**Exhibit 4.1**

 

**VIDÉOTRONLTÉE, as Borrower**

 

-and-

 

**RBCDOMINION SECURITIES INC., as Lead Arranger and Bookrunner**

 

-and-

 

**BANK OF AMERICA, N.A., CANADA BRANCH**

 

**BMO NESBITT BURNS INC.**

 

**THE TORONTO-DOMINION BANK**

 

**THE BANK OF NOVA SCOTIA**

 

as Co-Arrangers

 

-and-

 

**THE FINANCIALINSTITUTIONS NAMEDON THE SIGNATURE PAGES HERETO**

** **

as Lenders

 

**ROYALBANK OF CANADA, as Administrative Agent**

 

as of

 

November 28,2000, as amended as of April 7, 2008

 

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**$450,000,000**

 

**CREDIT AGREEMENT**

 

**(as amended by a First AmendingAgreement dated as of January 5, 2001,****a Second AmendingAgreement dated as of June 29, 2001, a Third Amending****Agreement dated December 12, 2001 and accepted by the Lenders asof****December 21, 2001, a Fourth AmendingAgreement dated as of December 23,****2002, a FifthAmending Agreement dated as of March 24, 2003, a Sixth****Amending Agreement dated as of October 8, 2003, a Seventh Amending****Agreement dated as of November 19, 2004, anEighth Amending****Agreement dated as of March 6,2008 and a Ninth Amending Agreement dated as of April 7, 2008)**

 

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**AMENDED AND RESTATED CREDIT AGREEMENT** entered into in the City of Montreal,Province of Quebec, as of November 28, 2000, as amended by a FirstAmending Agreement dated as of January 5, 2001, a Second AmendingAgreement dated as of June 29, 2001, a Third Amending Agreement dated December 12,2001 and accepted by the Lenders as of December 21, 2001, a FourthAmending Agreement dated as of December 23, 2002, a Fifth AmendingAgreement dated as of March 24, 2003, a Sixth Amending Agreement dated asof October 8, 2003, a Seventh Amending Agreement dated as of November 19,2004, and an Eighth Amending Agreement dated as of March 6, 2008,

 
| **AMONG:** | ** ** | **VIDÉOTRON  LTÉE**, a company  constituted in accordance with the laws of Quebec, having its registered  office at 300 Viger Street East, 6th floor, in the  City of Montreal, Province of Quebec (hereinafter called the “**Borrower**”)                 |
|------------|------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|       |       |                                                                                                                                                                                                                                                                                |
| ** ** | ** ** | **PARTY  OF THE FIRST PART**                                                                                                                                                                                                                                                        |
|       |       |                                                                                                                                                                                                                                                                                |
| **AND:**   | ** ** | **THE FINANCIAL INSTITUTIONS NAMED ON THE  SIGNATURE PAGE HEREOF OR FROM TIME TO TIME PARTIES HERETO**(the “**Lenders**”)                                                                                                                                                 |
|       |       |                                                                                                                                                                                                                                                                                |
| ** ** | ** ** | **PARTIES  OF THE SECOND PART**                                                                                                                                                                                                                                                     |
|       |       |                                                                                                                                                                                                                                                                                |
| **AND:**   | ** ** | **ROYAL****BANK OF CANADA, AS  ADMINISTRATIVE AGENT FOR THE LENDERS,** a Canadian bank, having a  place of business at 200 Bay Street, 12th floor, South  Tower, Royal Bank Plaza, in the City of Toronto, Province of Ontario  (hereinafter called the “**Agent**”) |
|       |       |                                                                                                                                                                                                                                                                                |
| ** ** | ** ** | **PARTY  OF THE THIRD PART**                                                                                                                                                                                                                                                        |

 

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

 

NOW THEREFORE, THE PARTIES HERETO HAVE AGREED ASFOLLOWS:

 

# **1.**             INTERPRETATION

# ** **

1.1           **Definitions**

 

The following words and expressions, when used in thisAgreement or in any agreement supplementary hereto, unless the contrary isstipulated, have the following meaning:

 

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### 1.1.1                  “**Acquisition**” means, withrespect to any Person, any transaction or series of related transactionswhereby such Person acquires, directly or indirectly, (a) a business,division, or all or a substantial portion of the assets of any other Person; (b) anyInvestment; or (c) by way of reorganization, consolidation, amalgamation,winding-up, merger, transfer, sale, lease or other combination, the assets orshares of any other Person; and “**Acquire**” and **“Acquired**” have meanings correlative thereto;

###  

### 1.1.2                  “**Additional Offering**”****means anOffering of unsecured Debt incurred or issued by the Borrower having a maturitydate (meaning the date on which repayment can be required by the lender, notthe date of any initial maturity leading to an automatic conversion orreplacement) expiring after the expiry of the Term, the terms and conditions ofwhich Offering (including any automatic conversion or replacement as aforesaidand excluding, for greater certainty, (a) pricing, and (b) the rightto require a replacement via an unsecured term loan or an offering of unsecuredhigh yield Debt in an amount equal to the Additional Offering being replaced (“**AO Replacement Debt**”)) are no morefavourable to the Persons providing such Debt, in all material respects, thanthe provisions hereof; for greater certainty, for the purposes of paragraph (j) ofSection 13.8, any such AO Replacement Debt will not be considered a newincurrence of Debt;

###  

### 1.1.3                  “**Advance**” meansany advance by a Lender under this Agreement, including direct Advances by wayof Prime Rate Advances and indirect Advances by way of BA Advances (or, in thecase of Lenders who are Foreign Lenders who cannot make such forms of Advances,Libor Advances in Cdn. $, or, in the circumstances set out in Section 4.11,Libor Advances in US$);

###  

### 1.1.4                  “**Affiliate**” hasthe meaning ascribed thereto in the Canada Business Corporations Act and, withrespect to any Lender that is a fund that invests in bank loans, includes anyother fund that invests in bank loans and is advised or managed by the sameinvestment advisor as such Lender or by an Affiliate of such investmentadvisor;

###  

### 1.1.5                  “**Agency Branch**”means the branch of the Agent located at Royal Bank Plaza, South Tower, 12th Floor, in theCity of Toronto, Province of Ontario, M5J 2W7, or such other address in Canadaof which the Agent may notify the Borrower from time to time;

###  

### 1.1.6                  “**Agent**” meansRoyal Bank of Canada in its capacity as agent for all of the Lenders;

###  

### 1.1.7                  “**Agreement**”, “**Credit Agreement**”, “**these presents**”,“**herein**”, “**hereby**”,“**hereunder**” and other similarexpressions refer collectively to this Credit Agreement and the Schedules andappendices hereto as same may be amended or amended and restated from time totime, and include any deed or document which is supplementary or accessory orwhich is made in order to 

 

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### complete thisAgreement, as all of same may subsequently be amended,amended and restated, modified, supplemented or replaced from time to time;

###  

### 1.1.8                  “**Annual Business Plan**” means, for any financial year, (a) detailedprojected balance sheets, income statements, statements of cash flows andCapital Expenditures budgets of the VL Group, prepared on a Consolidated basis,in respect of such financial year and each financial quarter therein and inrespect of, and as at the last day of, each of the next two following financialyears, in each case supported by appropriate explanations, notes andinformation and commentary; and (b) a detailed narrative of the businessesof the VL Group for the financial year then ended and for the followingfinancial year which shall include a management discussion and analysis, insufficient detail, all as approved by the board of directors of the Borrower;

###  

### 1.1.9                  “**Asset Disposition**”has the meaning ascribed to it in subsection 1.1.90.1;

###  

### 1.1.10                “**Assignment**”means an assignment of all or a portion of a Lender’s rights and obligationsunder this Agreement in accordance with Sections 16.2 and 16.3, and “Assignee”has the meaning ascribed to it in subsection 16.2.1;

###  

### 1.1.11                “**Associate**” hasthe meaning ascribed thereto in the Canada Business Corporations Act;

###  

### 1.1.12                “**BA Advance**”means at any time the part of the Advances under the Revolving Facility whichthe Borrower has chosen to borrow by Bankers’ Acceptances, calculated based onthe face amount of such Bankers’ Acceptances;

###  

### 1.1.13                “**BA Proceeds**”means, (a) for any Bankers’ Acceptance issued hereunder, an amountcalculated on the applicable Acceptance Date (as defined in subsection 6.1.1)by multiplying: i) the face amount of the Bankers’ Acceptance by ii) thefollowing fraction:

###  

|   |   | 1                                                                                          |   |
|--------|--------|--------------------------------------------------------------------------------------------|--------|
|   |   | (1+ (Bankers’  Acceptance Discount Rate × Designated Period (in days)÷365)) |   |

 

### , with suchfraction being rounded up or down to the fifth decimal place and .00005 beingrounded up; and (b) with respect to Assignees that are not banks or thatdo not accept Bankers’ Acceptances, the face amount of Discount Notes issued tothem, less a discount established in the same manner as provided in (a) above(with references to “Bankers’ Acceptances” being replaced by references to “DiscountNotes”);

###  

### 1.1.14                “**BA Schedule I ReferenceLender**” means Royal Bank of Canada or such other Lender which is aSchedule I bank under the *Bank Act*(Canada) appointed by the Agent with the consent of the Borrower in replacementof the said Lender;

 

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### 1.1.15                “**BA Schedule II ReferenceLenders**” means Bank of America, N.A. Canada Branch and Credit SuisseFirst Boston, Toronto Branch, or such other Lenders which are Schedule II orSchedule III banks under the *Bank Act*(Canada) appointed by the Agent with the consent of the Borrower in replacementof such Lenders;

###  

### 1.1.16                “**Back-to-Back Debt**”means any loans made or debt instruments issued as part of a Back-to-BackTransaction and in which each party to such Back-to-Back Transaction, otherthan a member of the VL Group, executes a subordination agreement in favor ofthe Agent in substantially the form attached hereto as Schedule “N”;

###  

### 1.1.17                “**Back-to-Back PreferredShares**” means preferred shares issued:

###  

(a)           to a member of the VL Group by anAffiliate of the Borrower in circumstances where, immediately prior to theissuance of such preferred shares, an Affiliate of such member of the VL Grouphas loaned on an unsecured basis to such member of the VL Group, or anAffiliate of such member of the VL Group has subscribed for preferred shares ofsuch member of the VL Group in an amount equal to, the requisite subscriptionprice for such preferred shares;

 

(b)           by a member of the VL Group to one of itsAffiliates in circumstances where, immediately prior to or immediately after,as the case may be, the issuance of such preferred shares, such member of the VLGroup has loaned an amount equal to the proceeds of such issuance to anAffiliate on an unsecured basis; or

 

(c)           by a member of the VL Group to one of itsAffiliates in circumstances where, immediately after the issuance of suchpreferred shares, such member of the VL Group has used all of the proceeds ofsuch issuance to subscribe for preferred shares issued by an Affiliate;

 

in each case on terms whereby:

 

(i)            the aggregate redemption amountapplicable to the preferred shares issued to or by such member of the VL Groupis identical:

 

(A)          in the case of (a) above, to theprincipal amount of the loan made or the aggregate redemption amount of thepreferred shares subscribed for by such Affiliate prior to the issuancethereof;

 

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

 

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

 

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(ii)           the dividend payment date applicable tothe preferred shares issued to or by such member of the VL Group will:

 

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

 

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

 

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

 

(iii)          theamount of dividends provided for on any payment date in the share conditionsattaching to the preferred shares issued:

 

(A)          to a member of the VL Group in the caseof (a) above, will be equal to or in excess of the amount of interestpayable in respect of the loan made or the amount of dividends provided for inrespect of the preferred shares subscribed for by such Affiliate prior to theissuance thereof;

 

(B)           by a member of the VL Group in the caseof (b) above, will be equal to or less than the amount of interest payablein respect of the loan made to such Affiliate with the proceeds of the issuancethereof; or

 

(C)           by a member of the VL Group in the caseof (c) above, will be equal to the amount of dividends in respect of thepreferred shares issued by such Affiliate with the proceeds of the issuancethereof.

 

Provided, for greater certainty, that in all cases, (I) theredemption of any preferred shares by a member of the VL Group, (II) therepayment of any Back-to-Back Debt by a member of the VL Group, (III) thepayment of any dividends by a member of the VL Group in respect of itspreferred shares, and (IV) the payment of any interest on Back-to-BackDebt of a member of the VL Group, may, in each case, be made by a member of theVL Group solely by delivering the relevant Back-to-Back Securities to theAffiliate in question, or by paying to the Affiliate an amount in cash not inexcess of the amount already received in cash from such Affiliate;

 

### 1.1.18                “**Back-to-Back Securities**”means the Back-to-Back Preferred Shares or the Back-to-Back Debt or both, asthe context requires;

###  

### 1.1.19                “**Back-to-Back Transactions**”means any of the transactions described under the definition of Back-to-BackPreferred Shares;

###  

### 1.1.20                “**Bankers’ Acceptance**”means a non-interest bearing draft or bill of exchange in Canadian Dollarsdrawn and endorsed by the Borrower and accepted by a Lender in accordance withthe provisions of Article 6, and includes a Discount 

 

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### Note where thecontext permits.  Subject to the Lenderselecting to use a clearing house as contemplated by the Depository Bills andNotes Act (S.C. 1998 c. 13) (the “**Act**”),“Bankers’ Acceptance” shall mean a depository bill (as defined in the Act) inCanadian Dollars signed by the Borrower and accepted by a Lender.  Drafts or bills of exchange that becomedepository bills may nevertheless be referred to herein as “drafts”;

###  

### 1.1.21                “**Bankers’ AcceptanceDiscount Rate**” means (a) in respect of Bankers’ Acceptances tobe purchased by the Lenders which are Schedule I banks under the *Bank Act* (Canada), the average rate for Canadian Dollarbankers’ acceptances having Designated Periods of 1, 2, 3, or 6 months quotedon Reuters Service, page CDOR “Canadian Interbank Bid BA Rates” (the “**CDOR Rate**”), having an identical Designated Period to thatof the Bankers’ Acceptance to be issued on such day, and (b) in respect ofBankers’ Acceptances to be purchased by the Lenders which are Schedule II orSchedule III banks under the *Bank Act*(Canada) and in respect of Discount Notes, the lesser of (i) thearithmetic average (rounded upward to the nearest one hundredth of one percent(.01%)) of the discount rates for Canadian Dollar bankers’ acceptances quotedby the BA Schedule II Reference Lenders, and (ii) the rate specified in (a) aboveplus 10 basis points (.10%) (in each of cases (a) and (b), the “**Discount Rates**”).  Inall cases, the Discount Rates shall be quoted at approximately 10:00 a.m.(Montreal time) on the Acceptance Date calculated on the basis of a year of 365days.

###  

### In the absence ofany such quote, the Bankers’ Acceptance Discount Rate which would have beendetermined in accordance with paragraph (a) or paragraph (b) above,respectively, shall be equal to the rate determined from time to time by theAgent as the discount rates for bankers’ acceptances of

###  

(A) in the case of paragraph (a), the BA ScheduleI Reference Lender; and

 

(B) in the case of paragraph (b), the BA ScheduleI Reference Lender plus 10 basis points (.10%);

 

### established in accordancewith its normal practices in amounts equal to the Selected Amount, having anidentical Designated Period to that of the proposed Bankers’ Acceptances to beissued on such day;

###  

### 1.1.22                “**Banking Day**”means any day which is at the same time a Business Day and a day on whichbanking institutions are not authorized by law or by local proclamation toclose for business in New York (USA) and in London (England);

###  

### 1.1.23                “**Branch**” meansthe branch of Royal Bank of Canada located at 1 Place Ville Marie, or any otherbranch designated by the Agent from time to time by notice to the Borrower;

 

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### 1.1.24                “**Business Day**”means any day, except Saturdays, Sundays and other days which in Montreal orToronto (Canada) are holidays or a day upon which banking institutions are notauthorized or required by law or by local proclamation to close;

###  

### 1.1.25                “**Canadian Dollars**”or “**Cdn.**$” means the lawful currency ofCanada;

###  

### 1.1.26                “**Capital Expenditures**”means the aggregate amount actually paid in cash in any period by the VL Groupfor or in connection with the acquisition or maintenance of assets required tobe capitalized, including expenditures of the type described in the lastsentence of Section 13.9, determined on a Consolidated basis and otherwisein accordance with GAAP other than, for greater certainty, expenditures forAcquisitions permitted by Section 13.7;

###  

### 1.1.27                “**Capital Lease**” means any lease (a) whichis required to be capitalized on a balance sheet of the lessee in accordancewith GAAP, or (b) for which the amount of the asset and liabilitythereunder should be disclosed in a note to such balance sheet as if socapitalized in accordance with GAAP;

###  

### 1.1.28                “**Cash Equivalents**”means, as of the date of any determination thereof, instruments of thefollowing types:

###  

#### 1.1.28.1                   obligations of or unconditionally guaranteed by the governments ofCanada or the United States of America (“**USA**”), or anyagency of any of them backed by the full faith and credit of the governments ofCanada or the USA, respectively, maturing within 364 days of acquisition;

####  

#### 1.1.28.2                   marketable direct obligations of the governments of one of theprovinces of Canada, one of the states of the USA, or any agency thereof, or ofany county, department, municipality or other political subdivision of Canadaor the USA, the payment or guarantee of which constitutes a full faith andcredit obligation of such province, state, municipality or other politicalsubdivision, which matures within 364 days of acquisition and which iscurrently accorded a short-term credit rating of at least A-1 by Standard &Poor’s Rating Services, a division of The McGraw-Hill Companies, Inc. (“**S & P**”) or at least Prime-1 by Moody’s InvestorsService, Inc. (“**Moody’s**”) orthe equivalent thereof from Dominion Bond Rating Service Inc. (“**DBRS**”);

####  

#### 1.1.28.3                   commercial paper, bonds, notes, debentures and bankers’ acceptancesissued by a Person residing in Canada or the 

 

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#### USA and notreferred to in subsections 1.1.28.1, 1.1.28.2 or 1.1.28.4, and maturing within364 days from the date of issuance which, at the time of acquisition, isaccorded a short-term credit rating of at least A-1 by S & P or atleast Prime-1 by Moody’s or the equivalent thereof from DBRS;

####  

#### 1.1.28.4                   (a) certificates of deposit maturing within 364 days from the dateof issuance thereof, issued by a bank or trust company organized under the lawsof the USA, any state thereof, or Canada or any province thereof, or (b) USDollar certificates of deposit maturing within 364 days of acquisition andissued by a bank in western Europe or the United Kingdom, in all cases havingcapital, surplus and undivided profits aggregating at least US $500,000,000 (orits equivalent in Canadian Dollars) and whose short-term credit rating is, atthe time of acquisition thereof, rated A-1 or better by S & P orPrime-1 or better by Moody’s (or the equivalent thereof from DBRS);

####  

### 1.1.29                “**Cash Management Facilities**”means the cash management facilities described in the two agreements (the “**Cash Management Agreements**”) entered into among VidéotronTélécom Ltée,  the Borrower, Groupe deDivertissement Superclub Vidéotron Ltée, Le Superclub Vidéotron Ltée,Protectron Inc., Vidéotron TVN Inc., CF Cable TV Inc., 2841-8044 Québec Inc.,2759-8911 Québec Inc., 9028-9778 Québec Inc., 2516527 Canada Inc., VidéotronIncotel Ltée, Vidéotron (1998) Ltée, Vidéotron Communications Inc., VidéotronTélécom (1998) Ltée, as participants, the Borrower as concentrator and The Toronto-DominionBank dated August 9, 1999, providing for an aggregate maximum net dailyoverdraft of $20,000,000 (which amount has been decreased to $15,000,000), assame has or may be amended or replaced from time to time;

###  

### 1.1.30                “**CF Cable Notes**”means the US $94,675,000 9 1/8% Senior Secured FirstPriority Notes issued by CF Cable TV Inc.;

###  

### 1.1.31                “**Change in Control**”means (a) the acquisition by any Person or group of Persons acting inconcert (other than Quebecor Media Inc. or any of its wholly-owned Subsidiaries)of a majority of the votes attached to the outstanding voting shares of theBorrower or any of the Initial VL Group Guarantors, or (b) any event whichresults in more than a majority of the votes attached to the outstanding sharesof Quebecor Media Inc. being held by a Person other than Quebecor Inc. and itsSubsidiaries;

###  

### 1.1.32                “**Charge**” meansany right to any property, or the income or benefits flowing therefrom, whichsecures an obligation due to a Person or a claim of such Person, whether suchinterest is based on the common law, statute or contract, and 

 

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### includes anysecurity interest, hypothec, pledge, pawn, mortgage, privilege, prior claim,lien, charge, assignment, transfer, cession, encumbrance, Capital Lease,Synthetic Lease, instalment sale, conditional sale or trust receipt or aconsignment or bailment for security purposes. The term “Charge” shall include reservations, exceptions, encroachments,easements, servitudes, rights-of-way, covenants, conditions, restrictions andother title exceptions and encumbrances (including, with respect to stock,stockholder agreements having the effect of restricting the ability, in anymaterial respect, of a Person to fulfill its obligations hereunder, votingtrust agreements and all similar arrangements) affecting property, but shallexclude, for greater certainty, the rights of lessors under operating leases(but not Synthetic Leases).  Solely forthe purposes of determining whether a Charge exists for the purposes of thisAgreement, a Person shall be deemed to be the owner of any property which ithas acquired or holds subject to a conditional sale agreement, Capital Lease orother arrangement pursuant to which title to the property has been retained byor vested in some other Person for security purposes and such retention orvesting shall constitute a Charge;

###  

### 1.1.33                “**Closing Date**”means November 28, 2000;

###  

### 1.1.34                “**Commitment**”means the portion of the Credit for which a Lender is responsible, as set outin Schedule “A” hereof;

###  

### 1.1.35                “**Compliance Certificate**”has the meaning ascribed to it in subsection 12.15.1;

###  

### 1.1.36                “**Consolidated**”means produced by aggregating the relevant financial statements or accounts ofthe VL Group on a line-by-line basis (i.e.: adding together corresponding itemsof assets, liabilities, revenues and expenses), eliminating inter-companybalances and transactions and providing for any minority interest, all asotherwise (i.e. except for the fact that the financial information in questionrelates to the members of the VL Group, all of which are owned, directly orindirectly, by the same Person, Quebecor Media Inc., but are not themselvesSubsidiaries of one another) determined in accordance with GAAP;

###  

### 1.1.37                “**Contingent Obligation**”of any Person means all contingent liabilities required to be included in thefinancial statements of such Person in accordance with GAAP, excluding anynotes thereto;

###  

### 1.1.38                “**Core Business**”means the business described in Section 11.4;

###  

### 1.1.39                “**Credit**” meansthe aggregate amount available to the Borrower under the Revolving Facility;

###  

### 1.1.40                “**CRTC**” means the Canadian Radio-television andTelecommunications Commission, or a successor regulatory body, commission oragency;

 

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### 1.1.41                “**Debenture**” means the Debenture to be issued in favour ofeach Lender (or in favour of a collateral agent designated by the Agent) by theBorrower and the Guarantors after the Phase II Date in accordance with theprovisions of subsection 9.2.4 or 9.2.9;

###  

### 1.1.42                “**Debenture Pledge**” means the pledge of the Debenture infavour of the Agent or any designated collateral agent by the Borrower and theGuarantors;

###  

### 1.1.43                “**Debt**” includes, for any Person,

###  

#### 1.1.43.1                                                     obligationsin respect of borrowed money, whether or not evidenced by notes, bonds,debentures or similar evidences of indebtedness of such Person;

####  

#### 1.1.43.2                                                     obligationsin respect of borrowed money and the Negative Value of Derivative Instruments,but without duplication of any underlying Debt that may be hedged by same, and,in particular, without taking into account the currency hedging in respect ofthe US$ denominated Debt referred to in the final paragraph of this definition;

####  

#### 1.1.43.3                                                     obligationsrepresenting the deferred purchase price of goods and services, other than suchobligations incurred in the ordinary course of business of the VL Group andpayable within a period not exceeding 120 days from the date of theirincurrence,

####  

#### 1.1.43.4                                                     theobligations, whether or not assumed, which are secured by Charges on theproperty belonging to such Person or payable out of the proceeds flowingtherefrom,

####  

#### 1.1.43.5                                                     ContingentObligations;

####  

#### 1.1.43.6                                                     obligationsunder Capital Leases and Synthetic Leases, and

####  

#### 1.1.43.7                                                     obligationsunder letters of credit, letters of guarantee, bankers’ acceptances orGuarantees,

####  

but shall not includeDebt under the Back-to-Back Securities. In addition, any Debt denominated in US$ which is validly andeffectively hedged through the use of one or more Derivative Instruments willbe calculated at the exchange rate applicable to such US$ Debt under theapplicable Derivative Instrument;

 

### 1.1.44                “**Default**” means an event or circumstances, the occurrence ornon-occurrence of which would, with the giving of a notice, lapse of time orcombination 

 

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### thereof, constitute anEvent of Default unless remedied within the prescribed delays or renounced toin writing by the Agent, as authorized by the Lenders;

###  

### 1.1.45                “**Derivative Instrument**” means an agreement entered into fromtime to time by a Person in order to control, fix or regulate currency exchangefluctuations, or the rate of interest payable on borrowings, including a rateswap transaction, basis swap, forward rate transaction, commodity swap,commodity option, equity or index equity swap, equity or index equity option,bond option, interest rate option, foreign exchange transaction, captransaction, floor transaction, collar transaction, currency swap transaction,cross-currency rate swap transaction, currency option or any other similartransaction (including any option with respect to any of these transactions andany combination of these transactions);

###  

### 1.1.46                “**Derivative Obligations**” means obligations of the Borrower toone or more Lenders under Derivative Instruments;

###  

### 1.1.47                “**Designated Period**” means, with respect to a Libor Advance ora BA Advance, a period designated by the Borrower in accordance with Sections4.2, 6.1 and 6.4, respectively;

###  

### 1.1.48                “**Disbursement Period**” means, with respect to the RevolvingFacility, the period from the Closing Date until the expiry of the Term,subject to satisfying the applicable conditions precedent set out in Article 10;

###  

### 1.1.49                “**Discount Note**” means a non-interest bearing promissory notedenominated in Canadian Dollars issued by the Borrower to a Lender or asub-participant which is a Non-BA Lender (as defined in subsection 6.1.2(b)),such note to be in the form normally used by such Lender or sub-participant;

###  

### 1.1.50                “**EBITDA**” means, during a financial period, earnings of the VLGroup before non-controlling interests, earnings from equity-accountedinvestments, extraordinary items, non-recurring gains or losses on debtextinguishment and asset sales and restructuring, Interest Expense, taxes,depreciation and amortization, foreign exchange translation gains or losses notinvolving the payment of cash and other non-cash financial charges, withouttaking into account any goodwill adjustments, calculated on a Consolidatedbasis, and otherwise in accordance with GAAP; for greater certainty, thereshall be excluded from the calculation of EBITDA, to the extent included insuch calculation, the amount of any income or expense relating to Back-to-BackSecurities and the costs arising out of the termination of the DerivativeInstruments associated with Term Facility B upon its repayment, in anapproximate amount of $8,000,000;

###  

### 1.1.51                “**Eighth Amendment Closing Date**” means March 6, 2008;

###  

### 1.1.52                “**Excess Cash Flow**” means the VL Group’s EBITDA calculated asat the end of each financial quarter, plus an amount equal to any spread paidto the 

 

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### Borrower resulting fromBack-to-Back Securities, to the extent not previously included in EBITDA, andless

###  

#### 1.1.52.1                  the amount oftaxes paid or otherwise due during the period in question;

####  

#### 1.1.52.2                  the amount ofany Interest Expense paid in cash (and not accrued); however, for the purposesof this definition alone, “Interest Expense” shall include all fees and expensesrelating to the HYD Offering, any Additional Offering and all other future DebtOfferings, except to the extent that the fees and expenses in question are paidfor out of the proceeds of such Debt Offerings and not out of the VL Group’scash flow;

####  

#### 1.1.52.3                  the amount ofall voluntary prepayments of Debt, other than (a) payments under theRevolving Facility or under the unsecured cash management facility notexceeding $10,000,000 permitted hereunder, (b) voluntary prepayments usingthe proceeds of Asset Dispositions and Offerings, and (c) voluntaryprepayments of the QMI Subordinated Debt made in accordance with Section 13.10hereof;

####  

#### 1.1.52.4                  the amount ofextraordinary items not included in earnings but which required the payment ofcash;

####  

#### 1.1.52.5                  the amount ofany mandatory principal repayment (other than Mandatory Repayments undersubsections 8.2.1 and 8.2.2) of Debt that is permitted hereunder; and

####  

#### 1.1.52.6                  the sum of (1) theamount of Capital Expenditures made during such period that have not beenfinanced separately out of (i) the proceeds of Debt permitted hereunder; (ii) equityobtained after the date hereof; or (iii) the Net Proceeds arising out ofAsset Dispositions made during the period which are not used to make MandatoryRepayments under subsection 8.2.1 and (2) the amount, if any, by which $18,750,000exceeds the actual Capital Expenditures made during such period;

####  

provided, however,that no amount will be so deducted if such amount has already been deductedfrom the VL Group’s EBITDA;

 

### 1.1.53                “**Existing Credit Agreement**” means the $800,000,000 creditagreement, dated as of December 11, 1997, among the Borrower, CF Cable TVInc., 

 

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### Vidéotron.Net Ltée andthe lenders named therein, as amended prior to the Closing Date;

###  

### 1.1.54                “**Event of Default**” means one or more of the events describedin Section 14.1;

###  

### 1.1.55                “**Facility**” or “**Revolving Facility**”means the Credit available pursuant to Section 2.1;

###  

### 1.1.56                “**Facility Fee**” has the meaning ascribed to it in subsection5.11.1;

###  

### 1.1.57                “**Fees**” means the fees payable to the Agent and to the Lendersin accordance with the provisions of Section 5.11;

###  

### 1.1.58                “**First Currency**” has the meaning ascribed to it pursuant to Section 15.1;

###  

### 1.1.59                “**Foreign Lenders**” has the meaning ascribed to it in Section 17.15;

###  

### 1.1.60                “**Generally Accepted Accounting Principles**” or “**GAAP**” means the generally accepted accounting principlesacknowledged by the Canadian Institute of Chartered Accountants and publishedin the Canadian Institute of Chartered Accountants’ Handbook;

###  

### 1.1.61                “**Guarantees**” by any Person means all obligations (other thanendorsements in the ordinary course of business of negotiable instruments fordeposit or collection) of such Person guaranteeing, or in effect guaranteeing,any Indebtedness, dividend or other obligation of any other Person (the “**Primary Obligor**”) in any manner, whether directly orindirectly, including all obligations incurred through an agreement, contingentor otherwise, by such Person: (a) to purchase such Indebtedness orobligation or any property or assets constituting security therefor, (b) toadvance or supply funds (i) for the purchase or payment of suchIndebtedness or obligation, or (ii) to maintain working capital or otherbalance sheet condition or otherwise to advance or make available funds for thepurchase or payment of such Indebtedness or obligation against loss, (c) tolease property or to purchase securities or other property or servicesprimarily for the purpose of assuring the owner of such Indebtedness orobligation, or (d) otherwise to assure the owner of the Indebtedness orobligation of the Primary Obligor against loss in respect thereof.  For the purposes of all computations madeunder this Agreement, a Guarantee in respect of any Indebtedness for borrowedmoney, and a Guarantee in respect of any other obligation or liability or anydividend, shall be deemed to be Indebtedness equal to the maximum aggregateamount of such obligation, liability or dividend, unless the Guarantee islimited in amount, in which case such limit shall be used for such computation;

 

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### 1.1.62                “**Guarantors**” means, (a) prior to the Phase II Date, Vidéotron (1998) ltée, Le SuperClubVidéotron ltée and 9096-5807 Quebec Inc. (successor to the business ofVidéotron TVN Inc.) (collectively the “**Initial VL GroupGuarantors**”), as well as GVL and Quebecor Media Inc., and (b) followingthe Phase II Date, (i) Quebecor Media Inc. but only as specified in Section 10.5,(ii) GVL, if not amalgamated with or wound up into Quebecor Media Inc. oranother wholly-owned Subsidiary of Quebecor Media Inc. at such time, (iii) theInitial VL Group Guarantors, and (iv) all of the wholly-owned Subsidiariesof the Borrower and of the Initial VL Group Guarantors, excluding ConsortiumCâble-Axion Digitel Inc. and its Subsidiaries, and including, (a) afterthe CF Cable Notes have been paid or as permitted thereunder, CF Cable TV Inc.and its Subsidiaries, and (b) all Subsidiaries of the Initial VL GroupGuarantors created or acquired after the Closing Date.  A list of the Guarantors as of June 29, 2001 is provided inSchedule “L” hereto, and as of the Eighth Amendment Closing Date is provided inSchedule “M” hereto;

###  

### 1.1.63                “**GVL**” means LeGroupe Vidéotron ltée;

###  

### 1.1.64                “**HYD Offering**” means the Offering by the Borrower ofapproximately US$335,000,000 in senior unsecured notes due January 15,2014 which shall have occurred on the Sixth Amendment Closing Date, the termsand conditions of which Offering will be satisfactory to the Lenders;

###  

### 1.1.65                “**Initial VL Group Guarantors**” has the meaning ascribed to itin the definition of “Guarantors”;

###  

### 1.1.66                “**Indebtedness**” of any Person means (without duplication) allobligations of such Person which in accordance with GAAP should be classifiedupon a balance sheet of such Person as liabilities of such Person, and in anyevent includes all Debt of such Person;

###  

### 1.1.67                “**Inter-Creditor Agreement**” means that certain Inter-CreditorAgreement dated as of June 29, 2001 executed by the Agent on behalf of theLenders, The Chase Manhattan Bank, as trustee, CF Cable TV Inc. and others inrelation to the rights of various creditors of CF Cable TV Inc. and itsSubsidiaries, as same may be amended or replaced from time to time;

###  

### 1.1.68                “**Interest Coverage Ratio**” means, for any period, the ratio ofEBITDA to Interest Expense in respect of the VL Group for such period;

###  

### 1.1.69                “**Interest Expense**” for any period means all interest and allamortization of debt discount and expense (excluding fees and expenses relatingto the Transaction and the financing thereof or to the HYD Offering, anyAdditional Offering or to any other future financing) on any particularIndebtedness for which such calculations are being made in respect of the VLGroup, excluding interest onthe Back-to-Back Debt to the extent offset by an equal amount of dividends onthe Back-to-Back Preferred Shares, as well as any interest not paid in cash or other 

 

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### assets of the Borrower on the QMI Subordinated Debt, calculatedon a Consolidated basis, including the interest component of Capital Leases,and discounts and fees payable in respect of bankers’ acceptances or accountsreceivable sold in connection with any asset securitization program approved bythe Lenders;

###  

### 1.1.70                “**Investments**” means all investments, in cash or by deliveryof property, made directly or indirectly in any Person, whether by acquisitionof shares of capital stock, Indebtedness or other obligations or securities orby loan, advance, capital contribution or otherwise; *provided,however,* that “Investments” shall not mean or include investments incash or Cash Equivalents or routine investments in inventory, equipment andsupplies to be used or consumed, or trade credit granted, in the ordinarycourse of business;

###  

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

###  

### 1.1.72                “**Issuing Lender**” means Royal Bank of Canadaas the issuer of Letters of Credit (in that capacity), or any successor issuerof Letters of Credit.  For greatercertainty, where the context requires, references to “Lenders” herein includethe Issuing Lender;

###  

### 1.1.73                “**Joinder Agreement**” means an agreement substantially in theform of Schedule “O”.

###  

### 1.1.74                “**Laws**” or “**Law**” means allapplicable provisions of all laws, ordinances, decrees, orders, rules,regulations and directives of governmental bodies, and all applicable provisionsof treaties, as well as all rulings, orders and other decrees of tribunals andarbitrators;

###  

### 1.1.75                “**LC Fees**” has the meaning ascribed to suchterm in subsection 4.3.2;

###  

### 1.1.76                “**Lender**” or “**Lenders**” meansthe Revolving Facility Lenders listed in Schedule “A”, together with anyAssignee(s), or, as the context permits, any of them alone.  When used in connection with “DerivativeInstruments”, 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 Derivative Instrument,provided that the counterparty was a Lender or an Affiliate of a Lender at thetime any such Derivative Instrument was entered into;

###  

### 1.1.77                “**Letter of Credit**” means any stand-by letterof credit or letter of guarantee issued by the Issuing Lender in connectionwith the Spectrum Auction and Purchase in accordance with the provisionshereof;

 

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### 1.1.78                “**Leverage Ratio**” means, as of any date of determination, theratio of Debt (excluding the QMI Subordinated Debt) as of such date to EBITDA forthe preceding four quarters ending on such date;

###  

### 1.1.79                “**LIBOR**” means, with respect to any Designated Period of 1, 2,3 or 6 months relating to a Libor Advance, the average rate for deposits inCdn. $ for Foreign Lenders under the Revolving Facility (except in thecircumstances described in Section 4.11, in which case the applicable ratewill be for US$ deposits) for a period comparable to the Designated Periodwhich, if in US $, is quoted on Libor01 Page of Reuters, and if in Cdn. $,is quoted on Libor02 Page of Reuters or, in case of the unavailability ofeither such page, which is quoted on the British Bankers Association LiborRates Telerate (page 3750 for US $ or 3740 for Cdn. $, or other applicablepage), in either case at or about 11:00 a.m. (London, England time),determined two Banking Days prior to the date on which a Libor Advance is to bemade in accordance with Section 5.6; if neither of such quotes isavailable, then LIBOR shall be determined by the Agent as the average of therate at which deposits in US$ or Cdn. $, as the case may be, for a periodsimilar to the Designated Period and in amounts comparable to the amount ofsuch Libor Advance are offered by the Libor Reference Lenders to prime banks inthe London inter-bank market at or about 11:00 a.m. London, England timeon the date of such determination;

###  

### 1.1.80                “**Libor Advance**” means, at any time, any Cdn. $ Advances madeby Foreign Lenders, or, in the circumstances described in Section 4.11,US$ Advances made by Foreign Lenders;

###  

### 1.1.81                “**Libor Basis**” means the basis of calculation of interest onLibor Advances, or any part thereof, made in accordance with the provisions ofSections 5.3 and 5.4;

###  

### 1.1.82                “**Libor Reference Lenders**” means any two Lender(s) appointedby the Agent with the consent of such Lenders and the Borrower, actingreasonably;

###  

### 1.1.83                “**Licences**”****means all licences, permits and authorizations issued to the VLGroup by the CRTC pursuant to the *Broadcasting Act*(Canada) and the orders, rules, regulations and directions promulgated pursuantto such Act;

###  

### 1.1.84                “**Loan**” means, at any time, the aggregate of the Advancesoutstanding in accordance with the provisions hereof, including the face amountof any Bankers’ Acceptances and Letters of Credit issued in accordance with theprovisions hereof, together with all unpaid interest thereon and any otheramount in principal, interest and accessory costs payable to the Agent or theLenders by the Borrower pursuant hereto, including, for greater certainty,amounts contemplated by Section 5.7;

###  

### 1.1.85                “**Majority Lenders**”****means Lendershaving at least 51% of the Commitments;

 

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### 1.1.86                “**Mandatory Repayment**” means the repayment of all or any partof the Loan which the Borrower is obliged to effect in accordance with Section 8.2;

###  

### 1.1.87                “**Margin**” means, for Prime Rate Advances, Stamping Fees, LCFees and Facility Fees, as well as Libor Advances by Foreign Lenders, under theRevolving Facility, the following annual percentages depending on the VL Group’sthen-applicable Leverage Ratio, determined at the times and in the manner setout below the table:

 
| **Leverage Ratio** | ** ** | **Facility Fees** | ** ** | **Prime Rate plus** | ** ** | **Stamping Fees or Cdn$ Libor plus or LC Fee** |
|--------------------|------------|-------------------|------------|---------------------|------------|-----------------------------------------------------|
|               |       |              |       |                |       |                                                |
|               |       |              |       |                |       |                                                |
|               |       |              |       |                |       |                                                |
|               |       |              |       |                |       |                                                |

 

Each changeresulting from a change in the Leverage Ratio shall be effective with respectto all outstanding Loans retroactively from the first day of each fiscalquarter of the Borrower, and shall be based on the VL Group’s financialstatements and Compliance Certificates required by subsections 12.15.1 and12.15.2, as applicable, and the Leverage Ratio derived from such financialstatements.  Thus, the financialstatements and Compliance Certificates which shall be delivered 60 days afterquarter-end and 75 days after year-end (based on unaudited results and subjectto readjustment upon delivery of a second Compliance Certificate in accordancewith the provisions of subsection 12.15.2(b)) will be used to calculate theLeverage Ratio applicable from the first day of the quarter in which suchfinancial statements and Compliance Certificates were to be delivered.  For example, the financial statements andCompliance Certificates to be delivered in respect of the quarter ending May 31of any year of the Term shall be delivered by July 30 of that year, andshall be used to calculate the Leverage Ratio for the period from June 1of that year to August 31 of that year. If, as a result of an increase in the Leverage Ratio, the Margin hasincreased, the Agent will advise the Borrower and the Lenders and the Borrowerwill pay all additional amounts that may be due to the Lenders within 2Business Days of being advised of the amount due.  If, as a result of a reduction in theLeverage Ratio, the Margin has been reduced, the Agent shall advise theBorrower and the Lenders and the amounts owed to the Borrower (a) will bededucted from the Stamping Fees otherwise payable in the case of a BA Advance,on the next Rollover Date of the relevant BA Advance, or (b) in the caseof Prime Rate Advances, will be deducted from the interest otherwise payable bythe Borrower on the next interest payment date contemplated by Section 5.2,or (c) in the case of 

 

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Letters of Credit,will be deducted from the LC Fees otherwise payable by the Borrower on the nextLC Fee payment date contemplated by Section 4.3.2, and (d) if nointerest or Stamping Fees are payable during that period, the Lenders shallremit the necessary amounts to the Agent for payment to the Borrower;

 

### 1.1.88                “**Material Adverse Change**” means a material adverse change in (i) thebusiness, assets, liabilities, financial position, operating results orbusiness prospects of the VL Group, taken as a whole, or (ii) in theability of the Borrower and the Guarantors to perform any of their obligationshereunder or under the Security Documents, or (iii) the validity or enforceability of thisAgreement or the Security Documents or of the rights and remedies of the Agentor the Lenders hereunder or under the Security Documents;

###  

### 1.1.89                “**Negative Value of Derivative Instruments**” means theaggregate amount that would be payable to all Persons by the Borrower on thedate of determination pursuant to Section 6(e)(ii)(2)(A) of each ISDAMaster Agreement between the Borrower and such Persons as if all DerivativeInstruments under such ISDA Master Agreements were being terminated on thatday; provided that, with respect to the Derivative Instruments between eachLender and the Borrower, each Lender will determine Market Quotation (as suchterm is defined in the ISDA Master Agreement) using its estimates at mid-marketof the amounts that would be paid for Replacement Transactions (as such term isdefined in the ISDA Master Agreement);

###  

### 1.1.90                “**Net Proceeds**” means, for the purposes of Sections 8.2, 13.3,13.4 and 13.11:

###  

#### 1.1.90.1                  the gross amountof proceeds payable to any member of the VL Group in cash or Cash Equivalentsarising from the sale, lease, transfer, assignment or other disposition oralienation of any of the property (including shares, capital stock andownership interests) of any member of the VL Group (an “**AssetDisposition**”), less amounts payable to discharge or radiatePermitted Charges on the assets being disposed of, and less the amount of taxesarising from each such Asset Disposition and which cannot be offset againstlosses, depreciation or otherwise such that same must actually be paid in cash;****and

####  

#### 1.1.90.2                  the gross amountof proceeds payable to any member of the VL Group in cash or Cash Equivalentsfrom any public or private offering of equity securities or Debt permittedhereunder of any member of the VL Group (herein called an “**Offering**”);

 

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### in each case, minus reasonable out-of-pocket costs,fees and expenses incurred in connection with such Asset Disposition orOffering, including commissions but excluding any amounts paid to Affiliates;

###  

### 1.1.91                “**Ninth Amendment ClosingDate**” means April 7, 2008;

###  

### 1.1.92                “**Notice of Borrowing**” means a notice substantially in theform of Schedule “B” transmitted to the Agent by the Borrower in accordancewith the provisions of Sections 4.1 or 4.2, or of subsection 6.1.1;

###  

### 1.1.93                “**Offering**” has the meaning ascribed to it in the definitionof “Net Proceeds”;

###  

### 1.1.94                “**Permitted Charges**” means the Charges created by the SecurityDocuments and, with respect to any Person:

###  

#### 1.1.94.1                  any Chargecreated by law that is assumed in the ordinary course of business and in orderto exercise same, which, in the case of construction Charges in favour ofcontractors, sub-contractors, workmen, suppliers of materials, engineers andarchitects, has not at such date been registered in accordance with applicableLaws against such Person, which relates to obligations which are not yet due ordelinquent, which is not related to any loan of money or obtention of creditand which, in the aggregate, do not affect in a material way the use, theincome or the benefits flowing from the property so charged in the conduct ofthe business of such Person; any Charge resulting from judgments or decisionswhich such Person has, at such date, appealed or in respect of which it hassought revision and obtained a suspension of execution pending the appeal orthe revision; any Charge for taxes, assessments or governmental claims or otherimpositions not yet due or matured or in respect of which the validity at suchdate has been contested in good faith by such Person before a competenttribunal or other governmental body in accordance with the provisions of Section 12.7;or which relates to a deposit of monies or securities in the ordinary course ofbusiness with respect to any Charge referred to in this paragraph, or to secureworkmen’s compensation, surety or appeal bonds or security for costs oflitigation; or any Charge in favour of a landlord on movable or personalproperty to secure the payment of rent and other amounts owing under leases forimmovable or real property, provided the Charge is limited to property situatedon the leased premises;

 

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#### 1.1.94.2                  any right of amunicipality, governmental body or other public authority pursuant to anylease, license, franchise, grant or permit obtained by such Person, or anyright resulting from a legislative provision, to terminate such lease, license,franchise, grant or permit, or requiring an annual or periodic payment as acondition of its extension;

####  

#### 1.1.94.3                  Charges infavour of a public body, or to a municipal or governmental authority or publicutility, or which may be imposed by one or the other, when required by suchbody or authority with respect to the operations of such Person or in theordinary course of its business;

####  

#### 1.1.94.4                  Charges grantedin favour of municipal authorities or public utilities on immovables acquiredfrom time to time by such Person which do not adversely affect the value ormarketability of such Person ‘s immovable property in any material respect;

####  

#### 1.1.94.5                  title defects, homologatedlines, zoning and building by-laws, ordinances, regulations and othergovernmental restrictions on the use of property, or servitudes, easements orother similar encumbrances, provided that none of the foregoing adverselyaffect the value or marketability of such Person’s immovable property in anymaterial respect;

####  

#### 1.1.94.6                  Charges tosecure the payment of the purchase price incurred in connection with theacquisition after the Closing Date of assets to be used in carrying on the CoreBusiness, including Charges existing on such assets at the time of theacquisition thereof or at the time of the acquisition by a member of the VLGroup of any business entity then owning such assets, whether or not suchexisting Charges were given to secure the payment of the purchase price of theassets to which they attach, provided that such Charges are limited to theassets purchased and that the amount guaranteed by such Charges does not exceed100% of the acquisition price of the assets so acquired, and, in the aggregate,$10,000,000 outstanding at any time;

####  

#### 1.1.94.7                  Charges on theshares of the Borrower and the Initial VL Group Guarantors in favour of thelenders under the****Quebecor Media Credit Facility,which shall be a second-

 

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#### ranking Charge until the Phase II Date, and which thereafter will rankahead of the Charges on such shares in favour of the Lenders until all amountsowed under the Quebecor Media Credit Facility have been paid in full and thesaid credit facility cancelled;

####  

#### 1.1.94.8                  Chargesdisclosed in Schedule “H”, including any extension, renewal or refinancingthereof provided the amount secured by such Charge does not exceed the amountso secured immediately prior to such extension, renewal or refinancing thereof,and provided that the property subject to such Charge is not extended;

####  

### 1.1.95                “**Person**” means a legal person, a natural person, a jointventure, a partnership, a trust, an entity without juridical personality, agovernment or any ministry, organization or intermediary of such government;

###  

### 1.1.96                “**Phase II Date**” means the date on which all of the conditionsprecedent to an Advance under the previously existing Term Facility A-2 andTerm Facility B were met and the initial Advance under the said Term FacilityA-2 was made, such that the Quebecor Media Guarantee may be released by theAgent on behalf of the Lenders three months and one day later, in accordancewith the provisions of Section 10.5 hereof;

###  

### 1.1.97                “**Prime Rate**” means, on any day, the reference rate ofinterest, expressed as an annual rate, publicly announced or posted from timeto time by Royal Bank of Canada as being its reference rate then in effect fordetermining interest rates on demand commercial loans granted in Canada inCanadian Dollars to its clients (whether or not any such loans are actuallymade); provided that in the event that the Prime Rate is, at any time, lessthan the average one month Bankers’ Acceptance rate quoted on Reuters Service, page CDOR,as at approximately 10:00 a.m. on such day plus  % (the “**BA Rate**”), “Prime Rate” shall be equal to the BA Rate;

###  

### 1.1.98                “**Prime Rate Advance**” means, at any time, the portion of theAdvances in Canadian Dollars with respect to which the Borrower has chosen, or,in accordance with the provisions hereof, is obliged, to pay interest on thePrime Rate Basis;

###  

### 1.1.99                “**Prime Rate Basis**” means the basis of calculation of intereston the Prime Rate Advances, or any part thereof, made in accordance with theprovisions of Sections 5.1 and 5.2;

###  

### 1.1.100              “**QMI SubordinatedDebt**” has the meaning ascribed to it in Section 13.8;

 

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### 1.1.101              “**Quebecor Media Guarantee**” has the meaning ascribed to it insubsection 9.1.1;

###  

### 1.1.102              “**Quebecor Media CreditFacility**” means thecredit facility in the amount of $2,090,000,000 established pursuant to thecredit agreement entered into on October 23, 2000 by Quebecor Media Inc.as borrower, Quebecor Communications Inc., GVL, Quebecor New Media Inc., Canoe:Canadian Online Explorer Inc., Quebecor New Media Limited Partnership,9076-1883 Quebec Inc., 9076-1859 Quebec Inc. and 3588386 Canada Inc. asguarantors, the financial institutions named therein as lenders, RBC DominionSecurities Inc. as lead arranger and bookrunner, Bank of America Canada, BMONesbitt Burns Inc. and The Toronto-Dominion Bank as co-arrangers and Royal Bankof Canada as administrative agent, as amended, supplemented or restated fromtime to time, or asreplaced from time to time by another credit facility in an amount notexceeding Cdn. $1,905,000,000 minus the proceeds of any high-yield debtsecurities issued by QuebecorMedia Inc. on or before October 22, 2002;

###  

### 1.1.103              “**Regulatory Approval**” means the obtention of all materialapprovals of all governmental bodies having jurisdiction which are required tobe obtained in connection with the Transaction including, without limitation,the approval of the CRTC and all other approvals set forth in the New Offers toPurchase for Cash referred to in the definition “Transaction”;

###  

### 1.1.104              “**Revolving Facility**” or “**Facility**” meansthe Credit available pursuant to Section 2.1;

###  

### 1.1.105              “**Revolving Facility Lender**” means a Lender having aCommitment under the Revolving Facility;

###  

### 1.1.106              “**Rollover Date**” means, with respect to a Libor Advance or aBA Advance, the date of any such Advance, or the first day of any DesignatedPeriod;

###  

### 1.1.107              “**Second Currency**” has the meaning ascribed to it pursuant to Section 15.1;

###  

### 1.1.108              “**Security Documents**” means all of the security documentsdescribed in Article 9, and “**Security**” meansthe security created thereby;

###  

### 1.1.109              “**Selected Amount**” means

###  

#### 1.1.109.1                with respect to aBA Advance, the amount of the Advances in Canadian Dollars which the Borrowerhas asked to obtain by the issuance of Bankers’ Acceptances in accordance with Section 6.1,and

 

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####  

#### 1.1.109.2                with respect to aLibor Advance, the amount in respect of which the Borrower is deemed to haveasked, in accordance with Section 4.2, that the interest payable thereonbe calculated on the Libor Basis;

####  

### 1.1.110              “**Senior Secured Debt Coverage Ratio**” means, for any period,the ratio of (a) the Consolidated Debt of the VL Group owing under (i) thisCredit Agreement, plus (ii) the CF Cable Notes, plus (iii) theNegative Value of Derivative Instruments entered into with a Lender, plus (iv) anyother Debt supported by a Charge to secure its repayment, to (b) EBITDA;

###  

### 1.1.111              “**Seventh Amendment Closing Date**” means November 19,2004;

###  

### 1.1.112              “**Share Pledge**” has the meaning ascribed to it in subsection9.2.3;

###  

### 1.1.113              “**Sixth Amendment Closing Date**” means October 8, 2003;

###  

### 1.1.114              “**Spectrum Auction and Purchase**” means theprocess described in Industry Canada’s “NoticeNo. DGRB-011-07 — Licensing Framework for the Auction for Spectrum Licences for Advanced Wireless Services and otherSpectrum in the 2 GHz Range”;

###  

### 1.1.115              “**Spectrum Co.**” means any Person in which theBorrower may have a voting and/or economic interest and which Person may be thebidder on behalf of the Borrower and others in the Spectrum Auction andPurchase;

###  

### 1.1.116              “**Stamping Fees**” means, with respect to BA Advances, the feecalculated by (a) multiplying the percentage referred to in the definitionof “Margin” by the face amount of the Bankers’ Acceptances being issued andstamped in connection with the BA Advance being made, (b) dividing theproduct so obtained by 365 or, in a leap year, 366, and (c) multiplyingthe result so obtained by the number of days in the relevant Designated Period;

###  

### 1.1.117              “**Subordinated Debt**” means, in respect of any Person,unsecured Debt of such Person that has no required redemption provisions andmatures at least 6 months after the expiry of the Term hereof and that has beensubordinated in right of payment to the obligations of the VL Group hereunderand under the Security Documents in form and substance acceptable to theLenders and their counsel;

###  

### 1.1.118              “**Subsidiary**” means any Person in respect of which themajority of the issued and outstanding capital stock (including securitiesconvertible into voting shares and options to purchase voting shares) grantinga right to vote in all circumstances is at the relevant time owned by a memberof the VL Group or one or more of its Subsidiaries or by a member of the VLGroup and one or more of its Subsidiaries, and includes a limited partnershipthat would be an Affiliate;

 

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### 1.1.119              “**Synthetic Lease**” means any synthetic lease or similar off-balancesheet financing product where such transaction is considered borrowed money fortax purposes but is classified as an operating lease in accordance with GAAP;

###  

### 1.1.120              “**Tax Benefit Transaction**” means, for so long as the Borroweris a direct or indirect Subsidiary of Quebecor Inc. (“**Quebecor**”),any transaction between a member of the VL Group and Quebecor or any of itsAffiliates, the primary purpose of which is to create tax benefits for anymember of the VL Group or for Quebecor or any of its Affiliates; *provided, however,* that (1) the member of the VL Groupinvolved in the transaction obtains a favorable tax ruling from a competent taxauthority or a favorable tax opinion from a nationally recognized Canadian lawor accounting firm having a tax practice of national standing as to the taxefficiency of the transaction for such member of the VL Group; (2) theBorrower delivers to the Agent (a) a resolution of the board of directorsof the Borrower to the effect the transaction will not prejudice the Lendersand certifying that such transaction has been approved by a majority of thedisinterested members of such board of directors and (b) an opinion as tothe fairness to such member of the VL Group of such transaction from afinancial point of view issued by an accounting, appraisal or investmentbanking firm of national standing in the United States or Canada, except inrespect of any Tax Benefit Transaction in an amount of less than $1,000,000each, provided that the aggregate of all Tax Benefit Transactions for amountsof less than $1,000,000 does not exceed $10,000,000 in the aggregate in any 12month period; (3) such transaction is set forth in writing; (4) suchtransaction either (a) causes all of the Security creating a Charge on anytransferred assets to remain in full force and effect, or (b) provides forthe replacement of such assets by different assets of a value, nature and kindacceptable to each of the Lenders, and which shall in any event be subject tothe Security (and the assets so transferred that were previously Charged shallbe released); and (5) the Consolidated EBITDA of the VL Group is notreduced after giving *pro forma*effect to the transaction as if the same had occurred at the beginning of themost recently ended four fiscal quarter period of the VL Group for whichinternal financial statements are available; *provided,however*, that if such transaction shall thereafter cease to satisfythe preceding requirements as a Tax Benefit Transaction, it shall thereaftercease to be a Tax Benefit Transaction for purposes of this Agreement and shallbe deemed to have been effected as of such date and, if the transaction is nototherwise permitted by this Agreement as of such date, the Borrower will be inDefault hereunder if such transaction does not comply with the precedingrequirements or is not otherwise unwound within 30 days of that date;

###  

### 1.1.121              “**Term**” means the period commencing on the Closing Date andterminating, with respect to the Revolving Facility, on April 6, 2012;

###  

### 1.1.122              “**Term Facility A-1**” means the portion of the Creditpreviously available under this Credit Agreement, which was repaid in full outof the HYD Offering and out of Advances made under Term Facility C;

 

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### 1.1.123              “**Term Facility B**” means the portion of the Credit previouslyavailable under this Credit Agreement which was repaid in full by the Borrowerconcurrently with any Advances hereunder on and after the Sixth AmendmentClosing Date;

###  

### 1.1.124              “**Term Facility C**” means the portion of the Credit previouslyavailable under this Credit Agreement which was repaid in full by the Borrowerconcurrently with the initial Advance hereunder on or after the SeventhAmending Closing Date;

###  

### 1.1.125              “**Transaction**” means the acquisition by QuebecorMedia Inc. of all of the issued and outstanding multiple voting shares andsubordinate voting shares (including subordinate voting shares issuable uponthe exercise of options) of GVL as well as the investments in Quebecor MediaInc. to be made by Capital Communications CDPQ Inc. and Quebecor Inc. and thetransfer of assets to Quebecor Media Inc. to be made by Quebecor Inc. asdescribed in the document entitled “New Offers to Purchase for Cash” dated September 27,2000 made by Quebecor Media Inc. with respect to the shares of GVL;

###  

### 1.1.126              “**Transfer Agreement**” means a form of transfer agreementsubstantially in the form annexed hereto as Schedule “C”;

###  

### 1.1.127              “**US Dollars**” or “**US $**” means thelawful currency of the United States of America in same day immediatelyavailable funds or, if such funds are not available, the currency of the UnitedStates of America which is ordinarily used in the settlement of internationalbanking operations on the day on which any payment or any calculation must bemade pursuant to this Agreement;

###  

### 1.1.128              “**VL Group**” means the Borrower, the Guarantors (other thanQuebecor Media Inc. and GVL) and their respective Subsidiaries, and a referenceto a “member of the VL Group” means any of them; provided, however, that forthe purposes of all Back-to-Back Transactions alone, until the CF Cable Noteshave been repaid in full, CF Cable TV Inc. and its Subsidiaries shall not beconsidered to be part of the VL Group in the context of any Back-to-BackTransaction with another member of the VL Group.  However, CF Cable TV Inc. and itsSubsidiaries shall be considered members of the VL Group in the context of aBack-to-Back Transaction with an Affiliate of the Borrower that is not a memberof the VL Group.  A list of the membersof the VL Group as of the Seventh Amendment Closing Date is provided inSchedule “M” hereto.

###  

1.2           **Interpretation**

 

### Unless stipulated to the contrary, the words usedherein which indicate the singular include the plural and vice versa and thewords indicating masculine include the feminine and vice versa.  In addition, the word “**includes**”(or “**including**”) shall be interpreted tomean “includes (or including) without limitation”.  Finally, any reference to a time shall meanlocal time in the City of Montreal, Province of Quebec.

 

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1.3**           Currency**

 

Unlessthe contrary is indicated, all amounts referred to herein are expressed inCanadian Dollars.

 

1.4           **Generally Accepted Accounting Principles**

 

Unless the Lenders shallotherwise expressly agree or unless otherwise expressly provided herein (forexample, in connection with the definition of “Consolidated”), all of the termsof this Agreement which are defined under the rules constituting GenerallyAccepted Accounting Principles shall be interpreted, and all financialstatements and reports to be prepared hereunder shall be prepared, inaccordance with Generally Accepted Accounting Principles in effect from time totime, and with respect to the financial ratios, those in effect as of October 8,2003.

 

1.5           **Division and Titles**

 

The division of thisAgreement into Articles, Sections and subsections and the insertion of titlesare for convenience of reference only and shall not affect the meaning orinterpretation of this Agreement.

 

# **2.**             THE CREDIT

 

2.1           **Credit Facility**

 

Subject to the provisionshereof, and in particular, to the provisions of Article 3, each Lenderagrees to make available to the Borrower, individually and not jointly andseverally or solidarily, its Commitment in the Credit, which Credit consists ofthe Revolving Facility in a maximum amount equal to $575,000,000 minus themaximum amount that can be borrowed under the Cash Management Facilities, whichform part of the Revolving Facility.

 

2.2           **The Revolving Facility**

 

All Advances under theRevolving Facility shall be in Canadian Dollars alone and may be repaid andre-borrowed by the Borrower at all times during the Term.

 

2.3           **Increase in Revolving Facility**

 

### 2.3.1                  The Borrowermay, on one or more occasions during the portion of the Term of the RevolvingFacility commencing on the Ninth Amendment Closing Date and terminating April 6,2009, by written notice to the Agent (an “**IncreaseNotice**”), elect to request an increase to the existing Commitments(any such increase, the “**New Lender Commitments**”), by adding one or more Lenders (each, a “**New Lender**”) or having an existing Lender increase its Commitment (an 

 

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### “**Increased Commitment**”) in accordance withthe provisions of this Section.

###  

### 2.3.2                  The aggregateamount of any such New Lender Commitments and Increased Commitments shall notexceed $75,000,000 and shall not be less than $25,000,000 per New Lender (orsuch lesser amount as may be approved by the Agent).  Such Increase Notice shall specify (a) thedate (the “**IncreasedAmount Date**”) onwhich the Borrower proposes that the New Lender Commitments and/or IncreasedCommitments shall be effective, which shall be a date not less than 10 BusinessDays after the date on which such notice is delivered to the Agent, (b) theamount of the increase in the Revolving Facility, (c) the identity of eachNew Lender, and/or of each existing Lender that is prepared to provide anIncreased Commitment, and (d) the proposed allocation of such New LenderCommitments to each New Lender and/or the amount of each IncreasedCommitment.  Such New Lender Commitmentsand/or Increased Commitments shall become effective as of the Increased AmountDate; provided that (1) no Default or Event of Default shall exist on theIncreased Amount Date before or after giving effect to such New LenderCommitments and/or Increased Commitments; (2) the Borrower shall be incompliance with each of the covenants set forth in Section 12.11 as of thelast day of the most recently ended fiscal quarter after taking into accountsuch New Lender Commitments and/or Increased Commitments, on a *pro forma*basis; (3) the New LenderCommitments shall be effected pursuant to one or more Joinder Agreementsexecuted and delivered by the Borrower, each New Lender and the Agent, and eachof which shall be recorded in the register maintained by the Agent in respectof Assignments; (4) Increased Commitments shall be effected in accordancewith the last sentence of subsection 2.3.5; and (5) the Borrower shalldeliver or cause to be delivered any legal opinions or other documentsreasonably requested by the Agent in connection with any such transaction.

###  

### 2.3.3                 On the IncreasedAmount Date, subject to the satisfaction of the foregoing terms and conditions,(a) each of the Revolving Facility Lenders shall assign to each of the NewLenders or applicable existing Lenders, who shall purchase same, at theprincipal amount thereof (together with accrued interest), such interests inthe Loan outstanding on the Increased Amount Date as shall be necessary inorder that, after giving effect to all such assignments and purchases, suchLoan under the Revolving Facility will be held by existing Revolving FacilityLenders and New Lenders ratably in accordance with their Commitments aftergiving effect to the addition of such New Lender Commitments and/or IncreasedCommitments to the Commitments, (b) each New Lender Commitment shall bedeemed for all purposes a Commitment and each Advance made thereunder (a “**New Advance**”) shall be deemed, for all 

 

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### purposes, an Advanceunder the Revolving Facility and (c) each New Lender shall become a Lenderwith respect to the New Lender Commitment and all matters relating thereto.

###  

### 2.3.4                 The Agent shallnotify the Lenders, promptly upon receipt, of the Borrower’s Increase Notice,including the Increased Amount Date, any Increased Commitments, and the NewLender Commitments and New Lenders in respect thereof, as well as the effect ofsame as contemplated by the preceding paragraph.

###  

### 2.3.5                 The terms andprovisions of the New Advances shall be identical to the Advances under theRevolving Facility.  Each JoinderAgreement may, without the consent of any other Revolving Facility Lenders,effect such amendments to this Agreement and the Security Documents as may benecessary or appropriate, in the opinion of the Agent, to give effect to theprovisions of this Section 2.3.

###  

### 2.3.6                 If on April 6,2009, the Credit is less than $650,0000,000, from that date until the expiry ofthe Term, the Borrower may, on one additional occasion, again send an IncreaseNotice to the Agent.  The Agent shallprovide a copy of the Increase Notice to the Lenders, and the Lenders shall,within 10 Business Days following receipt thereof, advise the Agent of theirdecision whether or not to provide any Increased Commitments.  Any Lender approached to provide all or aportion of the Increased Commitments may elect or decline, in its solediscretion, to provide an Increased Commitment. If any Lender does not respond to the Increase Notice, it will be deemedto have elected not to provide an Increased Commitment.  Schedule “A” will be amended by the Agent toreflect any Increased Commitments made by Lenders, without requiring thesignature of each Lender.

###  

### 2.3.7                 If, after theBorrower has availed itself of the procedures set out in subsection 2.3.6, theCredit remains less than $650,000,000, the Borrower may again, on one occasion,attempt to obtain New Lender Commitments for the remaining balance subject tocomplying with the provisions of subsections 2.3.1 to 2.3.5.

###  

# **3.**             PURPOSE

 

3.1           **Purpose of the Advances**

 

All Advances made by theLenders to the Borrower under the Revolving Facility in accordance with theprovisions hereof from and after the Eighth Amendment Closing Date shall beused by the Borrower for general corporate purposes, including, withoutlimitation, to issue Letters of Credit solely in connection with the SpectrumAuction and Purchase and

 

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to pay dividends to QMI from time to time, subject to and in accordancewith the terms and conditions of this Agreement.

 

# **4.**                                      ADVANCES,CONVERSIONS AND OPERATION OF ACCOUNTS

** **

4.1**           Noticeof Borrowing - Direct Advances**

 

Subject to the applicable provisions of this Agreement, on any BusinessDay during the Disbursement Period, the Borrower shall be entitled to requestAdvances under the Revolving Facility, on one or more occasions, up to themaximum amount of the Credit, by way of Prime Rate Advances in minimum amountsof $1,000,000 and whole multiples thereof, provided that at least one (1) BusinessDay prior to the day on which any Prime Rate Advance is required (other than anAdvance under the Cash Management Facilities, which shall be made in accordancewith the provisions of the agreements pertaining thereto referred to in Section 4.3),the Borrower shall have provided to the Agent an irrevocable telephone noticeat or before 10:00 A.M. on any Business Day, followed by the immediatedelivery of a written Notice of Borrowing. Notices of Borrowing in respect of BA Advances shall be given inaccordance with the provisions of Section 6.1.

 

In the event that some of the Revolving Facility Lenders are ForeignLenders who cannot make Prime Rate Advances or BA Advances, prior to giving aNotice of Borrowing to the Agent as provided above or in Section 6.1, theBorrower shall give notice to the Agent that it wishes the Foreign Lenders tomake a Libor Advance, the whole in accordance with Section 4.2.  In such event, the Advance to be made by allLenders shall be made on the last day of the longest applicable notice period.

 

4.2**           LIBORAdvances and Conversions**

** **

Subject to the applicable provisions of this Agreement, on any BusinessDay during the Disbursement Period, upon an irrevocable telephone notice to theAgent given prior to 10:00 A.M., at least three Banking Days prior to thedate of a proposed Libor Advance or a Rollover Date, followed by the immediatedelivery of a written Notice of Borrowing, the Borrower may request that aLibor Advance be made by a Foreign Lender or that a Libor Advance by a ForeignLender or any part thereof be converted into a new Libor Advance, incircumstances where the Foreign Lender cannot provide Bankers’Acceptances.  The Agent shall determinethe LIBOR which will be in effect on the date of the Advance or the RolloverDate, as the case may be (which in such case must be a Banking Day), withrespect to the Selected Amount or to each of the Selected Amounts, as the casemay be, having a maturity of 10 to 180 days (subject to availability) from thedate of the Advance or the Rollover Date, as the case may be.  However, if the Borrower has not delivered anotice to the Agent in a timely manner in accordance with the provisions ofthis Section 4.2, the Borrower shall be deemed to have chosen to have theinterest on the amount of such Advance calculated on the Prime Rate Basis.

 

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** **

4.3**           Lettersof Credit for Spectrum Auction and Purchase**

 

### 4.3.1                                  Issuance.  Subject to the applicable provisions of thisAgreement, on any Business Day during the Disbursement Period, as part of theCredit available under the Revolving Facility, upon one (1) Business Day’sprior written Notice of Borrowing delivered to the Agent prior to 10:00 a.m.the preceding Business Day, the Borrower may cause to be issued by the IssuingLender on behalf of the Lenders one or more Letters of Credit in a maximumaggregate amount outstanding at any time not exceeding $350,000,000.  Each Letter of Credit may be issued solely tosupport, directly or indirectly, the bid in the Spectrum Auction and Purchase,and shall be issued in Canadian Dollars. Concurrently with the delivery of a Notice of Borrowing requesting aLetter of Credit, the Borrower shall execute and deliver to the Issuing Lenderthe documents required by the Issuing Lender in respect of the requested typeof Letter of Credit, including a Letter of Credit application and indemnity onthe Issuing Lender’s standard forms.  Inthe event of any conflict between the provisions of this Agreement and theprovisions of any document relating to a Letter of Credit, the provisions ofthis Agreement shall govern and prevail. The term of each Letter of Credit shall expire prior to the end of theTerm and shall not be more than 364 days and shall otherwise be in form andsubstance satisfactory to the Issuing Lender.

###  

### 4.3.2                                  Fee.  The Borrower shall pay fees in respect of anysuch Letters of Credit (“**LC Fees**”)issued orrenewed equal to the aggregate of: (i) for the Lenders, an amount equal to(A) the face amount of the Letter of Credit on the date that the fee ispayable multiplied by (B) a fraction (1) the numerator of which shallequal the product resulting from multiplying the applicable LC Fee percentageprovided for in the table contained in the definition of “Margin” by the numberof days in the term of the Letter of Credit selected by the Borrower, and (2) thedenominator of which shall consist of 365 days or 366 days (as the case maybe), which fees shall be payable quarterly in arrears on the last Business Dayof each calendar quarter and (ii) for the Issuing Lender,    % per annum of the face amountthereof and for the number of days in the term of the Letter of Credit selectedby the Borrower, payable quarterly in arrears on the last Business Day of eachcalendar quarter, or on such other date as the Agent may determine from time totime.

###  

### 4.3.3                                  ReimbursementObligations.  In the event of anydrawing under a Letter of Credit, the Issuing Lender shall promptly notify theBorrower who shall immediately reimburse the amount to the Issuing Lender insame day funds.  In the event that theBorrower fails to reimburse the Issuing Lender immediately upon a drawing andfails to provide a Notice of Borrowing with a different option, the Borrowershall be deemed to have requested from the Agent a Canadian Prime Rate Advanceon the date and in the amount of the drawing, the proceeds of which will beused to satisfy the reimbursement obligations of the Borrower to the Lenders inrespect of the drawing.  Thereimbursement obligations of the Borrower hereunder shall be absolute,unconditional and irrevocable and shall be performed strictly in accordancewith the terms of this Agreement under any and all circumstances whatsoever andirrespective of:

 

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####  

#### 4.3.3.1                                                             anylack of validity or enforceability of any Letter of Credit or this Agreement orany term or provision therein or herein;

####  

#### 4.3.3.2                                                             theexistence of any claim, set-off, compensation, defence or other right that theBorrower, any Guarantor or other member of the VL Group or any other Person mayat any time have against the beneficiary under any Letter of Credit, theIssuing Lender, the Agent, any Lender or any other Person, whether inconnection with this Agreement or any other related or unrelated agreement ortransaction;

####  

#### 4.3.3.3                                                             anydraft or other document presented under a Letter of Credit proving to beforged, fraudulent or invalid in any respect or any statement therein beinguntrue or inaccurate in any respect;

####  

#### 4.3.3.4                                                             anydispute between or among the members of the VL Group and any beneficiary of anyLetter of Credit or any other party to which such Letter of Credit may betransferred or any claims whatsoever of the members of the VL Group against anybeneficiary of such Letter of Credit or any such transferee; and

####  

#### 4.3.3.5                                                             thevalidity or sufficiency of any instrument transferring or assigning orpurporting to transfer or assign any Letter of Credit or any of the rights orbenefits thereunder or proceeds thereof in whole or in part, which may prove tobe invalid or ineffective for any reason.

####  

The Issuing Lender shall not be liable for any error, omission,interruption or delay in transmission, dispatch or delivery of any message oradvice, however transmitted, in connection with any Letter of Credit, exceptfor errors or omissions that result directly from the intentional or grossfault of the Issuing Lender, as determined by a final judgment of a court ofcompetent jurisdiction.

 

In furtherance and extension and not in limitation of the specificprovisions of this Section 4.3, (A) any action taken or omitted bythe Issuing Lender or any of its respective correspondents under or in connectionwith any of the Letters of Credit, if taken or omitted in good faith andwithout gross or intentional fault, as determined by a final judgment of acourt of competent jurisdiction, shall be binding upon the Borrower and shallnot put the Issuing Lender or its respective correspondents under any resultingliability to the Borrower and (B) the Issuing Lender may, without gross orintentional fault as determined by a final judgment of a court of competentjurisdiction, accept documents that appear on their face to be in substantialcompliance with the terms of a Letter of Credit, without responsibility forfurther investigation, regardless of any notice or information to the contrary(other than an injunction granted by a court of competent jurisdiction duringthe period for which such injunction is enforced), and may make payment uponpresentation of documents that appear on their face to be in substantialcompliance with the terms of such Letter of Credit, 

 

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provided that the Issuing Lender shall have the right, in its solediscretion, to decline to accept such documents and to make such payment ifsuch documents are not in strict compliance with the terms of such Letter ofCredit.

 

### 4.3.4                                  Indemnification.

 

#### 4.3.4.1                                                            TheBorrower agrees to indemnify and hold harmless the Issuing Lender and each ofits officers, directors, affiliates, employees, advisors and agents (the “**Indemnitees**”) from and against any and alllosses, claims, damages and liabilities which the Indemnitees may incur (orwhich may be claimed against any Indemnitee) by any Person by reason of or inconnection with the issuance or transfer of or payment or failure to pay underany Letter of Credit, provided that the foregoing indemnity will not, as to anIndemnitee, apply to losses, claims, damages, liabilities or related expensesto the extent they are found by a final, non-appealable judgment of a court toarise from the gross or intentional fault of such Indemnitee.

####  

#### 4.3.4.2                                                            TheBorrower agrees, as between the Borrower and the Issuing Lender, that theBorrower shall assume all risks of the acts, omissions or misuse by thebeneficiary of any Letter of Credit.

####  

#### 4.3.4.3                                                            Neitherthe Issuing Lender nor the Agent or any other Lender shall, in any way, beliable for any failure by the Issuing Lender or anyone else to pay any drawingunder any Letter of Credit as a result of any action by any governmentalauthority or any other cause beyond the control of the Issuing Lender.

####  

#### 4.3.4.4                                                            Theobligations of the Borrower under this Section 4.3 shall survive thetermination of this Agreement.  No actsor omissions of any current or prior beneficiary of a Letter of Credit shall inany way affect or impair the rights of the Issuing Lender to enforce any right,power or benefit under this Agreement.

####  

### 4.3.5                                  LCEscrowed Funds.  Upon the occurrenceand continuance of an Event of Default, or if a Mandatory Repayment to be madewould require the repayment of outstanding Letters of Credit prior to theirmaturity, the Borrower will forthwith, upon request from the IssuingLender or the Agent, pay to the Agent for deposit into an escrow accountmaintained by and in the name of the Agent, (i) in the case of theoccurrence and the continuance of an Event of Default, the amount equal to theIssuing Lender’s maximum potential exposure under the then outstanding Lettersof Credit or (ii) in the case of a Mandatory Repayment requiring therepayment of outstanding Letters of Credit prior to their maturity, the amountequal to the proportion of such Mandatory Repayment that would require Lettersof Credit to be repaid prior to their maturity (in each case, the “**LC Escrowed Funds**”).  The LC Escrowed Funds will be held by theAgent for compensation 

 

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###  

### or set-off against future Indebtedness owing by the Borrower to theIssuing Lender in respect of such Letters of Credit and pending suchapplication will bear interest at the rate declared by the Agent from time totime as that payable by it in respect of deposits for such amount and for theperiod from the date of deposit to the maturity date of the Letters ofCredit.  If such Event of Default iseither waived or cured in compliance with the terms of this Agreement, then theremaining LC Escrowed Funds, if any, together with any accrued interest to thedate of release, will be released to the Borrower.  The deposit of the LC Escrowed Funds by theBorrower with the Agent as herein provided will not operate as a repayment onaccount of the Loan Obligations until such time as the LC Escrowed Funds areactually paid to the Issuing Lender as a repayment of principal hereunder.  The Borrower shall sign and remit as Securitywith regard thereto all appropriate documents that the Agent or the Issuing Lendermight judge necessary or desirable.

###  

### 4.3.6                                  Resignation.  The Issuing Lender may resign as such (a “**Resigning Issuing Lender**”) upon 15 days’prior written notice to the Agent and the Borrower, in which event the Borrowershall designate another Lender as Issuing Lender.  Upon acceptance by another Lender of theappointment as Issuing Lender (the “**SuccessorIssuing Lender**”), the Successor Issuing Lender shall succeed to therights, powers and duties of the Resigning Issuing Lender and shall have allthe rights and obligations of the Resigning Issuing Lender under this Agreementand the other Loan Documents.  Uponrequest by any of the Resigning Issuing Lender, the Successor Issuing Lender,the Agent or the Borrower, each of the Resigning Issuing Lender, the Agent, theBorrower and the Successor Issuing Lender shall enter into an agreementevidencing the appointment of the Successor Issuing Lender and dealing withsuch other matters as the parties may agree including any reallocation of feespaid in relation to outstanding Letters of Credit which may be necessary.  Following the resignation of the ResigningIssuing Lender, the Resigning Issuing Lender shall continue to have all therights and obligations of an Issuing Lender under this Agreement and the otherLoan Documents with respect to Letters of Credit issued by it prior to suchresignation, but the Resigning Issuing Lender shall not be required to issueadditional Letters of Credit.  Foravoidance of doubt, the provisions of this Agreement relating to the IssuingLender shall inure to the benefit of the Resigning Issuing Lender as to anyactions taken or omitted to be taken by it (a) while it was the IssuingLender under this Agreement or (b) at any time with respect to Letters ofCredit issued by the Issuing Lender.

###  

4.4**           CashManagement Facilities**

 

Subject to the terms and conditions of this Agreement, the Lender thatprovides the Cash Management Facilities (the “**CashManagement Lender**”) shall make Advances to the Borrower inaccordance with the terms and conditions of the agreements governing the CashManagement Facilities, the purpose of which shall be to provide the Borrowerwith a deemed Prime Rate Advance in connection with any negative balance in aconsolidation account, and shall issue letters of credit subject to theBorrower executing the Cash Management Lender’s standard documentation withrespect thereto.  The fee for each suchletter of credit shall be equal to the then applicable Stamping Fee.  The Borrower and each of the Lenders agreesthat any amounts due to the Cash Management Lender under the Cash

 

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Management Facilities shall be deemed to form part of the Loan underthe Revolving Facility and shall be secured by the Security.  For greater certainty, only the net Loanunder the Cash Management Facilities (including outstanding letters of credit)will be treated as Advances hereunder at the end of any particular day.  The Cash Management Lender shall advise theAgent of any outstanding Advances upon the request of the Agent.

 

4.5**           Operationof Accounts**

 

The Agent shall maintain in its books at the Agency Branch a record ofthe Loan, including the Bankers’ Acceptances issued by the Borrower, attestingas to the total of the Borrower’s indebtedness to the Lenders in accordancewith the provisions hereof and with the provisions of the SecurityDocuments.  These accounts or registersshall constitute, in the absence of manifest error, *prima facie*proof of the total amount of the indebtedness of the Borrower to the Lenders inaccordance with the provisions hereof and of the Security Documents, of thedate of any Advance made to the Borrower and of the total of all amounts paidby the Borrower from time to time with respect to principal and interest owingon the Loan and the fees and other sums exigible in accordance with theprovisions hereof or of the Security Documents.

 

4.6**           Apportionmentof Advances**

 

The amount of each Advance will be apportioned among the Lenders by theAgent by reference to the Commitment of each Lender, as such Commitment shallbe immediately prior to the making of any Advance, subject to the provisions ofSection 6.9 hereof with respect to BA Advances.  If any amount is not in fact made availableto the Agent by a Lender, the Agent shall be entitled to recover such amount(together with interest thereon at the rate determined by the Agent as beingits cost of funds in the circumstances) on demand from such Lender or, if suchLender fails to reimburse the Agent for such amount on demand, from theBorrower.

 

4.7**           Limitationson Advances**

 

The undrawn Credit available under the Revolving Facility shall ceaseto be available at the expiry of the Disbursement Period.

 

4.8**           NoticesIrrevocable**

 

Any notice given to the Agent in accordance withArticles 4 or 6 may not be revoked or withdrawn.

 

4.9**           Marketfor Bankers’ Acceptances and Libor Advances**

 

If at any time or from time to time: (a) there no longer exists amarket for Bankers’ Acceptances or, (b) as a result of market conditions, (i) thereexists no appropriate or reasonable method to establish LIBOR, for a SelectedAmount or a Designated Period, or (ii) Canadian Dollar deposits are notavailable to the Foreign Lenders in such market in the ordinary course ofbusiness in amounts sufficient to permit them to make the Libor 

 

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Advance, for a Selected Amount or a Designated Period, such Lendersshall so advise the Agent and, subject to the provisions of Section 4.12hereof with regard to the Foreign Lenders, any such Lenders shall not beobliged to accept drafts of the Borrower presented to such Lenders pursuant tothe provisions of this Agreement nor to honour any notices of borrowing inconnection with any Libor Advances, and the Borrower’s option to request BAAdvances or Libor Advances, as the case may be, shall thereupon be suspendedupon notice by the Agent to the Borrower.

 

4.10**         Suspensionof BA Advance and Libor Advance Option**

 

If a notice has been given by the Agent in accordance with Section 4.9and except as provided in the next sentence of this Section, the BA Advance orthe Libor Advance, or any part thereof, as the case may be, shall not be made(whether as an Advance, a conversion or an extension) by the Lenders and theright of the Borrower to choose that Advances be made or, once made, beconverted or extended into the BA Advance or the Libor Advance, as the case maybe, shall be suspended until such time as the Agent has determined that thecircumstances having given rise to such suspension no longer exist, in respectof which determination the Agent shall advise the Borrower within a reasonabledelay.  If sufficient Canadian Dollarfunds are not available to the Foreign Lenders, the Foreign Lenders shall berelieved from their obligation to make an Advance until such time as such fundsbecome available in sufficient amounts, but they shall comply with theprovisions of Section 4.12 hereof.

 

4.11**         Limitson BA Advances, Letters of Credit and Libor Advances**

 

Nothing in this Agreement shall be interpreted as authorizing theBorrower to issue Bankers’ Acceptances or borrow by way of Libor Advances for aDesignated Period expiring, nor to cause to be issued Letters of Creditmaturing, on a date which results in a situation where the Credit cannot bereduced as required by this Agreement, or on a date which is after the expiryof the Term (or, in the case of a Letter of Credit, on a date which is lessthan 5 Business Days before the expiry of the Term).

 

4.12**         SpecificClause with Regard to Foreign Lenders**

 

In the event of asuspension of the Borrower’s right to request Advances (including conversionsand extensions) from one or more Foreign Lenders under Sections 4.9 and 4.10hereof (each an “**Affected Lender**”), each AffectedLender shall, concurrently with the notice described in Section 4.9, seekalternative sources of funding Cdn. $ Advances and, if sufficient funds areobtained, shall notify the Borrower as to when such funds will be available forAdvances.  On the date indicated in suchnotice, the Affected Lender shall be deemed to have made an Advance withinterest payable on the Prime Rate Basis.

 

If within 5 Business Days following the notice described in Section 4.8,there remain one or more Affected Lenders who have not been deemed to have madean Advance on the Prime Rate Basis under the preceding paragraph, such Lender(an “**Incapable Lender**”) shall provide anadditional notice to the Agent and the Borrower of such fact and the followingprovisions shall apply:

 

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### 4.12.1                                               TheIncapable Lender shall make US$ Advances on the Libor Basis, and the partieswill negotiate such amendments hereto as may be required to give full effect tosuch intention, it being understood that the Borrower alone will bear allforeign exchange risks; and

###  

### 4.12.2                                               Sections4.9 and 4.10 hereof shall apply without reference to this Section 4.12and, upon the expiration of the Designated Period of any existing LiborAdvance, the provisions of Section 5.8 hereof shall apply to such LiborAdvances.

###  

**5.****                                      INTERESTAND FEES**

** **

5.1**           Intereston the Prime Rate Basis**

 

The principal amount of the Loan which at any time and from time totime remains outstanding and in respect of which the Borrower has chosen(subject to the provisions of Section 4.1 with regard to Cdn. $ LiborAdvances by Foreign Lenders) or, in accordance with the provisions hereof, isobliged to pay interest on the Prime Rate Basis, shall bear interest,calculated daily, on the daily balance of such Loan, from the date of eachAdvance up to and including the day preceding the date of repayment thereof infull at the annual rate (calculated based on a 365 or 366 day year, as the casemay be) applicable to each of such days which corresponds to the Prime Rate at theclose of business on each of such days, plus the Margin.

 

5.2**           Paymentof Interest on the Prime Rate Basis**

 

The interest payable in accordance with Section 5.1 and calculatedin the manner described therein shall be payable to the Agent monthly, in arrears,on the last day of each month or on such other date (limited to once per month)as the Agent may determine and advise the Borrower from time to time, the firstpayment of which shall be exigible on the last day of the month in which thefirst Prime Rate Advance was made.

 

5.3**           Intereston the Libor Basis**

 

The principal amount of the Libor Advances which at any time and fromtime to time remains outstanding shall bear interest, calculated daily, on thedaily balance of such Libor Advances, from each Rollover Date, at the annualrate (calculated based on a 360-day year) applicable to each of such days whichcorresponds to the LIBOR applicable to each Selected Amount, plus the Margin,and shall be effective as and from each Rollover Date up to and including thedate prior to the next Rollover Date.

 

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** **

5.4**           Paymentof Interest on the Libor Basis**

 

The interest payable in accordance with the provisions of Section 5.3and calculated in the manner hereinabove set out on the amount outstanding fromtime to time is payable to the Agent, in arrears,

 

### 5.4.1                                                     onthe last day of the Designated Period when the Designated Period is 1 to 3months,

###  

### 5.4.2                                                     whenthe Designated Period exceeds 3 months, on the last Business Day of each periodof 3 months during such Designated Period and on the last day of the DesignatedPeriod.

###  

5.5**           Limitsto the Determination of LIBOR**

 

Nothing herein contained shall be interpreted as authorizing theBorrower, with respect to the determination of LIBOR, to choose a SelectedAmount with respect to each Designated Period of less than Cdn. $1,000,000 or agreater amount other than in whole multiples of Cdn. $1,000,000.

 

5.6**           Fixingof LIBOR**

 

LIBOR shall be transmitted to the Borrower at approximately 11:00 A.M.,two Banking Days prior to:

 

### 5.6.1                                                     thedate on which the Libor Advance is to be made; or

###  

### 5.6.2                                                     therelevant Rollover Date.

###  

5.7**           Hedging**

 

The Borrower shall enter into agreements with one ormore Lenders providing for, at all times during the Term, foreign exchangeprotection to the Borrower with respect to 50% of the Debt under the HYDOffering (and any Additional Offering if in US$), by way of DerivativeInstruments acceptable to the Agent, with an amortization schedule coincidentalwith the amortization of the Debt under the HYD Offering and covering the fullterm of the HYD Offering (and any Additional Offering if in US$).

 

The Borrower agrees that any amounts due to the Agentor the Lenders under any Derivative Instruments of the nature described in thisSection 5.7 shall be deemed to form part of the Loan and shall be securedby the Security.

 

5.8**           Intereston the Loan**

 

Where no specific provision with respect to interest on an outstandingportion of the Loan is contained in this Agreement, including with respect toCdn. $ Libor Advances by Foreign 

 

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Lenders which cannot be rolled over due to the provisions of Sections4.10 and 4.11, the interest on such portion of the Loan shall be calculated andpayable on the Prime Rate Basis.

 

5.9**                                 Arrearsof Interest**

** **

Any arrears of interest or principal shall bear interest at a rate thatis two percent (2%) per annum higher than the rate of interest payable inrespect of the relevant principal amount of the Loan and shall be calculatedand exigible on the same basis.

 

5.10**                           MaximumInterest Rate**

** **

The amount of the interest or fees exigible in applying this agreementshall not exceed the maximum rate permitted by Law.  Where the amount of such interest or suchfees is greater than such maximum rate, the amount shall be reduced to thehighest rate which may be recovered in accordance with the applicableprovisions of Law.

 

5.11                           **Fees**

** **

The Borrower shall pay the following fees (the “**Fees**”)to the Agent:

 

### 5.11.1                                               for theRevolving Facility Lenders, a facility fee (the “**Facility Fee**”)calculated daily by multiplying the amount of the Credit under the RevolvingFacility (including the Credit under the Cash Management Facilities) each dayby the applicable rate set out in the definition of “Margin”, and dividing theresult by 365 (or 366 in a leap year), and then multiplying that result by thenumber of days in the relevant quarter, payable quarterly in arrears twoBusiness Days following the last day of each calendar quarter, commencing inrespect of the quarter ending on December 31, 2003, or on such other dateas the Lenders may determine, acting reasonably; and

###  

### 5.11.2                                               for theAgent, an annual agency fee in the amount and payable in accordance with theprovisions of a letter agreement dated as of August 9, 2000, entered intobetween *inter alia*, Quebecor Media Inc. and theAgent, and consented to by the Borrower.

###  

5.12**                           InterestAct**

** **

### 5.12.1                                               For thepurposes of the *Interest Act* (Canada), any amountof interest or fees calculated herein using 360, 365 or 366 days per year andexpressed as an annual rate is equal to the said rate of interest or feesmultiplied by the actual number of days comprised within the calendar year,divided by 360, 365 or 366, as the case may be.

 

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###  

### 5.12.2                                               Theparties agree that all interest in this Agreement will be calculated using thenominal rate method and not the effective rate method, and that the deemedre-investment principle shall not apply to such calculations.  In addition, the parties acknowledge thatthere is a material distinction between the nominal and effective rates ofinterest and that they are capable of making the calculations necessary tocompare such rates.

###  

6.**                                       BANKERS’ACCEPTANCES**

** **

6.1**                                 Advancesby Bankers’ Acceptances and Conversions into Bankers’ Acceptances**

** **

### 6.1.1                                                     Subjectto the applicable provisions of this Agreement, including those of the secondparagraph of Section 4.1 with regard to Notices of Borrowing for LiborAdvances by Foreign Lenders, on any Business Day during the DisbursementPeriod, by written Notice of Borrowing to the Agent given at least two (2) BusinessDays prior to the date of the Advance or the Rollover Date (for the purposes ofthis Article 6 called the “**Acceptance Date**”)and before 10:00 A.M., the Borrower may request that a BA Advance be made,that one or more Advances (other than Cdn. $ Libor Advances by Foreign Lenders)not borrowed as BA Advances be converted into one or more BA Advances or that aBA Advance or any part thereof be extended, as the case may be (the “**BA Request**”).  Bankers’Acceptances shall be issued on each Acceptance Date or Rollover Date, in aminimum Selected Amount, with respect to each Designated Period, of $5,000,000or such greater amount which is an integral multiple of $1,000,000, shall havea Designated Period of 10 to 180 days (or such other period as may be availableand acceptable to the Agent), subject to availability, and shall, in no event,mature on a date after the expiry of the applicable Term.

###  

### 6.1.2                                                     Priorto making any BA Request, the Borrower shall deliver:

###  

##### (a)                        tothe Lenders, in the name of each Lender which is a bank that accepts bankers’acceptances (a “**BA Lender**”), drafts in form andsubstance acceptable to the Agent and the Lenders; and

#####  

##### (b)                       tothe Lenders in the name of each Lender which is not a bank or does not acceptbankers’ acceptances (a “**Non-BA Lender**”),Discount Notes;

#####  

completed and executed by its authorized signatories in sufficientquantity for the Advance requested and in appropriate denominations tofacilitate the sale of the Bankers’ Acceptances in the financial markets.  No Lender shall be responsible or liable forits failure to accept a Bankers’ Acceptance hereunder if such failure is due, 

 

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in whole or in part, to the failure of the Borrower to give appropriateinstructions to the Agent on a timely basis, nor shall the Agent or any Lenderbe liable for any damage, loss or other claim arising by reason of any loss orimproper use of any such instrument except a loss or improper use arising byreason of the gross negligence or wilful misconduct of the Agent, such Lender,or their respective employees.  In orderto facilitate issuances of Bankers’ Acceptances pursuant hereto, in accordancewith the instructions given from time to time by the Borrower, the Borrowerhereby authorizes each Lender, and for this purpose appoints each Lender itslawful attorney, to complete and sign Bankers’ Acceptances on behalf of theBorrower, in handwritten or facsimile or mechanical signature or otherwise, andonce so completed, signed and endorsed, and following acceptance of them asBankers’ Acceptances, to purchase, discount or negotiate such Bankers’Acceptances in accordance with the provisions of this Article 6, and toprovide the Available Proceeds (as defined in subsection 6.2.4 (d)) to theAgent in accordance with the provisions hereof. Drafts so completed, signed, endorsed and negotiated on behalf of theBorrower by any Lender shall bind the Borrower as fully and effectively as ifso performed by an authorized officer of the Borrower.  Each Lender shall maintain a record withrespect to such instruments (i) received by it hereunder, (ii) voidedby it for any reason, (iii) accepted by it hereunder and (iv) cancelledat their respective maturities.  EachLender agrees to provide such records to the Borrower promptly upon requestand, at the request of the Borrower, to cancel such instruments which have beenso completed and executed and which are held by such Lender and have not yetbeen issued hereunder.

 

6.2**                                 AcceptanceProcedure**

** **

With respect to any BA Advance:

 

### 6.2.1                                                     TheAgent shall promptly notify in writing each Lender of the details of theproposed issue, specifying:

###  

### 6.2.2                                                     (a)  For each BA Lender, (i) the principalamount of the Bankers’ Acceptances to be accepted by such Lender, and (ii) theDesignated Period of such Bankers’ Acceptances; and

###  

(b) For eachLender which is a Non-BA Lender, (i) the principal amount of the DiscountNotes to be issued to such Lender, and (ii) the Designated Period of suchDiscount Notes.

 

### 6.2.3                                                     TheAgent shall establish the Bankers’ Acceptance Discount Rate at or about 10:00 a.m.on the Acceptance Date, and the Agent shall promptly determine the amount ofthe BA Proceeds.

###  

### 6.2.4                                                     Forthwith,and in any event not later than 11:30 A.M. on the Acceptance Date, theAgent shall indicate to each Lender, in the manner set out in Section 18.5:

 

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(a)           theBankers’ Acceptance Discount Rate;

 

(b)           theamount of the Stamping Fee applicable to those Bankers’ Acceptances to beaccepted by such Lender on the Acceptance Date, calculated by multiplying theappropriate percentage set out in the definition of “Stamping Fee” by the faceamount of each Bankers’ Acceptance (taking into account the number of days inthe Designated Period), any such Lender being authorized by the Borrower tocollect the Stamping Fee out of the BA Proceeds of those Bankers’ Acceptances;

 

(c)           theBA Proceeds of the Bankers’ Acceptances to be purchased by such Lender on suchAcceptance Date; and

 

(d)           theamount obtained (the “**Available Proceeds**”)by subtracting the Stamping Fee mentioned in subsection 6.2.4(b) from theBA Proceeds mentioned in subsection 6.2.4(c).

 

### 6.2.5                                                     Notlater than 1:00 P.M. on the Acceptance Date, each Lender shall makeavailable to the Agent its Available Proceeds.

###  

### 6.2.6                                                     Notlater than 4:00 P.M. on the Acceptance Date, the Agent shall transfer theAvailable Proceeds to the Borrower in accordance with Section 8.9 andshall notify the Borrower on such day either by telex, fax or telephone (if bytelephone, to be confirmed subsequently in writing) of the details of theissue.

###  

6.3**                                 Purchaseof Bankers’ Acceptances and Discount Notes**

** **

Before giving value to the Borrower, the Lenders or thesub-participants (other than Foreign Lenders who cannot make BA Advances)which:

 

### 6.3.1                                                     areBA Lenders shall, on the Acceptance Date, accept the Bankers’ Acceptances byinserting the appropriate principal amount, Acceptance Date and maturity datein accordance with the BA Request relating thereto and affixing theiracceptance stamps thereto, and shall purchase or sell same; and

###  

### 6.3.2                                                     areNon-BA Lenders shall, on the Acceptance Date, complete the Discount Notes byinserting the appropriate principal amount, Acceptance Date and maturity datein accordance with the BA Request relating thereto.

###  

6.4**                                 MaturityDate of Bankers’ Acceptances**

** **

Subject to the applicable notice provisions, at or prior to thematurity date of each Bankers’ Acceptance, the Borrower shall:

 

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###  

### 6.4.1                                                     giveto the Agent a notice in the form of Schedule “B” requesting that the Lendersconvert all or any part of the BA Advance then outstanding by way of Bankers’Acceptances which are maturing into a Prime Rate Advance; or

###  

### 6.4.2                                                     giveto the Agent a notice in the form of Schedule “B” requesting that the Lendersextend all or any part of the BA Advance outstanding by way of Bankers’Acceptances which are maturing into another BA Advance by issuing new Bankers’Acceptances, subject to compliance with the provisions of subsection 6.1.1 withrespect to the minimum Selected Amount and Designated Period; or

###  

### 6.4.3                                                     atlatest at 10:00 A.M., two (2) Business Days prior to the RolloverDate of each Bankers’ Acceptance then outstanding and reaching maturity, notifythe Agent by way of a notice substantially in the form of Schedule “B-1” (butomitting paragraph 3 thereof) that it intends to deposit in its account for theaccount of the Lenders on the Rollover Date an amount equal to the principalamount of each such Bankers’ Acceptance.

###  

6.5**                                 DeemedConversions on the Maturity Date**

** **

If the Borrower does not deliver to the Agent one or more of thenotices contemplated by subsections 6.4.1 or 6.4.2 or does not give the noticeand make the deposit contemplated by subsection 6.4.3, the Borrower shall bedeemed to have requested that the part of the BA Advance then outstanding whichis reaching maturity be converted into a Prime Rate Advance.

 

6.6**                                 Conversionand Extension Mechanism**

** **

If under the conditions

 

### 6.6.1                                                     ofsubsection 6.4.1 and of Section 6.5, the Borrower requests or is deemed tohave requested, as the case may be, that the Agent convert the portion of theBA Advance which is maturing into a Prime Rate Advance, the Lenders shall paythe Bankers’ Acceptances which are outstanding and maturing.  Such payments by the Lenders will constitutean Advance within the meaning of this Agreement and the interest thereon shallbe calculated and payable as the Borrower may request or may be deemed to haverequested;

###  

### 6.6.2                                                     ofsubsection 6.4.3, the Borrower makes a deposit in its account, without limitingin any way the generality of Section 17.5, the Borrower hereby expresslyand irrevocably authorizes the Agent to make any debits necessary in itsaccount in order to pay the Bankers’ Acceptances which are outstanding andmaturing.

 

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** **

6.7**                                 Amountsgiven to the Lenders do not constitute a prepayment**

** **

All amounts debited by the Agent from the Borrower’s account inaccordance with the provisions of subsection 6.6.2 shall not constitute aprepayment in accordance with the provisions of Section 8.3.

 

6.8**                                 Prepaymentof Bankers’ Acceptances**

** **

Notwithstanding any provision hereof, the Borrower may not prepay anyBankers’ Acceptance other than on its maturity date; however, this provisionshall not prevent the Borrower from acquiring, in its discretion but subject tothe other provisions of this Agreement, any Bankers’ Acceptance in circulationfrom time to time.

 

6.9**                                 ApportionmentAmongst the Lenders**

** **

The Agent is authorized by the Borrower and each Lender to allocateamongst the Lenders (other than Foreign Lenders who cannot make BA Advances)the Bankers’ Acceptances to be issued and purchased in such manner and amountsas the Agent may, in its sole discretion, but acting reasonably, considernecessary, so as to ensure that no Lender is required to accept and purchase aBankers’ Acceptance for a fraction of $100,000, and in such event, the Lenders’respective Commitments in any such Bankers’ Acceptances and repayments thereofshall be altered accordingly.  Further,the Agent is authorized by the Borrower and each Lender to cause theproportionate share of one or more Lender’s Advances (calculated based on itsCommitment) to be exceeded by no more than $100,000 each as a result of suchallocations provided that the principal amount of outstanding Advances,including Bankers’ Acceptances, shall not thereby exceed the maximum amount ofthe respective Commitment of each Lender.  Anyresulting amount by which the requested face amount of any such Bankers’Acceptance shall have been so reduced shall be advanced, converted orcontinued, as the case may be, as a Prime Rate Advance, to be madecontemporaneously with the BA Advance.

 

6.10**                           CashDeposits**

** **

Each Lender may, in its discretion, at any time, in the absence of anydemand by the Borrower to such effect, grant an Advance to the Borrower, theamount of which shall be equivalent to the face value of all Bankers’Acceptances then in circulation which have been accepted, which Advance shallnot bear interest.  The amount of theAdvance shall not be taken into account in order to calculate the amount of theCredit used pursuant hereto.  The Agentshall retain the amount of the Advance in a non-interest bearing cashcollateral account as security, for the benefit of the Borrower, which amountmay be entirely set-off against the amount of the Advance and the amount of theBankers’ Acceptances in circulation which such Lender has accepted and may beimputed, in the Lender’s discretion, to the payment of the Bankers’ Acceptancesat their maturity.  The Borrower shallsign and remit as security with regard thereto all appropriate documents whichthe Lenders might judge necessary or desirable, specifically including anassignment of the credit balance of the deposit account held as security.

 

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** **

6.11**                           Daysof Grace**

** **

The Borrower shall not claim from the Lenders any days of grace for thepayment at maturity of any Bankers’ Acceptances presented and accepted by theLenders pursuant to the provisions of this Agreement.  Further, the Borrower waives any defence topayment which might otherwise exist if for any reason a Bankers’ Acceptanceshall be held by any Lender in its own right at the maturity thereof.

 

6.12                           **Obligations Absolute**

** **

The obligations of the Borrower with respect to Bankers’ Acceptancesshall be unconditional and irrevocable and shall be paid strictly in accordancewith the provisions of this Agreement under all circumstances, including thefollowing circumstances:

 

### 6.12.1                                             any lackof validity or enforceability of any draft accepted by any Lender as a Bankers’Acceptance; or

###  

### 6.12.2                                             theexistence of any claim, set-off, defence or other right which the Borrower mayhave at any time against the holder of a Bankers’ Acceptance, the Lenders, orany other person or entity, whether in connection with this Agreement orotherwise.

###  

6.13**                           DepositoryBills and Notes Act**

** **

Bankers’ Acceptances may be issued in the form of a depository bill anddeposited with a clearing house, both terms as defined in the *Depository Bills and Notes Act*.  The Agent and the Borrower shall agree on theprocedures to be followed, acting reasonably. The Lenders are also authorized to issue depository bills asreplacements for previously issued Bankers’ Acceptances, on the same terms asthose replaced, and deposit them with a clearing house against cancellation ofthe previously issued Bankers’ Acceptances.

 

**7.****                                      ILLEGALITY,INCREASED COSTS AND INDEMNIFICATION**

** **

7.1**                                 Illegality,Increased Costs**

** **

If a Lender, acting reasonably, determines (which determination shallbe attested to by a certificate submitted to the Borrower by the Lender with acopy to the Agent and which shall be final and binding between the partieshereto in the absence of manifest error) that (a) the adoption by agovernmental or international authority (including the Bank for InternationalSettlements (the “**BIS**”)) of alaw, directive, requirement or guideline, whether or not having the force oflaw, (b) any modification to a law, directive or guideline, whether or nothaving the force of law, or to the interpretation or application of same by atribunal or governmental or international authority (including the BIS) orother body charged with such interpretation or application, or (c) anyquashing by a tribunal or other governmental or 

 

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international authority or body (including the BIS) of aninterpretation of any law, directive, requirement or guideline, whether or nothaving the force of law:

 

### 7.1.1                                                     hasrendered or will render it illegal or contrary to any law, directive orguideline for any of the Lenders to maintain or to give effect to all or partof their obligations stipulated in this Agreement, including the obligation tomake or maintain all or any part of a BA Advance or a Libor Advance pursuant tothe terms hereof, then the obligation of such Lender(s) to maintain or togive effect to such part of its obligations will become null and, subject tothe provisions of the particular law, directive or guideline and of Section 7.2with respect to losses, costs and expenses, if the Loan affected is a BAAdvance, the Borrower may convert the principal amount thereof into a PrimeRate Advance.  If the Loan affected is aLibor Advance, the provisions of Section 4.12 shall apply.  In either case, the Borrower shall pay theinterest accrued thereon, or may reimburse the particular BA Advance or LiborAdvance, as the case may be, in whole with interest accrued thereon.

###  

### 7.1.2                                                     Suchconversion or reimbursement shall be made at the expiry of the relevantDesignated Period of any then outstanding Libor Advances or BA Advances, as thecase may be, or, if in the judgment of the Lender expressed to the Agent in thecertificate referred to above, an immediate conversion or reimbursement isnecessary, immediately upon demand by the Agent, subject to the payment by theBorrower of breakage costs, if any; or

###  

### 7.1.3                                                     (a) hasimposed, modified or deemed applicable any loan ceiling with respect to theLenders, or imposed, modified or deemed applicable any special tax, reserve,deposit, capital adequacy or similar requirement with respect to the assetsheld by, deposited at or used for the purchase of funds, or to the loans madeby the Lenders, or (b) changes the basis of taxation on payments made tothe Lenders under this Agreement (other than a change affecting the taxes basedon net profits of the Lenders), or (c) imposes upon the Lenders any othermonetary conditions or restrictions with respect to this Agreement, all or anypart of a Loan, as the case may be, or any other document, effect or operationcontemplated hereby, and if the result of any of the foregoing is to increasethe cost to such Lender of making or maintaining its Commitment or any Advance,or to reduce any amount otherwise receivable by such Lender hereunder withrespect thereto, then, in any such case, the Borrower shall promptly pay tosuch Lender, within 10 Business Days from demand, such additional amountsnecessary to compensate such Lender for such additional cost or reduced amountreceivable as is determined in good faith by such Lender.  If a Lender becomes entitled to claim anyadditional amounts pursuant to this Section 7.1, it shall promptly notifythe Borrower, through the Agent, of 

 

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###  

### the event by reason of which it has become so entitled and providereasonable particulars of the calculation of such amount.  A certificate of a Lender as to any suchadditional amounts payable to it shall be conclusive and binding in the absenceof manifest error.

###  

7.2**                                 Indemnity**

** **

The Borrower shall indemnify each Lender against and hold each Lender,as well as its directors, officers and employees, harmless from any loss orexpense, including without limitation any loss or expense arising from interestor fees payable by such Lender to lenders of funds obtained by it in order tomake or maintain any Advance and any loss or expense incurred in liquidating orre-employing deposits from which such funds were obtained, which such Lendermay sustain or incur as a consequence of any (a) default by the Borrowerin the payment when due of the amount of or interest on any Loan or in thepayment when due of any other amount hereunder, (b) default by theBorrower in obtaining an Advance after the Borrower has given notice hereunderthat it desires to obtain such Advance, (c) default by the Borrower inmaking any voluntary reduction of the outstanding amount of any Loan after theBorrower has given notice hereunder that it desires to make such reduction, and(d) the payment of any Bankers’ Acceptance or Libor Advance otherwise thanon the maturity date thereof (including without limitation any such paymentrequired pursuant to Section 8.1 or upon acceleration pursuant to Section 14.2).  A certificate of the Agent providingreasonable particulars of the calculation of any such loss or expense shall beconclusive and binding in the absence of manifest error.  If any Lender becomes entitled to claim anyamount pursuant to this Section 7.2, it shall promptly notify the Borrowerof the event by reason of which it has become so entitled and reasonableparticulars of the related loss or expense, provided that the failure to do sopromptly shall not prejudice the Lenders’ right to claim hereunder.

 

Without prejudice to the survival or termination of any other agreementof the Borrower under this Agreement, the obligations of the Borrower underthis Section 7.2 shall survive the payment of principal and interest onall Loans and the termination of the Credit.

 

**8.****                                      PAYMENT,REPAYMENT AND PREPAYMENT**

** **

8.1**                                 Repaymentof the Loan**

** **

The Borrower hereby agrees to repay the amount of the Loan outstandingunder the Revolving Facility on the last day of the Term.

 

8.2**                                 Amountand Apportionment of Mandatory Repayments**

** **

The Borrower hereby undertakes to make Mandatory Repayments equal tothe sum of:

 

### 8.2.1                                                     100%of the Net Proceeds of all Asset Dispositions (excluding the Net Proceeds ofAsset Dispositions received by the Borrower up to an amount of $50,000,000 inthe aggregate) of the VL Group (excluding 

 

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###  

### the non-material assets referred to in Section 13.3), unless sameare reinvested within 12 months following any such Asset Disposition to acquirecapital assets used in the Core Business, payable within 5 Business Daysfollowing the expiry of such 12 month period; plus

###  

### 8.2.2                                                     Anyamounts payable to the Agent for the Lenders in accordance with the provisionsof Section 12.6, provided that insurance proceeds received by theBorrower, up to an amount of $50,000,000 in the aggregate, will be exempt fromthe imputation rules set out in this Section 8.2 and may be retainedby the Borrower.

###  

The Borrower shall advise the Agent of its intention to make any suchMandatory Repayment by notice in writing substantially in the form of Schedule “B-1”,at least 5 and not more than 20 days before the Mandatory Repayment is due, andshall pay the amount of such Mandatory Repayment to the Agent when it isdue.  All proceeds of each MandatoryRepayment shall be applied to repay and permanently reduce the RevolvingFacility..

 

No such Mandatory Repayment may be made on a date that would require aLibor Advance or BA Advance to be prepaid, except in accordance with theprovisions of Section 8.4.

 

8.3**                                 VoluntaryRepayment and Prepayment of the Loan or Cancellation of the Credit**

** **

On any Business Day during the Term, after having given notice to theAgent of one (1) Business Day with respect to the repayment of Prime RateAdvances and two (2) Business Days with respect to BA Advances,substantially in the form of Schedule “B-1”, the Borrower may repay in minimumamounts of $1,000,000 or in whole multiples of such amount, all or part of theprincipal amount of the Loan under the Revolving Facility, provided that inrespect of a BA Advance, no repayment shall be made on a date other than a maturitydate of the Bankers’ Acceptances outstanding at that time, with, in each case,all interest accrued and unpaid on the amounts so prepaid.  In respect of Cdn. $ Libor Advances byForeign Lenders, no repayment may be made on a day other than a Rollover Date,save as provided in Sections 7.1, 7.2 and 8.4.

 

On any Business Day during the Term, after having given notice to theAgent at least ten (10) days prior to the proposed prepayment,substantially in the form of Schedule “B-1”, the Borrower may repay or prepayin minimum amounts of $10,000,000, or in whole multiples of such amounts, allor part of the principal amount of the Loan, provided that in respect of theLibor Advances, no repayment may be made on a day other than a Rollover Date,save as provided in Sections 7.1, 7.2 and 8.4, and in respect of a BA Advance,no prepayment shall be made on a date other than a maturity date of the Bankers’Acceptances outstanding at that time, with, in each case, all interest accruedand unpaid on the amounts so prepaid. Notwithstanding the foregoing and in the case of voluntary repayments orprepayments under the Revolving Facility other than Cdn. $ Libor Advances byForeign Lenders, accrued and unpaid interest on the amounts repaid or prepaidneed not be paid at the time of the repayment or prepayment, but shall be paidin accordance with the provisions of Section 5.2 hereof.

 

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In addition, the Borrower may, upon the same notice, cancel any portionof the Credit that has not been drawn by the Borrower.  No Facility Fee shall be payable in respectof any portion of the Credit so cancelled as and from the effective date of itscancellation.  The Borrower shall not bepermitted to draw Advances in respect of any portion of the Credit socancelled.

 

8.4**                                 Paymentof Losses Resulting From a Prepayment or a Mandatory Repayment**

** **

If a prepayment or Mandatory Repayment to be made would require therepayment of outstanding Bankers’ Acceptances prior to their maturity, or therepayment of a Libor Advance on a day other than a Rollover Date, the Borrowershall provide to the Agent cash collateral in an amount equal to the faceamount of such Bankers’ Acceptances or the principal amount of such LiborAdvance, as the case may be, which cash collateral shall be held by the Agentin an interest bearing account and used to repay same at maturity or on thenext Rollover Date, as the case may be. However, in the case where the prepayment or Mandatory Repayment wouldrequire the prepayment of a Libor Advance, the Borrower may elect to prepaysame and pay to the Agent for the Lenders the amount of the losses, costs andexpenses suffered or incurred by the Lenders with respect thereto which arereferred to in Section 7.2.

 

8.5**                                 Currencyof Payments**

** **

All payments, repayments, prepayments or Mandatory Repayments, as thecase may be:

 

### 8.5.1                                                     ofprincipal under the Loan, or any part thereof, shall be made in the samecurrency as that in which they are outstanding;

###  

### 8.5.2                                                     ofinterest, shall be made in the same currency as the principal amountoutstanding to which they relate;

###  

### 8.5.3                                                     ofFees, shall be made in Canadian Dollars alone; and

###  

### 8.5.4                                                     ofthe amounts referred to in Section 7.2, shall be made in the same currencyas the losses, costs and expenses suffered or incurred by the Lenders.

###  

8.6**                                 Paymentsby the Borrower to the Agent**

** **

All payments to be made by the Borrower in connection with thisAgreement shall be made in funds having same day value to the Agent, at theAgency Branch, or at any other office or account in Toronto or Montrealdesignated by the Agent.  Any suchpayment shall be made on the date upon which such payment is due, in accordancewith the terms hereof, no later than 11:00 A.M.

 

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8.7           **Paymenton a Business Day**

## ** **

Each time a payment, repayment, prepayment or Mandatory Repayment isdue on a day that is not a Business Day, it shall be made on the followingBusiness Day.

 

8.8           **Payments by the Lenders to the Agent**

 

Any amounts payable to the Agent by a Lender shall be paid in fundshaving same day value to the Agent by the Lenders on a Business Day at theAgency Branch.

 

8.9           **Paymentsby the Agent to the Borrower**

 

Any payment received by the Agent for the account of the Borrower shallbe paid in funds having same day value to the Borrower on the date of receipt,or if such date is not a Business Day, on the next Business Day, at the Branch.

 

8.10         **Netting**

## ** **

On the date of any Advance or on a Rollover Date (a “**Transaction Date**”), the Agent shall be entitled to netamounts payable on such date by the Agent to a Lender against amounts payablein the same currency on such date by such Lender to the Agent, for the accountof the Borrower.  Similarly, on any TransactionDate, the Borrower hereby authorizes each Lender to net amounts payable in onecurrency on such date by such Lender to the Agent, for the account of theBorrower, against amounts payable in the same currency on such date by theBorrower to such Lender in accordance with the Agent’s calculations made inaccordance with the provisions of this Agreement.

 

8.11         **Application of Payments**

## ** **

### 8.11.1                Except as otherwise indicated herein,all payments made to the Agent by the Borrower for the account of the Lendersshall be distributed the same day by the Agent, in accordance with its normalpractice, in funds having same day value, among the Lenders to the accountslast designated in writing by each Lender to the Agent, *pro rata*in accordance with their respective Commitments, and notice thereof shall begiven to the Borrower by the Agent within a reasonable delay.

###  

### 8.11.2                Except as otherwise indicated herein oras otherwise determined by the Lenders, all payments made by the Borrower tothe Agent on behalf of the Lenders shall be applied by the Lenders as follows:

###  

##### (a)                  tothe fees, costs, expenses and accessories contemplated by Article 7, Section 14.5and Section 17.5 or by the Security Documents;

#####  

##### (b)                 toall amounts due under Article 5 hereunder;

 

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#####  

##### (c)                  tothe repayment of the principal amount of the Loan subject, in the case ofMandatory Repayments, to the imputation rules set out in Section 8.2;

#####  

##### (d)                 toany other amounts due pursuant to this Agreement.

#####  

8.12         **No Set-Off or Counterclaim by Borrower**

## ** **

All payments by the Borrower shall be made free and clear of andwithout any deduction for or on account of any set-off or counterclaim.

 

8.13**         DebitAuthorization**

## ** **

The Agent is hereby authorized to debit the Borrower’s and theGuarantors’ account or accounts maintained from time to time at the Branch orelsewhere, and to set off and compensate against any and all accounts, creditsand balances maintained at any time by the Borrower or the Guarantors for theamount of any interest or any other amounts due and owing hereunder from timeto time payable by the Borrower, in order to obtain payment thereof.

 

8.14**         WithholdingTaxes**

## ** **

### 8.14.1                All payments to be made hereunder bythe Borrower shall be made free and clear of, and without deduction orwithholding for or on account of, any present or future tax, levy, impost,duty, charge, assessment or fee (including interest, penalties and additionsthereto) (herein “**Taxes**”), butexcluding net income taxes and franchise taxes (imposed in lieu of incometaxes) imposed on any Lender as a result of a present or former connectionbetween such Lender and the jurisdiction imposing such tax (other than any suchconnection arising solely from such Lender having executed, delivered orperformed its obligations under, or received a payment under, or enforced thisAgreement or any Guarantee).  If anyTaxes are required to be withheld from any payment hereunder, the Borrowershall (a) increase the amount of such payment so that the Lenders willreceive a net amount (after deduction and withholding of all Taxes) equal tothe amount otherwise due hereunder; (b) pay such Taxes to the appropriatetaxing authority for the account of the relevant Lenders and (c) aspromptly as possible thereafter, send the Agent and the Lenders an originalreceipt showing payment thereof, together with such additional documentaryevidence as the Lenders may from time to time reasonably require.

###  

### 8.14.2                Each Lender other than a Foreign Lenderagrees to use reasonable measures to avoid or to minimize any amounts whichmight otherwise be payable pursuant to this Section 8.14, but no Lendershall be required 

###  

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### to disclose any information about its taxes to the Borrower that is notpublicly available.

###  

### 8.14.3                If the Borrower fails to perform itsobligations under subsection 8.14.1, the Borrower shall indemnify the Lendersfor any incremental Taxes, interest or penalties that may become payable by theLenders as a consequence of such failure. The obligations of the Borrower under this Section 8.14 shallsurvive the termination of this Agreement.

###  

# **9.**             SECURITY

# ** **

9.1**           Securityfor Advances Prior to the Phase II Date**

## ** **

As general and continuing security for the performance by the Borrowerof its obligations to the Lenders prior to the Phase II Date hereunder(including under the Cash Management Facilities) and under the SecurityDocuments, and of the Borrower’s obligation to repay the Loan, including allamounts owing by the Borrower to the Lenders in principal, interest andaccessories hereunder and under any agreement pertaining to DerivativeObligations, including the Negative Value of Derivative Instruments enteredinto with a Lender, as such agreements are, from time to time, amended,restated, amended and restated, extended or renewed, the Borrower shall:

 

### 9.1.1                  cause to be executed by QuebecorMedia Inc. (the “**Quebecor Media Guarantee**”) and byeach of the other Guarantors an unconditional solidary (joint and several)Guarantee, in favour of the Agent on behalf of the Lenders, of the obligationsof the Borrower under this Agreement and the Security Documents, substantiallyin the form annexed as Schedule “D”; provided that the Quebecor Media Guaranteeshall incorporate by reference the provisions of, *inter alia*,Sections 8.1 and 8.2 of the Quebecor Media Credit Facility, providing forcertain restrictions as to the ability of Quebecor Media Inc. to incur Debt,sell assets and otherwise perform certain acts, as such provisions appear atthe Closing Date and irrespective of any amendment subsequent thereto; and

###  

### 9.1.2                  cause to be executed by the owner ofthe shares of the Borrower and each of the Initial VL Group Guarantors anagreement creating a first-ranking (prior to the Phase II Date) pledge of theshares of each of the Borrower and the Initial VL Group Guarantors (other thanQuebecor Media Inc. and GVL) to the Agent on behalf of the Lenders, whichagreement shall be substantially in form of Schedule “E”.

###  

9.2**           Securityfor Advances Following the Phase II Date**

## ** **

As general and continuing security for the performance by the Borrowerof its obligations to the Lenders on and after the Phase II Date hereunder(including under the Cash 

 

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Management Facilities) and under the Security Documents, and of theBorrower’s obligation to repay the Loan, including all amounts owing by theBorrower to the Lenders in principal, interest and accessories hereunder andunder any agreement pertaining to Derivative Obligations, including theNegative Value of Derivative Instruments entered into with a Lender, as suchagreements are, from time to time, amended, restated, amended and restated,extended or renewed, the Borrower shall:

 

### 9.2.1                  cause to be executed by each of theGuarantors an unconditional solidary (joint and several) Guarantee (or, in thecase of the Initial VL Group Guarantors, confirmations of their existingGuarantees), in favour of the Agent on behalf of the Lenders, of theobligations of the Borrower under this Agreement and the Security Documents,substantially in the form annexed as Schedule “D”, provided that the Guaranteesprovided by CF Cable TV Inc.and its Subsidiaries shall be limited to the extent contemplated by the termsof the CF Cable Notes. The existing Guarantee executed by GVL shall beamended to provide that the Agent shall not have any recourse to any of theshares owned by GVL which have not been pledged in accordance with theprovisions of subsection 9.1.2.  The Guaranteesprovided by CF Cable TV Inc. and its Subsidiaries shall provide that, to theextent permitted by the provisions of the CF Cable Notes, such Guaranteesconstitute “First Priority Debt”, as such expression is defined in the CF CableNotes;

###  

### 9.2.2                  cause to be executed by QuebecorMedia Inc. a limited-recourse Guarantee agreement with the Agent for theLenders, which will be substantially in the form of Schedule “D” but willprovide that (A) the recourse of the Lenders under such Guarantee shall belimited to the pledge, if any, of the shares referred to in subsection 9.1.2,which pledge shall remain in effect but shall rank second to the PermittedCharge referred to in subsection 1.1.94.7 until the Quebecor Media CreditFacility has been repaid in full and cancelled, and (B) the restrictionscontained in the Quebecor Media Credit Facility and incorporated by referencein the Guarantee referred to in subsection 9.1.1 shall no longer be soincorporated;

###  

### 9.2.3                  execute and cause to be executed bythe Guarantors other than Quebecor Media Inc. and GVL, whose pledges of sharespursuant to the provisions of subsection 9.1.2 shall remain in effect, anagreement pledging the shares of each of their respective Subsidiaries to theAgent on behalf of the Lenders, which agreement shall be substantially in formof Schedule “E” (the “**Share Pledge**”),provided that the Share Pledges by CF Cable TV Inc. and its Subsidiaries shallbe limited to the extent contemplated by the provisions of the CF Cable Notes;

###  

### 9.2.4                  execute and cause to be executed byeach of the Guarantors (other than Quebecor Media Inc.) first-ranking security(subject only to Permitted 

###  

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###  

### Charges) in favour of the Agent on behalf of the Lenders, by way of ahypothec on the universality of all of its movable and immovable propertylocated in the Province of Quebec (and/or, at the option of the Agent, by wayof a hypothec securing Debentures granted in favour of the Agent or acollateral agent designated by the Agent as the power of attorney (“fondé de pouvoir”)of the Lenders within the meaning of Article 2692 of the Civil Code ofQuebec, as contemplated by Section 18.16), provided that (a) anySecurity created by CF Cable TV Inc. and its Subsidiaries shall be limited tothe extent contemplated by the provisions of the CF Cable Notes, and (b) theSecurity created by GVL shall not extend to any shares owned by GVL which havenot been pledged in accordance with the provisions of subsection 9.1.2;

###  

### 9.2.5                  execute first-ranking security(subject only to Permitted Charges) in favour of each Lender that is a bank,within the meaning of the Bank Act (Canada), under Sections 427 and followingof the Bank Act (Canada);

###  

### 9.2.6                  execute and cause to be executed byeach of the Guarantors (other than Quebecor Media Inc. and GVL) in favour ofthe Agent on behalf of the Lenders, a first-ranking (subject only to PermittedCharges) General Security Agreement and mortgage charging all of its propertyand assets, personal (movable) and real (immovable), if any, located elsewherein Canada or in the USA (and/or, at the option of the Agent, by way of adebenture or other instrument containing the same Charges), provided that anySecurity created by CF Cable TV Inc. and its Subsidiaries shall be limited tothe extent contemplated by the provisions of the CF Cable Notes;

###  

### 9.2.7                  execute and cause to be executed byeach of the Guarantors (other than Quebecor Media Inc. and GVL), afirst-ranking assignment, by way of collateral security, of the contractsgoverning or evidencing intellectual property rights (subject to PermittedCharges, and to the extent not prohibited by the terms of the agreementsgoverning such rights) in favour of the Agent on behalf of the Lenders,provided that any Security created by CF Cable TV Inc. and its Subsidiariesshall be limited to the extent contemplated by the provisions of the CF CableNotes;

###  

### 9.2.8                  cause the Agent on behalf of theLenders to be named in all insurance policies protecting the members of the VLGroup and their movable property, activities, business interruption and thirdparty liability against any form of loss as a named insured as its interest mayappear, and deliver to the Agent certificates of insurance in form andsubstance satisfactory to the Agent;

###  

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### 9.2.9                  execute concurrently with (in respectof movable property), and within sixty days of (in respect of immovableproperty), the integration of Videotron Telecom Ltd. (“**VTL**”),by way of amalgamation or otherwise, with the Borrower (the “**Merger**”), any and all Security Documents or as the case maybe, make any additional filings or registrations, reasonably requested by theLenders, to ensure that the Lenders will hold valid and enforceable Securityin, to and under the assets of****VTL acquiredby the Borrower as a result of the Merger;

###  

### 9.2.10                if the Borrower elects to use SpectrumCo. as the bidder on behalf of the Borrower and others in the Spectrum Auctionand Purchase, execute and cause to be executed by the Borrower and any of itsSubsidiaries holding shares or other equity interests in Spectrum Co., from thedate on which any of same are acquired, an agreement pledging such shares andequity interests to the Agent on behalf of the Lenders by way of afirst-ranking pledge (subject only to Permitted Charges), which agreement shallbe substantially in the form of the SharePledge.

###  

9.3**           Limitationson Guarantees and Security for Advances**

## ** **

The liability of eachGuarantor governed by the *Companies Act*(Quebec) under its Guarantee (other than each of the Initial VL GroupGuarantors, the liability of whom is unlimited) (each an “**ApplicableGuarantor**”) shall be limited as follows, but only to theextent that the provisions of Section 123.66 of the *CompaniesAct*(Quebec) apply thereto:

 

### 9.3.1                  on the Phase II Date, the liability of each Applicable Guarantor shallbe limited to the amount of the book value or the realization value of itsassets, whichever is greater, less the sum of its liabilities and its issuedand paid-up share capital account on such date (the “**InitialLiability**”);

###  

### 9.3.2                  every****day thereafter that its Guaranteeremains in effect and until the date of determination on which it is then ableto discharge its liabilities when due, each Applicable Guarantor shall bedeemed to have granted a new Guarantee in an amount equal to the increase inthe aggregate amount of the Guarantee that such Applicable Guarantor canprovide on such day (calculated in accordance with the provisions ofsubsection 9.3.1);

###  

### 9.3.3                  the liability of each Applicable Guarantor may never be less than itsInitial Liability; and

###  

### 9.3.4                  if ever the restriction provided by Law with respect to each ApplicableGuarantor’s ability to execute a Guarantee is repealed, each of the ApplicableGuarantors shall be deemed to have granted an unlimited Guarantee on the datesuch repeal came into force.

###  

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### The relevant amounts on the Phase II Date, asdetermined by the directors of the Applicable Guarantor, will be set forth in acertificate in the form set out in Schedule****“K”, to bedelivered within 5 Business Days following the Phase II Date**.**

###  

9.4**           FurtherLimitations on Guarantees and Security for Advances**

## ** **

Notwithstanding any otherprovision hereof to the contrary, the liability of CF Cable TV Inc. and each ofits Subsidiaries (each a “**Relevant Guarantor**”)shall be limited as follows:

 

### 9.4.1                  on the Phase II Date, the liability of each Relevant Guarantor under itsGuarantee and the Security Documents shall constitute First PriorityDebt within the meaning and to the extent permitted by the trust indenturedated as of July 11, 1995 among the Guarantors party thereto and The ChaseManhattan Bank, as Trustee, providing for the issue of notes, including theaggregate of US$100,000,000 of 12 year notes of CF Cable TV Inc. designated as9 1/8% Senior Secured First Priority Notes due 2007 (the “**TrustIndenture**”) and thereafter shall constitute Second Priority Debtwithin the meaning and to the extent permitted by the Trust Indenture (the “**InitialLiability**”);

###  

### 9.4.2                  every****day thereafter that its Guaranteeremains in effect and until the provisions of subsection 9.4.4 apply, eachRelevant Guarantor shall be deemed to have granted a new Guarantee byincurring additional First Priority Debt and additional Second Priority Debt tothe extent permitted by the Trust Indenture in amounts equal to the increase in the aggregate amountof the Guarantee that such Relevant Guarantor can provide on such day (byway of First Priority Debt and Second Priority Debt under the Trust Indenture);

###  

### 9.4.3                  the liability of each Relevant Guarantor may never be less than itsInitial Liability;

###  

### 9.4.4                  if ever the restriction provided by the Trust Indenture with respect toeach Relevant Guarantor’s ability to execute a Guarantee is no longerapplicable, each of the Relevant Guarantors shall be deemed to have granted anunlimited Guarantee on the date such restriction ceased to be applicable; and

###  

### 9.4.5                  the Security Documents shall obligeeach Relevant Guarantor to provide additional security in the event that itsliability is increased in accordance with the foregoing.

###  

The relevant amounts on thePhase II Date, as determined by the directors of the Relevant Guarantor, willbe set forth in a certificate in the form set out in Schedule****“K”, to be delivered on such date**.**  For the purposes hereof, the directors ofeach Relevant Guarantor 

 

55

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shall, not less frequentlythan quarterly, determine such amounts as of the end of each financial quarterand the Borrower shall deliver or cause to be delivered to the Agent, as partof its Compliance Certificate with respect to such financial quarter, a summaryof such increases, if any, supported by a certificate of the chief financial officerof each Relevant Guarantor setting forth such amounts and reasonable details ofthe calculations thereof.

 

# **10.**          CONDITIONS PRECEDENT

# ** **

10.1**         InitialAdvance under the Revolving Facility and Term Facility A-1**

## ** **

The obligation of the Lenders to make an initial Advance under theRevolving Facility and under Term Facility A-1 is conditional upon the fulfilment of each of theconditions set out in this Section 10.1 and in Section 10.3 to theentire satisfaction of the Agent and the Lenders:

 

### 10.1.1                certified copies of all of theconstating documents, borrowing by-laws and resolutions of the Borrower, ofQuebecor Media Inc., of GVL and of each member of the VL Group shall have beenprovided to the Agent;

###  

### 10.1.2                the Borrower shall have provided anirrevocable direction of payment to the Agent pursuant to which the Borrowerinstructs the Agent, contemporaneously with the first Advance hereunder andusing the proceeds thereof, to repay all amounts due under the Existing CreditAgreement and the Existing Credit Agreement shall have been cancelled;

###  

### 10.1.3                all Charges on the property of eachmember of the VL Group, other than Permitted Charges, shall have beendischarged;

###  

### 10.1.4                each of this Agreement and the SecurityDocuments contemplated by Section 9.1 shall have been executed, delivered,issued or assigned and registered or published, as the case may be, whereverrequired;

###  

### 10.1.5                the Agent shall have received copies ofall existing title and search reports prepared by lawyers or notaries withrespect to any immovable property owned by the VL Group and with respect to anynetwork pertaining to the Core Business, together with an undertaking to updatesame prior to the Phase II Date;

###  

### 10.1.6                evidence satisfactory to the Lendersshall have been provided to the Agent that Quebecor Media Inc. owns all orsubstantially all of the shares of every class of GVL (meaning for these purposes not lessthan 94% of all such shares), and the Lenders shall be satisfied that QuebecorMedia Inc. is in a position to obtain 100% of all such shares within a delaynot exceeding 60****days (or such additional periodas may be approved by the Majority Lenders) from the Closing Date by way of the

###  

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###  

### compulsory acquisition of same in accordance with the provisions of theQuebec Companies Act;

###  

### 10.1.7                evidence satisfactory to the Lendersshall have been provided to the Agent that GVL or another wholly-owned Subsidiary of Quebecor Media Inc. owns (a) allof the shares of every class of each of the Initial VL Group Guarantors, and (b) thepercentages and classes of shares of each Subsidiary of GVL as set out in thediagram referred to in subsection 10.1.10(c);

###  

### 10.1.8                all of the issued and outstandingshares of the Borrower and each of the Guarantors (other than Quebecor MediaInc. and GVL) shall have been pledged in accordance with the pledge describedin subsection 9.1.2, and all of the pledged shares shall have been remitted tothe Agent or to one or more agents of the Agent;

###  

### 10.1.9                all necessary Regulatory Approvals(other than the approval of the CRTC) and all other required approvals shallhave obtained, and all Laws, including environmental Laws, shall have beencomplied with;

###  

### 10.1.10              the Borrower shall have delivered to theAgent a certificate in the form of Schedule “F” signed by an officerstipulating and certifying that:

###  

##### (a)        suchofficer has taken cognizance of all the terms and conditions of this Agreementand of all contracts, agreements and deeds pertaining hereto;

#####  

##### (b)        noDefault or Event of Default has occurred or exists hereunder;

#####  

##### (c)        thecorporate structure of Quebecor Media Inc. and the VL Group is as set out inthe diagram attached to the certificate; and

#####  

##### (d)        subjectto obtaining the approval of the CRTC to the Transaction, each member of the VLGroup holds the permits, Licences, licences and authorizations required inorder to permit it to possess its property and its real estate and to carry onits business in the manner in which it is being carried on at present;

#####  

### 10.1.11              nothing shall have occurred which wouldconstitute a Material Adverse Change;

###  

### 10.1.12              the Borrower shall have delivered to theAgent the favourable legal opinion of counsel to the Borrower and to theGuarantors, addressed to the Lenders, the Agent and its counsel, substantiallyin the form set forth in Schedule “G” and covering as well such other ancillarymatters as 

###  

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### pertain to the transactions contemplated hereunder, as required by theAgent, acting reasonably.

###  

10.2**         InitialAdvance under the Revolving Facility After the Ninth Amendment Closing Date**

## ** **

The obligation of the Lenders to make the initial Advance under theRevolving Facility after the Ninth Amendment Closing Date is conditional uponthe fulfilmentof each of the conditions set out in this Section 10.2 and in Section 10.3to the entire satisfaction of the Agent and the Lenders:

 

### 10.2.1                certified copies of all of theconstating documents, borrowing by-laws and resolutions of the Borrower, eachother member of the VL Group and Spectrum Co. (if the Borrower elects to useSpectrum Co. to act as bidder on behalf of the Borrower and others in theSpectrum Auction and Purchase) not previously provided to the Agent shall havebeen provided to the Agent;

###  

### 10.2.2                each of the Security Documents requiredby Section 9.2 shall have been executed, delivered, issued or assigned andregistered or published, as the case may be, wherever required;

###  

### 10.2.3                all of the issued and outstandingshares of the Subsidiaries referred to in subsection 9.2.3, and the shares ofSpectrum Co. referred to in subsection 9.2.10, owned, directly or indirectly bythe Borrower and any of its Subsidiaries at the relevant time, shall have beenpledged in accordance with the Share Pledge executed by the Borrower and therelevant Subsidiaries and all of the pledged shares shall have been remitted tothe Agent;

###  

### 10.2.4                the Borrower shall have delivered tothe Agent a certificate in the form of Schedule “F” signed by an officerstipulating and certifying that:

###  

##### (a)        suchofficer has taken cognizance of all the terms and conditions of this Agreementand of all contracts, agreements and deeds pertaining hereto;

#####  

##### (b)        noDefault or Event of Default has occurred or exists hereunder;

#####  

##### (c)        thecorporate structure of the VL Group is as set out in the diagram attached tothe certificate;

#####  

##### (d)        eachmember of the VL Group holds the permits, Licences, licences and authorizationsrequired in order to permit it to possess its property and its real estate andto carry on its business in the manner in which it is being carried on atpresent; and

 

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##### (e)        allproperty to be charged by the Security Documents is located in thejurisdictions described in a schedule thereto;

#####  

### 10.2.5                each of the Security Documents shallhave been amended (to the extent required), executed, delivered, issued orassigned and registered or published, as the case may be, wherever required;

###  

### 10.2.6                the Borrower shall have delivered tothe Agent the favourable legal opinion(s) of the counsel to the Borrower,addressed to the Lenders, the Agent and its counsel, in form and substanceacceptable to the Agent and its counsel, acting reasonably, including withregard to the continuing validity of all relevant Guarantees and Security.

###  

10.3         **ConditionsPrecedent to any Advance**

## ** **

The obligation of the Lenders to make any Advance under the Credit isconditional upon each of the following conditions having been satisfied:

 

### 10.3.1                the representations and warrantiescontained in this Agreement shall continue to be true and correct (except wherestated to be made as at a particular date);

###  

### 10.3.2                the Borrower shall have delivered tothe Agent a completed Notice of Borrowing;

###  

### 10.3.3                nothing shall have occurred since theSixth Amendment Closing Date which would constitute a Material Adverse Change;and

###  

### 10.3.4                no Default shall have occurred and be continuingand no Event of Default shall have occurred.

###  

10.4**         Waiver of ConditionsPrecedent**

## ** **

The conditions set out in Sections 10.1, 10.2 and 10.3 are solely forthe benefit of the Lenders, and may be waived by the Agent with the unanimousconsent of the Lenders, without prejudice to the right of the Agent to assertany such condition in connection with any subsequently requested Advance.

 

10.5**         Release of QuebecorMedia Guarantee**

## ** **

The parties agree that the Quebecor Media Guarantee has become alimited recourse guarantee, such that the recourse of the Agent is limited tothe pledge of the shares executed by GVL pursuant to subsection 9.1.2 of thisCredit Agreement, which was thereafter assumed by Quebecor Media Inc.

 

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# ** **

# **11.**          REPRESENTATIONS ANDWARRANTIES

# ** **

For so long as theLoan remains outstanding and unpaid, or the Borrower is entitled to borrowhereunder (whether or not the conditions precedent to such borrowing have beenor may be satisfied), the Borrower hereby represents and warrants to theLenders that:

 

11.1**         Incorporation**

## ** **

Each member of the VL Group is a corporation duly incorporated andorganized, validly existing and in good standing under the Laws of itsjurisdiction of incorporation and of all jurisdictions in which it carries onbusiness or is otherwise required to be so qualified.  Each member of the VL Group has the capacityand power, whether corporate or otherwise, to hold its assets and carry on thebusiness presently carried on by it or which it proposes to carry on hereafterin each jurisdiction where such business is carried on.

 

11.2**         Authorization**

## ** **

The Borrower and each member of the VL Group which is a party to anySecurity Document has the power and has taken all necessary steps under theLaws in order to be authorized to borrow hereunder, to provide the Security, asthe case may be, and to execute and deliver and perform its obligations underthis Agreement and each of the Security Documents to which it is a party, asthe case may be, in accordance with the terms and conditions thereof and tocomplete the transactions contemplated in the Security Documents and herein, asthe case may be.  This Agreement has beenduly executed and delivered by duly authorized officers of the Borrower and is,and each of the Security Documents to which the Borrower and each other memberof the VL Group is a party is, and when executed and delivered in accordancewith the terms hereof, shall be, a legal, valid and binding obligation of theBorrower and each other member of the VL Group, respectively, enforceable inaccordance with its terms.

 

11.3**         Compliance with Lawsand Contracts**

## ** **

The execution and delivery of and performance of the obligations underthis Agreement and each of the Security Documents by the Borrower and eachother member of the VL Group, as the case may be, in accordance with theirrespective terms and the completion of the transactions contemplated thereinand herein by the Borrower and each other member of the VL Group, as the casemay be, do not require any consents or approvals, do not violate any Laws, donot conflict with, violate or constitute a breach under the documents ofincorporation or by-laws of any member of the VL Group or under any agreements,contracts or deeds to which any member of the VL Group is a party or bindingupon it or its assets and do not result in or require the creation orimposition of any Charge whatsoever on the assets of any member of the VLGroup, whether presently owned or hereafter acquired, save for the PermittedCharges.

 

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## ** **

11.4**         Current Business**

## ** **

The VL Group operates businesses in the cable and telecommunicationsindustry, including on-line internet services, telephony, and the sale andrental of videocassettes, or anything related or ancillary thereto

 

11.5**         Financial Statements**

## ** **

The Consolidated financial statements provided from time to timehereunder are prepared in accordance with GAAP applied on a consistent basisthroughout the periods specified (except as noted thereon) and are an accuraterepresentation of the financial position of the VL Group as of the respectivedates specified and the results of their operations and cash flows for therespective periods specified.

 

11.6**         Contingent Liabilitiesand Indebtedness**

## ** **

Neither the Borrower nor any other member of the VL Group has (a) anymaterial Contingent Obligations or contingent liabilities known to it which arenot disclosed or referred to in the most recent financial statements deliveredto the Agent in accordance with the provisions of Section 12.15 orotherwise disclosed to the Agent in writing, or (b) incurred anyIndebtedness which is not disclosed in or reflected in such financialstatements, or otherwise disclosed to the Agent in writing, other thanContingent Obligations, contingent liabilities or Indebtedness incurred in theordinary course of business and Debt permitted hereunder.

 

11.7**         Title to Assets**

## ** **

Each member of the VL Group has good, valid and marketable title to allof its properties and assets, free and clear of any Charges other thanPermitted Charges.  All of the immovableproperty (including any cable network) owned by the VL Group as of the SixthAmendment Closing Date is listed in Schedule “I”.  All premises occupied by any member of the VLGroup as of the Sixth Amendment Closing Date containing material assetsbelonging to such members of the VL Group are also listed in Schedule “I”.  All of the movable property of the VL Groupas of the Sixth Amendment Closing Date is located in the province of Quebec andin Ontario, New Brunswick and Prince Edward Island. Each member of the VL Grouphas rights sufficient for it to use all the Licences, licences, intellectualproperty and patents, patent applications, trade marks, trade mark applications,tradenames, service marks, copyrights, industrial designs, technology and othersimilar intellectual property rights reasonably necessary for the conduct ofits business.  To the knowledge of theBorrower, neither it nor any member of the VL Group is infringing or is allegedto be infringing the intellectual property rights of any other Person.

 

11.8**         Litigation**

## ** **

There are no actions, suits or legal proceedings instituted or pendingor, to the knowledge of each member of the VL Group, threatened, against any ofthem or their property before any 

 

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court or arbitrator or any governmental body or instituted by anygovernmental body which could reasonably be expected to result in a MaterialAdverse Change.

 

11.9**         Taxes**

## ** **

Each member of the VL Group has filed within the prescribed delays allfederal, provincial or other tax returns which it is required by Law to fileand all taxes, assessments and other duties levied by the various governmentalauthorities with respect to each member of the VL Group have been paid whendue, except to the extent that (a) payment thereof is being contested ingood faith by such member of the VL Group in accordance with the appropriateprocedures, for which adequate reserves have been established in the books ofthe relevant member of the VL Group, and (b) the outcome of suchcontestation would not reasonably be expected to result in a Material AdverseChange.

 

11.10**       Insurance**

## ** **

Each member of the VL Group has contracted for the insurance coveragedescribed in Section 12.6.

 

11.11**       No Adverse Change**

## ** **

No Material Adverse Change has occurred since August 31, 2000.

 

11.12**       Regulatory Approvals**

## ** **

No member of the VL Group is required to obtain any consent, approval,authorization, permit, Licence or licence from, nor to effect any filing orregistration with, any federal, provincial or other regulatory authority inconnection with the execution, delivery or performance, in accordance withtheir respective terms, of this Agreement or the Security Documents, anyborrowings hereunder and the granting of the Security, save with respect to thedue registration of any Security Documents that remain to be registered afterthe Sixth Amendment Closing Date.

 

11.13**       Compliance with Laws andLicences**

## ** **

Each member of the VL Group is in full compliance in all materialrespects with all requirements of applicable Laws and with all of theconditions attaching to its permits, authorizations, Licences, licences,certificates and approvals, including without limitation its articles ofincorporation and by-laws.

 

11.14**       Pension and EmploymentLiabilities**

## ** **

Except for a deficit not exceeding $2,000,000 in respect of the pensionplan for executives of the Borrower, no member of the VL Group has any unfundedpension liabilities, whether valued on a going concern or a wind-up basis, andall obligations (including wages, salaries, commissions and vacation pay) tocurrent employees and to former employees have been paid in full or dulyprovided for.

 

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## ** **

11.15**       Priority**

## ** **

The Security and Charges created, evidenced or constituted by or underthe Security Documents bind each member of the VL Group which is a partythereto, are valid and subject to no Charge, other than the Permitted Charges,and are enforceable, as security for the performance of the obligations securedthereunder, in accordance with their respective terms, against the members ofthe VL Group which are parties thereto.

 

11.16       **Completeand Accurate Information**

## ** **

All of the information, reports and other documents and all data (otherthan forecasts), as well as the amendments thereto, provided to the Agent by oron behalf of the VL Group were, at the time same were provided, and are at thedate hereof, complete, true and accurate in all material respects.  All forecasts provided to the Agent wereprepared in good faith and all assumptions used therein were reasonable.

 

11.17**       Share Capital**

## ** **

On the Sixth Amendment Closing Date, all of the shares of the Borrowerand each of the Guarantors (other than Quebecor Media Inc.) are owned, directlyor indirectly, by Quebecor Media Inc., free and clear of any Charges, otherthan Permitted Charges; following the Sixth Amendment Closing Date, no Changeof Control has occurred and the shares of the Borrower and each of theGuarantors (other than Quebecor Media Inc.) owned, directly or indirectly, byQuebecor Media Inc. are owned free and clear of any Charges, other thanPermitted Charges.

 

11.18**       Absence of Default**

## ** **

There exists no Default or Event of Default hereunder.

 

11.19**       Agreements with ThirdParties**

## ** **

Each member of the VL Group is in compliance in all material respectswith each and every one of its obligations under agreements with third partiesto which it is a party or by which it is bound, the breach of which could beexpected to result in a Material Adverse Change.

 

11.20**       Environment**

## ** **

### 11.20.1              There are no existing claims, demands,suits, proceedings or actions of any nature whatsoever, whether threatened orpending, arising out of the presence on any property owned or controlled by anymember of the VL Group, either past or present, of any hazardous substance orhazardous waste, or out of any past or present activity conducted on anyproperty now owned by any member of the VL Group, whether or not conducted byany member of the VL Group, involving hazardous substances or hazardous waste,which would reasonably be expected to result in a Material Adverse Change;

###  

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###  

### 11.20.2              To the best of the knowledge of theBorrower, after due enquiry:

###  

##### (a)        thereis no hazardous substance or hazardous waste existing on or under any propertyof any member of the VL Group which constitutes a material violation of anyordinance, statute or law for which an owner, operator or person in control ofa property may be held liable;

#####  

##### (b)        thebusiness of each member of the VL Group is being carried on so as to respect inall material ways the Laws applicable to environmental and health and safetymatters; and

#####  

##### (c)        nocontaminant, pollutant, toxic substance or material or dangerous waste has beenspilled or emitted into the environment from any property owned, operated orcontrolled by any member of the VL Group for which such member of the VL Groupcould have any material liability.

#####  

11.21**       Survival ofRepresentations and Warranties**

## ** **

All of the representations and warranties made hereunder are true andcorrect at the Closing Date, shall be true and correct at the date of anyAdvance hereunder (except where qualified in this Article 11 as being madeas at a particular date), shall survive the execution and delivery of thisAgreement, any investigation by or on behalf of the Lenders or the making ofany Advance hereunder, and none of same are nor shall be waived, except inwriting.

 

# **12.**          COVENANTS

# ** **

For so long as theLoan remains outstanding and unpaid, or the Borrower is entitled to borrowhereunder (whether or not the conditions precedent to such borrowing have beenor may be satisfied) and unless the Agent shall otherwise agree in writing, theBorrower, for itself and each member of the VL Group and with respect to itselfand each member of the VL Group, agrees as follows:

 

12.1**         Preservation ofJuridical Personality**

## ** **

It shall do or cause to be done all things necessary to preserve andmaintain its corporate existence in full force and effect, except as permittedunder Sections 13.1 and 13.3.

 

12.2**         Preservation ofLicences**

## ** **

It shall maintain in effect and obtain, where necessary, all suchauthorizations, approvals, Licences, licences or consents of such governmentalagencies, whether federal, provincial or local, which may be or becomenecessary or required for each member of the VL Group 

 

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to carry on its businesses and to satisfy its obligations hereunder andunder the Security Documents.

 

12.3**         Compliance withApplicable Laws**

## ** **

It shall conduct its business in a proper and efficient manner andshall keep or cause to be kept appropriate books and records of account, incompliance with the Law, and shall record or cause to be recorded faithfullyand accurately all transactions with respect to its business in accordance withGAAP applied on a consistent basis, and shall comply with all requirements ofLaw and with all the conditions attaching to its permits, authorizations,Licences, licences, certificates and approvals in all material respects.

 

12.4**         Maintenance of Assets**

## ** **

It shall maintain or cause to be maintained in good operating conditionall of its assets used or useful in the conduct of its business, as would aprudent owner of similar property, whether same are held under lease or underany agreement providing for the retention of ownership, and shall from time totime make or cause to be made thereto all necessary and appropriate repairs,renewals, replacements, additions, improvements and other works except aspermitted under Section 13.3.

 

12.5**         Business**

## ** **

It shall not substantially change the nature of its business activitiesfrom its Core Business.

 

12.6**         Insurance**

## ** **

It shall maintain insurance coverage with responsible insurers, inamounts and against risks normally insured by owners of similar businesses orassets in areas which are generally similar to those in which the members ofthe VL Group are engaged.  By no laterthan the Phase II Date, all such policies of insurance will contain a standard “mortgageclause” acceptable to the Agent providing that no such policy may be cancelledwithout the insurer providing not less than 30 days’ prior written notice tothe Agent.  The insurance policiesconfirming the insurance required hereunder shall not contain any co-insuranceprovisions except to the extent such co-insurance provisions would normallyappear in policies covering other Persons engaged in similar businesses andowning similar properties as the VL Group, and consistent with prudent businesspractices.

 

If any proceeds of such insurance become payable at any time, themember of the VL Group entitled to receive same, subject to the rights of theAgent on behalf of the Lenders, shall be entitled to receive such proceeds upto an amount of $50,000,000 in the aggregate; any proceeds in excess of suchamount shall, if requested by the Borrower, be held by the Agent forreinvestment by the Borrower or the relevant Guarantor in capital assets in theCore Business within a period of 12 months from the date of receipt andotherwise shall be paid to the Agent for the benefit of the Lenders as aMandatory Repayment in accordance with the provisions of Section 8.2.

 

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## ** **

12.7**         Payment of Taxes andDuties**

## ** **

It shall pay all taxes, assessments and other governmental duties whichare imposed on it or on its income or profits or its assets, when due andpayable, provided that no such tax, assessment or duty need be paid if (a) itis being contested in good faith by appropriate proceedings promptly initiatedand diligently conducted, and (b) such reserves or other appropriateprovision, if any, as shall be required by GAAP shall have been made therefor,and (c) the outcome of such contestation would not reasonably be expectedto result in a Material Adverse Change.

 

12.8**         Access and Inspection**

## ** **

It shall allow the employees and representatives of the Agent, duringnormal business hours, to have access to and inspect the assets of the membersof the VL Group, to inspect and take extracts from or copies of the books andrecords of the members of the VL Group and to discuss the business, assets,liabilities, financial position, operating results or business prospects of themembers of the VL Group with the principal officers of the members of the VLGroup and, after obtaining the approval of the Borrower which shall not beunreasonably withheld, with the auditors of the Borrower.

 

12.9**         Maintenance of Account**

## ** **

It shall maintain operating accounts at the Branch or other branches ofthe Agent at all times during the Term. In addition, the Lenders shall have the right to provide all of theauxiliary non-credit banking services to the Borrower, at fees acceptable tothe relevant Lender and the Borrower, acting reasonably.

 

12.10**       Performance ofObligations**

## ** **

It shall perform all obligations in the ordinary course of business,except to the extent that the non-fulfilment of same would not reasonably beexpected to result in a Material Adverse Change, and except where the same arebeing contested in good faith, if the outcome of such contestation would notreasonably be expected to result in a Material Adverse Change.  Notwithstanding the foregoing contained inthis Section 12.10, it shall punctually pay all amounts due or to becomedue under this Agreement.

 

12.11**       Maintenance of Ratios**

## ** **

At the end of each quarter during the Term commencing February 28,2001, on a rolling four-quarter basis, the VL Group shall maintain thefollowing ratios, provided that (a) the first test as at February 28,2001, shall be calculated by extrapolating from the relevant results for thatquarter; (b) the second test effective May 31, 2001 shall becalculated by extrapolating from the relevant results for that quarter and thepreceding quarter; (c) the third test effective August 31, 2001 shallbe calculated by extrapolating from the relevant results for that quarter andthe 2 preceding quarters and (d) the fourth and all subsequent tests shallbe calculated in respect of the preceding four quarters:

 

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###  

### 12.11.1              *Leverage Ratio*.  A Leverage Ratio not exceeding the following:

* *
| **Quarter Ending**      | ** ** | **Maximum Leverage Ratio** |
|-------------------------|------------|----------------------------|
| August 31, 2001    |       |                       |
| December 31, 2001  |       | 5.0:1                      |
| March 31, 2002     |       |                       |
| June 30, 2002      |       |                       |
| September 30, 2002 |       |                       |
|                    |       |                       |
| December 31, 2002  |       |                       |
| March 31, 2003     |       | 4.5:1                      |
| June 30, 2003      |       |                       |
|                    |       |                       |
| September 30, 2003 |       |                       |
| December 31, 2003  |       | 5.0:1                      |
| March 31, 2004     |       |                       |
| June 30,  2004     |       |                       |
|                    |       |                       |
| September 30, 2004 |       |                       |
| December 31, 2004  |       | 4.75:1                     |
| March 31, 2005     |       |                       |
| June 30,  2005     |       |                       |
|                    |       |                       |
| Thereafter              |       | 4.5:1                      |

###  

### 12.11.2              *Interest Coverage Ratio*.  An Interest Coverage Ratio of at least:

* *
| **Quarter Ending**      | ** ** | **Minimum Interest Coverage   Ratio** |
|-------------------------|------------|---------------------------------------|
| August 31, 2001    |       |                                  |
| December 31, 2001  |       | 1.75:1                                |
|                    |       |                                  |
| March 31, 2002     |       |                                  |
| June 30, 2002      |       | 2.00:1                                |
| September 30, 2002 |       |                                  |
| December 31, 2002  |       |                                  |
|                    |       |                                  |
| March 31, 2003     |       |                                  |
| June 30, 2003      |       |                                  |
| September 30, 2003 |       | 2.50:1                                |
| December 31, 2003  |       |                                  |
|                    |       |                                  |
| March 31, 2004     |       |                                  |
| and thereafter          |       | 3.00:1                                |

* *

### 12.11.3              *Senior Secured DebtCoverage Ratio*.  A SeniorSecured Debt Coverage Ratio of not more than 2.5:1.

###  

For greatercertainty and without limiting any provision of this Agreement, the Borroweracknowledges that the failure to respect any of the foregoing financial ratiosat any time during the Term constitutes a material breach of this Agreement.

 

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## ** **

12.12**       Mandatory Repayments**

## ** **

It shall pay to the Lenders any amounts required to be paid inaccordance with Section 8.2.

 

12.13**       Maintenance of Security**

## ** **

Itshall take all necessary steps to preserve and maintain in effect the rights ofthe Agent and the Lenders, as well as any collateral agent designated by theAgent, pursuant to the Security Documents, together with any renewals thereofor additional documents creating Charges that may be required from time totime.  In addition, if any new Subsidiaryof any member of the VL Group is created or Acquired, or if a Person otherwisebecomes a member of the VL Group, such Subsidiary will provide Security of thenature described in Article 9.

 

12.14**       Payment of Legal Feesand Other Expenses**

## ** **

Whether the transactions contemplated by this Agreement are concludedor not and whether or not any part of the Credit is actually advanced, in wholeor in part, the Borrower shall pay all reasonable costs relating to the Credit,including in particular:

 

### 12.14.1              the reasonable legal fees and costsincurred by the Agent and the Lenders for the negotiation, drafting, signing,registration, publication and/or service of the commitment letter, thisAgreement and the Security Documents, as well as any amendments, renunciations,consents or examinations pertaining to this Agreement and the SecurityDocuments; and

###  

### 12.14.2              the reasonable costs of syndicating andadvertising, as well as all reasonable fees, including reasonable legal feesand costs, incurred by the Agent, any collateral agent designated by the Agent,and the Lenders to preserve, enforce or exercise  their respective rights hereunder or underthe Security Documents following an action, a Default or an omission of theBorrower or of any other member of the VL Group.

###  

All amounts due to the Agent and the Lenders pursuant hereto shall bearinterest on the Prime Rate Basis from the date of their disbursement by theLenders or from the date of their undertaking until the Borrower has repaidsame in full, with interest on unpaid interest, as in the case of the PrimeRate Advances, taking into account such modifications as may be necessary.  The obligations of the Borrower under this Section 12.14shall subsist notwithstanding the full repayment of the Loan under theprovisions hereof.

 

12.15**       Financial Reporting**

## ** **

For so long as the Loan remains outstanding and unpaid, or the Borroweris entitled to borrow hereunder (whether or not the conditions precedent tosuch borrowing have been or may be satisfied) and unless the Lenders shallotherwise agree in writing, the Borrower

 

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agrees to provide orcause to be provided to the Agent, with sufficient copies for the Agent andeach Lender, and so undertakes:

###  

### 12.15.1                                         **Quarterly Statements**

###  

Within 60 days after the end of each financial quarter of eachfinancial year of the Borrower (other than the last quarter):

 

##### (a)                        theunaudited Consolidated balance sheet of the VL Group as at the end of suchquarter and the related Consolidated statements of earnings and cash flows, forthe period then ended, in each case with comparative figures for the sameperiod for the immediately preceding financial year and in respect of thepreceding financial year end; and

#####  

##### (b)                       theunaudited consolidated balance sheet of the Borrower as at the end of suchquarter and the related consolidated statements of earnings and cash flows ofthe Borrower, determined in accordance with GAAP, for the period then ended, ineach case with comparative figures for the same period for the immediatelypreceding financial year and in respect of the preceding financial year end;and

#####  

##### (c)                        aCompliance Certificate of the chief financial officer of the Borrower in theform of Schedule “J” and setting forth the information necessary to determinewhether the Borrower has complied with the covenants contained in Section 12.11,as well as a reconciliation of the financial statements prepared in accordancewith GAAP to the information used in determining compliance with the financialcovenants using GAAP as at the Sixth Amendment Closing Date, certifying thatthe Borrower is in compliance with all of its covenants hereunder and that noDefault or Event of Default has come to the attention of the officer of theBorrower signing the certificate, after due inquiry, or if a Default or anEvent of Default has occurred, setting out the relevant particulars thereof,the period of existence thereof and what action the Borrower has taken orproposes to take with respect thereto (a “**Compliance Certificate**”).

#####  

### 12.15.2                                         **Annual Statements**

###  

##### (a)                     Within120 days following the end of each financial year of the Borrower, the auditedConsolidated balance sheet of the VL Group as at the end of such year and therelated Consolidated statements of earnings and cash flows for such financialyear, together with comparative figures for the immediately preceding 

 

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##### year, the whole as certified without qualification by the currentauditors of the Borrower or otherwise by another reputable firm of independentchartered accountants acceptable to the Agent, together with the unauditedconsolidated balance sheet of the Borrower as at the end of such year and therelated consolidated statements of earnings and changes in financial positionfor such financial year, determined in accordance with GAAP, together withcomparative figures for the immediately preceding year, and any auditedstatements of any other member of the VL Group that may be prepared; and

#####  

##### (b)                    Within75 days following the end of each financial year of the Borrower, a ComplianceCertificate, based on unaudited financial information, to be updated andreplaced by a second Compliance Certificate to be provided along with theaudited financial statements referred to in paragraph (a) above.

#####  

### 12.15.3                                         **Other Information**

###  

##### (a)                     Within75 days following the end of each financial year of the Borrower commencingwith the financial year ending August 31, 2001, the Annual Business Plan,which shall promptly be submitted to the Agent for the Lenders; and

#####  

##### (b)                    Within75 days following the end of each financial quarter of the Borrower, acertificate of its Chief Financial Officer certifying a detailed calculation ofExcess Cash Flow (in such form and providing such detail as the Agent mayreasonably require) during such quarter (the “**Excess CashFlow Certificate**”); and

#####  

##### (c)                     fromtime to time and forthwith upon demand by the Agent, such data, reports,statements, documents or other additional information pertaining to thebusiness, assets, liabilities, financial position, operating results orbusiness prospects of the VL Group as the Agent may request, acting reasonably.

#####  

12.16                     **Notice of Certain Events**

## ** **

### The Borrower shalladvise the Agent forthwith upon the occurrence of any of the following events:

###  

### 12.16.1                                     The commencementof any proceeding or investigation by or before any governmental body and anyaction or proceeding before any court or arbitrator against any member of theVL Group, or any of its property, assets or activities which could reasonablybe expected to result in a Material Adverse Change;

 

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### 12.16.2                                     The occurrence ofany Material Adverse Change which is known to the Borrower or any other memberof the VL Group, acting reasonably;

###  

### 12.16.3                                     Any Default orEvent of Default, specifying in each case the relevant details and the actioncontemplated in this respect.

###  

## **12.17**                 CF CableInter-Creditor Agreement

## ** **

The Borrower agrees to use its best efforts to obtain the consent,waiver or amendment to the Inter-Creditor Agreement required by the Lenders onthe Sixth Amendment Closing Date from the holders of the CF Cable Notes.

 

## **12.18**                 Accuracy ofReports

## ** **

All information, reports, statements and other documents and dataprovided to the Agent or the Lenders, whether pursuant to this Article orany other provisions of this Agreement shall, at the time same shall beprovided, be true, complete and accurate in all material respects to the extentnecessary to provide the Lenders with a true and accurate understanding oftheir effect.

 

## **12.19**                 Transfer ofLicences from Spectrum Co. to the VL Group

## ** **

The Borrower shall causeSpectrum Co. to transfer to a member of the VL Group that has providedunlimited Guarantees and Security to the Agent for the benefit of the Agent andthe Lenders, all of the licences and rights it obtains in the SpectrumAuction and Purchase inrespect of the Province of Quebec (and for any other area to the extent thatthe licences and rights for such area were acquired using a Letter of Creditissued hereunder or were otherwise paid for by a member of the VL Group) as soonas reasonably possible after any Letter of Credit issued in support of the saidSpectrum Auction and Purchase is presented for payment or payment is otherwisemade to acquire such licences.  TheBorrower shall take all steps required by the Agent to ensure that thetransferred assets are subject to the Security.

 

# **13.**                               NEGATIVECOVENANTS

# ** **

For so long as theLoan or any other amounts payable hereunder to the Lender remain outstandingand unpaid, or the Borrower is entitled to borrow hereunder (whether or not theconditions precedent to such borrowing have been or may be satisfied), theBorrower, for itself and each member of the VL Group and with respect to itselfand each member of the VL Group agrees that it shall not do any of thefollowing:

 

## **13.1**                        Liquidationand Amalgamation

## ** **

Liquidate or dissolve or take any steps to amalgamate, consolidate oreffect any restructuring or corporate or capital reorganization, or change itshead or registered office, 

 

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except where **(i) **(a) thesurviving entity of any such amalgamation or merger assumes all of theobligations hereunder and (b) the transaction in question is between amember of the VL Group and its wholly-owned Subsidiaries or is amongwholly-owned Subsidiaries of the same member of the VL Group; or **(ii) **in all other cases, the transaction in question,in the sole opinion of the Lenders, acting reasonably, does not have adetrimental effect on the financial condition of the VL Group or on theposition of the Lenders and their Security under the Security Documents orotherwise.  Notwithstanding theforegoing, no member of the VL Group may become a Subsidiary of (i) CFCable TV Inc. until the CF Cable Notes have been repaid in full, or (ii) aPerson who is a non-resident of Canada within the meaning of the *Income Tax Act* (Canada), without the prior written consentof the Lenders. For greater certainty, the Lenders hereby consent to the Mergerpursuant to this Section13.1 (ii), subject to compliance with the conditionsprecedent set out in Sections 10.2 and 10.3, and subject to the following:

 

### 13.1.1                                            All of therepresentations and warranties and covenants contained herein shall apply toVTL as and from the date of the Merger;

###  

### 13.1.2                                            VTL shallbecome a member of the VL Group as and from the date of the Merger;

###  

### 13.1.3                                            each of theSecurity Documents with respect to movable (personal) property referred to insubsection 9.2.9 shall have been executed, delivered, issued or assigned andregistered or published, as the case may be, wherever required, and providedthat the Security Documents required with respect to immovable property areexecuted, delivered and registered or published, as the case may be, whereverrequired, within 60 days following the Merger as set out in subsection 9.2.9;and

###  

### 13.1.4                                            TheBorrower shall have delivered to the Agent a certificate in the form ofSchedule “F” signed by an officer stipulating and certifying that:

###  

##### (a)                     suchofficer has taken cognizance of all the terms and conditions of this Agreementand of all contracts, agreements and deeds pertaining hereto;

#####  

##### (b)                    noDefault or Event of Default has occurred or exists hereunder;

#####  

##### (c)                     thecorporate structure of the VL Group is as set out in the diagram attached tothe certificate;

#####  

##### (d)                    VideotronTelecom Ltd. has no Debt as of the date of the Merger, and has no materialliabilities other than those that have been disclosed to the Lenders in thefinancial statements provided to the Lenders immediately prior to the SeventhAmendment Closing Date and liabilities incurred in the ordinary course ofbusiness since that date;

 

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##### (e)                     eachmember of the VL Group holds the permits, Licences, licences and authorizationsrequired in order to permit it to possess its property and its real estate andto carry on its business in the manner in which it is being carried on atpresent, including all Regulatory Approvals; and

#####  

##### (f)                       allproperty to be charged by the Security Documents is located in thejurisdictions described in a schedule thereto;

#####  

## **13.2**                        Charges

## ** **

Create, assume, enter into or permit to subsist, directly orindirectly, any Charge on the property of any member of the VL Group, otherthan Permitted Charges.

 

## **13.3**                        AssetDispositions

## ** **

The VL Group shall not permit an Asset Disposition of all or any partof their property or assets (whether presently held or subsequently acquired),other than sales at fair market value, and, in such case, only if (a) atthe time of the proposed Asset Disposition, there is no Default or Event ofDefault hereunder and the proposed Asset Disposition will not cause such aDefault or Event of Default, (b) the Net Proceeds of such AssetDisposition are dealt with in accordance with the provisions of Section 8.2,and (c) the amount of (A) EBITDA generated during the preceding 12months by the assets comprised in any such Asset Disposition, plus (B) theaggregate 12-month trailing EBITDA generated by all other assets comprised inall previous Asset Dispositions made during the Term (calculated as of the dateof the applicable Asset Disposition), does not exceed 15% of the VL Group’sEBITDA for the 12 months ending on the last day of the month immediatelypreceding the date of the proposed Asset Disposition; provided that the VLGroup shall be permitted to make (i) dispositions of inventory in theordinary course of business, (ii) dispositions of machinery, equipment,spare parts and materials, appliances or vehicles, if same are no longernecessary or useful to the operation of the business or have become obsolete,worn out, surplus, damaged or unusable, as well as the non-material assetslisted in Schedule “I” consisting of surplus real estate of the VL Group, whichare excluded from the Security and not subject to any Charge thereunder, (iii) exchangesof assets between members of the VL Group that have provided unlimitedGuarantees and Security to the Agent for the Lenders. In the event of any suchpermitted Asset Disposition to a Person other than a member of the VL Group,the Security on the assets so disposed of shall be discharged by the Agentwithout any requirement to obtain the consent of the Lenders.  In addition, any member of the VL Group(other than VTL until it has provided Security on all of its assets) shall bepermitted to dispose of Back-to-Back Preferred Shares in order to repayBack-to-Back Debt, and shall also be permitted to dispose of property as partof a Tax Benefit Transaction, provided that (A) no Default or Event ofDefault exists at the time and (B) disposing of such Back-to-BackPreferred Shares or property as part of a Tax Benefit Transaction will notcause a Default or an Event of Default.

 

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## **13.4**                        Preservationof Capital

## ** **

Neither the Borrower nor any of the Guarantors (other than QuebecorMedia Inc.) shall: (a) return any capital to its shareholders or purchase,redeem, repurchase or otherwise acquire, directly or indirectly, forconsideration, any shares of any class of its capital stock now or subsequentlyissued, or any other equity security issued by it of any nature (includingwarrants and options), (b) declare, pay or set aside for payment anydividend or distribution whatsoever in respect of any share of the capitalstock of the Borrower or any of the Initial VL Group Guarantors (provided that (x) adividend or other distribution in an amount of approximately $150,000,000 paidby the Borrower to GVL to permit GVL to repay certain Debt to the Borrower (the“**GVL Distribution**”), (y) distributionsarising under Back-to-Back Transactions and Tax Benefit Transactions, and (z) distributionsconsisting of (1) a quarterly payment equal to (aa) 100% of Excess CashFlow if the Leverage Ratio, calculated on a *pro forma* basis after taking into account the paymentproposed, is greater than 3.5:1 but less than or equal to 4.0:1, or (bb) 50% ofExcess Cash Flow if the Leverage Ratio, calculated on a pro forma basis aftertaking into account the payment proposed, is more than 4.0:1, and (2) amaximum of $50,000,000 net during the Term (provided that no Advance for suchpurpose shall be made if the amount of the Credit available under the RevolvingFacility, after the disbursement of such Advance, would be less than$50,000,000), by way of loans, dividends, return of capital or sharerepurchases will be permitted under this paragraph (b) without complyingwith the provisions of paragraphs (i) and (ii) below), or (c) setaside any funds for any of the purposes proscribed in paragraphs (a) or(b).  However, transactions of the naturedescribed in paragraphs (a), (b) and (c) will be permitted (i) ifall amounts so paid under such provisions are paid to the Borrower or to aGuarantor that has provided an unlimited Guarantee and the Security to theAgent on behalf of the Lenders, or (ii) if the Leverage Ratio, calculatedon a *pro forma*basis after taking intoaccount the payment proposed, is less than or equal to 3.5:1; provided that,with respect to any of the transactions described in paragraphs (a), (b) or(c), (A) no Default or Event of Default exists at the time and (B) makingthe payment of such amount will not cause a Default or Event of Default.

 

## **13.5**                        Restrictionson Subsidiaries

## ** **

Without the consent of the Majority Lenders, no Subsidiary of theBorrower or of any Guarantor shall assume, enter into or otherwise become boundby any agreement or undertaking (including any undertaking in the HYD Offeringor any Additional Offering) that would reasonably be expected to prevent suchPerson from declaring or paying dividends or inter-company payments ordistributions of any kind to the Borrower, except as contained (a) herein,(b) in the CF Cable Notes, until repayment of same, or (c) in theQuebecor Media Facility.

 

## **13.6**                        Issuanceand Transfer of Shares

## ** **

Issue any shares of its capital stock to which are attached votingrights or allow any such shares to be transferred, assigned or otherwisealienated, unless the proceeds thereof are used in accordance with Section 8.2,or such shares are pledged in favour of the Agent on 

 

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behalf of the Lenders under the share pledge agreements contemplated bysubsection 9.1.2 or 9.2.3.

 

## **13.7**                        Acquisitions

## ** **

Make any Acquisition, in any manner whatsoever, directly or indirectly,other than an Acquisition required for the purpose of carrying on its businessin the ordinary course, or permit any Subsidiary or Subsidiaries to beconstituted otherwise than in accordance with the provisions of Section 13.11,except that (A) the members of the VL Group shall be permitted to makeAcquisitions in the Core Business and to create Subsidiaries if: (a) noDefault or Event of Default exists at the time, (b) paying the purchaseprice in respect of such Acquisition will not cause a Default or Event ofDefault, and (c) any Person which is Acquired or created as a Subsidiarybecomes a member of the VL Group and provides the Security contemplated by Article 9,and (B) any member of the VL Group shall be permitted to acquireBack-to-Back Securities in an amount not exceeding the amount of thecorresponding Back-to-Back Securities, and shall also be permitted to acquireproperty as part of a Tax Benefit Transaction, provided that (A) noDefault or Event of Default exists at the time and (B) acquiring suchBack-to-Back Preferred Shares or property as part of a Tax Benefit Transactionwill not cause a Default or an Event of Default.

 

## **13.8**                        Debtand Guarantees

## ** **

Incur or assume Debt, provide Guarantees or render itself liable in anymanner whatsoever, directly or indirectly, for any Indebtedness or obligationwhatsoever of another Person, except (a) hereunder for the purposes setforth in Section 3.1; (b) under the CF Cable Notes, limited to theamount outstanding thereunder at the Closing Date, or any Debt incurred on therefinancing of the CF Cable Notes by a member of the VL Group, whichrefinancing shall be only on an unsecured basis and for an amount not in excessof US$100,000,000; (c) that a member of the VL Group may provide financialassistance to another member of the VL Group that has provided an unlimitedGuarantee and the Security to the Agent on behalf of the Lenders; (d) underthe Cash Management Agreements; (e) in connection with the Acquisition ofConsortium Câble-Axion Digitel Inc., in respect of which not more than $20,000,000will be due; (f) in connection with the Borrower’s existing commercialpaper program which will be terminated on or before December 31, 2000; (g) inconnection with Debt incurred or assumed that is secured by Permitted Charges,and within the limits applicable thereto; (h) in connection withBack-to-Back Transactions and Tax Benefit Transactions (including by way ofunsecured daylight loans); (i) in connection with the HYD Offering; (j) thatthe Borrower may incur or assume Debt by way of Additional Offerings, and thatthe members of the VL Group may provide unsecured Guarantees in respect ofobligations of the Borrower under any such Debt outstanding at any time, to theextent that the Borrower complies with the applicable Leverage Ratio calculatedon a *pro forma* basis; (k) the Borrowermay borrow Subordinated Debt from Quebecor Media Inc. in an initial principalamount of up to $150,000,000, with interest at a rate not exceeding the threemonth bankers’ acceptance rate quoted on Reuter’s Services, page CDOR, asat approximately 10:00 a.m. on such day plus 1.5% per annum (together withinterest accrued thereon or paid in kind, the “**QMISubordinated Debt**”); (l) in connection with an unsecured cashmanagement credit facility limited to a maximum amount of $10,000,000, 

 

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provided that the aggregate amount of such cash management facility andthe Cash Management Facility shall never exceed $15,000,000; (m) additionalunsecured Debt of up to $50,000,000; (n) any unsecured daylight loan inorder to permit the VL Group to purchase from Spectrum Co. any licences grantedas part of the Spectrum Auction and Purchase, which daylight loan will berepaid immediately following such sale by (i) Spectrum Co. using the proceedsof the sale to repurchase the preferred shares or other equity interests heldin it by the VL Group, and (ii) the VL Group using such proceeds to repaythe daylight loan; and (o) in connection with other Subordinated Debt;provided that, with respect to any of the matters described in paragraphs (c) to(n) above inclusive, (A) no Default or Event of Default exists at thetime, (B) incurring or assuming such Debt (including by way of providingsuch Guarantee) will not cause a Default or Event of Default, and (C) on a*pro forma*basis, the incurrence orassumption of such Debt would not reasonably be expected to cause the Borrowerto breach any of its covenants under Section 12.11 hereof.

 

## **13.9**                        FinancialAssistance by the VL Group

## ** **

Make any loan or advance to any party other than (a) ascontemplated by Sections 13.4 and 13.7, or (b) to another member of the VLGroup that has provided an unlimited Guarantee and the Security to the Agent onbehalf of the Lenders and has fully guaranteed the obligations of the Borrowerhereunder, or (c) by way of Back-to-Back Transactions or Tax BenefitTransactions, or (d) under the Cash Management Facilities.  Notwithstanding the foregoing, the VL Groupshall be entitled to provide financial assistance to their customers in theordinary course of the Core Business by way of subsidizing consumer equipmentpurchases and leases and similar transactions.

 

## **13.10**                 SubordinatedDebt

## ** **

Repay any Debt the repayment of which is subordinated to the rights ofthe Lenders, or pay any interest due to the creditor of any such Debt, other than (a) interest due inrespect of Subordinated Debt (including the QMI Subordinated Debt), provided(for greater certainty) that no Default has occurred or will occur as a resultof such payment, and (b) any amount due under or in connection withthe QMI Subordinated Debt, provided that the amount so repaid, together withthe amounts distributed by the Borrower in accordance with Section 13.4,do not in the aggregate exceed the amounts permitted to be distributed by theBorrower under Section 13.4,and (c) in respect of Back-to-Back Securities or Back-to-Back Transactions.  In addition, the Borrower may agree to theconversion of the QMI Subordinated Debt into equity, provided that any newshares resulting from such conversion are pledged to the Agent on behalf of theLenders.

 

## **13.11**                 Members of theVL Group, Related Party Transactions

## ** **

Prior to the Phase II Date, permit any member of the VL Group to ceasebeing wholly-owned, or create or acquire any Subsidiaries other thanwholly-owned Subsidiaries; provided that Télé-Câble Charlevoix Inc. and Sociétéd’Édition et de Transcodage T.E. Ltée. need not be wholly-owned.  On and after the Phase II Date, permit anyChange in Control of the Borrower and the Initial VL Group Guarantors.  In addition, no transaction 

 

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shall be entered into by any member of the VL Group with any Associateof any member of the VL Group except on fair market terms and conditions aswould be contracted by Persons dealing at arms’ length, provided that this last sentenceshall not apply to the transactions expressly permitted by paragraph (h) ofSection 13.8; provided, however, for greater certainty, that to theextent payments made in connection with or in respect of the Back-to-BackTransactions are made to any Affiliates of the Borrower that are not members ofthe VL Group, all corresponding payments required to be paid by such Affiliatespursuant to the related Back-to-Back Securities are received, immediately priorto, concurrently with or immediately subsequent to any such payments, by allapplicable members of the VL Group, and each such payment by a member of the VLGroup shall be conditional upon receipt of an equal or greater amount from suchnon-member of the VL Group that is an Affiliate.  Finally, payment of a management fee or othersimilar expense by the Borrower to its direct or indirect parent company shallbe permitted for bona fide services (including reimbursement for expensesincurred in connection with, or allocation of corporate expenses in relationto, providing such services) provided to, and directly related to theoperations of, the VL Group, in an aggregate annual amount not to exceed 1.25%of consolidated revenues (being gross revenues of the VL Group calculated inaccordance with GAAP, less any amounts derived from Subsidiaries that are notmembers of the VL Group, and save that any portion of such gross revenuesderived from a Person that is not a Subsidiary of the Borrower accounted for bythe equity method of accounting shall be included in such calculation only tothe extent of the amount of dividends or distributions actually paid to amember of the VL Group by such Person) in any twelve-month period.

 

## **13.12**                 DerivativeInstruments

## ** **

Enter into any Derivative Instruments other than for the purposes ofhedging interest rate, commodity or foreign exchange exposure, and not for thepurpose of speculation.

 

# **14.**                               EVENTSOF DEFAULT AND REALIZATION

# ** **

## **14.1**                        Eventof Default

## ** **

The occurrence of any of the following events shall constitute an Eventof Default unless remedied within the prescribed delays or renounced to inwriting:

 

### 14.1.1                                            If theBorrower fails to make any payment of interest or principal with respect to theLoan when due; or

###  

### 14.1.2                                            If the VLGroup fails to respect any of the financial tests set out in Section 12.11hereof at any time;

###  

### 14.1.3                                            If theBorrower or any Guarantor fails to respect any of its other obligations andundertakings hereunder or under the Security Documents or another undertakingof the Borrower or any other 

 

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### Guarantor with respect to the Loan not otherwise contemplated by this Section 14.1and has not remedied the Default within fifteen (15) days following the date onwhich the Agent has given written notice to the Borrower; or

###  

### 14.1.4                                            If (a) theBorrower or any Guarantor commits an act of bankruptcy within the meaning ofthe Bankruptcy and Insolvency Act, makes an assignment in favour of its creditors,consents to the filing of a petition for a receiving order against it, files aproposal within the meaning of the Bankruptcy and Insolvency Act, or makes amotion to a tribunal to name, or consents to, approves or accepts theappointment of a trustee, receiver, liquidator or sequestrator with respect toitself or its property, commences any other proceeding with respect to itselfor its property under the provisions of any law contemplating reorganizations,proposals, rectifications, compromises or liquidations in connection withinsolvent Persons, in any jurisdiction whatsoever; or (b) a trustee,receiver, liquidator or sequestrator is named with respect to the Borrower, anyGuarantor or its property, or the Borrower or any Guarantor is judged insolventor bankrupt; or (c) a proceeding seeking to name a trustee, receiver,liquidator or sequestrator, or to force the Borrower or any Guarantor intobankruptcy, is commenced against the Borrower or any Guarantor and is notsettled or withdrawn within a delay of 30 days; or

###  

### 14.1.5                                            If theBorrower or any Guarantor is in default with respect to any Indebtedness (otherthan amounts due to the Lenders hereunder) which has resulted in Indebtednessin excess of an amount of $10,000,000 ($25,000,000 in the case of QuebecorMedia Inc.) becoming payable prior to its stated maturity or scheduledrepayment date; or

###  

### 14.1.6                                            If one ormore judgments is rendered by a competent tribunal against the Borrower or anyGuarantor in an aggregate amount in excess of $10,000,000 ($25,000,000 in thecase of Quebecor Media Inc.) (net of applicable insurance coverage pursuant towhich liability is acknowledged in writing by the insurer, with a copy promptlyprovided to the Agent on behalf of the Lenders) and remains undischarged orunsatisfied for a period ending on the earlier of (a) 25 days from suchjudgment, or (b) the 5th day prior to the date on which such judgmentbecomes executory; or

###  

### 14.1.7                                            If propertyof any of the Borrower or any Guarantor having a total value in excess of$10,000,000 ($25,000,000 in the case of Quebecor Media Inc.) is the object ofone or more seizures or takings of possession or other legal proceedings bycreditors, and is not released within 15 days in respect of movable property or45 days in respect of immovable

 

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### property, and in any event, not less than 10 days prior to the datefixed for any sale of such property; or

###  

### 14.1.8                                            If anystatement, attestation, financial statement, report, data, representation orwarranty which was given by, for the account of or in the name of the Borroweror any Guarantor to the Lenders, with respect to this Agreement or any SecurityDocuments, is revealed at any time to be misleading or incorrect in anymaterial respect when it was made, and if any event or circumstance which makessuch statement, attestation, financial statement, report, data, representationor warranty misleading in any material respect is capable of being remedied,such action as may be required to remedy same shall not have been completedwithin 15 days of the earlier of (a) the Agent notifying the Borrower or,as the case may be, a Guarantor of such breach, or (b) the Borrowernotifying the Agent of the Default in accordance with subsection 12.16.3; or

###  

### 14.1.9                                            If in theopinion of the Lenders, acting in good faith, there occurs a Material AdverseChange and the situation has not been remedied within 15 days following theearlier of the date on which (a) the Agent gave notice thereof to theBorrower, or (b) the Borrower gave notice to the Agent in accordance withsubsection 12.16.3; or

###  

### 14.1.10                                      If a Change inControl occurs; or

###  

### 14.1.11                                      If any Guaranteeto be provided by any Guarantor hereunder is or purports to be terminated bynotice given under article 2362 of the Quebec Civil Code.

###  

## **14.2**                        Remedies

## ** **

If an Event of Default occurs under subsection 14.1.4, the Loans shallimmediately become due and exigible, without presentation, demand, protest orother notice of any nature, to which the Borrower hereby expresslyrenounces.  If any other Event of Defaultoccurs, the Agent may, at its option, and shall if required to do so by theLenders, declare immediately due and exigible, without presentation, demand,protest or other notice of any nature, to which the Borrower hereby expresslyrenounces, notwithstanding any provision to the contrary effect in thisAgreement or in the Security Documents:

 

### 14.2.1                                            the entireamount of the Loan, including the amount corresponding to the principal amountof the BA Advances then outstanding, in principal and interest, notwithstandingthe fact that one or more of the holders of the Bankers’ Acceptances issuedpursuant to the provisions hereof have not demanded payment in whole or in partor have demanded only partial payment from the Lenders, and the amount of theNegative Value of Derivative Instruments. The Borrower shall not have the right to 

 

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### invoke against the Lenders any defence or right of action,indemnification or compensation of any nature or kind whatsoever that theBorrower may at any time have or have had with respect to any holder of one ormore of the Derivative Instruments or Bankers’ Acceptances issued in accordancewith the provisions hereof; and

###  

### 14.2.2                                            an amountequal to the amount of losses, costs and expenses assumed by the Lenders andreferred to in Section 7.2; and

###  

the Credit shall cease and as and from such time shall be cancelled,and the Lenders may exercise all of their rights and recourses under theprovisions of this Agreement and of the Security Documents.  For greater certainty, from and after theoccurrence of any Default or Event of Default, the Lenders shall not be obligedto make any further Advances under the Credit.

 

## **14.3**                        Bankruptcyand Insolvency

## ** **

If the Borrower files a notice of intention to file a proposal, orfiles a proposal under the Bankruptcy and Insolvency Act, or if the Borrowerobtains the permission of the court to file a Plan of Arrangement under theCompanies’ Creditors Arrangements Act, and if a stay of proceedings is obtainedor ordered under the provisions of either of those statutes, without prejudiceto the Lenders’ rights to contest such stay of proceedings, the Borrowercovenants and agrees to continue to pay interest on all amounts due to theLenders in accordance with the provisions hereof. In this regard, the Borroweracknowledges that permitting the Borrower to continue to use the proceeds ofthe Loan constitutes valuable consideration provided after the filing of anysuch proceeding in the same way that permitting the Borrower to use leasedpremises constitutes such valuable consideration.

 

## **14.4**                        Notice

## ** **

Except where otherwise expressly provided herein, no notice or demandof any nature is required to be given to the Borrower by the Agent in order toput the Borrower in default, the latter being in default by the simple lapse oftime granted to execute an obligation or by the simple occurrence of a Default.

 

## **14.5**                        Costs

## ** **

If an Event of Default occurs, and within the limits contemplated by Section 12.14,the Agent may impute to the account of the Lenders and pay to other personsreasonable sums for services rendered with respect to the realization,recovery, sale, transfer, delivery and obtention of payment with respect to theSecurity and may deduct the amount of such costs and payments from the proceedswhich it receives therefrom.  The balanceof such proceeds may be held by the Agent in the place of such Security and,when the Agent decides it is opportune, may be applied to the account of thepart of the indebtedness of the Borrower to the Lenders which the Agent deemspreferable, without prejudice to the rights of the Lenders against the Borrowerfor any loss of profit.

 

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## **14.6**                        Relationswith the Borrower

## ** **

The Agent may grant delays, take security or renounce thereto, acceptcompromises, grant acquittances and releases and otherwise negotiate with theBorrower as it deems advisable without in any way diminishing the liability ofthe Borrower or prejudicing the rights of the Lenders with respect to theSecurity.

 

## **14.7**                        Applicationof Proceeds

## ** **

Subject to the provisions hereof, the Agent may apply the proceeds ofrealization of the property contemplated by the Security Documents and of anycredit or compensating balance in reduction of the part of the Loan (principal,interest or accessories and/or the Negative Value of Derivative Instrumentsoriginally entered into with a Lender) which the Agent judges appropriate.  If any Lender is owed money by the Borroweras a result of Derivative Obligations, and, in particular, as a result of theNegative Value of Derivative Instruments, the claim of such Lender shall rank *pari passu*with the other amounts comprising the Loan.

 

# **15.**                               JUDGMENTCURRENCY

# ** **

## **15.1**                        Rules ofConversion

## ** **

If for the purpose of obtaining judgment in any court or for any otherpurpose hereunder, it is necessary to convert an amount due, advanced or to beadvanced 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 atwhich, in accordance with normal banking procedures, the Agent could purchase,in the Canadian money market or the Canadian exchange market, as the case maybe, the First Currency with the Second Currency on the date on which thejudgment is rendered, the sum is exigible or advanced or to be advanced, as thecase may be.  The Borrower agrees thatits obligations in respect of any First Currency due from it to the Lenders in accordancewith the provisions hereof shall, notwithstanding any judgment rendered orpayment made in the Second Currency, be discharged by a payment made to theAgent on account thereof in the Second Currency only to the extent that, on theBusiness Day following receipt of such payment in the Second Currency, theAgent may, in accordance with normal banking procedures, purchase on theCanadian money market or the Canadian foreign exchange market, as the case maybe, the First Currency with the amount of the Second Currency so paid or whicha judgment rendered exigible; and if the amount of the First Currency which maybe so purchased is less than the amount originally due in the First Currency,the Borrower agrees as a separate and independent obligation andnotwithstanding any such payment or judgment to indemnify the Lenders againstsuch deficiency.

 

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## **15.2**                        Determinationof an Equivalent Currency

## ** **

If, in their discretion, the Lenders or the Agent choose or, pursuantto the terms of this Agreement, are obliged to choose the equivalent inCanadian Dollars of any securities or amounts expressed in US Dollars or theequivalent in US Dollars of any securities or amounts expressed in CanadianDollars, the Agent, in accordance with the conversion rules as stipulatedin Section 15.1

 

### 15.2.1                                            on the dateindicated in the Notice of Borrowing as the date of a request for an Advance;and

###  

### 15.2.2                                            at anyother time which in the opinion of the Lenders is desirable;

###  

may, using the spot rate of the Agent on such date, determine theequivalent in Canadian Dollars or in US Dollars, as the case may be, of anysecurity or amount expressed in the other currency pursuant to the termshereof.  Immediately following suchdetermination, the Agent shall inform the Borrower of the conclusion which theLenders have reached.

 

# **16.**                               ASSIGNMENT

# ** **

## **16.1**                        Assignmentby the Borrower

## ** **

The rights of the Borrower under the provisions hereof are purelypersonal and may not be transferred or assigned, and the Borrower may nottransfer or assign any of its obligations, such assignment being null and of noeffect opposite the Lenders and rendering any balance outstanding of theamounts referred to in Section 14.2 immediately due and exigible at theoption of the Lenders and further releasing the Lenders from any obligation tomake any further Advances under the provisions hereof.

 

## **16.2**                        Assignmentsand Transfers by the Lenders

## ** **

### 16.2.1                                            Each Lendermay, at its own cost, assign or transfer to a Person entitled to lend money inCanada or any other Person consented to by the Borrower, the Agent and theIssuing Lender, or, to the extent permitted under Section 17.15, to aForeign Lender (the “**Assignee**”) inaccordance with this Article 16 up to 100% of its rights, benefits andobligations hereunder (provided that its aggregate retained Commitment, if any,under the Revolving Facility is not less than $5,000,000) with the priorconsent of the Borrower, which shall not be unreasonably withheld ordelayed.  The Borrower may not refuse toconsent to an assignment or transfer on the sole grounds that the Assignee is aForeign Lender, provided the provisions of Section 17.15 arerespected.  After the occurrence of aDefault, any Lender may transfer all or any part of its rights, benefits andobligations hereunder to any Person, without the 

 

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### consent of the Borrower, but upon notice to the Agent and the Borrowerand subject to the consent of the Issuing Lender.

###  

### 16.2.2                                            Except forany assignments or transfers arranged by the Arrangers for their Affiliates inorder to fulfill their sell-down requirements, for which no restrictions shallapply, any such assignment or transfer under the Revolving Facility shall befor a minimum amount of  $5,000,000 inthe aggregate and in multiples of $1,000,000 thereafter.

###  

### 16.2.3                                            Notwithstandingsubsection 16.2.1, each Lender shall be entitled to assign or transfer, at itsown cost, in accordance with the other provisions of this Section 16(including 16.5), its rights, benefits and obligations hereunder, in whole orin part, to a parent or subsidiary corporation or an Affiliate of such Lender.

###  

## **16.3**                        TransferAgreement

## ** **

If a Lender wishes to assign or transfer all or any of its rights,benefits and obligations hereunder in accordance with Section 16.2, thensuch assignment or transfer shall be effected by the execution and delivery ofa duly completed and executed Transfer Agreement by such Lender to the Agenttogether with a transfer fee of $3,500 (other than in connection with the initialsyndication of the Credit), at least 5 Business Days prior to the effectivedate of such transfer, whereupon, to the extent that in such Transfer Agreementsuch Lender seeks to assign or transfer its rights and obligations hereunder:

 

### 16.3.1                                            such Lendershall be released from further obligations to the Borrower with respect to theportion of the obligations of such Lender assumed by the Assignee;

###  

### 16.3.2                                            theAssignee shall assume the obligations of such Lender and acquire the rights ofsuch Lender in respect of the Borrower, without novation of the Borrower’sobligations;

###  

### 16.3.3                                            the Agent,such Lender and the Assignee shall acquire the same rights and assume the sameobligations between themselves as they would have acquired and assumed had theAssignee been an original party hereto with the obligations assumed and therights acquired by it as a result of such assignment or transfer; infurtherance of such principle, the Assignee shall be deemed to have agreed tobe bound by the provisions of the Inter-Creditor Agreement, to the extent itremains in force at the relevant time, as if it had been an original partythereto; and

###  

### 16.3.4                                            theBorrower, the Agent and such Lenders shall all execute such documents andperform such acts as may be required to give effect to the transfer orassignment.

 

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## **16.4**                        Notice

## ** **

The Agent shall promptly deliver an executed copy of any TransferAgreement to each party thereto.

 

## **16.5**                        Sub-Participations

## ** **

A Lender may, at its own cost, grant one or more sub-participations inits rights, benefits and obligations hereunder, provided that, notwithstandingany such sub-participation, such Lender shall remain, insofar as the Borrowerand the Agent is concerned, as the Lender responsible hereunder, and theBorrower shall not be obliged to recognize any such sub-participant as havingthe rights against it which it would have if it had been a party hereto.

 

## **16.6**                        General

## ** **

Notwithstanding anything contained in this Article:

 

### 16.6.1                                            the Agentshall act as agent for each Assignee and, in this connection, with respect toall decisions, notices and other matters relating to anything referred to inthis Agreement, the Borrower shall only be obliged to give notice to or requestconsents from the Agent;

###  

### 16.6.2                                            except asthe result of an assignment and transfer permitted under Section 17.15,the amounts payable by the Borrower under this Agreement shall not increase,whether in respect of withholding on account of taxes or otherwise, as a resultof any such assignment or transfer to an Assignee which is a non-resident ofCanada as defined in the Income Tax Act (Canada); and

###  

### 16.6.3                                            any Lender(a “**Granting Lender**”) may grant to aspecial purpose funding vehicle (an “**SPV**”),identified as such from time to time by the Granting Lender to the Agent andthe Borrower, the option to provide to the Borrower all or any part of anAdvance that such Granting Lender would otherwise be required to makehereunder; provided that (a) nothing herein shall constitute a commitmentby any SPV to make any Advance, and (b) if an SPV does not make suchAdvance, the Granting Lender shall remain liable to do so.  Any Advance by an SPV shall be made using theCommitment of the Granting Lender as if the Advance in question had been madeby such Granting Lender.  Each partyhereto agrees that no SPV shall be liable for any indemnity or other paymenthereunder, all of which liability shall remain with the Granting Lender.  Accordingly, each party further agrees (whichagreement will survive the termination hereof) that it shall not institute anyinsolvency or other proceeding against the SPV until a date that is not lessthan one year and one day following the repayment of all of such SPV’scommercial paper and other senior Indebtedness. In addition, any SPV may (a) assign all 

 

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### or any portion of its interests in any Loans (i) with notice to,but without the consent of the Borrower or the Agent, and without paying anyfees therefor, to the Granting Lender or (ii) to any financialinstitution, with the consent of the Borrower and the Agent providing liquidityand/or credit support to or for the account of such SPV to support the fundingand maintenance of Advances; and (b) disclose on a confidential basis anynon-public information relating to the Loans to any rating agency, commercialpaper dealer or provider of any surety, guarantee or credit or liquidityenhancement to such SPV.

###  

# **17.**                               MISCELLANEOUS

# ** **

## **17.1**                        Notices

## ** **

Except where otherwise specified herein, all notices, requests, demandsor other communications between the parties hereto shall be in writing andshall be deemed to have been duly given or made to the party to whom suchnotice, request, demand or other communication is given or permitted to begiven or made hereunder, when delivered to the party (by certified mail,postage prepaid, or by facsimile or by physical delivery) to the address ofsuch party and to the attention indicated under the signature of such party orto any other address which the parties hereto may subsequently communicate toeach other in writing.  Notwithstandingthe foregoing, any notice shall be deemed to have been received by the party towhom it is addressed (a) upon receipt if sent by mail and (b) iftelecopied before 3:00 p.m. on a Business Day, on that day and iftelecopied after 3:00 p.m. on a Business Day, on the Business Day nextfollowing the date of transmission.  Ifnormal postal or telecopier service is interrupted by strike, work slow-down,fortuitous event or other cause, the party sending the notice shall use suchservices which have not been interrupted or shall deliver such notice bymessenger in order to ensure its prompt receipt by the other party.

 

## **17.2**                        Amendmentand Waiver

## ** **

The rights and recourses of the Lenders under this Agreement and theSecurity Documents are cumulative and do not exclude any other rights andrecourses which the Lenders might have, and no omission or delay on the part ofthe Lenders in the exercise of any right shall have the effect of operating asa waiver of such right, and the partial or sole exercise of a right or powerwill not prevent the Lenders from exercising thereafter any other right orpower.  The provisions of this Agreementmay only be amended or waived by an instrument in writing (and not orally) ineach case signed by the Agent with the approval of the requisite majority ofLenders.

 

## **17.3**                        DeterminationsFinal

## ** **

In the absence of any manifest error, any determinations to be made bythe Lenders in accordance with the provisions hereof, when made, are final andirrevocable for all parties.

 

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## **17.4**                        EntireAgreement

## ** **

The entire agreement between the parties is expressed herein, and novariation or modification of its terms shall be valid unless expressed inwriting and signed by the parties.  Allprevious agreements, promises, proposals, representations, understandings andnegotiations between the parties hereto which relate in any way to the subjectmatter of this Agreement are hereby deemed to be null other than thosecontained in a letter by the Borrower to the Agent dated December 21, 2005and confirmed by the Agent on March 1, 2006, and a letter by the Borrowerto the Agent dated February 28, 2006 and confirmed by the Agent on thesame date.

 

## **17.5**                        Indemnificationand Compensation

## ** **

In addition to the other rights now or hereafter conferred by law andthose described in subsection 6.6.2 and Section 8.13, and without limitingsuch rights, if a Default or Event of Default should occur, each Lender and theAgent is hereby authorized by the Borrower, at any time and from time to time,subject to the obligation to give notice to the Borrower subsequently andwithin a reasonable delay, to indemnify, compensate, use and allocate anydeposit (general or special, term or demand, including, without limitation, anydebt evidenced by certificates of deposit, whether or not matured) and anyother debt at any time held or due by the Lenders to the Borrower or to itscredit or its account, with respect to and on account of any obligation andindebtedness of the Borrower to the Lenders in accordance with the provisionshereof or the Security Documents, including, without limitation, the accountsof any nature or kind which flow from or relate to this Agreement or theSecurity Documents, whether or not the Agent has made demand under the termshereof or has declared the amounts referred to in Section 14.2 as exigiblein accordance with the provisions of that Section and even if such obligationand Debt or either of them is a future or unmatured Debt.

 

## **17.6**                        Benefitof Agreement

## ** **

This Agreement shall be binding upon and enure to the benefit of eachparty hereto and its successors and permitted assigns.

 

## **17.7**                        Counterparts

## ** **

This Agreement may be signed in any number of counterparts, each ofwhich shall be deemed to constitute an original, but all of the separatecounterparts shall constitute one single document.

 

## **17.8**                        ApplicableLaw

## ** **

This Agreement, its interpretation and its application shall begoverned by the Laws of the Province of Quebec and the Laws of Canadaapplicable therein.

 

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## **17.9**                        Severability

## ** **

Each provision of this Agreement is separate and distinct from theothers, such that any decision of a court or tribunal to the effect that anyprovision of this Agreement is null or unenforceable shall in no way affect thevalidity of the other provisions of this Agreement or the enforceabilitythereof.  Any provision of this agreementwhich is prohibited or unenforceable in any jurisdiction shall, as to suchjurisdiction, be ineffective to the extent of such prohibition orunenforceability without invalidating the remaining provisions hereof, and anysuch prohibition or unenforceability in any jurisdiction shall not invalidateor render unenforceable such provision in any other jurisdiction.  To the extent permitted by applicable Laws,the Borrower hereby waives any provision of any Laws which renders anyprovision hereof prohibited or unenforceable in any respect.

 

## **17.10**                 FurtherAssurances

## ** **

The Borrower covenants and agrees on its own behalf and on behalf ofeach member of the VL Group that, at the request of the Agent, the Borrower andeach other member of the VL Group will at any time and from time to timeexecute and deliver such further and other documents and instruments and do allacts and things as the Agent in its absolute discretion requires in order toevidence the indebtedness of the Borrower under this Agreement or otherwise, includingunder any Derivative Instruments, and to confirm and perfect, and maintainperfection of, the Security.

 

## **17.11**                 Good Faith andFair Consideration

## ** **

Each party hereto acknowledges and declares that it has entered intothis Agreement freely and of its own will. In particular, each party hereto acknowledges that this Agreement wasfreely negotiated by the Borrower and the Lenders in good faith, that thisAgreement does not constitute a contract of adhesion, that there was noexploitation of the Borrower by the Lenders, and that there is no seriousdisproportion between the consideration provided by the Lenders and thatprovided by the Borrower.

 

## **17.12**                 Responsibilityof the Lenders

## ** **

Each Lender shall be solely responsible for the performance of its ownobligations hereunder.  Accordingly, noLender is in any way jointly and severally or solidarily responsible for theperformance of the obligations of any other Lender.

 

## **17.13**                 Indemnity

## ** **

The Borrower agrees to indemnify and defend each of the Agent, eachLender, and their respective directors, officers, agents and employees from,and hold each of them harmless against, any and all losses, liabilities,claims, damages or expenses of any kind which at any time or from time to timemay be asserted against or incurred or paid by any of them for or in connectionwith, arising directly or indirectly from or relating to: (i) theparticipation of the Agent or of any of the Lenders in the transactionscontemplated by this Agreement, (ii) any Advance or the use or proposeduse of the proceeds therefrom (including any refusal by 

 

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the Issuing Lender to honor a demand for payment under a Letter ofCredit if the documents presented in connection with such demand do not strictlycomply with the terms of such Letter of Credit), (iii) the role of theAgent or the Lenders in any investigation, litigation or other proceedingbrought or threatened relating to the Credit, (iv) the presence on orunder or the release or migration from any property or into the environment ofany hazardous material, and/or (v) the compliance with or enforcement ofany of their rights or obligations hereunder, including without limitation:

 

### 17.13.1                                      the fees anddisbursements of counsel;

###  

### 17.13.2                                      the costs ofdefending, counterclaiming or claiming over against third parties in respect ofany action or matter and any cost, liability or damage arising out of anysettlement; and

###  

### 17.13.3                                      other thanlosses, liabilities, claims, damages or expenses incurred by reason of thegross negligence or willful misconduct of the indemnified party, as determinedby a final judgment of a court of competent jurisdiction.

###  

## **17.14**                 Language

## ** **

The parties acknowledge that they have required that the presentagreement, as well as all documents, notices and legal proceedings enteredinto, given or instituted pursuant hereto or relating directly or indirectlyhereto be drawn up in English.  Les parties reconnaissent avoirexigé la rédaction en anglais de la présente convention ainsi que de tousdocuments exécutés, avis donnés et procédures judiciaires intentées,directement ou indirectement, relativement ou à la suite de la présenteconvention.

 

## **17.15**                 ForeignLenders

## ** **

Notwithstanding the provisions of subsection 16.2.1 hereof, each of theBorrower, the Agent and the Lenders agrees that:

 

### 17.15.1                                      the Arrangers (ashereinafter defined) may solicit and receive Commitments from any Person who isa non-resident of Canada (within the meaning of the *Income TaxAct* (Canada)) and who is authorized by law to lend money (“**Foreign Lenders**”) to the extent of $11,000,000 of theRevolving Facility;

###  

### 17.15.2                                      in such case, theAffiliates of the Arrangers may make the required Assignments to such ForeignLenders; and

###  

### 17.15.3                                      upon compliancewith the provisions of Article 16, such Foreign Lenders may further assignand transfer their Commitments to any other Foreign Lender.

 

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Neither the Agent nor the Borrower shall accept or be bound by anyassignment or transfer where the effect of the purported assignment or transferwould be to create Commitments of Foreign Lenders in excess of the limitsmentioned above. “**Arrangers**”shall mean RBC Dominion Securities Inc., Bank of America, N.A., Canada Branch,BMO Nesbitt Burns Inc., The Toronto-Dominion Bank and their respectivesuccessors and assignees.

 

Notwithstanding any other provision of this Agreement to the contrary,any Foreign Lender governed by the applicable Laws of the United States ofAmerica may at any time assign all or a portion of its rights under thisAgreement and all other documents ancillary thereto (including the SecurityDocuments) to a Federal Reserve Bank.  Nosuch assignment shall relieve the assigning Foreign Lender from its obligationsunder this Agreement or such other documents.

 

# **18.**                               THEAGENT AND THE LENDERS

# ** **

18.1         **Authorization of Agent**

 

### 18.1.1                                               EachLender hereby irrevocably appoints and authorizes the Agent to act for allpurposes as its agent hereunder and under the Security Documents with suchpowers as are expressly delegated to the Agent by the terms of this Agreement,together with such other powers as are reasonably incidental thereto andundertakes not to take any action on its own. Notwithstanding the provisions of the Civil Code of Quebec relating tocontracts generally and to mandate, the Agent shall have no duties orresponsibilities except those expressly set forth in this Agreement.  As to any matters not expressly provided forby this Agreement, the Agent shall act hereunder or in connection herewith inaccordance with the instructions of the Lenders in accordance with theprovisions of this Article 18, but, in the absence of any such instructions,the Agent may (but shall not be obliged to) act as it shall deem fit in thebest interests of the Lenders, and any such instructions and any action takenby the Agent in accordance herewith shall be binding upon each Lender.  The Agent shall not, by reason of thisAgreement, be deemed to be a trustee for the benefit of any Lender, theBorrower or any other Person. Neither the Agent nor any of its directors,officers, employees or agents shall be responsible to the Lenders for anyrecitals, statements, representations or warranties contained in this Agreementor in any certificate or other document referred to, or provided for in, orreceived by any of them under, this Agreement, for the value, validity,effectiveness, genuineness, enforceability or sufficiency of this Agreement, orany other document referred to or provided for herein or any collateralprovided for hereby or for any failure by the Borrower to perform itsobligations hereunder.  The Agent mayemploy agents and attorneys-in-fact and shall not be responsible for thenegligence or misconduct of any such agents or attorneys-in-fact selected by itwith reasonable care.  Neither the Agentnor any of its directors, officers, employees or agents shall be responsiblefor any 

###  

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### action taken or omitted to be taken by it or them under or inconnection herewith, except for its or their own gross negligence or wilfulmisconduct.

###  

### 18.1.2                                               For the purposes of creating a *solidarité active* between each Lender, taken individually,and the Agent in accordance with Article 1541 of the *Civil Codeof Québec*, the Borrower and each Lender (on its own behalf)acknowledge and agree with the Agent that such Lender and the Agent are herebyconferred the legal status of solidary creditors of the Borrower and theGuarantors in respect of all amounts, liabilities and other obligations,present and future, owed by the Borrower to the Agent and such Lender hereunderand under Derivative Instruments (collectively, the “**LenderSolidary Claim**”). Accordingly, but subject (for the avoidance of doubt) to Article 1542of the *Civil Code of Québec*, the Borrower andeach of the Guarantors is irrevocably bound towards the Agent and each Lenderin respect of the entire Lender Solidary Claim of the Agent and such Lender,such that the Agent and each Lender shall at all times have a valid andeffective right of action for the entire Lender Solidary Claim of the Agent andsuch Lender and the right to give a full acquittance for it.  Thus, without limiting the generality of theforegoing, the Agent, as solidary creditor for itself and each Lender, shall atall times have a valid and effective right of action in respect of all amounts,liabilities and other obligations owed by the Borrower and the Guarantors tothe Agent and the Lenders or any of them hereunder and under DerivativeInstruments and the right to give full acquittance for same.  The parties further agree and acknowledgethat the Security Documents described in subsections 9.1.1, 9.1.2,9.2.1, 9.2.2, 9.2.3, 9.2.4, 9.2.7 and 9.2.9, as the case may be, shall be granted to the Agent, for its own benefitand for the benefit of the Lenders, as solidary creditor as hereinabove setforth.

###  

18.2         **Agent’s Responsibility**

## ** **

### 18.2.1                                               TheAgent shall be entitled to rely upon any certificate, notice or other document(including any cable, telegram, telex or telecopy) believed by it to be genuineand correct and to have been signed or sent by or on behalf of the properperson or persons, and upon advice and statements of legal advisers,independent accountants and other experts selected by the Agent.  The Agent may deem and treat each Lender asthe holder of the Commitment in the Loan made by such Lender for all purposeshereof unless and until an Assignment has been completed in accordance with Section 16.2.

###  

### 18.2.2                                               TheAgent shall not be deemed to have knowledge of the occurrence of a Default orEvent of Default unless the Agent has received notice from a Lender or theBorrower describing such a Default or Event of Default 

 

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###  

### and stating that such notice is a “Notice of Default”.  In the event that the Agent receives such anotice of the occurrence of a Default or Event of Default or otherwise becomes awarethat a Default or Event of Default has occurred, the Agent shall promptly givenotice thereof to the Lenders.  The Agentshall take such action with respect to such Default or Event of Default asshall be reasonably directed by the Lenders in accordance with the provisionsof this Article 18 provided that, unless and until the Agent shall havereceived such directions, the Agent may (but shall not be obliged to) take suchaction, or refrain from taking such action, with respect to such a Default orEvent of Default as it shall deem advisable in the best interest of theLenders.

###  

### 18.2.3                                               TheAgent shall have no responsibility, (a) to the Borrower on account of thefailure of any Lender to perform its obligations hereunder, or (b) to anyLender on account of the failure of the Borrower to perform its obligationshereunder.

###  

### 18.2.4                                               EachLender severally represents and warrants to the Agent that it has made its ownindependent investigation of the financial condition and affairs of theBorrower in connection with the making and continuation of its Commitment inthe Loan hereunder and has not relied on any information provided to suchLender by the Agent in connection herewith, and each Lender represents andwarrants to the Agent that it shall continue to make its own independentappraisal of the creditworthiness of the Borrower while the Loan is outstandingor the Lenders have any obligations hereunder.

###  

18.3         **Rights of Agent as Lender**

 

With respect to its Commitment in the Loan, the Agent in its capacityas a Lender shall have the same rights and powers hereunder as any other Lenderand may exercise the same as though it were not acting as the Agent and theterm “Lender” shall, unless the context otherwise indicates, include the Agentin its capacity as a Lender.  The Agentmay (without having to account therefor to any Lender) accept deposits from,lend money to and generally engage in any kind of banking or other businesswith the Borrower as if it were not acting as the Agent and may accept fees andother consideration from the Borrower for customary services in connection withthis Agreement and the Loan and otherwise without having to account for thesame to the Lenders.

 

18.4         **Indemnity**

## ** **

Each Lender agrees to indemnify the Agent, to the extent not otherwise reimbursedby the Borrower, rateably in accordance with its respective Commitments, forany and all liabilities, obligations, losses, damages, penalties, actions,judgements, suits, costs, expenses or disbursements of any kind and naturewhatsoever which may be imposed on, incurred by or asserted against, the Agentin any way relating to or arising out of this 

 

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Agreement, the Security Documents or any other documents contemplatedby or referred to herein or therein or the transactions contemplated hereby orthereby (excluding, unless a Default or Event of Default is apprehended or hasoccurred and is continuing, normal administrative costs and expenses incidentalto the performance of its agency duties hereunder) or the enforcement of any ofthe terms hereof or of any such other documents, provided that no Lender shallbe liable for any of the foregoing to the extent they arise from the Agent’sgross negligence or wilful misconduct.

 

18.5         **Notice by Agent to Lenders**

 

As soon as practicable after its receipt thereof, the Agent willforward to each Lender a copy of each report, notice or other document requiredby this Agreement to be delivered to the Agent for such Lender.

 

18.6         **Protection of Agent**

 

### 18.6.1                                               TheAgent shall not be required to keep itself informed as to the performance orobservance by the Borrower of this Agreement or any other document referred toor provided for herein or therein or to inspect the properties or books of theBorrower.  Except (in the case of theAgent) for notices, reports and other documents and information expresslyrequired to be furnished to the Lenders by the Agent hereunder, the Agent shallhave no duty or responsibility to provide any Lender with any credit or otherinformation concerning the affairs or financial condition of the Borrower whichmay come to the attention of the Agent, except where provided to the Agent forthe Lenders, provided that such information does not confer any advantage tothe Agent as a Lender over the other Lenders. Nothing in this Agreement shall oblige the Agent to disclose anyinformation relating to the Borrower if such disclosure would or might, in theopinion of the Agent, constitute a breach of any Laws or duty of secrecy orconfidence.

###  

### 18.6.2                                               Unlessthe Agent shall have been notified in writing or by telegraph, telex ortelecopier by any Lender prior to the date of an Advance requested hereunderthat such Lender does not intend to make available to the Agent such Lender’sproportionate share of such Advance, based on its Commitment, the Agent mayassume that such Lender has made such Lender’s Commitment in such Advanceavailable to the Agent on the date of such Advance and the Agent may, inreliance upon such assumption, make available to the Borrower a correspondingamount.  If such corresponding amount isnot in fact made available to the Agent by such Lender, the Agent shall beentitled to recover such amount (together with interest thereon at the ratedetermined by the Agent as being its cost of funds in the circumstances) ondemand from such Lender or, if such Lender fails to reimburse the Agent forsuch amount on demand, from the Borrower.

###  

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###  

### 18.6.3                                               Unlessthe Agent shall have been notified in writing or by telegraph, telex ortelecopier by the Borrower prior to the date on which any payment is duehereunder that the Borrower does not intend to make such payment, the Agent mayassume that the Borrower has made such payment when due and the Agent may, inreliance upon such assumption, make available to each Lender on such paymentdate an amount equal to such Lender’s *pro rata* shareof such assumed payment.  If it isestablished that the Borrower has not in fact made such payment to the Agent,each Lender shall forthwith on demand repay to the Agent the amount madeavailable to such Lender (together with interest at the rate determined by theAgent as being its cost of funds in the circumstances).

###  

18.7         **Notice by Lenders to Agent**

 

Each Lender shall endeavour to use its best efforts to notify the Agentof the occurrence of any Default or Event of Default forthwith upon becomingaware of such event, but no Lender shall be liable if it fails to give suchnotice to the Agent.

 

18.8         **Sharing Among the Lenders**

 

Each Lender agrees that as amongst themselves, except as otherwiseprovided for by the provisions of this Agreement, all amounts received by theAgent, in its capacity as agent of the Lenders pursuant to this Agreement orany other document contemplated hereby (whether received by voluntary payment,by the exercise of the right of set-off or compensation or by counterclaim,cross-claim, separate action or as proceeds of realization of any security,other than agency fees), and all amounts received by any Lender in relation to this Agreementshall be shared by each Lender *pro rata*, inaccordance with their respective Commitment and each Lender undertakes to doall such things as may be reasonably required to give full effect to this Section 18.8. If any amount which is so shared islater recovered from the Lender who originally received it, each other Lendershall restore its proportionate share of such amount to such Lender, withoutinterest.

 

As a necessary consequence of the foregoing, each Lender shall share,in a percentage equal to its Commitment (and, for the purposes of this Section,a Lender that holds a Derivative Instrument creating Deriviative Obligationsshall have a Commitment that is deemed to be in an amount equal to (a) itsCommitment otherwise calculated, plus (b) the Negative Value of DerivativeInstruments entered into by such Lender that created Derivative Obligations),any losses incurred as a result of any Default or Event of Default by theBorrower, and shall pay to the Agent, within two (2) Business Daysfollowing a request by the Agent, any amount required to ensure that suchLender bears its *pro rata* share of such losses, ifany, including any amounts required to be paid to any Lender in respect of anyBankers’ Acceptances and, for greater certainty, amounts forming part of theCash Management Facilities (which form part of the Revolving Facility).  Such obligation to share losses shall beabsolute and unconditional and shall not be affected by any circumstance,including, without limitation, (1) any set-off, compensation,counterclaim, recoupment, defence or 

 

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other right which such Lender may have against the Agent, the Borroweror any other Person for any reason whatsoever; (2) the occurrence orcontinuance of any Default or Event of Default; (3) any adverse change inthe condition (financial or otherwise) of the Borrower or any other Person; (4) anybreach of this Agreement by the Borrower or any other Person; or (5) any othercircumstance, happening or event whatsoever, whether or not similar to any ofthe foregoing.  If any Lender does notmake available the amount required hereunder, the Agent shall be entitled torecover such amount on demand from such Lender, together with interest thereonat the Prime Rate from the date of non-payment until such amount is paid infull.

 

18.9         **Derivative Obligations**

## ** **

### 18.9.1                                               TheDerivative Obligations shall be secured by the Security provided that therelated Derivative Instruments:

###  

(a)           aregoverned by an ISDA Master Agreement; and

 

(b)           providethat bankruptcy or insolvency constitutes an event of default thereunder.

 

### 18.9.2                                               EachLender shall confirm to the Agent and to the Borrower, upon request, quarterlyon or about the last day of each financial quarter of each financial year ofthe Borrower, the Negative Value of the Derivative Instruments issued by it orcontracted through it, calculated on a net as well as on a gross basis whereseveral Derivative Instruments are governed by the same Master Agreement, aswell as the Credit Facility in respect of which such Derivative Instrumentsapply.

###  

18.10       **Procedure with respect toAdvances**

 

Subject to the provisions of this Agreement, upon receipt of a Noticeof Borrowing from the Borrower, the Agent shall, without delay, advise eachLender of the receipt of such notice, of the date of such Advance, of itsproportionate share of the amount of each Advance and of the relevant detailsof the Agent’s account(s).  Each Lendershall disburse its proportionate share of each Advance, taking into account itsCommitment, and shall make it available to the Agent (no later than 10:00 A.M.)on the date of the Advance fixed by the Borrower, by depositing itsproportionate share of the Advance in the Agent’s account in Canadian Dollarsor US Dollars, as the case may be.  Oncethe Borrower has fulfilled the conditions stipulated in this Agreement, theAgent will make such amounts available to the Borrower on the date of theAdvance, at the Branch, and, in the absence of other arrangements made inwriting between the Agent and the Borrower, by transferring or causing to betransferred an equivalent amount in the case of a direct Advance, and theAvailable Proceeds (as defined in subsection 6.2.4 (d)) in the case of Banker’sAcceptances, in accordance with the instructions of the Borrower which appearin the Notice of Borrowing with respect to each Advance; however, theobligation of the Agent with respect hereto is limited to taking the stepsjudged commercially reasonable in order to follow such instructions, and onceundertaken, such steps shall constitute conclusive evidence that the 

 

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amounts have been disbursed in accordance with the applicableprovisions. The Agent shall not be liable for damages, claims or costs imputedto the Borrower and resulting from the fact that the amount of an Advance didnot arrive at its agreed-upon destination.

 

18.11       **Accounts kept by eachLender**

 

Each Lender shall keep in its books, in respect of its Commitment,accounts for the Libor Advances (if a Foreign Lender), Prime Rate Advances,Bankers’ Acceptances and other amounts payable by the Borrower under thisAgreement.  Each Lender shall makeappropriate entries showing, as debits, the amount of the Debt of the Borrowerto it in respect of the Libor Advances, Prime Rate Advances and BA Advances, asthe case may be, the amount of all accrued interest and any other amount due tosuch Lender pursuant hereto and, as credits, each payment or repayment ofprincipal and interest made in respect of such indebtedness as well as anyother amount paid to such Lender pursuant hereto.  These accounts shall constitute (in theabsence of manifest error or of contradictory entries in the accounts of theAgent referred to in Section 4.4) *prima facie*evidence of their content against the Borrower.

 

The accounts which are maintained by the Agent shall constitute, exceptin the case of manifest error, *prima facie*proof of the amounts advanced and the Bankers’ Acceptances accepted by eachLender, the interest and other amounts due to them and the payments ofprincipal, interest or others made to the Lenders.

 

18.12       **Binding Determinations**

 

The Agent shall proceed in good faith to make any determination whichis required in order to apply this Agreement and, once made, such determinationshall be final and binding upon all parties, except in the case of manifesterror.

 

18.13       **Amendment of Article 18**

 

The provisions of this Article 18 relating to the rights andobligations of the Lenders and the Agent *inter se* may beamended or added to, from time to time, by the execution by the Agent and theLenders of an instrument in writing and such instrument in writing shallvalidly and effectively amend or add to any or all of the provisions of this Article affecting the Lenders without requiring the execution of such instrument inwriting by the Borrower.

 

18.14       **Decisions, Amendments andWaivers of the Lenders**

 

When the Lenders may or must consent to an action or to anything or toaccomplish another act in applying this Agreement, the Agent shall request thateach Lender give its consent in this regard. Subject to the provisions of Section 18.15, all decisions taken bythe Lenders shall be taken as follows: a) if there are two Lenders, byunanimous consent; b) if there are three or more Lenders, by the MajorityLenders.  The Agent shall confirm suchconsent to each Lender and to the Borrower.

 

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## ** **

18.15       **Authorized Waivers,Variations and Omissions**

## ** **

If so authorized in writing by the Lenders, the Agent, on behalf of theLenders, may grant waivers, consents, vary the terms of this Agreement and theSecurity Documents and do or omit to do all acts and things in connection herewithor therewith.  Notwithstanding theforegoing, except with the prior written agreement of each of the Lenders,nothing in Section 18.14 or this Section 18.15 shall authorize (i) anyextension of the date for, or alteration in the amount, currency or mode ofcalculation or computation of any payment of principal or interest or otheramount, (ii) any increase in the Commitment of a Lender, (iii) anyextension of any maturity date, (iv) any change in the terms of Article 18,(v) any change in the manner of making decisions among the Lendersincluding the definition of Majority Lenders, (vi) the release of theBorrower or any Guarantor, except as provided herein with respect to permittedAsset Dispositions or as contemplated in Section 13.1, (vii) therelease, in whole or in part, of any of the Security Documents or the Securityconstituted thereby, except as provided herein with respect to permitted AssetDispositions or as contemplated in Section 13.1, (viii) any change inor any waiver of the conditions precedent provided for in Article 10 or (ix) anyamendment to this Section 18.15.

 

18.16       **Provisions for the Benefitof Lenders Only - Power of Attorney for Quebec Purposes**

 

Without limiting thepowers of the Agent hereunder or under the Security Documents and to the extentapplicable, each of the Lenders hereby acknowledges that the Agent (or acollateral agent designated by the Agent) shall, for the purposes of holdingany security granted under the hypothecs described in Section 9.2.3 orgranted under Section 9.2.9 hereof to secure payment of the Debentures, bethe holder of an irrevocable power of attorney (*fondé depouvoir*) (within the meaning of Article 2692 of the *Civil Code of Quebec*) for all present and future Lenders andin particular for all present and future holders of the Debentures.  Each of the Lenders hereby constitutes, tothe extent necessary, the Agent (or such designated collateral agent) as theholder of such irrevocable power of attorney in order to hold security grantedunder such hypothecs to secure the Debentures. Each Assignee shall be deemed to have confirmed and ratified theconstitution of the Agent as the holder of such irrevocable power of attorneyby execution of the relevant Transfer Agreement.  Notwithstanding the provisions of Section 32of the *An Act respecting the Special Powers ofLegal Persons***(Quebec), the Borrower, the Guarantors and the Lendersirrevocably agree that the Agent may acquire and be the holder of aDebenture.  By executing a Debenture, theissuer of the Debenture shall be deemed to have acknowledged that the Debentureconstitutes a title of indebtedness, as such term is used in Article 2692of the *Civil Code of Quebec*.

 

18.17       **Provisions for the Benefitof Lenders Only**

 

The provisions of this Article 18 relating to the rights andobligations of the Lenders and Agent *inter se* shallbe operative as between the Lenders and Agent only, and the Borrower shall nothave any rights or obligations under or be entitled to rely for any purposesupon 

 

96

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such provisions.  However, theprovisions of subsection 18.2.3 and 18.16 shall be applicable as between theBorrower, the Guarantors (if applicable) and the Agent.

 

18.18       **Resignation of Agent**

 

### 18.18.1                                         Notwithstandingthe irrevocable appointment of the Agent, a majority of Lenders holding notless than 66.67% of the Commitments may (with the consent of the Borrower),upon giving the Agent thirty (30) days prior written notice to such effect,terminate the Agent’s appointment hereunder provided that a successor Agent hasbeen appointed at or prior to the expiry of such notice.

###  

### 18.18.2                                         The Agent mayresign its appointment hereunder at any time without giving any reason thereforby giving written notice to such effect to each of the other partieshereto.  Such resignation shall not beeffective until a successor Agent has been appointed.

###  

### 18.18.3              In the eventof any such termination or resignation, the Lenders shall appoint a successorAgent that is willing to accept such role and is acceptable to the Borrowerwithin thirty (30) days therefrom, deliver copies of all accounts to suchsuccessor and the retiring Agent shall be discharged from any furtherobligations hereunder but shall remain entitled to the benefit of the provisionsof this Article 18 and the Agent’s successor and each of the other partieshereto shall have the same rights and obligations among themselves as theywould have had if such successor originally had been a party hereto as Agent.

###  

18.19       **No Novation**

## ** **

The parties hereto agree thatthe changes to the terms and conditions of the Credit Agreement and theamendments and restatement set out herein and the execution of these presentsshall not constitute novation, and that all Security shall continue to apply tothis Credit Agreement, as amended and restated by these presents, and all otherobligations secured thereby.

 

# **19.**                               FORMALDATE

# ** **

19.1         **Formal Date**

 

For the purposes of convenience, this Agreement may be referred to asbearing the Formal Date of November 28, 2000 notwithstanding its actualdate of signature.

 

97

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IN WITNESS WHEREOFTHE PARTIES HERETO HAVE SIGNED THIS AGREEMENT ON THE DATE AND AT THE PLACEFIRST HEREINABOVE MENTIONED.

 

 
| **VIDÉOTRON LTÉE**              | ** ** | **ROYAL BANK OF CANADA**                      |
|-------------------------------------------|------------|-----------------------------------------------|
| ** **                                | ** ** | ** **                                    |
| ** **                                | ** ** | ** **                                    |
| Per:                                      |       |                                          | Per: |   |
|                                      |       |                                          |   |   |
| Per:                                      |       |                                          | Per: |   |
|                                      |       |                                          |
| Address: 300 Viger St. East               |       | Address: 1 Place Ville Marie                  |
| 6th floor                            |       | 4th floor                                |
| Montreal, Quebec                          |       | Montreal, Quebec                              |
| H2X 3W4                                   |       | H3B 4R8                                       |
|                                      |       |                                          |
| Attention: Treasurer                      |       | Attention: Managing Director Corporate Credit |
|                                      |       |                                          |
| Telephone: (514) 380-1912                 |       | Telephone: 878-7214                           |
| Fax: (514) 380-1983                       |       | Fax: (514) 878-7220                           |
|                                      |       |                                          |
|                                      |       |                                          |
| **THE TORONTO-DOMINION BANK**             | ** ** | **BANK OF MONTREAL**                          |
| ** **                                | ** ** | ** **                                    |
| ** **                                | ** ** | ** **                                    |
| Per:                                      |       |                                          | Per: |   |
|                                      |       |                                          |   |   |
| Per:                                      |       |                                          | Per: |   |
|                                      |       |                                          |
| Address: Corporate and Investment Banking |       | Address: Loan Products Group                  |
| 500 St. Jacques, 9th floor           |       | Investment and Corporate Banking              |
| Montreal, Quebec                          |       | 1 First Canadian Place, 4th floor        |
| H2Y 1S1                                   |       | Toronto, Ontario M5X 1H3                      |
|                                      |       |                                          |
| Attention: Manager                        |       | Attention: Vice-President                     |
|                                      |       |                                          |
| Tel: (514) 289-0102                       |       | Tel: (416) 359-6873                           |
| Fax: (514) 289-0788                       |       | Fax: (416) 359-7796                           |

 

98

----

 
| **BANK OF AMERICA, N.A.**                | ** ** | **ROYAL BANK OF CANADA, as Agent**       |
|------------------------------------------|------------|------------------------------------------|
| **CANADA BRANCH**                        |       |                                     |
| ** **                               |       |                                     |
| ** **                               |       |                                     |
| Per:                                     |       |                                     | Per: |   |
|                                     |       |                                     |   |   |
|                                     |       |                                     | Per: |   |
|                                     |       |                                     |   |
| Address: Global Corporate and Investment |       | Address: 200 Bay Street, 12th floor |
| Banking                                  |       | South Tower, Royal Bank Plaza            |
| 200 Front St. West, Suite 2700      |       | Toronto, Ontario                         |
| Toronto, Ontario                         |       | M5J 2W7                                  |
| M5V 3L2                                  |       |                                     |
|                                     |       |                                     |
| Attention: Vice-President                |       | Attention:                               |
| Tel: (416) 349-5352                      |       | Tel: (416) 842-3901                      |
| Fax: (416) 349-4283                      |       | Fax: (416) 842-4023                      |
|                                     |       |                                     |
|                                     |       |                                     |
| **CANADIAN IMPERIAL BANK OF**            | ** ** | **THE BANK OF NOVA SCOTIA**              |
| **COMMERCE**                             |       |                                     |
| ** **                               |       |                                     |
| Per:                                     |       |                                     | Per: |   |
|                                     |       |                                     |   |   |
| Per:                                     |       |                                     | Per: |   |
|                                     |       |                                     |   |   |
| Address: 161 Bay Street, 8th Floor  |       | Address: P.O. Box 4085, Station A   |
| BCE Place                                |       | 40 King St. West, Scotia Plaza           |
| Toronto, Ontario                         |       | 62nd floor                          |
| M5J 2S8                                  |       | Toronto, Ontario, M5W 2X6                |
|                                     |       |                                     |
| Attention: Director                      |       | Attention: Director                      |
|                                     |       |                                     |
| Telephone: (416) 594-8246                |       | Telephone: (416) 933-1873                |
| Fax: (416) 956-3816                      |       | Fax: (416) 866-2010                      |

 

99

----

 
| **CITIBANK N.A., CANADIAN BRANCH**     | ** ** | **CREDIT SUISSE FIRST BOSTON,**          |
|----------------------------------------|------------|------------------------------------------|
|                                   |       | **TORONTO BRANCH**                       |
| ** **                             |       |                                     |
| Per:                                   |       |                                     | Per: |   |
|                                   |       |                                     |   |   |
| Per:                                   |       |                                     | Per: |   |
|                                   |       |                                     |
| Address: Citibank Place                |       | Address: One First Canadian Place        |
| 123 Front Street West, Suite 1900 |       | Suite 3000, P.O. Box 301       |
| Toronto, Ontario                       |       | Toronto, Ontario                         |
| M5J 2M3                                |       | M5X 1C9                                  |
|                                   |       |                                     |
| Attention: Manager                     |       | Attention: Director                      |
|                                   |       |                                     |
| Tel: (416) 947-4171                    |       | Telephone: (416) 352-4527                |
| Fax: (416) 947-5802                    |       | Fax: (416) 352-4576                      |
|                                   |       |                                     |
|                                   |       |                                     |
| **CAISSE CENTRALE DESJARDINS**         | ** ** | **BANK OF TOKYO-MITSUBISHI**             |
|                                   |       | **(CANADA)**                             |
| ** **                             |       |                                     |
| Per:                                   |       |                                     | Per: |   |
|                                   |       |                                     |   |   |
| Per:                                   |       |                                     | Per: |   |
|                                   |       |                                     |
| Address: 1 Complexe Desjardins         |       | Address: 600 de la Gauchetière West |
| Suite 2822                        |       | Suite 2780                          |
| Montreal, Quebec                       |       | Montreal, Quebec                         |
| H5B 1B3                                |       | H3B 4L8                                  |
|                                   |       |                                     |
|                                   |       |                                     |
| Attention:                             |       |                                     | Attention: |   |
|                                   |       |                                     |   |   |
| Telephone: (514) 281-7791              |       | Telephone: (514) 875-9261                |
| Fax: (514) 281-7083                    |       | Fax: (514) 875-9392                      |
|                                        |            |                                          |  |  |  |  |

 

100

----

 
| **LAURENTIAN BANK OF CANADA**                     | ** ** | **NATIONAL BANK OF CANADA** |
|---------------------------------------------------|------------|-----------------------------|
| ** **                                        | ** ** | ** **                  |
| ** **                                        | ** ** | ** **                  |
| Per:                                              |       |                        | Per: |   |
|                                              |       |                        |   |   |
| Per:                                              |       |                        | Per: |   |
|                                              |       |                        |
|                                              |       |                        |
| Address: 1981 McGill College Avenue               |       | Address: 1155 Metcalfe      |
| Suite 1980                                   |       | 5th floor              |
| Montreal, Quebec                                  |       | Montreal, Quebec            |
| H3A 3K3                                           |       | H3B 4B9                     |
|                                              |       |                        |
| Attention:                                        |       |                        | Attention: Vice President |
|                                              |       |                        |   |
| Telephone: (514) 284-4500, # 4732                 |       | Telephone: (514) 390-7508   |
| Fax: (514) 284-4551                               |       | Fax: (514) 390-7860         |
|                                              |       |                        |
|                                              |       |                        |
| **HSBC BANK CANADA**                              |       |                        |
| ** **                                        |       |                        |
| Per:                                              |       |                        |   |   |
|                                              |       |                        |   |   |
| Per:                                              |       |                        |   |   |
|                                              |       |                        |   |   |
| Address:                                          |       |                        |
|                                              |       |                        |
| 2001 McGill College Avenue, Suite 300        |       |                        |
| Montreal, Quebec, Canada, H3A 1G1                 |       |                        |
|                                              |       |                        |
| Attention: Global Relationship Manager, Corporate |       |                        |
| & Institutional Banking                       |       |                        |
|                                              |       |                        |
| Telephone: (514) 286-5332                         |       |                        |
| Fax: (514)  286-5330                              |       |                        |
|                                              |       |                        |
| **[Société  Générale?]**      |       |                        |
|                                                   |            |                             |  |  |  |

 

101

----

** **

**SCHEDULE“A” - LIST OF LENDERS AND COMMITMENTS**

** **

**TheRevolving Facility**

 

Cash ManagementFacilities — The Toronto-Dominion Bank (“**TD**”) -$15,000,000.

 

Balance ofRevolving Facility:

 
| **Lender**                                    | ** ** | **Commitment ($)** | ** **      | **Commitment (%)** | ** ** |
|-----------------------------------------------|------------|-------------------------|-----------------|-------------------------|------------|
| Royal Bank of Canada                          |       |                    |            |                    |       |
| The Bank of Nova Scotia                       |       |                    |            |                    |       |
| The Toronto-Dominion Bank                     |       |                    |            |                    |       |
| Bank of America N.A., Canada Branch           |       |                    |            |                    |       |
| Citibank N.A., Canadian Branch                |       |                    |            |                    |       |
| Bank of Montreal                              |       |                    |            |                    |       |
| Canadian Imperial Bank of Commerce            |       |                    |            |                    |       |
| National Bank of Canada                       |       |                    |            |                    |       |
| Caisse centrale Desjardins                    |       |                    |            |                    |       |
| Laurentian Bank of Canada                     |       |                    |            |                    |       |
| HSBC Bank Canada                              |       |                    |            |                    |       |
| Sumitomo Mitsui Banking Corporation of Canada |       |                    |            |                    |       |
|                                          |       |                    |            |                    |       |
| **Total**                                     | ** ** | **$**                   | **575,000,000** | ** **              | **100**    | **%** |
|                                               |            |                         |                 |                         |            |  |

 

----

** **

**TABLE OF CONTENTS**

 
| 1.     | INTERPRETATION                                   |                                                                                  | 1      |
|--------|--------------------------------------------------|---------------------------------------------------------------------------------------|--------|
|   | 1.1                                              | Definitions                                                                           |   | 1 |
|   | 1.2                                              | Interpretation                                                                        |   | 25 |
|   | 1.3                                              | Currency                                                                              |   | 26 |
|   | 1.4                                              | Generally Accepted Accounting Principles                                              |   | 26 |
|   | 1.5                                              | Division and Titles                                                                   |   | 26 |
| 2.     | THE CREDIT                                       |                                                                                  | 26     |
|   | 2.1                                              | Credit Facility                                                                       |   | 26 |
|   | 2.2                                              | The Revolving Facility                                                                |   | 26 |
|   | 2.3                                              | Increase in Revolving Facility                                                        |   | 26 |
| 3.     | PURPOSE                                          |                                                                                  | 28     |
|   | 3.1                                              | Purpose of the Advances                                                               |   | 28 |
| 4.     | ADVANCES, CONVERSIONS AND OPERATION OF  ACCOUNTS |                                                                                  | 29     |
|   | 4.1                                              | Notice of Borrowing - Direct Advances                                                 |   | 29 |
|   | 4.2                                              | LIBOR Advances and Conversions                                                        |   | 29 |
|   | 4.3                                              | Letters of Credit for Spectrum Auction and Purchase                                   |   | 30 |
|   | 4.4                                              | Cash Management Facilities                                                            |   | 33 |
|   | 4.5                                              | Operation of Accounts                                                                 |   | 34 |
|   | 4.6                                              | Apportionment of Advances                                                             |   | 34 |
|   | 4.7                                              | Limitations on Advances                                                               |   | 34 |
|   | 4.8                                              | Notices Irrevocable                                                                   |   | 34 |
|   | 4.9                                              | Market for Bankers’ Acceptances and Libor Advances                               |   | 34 |
|   | 4.10                                             | Suspension of BA Advance and Libor Advance Option                                     |   | 35 |
|   | 4.11                                             | Limits on BA Advances, Letters of Credit and Libor  Advances                          |   | 35 |
|   | 4.12                                             | Specific Clause with Regard to Foreign Lenders                                        |   | 35 |
| 5.     | INTEREST AND FEES                                |                                                                                  | 36     |
|   | 5.1                                              | Interest on the Prime Rate Basis                                                      |   | 36 |
|   | 5.2                                              | Payment of Interest on the Prime Rate Basis                                           |   | 36 |
|   | 5.3                                              | Interest on the Libor Basis                                                           |   | 36 |
|   | 5.4                                              | Payment of Interest on the Libor Basis                                                |   | 37 |
|   | 5.5                                              | Limits to the Determination of LIBOR                                                  |   | 37 |
|   | 5.6                                              | Fixing of LIBOR                                                                       |   | 37 |
|   | 5.7                                              | Hedging                                                                               |   | 37 |
|   | 5.8                                              | Interest on the Loan                                                                  |   | 37 |
|   | 5.9                                              | Arrears of Interest                                                                   |   | 38 |
|   | 5.10                                             | Maximum Interest Rate                                                                 |   | 38 |
|   | 5.11                                             | Fees                                                                                  |   | 38 |
|   | 5.12                                             | Interest Act                                                                          |   | 38 |
| 6.     | BANKERS’ ACCEPTANCES                        |                                                                                  | 39     |
|   | 6.1                                              | Advances by Bankers’ Acceptances and Conversions  into Bankers’ Acceptances |   | 39 |
|   | 6.2                                              | Acceptance Procedure                                                                  |   | 40 |
|   | 6.3                                              | Purchase of Bankers’ Acceptances and Discount Notes                              |   | 41 |
|   | 6.4                                              | Maturity Date of Bankers’ Acceptances                                            |   | 41 |
|   | 6.5                                              | Deemed Conversions on the Maturity Date                                               |   | 42 |
|   | 6.6                                              | Conversion and Extension Mechanism                                                    |   | 42 |
|   | 6.7                                              | Amounts given to the Lenders do not constitute a  prepayment                          |   | 43 |
|   | 6.8                                              | Prepayment of Bankers’ Acceptances                                               |   | 43 |
|   | 6.9                                              | Apportionment Amongst the Lenders                                                     |   | 43 |

 

----

 
|   | 6.10                                             | Cash Deposits                                                                        |   | 43 |
|--------|--------------------------------------------------|--------------------------------------------------------------------------------------|--------|----|
|   | 6.11                                             | Days of Grace                                                                        |   | 44 |
|   | 6.12                                             | Obligations Absolute                                                                 |   | 44 |
|   | 6.13                                             | Depository Bills and Notes Act                                                       |   | 44 |
| 7.     | ILLEGALITY, INCREASED COSTS AND  INDEMNIFICATION |                                                                                 | 44     |
|   | 7.1                                              | Illegality, Increased Costs                                                          |   | 44 |
|   | 7.2                                              | Indemnity                                                                            |   | 46 |
| 8.     | PAYMENT, REPAYMENT AND PREPAYMENT                |                                                                                 | 46     |
|   | 8.1                                              | Repayment of the Loan                                                                |   | 46 |
|   | 8.2                                              | Amount and Apportionment of Mandatory Repayments                                     |   | 46 |
|   | 8.3                                              | Voluntary Repayment and Prepayment of the Loan or  Cancellation of the Credit        |   | 47 |
|   | 8.4                                              | Payment of Losses Resulting From a Prepayment or a  Mandatory Repayment              |   | 48 |
|   | 8.5                                              | Currency of Payments                                                                 |   | 48 |
|   | 8.6                                              | Payments by the Borrower to the Agent                                                |   | 48 |
|   | 8.7                                              | Payment on a Business Day                                                            |   | 49 |
|   | 8.8                                              | Payments by the Lenders to the Agent                                                 |   | 49 |
|   | 8.9                                              | Payments by the Agent to the Borrower                                                |   | 49 |
|   | 8.10                                             | Netting                                                                              |   | 49 |
|   | 8.11                                             | Application of Payments                                                              |   | 49 |
|   | 8.12                                             | No Set-Off or Counterclaim by Borrower                                               |   | 50 |
|   | 8.13                                             | Debit Authorization                                                                  |   | 50 |
|   | 8.14                                             | Withholding Taxes                                                                    |   | 50 |
| 9.     | SECURITY                                         |                                                                                 | 51     |
|   | 9.1                                              | Security for Advances Prior to the Phase II Date                                     |   | 51 |
|   | 9.2                                              | Security for Advances Following the Phase II Date                                    |   | 51 |
|   | 9.3                                              | Limitations on Guarantees and Security for Advances                                  |   | 54 |
|   | 9.4                                              | Further Limitations on Guarantees and Security for Advances                          |   | 55 |
| 10.    | CONDITIONS PRECEDENT                             |                                                                                 | 56     |
|   | 10.1                                             | Initial Advance under the Revolving Facility and  Term Facility A-1                  |   | 56 |
|   | 10.2                                             | Initial Advance under the Revolving Facility After  the Ninth Amendment Closing Date |   | 58 |
|   | 10.3                                             | Conditions Precedent to any Advance                                                  |   | 59 |
|   | 10.4                                             | Waiver of Conditions Precedent                                                       |   | 59 |
|   | 10.5                                             | Release of Quebecor Media Guarantee                                                  |   | 59 |
| 11.    | REPRESENTATIONS AND WARRANTIES                   |                                                                                 | 60     |
|   | 11.1                                             | Incorporation                                                                        |   | 60 |
|   | 11.2                                             | Authorization                                                                        |   | 60 |
|   | 11.3                                             | Compliance with Laws and Contracts                                                   |   | 60 |
|   | 11.4                                             | Current Business                                                                     |   | 61 |
|   | 11.5                                             | Financial Statements                                                                 |   | 61 |
|   | 11.6                                             | Contingent Liabilities and Indebtedness                                              |   | 61 |
|   | 11.7                                             | Title to Assets                                                                      |   | 61 |
|   | 11.8                                             | Litigation                                                                           |   | 61 |
|   | 11.9                                             | Taxes                                                                                |   | 62 |
|   | 11.10                                            | Insurance                                                                            |   | 62 |
|   | 11.11                                            | No Adverse Change                                                                    |   | 62 |
|   | 11.12                                            | Regulatory Approvals                                                                 |   | 62 |
|   | 11.13                                            | Compliance with Laws  and Licences                                                   |   | 62 |
|   | 11.14                                            | Pension and Employment  Liabilities                                                  |   | 62 |

 

ii

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|   | 11.15                             | Priority                                                |   | 63 |
|--------|-----------------------------------|---------------------------------------------------------|--------|----|
|   | 11.16                             | Complete and Accurate  Information                      |   | 63 |
|   | 11.17                             | Share Capital                                           |   | 63 |
|   | 11.18                             | Absence of Default                                      |   | 63 |
|   | 11.19                             | Agreements with Third  Parties                          |   | 63 |
|   | 11.20                             | Environment                                             |   | 63 |
|   | 11.21                             | Survival of  Representations and Warranties             |   | 64 |
| 12.    | COVENANTS                         |                                                    | 64     |
|   | 12.1                              | Preservation of Juridical Personality                   |   | 64 |
|   | 12.2                              | Preservation of Licences                                |   | 64 |
|   | 12.3                              | Compliance with Applicable Laws                         |   | 65 |
|   | 12.4                              | Maintenance of Assets                                   |   | 65 |
|   | 12.5                              | Business                                                |   | 65 |
|   | 12.6                              | Insurance                                               |   | 65 |
|   | 12.7                              | Payment of Taxes and Duties                             |   | 66 |
|   | 12.8                              | Access and Inspection                                   |   | 66 |
|   | 12.9                              | Maintenance of Account                                  |   | 66 |
|   | 12.10                             | Performance of Obligations                              |   | 66 |
|   | 12.11                             | Maintenance of Ratios                                   |   | 66 |
|   | 12.12                             | Mandatory Repayments                                    |   | 68 |
|   | 12.13                             | Maintenance of Security                                 |   | 68 |
|   | 12.14                             | Payment of Legal Fees and Other Expenses                |   | 68 |
|   | 12.15                             | Financial Reporting                                     |   | 68 |
|   | 12.16                             | Notice of Certain Events                                |   | 70 |
|   | 12.17                             | CF Cable Inter-Creditor Agreement                       |   | 71 |
|   | 12.18                             | Accuracy of Reports                                     |   | 71 |
|   | 12.19                             | Transfer of Licences from Spectrum Co. to the VL  Group |   | 71 |
| 13.    | NEGATIVE COVENANTS                |                                                    | 71     |
|   | 13.1                              | Liquidation and Amalgamation                            |   | 71 |
|   | 13.2                              | Charges                                                 |   | 73 |
|   | 13.3                              | Asset Dispositions                                      |   | 73 |
|   | 13.4                              | Preservation of Capital                                 |   | 74 |
|   | 13.5                              | Restrictions on Subsidiaries                            |   | 74 |
|   | 13.6                              | Issuance and Transfer of Shares                         |   | 74 |
|   | 13.7                              | Acquisitions                                            |   | 75 |
|   | 13.8                              | Debt and Guarantees                                     |   | 75 |
|   | 13.9                              | Financial Assistance by the VL Group                    |   | 76 |
|   | 13.10                             | Subordinated Debt                                       |   | 76 |
|   | 13.11                             | Members of the VL  Group, Related Party Transactions    |   | 76 |
|   | 13.12                             | Derivative Instruments                                  |   | 77 |
| 14.    | EVENTS OF DEFAULT AND REALIZATION |                                                    | 77     |
|   | 14.1                              | Event of Default                                        |   | 77 |
|   | 14.2                              | Remedies                                                |   | 79 |
|   | 14.3                              | Bankruptcy and Insolvency                               |   | 80 |
|   | 14.4                              | Notice                                                  |   | 80 |
|   | 14.5                              | Costs                                                   |   | 80 |
|   | 14.6                              | Relations with the Borrower                             |   | 81 |
|   | 14.7                              | Application of Proceeds                                 |   | 81 |
| 15.    | JUDGMENT CURRENCY                 |                                                    | 81     |

 

iii

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|                   | 15.1                      | Rules of Conversion                                                            |   | 81 |
|------------------------|---------------------------|-------------------------------------------------------------------------------------|--------|----|
|                   | 15.2                      | Determination of an Equivalent Currency                                             |   | 82 |
| 16.                    | ASSIGNMENT                |                                                                                | 82     |
|                   | 16.1                      | Assignment by the Borrower                                                          |   | 82 |
|                   | 16.2                      | Assignments and Transfers by the Lenders                                            |   | 82 |
|                   | 16.3                      | Transfer Agreement                                                                  |   | 83 |
|                   | 16.4                      | Notice                                                                              |   | 84 |
|                   | 16.5                      | Sub-Participations                                                                  |   | 84 |
|                   | 16.6                      | General                                                                             |   | 84 |
| 17.                    | MISCELLANEOUS             |                                                                                | 85     |
|                   | 17.1                      | Notices                                                                             |   | 85 |
|                   | 17.2                      | Amendment and Waiver                                                                |   | 85 |
|                   | 17.3                      | Determinations Final                                                                |   | 85 |
|                   | 17.4                      | Entire Agreement                                                                    |   | 86 |
|                   | 17.5                      | Indemnification and Compensation                                                    |   | 86 |
|                   | 17.6                      | Benefit of Agreement                                                                |   | 86 |
|                   | 17.7                      | Counterparts                                                                        |   | 86 |
|                   | 17.8                      | Applicable Law                                                                      |   | 86 |
|                   | 17.9                      | Severability                                                                        |   | 87 |
|                   | 17.10                     | Further Assurances                                                                  |   | 87 |
|                   | 17.11                     | Good Faith and Fair  Consideration                                                  |   | 87 |
|                   | 17.12                     | Responsibility of the  Lenders                                                      |   | 87 |
|                   | 17.13                     | Indemnity                                                                           |   | 87 |
|                   | 17.14                     | Language                                                                            |   | 88 |
|                   | 17.15                     | Foreign Lenders                                                                     |   | 88 |
| 18.                    | THE AGENT AND THE LENDERS |                                                                                | 89     |
|                   | 18.1                      | Authorization of Agent                                                              |   | 89 |
|                   | 18.2                      | Agent’s Responsibility                                                         |   | 90 |
|                   | 18.3                      | Rights of Agent as Lender                                                           |   | 91 |
|                   | 18.4                      | Indemnity                                                                           |   | 91 |
|                   | 18.5                      | Notice by Agent to Lenders                                                          |   | 92 |
|                   | 18.6                      | Protection of Agent                                                                 |   | 92 |
|                   | 18.7                      | Notice by Lenders to Agent                                                          |   | 93 |
|                   | 18.8                      | Sharing Among the Lenders                                                           |   | 93 |
|                   | 18.9                      | Derivative Obligations                                                              |   | 94 |
|                   | 18.10                     | Procedure with respect  to Advances                                                 |   | 94 |
|                   | 18.11                     | Accounts kept by each Lender                                                        |   | 95 |
|                   | 18.12                     | Binding Determinations                                                              |   | 95 |
|                   | 18.13                     | Amendment of  Article 18                                                       |   | 95 |
|                   | 18.14                     | Decisions, Amendments  and Waivers of the Lenders                                   |   | 95 |
|                   | 18.15                     | Authorized Waivers,  Variations and Omissions                                       |   | 96 |
|                   | 18.16                     | Provisions for the  Benefit of Lenders Only - Power of Attorney for Quebec Purposes |   | 96 |
|                   | 18.17                     | Provisions for the  Benefit of Lenders Only                                         |   | 96 |
|                   | 18.18                     | Resignation of Agent                                                                |   | 97 |
|                   | 18.19                     | No Novation                                                                         |   | 97 |
| 19.                    | FORMAL DATE               |                                                                                | 97     |
|                   | 19.1                      | Formal Date                                                                         |   | 97 |
| [Previously delivered] |                      |                                                                                |

 

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|                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | SCHEDULE “I” – PROPERTY OF THE VL GROUP |   |   |
|------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------|--------|--------|
|                   | No                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                   |   |   |
| Adresse de  l'immeuble |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                                   |
| 3**.**                 | **Subordination**. The indebtedness represented by the  Subordinated Notes shall be subordinated as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                   |   |
|                   | (g)   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 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 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 Agent  for the benefit of the Lenders.                                                                                                                                                                               |                                                   |   |
|                   | 5.   **Miscellaneous.**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                   |   |

 

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