders, the only direct and indirect,
shareholders of the Borrower at the date hereof, are set forth in Schedule 7.01(v). Schedule
7.01(v) sets forth the complete particulars at the date hereof of (i) such shareholders; (ii) the
interest of each shareholder in the Borrower; and (iii) the direct and indirect interests of each
shareholder and their respective interests. Except as described in Schedule 7.01(v), at the date
hereof, none of the shareholders is a party to any unanimous shareholders or other agreement
relating to the shares owned by such shareholder.



     (w) Contingent Obligations and Indebtedness. Neither the Borrower nor any of its Subsidiaries
has (except for any deferred purchase price payable under the Carlyle Agreement) (a) any material
Contingent Obligations or contingent liabilities known to it which are not disclosed or referred to
in the financial statements referred to in Section 7.01(q)or in the most recent financial
statements delivered to the Administrative Agent in accordance with the provisions of Section 8.01
or otherwise disclosed to the Administrative Agent in writing, or (b) incurred any material
indebtedness which is not disclosed in or reflected in such financial statements, or otherwise
disclosed to the Administrative Agent in writing, other than Contingent Obligations,
contingent liabilities or indebtedness incurred in the ordinary course of business and Permitted
Debt.



     (x) Disclosure. All (i) forecasts and projections supplied to the Administrative Agent and the
Lenders were prepared in good faith, disclosed all assumptions relevant thereto and are, in the
opinion of the Borrower’s management when taken together, reasonable estimates (as of the Closing
Date) of the prospects for its business; and (ii) other written information heretofore supplied to
the Administrative Agent and the Lenders by the Borrower is complete and accurate in all material
respects. There is no fact known as of the Closing Date to the Borrower, after reasonable
investigation, which would reasonably be expected to have a Material Adverse Effect and which has
not been fully disclosed in writing to the Administrative Agent and the Lenders. There has been no
change which has had or would reasonably be expected to have a Material Adverse Effect since
December 31, 2004 and up to the Closing Date.



     (y) No Default. No Default or Event of Default has occurred and is continuing.



     (z) 9101-0827 Quebec. As of the Closing Date, 9101-0827 Quebec Inc. does not have any Debt and
its only Assets are the shares it owns in the capital of Vidéotron Ltée.



     (aa) Erisa. The Borrower and each Subsidiary are in compliance with all obligations to which
they are subject under ERISA, as well as under the regulations or rules issued thereunder, in
respect of their Benefit Plans, except to the extent that any non-compliance therewith would not
have a Material Adverse Effect.



          Section 7.02 Survival of Representations and Warranties. The representations and warranties herein
set forth or contained in any certificates or documents delivered to the Administrative Agent and
the Lenders pursuant hereto shall not merge in or be prejudiced by and shall survive any
Accommodation hereunder and shall continue in full force and effect (as of the date when made or
deemed to be made) so long as any amounts are owing by the Borrower to the Lenders hereunder.
Schedules requiring updates shall be so updated not less frequently than quarterly. All
representations and warranties made hereunder and in any other Credit Document or other document
delivered pursuant hereto or thereto or in connection









 



60


herewith or therewith shall survive the execution and delivery hereof and thereof. Such representations and warranties have been or will
be relied upon by the Administrative Agent and each Lender, regardless of any investigation made by
the Administrative Agent or any Lender or on their behalf and notwithstanding that the
Administrative Agent or any Lender may have had notice or knowledge of any Default at the time of
any Accommodation.




ARTICLE 8




COVENANTS OF THE BORROWER




          Section 8.01 Affirmative Covenants. So long as any amount owing hereunder remains unpaid or any
Lender has any obligation under this Agreement, and unless consent is given in accordance with
Section 12.01 hereof, the Borrower shall:




     (a) Financial Reporting Requirements. Furnish to the Administrative Agent (in electronic and
paper forms) (i) as soon as practicable, and in any event within 60 days after the end of each of
the first three Financial Quarters in each Financial Year, unaudited consolidated financial
statements of the Borrower, consisting of (A) a consolidated balance sheet as at the end of the
Financial Quarter with comparative amounts at the end of the corresponding Financial Quarter in the
previous Financial Year, (B) consolidated statements of earnings, retained earnings and cash flow
for the Financial Quarter and for the period from the end of the previous Financial Year to the end
of the Financial Quarter with comparative amounts for the corresponding periods in the previous
Financial Year; (ii) as soon as practicable, and in any event within 120 days after the end of each
Financial Year, audited consolidated financial statements of the Borrower, consisting of (A) a
consolidated balance sheet as at the end of the Financial Year with comparative amounts at the end
of the previous Financial Year, (B) consolidated statements of earnings, retained earnings and cash
flow for the Financial Year with comparative amounts for the previous Financial Year, (C) the
financial statements specified in (ii)(A) and (B) being certified without qualification by the
current auditors of the Borrower or otherwise by another reputable firm of independent chartered
accountants acceptable to the Administrative Agent; (iii) a soon as practicable, and in any event
within 120 days after the end of each Financial Year, unaudited unconsolidated financial statements
of the Borrower, consisting of (A) an unconsolidated balance sheet as at the end of the Financial
Year with comparative amounts at the end of the previous Financial Year, and (B) unconsolidated
statements of earnings, retained earnings and cash flow for the Financial Year with comparative
amounts for the previous Financial Year; (iv) as soon as practicable, and in any event within 60
days after the end of each of the first three Financial Quarters in each Financial Year, a
Compliance Certificate; and (v) as soon as practicable, and in any event within 120 days after the
end of each Financial Year, a Compliance Certificate.



     (b) Environmental Reporting. Promptly, and in any event within 10 days of each occurrence, (i)
notify the Administrative Agent of any proceeding or order before any Governmental Entity requiring
the Borrower or any of its Subsidiaries to comply with or take action under any Environmental Laws
and of any state or affairs on the Owned Properties, Leased Properties or its business which would
reasonably be expected to have a Material









 



61



Adverse Effect; and (ii) notify the Administrative Agent and the Lenders, within 10 days therefrom, of any other occurrence with respect to Environmental
Laws and involving the Borrower or any of its Subsidiaries which would reasonably be expected to
have a Material Adverse Effect, including, provided that same would reasonably be expected to have
a Material Adverse Effect, the Borrower or any of its Subsidiaries (A) receiving a notice or claim
to the effect that the Borrower or any of its Subsidiaries are liable to any Person in a material amount as a result of the Release or
threatened Release of any Hazardous Substance into the environment in, on, under or adjacent to the
Owned Properties or Leased Properties; (B) receiving any notice that the Borrower or any of its
Subsidiaries is subject to investigation by any Governmental Entity evaluating whether any Remedial
Action is needed to respond to the Release or threatened Release of any Hazardous Substance into
the environment, in, on, under or adjacent to the Owned Properties or the Leased Properties; (C)
receiving any notice that all or any portion of the Owned Properties or the Leased Properties is
subject to an order or a Security Interest under or pursuant to any Environmental Law; (D)
receiving any notice of a material condition with respect to the Owned Properties or the Leased
Properties which might reasonably result in a notice of violation of any Environmental Law; (E)
receiving any notice of the commencement of any judicial or administrative proceeding alleging a
violation of any Environmental Law with respect to the Owned Properties or the Leased Properties;
or (F) undertaking any material activities as a result of new or proposed changes to any existing
Environmental Law that would reasonably be expected to have a Material Adverse Effect.



     (c) Additional Reporting Requirements. Deliver to the Administrative Agent (i) as soon as
practicable and in any event not more than 90 days after the end of each Financial Year of the
Borrower, the Annual Business Plan for the next Financial Year (the First Annual Business Plan to
be delivered hereunder being in respect of the Financial Year 2007) together with detailed
schedules and information supplementary to and consistent with such Annual Business Plan; (ii) as
soon as possible, and in any event within five days after the Borrower becomes aware of the
occurrence of any Default or Event of Default, a statement of the chief financial officer,
treasurer or chief operating officer of the Borrower or any other officer acceptable to the
Administrative Agent setting forth the details of such Default or Event of Default and the action
which the Borrower proposes to take or has taken with respect thereto; (iii) prompt notice in
writing of any default, or event, condition or occurrence which with notice or lapse of time, or
both, would constitute a default under any agreement in respect of Debt to which the Borrower or
any of its Subsidiaries owes (contingently or otherwise) at least C$25,000,000 (or the equivalent
amount in any other currency); (iv) from time to time upon request of the Administrative Agent,
evidence of maintenance of all insurance required to be maintained by Section 8.01(m), including
such originals or copies as the Administrative Agent may reasonably request of policies,
certificates of insurance, riders and endorsements relating to such insurance and proof of premium
payments; (v) promptly upon the issuance thereof, copies of all notices and other documents (which
are considered material under the Securities Act (Quebec), as amended from time to time) in respect
of the Borrower filed with, or delivered to, any stock exchange or to the Quebec or Ontario
Securities Commission or similar Governmental Entity in any other jurisdiction (with the exception
of any private and confidential filings) by the Borrower or any of its Subsidiaries; (vi) promptly,
and in any event within 10 days after the Borrower or any of its Subsidiaries receives notice of
any suit, proceeding or similar action commenced or threatened by any Governmental Entity or any
other Person, which would reasonably be expected to have a Material Adverse Effect; (vii) prompt
notice of any material









 



62



changes in accounting or financial reporting practices of the Borrower;
(viii) prompt notice of any ERISA Event which could reasonably be expected to constitute an Event
of Default and (ix) such other information respecting the condition or operations, financial or
otherwise, of the business of the Borrower or any of its Subsidiaries as the Administrative Agent, on behalf of the Lenders, may from time
to time reasonably request.



     (d) Corporate Existence. Except as permitted pursuant to Section 8.02(c), preserve and
maintain, and cause each Pledgor and each of Sun Media Corporation and Vidéotron Ltée to preserve
and maintain, its corporate existence.



     (e) Compliance with Laws, etc. Comply, and cause each of its Subsidiaries to comply, with the
requirements of all applicable Laws and of all its contractual obligations, non-compliance with
which would reasonably be expected to have a Material Adverse Effect.



     (f) Status of Accounts and Collateral. With respect to the Collateral (i) maintain books and
records pertaining to the Collateral in such detail, form and scope as the Administrative Agent
shall reasonably require; and (ii) report immediately to the Administrative Agent any matters
materially adversely affecting the value, enforceability or collectability of any of the
Collateral.



     (g) Conduct of Business . Conduct, and cause each of its Subsidiaries to conduct, in each
Financial Year, its business in a prudent manner and consistent with good business practices.



     (h) Environmental Audits. Promptly (i) if the Administrative Agent has a good faith concern
that there is non-compliance by the Borrower or any of its Subsidiaries with Environmental Laws
which would reasonably be expected to have a Material Adverse Effect, conduct such environmental
audits (by an environmental auditor or auditors approved by the Administrative Agent and, prior to
the occurrence of an Event of Default which is continuing, the Borrower) concerning such alleged
material non-compliance as the Administrative Agent may request and permit the Administrative Agent
and the Lenders to discuss such audits with such auditors; and (ii) remedy any material
non-compliance with Environmental Laws revealed by any such audit. Such audit shall be at the
Borrower’s expense.



     (i) Auditors. Appoint and maintain as its auditors a firm of national standing.



     (j) Payment of Taxes and Claims. Pay and discharge, and cause each of its Subsidiaries to pay
and discharge, before the same shall become delinquent, (i) all taxes, assessments and governmental
charges or levies imposed upon it or upon the Assets or upon its Subsidiaries; and (ii) all lawful
Claims which, if unpaid, would by Law become a Lien (other than a Permitted Lien) upon the Assets,
except for any such assessment, tax or Claim (I) in an amount of up to C$2,500,000 in the aggregate
outstanding at any time; or (II) (A) which is being contested in good faith by proper legal
proceedings, for which adequate reserves have been established in the books of the Borrower or the
relevant Subsidiary, and (B) the outcome of the contestation of which or the failure to comply with
this covenant would not reasonably be expected to have a Material Adverse Effect.









 



63


     (k) Keeping of Books. Keep, and cause each of its Subsidiaries to keep, proper books of record
and account, in which full and correct entries shall be made of all financial transactions and the
Assets and Business in accordance with GAAP (to the extent applicable).



     (l) Visitation and Inspection. At (i) any reasonable time or times and upon reasonable prior
notice, and at least semi-annually, permit the Administrative Agent on behalf of the Lenders to
visit the properties of the Borrower or any of its Subsidiaries or the location of the chief
financial officer, and to discuss the affairs, finances and accounts of the Borrower or any of its
Subsidiaries with executive management including the officer appointed as (or performing the
functions of) the chief financial officer thereof. If a Default has occurred and is continuing or
an Event of Default has occurred and not been waived, the Borrower shall be required to reimburse
the Administrative Agent or its mandatary for any related expenses and fees; and (ii) at least
annually, permit the Lenders to have access to the Borrower’s chief financial officer controller
for the purpose of reviewing the affairs, finances and accounts of the Borrower and its
Subsidiaries.



     (m) Maintenance of Insurance. Maintain, in respect of itself and each of its Subsidiaries,
insurance at all times with responsible insurance carriers in such amounts and covering such risks
as are usually carried by companies engaged in similar businesses and owning similar properties in
the same general areas in which the Borrower or any such Subsidiaries, as the case may be, operate;
such insurance policies of the Loan Parties to show the Administrative Agent (or a sub-agent
appointed by the Administrative Agent), for and on behalf of the Lenders, as loss payee thereof
under a mortgage clause in a form approved by the Insurance Bureau of Canada and promptly furnish
or cause to be furnished evidence thereof to the Administrative Agent and the Lenders.



     (n) Cure Defects, Preservation of Security. Upon the reasonable request of the Administrative
Agent, take all necessary steps to preserve and maintain in effect the rights of the Administrative
Agent and the Lenders, as well as of any collateral agent or fondé de pouvoir, pursuant to the
Security Documents, together with any renewals thereof or additional documents creating Liens that
may be, reasonably requested by the Administrative Agent from time to time or on its behalf. Upon
the reasonable request of the Administrative Agent or on its behalf, promptly cure or cause to be
cured any defects in the execution and delivery of any of the Credit Documents or any of the other
agreements, instruments or documents contemplated thereby or executed pursuant thereto or any
defects in the validity or enforceability of any of the Security, and at its expense, execute and
deliver or cause to be executed and delivered, all such agreements, instruments and other documents
as the Administrative Agent may consider necessary or desirable for the foregoing purposes.



     (o) Further Assurances. At the Borrower’s cost and expense, upon the reasonable request of the
Administrative Agent, duly execute and deliver or cause to be duly executed and delivered to the
Administrative Agent such further instruments and do and cause to be done such further acts as may
be necessary or proper in the reasonable opinion of the Administrative Agent to carry out more
effectually the provisions and purposes of the Credit Documents.



     (p) Payment of Obligations. Pay and cause the Pledgors to pay as the same shall become due and
payable, all its obligations and liabilities under the Credit Documents.









 



64


     (q) Use of Proceeds. Use the proceeds of the Credit Facilities for the purposes contemplated
herein.



     (r) Hedging Requirements. Enter into the hedging agreements required to satisfy the Hedging
Requirements within 30 days from the Closing Date.



     (s) Erisa. Perform and cause each of its Subsidiaries to perform, in a timely fashion, all
obligations to which it is subject under ERISA, in respect of its Benefit Plans, except where the
failure to do so could not reasonably be expected to have a Material Adverse Effect.



     (t) Collateral. Execute and deliver as soon as possible all documentation (i) necessary or
reasonably required by the Administrative Agent in order to grant in favor of the Administrative
Agent and the Lenders (or on their behalf) a valid duly perfected first ranking Lien on the movable
Assets of the Borrower that are acquired or moved by the Borrower to a jurisdiction where the
Administrative Agent and the Lenders (or anyone on their behalf) do not have Security or (ii) that
is required further to a change of the registered or head office of the Borrower to ensure that the
Administrative Agent and the Lenders (or anyone on their behalf) keep the benefit of a first
ranking Security. Such additional documentation shall form part of the Security Documents.



          Section 8.02 Negative Covenants. So long as any amount owing hereunder remains unpaid or any Lender
has any obligation under this Agreement, and unless consent is given in accordance with Section
12.01 hereof, the Borrower shall not:




     (a) Debt. Create, incur, assume or suffer to exist, or permit the Pledgors to create, incur,
assume or suffer to exist, any Debt other than Permitted Debt. Notwithstanding the foregoing, it is
understood and agreed that 9101-0827 Quebec Inc. shall not create, incur, assume or suffer to exist
any Debt other than Debt under the Credit Documents, Back-to-Back Securities, Existing Back-to-Back
Securities, Debt in connection with Tax Benefit Transactions and Debt owed by 9101-0827 Quebec Inc.
to the Borrower.



     (b) Encumbrances. Create, incur, assume or suffer to exist, or permit any of the Pledgors to
create, incur, assume or suffer to exist any Lien on any of its or their, as the case may be,
respective Assets, other than Permitted Liens.



     (c) Mergers, Etc. Enter into, or permit any of the Pledgors to enter into, any transaction
(whether by way of reconstruction, reorganization, consolidation, amalgamation, winding-up, merger,
transfer, sale, lease or otherwise) whereby all or any substantial part of its undertaking or
Assets would become the property of any other Person (except that the Loan Parties may enter into
any such transaction with each other), unless (i) immediately after giving effect thereto, no event shall have occurred and be
continuing which constitutes a Default or Event of Default, (ii) the corporation continuing from
any such transaction shall be a corporation organized and existing under the laws of Canada or any
province thereof, (iii) such continuing corporation shall assume the Borrower’s (or the Pledgor’s,
as the case may be) obligations, if any, under the Credit Documents, pursuant to an agreement in
form and substance satisfactory to the Administrative Agent, provided that such agreement shall not
be required if such obligations are otherwise assumed by operation of Law, (iv) if the transaction
in question is with a Person (A) who was not a wholly-owned Subsidiary of the Borrower









 



65



immediately before the effective date thereof, the transaction, in the sole opinion of the Majority Lenders
acting reasonably, would not reasonably be expected to have a Material Adverse Effect, or (B) who
was a wholly-owned Subsidiary of the Borrower immediately before the effective date thereof, the
proposed transaction will not have a detrimental effect on the financial condition of the Borrower,
nor on the rights of the Administrative Agent and the Lenders under the Credit Documents, and (v)
the Lenders shall have received an opinion of counsel to the Borrower, acceptable to them, that
such transaction complies with Law and other matters of Law referred to in this Section 8.02(c), or
except as permitted under Section 8.02(d).



     (d) Disposal of Assets Generally. Dispose of, or permit the Pledgors to Dispose of, any Assets
to any Person, other than, (i) any disposition of Assets between QMI Entities (other than a
Disposition of the equity participation in Vidéotron Ltée or in Sun Media Corporation held by any
Loan Party unless such Disposition is to the Borrower); (ii) pursuant to a transaction consummated
in accordance with Section 8.02(c); (iii) so long as no Default has occurred and is continuing or
would arise therefrom and no Event of Default has occurred, any other bona fide Dispositions (other
than a Disposition of the equity participation in Vidéotron Ltée or in Sun Media Corporation held
by any Loan Party), provided the proceeds thereof are dealt with in accordance with Section 2.05(2)
hereof to the extent applicable. The Administrative Agent shall, upon the Borrower’s or applicable
Pledgor’s request and provided that no Default or Event of Default has occurred and is continuing
or would result from such Disposition, execute a release of any Collateral which the Borrower or
applicable Pledgor proposes to Dispose of, or confirm to the purchaser or transferee thereof that
such Disposition may occur free of the Security, unless such Disposition is contrary to any
provision hereof and provided that, where applicable, the Net Proceeds in respect of the
Disposition are used to repay the Accommodations Outstanding in accordance with Section 2.05.



     (e) Transactions with Affiliates. Subject to the following sentences, and except among the
Borrower and wholly-owned Subsidiaries or among wholly-owned Subsidiaries, directly or indirectly
(i) purchase, acquire, lease or licence any material property, right or service from; (ii) sell,
transfer, lease or licence any Assets or right to; or (iii) permit any Subsidiary to purchase,
acquire, lease or licence any Asset, right or service from, or sell, transfer, lease or licence any
Assets or right to, any Person not at Arm’s Length with the Borrower or such Subsidiary, except at
prices and on terms not less favourable to the Borrower or such Subsidiary, as the case may be,
than those which would have been obtained in an Arm’s Length transaction with an Arm’s Length
Person. Notwithstanding the foregoing, (a) the Borrower may enter into, perform its obligations in
connection with, or redeem or repay, the Back-to-Back Securities, the Existing Back-to-Back
Securities or the Tax Benefit Transactions, (b) the Borrower may make or pay Permitted
Distributions, (c) the Borrower may pay management fees to Quebecor, Caisse de Dépôt et Placement
du Québec or any of their respective Affiliates in an amount not to exceed US$2,000,000 in total
per Financial Year, and (d) the Borrower or any wholly-owned Subsidiary may transact with
Subsidiaries that are not wholly-owned at prices and on terms less favorable to the Borrower or
such wholly-owned Subsidiary than those which would have been obtained in Arm’s Length transaction
with an Arm’s Length Person, provided that the aggregate value of all such transactions does not
exceed C$10,000,000 in total per Financial Year.









 



66


     (f) Change in Business. Make, or permit to be made, any material change in the Business.



     (g) Distributions. Declare, make or pay any Equity Distribution or Debt Distribution which is
not a Permitted Debt Distribution unless the Consolidated Senior Leverage Ratio of the Borrower,
calculated on a proforma basis as at the end of the last previously completed Fiscal Quarter in
respect of which financial statements are available after giving effect to such Distribution, is
below the Required Threshold on a trailing four quarter basis provided however that at the time of
payment of such Distribution no Default exist or could result therefrom. Notwithstanding the
foregoing, the Borrower shall be entitled to declare, make or pay any such Distribution during any
period when such Consolidated Senior Leverage Ratio is not below the Required Threshold on the
condition that the aggregate amount of such Distributions paid during such period does not exceed
C$275,000,000 for the Term of Facility B, provided however that at the time of payment of such
Distribution no Default exist or could result therefrom. For the purposes set forth hereunder the
Required Threshold shall be as follows:



	 	 	 
	 	 	Required
	Period	 	Threshold
	Closing Date to December 30, 2007
	 	4.5:1.0
	December 31, 2007 to December 30, 2009
	 	4.0:1.0
	December 31, 2009 and thereafater
	 	3.5:1.0






     (h) Investments and Acquisitions. Make any Investments or Acquisitions, (other than in
connection with Capital Expenditures permitted pursuant to Section 8.02(k), or permit the Pledgors
to make any such Investments or Acquisitions, except, provided no Default has occurred and is
continuing or would result therefrom, (i) for the hedging agreements in connection with the Hedging
Requirements, other hedging agreements and other foreign currency hedges, interest rate swaps,
commodity hedges or similar obligations or agreements, in each case incurred in the ordinary course
of the Business and not for speculative purposes; (ii) Investments or Acquisitions so long as at
the date of such Investment or Acquisition and on a proforma basis after taking such Investment or
Acquisition into account as if it existed at all times during the relevant period, the Leverage
Ratio and the Interest Coverage Ratio are complied with in accordance with Section 8.03 and such
Investments or Acquisitions are made with respect to Assets or Persons in the same line of business
as the Business; and (iii) the acquisition of Back-to-Back Securities or the acquisition of
property as part of Tax Benefit Transactions.



     (i) Subsidiaries. Permit any of its Subsidiaries to assume, enter into or otherwise become
bound by any agreement or undertaking that would reasonably be expected to prevent such Subsidiary
from declaring or paying dividends, inter company payments, Equity Distributions or Debt
Distributions of any kind except on terms and conditions not more restrictive for such Subsidiary
than those provided under the Sun Media Credit Agreement or the Vidéotron Credit agreement except
where so preventing such Subsidiary from declaring or paying dividends, inter company payments,
Equity Distributions or Debt Distributions would not reasonably be expected to have a Material
Adverse Effect.









 



67


     (j) Maintenance and Ownership of Pledgors. Sell or otherwise dispose of or permit the sale or
disposition of any shares of any of the Pledgors or permit any of the Pledgors to issue any shares
of their capital stock except to the Borrower, or except pursuant to a Disposition permitted
hereunder.



     (k) Capital Expenditures. Make or commit to make, or permit the Pledgors to make or commit to
make, during the Term of Facility B, Capital Expenditures which exceed, in the aggregate,
C$100,000,000, excluding any Capital Expenditures related to the Press Investment.



     (l) Business Outside Certain Jurisdictions. Keep or store any of its material tangible
property outside of those jurisdictions (or registration districts within such jurisdictions) set
forth in Schedule 7.01(g) (i) except upon 30 days’ prior written notice thereof to the
Administrative Agent; and (ii) unless the Borrower has done or caused to be done all such acts and
things and executed and delivered or caused to be executed and delivered all such deeds, transfers,
assignments and instruments as the Administrative Agent may reasonably require for perfecting a
Security Interest in such property in favour of the Administrative Agent and the Lenders.



     (m) Financial Year. Change its Financial Year.



     (n) Amendments. Allow any amendments to its or the Pledgors’ constating documents or by-laws
which are adverse to the Lenders interests hereunder or the Security Interests arising under or
created by the Security Documents, without the prior written consent of the Administrative Agent
upon instructions from the Majority Lenders.



          Section 8.03 Financial Covenants. So long as any amount owing hereunder remains unpaid or any
Lender has any obligations under this Agreement, and unless consent is given in accordance with
Section 12.01 hereof, the Borrower shall:




     (a) Leverage Ratio. Maintain, at all times, tested as at the end of each Financial Quarter in
each Financial Year, a maximum Leverage Ratio, calculated as at the end of such Financial Quarter
for the four Financial Quarters then ended, as follows:



	 	 	 
	Period	 	Ratio
	Closing Date to March 30, 2007
	 	6.00:1.00
	March 31, 2007 to June 29, 2008
	 	5.50:1.00
	June 30, 2008 to March 30, 2009
	 	5.00:1.00
	March 31, 2009to June 29, 2010
	 	4.75:1.00
	June 30, 2010 and thereafter
	 	4.25:1.00






     (b) Interest Coverage Ratio. Maintain, at all times, tested as at the end of each Financial
Quarter in each Financial Year, a minimum Interest Coverage Ratio, calculated as at the end of such
Financial Quarter for the four Financial Quarters then ended, as follows:









 



68


	 	 	 
	Period	 	Ratio
	Closing Date to March 30, 2007

	 	2.00:1.00
	March 31, 2007 to June 29, 2008

	 	2.25:1.00
	June 30, 2008 to September 29, 2009

	 	2.50:1.00
	September 30, 2009 to June 29, 2010

	 	2.75:1.00
	June 30, 2010 and thereafter

	 	3.00:1.00






     (c) Unconsolidated Coverage Ratio. Maintain, at all times, tested as at the end of each
Financial Quarter in each Financial Year, a minimum Unconsolidated Coverage Ratio calculated as at
the end of such Financial Quarter for the four Financial Quarters then ended, of not less than
1.25:1.00.



ARTICLE 9




EVENTS OF DEFAULT




          Section 9.01 Events of Default. The occurrence of any of the following events (each an “Event of
Default”) shall constitute an Event of Default unless remedied within the prescribed delays or
waived by the requisite majority of Lenders:




     (a) the Borrower shall fail to pay any amount of the Accommodations Outstanding when such
amount becomes due and payable;



     (b) the Borrower shall fail to pay any interest or Fees when the same become due and payable
hereunder and such failure shall remain unremedied for three Business Days;



     (c) any representation or warranty or certification made or deemed to be made by the Borrower
or any Pledgor or any of their respective directors or officers in this Agreement or any other
Credit Document to which it is a party shall prove to have been incorrect in any material respect
when made or deemed to be made;



     (d) the Borrower shall fail to perform, observe or comply with any of the covenants contained
in (i) Section 8.02(a), Section 8.02(b), Section 8.02(f), Section 8.02(h), Section 8.02(k) or
Section 8.02(l), and such failure shall remain unremedied for three (3) Business Days from the
Loan Party’s knowledge of such event, or (ii) the other subsections of Section 8.02, or (iii)
Section 8.03;



     (e) the Borrower shall fail to perform, observe or comply with any of the covenants contained
in this Agreement (and not covered by Section 9.01(d)) and such failure shall remain unremedied for
15 days following notice thereof by the Administrative Agent to the Borrower;



     (f) the Borrower or any Pledgor shall fail to perform or observe any other term, covenant or
agreement contained in any Credit Document (other than this Agreement) to which it is a party and
such failure shall remain unremedied for 15 days following notice thereof by the Administrative
Agent to the Borrower;









 



69


     (g) the Borrower or any of its Subsidiaries shall fail to pay the principal of or premium or
interest on any Debt of the Borrower or such Subsidiary (excluding any Debt hereunder and under a
Hedging Agreement) which is outstanding in an aggregate principal amount exceeding C$25,000,000 (or
the equivalent amount in any other currency), when such amount becomes due and payable (whether by
scheduled maturity, required prepayment, acceleration, demand or otherwise) and such failure shall
continue after the applicable grace period, if any, specified in the agreement or instrument
relating to such Debt which has not been extended, waived or modified; or any other event shall
occur or condition shall exist, and shall continue after the applicable grace period, if any,
specified in any agreement or instrument relating to any such Debt, if the effect of such event is
to accelerate, or permit the acceleration of such Debt; or any such Debt shall be declared to be
due and payable prior to the stated maturity thereof;



     (h) the Borrower shall fail to pay the principal of or premium or interest on any Debt of the
Borrower under one or more Hedging Agreement in respect of which the Negative Value of Heding
Agreement exceeds C$25,000,000 when such amount becomes due and payable (whether by scheduled
maturity, required prepayment, acceleration, demand or otherwise) and such failure shall continue
after the applicable grace period, if any, specified in the agreement or instrument relating to
such Debt which has not been extended, waived or modified, if the effect of such event is to
accelerate such Debt or result in the termination of such Hedging Agreement prior to its stated
date of maturity; or any other default of the Borrower shall occur and shall continue after the
applicable grace period, if any, specified in any agreement or instrument relating to any such
Debt, if the effect of such event is to accelerate such Debt or result in the termination of such
Hedging Agreement prior to its stated date of maturity;



     (i) any seizure, taking of possession, or process of execution is enforced or levied upon
material property having a value of C$25,000,000 or more of the Borrower, any Pledgor, Sun Media
Corporation, Vidéotron Ltée, any Subsidiary of any Pledgor, of Sun Media Corporation or of
Vidéotron Ltée, or any other Subsidiary whose Consolidated EBITDA for a period of four consecutive
Financial Quarters (calculated as at the last completed Financial Quarter for which financial
statements are available) exceeds 10% of the Consolidated EBITDA of the Borrower for such period
and remains unsatisfied for a period (for each action) of 60 days, as to movable or personal
property, or 90 days as to immovable or real property, and, in any event, not less than 10 days
prior to the date fixed for the sale of any such property;



     (j) any judgment or order for the payment of money in excess of C$25,000,000 (or the
equivalent amount in any other currency), net of applicable insurance coverage pursuant to which
liability is acknowledged in writing by the insurer, with a copy promptly provided to the
Administrative Agent, shall be rendered against the Borrower or any of its Subsidiaries and remains
undischarged or unsatisfied for a period ending on the earlier of (a) 30 days from the date of such
judgment (unless appealed and provided, in such case, that there shall be a stay of enforcement of
such judgment or order during such period); or (b) the 5th day prior to the date on
which such judgment becomes executory;



     (k) the Borrower or any of its Subsidiaries shall (i) become insolvent or generally not pay
its debts as such debts become due; (ii) admit in writing its inability to pay its debts




 









 








70



generally,
or shall make a general assignment for the benefit of creditors; (iii) institute or have instituted
against it any proceeding seeking (x) to adjudicate it a bankrupt or insolvent, (y) any
liquidation, winding-up, reorganization, arrangement, adjustment, protection, relief or composition
of it or its debts under any Law relating to bankruptcy, insolvency, reorganization or relief of
debtors including any plan of compromise or arrangement or other similar corporate proceeding
involving or affecting its creditors, or (z) the entry of an order for relief or the appointment of
a receiver, trustee or other similar official for it or for any substantial part of its Assets, and
in the case of any such proceeding instituted against it (but not instituted by it), either such
proceeding shall remain undismissed or unstayed for a period of 45 days, or any of the actions
sought in such proceeding (including the entry of an order for relief against it or the appointment
of a receiver, trustee, custodian or other similar official for it or for any substantial part of
its Assets) shall occur; or (iv) take any corporate action to authorize any of the foregoing
actions;




     (l) if any of the Credit Documents shall be cancelled, terminated, revoked or rescinded or the
Administrative Agent’s or the Lenders’ (or any Person’s on their behalf) Security Interests in the
Collateral shall cease to be valid and enforceable, or shall cease to have the priority
contemplated by the Security Documents, otherwise than in accordance with the terms thereof or with
the express prior written agreement, consent or approval of the Lenders, or any action at law, suit
or in equity or other legal proceeding to cancel, revoke or rescind any of the Credit Documents
shall be commenced by or on behalf of the Borrower or the Pledgors thereto or any of their
respective stockholders, or any court or any other governmental or regulatory authority or agency
of competent jurisdiction shall make a determination that, or issue a judgment, order, decree or
ruling to the effect that, any one or more of the Credit Documents is illegal, invalid or
unenforceable in accordance with the terms thereof, unless such Credit Document is duly replaced
with a fully enforceable one within 7 days of any such event;



     (m) a Change of Control;



     (n) any Impermissible Qualification of the audited financial statements of the Borrower by its
independent auditors; or



     (o) (i) any Termination Event shall occur with respect to any Benefit Plan of the Borrower,
any Subsidiary or any of their respective ERISA Affiliates, (ii) any accumulated funding
deficiency (as defined in Section 302 of ERISA) shall exist at any time with respect to any such
Benefit Plan (other than a Multiemployer Plan) in an amount in excess of an amount equivalent to 4%
of the Borrower’s Equity at such time, (iii) any Subsidiary or any of its ERISA Affiliates shall
engage in any prohibited transaction involving any such Benefit Plan, (iv) a Subsidiary or any of
its ERISA Affiliates shall be in “default” (as defined in ERISA Section 4219(c)(5)) with respect to
payments owing to any such Benefit Plan that is a Multiemployer Plan as a result of such Person’s
complete or partial withdrawal (as described in ERISA Section 4203 or 4205) therefrom, (v) a
Subsidiary or any of its ERISA Affiliates shall fail to pay when due an amount that is payable by
it to the PBGC or to any such Benefit Plan under Title IV of ERISA, or (vi) a proceeding shall be
instituted by a fiduciary of any such Benefit Plan against a Subsidiary or any of its ERISA
Affiliates to enforce ERISA Section 515 and such proceeding shall not have been dismissed within 30
days thereafter, except that no event or condition referred to in paragraphs (i) through (vi) shall
constitute an Event of Default if it,









 



71

together with all other such events or conditions at the time
existing, has not subjected, and in the reasonable determination of the Majority Lenders will not
subject, the Borrower to aggregate liabilities, at any time, that exceed an amount equivalent to 4%
of the Borrower’s Equity at such time.



then, (A) if the Event of Default that occurred is that mentioned in paragraph (k) above, all
Accommodations Outstanding, together with all interest and Fees accrued thereon and all other
amounts payable under this Agreement in respect of the Credit Facilities, shall immediately become
due and payable, without demand, presentation, protest or other notice of any nature, to which the
Borrower expressly renounces; and (B) if the Event of Default that occurred was any other Event of
Default, the Administrative Agent may, and shall at the request of the Majority Lenders, (i)
terminate the Lenders’ obligations to make further Accommodations under the Credit Facilities; and
(ii) (at the same time or at any time after such termination) declare the principal amount of all
Accommodations Outstanding, together with all interest and Fees accrued thereon and all other
amounts payable under this Agreement in respect of the
Credit Facilities, to be immediately due and payable, without presentment, demand, protest or
further notice of any kind, all of which are hereby expressly waived by the Borrower. For greater
certainty, from and after the occurrence of a Default or Event of Default, the Lenders shall not be
obliged to provide any Accommodation hereunder.




          Upon the acceleration of any amount hereunder and notwithstanding anything herein to the
contrary, the Borrower hereby acknowledges that it shall be then indebted to, and shall be
obligated to pay to the Administrative Agent, as a separate and absolute obligation, all unpaid
principal amount of and accrued interest on Accommodations Outstanding, all Fees and all other
amounts payable under this Agreement. Such payment to the Administrative Agent when made shall be
deemed to have been made in discharge of the Borrower’s obligations hereunder, and the
Administrative Agent shall distribute such proceeds among the Lenders as provided herein.




          Section 9.02 Remedies Upon Demand and Default. (1) Upon a declaration that the Accommodations
Outstanding under the Credit Facilities are immediately due and payable pursuant to Section 9.01,
the Administrative Agent shall at the request of, or may with the consent of, the Majority Lenders,
commence such legal action or proceedings as it, in its sole discretion, may deem expedient,
including the commencement of enforcement proceedings under the Security Documents or any other
security granted by the Borrower, any Pledgor or others to the Administrative Agent or the Lenders,
or both, or for their benefit, all without any additional notice, presentation, demand, protest,
notice of dishonour, entering into of possession of any of the Assets, or any other action or
notice, all of which the Borrower hereby expressly waives.




          (2) The rights and remedies of the Administrative Agent and the Lenders hereunder and under
the other Credit Documents are cumulative and are in addition to and not in substitution for any
other rights or remedies. Nothing contained herein or in the Security Documents or any other
security hereafter held by the Administrative Agent and the Lenders, or for their benefit, with
respect to the indebtedness or liability of the Borrower or the Pledgors to the Administrative
Agent and the Lenders, or any part thereof, nor any act or omission of the Administrative Agent or
the Lenders or anyone on their behalf with respect to the Security










 



72



Documents, the Security or such
other security, shall in any way prejudice or affect the rights, remedies and powers of the
Administrative Agent, the Lenders and any Person holding any Security Interest on their behalf
hereunder or under the Security Documents or such Security.




          Section 9.03 Bankruptcy and Insolvency. If the Borrower files a notice of intention to file a
proposal, or files a proposal under the Bankruptcy and Insolvency Act (Canada), or if the Borrower
obtains the permission of the court to file a Plan of Arrangement under the Companies’ Creditors
Arrangements Act (Canada), and if a stay of proceedings is obtained or ordered under the provisions
of either of those statutes, without prejudice to the Lenders’ rights to contest such stay of
proceedings, the Borrower covenants and agrees to continue to pay interest on all amounts due to
the Lenders in accordance with the provisions hereof. In this regard, the Borrower acknowledges
that permitting the Borrower to continue to use the proceeds of the Accommodations constitutes
valuable consideration provided after the filing of any such proceeding in the same way that
permitting the Borrower to use leased premises constitutes such valuable consideration.




          Section 9.04 Relations with the Borrower. The Administrative Agent may grant delays, take security
or renounce thereto, accept compromises, grant acquittances and releases and otherwise negotiate
with the Borrower and any Pledgor as it deems advisable without in any way diminishing the
liability of the Borrower or any Pledgor nor prejudicing the rights of the Lenders with respect to
the Security.




          Section 9.05 Application of Proceeds. Following the occurrence of an Event of Default which has not
been waived, subject to the provisions hereof, the Administrative Agent may apply the proceeds of
realization of the property contemplated by the Security Documents and of any credit or
compensating balance in reduction of the part of the Accommodations (principal, interest or
accessories and/or the Negative Value of Hedging Agreement relating to all Hedging Agreements
entered into with a Lender) which the Administrative Agent judges appropriate; provided that, to
the extent practicable, the Administrative Agent will follow the order contemplated by Section
2.09(2) hereof. If any Lender is owed money by the Borrower as a result of Hedging Agreements, and,
in particular, as a result of the Negative Value of Hedging Agreement in respect of such Hedging
Agreement, the claim of such Lender for all amounts owed thereunder, shall rank pari passu with the
other amounts comprising the Accommodations.




ARTICLE 10




THE ADMINISTRATIVE AGENT AND THE LENDERS




          Section 10.01 Appointment and Authority. (1) Each of the Lenders and the Issuing Lender hereby
irrevocably appoints Bank of America, N.A. to act on its behalf as the Administrative Agent
hereunder and under the other Credit Documents and authorizes the Administrative Agent to take such
actions on its behalf and to exercise such powers as are delegated to the Administrative Agent by
the terms hereof or thereof, together with such actions and powers as are reasonably incidental
thereto. The provisions of this Article are solely for the benefit of the Administrative Agent,
the Lenders and the Issuing Lender, and neither the










 



73



Borrower nor any other Loan Party shall have
rights as a third party beneficiary of any of such provisions.




          (2) In addition to the provisions of Section 10.12 hereof, the Administrative Agent shall also
act as the “collateral agent” under the Credit Documents, and each of the Lenders (in its
capacities as a Lender, potential party to a Hedging Agreement) and the Issuing Lender hereby
irrevocably appoints and authorizes the Administrative Agent to act as the agent of such Lender and
Issuing Lender for purposes of acquiring, holding and enforcing any and all Liens on Collateral
granted by any of the Loan Parties to secure the obligations secured by the terms of the Security
Documents, together with such powers and discretion as are reasonably incidental thereto. In this
connection, the Administrative Agent, as “collateral agent” and any co-agents, sub-agents and
attorneys-in-fact appointed by the Administrative Agent pursuant to Section 10.05 for purposes of
holding or enforcing any Lien on the Collateral (or any portion thereof) granted under the Security
Documents, or for exercising any rights and remedies thereunder at the direction of the
Administrative Agent), shall be entitled to the benefits of all provisions of this Article 10 and
Article 12 (including Section 12.06 as though such co-agents,
sub-agents and attorneys-in-fact were the “collateral agent” under the Credit Documents) as if
set forth in full herein with respect thereto.




          Section 10.02 Rights as a Lender. The Person serving as the Administrative Agent hereunder shall
have the same rights and powers in its capacity as a Lender as any other Lender and may exercise
the same as though it were not the Administrative Agent and the term “Lender” or “Lenders” shall,
unless otherwise expressly indicated or unless the context otherwise requires, include the Person
serving as the Administrative Agent hereunder in its individual capacity. Such Person and its
Affiliates may accept deposits from, lend money to, act as the financial advisor or in any other
advisory capacity for and generally engage in any kind of business with the Borrower or any of its
Subsidiaries or other Affiliate thereof as if such Person were not the Administrative Agent
hereunder and without any duty to account therefor to the Lenders.




          Section 10.03 Exculpatory Provisions. (1) The Administrative Agent shall not have any duties
or obligations except those expressly set forth herein and in the other Credit Documents. Without
limiting the generality of the foregoing, the Administrative Agent:





(a) shall not be subject to any fiduciary or other implied duties, regardless
of whether a Default has occurred and is continuing;




(b) shall not have any duty to take any discretionary action or exercise any
discretionary powers, except discretionary rights and powers expressly contemplated
hereby or by the other Credit Documents that the Administrative Agent is required to
exercise as directed in writing by the Majority Lenders (or such other number or
percentage of the Lenders as shall be expressly provided for herein or in the other
Credit Documents), provided that the Administrative Agent shall not be
required to take any action that, in its opinion or the opinion of its counsel, may
expose the Administrative Agent to liability or that is contrary to any Credit
Document or applicable Law; and









 



74



(c) shall not, except as expressly set forth herein and in the other Credit
Documents, have any duty to disclose, and shall not be liable for the failure to
disclose, any information relating to the Borrower or any of its Affiliates that is
communicated to or obtained by the Person serving as the Administrative Agent or any
of its Affiliates in any capacity.



          (2) The Administrative Agent shall not be liable for any action taken or not taken by it (i)
with the consent or at the request of the Majority Lenders (or such other number or percentage of
the Lenders as shall be necessary, or as the Administrative Agent shall believe in good faith shall
be necessary, under the circumstances as provided in Section 12.01 and Section 9.02) or (ii) in the
absence of its own gross or intentional fault. The Administrative Agent shall be deemed not to
have knowledge of any Default unless and until notice describing such Default is given to the
Administrative Agent by the Borrower, a Lender or the Issuing Lender.




          (3) The Administrative Agent shall not be responsible for or have any duty to ascertain or
inquire into (i) any statement, warranty or representation made in or in connection with this
Agreement or any other Credit Document, (ii) the contents of any certificate, report or
other document delivered hereunder or thereunder or in connection herewith or therewith, (iii)
the performance or observance of any of the covenants, agreements or other terms or conditions set
forth herein or therein or the occurrence of any Default, (iv) the validity, enforceability,
effectiveness or genuineness of this Agreement, any other Credit Document or any other agreement,
instrument or document, or the creation, perfection or priority of any Lien purported to be created
by the Security Documents, (v) the value or the sufficiency of any Collateral, or (v) the
satisfaction of any condition set forth in Article 6 or elsewhere herein, other than to confirm
receipt of items expressly required to be delivered to the Administrative Agent.




          Section 10.04 Reliance by Administrative Agent. The Administrative Agent shall be entitled to
rely upon, and shall not incur any liability for relying upon, any notice, request, certificate,
consent, statement, instrument, document or other writing (including any electronic message,
Internet or intranet website posting or other distribution) believed by it to be genuine and to
have been signed, sent or otherwise authenticated by the proper Person. The Administrative Agent
also may rely upon any statement made to it orally or by telephone and believed by it to have been
made by the proper Person, and shall not incur any liability for relying thereon. In determining
compliance with any condition hereunder to the making of an Accommodation, that by its terms must
be fulfilled to the satisfaction of a Lender or the Issuing Lender, the Administrative Agent may
presume that such condition is satisfactory to such Lender or the Issuing Lender unless the
Administrative Agent shall have received notice to the contrary from such Lender or the Issuing
Lender prior to the making of such Accomodation. The Administrative Agent may consult with legal
counsel (who may be counsel for the Borrower), independent accountants and other experts selected
by it, and shall not be liable for any action taken or not taken by it in accordance with the
advice of any such counsel, accountants or experts.




          Section 10.05 Delegation of Duties. The Administrative Agent may perform any and all of its
duties and exercise its rights and powers hereunder or under any other Credit Document by or
through any one or more sub-agents appointed by the Administrative Agent. The Administrative Agent
and any such sub-agent may perform any and all of its duties and exercise its rights and powers by
or through their respective Related Parties. The exculpatory











 



75



provisions of this Article shall
apply to any such sub-agent and to the Related Parties of the Administrative Agent and any such
sub-agent, and shall apply to their respective activities in connection with the syndication of the
credit facilities provided for herein as well as activities as Administrative Agent.




          Section 10.06 Resignation of Administrative Agent.. (1) The Administrative Agent may at any
time give notice of its resignation to the Lenders, the Issuing Lender and the Borrower. Upon
receipt of any such notice of resignation, the Majority Lenders shall have the right, with the
consent of Borrower (prior to the occurrence of a Default which is continuing or an Event of
Default which has not been waived) which consent shall not be unreasonably withheld, to appoint a
successor, which shall be a bank with an office in Canada, or an Affiliate of any such bank with an
office in Canada. If no such successor shall have been so appointed by the Majority Lenders and
shall have accepted such appointment within 30 days after the retiring Administrative Agent gives
notice of its resignation, then the retiring Administrative Agent may on behalf of the Lenders and
the Issuing Lender, appoint a successor Administrative Agent meeting the qualifications set forth
above; provided that if the Administrative Agent shall notify the Borrower and the Lenders
that no qualifying Person has accepted such appointment,
then such resignation shall nonetheless become effective in accordance with such notice and
(a) the retiring Administrative Agent shall be discharged from its duties and obligations hereunder
and under the other Credit Documents (except that in the case of any collateral security held by
the Administrative Agent on behalf of the Lenders or the Issuing Lender under any of the Credit
Documents, the retiring Administrative Agent shall continue to hold such collateral security until
such time as a successor Administrative Agent is appointed) and (b) all payments, communications
and determinations provided to be made by, to or through the Administrative Agent shall instead be
made by or to each Lender and the Issuing Lender directly, until such time as the Majority Lenders
appoint a successor Administrative Agent as provided for above in this Section. Upon the
acceptance of a successor’s appointment as Administrative Agent hereunder, such successor shall
succeed to and become vested with all of the rights, powers, privileges and duties of the retiring
(or retired) Administrative Agent, and the retiring Administrative Agent shall be discharged from
all of its duties and obligations hereunder or under the other Credit Documents (if not already
discharged therefrom as provided above in this Section). The Fees payable by the Borrower to a
successor Administrative Agent shall be the same as those payable to its predecessor unless
otherwise agreed between the Borrower and such successor. After the retiring Administrative
Agent’s resignation hereunder and under the other Credit Documents, the provisions of this Article
and Section 12.06 shall continue in effect for the benefit of such retiring Administrative Agent,
its sub-agents and their respective Related Parties in respect of any actions taken or omitted to
be taken by any of them while the retiring Administrative Agent was acting as Administrative Agent.




          (2) Any resignation by Bank of America, N.A. as Administrative Agent pursuant to this Section
shall also constitute the resignation of Bank of America, N.A., Canada Branch as Issuing Lender.
Upon the acceptance of a successor’s appointment as Administrative Agent hereunder, (i) such
successor shall succeed to and become vested with all of the rights, powers, privileges and duties
of the retiring Issuing Lender, (ii) the retiring Issuing Lender shall be discharged from all of
its duties and obligations hereunder or under the other Credit Documents, and (iii) the successor
Issuing Lender shall issue letters of credit in substitution for the Letters of Credit, if any,
outstanding at the time of such succession or make other arrangements satisfactory










 



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to the retiring
Issuing Lender to effectively assume the obligations of the retiring Issuing Lender with respect to
such Letters of Credit.




          Section 10.07 Non-Reliance on Administrative Agent and Other Lenders. Each Lender and the
Issuing Lender acknowledges that it has, independently and without reliance upon the Administrative
Agent or any other Lender or any of their Related Parties and based on such documents and
information as it has deemed appropriate, made its own credit analysis and decision to enter into
this Agreement. Each Lender and the Issuing Lender also acknowledges that it will, independently
and without reliance upon the Administrative Agent or any other Lender or any of their Related
Parties and based on such documents and information as it shall from time to time deem appropriate,
continue to make its own decisions in taking or not taking action under or based upon this
Agreement, any other Credit Document or any related agreement or any document furnished hereunder
or thereunder.




          Section 10.08 No Other Duties, Etc. Anything herein to the contrary notwithstanding, none of
the bookmanagers, arrangers, syndication agent or documentation agent listed on the cover page
hereof shall have any powers, duties or responsibilities under this
Agreement or any of the other Credit Documents, except in its capacity, as applicable, as the
Administrative Agent, a Lender or the Issuing Lender hereunder.




          Section 10.09 Administrative Agent May File Proofs of Claim. (1) In case of the pendency of
any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment,
composition or other judicial proceeding relative to any Loan Party, the Administrative Agent
(irrespective of whether the principal of any Advance or the Face Amount of any other Accommodation
shall then be due and payable as herein expressed or by declaration or otherwise and irrespective
of whether the Administrative Agent shall have made any demand on the Borrower) shall be entitled
and empowered, by intervention in such proceeding or otherwise :





     (a) to file and prove a claim for the whole amount of the principal, Face Amount and
interest and Fees owing and unpaid in respect of the Advances and all other Accommodations
that are owing and unpaid and to file such other documents as may be necessary or advisable
in order to have the claims of the Lenders, the Issuing Lender and the Administrative Agent
(including any claim for the reasonable compensation, expenses, disbursements and advances
of the Lenders, the Issuing Lender and the Administrative Agent and their respective agents
and counsel and all other amounts due the Lenders, the Issuing Lender and the Administrative
Agent hereunder) allowed in such judicial proceeding; and




     (b) to collect and receive any monies or other property payable or deliverable on any
such claims and to distribute the same;



and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official
in any such judicial proceeding is hereby authorized by each Lender and the Issuing Lender to make
such payments to the Administrative Agent and, if the Administrative Agent shall consent to the
making of such payments directly to the Lenders and the Issuing Lender, to pay to the
Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and
advances of the Administrative Agent and its agents and counsel, and any other amounts due the
Administrative Agent hereunder, as Fees or otherwise.









 



77


          (2) Nothing contained herein shall be deemed to authorize the Administrative Agent to
authorize or consent to or accept or adopt on behalf of any Lender or the Issuing Lender any plan
of reorganization, arrangement, adjustment or composition affecting the obligations of the Loan
Parties hereunder and under the other Credit Documents or the rights of any Lender or the Issuing
Lender or to authorize the Administrative Agent to vote in respect of the claim of any Lender or
the Issuing Lender or in any such proceeding.




          Section 10.10 Collateral and Guaranty Matters. (1) The Lenders and the Issuing Lender
irrevocably authorize the Administrative Agent, at its option and in its discretion,





     (a) to release any Lien on any property granted to or held by the Administrative Agent
(or by any Person on its behalf) under any Credit Document (i) upon termination of the
Commitments and payment in full of all obligations owed hereunder and under the other Credit
Documents (other than contingent indemnification obligations) and the expiration or
termination of all Letters of Credit and BA Instruments, (ii) that is sold or to be sold as
part of or in connection with any sale permitted hereunder or under any
other Credit Document, or (iii) if approved, authorized or ratified in writing in
accordance with Section 12.01;




     (b) to release any Pledgor from its obligations under any Credit Document if such
Person ceases to be a Subsidiary as a result of a transaction permitted hereunder; and




     (c) to subordinate any Security Interest on any property created pursuant to any
Security Document to the holder of any Lien on such property that is permitted hereunder
unless such Permitted Lien is specifically stipulated hereunder to rank equally or after
such Security Interest.



          (2) Upon request by the Administrative Agent at any time, the Majority Lenders or the Lenders,
as applicable, will confirm in writing the Administrative Agent’s authority to release or
subordinate its interest in particular types or items of property, or to release any Pledgor from
its obligations under the Security Documents pursuant to this Section. In each case as specified
in this Section, the Administrative Agent will, at the Borrower’s expense, execute and deliver to
the applicable Loan Party such documents as such Loan Party may reasonably request to evidence the
release of such item of Collateral from the assignment and security interest granted under the
Security Documents or to subordinate its interest in such item, or to release such Pledgor from its
obligations under the Security Documents, in each case in accordance with the terms of the Credit
Documents and this Section.




          Section 10.11 Replacement of Non-Schedule I Reference Banks. If a non-Schedule I Reference
Bank assigns, subject to the provisions of Section 12.08, all of its rights hereunder or otherwise
ceases to be a Lender, or if a Non-Schedule I Reference Bank gives notice of its intention to cease
being a Non-Schedule I Reference Bank, or if in the opinion of the Administrative Agent, a
Non-Schedule I Reference Bank is no longer capable of exercising its functions as a Non-Schedule I
Reference Bank, the Administrative Agent shall, with the prior written consent of the Borrower if
prior to an Event of Default which has not been waived, appoint another Lender designated as a
Schedule II or Schedule III bank under the Bank Act (Canada) (with the latter’s consent) to act as
a Non-Schedule I Reference Bank in replacement thereof.











 



78




          Section 10.12 Irrevocable Power of Attorney (fondé de pouvoir).Without limiting the
powers of the Administrative Agent hereunder or under the Credit Documents and to the extent
applicable, each of the Lenders and the Administrative Agent hereby confirms that Computershare
Trust Company of Canada shall, for the purposes of holding any Security granted under the Security
Documents for use in the Province of Quebec, to secure payment of the Debentures, be the holder of
an irrevocable power of attorney (fondé de pouvoir) (within the meaning of Article 2692 of the
Civil Code of Quebec) for the Administrative Agent and all present and future Lenders and in
particular for all present and future holders of the Debentures. Each of the Lenders and the
Administrative Agent hereby ratifies the constitution of, to the extent necessary, Computershare
Trust Company of Canada (or, if desired, a designated collateral agent) as the holder of such
irrevocable power of attorney in order to hold security granted under such hypothecs to secure the
Debentures. Each Assignee shall be deemed to have confirmed and ratified the constitution of
Computershare Trust Company of Canada as the holder of such irrevocable power of attorney by
execution of the relevant Assignment and Assumption. Notwithstanding the provisions of Section 32
of the An Act respecting the Special Powers of Legal
Persons (Quebec), the Borrower, the Pledgors, the Administrative Agent and the Lenders
irrevocably agree that Computershare Trust Company of Canada may acquire and be the holder of a
Debenture. By executing a Debenture, the issuer of the Debenture shall be deemed to have
acknowledged that the Debenture constitutes a title of indebtedness, as such term is used in
Article 2692 of the Civil Code of Quebec.




          Section 10.13 Issuing Lender. The Issuing Lender shall act on behalf of the Lenders with
respect to any Letters of Credit issued by it and the documents associated therewith, and the
Issuing Lender shall have all of the benefits and immunities (i) provided to the Administrative
Agent in this Article 10 with respect to any acts taken or omissions suffered by the Issuing Lender
in connection with Letters of Credit issued by it or proposed to be issued by it and the
applications and agreements for letters of credit pertaining to such Letters of Credit as fully as
if the term “Administrative Agent” as used in this Article 10 and in the definition of
“Agent-Related Person” included the Issuing Lender with respect to such acts or omissions, and (ii)
as additionally provided herein with respect to the Issuing Lender.




          Section 10.14 Borrower Materials. The Borrower hereby acknowledges that (a) the
Administrative Agent and/or the arrangers hereunder will make available to the Lenders and the
Issuing Lender materials and/or information provided by or on behalf of such Borrower hereunder
(collectively, “Borrower Materials”) by posting the Borrower Materials on IntraLinks or another
similar electronic system (the “Platform”) and (b) certain of the Lenders may be “public-side”
Lenders (i.e., Lenders that do not wish to receive material non-public information with respect to
the Borrower or its securities) (each, a “Public Lender”). The Borrower hereby agrees that (w) all
Borrower Materials that are to be made available to Public Lenders shall be clearly and
conspicuously marked “PUBLIC” which, at a minimum, shall mean that the word “PUBLIC” shall appear
prominently on the first page thereof; (x) by marking Borrower Materials “PUBLIC,” the Borrower
shall be deemed to have authorized the Administrative Agent, the arrangers, the Issuing Lender and
the Lenders to treat such Borrower Materials as not containing any material non-public information
with respect to the Borrower or its securities for purposes of United States Federal and state
securities laws; (y) all Borrower Materials marked “PUBLIC” are permitted to be made available
through a portion of the Platform designated “Public Investor;” and (z) the Administrative Agent
and the arrangers shall be entitled to treat any Borrower











 



79



Materials that are not marked “PUBLIC” as
being suitable only for posting on a portion of the Platform not designated “Public Investor.”




ARTICLE 11




CURRENCY AND EXCHANGE




          Section 11.01 Rules of Conversion. If for the purpose of obtaining judgment in any court or for any
other purpose hereunder, it is necessary to convert an amount due, advanced or to be advanced
hereunder from the currency in which it is due (the “First Currency”) into another currency (the
“Second Currency”) the rate of exchange used shall be that at which, in accordance with normal
banking procedures, the Administrative Agent could purchase, in the Canadian money market or the
Canadian exchange market, as the case may be, the First Currency with the Second Currency on the
date on which the judgment is rendered, the sum is payable or advanced or to be advanced, as the
case may be. The Borrower agrees that
its obligations in respect of any First Currency due from it to the Lenders in accordance with the
provisions hereof shall, notwithstanding any judgment rendered or payment made in the Second
Currency, be discharged by a payment made to the Administrative Agent on account thereof in the
Second Currency only to the extent that, on the Business Day following receipt of such payment in
the Second Currency, the Administrative Agent may, in accordance with normal banking procedures,
purchase on the Canadian money market or the Canadian foreign exchange market, as the case may be,
the First Currency with the amount of the Second Currency so paid or which a judgment rendered
payable; and if the amount of the First Currency which may be so purchased is less than the amount
originally due in the First Currency, the Borrower agrees as a separate and independent obligation
and notwithstanding any such payment or judgment to indemnify the Lenders against such deficiency.




          Section 11.02 Determination of an Equivalent Currency. If, in their discretion, the Lenders or the
Administrative Agent chooses or, pursuant to the terms of this Agreement, are obliged to choose the
equivalent in Canadian Dollars of any securities or amounts expressed in US Dollars or another
currency or the equivalent in US Dollars of any securities or amounts expressed in Canadian Dollars
or another currency, the Administrative Agent, in accordance with the conversion rules as
stipulated in Section 11.01, on the date indicated in the Borrowing Notice as the date of a request
for an Advance, and at any other time which in the opinion of the Lenders is desirable; may, using
the spot rate of the Administrative Agent or an Affiliate on such date, determine the equivalent in
Canadian Dollars or in US Dollars, as the case may be, of any security or amount expressed in the
other currency pursuant to the terms hereof. Immediately following such determination, the
Administrative Agent shall inform the Borrower of the conclusion which the Lenders have reached.




ARTICLE 12




MISCELLANEOUS




          Section 12.01 Amendment Etc. (1) No amendment or waiver of any provision of this Agreement or any
other Credit Document, and no consent to any departure by










 



80



the Borrower or any other Loan Party
therefrom, shall be effective unless in writing signed by the Administrative Agent acting with the
approval of the Majority Lenders (it being understood that with respect to any amendment or waiver
pertaining to a specific Credit Facility without affecting the Lenders generally, Majority Lenders
shall refer to the “Majority Lenders” under such Credit Facility) and the Borrower or the
applicable Loan Party, as the case may be, and acknowledged by the Administrative Agent, and each
such waiver or consent shall be effective only in the specific instance and for the specific
purpose for which given; provided, however, that no such amendment, waiver or
consent shall:.





     (a) waive any condition set forth in Section 6.02, or, in the case of the initial
Accommodation, Section 6.01 without the written consent of each Lender;




     (b) extend or increase the Commitment of any Lender (or reinstate any Commitment
terminated pursuant to Section 9.01) without the written consent of such Lender;




     (c) postpone any date fixed by this Agreement or any other Credit Document for any
payment of principal, interest, fees or other amounts due to the Lenders (or any of them)
hereunder or under such other Credit Document without the written consent of each Lender
entitled to such payment;




     (d) reduce the principal of, or the rate of interest specified herein on, any Advance
or other Type of Accommodation, or (subject to clause (iii) of the second proviso to this
Section 12.01) any fees or other amounts payable hereunder or under any other Credit
Document, or change the manner of computation of any financial ratio (including any change
in any applicable defined term) used in determining the Applicable Margin that would result
in a reduction of any interest rate or Fee payable on any Advance, any other Type of
Accommodation or any Fee payable hereunder without the written consent of each Lender
entitled to such amount; provided, however, that only the consent of the
Majority Lenders shall be necessary to amend the rate of interest charged as a default rate
or to waive any obligation of the Borrower to pay interest or Fees at such default rate ;




     (e) change (i) Section 2.09 in a manner that would alter the pro rata sharing of
payments required thereby without the written consent of each Lender or (ii) the order of
application of any reduction in the Commitments or any prepayment of Accommodations among
the Credit Facilities from the application thereof set forth in the applicable provisions of
Section 2.05 and Section 2.06, respectively, in any manner that materially and adversely
affects the Lenders under a Credit Facility without the written consent of (i) if such
Credit Facility is the Revolving Facility, the Majority Lenders under the Revolving
Facility, (ii) if such Facility is Facility A, the Majority Lenders under Facility A and
(iii) if such Facility is Facility B, the Majority Lenders under Facility B;




     (f) change (i) any provision of this Section or the definition of “Majority Lenders” or
any other provision hereof specifying the number or percentage of Lenders required to amend,
waive or otherwise modify any rights hereunder or make any determination or grant any
consent hereunder, without the written consent of each Lender;









 



81



     (g) release all or substantially all (including without limitation any shares of
Vidéotron Ltée or of Sun Media Corporation) of the Collateral in any transaction or series
of related transactions, without the written consent of each Lender; or




     (h) impose any greater restriction on the ability of any Lender under a Credit Facility
to assign any of its rights or obligations hereunder without the written consent of (i) if
such Credit Facility is the Revolving Facility, the Majority Lenders under the Revolving
Facility, (ii) if such Credit Facility is Facility A, the Majority Lenders under Facility A
and (iii) if such Credit Facility is Facility B, the Majority Lenders under Facility B;



     and provided, further, that (i) no amendment, waiver or consent shall, unless
in writing and signed by the Issuing Lender in addition to the Lenders required above, affect the
rights or duties of the Issuing Lender under this Agreement or any Letter of Credit Application
Form relating to any Letter of Credit issued or to be issued by it; (ii) no amendment, waiver or
consent shall, unless in writing and signed by the Administrative Agent in addition to the
Lenders required above, affect the rights or duties of the Administrative Agent under this
Agreement or any other Credit Document; and (iii) Section 12.08(8) may not be amended, waived or
otherwise modified without the consent of each Granting Lender all or any part of whose Advances
are being funded by an SPV at the time of such amendment, waiver or other modification.
Notwithstanding anything to the contrary herein, no Defaulting Lender shall have any right to
approve or disapprove any amendment, waiver or consent hereunder, except that the Commitment of
such Lender may not be increased or extended without the consent of such Lender.



          Section 12.02 Waiver. (1) No failure on the part of any Lender or the Administrative Agent (or
anyone on its behalf or on behalf of the Lenders) to exercise, and no delay in exercising, any
right under any of the Credit Documents shall operate as a waiver of such right; nor shall any
single or partial exercise of any right under any of the Credit Documents preclude any other or
further exercise of such right or the exercise of any other right.




          (2) Except as otherwise expressly provided in this Agreement, the covenants, shall not merge
on and shall survive the initial Accommodation and, notwithstanding such initial Accommodation or
any investigation made by or on behalf of any party, shall continue in full force and effect. The
closing of this transaction shall not prejudice any right of one party against any other party in
respect of anything done or omitted under this Agreement or in respect of any right to damages or
other remedies.




          Section 12.03 Evidence of Debt and Accommodation Notices. (1) The indebtedness of the Borrower
resulting from Accommodations under the Credit Facilities shall be evidenced by the records of the
Lenders (or the Administrative Agent acting on behalf of the Lenders) which shall constitute prima
facie evidence of such indebtedness.




          (2) Prior to the receipt of any Accommodation Notice, the Administrative Agent may act upon
the basis of a notice by telephone (containing the same information as required to be contained in
such Accommodation Notice) believed by it in good faith to be from an authorized person
representing the Borrower. In the event of a conflict between the










 



82



Administrative Agent’s record of
any Accommodation and the Accommodation Notice, the Administrative Agent’s record shall prevail,
absent manifest error.




          Section 12.04 Notices, etc. Any notice, direction or other communication required or permitted to
be given under this Agreement shall, except as otherwise permitted, be in writing and given by
delivering it or sending it by telecopy or other similar form of recorded communication addressed,
if to the Borrower, to it at: 612, St-Jacques Street, Montreal, Quebec, H3C 4M8, Attention:
Treasurer, Phone: (514) 380-4144, Fax: (514) 380-1983, E-mail: pruneau.jean-françois@quebecor.com;
if to the Administrative Agent, (I) for the purposes of Accommodations and repayments under (A) the
Revolving Facility, Facility A and Facility B-2, to it at: 200 Front Street West, Suite 2700,
Toronto, Ontario, M5V 3L2, Attention: Sylwia Durkiewicz, Phone: (416) 349-4307, Fax (416) 349-4281,
E-mail: sylwiadurkiewicz@bankofamerica.com; and (B) Facility B-1, to it at: Bank of America, N. A.,
Agency Services, 1850 Gateway Blvd., 5th Floor, MC: CA4-706-05-09, Concord, CA 94520, Attention:
Kristine Kelleher, Phone: (925) 675-8373, Fax: (888) 969-2414, E-mail:
kristine.l.kelleher@bankofamerica.com; and (II), for all other purposes, to it at: 1455 Market St.,
5th Floor, Mail Code CA5-701-05-19, San Francisco, CA, 94103, U.S.A., Attention: Robert
J. Rittelmeyer, Vice President, Telephone: (415) 436-2616, Fax: (415) 503-5099, E-mail:
robert.j.rittelmeyer@bankofamerica.com and, if to the Lenders, at the addresses shown on the
signature pages. Any communication shall be deemed to have been validly and effectively given (i)
if personally delivered, on the date of such delivery if such date is a Business Day and such
delivery was made prior to 4:00 p.m. (Toronto time); (ii) if transmitted by facsimile or similar
means of recorded communication on the Business Day following the date of transmission. Any party
may change its address for service from time to time by notice given in accordance with the
foregoing and any subsequent notice shall be sent to the party at its changed address.




          Section 12.05 Confidentiality. Each Lender agrees to use reasonable efforts to ensure that
financial statements or other information relating to the Borrower which may be delivered to it
pursuant to this Agreement and which are not publicly filed or otherwise made available to the
public generally (and which are not independently known to the Lender) will, to the extent
permitted by Law, be treated confidentially by the Lender and will not, except with the consent of
the Borrower, be distributed or otherwise made available by the Lender to any Person other than its
directors, officers, employees, authorized agents, counsel or other representatives (provided the
other representatives have agreed or are under a duty to keep all information confidential)
required, in the reasonable opinion of the Lender, to have such information. Each Lender is
authorized to deliver a copy of any financial statement or any other information which may be
delivered to it pursuant to this Agreement, to (i) any actual or potential Participant or Assignee;
(ii) any Governmental Entity having jurisdiction over the Lender in order to comply with any
applicable laws; (iii) any Affiliate of the Lender required, in the reasonable opinion of the
Lender, to have such information; and (iv) any direct or indirect contractual counterparty in any
swap, hedge or similar agreement (or to any such contractual counterparty’s professional advisor),
so long as such contractual counterparty (or such professional advisor) agrees to be bound by the
provisions of this Section 12.05.




          Section 12.06 Costs, Expenses and Indemnity. (1) The Borrower shall, whether or not the
transactions contemplated in this Agreement are completed, indemnify and















 










83

hold each of the Lenders
and each Agent-Related Person and each of their respective officers, directors, employees, agents,
trustees and advisors (each an “Indemnified Person”) harmless from, and shall pay to such
Indemnified Person on demand any amounts required to compensate the Indemnified Person for, any
claim or loss suffered by, imposed on, or asserted against, the Indemnified Person as a result of,
connected with or arising
out of (i) the preparation, execution and delivery of the commitment letter, term sheet and fee
letter executed in connection with the Credit Facilities, (ii) the preparation, execution and
delivery of, preservation of rights under, enforcement of, or refinancing, renegotiation or
restructuring of, the Credit Documents and any related amendment, waiver or consent; (iii) any
advice of counsel as to the rights and duties of the Administrative Agent and the Lenders with
respect to the administration of the Credit Facilities, the Credit Documents or any transaction
contemplated under the Credit Documents, including any interpretation issues; (iv) a default
(whether or not constituting a Default or an Event of Default) by the Borrower; (v) any proceedings
brought against the Indemnified Person due to its entering into any of the Credit Documents and
performing its obligations under the Credit Documents except to the extent that it shall be
determined in a final, non-appealable judgment by a court of competent jurisdiction that such
losses, claims, damages, liabilities or expenses resulted primarily from the gross or intentional
fault of the Indemnified Person; and (vi) the presence on or under or the discharge or likely
discharge of Hazardous Substances from any of the properties used by the Borrower, or the breach of
any Environmental Law by the Borrower or by any mortgagor, owner, or lessee of such properties. No
Indemnified Person shall be liable for any damages arising from the use by others of information
provided by or on behalf of the Borrower and obtained through the Internet, Intralinks or other
similar information transmission systems in connection with the Credit Facilities except to the
extent that, as to any Indemnified Person, it shall be determined by a final, non-appealable
judgment by a court of competent jurisdiction that such damages resulted primarily from the gross
or intentional fault of such Indemnified Person. The Borrower agrees that no Indemnified Person
shall have any liability (whether direct or indirect, in contract or tort or otherwise) to any
Person, including the Borrower, any of its Subsidiaries and Affiliates or their respective security
holders or creditors arising out of or in connection with any aspect of this Agreement or the
Credit Facilities, except for direct, as opposed to consequential, damages determined in a final,
non-appealable judgment by a court of competent jurisdiction to have resulted primarily from the
gross or intentional fault of such Indemnified Person.




          (2) If, with respect to any Lender, (i) any Change in Law of general application occurring or
becoming effective after the Closing Date; or (ii) compliance by the Lender with any direction,
request or requirement (whether or not having the force of law) of any Governmental Entity made or
becoming effective after the Closing Date, has the effect of causing any loss to the Lender or
reducing the Lender’s rate of return by (w) increasing the cost to the Lender of performing its
obligations under this Agreement or in respect of any Accommodations Outstanding (including the
costs of maintaining any capital, reserve or special deposit requirements (other than a reduction
resulting from a higher rate or from a change in the calculation of income or capital tax relating
to the Lender’s income or capital in general)), (x) requiring the Lender to maintain or allocate
any capital or additional capital or affecting its allocation of capital in respect of its
obligations under this Agreement or in respect of any Accommodations Outstanding, (y) reducing any
amount payable to the Lender under this Agreement or in respect of any Accommodations Outstanding
by any material amount, (z)









 



84



causing the Lender to make any payment or to forego any return on, or
calculated by reference to, any amount received or receivable by the Lender under this Agreement or
in respect of any Accommodations Outstanding, then, subject to Section 12.06(3), the Lender may
give notice to the Borrower specifying, with reasonable detail, the nature of the event giving rise
to the loss and the Borrower may either: (A) on demand, pay such amounts as the Lender specifies is
necessary to compensate it for any such loss, or (B) provided no loss has yet been suffered by
the Lender or the Borrower has paid the compensating amount to the Lender, repay the Accommodations
Outstanding to such Lender and terminate the Lender’s Commitments all without affecting the
Commitments or Accommodations Outstanding of any other Lender. A certificate as to the amount of
any such loss submitted in good faith by a Lender to the Borrower shall be conclusive and binding
for all purposes, absent manifest error.




          (3) The Borrower shall not be liable to compensate a Lender for any costs, reduction, payment
or foregone return if such compensation is not being claimed as a general practice by such Lender
from customers of such Lender who by agreement are liable to pay such or similar compensation. In
determining the amount of compensation payable by the Borrower under Section 12.06(2), such Lender
shall use all reasonable efforts to minimize the compensation payable by the Borrower including
using all reasonable efforts to obtain refunds or credits in the ordinary course of its business,
and any compensation paid by the Borrower which is later determined not to have been properly
payable or in respect of which a refund, credit or compensation has been received shall forthwith
be reimbursed by such Lender to the Borrower.




          (4) The Borrower shall pay to each Lender on demand any amounts required to compensate the
Lender for any loss suffered or incurred by it as a result of (i) any payment being made in respect
of a BA Instrument or Libor Advance other than on the maturity applicable to it; (ii) the failure
of the Borrower to give any notice in the manner and at the times required by this Agreement; (iii)
the failure of the Borrower to effect an Accommodation in the manner and at the time specified in
any Accommodation Notice; or (iv) the failure of the Borrower to make a payment or a mandatory
repayment in the manner and at the time specified in this Agreement. A certificate as to the amount
of any loss submitted in good faith by a Lender to the Borrower shall be conclusive and binding for
all purposes, absent manifest error.




          (5) The provisions of this Section 12.06 shall survive the termination of this Agreement and
the repayment of all Accommodations Outstanding. The Borrower acknowledges that neither its
obligation to indemnify nor any actual indemnification by it of any Lender, the Administrative
Agent or any other Indemnified Person in respect of such Person’s losses for the legal fees and
expenses shall in any way affect the confidentiality or privilege relating to any information
communicated by such Person to its counsel.




          Section 12.07 Taxes. (1) The Borrower agrees to immediately pay any present or future stamp or
documentary taxes or any other excise or property taxes, withholding, charges, financial
institutions duties, debits or similar levies (all such taxes, charges, duties and levies being
referred to as “Taxes”) which arise from any payment made by the Borrower under any of the Credit
Documents or from the execution, delivery or registration of, or otherwise with respect to, any of
the Credit Documents. If any Taxes are required to be










 



85



withheld from any payment hereunder, the
Borrower shall (a) increase the amount of such payment so that the Lenders will receive a net
amount (after deduction and withholding of all Taxes) equal to the amount otherwise due hereunder;
(b) pay such Taxes to the appropriate taxing authority for the account of the relevant Lenders and
(c) as promptly as possible thereafter, send the Administrative Agent and the Lenders an original
receipt showing payment thereof, together with such additional documentary evidence as the Lenders
may from time to time reasonably require.




          (2) The Borrower shall indemnify the Lenders and the Administrative Agent for the full amount
of Taxes (including, without limitation, any Taxes imposed by any jurisdiction on amounts payable
by the Borrower under this Section 12.07) paid by the Lenders or the Administrative Agent and any
liability (including penalties, interest and expenses) arising from or with respect to such Taxes,
whether or not they were correctly or legally asserted, excluding, for greater certainty, taxes
imposed on or measured by their net income or capital taxes or receipts and franchise taxes.
Payment under this indemnification shall be made within 30 days from the date the Administrative
Agent or the relevant Lender, as the case may be, make written demand for it. A certificate as to
the amount of such Taxes submitted to the Borrower by the Administrative Agent or the relevant
Lender shall be conclusive evidence, absent manifest error, of the amount due from the Borrower to
the Administrative Agent or the Lenders, as the case may be.




          (3) The Borrower shall furnish to the Administrative Agent and the Lenders the original or a
certified copy of a receipt evidencing payment of Taxes made by the Borrower within 30 days after
the date of any payment of Taxes.




          (4) The provisions of this Section 12.07 shall survive the termination of the Agreement and
the repayment of all Accommodations Outstanding.




          Section 12.08 Successors and Assigns. (1) This Agreement shall become effective when executed by
the Borrower, the Administrative Agent and each Lender and after that time shall be binding upon
and enure to the benefit of the Borrower, the Lenders and the Administrative Agent and their
respective successors and permitted assigns.




          (2) The Borrower shall not have the right to assign its rights or obligations under this
Agreement or any interest in this Agreement without the prior consent of all the Lenders, which
consent may be arbitrarily withheld.




          (3) A Lender may (i) grant participations, without notice to or consent of the Borrower or the
Administrative Agent, in all or any part of its interest in the Credit Facilities to one or more
Persons (each a “Participant”), or (ii) upon prior written notice to the Administrative Agent and
the Borrower, assign all or any part of its interest in the Credit Facilities to one or more
Persons (each an “Assignee”), provided that in the case of any interest which is a partial interest
(other than after the occurrence of a Default which is continuing or an Event of Default which has
not been waived, in which case no minimums will apply), such partial interest is not less than
C$5,000,000 under the Revolving Facility or C$1,000,000 or US$1,000,000 under Facility A or
Facility B (or such lesser amount as agreed to by the Borrower and the Administrative Agent). An
assignment shall require (A) the consent of the Borrower, which shall not be unreasonably withheld
or delayed, prior to the occurrence of a Default which











 



86



is continuing or an Event of Default which
has not been waived, and thereafter shall not require any such consent, and (B) the consent of the
Administrative Agent (and, in the case of assignments under the Revolving Facility, the Issuing
Lender), which shall not be unreasonably
withheld or delayed; provided that the Borrower’s consent shall not be required for an
assignment to an Eligible Assignee. A Lender granting a participation shall, unless otherwise
expressly provided in this Agreement, act on behalf of all of its Participants in all dealings with
the Borrower in respect of the Credit Facilities and no Participant shall have any voting or
consent rights with respect to any matter requiring the Lenders’ consent. In the case of an
assignment, the Assignee shall have the same rights and benefits and be subject to the same
limitations under the Credit Documents as it would have if it was a Lender, provided that no
Assignee or Participant shall be entitled to receive any greater payment, on a cumulative basis,
pursuant to Section 12.06 or Section 12.07 than the Lender which granted the assignment or
participation would have been entitled to receive.




          (4) The Borrower shall provide such certificates, acknowledgments and further assurances in
respect of this Agreement and the Credit Facilities as such Lender may reasonably require in
connection with any participation or assignment pursuant to this Section 12.08.




          (5) In order to effect an assignment in accordance with this Section 12.08, a Lender shall
deliver to the Borrower an Assignment and Assumption by which an Assignee of the Lender assumes the
obligations and agrees to be bound by all the terms and conditions of this Agreement, all as if the
Assignee had been an original party. Upon receipt by the Administrative Agent from the assigning
Lender of a processing fee equal to the applicable Assignment Fee and the Assignment and
Assumption, the assigning Lender and the Borrower shall be released from their respective
obligations under this Agreement (to the extent of such assignment and assumption) and shall have
no liability or obligations to each other to such extent, except in respect of matters arising
prior to the assignment.




          (6) Any assignment or grant of participation pursuant to this Section 12.08 will not
constitute a repayment by the Borrower to the assigning or granting Lender of any Accommodation,
nor a new Accommodation to the Borrower by such Lender or by the Assignee or Participant, as the
case may be, and the parties acknowledge that the Borrower’s obligations with respect to any such
Accommodations will continue and will not constitute new obligations.




          (7) The amounts payable by the Borrower under this Agreement shall not increase on account of
withholding taxes as a result of any such assignment or transfer to an Assignee of a Revolving
Lender or Facility A Lender which is not a Cdn Qualified Lender; provided that an assignment which
occurs after the occurrence of an Event of Default which has not been waived shall not be subject
to this provision.




          (8) Any Lender (a “Granting Lender”) may grant to a special purpose funding vehicle (an
“SPV”), identified as such from time to time by the Granting Lender to the Agent and the Borrower,
the option to provide to the Borrower all or any part of an Advance that such Granting Lender would
otherwise be required to make hereunder; provided that (a) nothing herein shall constitute a
commitment by any SPV to make any Advance, (b) if an SPV does not make such Advance, the Granting
Lender shall remain liable to do so and (c) no SPV










 



87



shall be entitled to receive any greater
payment, on a cumulative basis, pursuant to Section 12.06 or Section 12.07 than the Granting Lender
would have been entitled to receive. Any Advance by an SPV shall be made using the Commitment of
the Granting Lender as if the
Advance in question had been made by such Granting Lender. Each party hereto agrees that no
SPV shall be liable for any indemnity or other payment hereunder, all of which liability shall
remain with the Granting Lender. Accordingly, each party further agrees (which agreement will
survive the termination hereof) that it shall not institute any insolvency or other proceeding
against the SPV until a date that is not less than one year and one day following the repayment of
all of such SPV’s commercial paper and other senior Debt. In addition, any SPV may (a) assign all
or any portion of its interests in any Accommodations (i) with notice to, but without the consent
of the Borrower or the Agent, and without paying any fees therefor, to the Granting Lender or (ii)
to any financial institutions, with the consent of the Borrower and the Administrative Agent
providing liquidity and/or credit support to or for the account of such SPV to support the funding
and maintenance of Accommodations; and (b) disclose on a confidential basis any non-public
information relating to the Accommodations to any rating agency, commercial paper dealer or
provider of any surety, guarantee or credit or liquidity enhancement to such SPV.




          (9) The Administrative Agent shall maintain at one of its offices a copy of each Assignment
and Assumption delivered to it and a register for the recordation of the names and addresses of the
Lenders, and the Commitments of, each Lender pursuant to the terms hereof from time to time (the
“Register”). The entries in the Register shall be conclusive, and the Borrower, the Administrative
Agent, the Issuing Lender and the Lenders may treat each Person whose name is recorded in the
Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement,
notwithstanding notice to the contrary. The Register shall be available for inspection by the
Borrower, the Issuing Lender and any Lender, at any reasonable time and from time to time upon
reasonable prior notice. No assignment shall be effective unless recorded in the Register.




          Section 12.09 Non-Cdn Qualified Lenders. Each Revolving Lender and each Facility A Lender
represents that it is a Cdn Qualified Lender as of the date hereof. If a Revolving Lender or
Facility A Lender ceases at any time to be a Cdn Qualified Lender, it shall promptly notify the
Administrative Agent and the Borrower, and if the Borrower unknowingly made payments to such Lender
that should have been subject to withholding taxes prior to such notice, such Lender shall repay
the amount that should have been so withheld to the Borrower to be paid to the appropriate taxation
authority. Following such notice, the Lender in question shall have one of the following options in
connection with its Commitment under the Revolving Facility or Facility A: (a) to permit the
Borrower to deduct and pay the applicable withholding tax to the appropriate taxation authority for
so long as it is non a non-Cdn Qualified Lender without increasing the payments or otherwise
indemnifying such Lender pursuant to Section 12.07; or (b) to require that the Borrower replace it
as a Revolving Lender and/or Facility A Lender within 15 Business Days from such notice, failing
which its affected Commitment will be cancelled, and the corresponding Commitment hereunder will be
permanently reduced by an equal amount (it being understood that the Borrower shall not have to
increase its payments or otherwise indemnify such Lender pursuant to Section 12.07 in connection
with the applicable withholding tax during that period).











 



88




          Section 12.10 Right of Set-off. Upon the occurrence of any Event of Default, each Lender is authorized at any time and from
time to time, to the fullest extent permitted by law (including general principles of common law),
to set off and apply any and all deposits (general or special, time or demand, provisional or
final) at any time held and other indebtedness at any time owing by it to or for the credit or the
account of the Borrower against any and all of the obligations of the Borrower under any of the
Credit Documents, irrespective of whether or not the Lender has made demand under any of the Credit
Documents and although such obligations may be unmatured or contingent. If an obligation is
unascertained, the Lender may, in good faith, estimate the obligation and exercise its right of
set-off in respect of the estimate, subject to providing the Borrower with an accounting when the
obligation is finally determined. Each Lender shall promptly notify the Borrower after any set-off
and application is made by it, provided that the failure to give notice shall not affect the
validity of the set-off and application. The rights of the Lenders under this Section 12.10 are in
addition to other rights and remedies (including all other rights of set-off) which the Lenders may
have.




          Section 12.11 Accommodations by Lenders. The failure of any Lender to make an Accommodation shall
not relieve any other Lender of its obligations in connection with such Accommodation, but no
Lender is responsible for any other Lender’s failure in respect of an Accommodation. Unless the
Administrative Agent receives notice from a Lender prior to the date of any Accommodation that the
Lender will not make its ratable portion of the Accommodation available to the Administrative
Agent, the Administrative Agent may assume that the Lender has made its portion so available on the
date of the Accommodation and may, in reliance upon such assumption, make a corresponding amount
available to the Borrower. If the Lender has not made its ratable portion available to the
Administrative Agent, the Lender shall pay the corresponding amount to the Administrative Agent
immediately upon demand. If the Lender pays the corresponding amount to the Administrative Agent,
the amount so paid shall constitute the Lender’s part of the Accommodation for purposes of this
Agreement. If the Lender does not pay the amount to the Administrative Agent immediately upon
demand and such amount has been made available to the Borrower, the Borrower shall pay the
corresponding amount to the Administrative Agent immediately upon demand and any amount received
and so reimbursed would not and will not constitute an Accommodation. The Administrative Agent
shall also be entitled to recover from the Lender or the Borrower, as the case may be, interest on
the corresponding amount, for each day from the date the amount was made available to the Borrower
until the date it is repaid to the Administrative Agent, at a rate per annum equal to the
Administrative Agent’s cost of funds.




          Section 12.12 Rateable Payments. Unless the Administrative Agent receives notice from the Borrower
prior to the date on which any payment is due to the Lenders that the Borrower will not make the
payment in full, the Administrative Agent may assume that the Borrower has made the payment in full
on that date and may, in reliance upon that assumption, distribute to each Lender on the due date
an amount equal to the amount then due to the Lender. If the Borrower has not made the payment in
full, each Lender shall repay to the Administrative Agent immediately upon demand the amount
distributed to it together with interest for each day from the date such amount was
distributed to the Lender until the date the Lender repays it to the Administrative Agent, at a
rate per annum equal to the Administrative Agent’s cost of funds.










 



89




          Section 12.13 Interest on Accounts. Except as may be expressly provided otherwise in this
Agreement, all amounts owed by the Borrower to the Administrative Agent and to any of the Lenders,
which are not paid when due (whether at stated maturity, on demand, by acceleration or otherwise)
shall (to the extent permitted by Law) bear interest (both before and after default and judgment),
from the date on which such amount is due until such amount is paid in full, payable on demand, at
a rate per annum equal at all times to the sum of the Canadian Prime Rate in effect from time to
time, the Applicable Margin and 2%.




          Section 12.14 Governing Law. This Agreement shall be governed by and interpreted and enforced in
accordance with the laws of the Province of Quebec and the laws of Canada applicable therein.




          Section 12.15 Consent to Jurisdiction. The Borrower and each Lender and each Agent hereby
irrevocably submits to the jurisdiction of any Quebec court sitting in Montreal, Quebec in any
action or proceeding arising out of or relating to the Credit Documents and hereby irrevocably
agrees that all claims in respect of any such action or proceeding may be heard and determined in
such Quebec court. The Borrower, each Lender and the Administrative Agent hereby irrevocably
waives, to the fullest extent each may effectively do so, the defence of an inconvenient forum to
the maintenance of such action or proceeding. The Borrower, each Lender and the Administrative
Agent agrees that a final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner provided by Law.




          Section 12.16 Counterparts. This Agreement may be executed in any number of counterparts (including
by way of facsimile) and all of such counterparts taken together shall be deemed to constitute one
and the same instrument.




          Section 12.17 Severability. Any provision of this Agreement which is or becomes prohibited or
unenforceable in any jurisdiction, does not invalidate, affect or impair the remaining provisions
thereof and any such prohibition or unenforceability in any jurisdiction does not invalidate or
render unenforceable such provision in any other jurisdiction.




          Section 12.18 Assignment to Federal Reserve Bank. (1) Notwithstanding any provision of this
Agreement to the contrary, any Lender governed by the applicable Laws of the United States of
America may at any time assign all or a portion of its rights under this Agreement and all other
documents ancillary thereto (including the Security
Documents) to a Federal Reserve Bank. No such assignment shall relieve the assigning Lender from
its obligations under this Agreement or such other documents.




          (2) Upon the request of any Lender, the Borrower will execute and deliver one or more
promissory notes substantially in the form of Schedule 8, evidencing the Facility B Commitment and
Accommodations Outstanding under Facility B.




          (3) In the case of any Lender that is a fund that invests in bank loans, such Lender may,
without the consent of the Borrower or Administrative Agent, assign or pledge all or any portion of
its rights under this Agreement, including the Accommodations and any instrument evidencing its
rights as a Lender under this Agreement, to any holder or, trustee for,











 



90



or any other representative
of holders of, obligations owed or securities issued, by such fund, as security for such
obligations or securities, without cost to the Borrower; provided that any foreclosure or similar
action by such trustee or representative shall be subject to the provisions of this Section
concerning assignments. Any such Lender shall, unless otherwise expressly provided in this
Agreement, act on behalf of all of its pledgees in all dealings with the Borrower in respect of the
Credit Facilities and no such pledgee shall have (i) any voting or consent rights with respect to
any matter requiring the Lenders’ consent, (ii) any entitlement to any amounts payable hereunder,
or (iii) any other rights of any nature hereunder until it has complied with the provisions of this
Section concerning assignments.




          Section 12.19 Good Faith and Fair Consideration. The Borrower acknowledges and declares that it has
entered into this Agreement freely and of its own will. In particular, the Borrower acknowledges
that this Agreement was negotiated by it and the Lenders in good faith, and that there was no
exploitation of the Borrower by the Lenders, nor is there any serious disproportion between the
consideration provided by the Lenders and that provided by the Borrower. Furthermore, the parties
to this Agreement agree to act in good faith and in a reasonable manner with each other during the
Term hereof.




          Section 12.20 Superior Force. The obligations of the Borrower hereunder shall not be reduced,
limited or cancelled pursuant to the occurrence of an event of force majeure, the Borrower
expressly assuming the risk of superior force.




          Section 12.21 Sharing of Payments Among Lenders. If any Lender shall, by exercising any
right of setoff or counterclaim or otherwise, obtain payment in respect of (a) obligations in
respect of any the Credit Facilities due and payable to such Lender hereunder and under the other
Credit Documents at such time in excess of its ratable share (according to the proportion of (i)
the amount of such obligations due and payable to such Lender at such time to (ii) the aggregate
amount of the obligations in respect of the Credit Facilities due and payable to all Lenders
hereunder and under the other Credit Documents at such time) of payments on account of the
obligations in respect of the Credit Facilities due and payable to all Lenders hereunder and under
the other Credit Documents at such time obtained by all the Lenders at such time or (b)
obligations in respect of any of the Credit Facilities owing (but not due and payable) to such
Lender hereunder and under the other Credit Documents at such time in excess of its ratable share
(according to the proportion of (i) the amount of such
obligations owing (but not due and payable) to such Lender at such time to (ii) the aggregate
amount of the obligations in respect of the Credit Facilities owing (but not due and payable) to
all Lenders hereunder and under the other Credit Documents at such time) of payment on account of
the obligations in respect of the Credit Facilities owing (but not due and payable) to all Lenders
hereunder and under the other Credit Documents at such time obtained by all of the Lenders at such
time then the Lender receiving such greater proportion shall (a) notify the Administrative Agent
of such fact, and (b) purchase (for cash at face value) participations in the Accommodations and,
as applicable, subparticipations in the Letters of Credit of the other Lenders, or make such other
adjustments as shall be equitable, so that the benefit of all such payments shall be shared by the
Lenders ratably in accordance with the aggregate amount of obligations in respect of the Credit
Facilities then due and payable to the Lenders or owing (but not due and payable) to the Lenders,
as the case may be, provided that:











 



91





     (i) if any such participations or subparticipations are purchased and all or any
portion of the payment giving rise thereto is recovered, such participations or
subparticipations shall be rescinded and the purchase price restored to the extent of
such recovery, without interest; and




     (ii) the provisions of this Section shall not be construed to apply to (A) any
payment made by the Borrower pursuant to and in accordance with the express terms of this
Agreement or (B) any payment obtained by a Lender as consideration for the assignment of
or sale of a participation in any of its Accommodations or, as applicable,
subparticipations in Letters of Credit to any assignee or participant, other than to the
Borrower or any Subsidiary thereof (as to which the provisions of this Section shall
apply).


The Borrower consents to the foregoing and agrees, to the extent it may effectively do so under
applicable law, that any Lender acquiring a participation pursuant to the foregoing arrangements
may exercise against the Borrower rights of setoff and counterclaim with respect to such
participation as fully as if such Lender were a direct creditor of the Borrower in the amount of
such participation.




     Section 12.22 Language.Section 12.23 The Borrower, the Administrative Agent and the Lenders
confirm that they have requested that this Agreement and all documents and notices contemplated
thereby be drawn up in the English language. L’emprunteur, l’agent administrative et les prêteurs
confirment avoir requis que cette convention et tous les documents et avis qui y sont envisages
soient rédigés en langue anglaise.



[signature pages follow]










 



 


     IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their respective
authorized officers as of the date first above written.



	 	 	 	 	 	 	 
	 	 	QUEBECOR MEDIA INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	Per:
	 	  /s/ Jean-Francois Pruneau	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name: Jean-Francois Pruneau	 	 
	 

	 	 	 	Title: Treasurer	 	 







 









 






	 	 	 	 	 	 	 
	 	 	BANK OF AMERICA, N.A.	 	 
	 	 	as Administrative Agent	 	 
	 
	 	 	 	 	 	 
	 

	 	Per:
	 	[signed]	 	 
	 

	 	 	 	 

Authorized Signing Officer
	 	 






	 	 	 	 	 
	 

	 	Address:
	 	1455 Market St.
	 

	 	 	 	5th Floor
	 

	 	 	 	Mail code CA5-701—05-19
	 

	 	 	 	San Francisco, CA 94103
	 
	 	 	 	 
	 

	 	 	 	Attention: Robert J. Rittelmeyer, Vice President
	 

	 	 	 	Telephone: (415) 436-2616
	 

	 	 	 	Fax: (415) 503-5099
	 

	 	 	 	Email: rojert.j.rittelmeyer@bankofamerica.com
	 
	 	 	 	 
	Address for operations (Facility B-1):	 	Bank of America N.A.
	 

	 	 	 	Credit Services/Agency Services
	 

	 	 	 	1850 Gateway Blvd., 5th Floor
	 

	 	 	 	MC: CA4-706-05-09
	 

	 	 	 	Concord, CA 94520
	 

	 	 	 	Attention: Kristine Kelleher,
	 

	 	 	 	AVP/Credit Service Representative
	 

	 	 	 	Phone: (925)675-8373
	 

	 	 	 	Fax: (888) 969-2414
	 

	 	 	 	E-mail: kristine.l.kelleher@bankofamerica.com
	 
	 	 	 	 
	Address for operations (Revolving Facility,	 	 
	Facility A and Facility B-2):	 	Bank of America, N.A., Canada Branch
	 

	 	 	 	200 Front Street West, Suite 2700
	 

	 	 	 	Toronto, Ontario, M5V 3L2
	 
	 	 	 	 
	 

	 	 	 	Attention: Sylwia Durkiewicz
	 

	 	 	 	Telephone: (416) 349-4307
	 

	 	 	 	Fax: (416) 349-4282
	 

	 	 	 	E-mail: Sylwia.durkiewicz@bankofamerica.com
	 
	 	 	 	 
	 

	 	 	 	Alternate – Domingo Braganza
	 

	 	 	 	Telephone: (416) 349-5464






 









 






	 	 	 	 	 	 	 	 	 
	 	 	BANK OF AMERICA, N.A.,	 	 
	 	 	Canada Branch, as Lender and as Issuing Lender	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Per:	 	/s/ Nelson Lam	 	 
	 	 	 	 	 	 	 
	 	 	 	 	Nelson Lam	 	 
	 	 	 	 	Vice President	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Address:	 	Corporate Banking	 	 
	 

	 	 	 	 	 	200 Front Street West,	 	 
	 

	 	 	 	 	 	Suite 2700	 	 
	 

	 	 	 	 	 	Toronto, Ontario, M5V 3L2	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Attention:	 	Nelson Lam	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Telephone:	 	(416) 349-5496	 	 
	 

	 	Fax:
	 	 	 	(416) 349-4282	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Email: nelson.lam@bankofamerica.com	 	 






 









 




2


	 	 	 	 	 	 	 	 	 
	 	 	CITIBANK, N.A.	 	 	 	 
	 	 	(Canadian Branch)	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	Per:
	 	[signed]	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	Per:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	Address:
	 	 	 	123 Front Street West

Toronto, Ontario

M5J 2M3	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	Attention:
	 	 	 	John Hastings, Managing Director	 	 
	 

	 	Telephone:
	 	 	 	(416) 947-2947	 	 
	 

	 	Fax:
	 	 	 	(416) 915-6289	 	 
	 

	 	E-mail:
	 	 	 	john.hastings@citigroup.com	 	 






 









 






	 	 	 	 	 	 	 	 	 
	 	 	CREDIT SUISSE,	 	 
	 	 	TORONTO BRANCH	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	Per:
	 	[signed]	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	Name: Alain Daoust	 	 
	 	 	 	 	Title: Director	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	Per:
	 	[signed]	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	Name: Steve W. Fuh	 	 
	 	 	 	 	Title: Vice-President Financial Control	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	Address:	 	 	 	One First Canadian Place	 	 
	 
	 	 	 	 	 	Suite 3000, P.O. Box 301	 	 
	 
	 	 	 	 	 	Toronto, Ontario	 	 
	 
	 	 	 	 	 	M5X 1C9	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	Attention:
	 	 	 	Alain Daoust	 	 
	 

	 	Telephone:
	 	 	 	(416) 352-4527	 	 
	 

	 	Fax:
	 	 	 	(416) 352-4576	 	 
	 

	 	E-mail:
	 	 	 	alain.daoust@csfb.com	 	 






 









 






	 	 	 	 	 	 	 	 	 
	 	 	HSBC BANK CANADA	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	Per:
	 	[signed]	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	Name: Eric Schumacher	 	 
	 	 	 	 	Title: Director	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	Per:
	 	[signed]	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	Address:
	 	 	 	2001 McGill College

Suite 300
Montreal, Quebec

H3A 1G1	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	Attention:
	 	 	 	Eric Schumacher, Director	 	 
	 

	 	Telephone:
	 	 	 	(514) 286-5332	 	 
	 

	 	Fax:
	 	 	 	(514) 286-5330	 	 
	 

	 	E-mail:
	 	 	 	eric_schumacher@hsbc.ca	 	 






 









 







	 	 	 	 	 	 	 	 	 
	 	 	THE BANK OF NOVA SCOTIA	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	Per:
	 	[signed]	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	Name: Rob King	 	 
	 	 	 	 	Title: Director	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	Per:
	 	[signed]	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	Name: Bradley Walker	 	 
	 	 	 	 	Title: Associate Director	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	Address:	 	 	 	62nd Floor	 	 
	 
	 	 	 	 	 	40 King Street West	 	 
	 
	 	 	 	 	 	Scotia Plaza	 	 
	 
	 	 	 	 	 	Toronto, Ontario	 	 
	 
	 	 	 	 	 	M5W 2X6	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	Attention:
	 	 	 	Rob King, Director	 	 
	 

	 	Telephone:
	 	 	 	(416) 933-1873	 	 
	 

	 	Fax:
	 	 	 	(416) 866-2010	 	 
	 

	 	E-mail:
	 	 	 	rob_king@scotiacapital.com	 	 






 









 






	 	 	 	 	 	 	 	 	 
	 	 	THE TORONTO-DOMINION BANK	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	Per:
	 	[signed]	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	Name: Paul Archer	 	 
	 	 	 	 	Title: Vice-President & Director	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	Per:
	 	[signed]	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	Name: Yves Bergeron	 	 
	 	 	 	 	Title: Managing Director	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	Per:
	 	[signed]	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	Name: Serge Cloutier	 	 
	 	 	 	 	Title: Vice President	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	Address:
	 	 	 	1 Place Ville Marie, Bureau 2315	 	 
	 

	 	 	 	 	 	Montréal, Québec	 	 
	 

	 	 	 	 	 	H3B 3M5	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	Attention:
	 	 	 	Yves Bergeron	 	 
	 

	 	Telephone:
	 	 	 	(514) 289-0099	 	 
	 

	 	Fax:
	 	 	 	(514) 289-0788	 	 
	 

	 	E-mail:	 	 	 	 	 	 






 









 






	 	 	 	 	 	 	 	 	 
	 	 	BANK OF MONTREAL	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	Per:
	 	[signed]	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	Name: Bruno Lemay	 	 
	 	 	 	 	Title: Director	 	 
	 

	 	Per:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	Address:
	 	 	 	1501 McGill College	 	 
	 

	 	 	 	 	 	Suite 3200	 	 
	 

	 	 	 	 	 	Montreal, Quebec	 	 
	 

	 	 	 	 	 	H3A 3M8	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	Attention:
	 	 	 	Bruno Lemay	 	 
	 

	 	Telephone:
	 	 	 	(514) 282-5916	 	 
	 

	 	Fax:
	 	 	 	(514) 282-5920	 	 
	 

	 	E-mail:
	 	 	 	bruno.lemay@bmo.com	 	 






 









 






	 	 	 	 	 	 	 	 	 
	 	 	CAISSE CENTRALE DESJARDINS	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	Per:
	 	[signed]	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	Name: André Roy	 	 
	 	 	 	 	Title: Senior Manager	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	Per:
	 	[signed]	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	Name: Francine Champoux	 	 
	 	 	 	 	Title: Vice President	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	Address:	 	 	 	1 Complexe Desjardins	 	 
	 
	 	 	 	 	 	Suite 2822	 	 
	 
	 	 	 	 	 	Montreal, Quebec	 	 
	 
	 	 	 	 	 	H5B 1B3	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	Attention:
	 	 	 	André Roy	 	 
	 

	 	Telephone:
	 	 	 	(514) 281-7791	 	 
	 

	 	Fax:
	 	 	 	(514) 281-7083	 	 
	 

	 	E-mail:
	 	 	 	andre.roy@cccd.desjardins.com	 	 







 










 






	 	 	 	 	 	 	 
	 	 	NATIONAL BANK OF CANADA	 	 
	 	 	 	 	 	 	 
	 

	 	Per:
	 	[signed]	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name: Stephen Redding	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 

	 	Per:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	Address:	 	 
	 
	 	 	 	 	 	 
	 	 	Attention:	 	 
	 	 	Telephone:	 	 
	 	 	Fax:	 	 
	 	 	E-mail:	 	 







 









 








	 	 	 	 	 	 	 	 	 	 	 
	 	 	ROYAL BANK OF CANADA	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	Per:
	 	[signed]	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	Name: Rod Smith	 	 	 	 
	 	 	 	 	Title: Authorized Signatory	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	Address:	 	1 Place Ville Marie	 	 
	 

	 	 	 	 	 	Suite 300	 	 	 	 
	 

	 	 	 	 	 	Montreal, Quebec	 	 	 	 
	 

	 	 	 	 	 	H3B 4R8	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	Attention:	 	Rod Smith, Managing Director
	 	 	Telephone:	 	(514) 878-2815	 	 
	 

	 	Fax:
	 	 	 	(514) 874-1349	 	 	 	 
	 	 	E-mail:	 	rod.smith@rbccm.com	 	 







 









 








	 	 	 	 	 	 	 	 	 	 	 
	 	 	NATIONAL CITY BANK, CANADA BRANCH	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	Per:
	 	[signed]	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	Name: Caroline Stade	 	 	 	 
	 	 	 	 	Title: Vice President	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	Per:
	 	[signed]	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	Name: Bill Hines	 	 	 	 
	 	 	 	 	Title: Senior Vice President	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	Address:	 	130 King St. West	 	 
	 	 	 	 	 	 	Suite 2140	 	 
	 	 	 	 	 	 	Toronto, Ontario	 	 
	 	 	 	 	 	 	M5X 1E4	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	Attention:	 	Caroline Stade	 	 
	 	 	Telephone:	 	(416) 361-1744 x. 224
	 	 	Fax:	 	 	 	(416) 361-0085	 	 
	 	 	E-mail:	 	caroline.stade@nationalcity.com







 









 








	 	 	 	 	 	 	 	 	 	 	 
	 	 	CANADIAN IMPERIAL BANK OF COMMERCE	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	Per:
	 	[signed]	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	Name: Alex Tessier	 	 	 	 
	 	 	 	 	Title: Director	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	Per:
	 	[signed]	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	Name: Steve Nishimura	 	 
	 	 	 	 	Title: Managing Director	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	Address:	 	BCE Place
	 	 	 	 	 	 	161 Bay Street, 8th Floor
	 	 	 	 	 	 	Toronto, Ontario
	 	 	 	 	 	 	M5J 2S8	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	Attention:	 	Alex Tessier
	 	 	Telephone:	 	(416) 956-3832
	 	 	Fax:	 	 	 	(416) 956-3816
	 	 	E-mail:	 	alex.tessier@cibc.ca







 









 








	 	 	 	 	 	 	 	 	 	 	 
	 	 	BANK OF AMERICA, N.A. As Lender	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	Per:
	 	[signed]	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	Name: Jeffrey Armitage	 	 	 	 
	 	 	 	 	Title: Senior Vice President	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	Per:	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	Address:	 	231 South LaSalle St.
	 	 	 	 	 	 	10th Floor
	 	 	 	 	 	 	Chicago, Illinois
	 	 	 	 	 	 	60604
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	Attention:	 	Jeffrey Armitage
	 	 	Telephone:	 	(312) 828-3898
	 	 	Fax:	 	(312) 974-8811
	 	 	E-mail:	 	Jeffrey.armitage@bankofamerica.com







 









 








	 	 	 	 	 	 	 	 	 
	 	 	THE BANK OF NOVA SCOTIA,

as a Facility B Lender
	 
	 	 	 	 	 	 	 	 
	 

	 	Per:
	 	[signed]	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	Name: Jose B. Carlos	 	 
	 	 	 	 	Title: Authorized Signatory	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	Per:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Address:	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Attention:	 	 	 	 
	 	 	Telephone:	 	 	 	 
	 

	 	Fax:	 	 	 	 	 	 
	 	 	E-mail:	 	 	 	 







 









 








	 	 	 	 	 	 	 	 	 
	 	 	TORONTO DOMINION (TEXAS) LLC

as a Facility B Lender
	 
	 	 	 	 	 	 	 	 
	 

	 	Per:
	 	[signed]	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	Name: Jim Bridwell	 	 
	 	 	 	 	Title: Authorized Signatory	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	Per:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Address:	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Attention:	 	 	 	 
	 	 	Telephone:	 	 	 	 
	 

	 	Fax:	 	 	 	 	 	 
	 	 	E-mail:	 	 	 	 







 









 








	 	 	 	 	 	 	 	 	 	 	 
	 	 	NATIONAL CITY BANK	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	Per:
	 	[signed]	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	Name: Timothy J. Ambrose	 	 	 	 
	 	 	 	 	Title: Vice President	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	Per:	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	Address:	 	One South Broad Street Building
	 	 	 	 	 	 	14th Floor
	 	 	 	 	 	 	Philadelphia, PA
	 	 	 	 	 	 	19107
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	Attention:	 	Tim Ambrose, Vice President
	 	 	Telephone:	 	(267) 256-4026
	 

	 	Fax:	 	 	 	 	 	 	 	 
	 	 	E-mail:	 	timothy.ambrose@nationalcity.com







 










 






SCHEDULE A




AGENCY BRANCH ACCOUNT




For the Revolving Lenders and the Facility A Lenders and the Facility B-2 Lenders




Canadian Dollars




LVTS-Large Value Transaction System

Bank of America, N.A. Canada Branch

200 Front Street West

Toronto, Ontario

Attention: Agency Loans Administration

Swift Code: BOFACATT

Transit #: 56792-241 Account #: 90083255

Reference: Quebecor Media Inc.




US Dollars

BankAmerica International New York

335 Madison Avenue

New York, NY 10017

Swift Code: BOFAU53N ABA# 02600593

For the account of: Bank of America, Canada Branch

Account: #65502-01805

Swift Code#: BOFACATT

Reference: Quebecor Media Inc.



or such other account or address in Canada of which the Administrative Agent may notify the
Borrower from time to time.




For the Facility B-1 Lenders




Bank of America, N.A.

Dallas, TX

ABA: 111000012

Account Number: 3750836479

Account Name: Credit Services West

Reference: Quebecor Media Inc.

Attention: Kristine Kelleher



or such other account or address in the U.S.A. of which the Administrative Agent may notify the
Borrower from time to time.





 









 








SCHEDULE B




COMMITMENTS




	 	 	 	 	 	 	 	 	 
	 	 	Revolving	 	 	 	 
	Lender	 	Facility	 	Facility A	 	Facility B
	 	 	 	 	 	 	B-1 Tranche	 	B-2 Tranche
	[Redacted]
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Total
	 	C$100,00,000	 	C$125,000,000	 	US$350,000,000	 	C$0
	 
	 	 	 	 	 	 	 	 





 








 








SCHEDULE 1




ACCOMMODATION NOTICE




	 	 	 
	TO:

	 	BANK OF AMERICA, N.A., as Administrative Agent
	 
	 	 
	FROM:

	 	QUEBECOR MEDIA INC.
	 
	 	 
	DATE:
	 	 





1) This Accommodation Notice is delivered to you pursuant to the credit agreement (as in effect on
the date hereof, the “Credit Agreement”) dated January 17, 2006 entered into among, inter alia,
QUEBECOR MEDIA INC., as Borrower, and Bank of America, N.A., as Administrative Agent. All terms
used in this Accommodation Notice which are defined in the Credit Agreement shall have herein the
respective meanings set forth in the Credit Agreement.



2) We hereby request an [Accommodation/conversion] under [the Revolving Facility, Facility A or
Facility B] of the Credit Agreement as follows:




	 	 	 	 	 
	 

	 	(a)
	 	Date of Accommodation:       
            
     
                                                                                  
	 

	 	(b)
	 	Currency and amount of
Accommodation:   
     
                                                                       
	 

	 	(c)
	 	Type of Accommodation:   
            
    
                                                                                      
	 

	 	(d)
	 	Designated Period(s) (if any):   
                                                                                                 
	 

	 	(e)
	 	Maturity date(s) (if applicable):   
  
                                                                                            
	 

	 	(f)
	 	Payment instruction (if any):   
      
                                                                                            





3) We have understood the provisions of the Credit Agreement which are relevant to the furnishing
of this Accommodation Notice. To the extent that this Accommodation Notice evidences, attests or
confirms compliance with any covenants or conditions precedent provided for in the Credit
Agreement, we have made such examination or investigation as was, in our opinion, necessary to
enable us to express an informed opinion as to whether such covenants or conditions have been
complied with.



4) WE HEREBY CERTIFY THAT, in our opinion, as of the date hereof:




     (a) All
of the representations and warranties of the Borrower contained in
Article 7 of the Credit Agreement (except where qualified in
Article 7 as being made as at a particular date) are true and correct in all material respects on and
as of the date hereof as though made on and as of the date hereof.



     (b) All
of the covenants of the Borrower contained in Article 8 of
the Credit Agreement together with all of the conditions precedent to an Advance and all other
terms and conditions contained in the Credit Agreement have been fully complied with.



     (c) No Event of Default has occurred and no Default has occurred and is continuing.




Yours truly,



 









 





	 	 	 	 	 	 	 
	 	 	QUEBECOR MEDIA INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	Per:	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 

	 	 






 









 






SCHEDULE 2




NOTICE OF REPAYMENT




	 	 	 
	TO:

	 	BANK OF AMERICA, N.A., as Administrative Agent
	 
	 	 
	FROM:

	 	QUEBECOR MEDIA INC.
	 
	 	 
	DATE:
	 	 





1) This notice of repayment is delivered to you pursuant to the Credit Agreement dated January 17,
2006 entered into among, inter alia, QUEBECOR MEDIA INC., as Borrower, and, Bank of America, N.
A., as Administrative Agent (as in effect on the date hereof, the “Credit Agreement”). All defined
terms set forth in this notice shall have the respective meanings set forth in the Credit
Agreement.



2) We hereby advise you that we will be repaying the sum of [C$ / US$]                     on                                          as follows [indicate amount payable in respect of each Facility as well as the type of
Advance to be repaid].



3) As to an amount of [C$ / US$                    , the above-mentioned payment should be
treated as a [mandatory prepayment / voluntary prepayment] under Error! Reference source not
found./ Error! Reference source not found.], which we understand will have the effect of reducing
the amount of Facility A and Facility B, or, if applicable, the Revolving Facility] by an equal
amount (or by an equivalent amount, if in another currency). [If the payment is a mandatory
prepayment resulting from an asset sale or an equity issuance, it will be applied (i) firstly, pro
rata to permanently reduce Facility A and Facility B (unless it is an Unacceptable Payment) and
(ii) secondly, to repay the Revolving Facility, if there are any Accommodations Outstanding
thereunder; in all cases, provide details of the calculations used to determine the amounts.]




	 	 	 	 	 	 	 
	 	 	Yours truly,	 	 
	 
	 	 	 	 	 	 
	 	 	QUEBECOR MEDIA INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	Per:	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 

	 	 






 









 






SCHEDULE 3




OFFER TO LENDERS




	 	 	 
	TO:

	 	[Name of Lender]
	 
	 	 
	FROM:

	 	QUEBECOR MEDIA INC.
	 
	 	 
	DATE:
	 	 





1) This offer of repayment is delivered to you pursuant to the Credit Agreement dated as of January
17, 2006 entered into among, inter alia, QUEBECOR MEDIA INC., as Borrower and Bank of America,
N.A., as Administrative Agent (as in effect on the date hereof, the “Credit Agreement”). All
defined terms set forth in this notice shall have the respective meanings set forth in the Credit
Agreement.



2) We hereby advise you that on [insert date, at least 10 and not more than 20 Business Days from
the date of this offer] (the “Payment Date”), we will be making a Mandatory Repayment of [Facility
A or Facility B] in an aggregate amount of US $/C$ ________, of which your proportionate share, based on
your Commitment under [Facility A or Facility B], is
US $/C$ ________ [indicate amount payable].



3) In accordance with the provisions of the Credit Agreement, you are required to advise us in
writing, with a copy to the Administrative Agent, not less than 3 Business Days before the Payment
Date if you wish to accept the Mandatory Repayment in question, failing which you shall be deemed
to have accepted same.




	 	 	 	 	 	 	 
	 	 	Yours truly,	 	 
	 
	 	 	 	 	 	 
	 	 	QUEBECOR MEDIA INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	Per:	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 

	 	 






 









 






SCHEDULE 4




APPLICABLE MARGINS

(per annum)




Revolving Facility and Facility A




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	Drawing Fee and	 	C$ Prime Rate /	 	Commitment	 	 
	Tier	 	Leverage Ratio	 	L/C Fee	 	US$ Prime Rate	 	Fee	 	Libor
	I

	 	R £2.75
	 	 	1.25	%	 	+0.25%
	 	 	0.30	%	 	+1.25%
	II

	 	2.75 < R £3.5
	 	 	1.50	%	 	+0.50%
	 	 	0.375	%	 	+1.50%
	III

	 	3.5 < R £4.5
	 	 	1.75	%	 	+0.75%
	 	 	0.375	%	 	+1.75%
	IV

	 	4.5 < R £5.25
	 	 	2.00	%	 	+1.00%
	 	 	0.50	%	 	+2.00%
	V

	 	5.25 < R
	 	 	2.25	%	 	+1.25%
	 	 	0.50	%	 	+2.25%






Facility B




	 	 	 	 	 	 	 	 	 
	US$ Prime Rate	 	 	 	 	 	Libor
	+1.00%
	 	 	 	 	 	 	2.00	%






 









 






SCHEDULE 5




SECURITY AND SECURITY DOCUMENTS





	1.	 	First-ranking security (subject only to Permitted Liens) in favour of the Administrative
Agent (or the fondé de pouvoir referred to below) on behalf of the Lenders, by way of a
hypothec on the universality of all of the movable property of the Borrower which property is
or is deemed to be located in the Province of Quebec (and/or, at the option of the
Administrative Agent, by way of a hypothec securing debentures (“Debentures”) granted in
favour of the Administrative Agent or a collateral agent designated by the Administrative
Agent as the holder of a power of attorney (“fondé de pouvoir”) of the Lenders within the
meaning of Article 2692 of the Civil Code of Quebec, as
contemplated by Section 10.12 of the Credit Agreement) subject, however to limitations on the realisation
or enforcement on the shares of TVA Group Inc. (or its successors) if such enforcement could
reasonably be expected to cause TVA Group Inc. (or its successors) to lose any Authorization
it holds or is required to hold at any time in the future for the operation of its business;






	2.	 	First-ranking limited recourse pledge granted by 3535991 Canada Inc. in respect of its shares
in Sun Media Corporation.






	3.	 	First-ranking limited recourse pledge granted by 9101-0827 Quebec Inc. in respect of its shares in Vidéotron Ltée.






 









 






SCHEDULE 6




ASSIGNMENT AND ASSUMPTION AGREEMENT



This Assignment and Assumption Agreement (this “Assignment and Assumption”) dated as of the
Effective Date referred to below is entered into by and between the party identified below as
“Assignor” and each party identified on each signature page hereto as an
“Assignee”. Capitalized terms used but not defined herein shall have the meanings given to
them in the Credit Agreement identified below (as amended or modified from time to time, the
“Credit Agreement”), receipt of a copy of which is hereby acknowledged by each Assignee.
The Standard Terms and Conditions set forth in Annex 1 attached hereto are hereby agreed to and
incorporated herein by reference and made a part of this Assignment and Assumption as if set forth
herein in full.



For an agreed consideration, the Assignor hereby irrevocably and ratably sells and assigns to each
Assignee, and each Assignee hereby irrevocably purchases and assumes from the Assignor, subject to
and in accordance with the Standard Terms and Conditions and the Credit Agreement, as of the
Effective Date referred to below (i) all of the Assignor’s respective rights and obligations in its
capacity as a Lender under the Credit Agreement, the other Credit Documents and any other documents
or instruments delivered pursuant thereto to the extent related to the amount and percentage
interest identified below the signature of that Assignee of all the Assignor’s respective
outstanding rights and obligations under the Credit Facilities identified below (including without
limitation any guarantees and Security included in such facilities) and (ii) to the extent
permitted to be assigned under applicable law, all claims, suits, causes of action and any other
rights of the Assignor (in its capacity as a Lender) against any Person, whether known or unknown,
arising under or in connection with the Credit Agreement, any other documents or instruments
delivered pursuant thereto or the loan transactions governed thereby or in any way based on or
related to any of the foregoing, including, but not limited to, contract claims, tort claims,
malpractice claims, statutory claims and all other claims at law or in equity related to the rights
and obligations sold and assigned pursuant to clause (i) above (the rights and obligations sold and
assigned pursuant to clauses (i) and (ii) above being referred to herein collectively as to each
Assignee, the “Assigned Interest”). Such sale and assignment is without recourse to the
Assignor and, except as expressly provided in this Assignment and Assumption, without
representation or warranty by the Assignor.




	 	 	 	 	 
	1.

	 	Assignor:
	 	l
	 
	 	 	 	 
	2.

	 	Assignees and their
Assigned Interests:
	 	Listed on the signature pages attached hereto
	 
	 	 	 	 
	3.

	 	Borrower:
	 	Quebecor Media Inc.
	 
	 	 	 	 
	4.

	 	Administrative Agent:
	 	Bank of America, N. A., as the administrative agent under the Credit Agreement referred
to below
	 
	 	 	 	 
	5.

	 	Credit Agreement:
	 	The Credit Agreement, dated as of January 17, 2006 among the Borrower named above, the
Lenders parties thereto, and the Administrative Agent named above






 









 






6. Assigned Interests:



	 	 	 	 	 	 	 
	 

	 	Aggregate Amount of	 	 	 	 
	 

	 	Commitment/`
	 	Amount of
	 	Percentage Assigned
	Facility

	 	Accommodations for
	 	Commitment/ Assigned
	 	of Commitments/
	Assigned1

	 	all Lenders
	 	Accommodations
	 	Accommodations
	 
	 
	 
	 
	 
	 






	 	 	 	 	 
	7.

	 	Effective Date:
	 	As to each Assignee, as indicated on attached signature page thereof
	 
	 	 	 	 
	8.

	 	Trade Date:
	 	As to each Assignee, as indicated on attached signature page thereof





The terms set forth in this Assignment and Assumption are hereby agreed to:




	 	 	 	 	 	 	 
	ASSIGNOR:

	 	l	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Name:
	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	Consent and Acceptance:	 	BANK OF AMERICA, N. A.,	 	 
	 	 	as Administrative Agent	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Name:
	 	 
	 

	 	 	 	Title:	 	 








 




			
	1	 	Fill in the appropriate terminology for the
type of facilities under the Credit Agreement that are being assigned under
this Assignment (i.e. Revolving Commitment, Facility A Commitment or Facility B
Commitment)




 









 










	 	 	 	 	 	 	 
	Consent and Acceptance:2	 	 QUEBECOR MEDIA INC., as Borrower	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	Name:

	 	 
	 

	 	 	 	Title:	 	 








 




			
	2	 	Obtain indicated consent(s) only if required
by Credit Agreement.




 









 










	 	 	 	 	 	 	 
	ASSIGNEE:
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	[Name of Assignee]	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	[Entity signing on behalf of Assignee]3	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:
	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	4Assignee is an Affiliate/Approved Fund of:
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	[Identify Lender]	 	 
	Trade Date:                                                             	 	 
	Effective Date:                                                             5	 	 








 




			
	3	 	Include if a general partner or manager of
the Assignee is signing on behalf of the Assignee.
	 
	4	 	Include as applicable.
	 
	5	 	Effective date to be inserted by
Administrative Agent.




 









 










ANNEX 1 TO ASSIGNMENT AND ASSUMPTION




STANDARD TERMS AND CONDITIONS FOR ASSIGNMENT

AND ASSUMPTION AGREEMENT




     1. Representations and Warranties.



     1.1. Assignor. The Assignor (a) represents and warrants that (i) it is the legal and
beneficial owner of each Assigned Interest, (ii) each Assigned Interest is free and clear of any
lien, encumbrance or other adverse claim and (iii) it has full power and authority, and has taken
all action necessary, to execute and deliver this Assignment and Assumption and to consummate the
transactions contemplated hereby; and (b) assumes no responsibility with respect to (i) any
statements, warranties or representations made in or in connection with the Credit Agreement or any
other Credit Document, (ii) the execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Credit Documents or any other instrument or document delivered pursuant
thereto, other than this Agreement, or any Collateral thereunder, (iii) the financial condition of
any Loan Party, any of its Subsidiaries or Affiliates or any other Person obligated in respect of
any Credit Document or (iv) the performance or observance by any Loan Party, any of its
Subsidiaries or Affiliates or any other Person of any of their respective obligations under any
Credit Document.



     1.2. Assignee. Each Assignee (a) represents and warrants that (i) it has full power
and authority, and has taken all action necessary, to execute and deliver this Assignment and
Assumption and to consummate the transactions contemplated hereby and to become a Lender under the
Credit Agreement, (ii) it meets all requirements of an Assignee under the Credit Agreement, (iii)
from and after the Effective Date, it shall be bound by the provisions of the Credit Agreement and,
to the extent of the Assigned Interest, shall have the obligations of a Lender thereunder, (iv) it
has received a copy of the Credit Agreement, together with copies of the most recent financial
statements delivered pursuant to Section 8.01 thereof, as applicable, and such other documents and
information as it has deemed appropriate to make its own credit analysis and decision to enter into
this Assignment and Assumption and to purchase the Assigned Interest on the basis of which it has
made such analysis and decision independently and without reliance on the Administrative Agent or
any other Lender; (v) if the contemplated Assignment and Assumption is under the Revolving Facility
or Facility A and occurs prior to an Event of Default which has not been waived, it is a Cdn
Qualified Lender; and (b) agrees that (i) it will, independently and without reliance on the
Administrative Agent, the Assignor or any other Lender, and based on such documents and information
as it shall deem appropriate at the time, continue to make its own credit decisions in taking or
not taking action under the Credit Documents, and (ii) it will perform in accordance with their
terms all of the obligations which by the terms of the Credit Documents are required to be
performed by it as a Lender.



     1.3 Assignee’s Address for Notices, Etc. Attached hereto as Schedule 1 is all contact
information, address, phone and facsimile information and account and payment instructions)
relative to the Assignee.



     2. Payments. From and after the Effective Date, the Administrative Agent shall make
all payments in respect of the Assigned Interest (including payments of principal, interest, fees
and other amounts) to the Assignor for amounts which have accrued prior to but excluding the
Effective Date and to the Assignee for amounts which have accrued from and after the Effective
Date.



     3. General Provisions. This Assignment and Assumption shall be binding upon, and inure
to the benefit of, the parties hereto and their respective successors and assigns. This Assignment
and Assumption may be executed in any number of counterparts, which together



 









 







shall constitute one instrument. Delivery of an executed counterpart of a signature page of
this Assignment and Assumption by telecopy shall be effective as delivery of a manually executed
counterpart of this Assignment and Assumption. This Assignment and Assumption shall be governed by,
and construed in accordance with, the laws applicable in the Province of Quebec.




 









 








SCHEDULE 1 TO ASSIGNMENT AND ASSUMPTION AGREEMENT




ADMINISTRATIVE DETAILS




(Assignee to list names of credit contacts, addresses, phone and facsimile numbers, electronic

mail addresses and account and payment information)





 









 








SCHEDULE 7




SUBORDINATION AGREEMENT FOR

BACK-TO-BACK SECURITIES



This SUBORDINATION AGREEMENT is dated as of l, 200l (the “Agreement”).



To: Bank of America, N.A., for itself and as Administrative Agent under the Credit Agreement
(defined below) for the Lenders (the “Administrative Agent”), l , a l company (the
“Obligor”), as obligor under the l dated as of l, and l in the principal amount
of l $ l and l $ l, respectively, made by the Obligor in favour of l
(the “Subordinated Notes”), and l, as holder (the “Holder”) of the Subordinated Notes, for
good and valuable consideration, hereby agree as follows:



1. Interpretation.




     (a) “Cash, Property or Securities”. “Cash, Property or Securities” shall not be deemed
to include securities of the Obligor or any other Person provided for by a plan of reorganization
or readjustment, the payment of which is subordinated at least to the extent provided herein with
respect to the Subordinated Notes, to the payment of all Senior Indebtedness which may at the time
be outstanding; provided, however, that (i) all Senior Indebtedness is assumed by the new Person,
if any, resulting from any such reorganization or readjustment, and (ii) the rights of the holders
of the Senior Indebtedness are not, without the consent of such holders, altered by such
reorganization or readjustment.



     (b) “payment in full”. “payment in full”, with respect to Senior Indebtedness, means
the receipt on an irrevocable basis of cash in an amount equal to the unpaid principal amount of
the Senior Indebtedness and premium, if any, and interest and any special interest thereon to the
date of such payment, together with all other amounts owing with respect to such Senior
Indebtedness.



     (c) “Senior Indebtedness”. “Senior Indebtedness” means, at any date all indebtedness
(including, without limitation, any and all amounts of principal, interest, special interest,
additional amounts, premium, fees, penalties, indemnities and “post-petition interest” in
bankruptcy and any reimbursement of expenses) under (1) [the Indenture , including, without
limitation, the “Notes”, the “Subsidiary Guarantees”, the “Exchange Notes”, the “Additional Notes”
and any Guarantee of the Exchange Notes or the Additional Notes (in each case, as defined in the
Indenture)] and (2) the Credit Agreement, dated as of January l, 2006, among Quebecor Media
Inc., as borrower, the financial institutions identified as lenders therein, Banc of America
Securities LLC, as joint lead arranger and joint bookmanager, Bank of America, N.A., as
administrative agent, and l, as joint lead arranger and bookmanager, documentation agent and
syndication agent (as amended or modified from time to time, the “Credit Agreement”; capitalized
terms used herein without definition having the meanings set forth therein) and the Credit
Documents.



 









 





(2)



2. Agreement Entered into Pursuant to Credit Agreement. The Obligor, the Administrative
Agent and the Lenders are entering into this Agreement pursuant to the provisions of the Credit
Agreement, pursuant to which Quebecor Media Inc. has borrowed approximately C$700,000,000 and has
additional borrowings available of C$350,000,000 (the “Accommodations”).



3. Subordination. The indebtedness represented by the Subordinated Notes shall be
subordinated as follows:




     (a) Agreement to Subordinate. The Obligor, for itself and its successors and assigns,
and the Holder agree that the indebtedness evidenced by the Subordinated Notes (including, without
limitation, principal, interest, premium, fees, penalties, indemnities and “post-petition interest”
in bankruptcy and any reimbursement of expenses) is subordinate and junior in right of payment, to
the extent and in the manner provided in this Section 3, to the prior payment in full of all Senior
Indebtedness. The provisions of this Section 3 are for the benefit of the Administrative Agent
acting on behalf of the holders from time to time of Senior Indebtedness under the Credit
Agreement, and such holders are hereby made obligees hereunder to the same extent as if their names
were written herein as such, and they (collectively or singly) may proceed to enforce such
provisions.



     (b) Liquidation, Dissolution or Bankruptcy.




	 	(i)	 	Upon any distribution of assets of the Obligor to creditors or
upon a liquidation or dissolution or winding-up of the Obligor or in a
bankruptcy, arrangement, liquidation, reorganization, insolvency, receivership
or similar case or proceeding relating to the Obligor or its property or other
marshalling of assets of the Obligor:






	 	(A)	 	the holders of Senior Indebtedness shall be
entitled to receive payment in full of all Senior Indebtedness before
the Holder shall be entitled to receive any payment of principal of or
interest on, or any other amount owing in respect of, the Subordinated
Notes;
	 
	 	(B)	 	until payment in full of all Senior
Indebtedness, any distribution of assets of the Obligor of any kind or
character to which the Holder would be entitled but for this Section 3
is hereby assigned to the holders of Senior Indebtedness absolutely and
shall be paid by the Obligor or by any receiver, trustee in bankruptcy,
liquidating trustee, agents or other Persons making such payment or
distribution to, the Administrative Agent behalf of the holders of
Senior Indebtedness under the Credit Agreement, as their interests may
appear; and
	 
	 	(C)	 	in the event that, notwithstanding the
foregoing, any payment or distribution of assets of the Obligor of any
kind or character, whether in Cash, Property or Securities, shall be
received by the Holder before all Senior Indebtedness is paid in full,
such payment or distribution shall be held in trust for the benefit of
and




 









 





(3)





	 	 	 	shall be paid over to the Administrative Agent on behalf of the
holders of Senior Indebtedness under the Credit Agreement, as their
interests may appear, for application to the payment of all Senior
Indebtedness under the Credit Agreement until all such Senior
Indebtedness shall have been paid in full after giving effect to any
concurrent payment or distribution to the holders of Senior
Indebtedness under the Credit Agreement in respect of such Senior
Indebtedness.






	 	(ii)	 	If (A) a bankruptcy, reorganization, insolvency, receivership
or similar proceeding relating to the Obligor or its property (a
“Reorganization Proceeding”) is commenced and is continuing and (B) the Holder
does not file proper claims or proofs of claim in the form required in a
Reorganization Proceeding prior to 45 days before the expiration of the time to
file such claims, then (1) upon the request of the Administrative Agent, the
Holder shall file such claims and proofs of claim in respect of the
Subordinated Notes and execute and deliver such powers of attorney, assignments
and proofs of claim or proxies as may be directed by the Administrative Agent
to enable it to exercise in the sole discretion of the Administrative Agent any
and all voting rights attributable to the Subordinated Notes which are capable
of being voted (whether by meeting, written resolution or otherwise) in a
Reorganization Proceeding and enforce any and all claims upon or in respect of
the Subordinated Notes and to collect and receive any and all payments or
distributions which may be payable or deliverable at any time upon or in
respect of the Subordinated Notes, and (2) whether or not the Administrative
Agent shall take the action described in clause (1) above, the Administrative
Agent shall nevertheless be deemed to have such powers of attorney as may be
necessary to enable the Administrative Agent to exercise such voting rights,
file appropriate claims and proofs of claim and otherwise exercise the powers
described above for and on behalf of the Holder.





     (c) Subrogation. After all Senior Indebtedness is paid in full and until the
Subordinated Notes are paid in full, the Holder shall be subrogated to the rights of the holders of
Senior Indebtedness. For purposes of this Section 3(c), a distribution made under this Section 3 to
holders of Senior Indebtedness which otherwise would have been made to the Holder, or a payment
made by the Holder to holders of Senior Indebtedness in respect of a turnover obligation under this
Section 3, is not, as between the Obligor and such holder, a payment by the Obligor on Senior
Indebtedness.



     (d) Relative Rights. This Section 3 defines the relative rights of the Holder and the
holders of Senior Indebtedness. Nothing in this Section 3 shall:




	 	(i)	 	impair, as between the Obligor and the Holder, the obligation
of the Obligor, which is absolute and unconditional, to pay the principal of
and interest on the Subordinated Notes in accordance with their terms; or




 









 






(4)




	 	(ii)	 	affect the relative rights of the Holder and creditors of the
Obligor other than the holders of Senior Indebtedness; or
	 
	 	(iii)	 	affect the relative rights of the holders of Senior
Indebtedness among themselves or opposite the Obligor under the Credit
Documents; or
	 
	 	(iv)	 	prevent the Holder from exercising its available remedies upon
a default, subject to the rights of the holders of Senior Indebtedness to
receive cash, property or other assets otherwise payable to the Holder.





     (e) Subordination May Not Be Impaired.




	 	(i)	 	No right of any holder of Senior Indebtedness to enforce the
subordination of indebtedness evidenced by the Subordinated Notes shall in any
way be prejudiced or impaired by any act or failure to act by the Obligor or by
any such holder or the Administrative Agent, or by any non-compliance by the
Obligor with the terms, provisions or covenants herein, regardless of any
knowledge thereof which any such holder or the Administrative Agent may have or
be otherwise charged with. Neither the subordination of the Subordinated Notes
as herein provided nor the rights of the holders of Senior Indebtedness with
respect hereto shall be affected by any extension, renewal or modification of
the terms, or the granting of any security in respect of, any Senior
Indebtedness or any exercise or non-exercise of any right, power or remedy with
respect thereto.
	 
	 	(ii)	 	The Holder agrees that all indebtedness evidenced by the
Subordinated Notes will be unsecured by any Lien upon or with respect to any
property of the Obligor.
	 
	 	(iii)	 	The Holder agrees not to exercise any offset or counterclaim
or similar right in respect of the indebtedness evidenced by the Subordinated
Notes except to the extent payment of such indebtedness is permitted and will
not assign or otherwise dispose of the Subordinated Notes or the indebtedness
which it evidences unless the assignee or acquiror, as the case may be, agrees
to be bound by the terms of this Agreement.





     (f) Holder Entitled to Rely.




Upon any payment or distribution pursuant to this Section 3, the Holder shall be
entitled to rely (i) upon any order or decree of a court of competent jurisdiction
in which any proceedings of the nature referred to in Section 3(b) are pending, (ii)
upon a certificate if the liquidating trustee or agent or other person in such
proceedings making such payment or distribution to the Holder or its representative,
if any, or (iii) upon a certificate of the Administrative Agent or any
representative (if any) of the holders of Senior Indebtedness for the purpose of
ascertaining the persons entitled to participate in such payment or distribution,
the holders of the Senior Indebtedness and other indebtedness of




 









 






(5)





the Obligor, the amount thereof or payable thereon, the amount or amounts paid
or distributed thereon and all other facts pertinent thereto or to this Section 3.


4. Enforceability. Each of the Obligor and the Holder represents and warrants that this
Agreement has been duly authorized, executed and delivered by each of the Obligor and the Holder
and constitutes a valid and legally binding obligation of each of the Obligor and the Holder,
enforceable in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability relating to or affecting
creditors’ rights and to general equity principles; and on the date hereof, the Holder shall
deliver an opinion or opinions of counsel to such effect to the Administrative Agent for the
benefit of the Lenders.




5. Miscellaneous.




     (a) Until payment in full of all the Senior Indebtedness, the Obligor and the Holder agree
that no amendment shall be made to either of the Subordinated Notes which would affect the rights
of the holders of the Senior Indebtedness.



     (b) This Agreement may not be amended or modified in any respect, nor may any of the terms or
provisions hereof be waived, except by an instrument signed by the Obligor, the Holder and the
Administrative Agent.



     (c) This Agreement shall be binding upon each of the parties hereto and their respective
successors and assigns and shall inure to the benefit of the Administrative Agent and each and
every holder of Senior Indebtedness and their respective successors and assigns.



     (d) This Agreement shall be governed by and construed in accordance with the laws of the
[State of New York.]



     (e) The Holder and the Obligor each hereby irrevocably agrees that any suits, actions or
proceedings arising out of or in connection with this Agreement may be brought in any state or
federal court sitting in the City of New York or any court in the Province of Quebec and submits
and attorns to the non-exclusive jurisdiction of each such court.



     (f) The Holder and the Obligor will whenever and as often as reasonably requested to do so by
the Administrative Agent, do, execute, acknowledge and deliver any and all such other and further
acts, assignments, transfers and any instruments of further assurance, approvals and consents as
are necessary or proper in order to give complete effect to this Agreement.



     (g) Each of the Holder and the Obligor irrevocably appoints CT Corporation System, as its
authorized agent in the State of New York upon which process may be served in any such suit or
proceedings, and agrees that service of process upon such agent, and written notice of said service
to CT Corporation System, by the person serving the same to the addresses listed below, shall be
deemed in every respect effective service of process upon the Holder or the Obligor, as applicable,
in any such suit or proceeding.



 









 





(6)




     If to the Obligor:



     l



     If to the Holder:



     l



     Each of the Holder and the Obligor further agrees to take any and all action as may be
necessary to maintain such designation and appointment of such agent in full force and effect for a
period of ten years from the date of this Agreement.



          IN WITNESS WHEREOF, the Obligor and the Holder each have caused this Agreement to be duly
executed.




	 	 	 	 	 	 	 
	 

	 	l	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	by	 	 	 	 
	 

	 	 	 	 

Name: n
	 	 
	 

	 	 	 	Title:   n	 	 
	 
	 	 	 	 	 	 
	 

	 	l	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	by	 	 	 	 
	 

	 	 	 	 

Name: n
	 	 
	 

	 	 	 	Title:   n	 	 





 









 





SCHEDULE 8




FORM OF NOTE



FOR VALUE RECEIVED, the undersigned (the “Borrower”), hereby promises to pay to
                                         or registered assigns (the “Lender”), in accordance with the provisions of
the Credit Agreement (as hereinafter defined), the principal amount of each Accommodation from time
to time made by the Lender to the Borrower under that certain Credit Agreement, dated as of January
17, 2006 (as amended, restated, extended, supplemented or otherwise modified in writing from time
to time, the “Credit Agreement;” the terms defined therein being used herein as therein defined),
among, inter alia, the Borrower, the Lenders from time to time party thereto, and Bank of America,
N.A., as Administrative Agent.



The Borrower promises to pay interest on the unpaid principal amount of each Accommodation from the
date of such Accommodation until such principal amount is paid in full, at such interest rates and
at such times as provided in the Credit Agreement. All payments of principal and interest shall be
made to the Administrative Agent for the account of the Lender in US Dollars in immediately
available funds at the Administrative Agent’s Office, as provided for in the Credit Agreement. If
any amount is not paid in full when due hereunder, such unpaid amount shall bear interest, to be
paid upon demand, from the due date thereof until the date of actual payment (and before as well as
after judgment) computed at the per annum rate set forth in the Credit Agreement.



This Note is one of the Notes referred to in the Credit Agreement, is entitled to the benefits
thereof and may be prepaid in whole or in part subject to the terms and conditions provided
therein. This Note is also entitled to the benefit of all guarantees and is secured by the
Security. Upon the occurrence and continuation of one or more of the Events of Default specified in
the Credit Agreement, all amounts then remaining unpaid on this Note shall become, or may be
declared to be, immediately due and payable all as provided in the Credit Agreement. Loans made by
the Lender shall be evidenced by one or more loan accounts or records maintained by the Lender in
the ordinary course of business. The Lender may also attach schedules to this Note and endorse
thereon the date, amount and maturity of its Loans and payments with respect thereto.



The Borrower, for itself, its successors and assigns, hereby waives diligence, presentment, protest
and demand and notice of protest, demand, dishonour and non-payment of this Note.



THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE PROVINCE OF QUEBEC.




	 	 	 	 	 	 	 
	 	 	QUEBECOR MEDIA INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Title: