**Exhibit 2.14**

 

VIDEOTRONLTD./VIDÉOTRON LTÉE

 

US$455,000,000

 

91/2% SENIOR NOTES DUE APRIL 15, 2018

 

----

 

INDENTURE

 

Dated as of April 15,2008

 

----

 

Wells Fargo Bank,National Association,

as Trustee

 

----

 

ThisINDENTURE, dated as of April 15, 2008, is by and among VIDEOTRON LTD., acompany incorporated under the laws of the Province of Québec, each SubsidiaryGuarantor listed on the signature pages hereto, and WELLS FARGO BANK,NATIONAL ASSOCIATION, as trustee (the “*Trustee*”).

 

TheCompany, each Subsidiary Guarantor and the Trustee agree as follows for thebenefit of each other and for the equal and ratable benefit of the Holders ofthe 91/8% Senior Notes due April 15,2018 (the “*Notes*”):

 

**ARTICLE 1.**

** **

**DEFINITIONS ANDINCORPORATION BY REFERENCE**

** **

*SECTION 1.01.           ***Definitions**.

 

Forall purposes of this Indenture, except as otherwise expressly provided orunless the context otherwise requires:

 

“*144A Global Note*” means a Global Note in the form of Exhibit Ahereto bearing the Global Note Legend and the Private Placement Legend anddeposited with and registered in the name of the Depositary or its nominee thatwill be issued in a denomination equal to the outstanding principal amount ofthe Notes sold for initial resale in reliance on Rule 144A.

 

“*Acquired Debt*” means, with respect to any specified Person:

 

(1)           Indebtedness of any other Personexisting at the time such other Person is merged with or into or becomes aSubsidiary of such specified Person, whether or not such Indebtedness isincurred in connection with, or in contemplation of, such other Person mergingwith or into, or becoming a Subsidiary of such specified Person; and

 

(2)           Indebtedness secured by a Lienencumbering any asset acquired by such specified Person.

 

“*Additional Notes*” means any Notes (other than Initial Notesand Exchange Notes and Notes issued under Sections 2.06, 2.07, 2.10 and3.06 hereof) issued under this Indenture in accordance with Sections 2.02,2.15 and 4.09 hereof, as part of the same series as the Initial Notes or as anadditional series.

 

“*Affiliate*” of any specified Person means any other Persondirectly or indirectly controlling or controlled by or under direct or indirectcommon control with such specified Person. For purposes of this definition, “control,” as used with respect to anyPerson, shall mean the possession, directly or indirectly, of the power todirect or cause the direction of the management or policies of such Person,whether through the ownership of voting securities, by agreement or otherwise; *provided, however*, that beneficial ownership of more than10% of the Voting Stock of a Person shall be deemed to be control.  For purposes of this definition, the terms “controlling,”“controlled by” and “under common control with” shall have correlativemeanings.

 

“*Agent*” means any Registrar, co-registrar, Paying Agent oradditional paying agent.

 

“*Applicable Procedures*” means, with respect to any transfer,redemption or exchange of or for beneficial interests in any Global Note, the rules andprocedures of the Depositary, Euroclear and Clearstream that apply to suchtransfer, redemption or exchange.

 

“*Asset Acquisition*” means (a) an Investment by theCompany or any Restricted Subsidiary in any other Person pursuant to which suchPerson shall become a Restricted Subsidiary or shall be consolidated or mergedwith or into the Company or any Restricted Subsidiary or (b) anyacquisition by the Company or any Restricted Subsidiary of the assets of anyPerson that constitute substantially all of an operating unit, a division orline of business of such Person or that is otherwise outside of the ordinarycourse of business.

 

“*Asset Sale*” means:

 

----

 

(1)           the sale, lease,conveyance or other disposition of any assets or rights, other than sales ofinventory in the ordinary course of business; *provided*,*however*, that the sale, conveyance orother disposition of all or substantially all of the assets of the Company andits Restricted Subsidiaries, taken as a whole, shall be governed by theprovisions of Sections 4.18 and 5.01 hereof and not by the provisions of Section 4.12hereof; and

 

(2)           the issuance ofEquity Interests of any Restricted Subsidiary or the sale of Equity Interestsby the Company or any of its Restricted Subsidiaries in any RestrictedSubsidiary.

 

Notwithstandingthe preceding, the following items shall not be deemed to be Asset Sales:

 

(1)           any singletransaction or series of related transactions that involves assets having afair market value (as determined by the Board of Directors of the Company andevidenced by a resolution of the Board of Directors of the Company) of lessthan US$1.0 million;

 

(2)           a sale, lease,conveyance or other disposition of assets between or among the Company and itsRestricted Subsidiaries;

 

(3)           an issuance ofEquity Interests by a Restricted Subsidiary to the Company or to anotherRestricted Subsidiary;

 

(4)           the sale, lease,conveyance or other disposition of equipment, inventory, accounts receivable orother assets in the ordinary course of business;

 

(5)           the sale or otherdisposition of cash or Cash Equivalents;

 

(6)           any Tax BenefitTransaction; and

 

(7)           a Restricted Paymentor Permitted Investment that is permitted by Section 4.10 hereof.

 

“*Asset Swap*” means anexchange of assets by the Company or a Restricted Subsidiary for:

 

(1)           one or more PermittedBusinesses;

 

(2)           a controlling equityinterest in any Person whose assets consist primarily of one or more PermittedBusinesses; provided such Person becomes a Restricted Subsidiary; and/or

 

(3)           long-term assetsthat are used in a Permitted Business in a like-kind exchange or transferpursuant to Section 1031 of the Code or any similar or successor provisionof the Code or Sections 51, 85, 85.1, 86, 87 or 88(1) of the Income TaxAct (Canada) or any similar or successor provisions of the Income Tax Act (Canada).

 

“*Attributable Debt*” in respect of a sale and leasebacktransaction means, at the time of determination, the present value of theobligation of the lessee for net rental payments during the remaining term ofthe lease included in such sale and leaseback transaction including any periodfor which such lease has been extended or may, at the option of the lessor, beextended.  Such present value shall becalculated using a discount rate equal to the rate of interest implicit in suchtransaction, determined in accordance with GAAP.

 

“*Back-to-Back Debt*” means any loans made or debt instrumentsissued as part of a Back-to-Back Transaction and in which each party to suchBack-to-Back Transaction, other than a Videotron Entity, executes asubordination agreement in favor of the Holders in substantially the formattached hereto as Exhibit F*.*

 

“*Back-to-Back Preferred Shares*” means Preferred Sharesissued:

 

2

----

 

(1)           to a VideotronEntity by an Affiliate of the Company in circumstances where, immediately priorto or after, as the case may be, the issuance of such Preferred Shares, anAffiliate of such Videotron Entity has loaned on an unsecured basis to suchVideotron Entity, or an Affiliate of such Videotron Entity has subscribed forPreferred Shares of such Videotron Entity in, an amount equal to the requisitesubscription price for such Preferred Shares;

 

(2)           by a VideotronEntity to one of its Affiliates in circumstances where, immediately prior to orafter, as the case may be, the issuance of such Preferred Shares, suchVideotron Entity has loaned an amount equal to the proceeds of such issuance toan Affiliate on an unsecured basis; or

 

(3)           by a VideotronEntity to one of its Affiliates in circumstances where, immediately prior to orafter, as the case may be, the issuance of such Preferred Shares, suchVideotron Entity has used the proceeds of such issuance to subscribe forPreferred Shares issued by an Affiliate;

 

in each case on terms whereby:

 

(i)           the aggregateredemption amount applicable to the Preferred Shares issued to or by suchVideotron Entity is identical:

 

(A)                             inthe case of (1) above, to the principal amount of the loan made or theaggregate redemption amount of the Preferred Shares subscribed for by suchAffiliate;

 

(B)                               inthe case of (2) above, to the principal amount of the loan made to suchAffiliate; or

 

(C)                               inthe case of (3) above, to the aggregate redemption amount of the PreferredShares issued by such Affiliate;

 

(ii)          the dividend paymentdate applicable to the Preferred Shares issued to or by such Videotron Entityshall:

 

(A)                          inthe case of (1) above, be immediately prior to, or on the same date as,the interest payment date relevant to the loan made or the dividend paymentdate on the Preferred Shares subscribed for by such Affiliate;

 

(B)                            inthe case of (2) above, be immediately after, or on the same date as,  the interest payment date relevant to theloan made to such Affiliate; or

 

(C)                            inthe case of (3) above, be immediately after, or on the same date as,  the dividend payment date on the PreferredShares issued by such Affiliate;

 

(iii)         the amount ofdividends provided for on any payment date in the share conditions attaching tothe Preferred Shares issued:

 

(A)                                 toa Videotron Entity in the case of (1) above, shall be equal to or inexcess of the amount of interest payable in respect of the loan made or theamount of dividends provided for in respect of the Preferred Shares subscribedfor by such Affiliate;

 

(B)                                   bya Videotron Entity in the case of (2) above, shall be less than or equalto the amount of interest payable in respect of the loan made to suchAffiliate; or

 

(C)                                   bya Videotron Entity in the case of (3) above, shall be equal to the amountof dividends in respect of the Preferred Shares issued by such Affiliate;

 

and *provided*that, in the case of Preferred Shares issued by a Restricted Subsidiary that isnot a Subsidiary Guarantor, each holder of such Preferred Shares under suchBack-to-Back Transaction, other than such Restricted 

 

3

----

 

Subsidiary, executes a subordination agreement infavor of the Holders in substantially the form attached hereto as Exhibit F.

 

“*Back-to-Back Securities*” means Back-to-Back Preferred Sharesor Back-to-Back Debt or both, as the context requires; *provided*that a Back-to-Back Security issued by any Restricted Subsidiary that is not aSubsidiary Guarantor (A) shall provide that (i) such RestrictedSubsidiary shall suspend any payment on such Back-to-Back Security until suchRestricted Subsidiary receives payment on the corresponding Back-to-BackSecurity in an amount equal to or exceeding the amount to be paid on theBack-to-Back Security issued by such Restricted Subsidiary and (ii) if theholder of such Back-to-Back Security is paid any amount on or with respect tosuch Back-to-Back Security by such Restricted Subsidiary, then to the extentsuch amounts are paid out of proceeds in excess of the corresponding paymentreceived by such Restricted Subsidiary on the corresponding Back-to-BackSecurity held by it, the holder of such Back-to-Back Security will hold suchexcess payment in trust for the benefit of such Restricted Subsidiary and willforthwith repay such payment to such Restricted Subsidiary and (B) mayprovide that, notwithstanding clause (A), such Restricted Subsidiary maymake payment on such Back-to-Back Security if at the time of payment suchRestricted Subsidiary would be permitted to make such payment under Section 4.10hereof; *provided* that any payment made pursuantto this clause (B) which is otherwise prohibited under clause (A) wouldconstitute a Restricted Payment.

 

“*Back-to-Back Transaction*” means any of the transactionsdescribed under the definition of Back-to-Back Preferred Shares.

 

“*Bankruptcy Law*” means Title 11, U.S. Code or any similarfederal or state law for the relief of debtors, the *Bankruptcyand Insolvency Act* (Canada), the *Companies’ CreditorsArrangement Act*(Canada) or any other Canadian federal or provinciallaw or the law of any other jurisdiction relating to bankruptcy, insolvency,winding up, liquidation, reorganization or relief of debtors.

 

*“BeneficialOwner”* has the meaning assigned to such term in Rule 13d-3and Rule 13d-5 under the Exchange Act, except that in calculating thebeneficial ownership of any particular “person” (as such term is used in Section 13(d)(3) ofthe Exchange Act), such “person” shall be deemed to have beneficial ownershipof all securities that such “person” has the right to acquire by conversion orexercise of other securities, whether such right is currently exercisable or isexercisable only upon the occurrence of a subsequent condition.  The terms *“BeneficiallyOwns”*and *“Beneficially Owned”*shall have corresponding meanings.

 

“*Board of Directors*” means:

 

(1)           with respect to acorporation, the board of directors of the corporation;

 

(2)           with respect to apartnership, the board of directors of the general partner of the partnership;and

 

(3)           with respect to anyother Person, the board or committee of such Person serving a similar function.

 

“*Board Resolution”* means a copy of a resolution certified bythe secretary or an assistant secretary (or individual performing comparableduties) of the applicable Person to have been duly adopted by the Board ofDirectors of such Person and to be in full force and effect on the date of suchcertification, and delivered to the Trustee.

 

“*Business Day*” means any day other than a Legal Holiday.

 

“*Canadian Taxing Authority*” means any federal, provincial,territorial or other Canadian government or any authority or agency thereinhaving the power to tax.

 

4

----

 

“*Capital Lease Obligation*” means, at the time anydetermination thereof is to be made, the amount of the liability in respect ofa capital lease that would at that time be required to be capitalized on abalance sheet in accordance with GAAP.

 

“*Capital Stock*” means:

 

(1)           in the case of acorporation, corporate stock;

 

(2)           in the case of anassociation or business entity, any and all shares, interests, participations,rights or other equivalents (however designated) of corporate stock;

 

(3)           in the case of apartnership or limited liability company, partnership or membership interests(whether general or limited); and

 

(4)           any other interestor participation that confers on a Person the right to receive a share of theprofits and losses of, or distributions of assets of, the issuing Person.

 

“*Capital Stock Sale Proceeds*” means the aggregate net cashproceeds received by the Company after October 8, 2003:

 

(1)           as a contribution tothe common equity capital or from the issue or sale of Equity Interests of theCompany (other than Disqualified Stock or Back-to-Back Securities); or

 

(2)           from the issue orsale of convertible or exchangeable Disqualified Stock or convertible orexchangeable debt securities of the Company that have been converted into orexchanged for such Equity Interests,

 

other than, in either (1) or (2), Equity Interests (or convertibleor exchangeable Disqualified Stock or convertible or exchangeable debtsecurities) sold to a Subsidiary of the Company.

 

“*Cash Equivalents*” means:

 

(1)           United Statesdollars or Canadian dollars;

 

(2)           investments insecurities with maturities of one year or less from the date of acquisitionissued or fully guaranteed by any state, commonwealth, territory or province ofthe United States of America or Canada, or by any political subdivision ortaxing authority thereof, and rated in the “R-1” category by the Dominion BondRating Service Limited;

 

(3)           certificates ofdeposit and eurodollar time deposits with maturities of one year or less fromthe date of acquisition, bankers’ acceptances with maturities not exceeding oneyear and overnight bank deposits, in each case, with any domestic commercialbank having capital and surplus in excess of US$500.0 million;

 

(4)           repurchaseobligations with a term of not more than seven days for underlying securitiesof the types described in clauses (2) and (3) above entered into withany financial institution meeting the qualifications specified in clause (3) above;

 

(5)           commercial paperhaving the highest rating obtainable from Moody’s Investors Service, Inc.or Standard & Poor’s Rating Services and in each case maturing withinone year after the date of acquisition or with respect to commercial paper inCanada, a rating in the “R-1” category by the Dominion Bond Rating ServiceLimited; and

 

(6)           money market fundsat least 90% of the assets of which constitute Cash Equivalents of the kindsdescribed in clauses (1) through (5) of this definition.

 

5

----

 

“*Change of Control*” means the occurrence of any of thefollowing:

 

(1)           the direct orindirect sale, transfer, conveyance or other disposition (other than by way ofmerger or consolidation), in one or a series of related transactions, of all orsubstantially all of the properties or assets of the Company and the RestrictedSubsidiaries, taken as a whole, to any “person” (as that term is used in Section 13(d)(3) ofthe Exchange Act) other than a Permitted Holder or a Related Party;

 

(2)           the adoption of aplan relating to the liquidation or dissolution of the Company;

 

(3)           the consummation ofany transaction (including, without limitation, any merger or consolidation)the result of which is that any Person, other than a Permitted Holder or aRelated Party, becomes the Beneficial Owner, directly or indirectly, of morethan 50% of the Voting Stock of the Company, measured by voting power ratherthan number of shares; or

 

(4)           during anyconsecutive two-year period, the first day on which individuals who constitutedthe Board of Directors of the Company as of the beginning of such two-yearperiod (together with any new directors who were nominated for election orelected to such Board of Directors with the approval of a majority of theindividuals who were members of such Board of Directors, or whose nomination orelection was previously so approved at the beginning of such two-year period)cease to constitute a majority of the Board of Directors of the Company.

 

“*Clearstream*”**meansClearstream Banking S.A. and any successor thereto.

 

“*Code*” means the U.S. Internal Revenue Code of 1986, asamended.

 

“*Commission*”means the U.S. Securities and Exchange Commission and any successor entitythereto.

 

*“Company”*means Videotron Ltd. (Vidéotron Ltée in its French version) and any successorthereto.

 

“*Consolidated Cash Flow*” means, with respect to any specifiedPerson for any period, the Consolidated Net Income of such Person for suchperiod plus:

 

(1)           provision for taxesbased on income or profits of such Person and its Restricted Subsidiaries forsuch period, to the extent that such provision for taxes was deducted incomputing such Consolidated Net Income; plus

 

(2)           Consolidated InterestExpense of such Person and its Restricted Subsidiaries for such period,including for the purpose of this clause (2) any interest expense on theQMI Subordinated Loan that was otherwise excluded from the definition ofConsolidated Interest Expense, in each case to the extent that any such expensewas deducted in computing such Consolidated Net Income; plus

 

(3)           depreciation,amortization (including amortization of goodwill and other intangibles, butexcluding amortization of prepaid cash expenses that were paid in a priorperiod to the extent such expense is amortized) and other non-cash expenses(excluding any such non-cash expense to the extent that it represents (i) anaccrual of or reserve for cash expenses in any future period, or (ii) amortizationof a prepaid cash expense that was paid in a prior period to the extent suchexpense is amortized) of such Person and its Restricted Subsidiaries for suchperiod, to the extent that such depreciation, amortization and other non-cashexpenses were deducted in computing such Consolidated Net Income; minus

 

(4)           any interest andother payments made to Persons other than any Videotron Entity in respect ofBack-to-Back Securities to the extent such interest and other payments were notdeducted in computing such Consolidated Net Income; minus

 

6

----

 

(5)           non-cash itemsincreasing such Consolidated Net Income for such period, other than the accrualof revenue in the ordinary course of business,

 

in each case, on aconsolidated basis and determined in accordance with GAAP.

 

Notwithstandingthe foregoing, the provision for taxes based on the income or profits of, theConsolidated Interest Expense of and the depreciation and amortization andother non-cash expenses of a Restricted Subsidiary shall be added toConsolidated Net Income to compute Consolidated Cash Flow of the Company onlyto the extent that a corresponding amount would be permitted at the date ofdetermination to be dividended or distributed to the Company by such RestrictedSubsidiary without prior governmental approval (unless such approval has beenobtained), and without direct or indirect restriction pursuant to the terms ofits charter and all agreements, instruments, judgments, decrees, orders,statutes, rules and governmental regulations applicable to that RestrictedSubsidiary or its shareholders.

 

“*Consolidated Indebtedness*” means, with respect to any Personas of any date of determination,  withoutduplication, the total amount of Indebtedness of such Person and its RestrictedSubsidiaries, including  (i) thetotal amount of Indebtedness of any other Person, to the extent that suchIndebtedness has been guaranteed by the referent Person or one or more of itsRestricted Subsidiaries, and (ii) the aggregate liquidation value of allDisqualified Stock of such Person and all Preferred Shares of RestrictedSubsidiaries of such Person, in each case, determined on a consolidated basisin accordance with GAAP.

 

“*Consolidated Interest Expense*” means, with respect to anyPerson, for any period, without duplication, the sum of (i) the consolidatedinterest expense of such Person and its Restricted Subsidiaries for suchperiod, whether paid or accrued (including, without limitation, amortization oforiginal issue discount, non-cash interest payments, the interest component ofany deferred payment Obligations, the interest component of all paymentsassociated with Capital Lease Obligations, imputed interest with respect toAttributable Debt, commissions, discounts, and other fees, and charges incurredin respect of letter of credit or bankers’ acceptance financings), allcalculated after taking into account the effect of all Hedging Obligations, (ii) theconsolidated interest expense of such Person and its Restricted Subsidiariesthat was capitalized during such period, (iii) any interest expense onIndebtedness of another Person that is guaranteed by such Person or any of itsRestricted Subsidiaries or secured by a Lien on assets of such Person or any ofits Restricted Subsidiaries (whether or not such guarantee or Lien is calledupon), (iv) the product of (a) all dividend payments on any series ofPreferred Shares of such Person or any of its Restricted Subsidiaries, times (b) afraction, the numerator of which is one and the denominator of which is oneminus the then current combined federal, state, provincial, territorial andlocal statutory tax rate of such Person, expressed as a decimal, in each case,on a consolidated basis and in accordance with GAAP, and (v) to the extentnot included in clause (iv) above for purposes of GAAP, the productof (a) all dividend payments on any series of Disqualified Stock of suchPerson or any of its Restricted Subsidiaries, times (b) a fraction, thenumerator of which is one and the denominator of which is one minus the thencurrent combined federal, state, provincial, territorial and local statutorytax rate of such Person, expressed as a decimal, in each case, on aconsolidated basis and in accordance with GAAP. Interest and other payments on Back-to-Back Securities, and any accrual,or payment-in-kind, of interest on the QMI Subordinated Loan to the extent thatsuch interest is not paid in cash, shall not be included as ConsolidatedInterest Expense.

 

“*Consolidated Net Income*” means, with respect to anyspecified Person for any period, the aggregate of the Net Income of such Personand its Restricted Subsidiaries for such period, on a consolidated basis,determined in accordance with GAAP; *provided, however,*that:

 

(1)           the Net Income (butnot loss) of any Person that is not a Restricted Subsidiary (other than anUnrestricted Subsidiary) or that is accounted for by the equity method ofaccounting shall be included; *provided*, thatthe Net Income shall be included only to the extent of the amount of dividendsor distributions paid in cash to the specified Person or a RestrictedSubsidiary thereof;

 

(2)           the Net Income ofany Restricted Subsidiary shall be excluded to the extent that the declarationor payment of dividends or similar distributions by that Restricted Subsidiaryof that Net Income is not at the date of determination permitted without anyprior governmental approval (unless such approval has been obtained) or,directly or indirectly, by operation of the terms of its charter or anyagreement, 

 

7

----

 

instrument,judgment, decree, order, statute, rule or governmental regulationapplicable to that Subsidiary or its equityholders;

 

(3)           the Net Income ofany Person acquired during the specified period for any period prior to thedate of such acquisition shall be excluded;

 

(4)           the cumulativeeffect of a change in accounting principles shall be excluded;

 

(5)           the Net Income (butnot loss) of any Unrestricted Subsidiary shall be excluded, whether or notdistributed to the specified Person or one of its Subsidiaries; *provided, however*, that for purposes of Sections 4.10hereof, the Net Income of any Unrestricted Subsidiary shall be included to theextent it would otherwise be included under clause (1) of this definition;and

 

(6)           any non-cashcompensation expense realized for grants of performance shares, stock optionsor other rights to officers, directors and employees of the Company or anyRestricted Subsidiary shall be excluded,*provided* thatsuch shares, options or other rights can be redeemed at the option of theholders thereof for Capital Stock of the Company or Quebecor Media (other thanin each case Disqualified Stock of the Company).

 

“*Consolidated Revenues*” means the gross revenues of theCompany and the Restricted Subsidiaries determined on a consolidated basis inaccordance with GAAP; *provided* that (1) anyportion of gross revenues derived directly or indirectly from UnrestrictedSubsidiaries, including dividends or distributions from UnrestrictedSubsidiaries, shall be excluded from such calculation, and (2) any portionof gross revenues derived directly or indirectly from a Person (other than aSubsidiary of the Company or a Restricted Subsidiary) accounted for by theequity method of accounting shall be included in such calculation only to theextent of the amount of dividends or distributions actually paid to the Companyor a Restricted Subsidiary by such Person.

 

“*Corporate Trust Office of the Trustee*” shall be at theaddress of the Trustee specified in Section 12.02 hereof, or such otheraddress as to which the Trustee may give notice to the Company.

 

*“Credit Agreement”*means the amended credit facility between theCompany, the guarantor subsidiaries named therein, Royal Bank of Canada, asadministrative agent, RBC Dominion Securities Inc., as lead arranger, and thelenders thereto dated as of November 28, 2000, as thereafter amended.

 

“*Credit Facilities*”means, one or more debt facilities (including, without limitation, the CreditAgreement) or commercial paper facilities, in each case with banks or otherinstitutional lenders providing for revolving credit loans, term loans,receivables financing (including through the sale of receivables to suchlenders or to special purpose entities formed to borrow from such lendersagainst such receivables) or letters of credit, in each case, as amended,restated, modified, renewed, refunded, replaced or refinanced in whole or inpart from time to time.

 

“*Currency ExchangeProtection Agreement*” means, in respect of a Person, any foreignexchange contract, currency swap agreement, currency option or other similaragreement or arrangement designed to protect such Person against fluctuationsin currency exchange rates entered into with any commercial bank or otherfinancial institutions having capital and surplus in excess ofUS$500.0 million.

 

“*Custodian*” means, with respect to the Notes issuable orissued in whole or in part in global form, the Person specified in Section 2.03(c) hereofas Custodian with respect to the Notes, and any and all successors theretoappointed as custodian hereunder and having become such pursuant to theapplicable provisions of this Indenture.

 

“*Debt to Cash Flow Ratio*” means, as of any date ofdetermination (the “Determination Date”), the ratio of (a) theConsolidated Indebtedness of the Company (excluding the QMI Subordinated Loan)as of such Determination Date to (b) the Consolidated Cash Flow of theCompany for the most recently ended fiscal quarter ending immediately prior to such Determination Date forwhich internal financial statements are available (the 

 

8

----

 

“Measurement Period”) multiplied by four, determinedon a *pro forma* basis after giving effect toall acquisitions or dispositions of assets made by the Company and theRestricted Subsidiaries from the beginning of such quarters through andincluding such Determination Date (including any related financingtransactions) as if such acquisitions and dispositions had occurred at thebeginning of such quarter.  For purposesof calculating Consolidated Cash Flow for each Measurement Period immediatelyprior to the relevant Determination Date, (i) any Person that is aRestricted Subsidiary on the Determination Date (or would become a RestrictedSubsidiary on such Determination Date in connection with the transaction thatrequires the determination of such Consolidated Cash Flow) shall be deemed tohave been a Restricted Subsidiary at all times during the applicable MeasurementPeriod; (ii) any Person that is not a Restricted Subsidiary on suchDetermination Date (or would cease to be a Restricted Subsidiary on suchDetermination Date in connection with the transaction that requires thedetermination of such Consolidated Cash Flow) shall be deemed not to have beena Restricted Subsidiary at any time during the applicable Measurement Period; (iii) ifthe Company or any Restricted Subsidiary shall have in any manner (x) acquiredthrough an Asset Acquisition or (y) disposed of (including by way of anAsset Sale or the termination or discontinuance of activities constituting suchoperating business) any operating business during the applicable MeasurementPeriod or after the end of such period and on or prior to such DeterminationDate, such calculation shall be made on a *pro forma* basisin accordance with GAAP, as if, in the case of an Asset Acquisition, all suchtransactions (including any related financing transactions) had beenconsummated on the first day of the applicable Measurement Period, and, in thecase of an Asset Sale or termination or discontinuance of activitiesconstituting such operating business, all such transactions (including anyrelated financing transactions) had been consummated prior to the first day ofthe applicable Measurement Period; (iv) if (A) since the beginning ofthe applicable Measurement Period, the Company or any Restricted Subsidiary hasincurred any Indebtedness that remains outstanding or has repaid anyIndebtedness, or (B) the transaction giving rise to the need to calculatethe Debt to Cash Flow Ratio is an incurrence or repayment of Indebtedness,Consolidated Interest Expense for such Measurement Period shall be calculatedafter giving effect on a *pro forma* basisto such incurrence or repayment as if such Indebtedness was incurred or repaidon the first day of such period, *provided* that,in the event of any such repayment of Indebtedness, Consolidated Cash Flow forsuch period shall be calculated as if the Company or such Restricted Subsidiaryhad not earned any interest income actually earned during such period inrespect of the funds used to repay such Indebtedness; and (v) if anyIndebtedness bears a floating rate of interest and is being given *pro forma* effect, the interest expense on such Indebtednessshall be calculated as if the base interest rate in effect for such floatingrate of interest on the Determination Date had been the applicable baseinterest rate for the entire Measurement Period (taking into account anyInterest Rate Agreement applicable to such Indebtedness if such Interest RateAgreement has a remaining term in excess of twelve months).  For purposes of this definition, any *pro forma* calculation shall be made ingood faith by a responsible financial or accounting officer of the Companyconsistent with Article 11 of Regulation S-X of the Securities Act, assuch Regulation may be amended.

 

“*Default*” means any event that is, or with the passage oftime or the giving of notice or both would be, an Event of Default.

 

“*Deferred Management Fees*” means, for any period, anyManagement Fees that were payable during any prior period, the payment of whichwas not effected when due.

 

“*Definitive Note*” means a certificated Note registered in thename of the Holder thereof and issued in accordance with Section 2.06 or2.10 hereof, in substantially the form of Exhibit A hereto except thatsuch Note shall not bear the Global Note Legend and shall not have the “Scheduleof Exchanges of Interests in the Global Note” attached thereto.

 

“*Depositary*” means, with respect to the Notes issuable orissued in whole or in part in global form, the Person specified in Section 2.03(b) hereofas the Depositary with respect to the Notes, and any and all successors theretoappointed as depositary hereunder and having become such pursuant to theapplicable provisions of this Indenture

 

“*Disqualified Stock*” means any Capital Stock that, by itsterms (or by the terms of any security into which it is convertible, or forwhich it is exchangeable, in each case at the option of the holder thereof), orupon the happening of any event, matures or is mandatorily redeemable, pursuantto a sinking fund obligation or otherwise, or redeemable at the option of theholder thereof, in whole or in part, on or prior to the date that is 91 daysafter the date on which the Notes mature. Notwithstanding the preceding sentence, (i) Back-to-Back Preferred

 

9

----

 

Shares shall not constitute Disqualified Stock and (ii) anyCapital Stock that would constitute Disqualified Stock solely because theholders thereof have the right to require the Company to repurchase suchCapital Stock upon the occurrence of a change of control or an asset sale shallnot constitute Disqualified Stock if the terms of such Capital Stock providethat the Company may not repurchase or redeem any such Capital Stock pursuantto such provisions unless such repurchase or redemption complies with theprovisions of Section 4.10 hereof. The term *“Disqualified Stock”*shallalso include any options, warrants or other rights that are convertible intoDisqualified Stock or that are redeemable at the option of the holder, orrequired to be redeemed, prior to the date that is 91 days after the date onwhich the Notes mature.

 

“*Distribution Compliance Period*” means the 40-daydistribution compliance period as defined in Regulation S.

 

“*Equity Interests*” means Capital Stock and all warrants,options or other rights to acquire Capital Stock (but excluding any debtsecurity that is convertible into, or exchangeable for, Capital Stock).

 

“*Equity Offering*” means an offering by the Company of EquityInterests (other than Disqualified Stock or Back-to-Back Securities) of theCompany however designated and whether voting or non-voting or an equitycontribution by a direct or indirect parent company to the common equity of theCompany.

 

“*Euroclear*” means Euroclear Bank, S.A./N.V., as operator ofthe Euroclear systems, and any successor thereto.

 

*“ExchangeAct*” means the U.S. Securities Exchange Act of 1934, asamended, and the rules and regulations thereunder, including any successorlegislation and rules and regulations.

 

“*Exchange Notes*” means Notes registered under the SecuritiesAct to be exchanged for Notes not so registered, pursuant to and as set forthin a Registration Rights Agreement relating to such an exchange.

 

“*Exchange Offer*” has the meaning set forth in a RegistrationRights Agreement relating to an exchange of Notes registered under theSecurities Act for Notes not so registered.

 

“*Exchange Offer Registration Statement*” has the meaning setforth in a Registration Rights Agreement.

 

“*Existing Indebtedness*” means Indebtedness of the Company andthe Restricted Subsidiaries (other than Indebtedness under the CreditAgreement) in existence on October 8, 2003, until such amounts are repaid.

 

“*GAAP*” means generallyaccepted accounting principles, consistently applied, as in effect in Canadafrom time to time*.*

 

“*Global Note Legend*” means the legend set forth in Section 2.06(g)(ii) hereof,which is required to be placed on all Global Notes issued under this Indenture.

 

“*Global Notes*” means the global Notes in the form of Exhibit Ahereto issued in accordance with Article 2 hereof.

 

“*Government Securities*” means direct obligations of, orobligations guaranteed by, the United States of America (including any agencyor instrumentality thereof) and the payment for which the United States ofAmerica pledges its full faith and credit, and which are not callable orredeemable at the issuer’s option.

 

“*guarantee*” means, as to any Person, a guarantee other thanby endorsement of negotiable instruments for collection in the ordinary courseof business, direct or indirect, in any manner including, without limitation,by way of a pledge of assets or through letters of credit or reimbursementagreements in respect thereof, of all or any part of any Indebtedness ofanother Person.

 

10

----

 

“*Hedging Obligations*” means, with respect to any specifiedPerson, the obligations of such Person pursuant to any Interest Rate Agreementor Currency Exchange Protection Agreement.

 

“*Holder*” means a Person in whose name a Note is registered.

 

“*Incur*” means,with respect to any Indebtedness or other Obligation of any Person, to create,incur, issue, assume, guarantee or otherwise become indirectly or directlyliable, contingently or otherwise, with respect of such Indebtedness or otherObligation.

 

“*Indebtedness*” means, with respect to any specified Person,any indebtedness of such Person, whether or not contingent:

 

(1)           representingprincipal of and premium, if any, in respect of borrowed money;

 

(2)           representingprincipal of and premium, if any, evidenced by bonds, notes, debentures orsimilar instruments or letters of credit (or reimbursement agreements inrespect thereof);

 

(3)           in respect ofbankers’ acceptances;

 

(4)           representing CapitalLease Obligations of such Person and all Attributable Debt in respect of saleand leaseback transactions entered into by such Person;

 

(5)           representing thebalance deferred and unpaid of the purchase price of any property, except anysuch balance that constitutes an accrued expense or trade payable;

 

(6)           representing theamount of all obligations of such Person with respect to the repayment of anyDisqualified Stock or, with respect to any Subsidiary of such Person, anyPreferred Stock (in each case, valued at the greater of its voluntary orinvoluntary maximum fixed repurchase price plus accrued dividends); or

 

(7)           representing anyHedging Obligations,

 

if and to the extent any of the preceding items (other than letters ofcredit, Hedging Obligations, Attributable Debt, Disqualified Stock andPreferred Stock) would appear as a liability upon a balance sheet of thespecified Person prepared in accordance with GAAP. In addition, the term “*Indebtedness”* includes all Indebtedness ofothers secured by a Lien on any asset of the specified Person (whether or notsuch Indebtedness is assumed by the specified Person) and, to the extent nototherwise included, the guarantee by the specified Person of any Indebtednessof any other Person. For purposes hereof, the “maximum fixed repurchase price”of any Disqualified Stock or Preferred Stock which does not have a fixedrepurchase price shall be calculated in accordance with the terms of suchDisqualified Stock or Preferred Stock as if such Disqualified Stock orPreferred Stock were purchased on any date on which Indebtedness shall berequired to be determined pursuant to this Indenture, and if such price isbased upon, or measured by, the fair market value of such Disqualified Stock orPreferred Stock, such fair market value shall be determined in good faith bythe Board of Directors of the issuer of such Disqualified Stock or PreferredStock. The term *“Indebtedness”*shall not include Back-to-Back Securities.

 

Theamount of any Indebtedness described above in clauses (1) through (7) andin the preceding paragraph outstanding as of any date shall be the outstandingbalance at such date of all unconditional obligations as described above and,with respect to contingent obligations, the maximum liability upon theoccurrence of the contingency giving rise to the obligation, and shall be:

 

(1)           the accreted valueof the Indebtedness, in the case of any Indebtedness issued with original issuediscount, and

 

(2)           the principal amountthereof, together with any interest thereon that is more than 30 days past due,in the case of any other Indebtedness;

 

11

----

 

*provided*, *however*,that if any Indebtedness denominated in a currency other than Canadian dollarsis hedged or swapped through the maturity of such Indebtedness under a CurrencyExchange Protection Agreement, the amount of such Indebtedness shall beadjusted to the extent of any positive or negative value (to the extent theObligation under such Currency Exchange Protection Agreement is not otherwiseincluded as Indebtedness of such Person) of such Currency Exchange ProtectionAgreement.

 

“*Indenture*” means this instrument, as originally executed oras it may from time to time be supplemented or amended in accordance with Article 9hereof.

 

“*Indirect Participant*” means a Person who holds a beneficial interestin a Global Note through a Participant.

 

“*Initial Notes*” means US$455.0 million aggregate principalamount of Notes issued under this Indenture on the date hereof.

 

“*Institutional Accredited Investor*” means an institution thatis an “accredited investor” as defined in Rule 501(a)(1), (2), (3) or(7) under the Securities Act.

 

*“InterestPayment Dates”* shall have the meaning set forth in paragraph1 of each Note.

 

“*Interest Rate Agreement*” means, for any Person, any interestrate swap agreement, interest rate cap agreement, interest rate collaragreement or other similar agreement or arrangement designed to protect againstfluctuations in interest rates entered into with any commercial bank or otherfinancial institution having capital and surplus in excess of US$500.0 million.

 

“*Investments*” means, with respect to any Person, all director indirect investments by such Person in other Persons (including Affiliates)in the forms of loans or other extensions of credit (including guarantees, butexcluding advances to customers or suppliers in the ordinary course of businessthat are, in conformity with GAAP, recorded as accounts receivable, prepaidexpenses or deposits on the balance sheet of the Company or its RestrictedSubsidiaries and endorsements for collection or deposit arising in the ordinarycourse of business), advances (excluding commission, travel and similaradvances to officers and employees made consistent with past practices),capital contributions (by means of any transfer of cash or other property toothers or any payment for property or services for the account or use ofothers), purchases or other acquisitions for consideration of Indebtedness,Equity Interests or other securities, together with all items that are or wouldbe classified as investments on a balance sheet prepared in accordance withGAAP and include the designation of a Restricted Subsidiary as an UnrestrictedSubsidiary.  If the Company or anyRestricted Subsidiary sells or otherwise disposes of any Equity Interests ofany direct or indirect Restricted Subsidiary such that, after giving effect toany such sale or disposition, such Person is no longer a Restricted Subsidiaryof the Company, the Company shall be deemed to have made an Investment on thedate of any such sale or disposition equal to the fair market value of theInvestment in such Restricted Subsidiary not sold or disposed of in an amountdetermined as provided in Section 4.10(c) hereof.  The acquisition by the Company or anyRestricted Subsidiary of a Person that holds an Investment in a third Personshall be deemed to be an Investment by the Company or such RestrictedSubsidiary in such third Person in an amount equal to the fair market value ofthe Investment held by the acquired Person in such third Person in an amountdetermined as provided in Section 4.10(c) hereof.

 

“*Issue Date*” means April 15, 2008.

 

“*Legal Holiday*” means a Saturday, a Sunday or a day on whichbanking institutions in each of the City of New York, Montréal, the city inwhich the Corporate Trust Office of the Trustee is located or any other placeof payment on the Notes are authorized by law, regulation or executive order toremain closed.

 

“*Lien*” means, with respect to any asset, any mortgage, lien,pledge, charge, security interest, hypothecation, assignment for security orencumbrance of any kind in respect of such asset, whether or not filed,recorded or otherwise perfected under applicable law, including any conditionalsale or capital lease or other title retention agreement, any lease in thenature thereof, any option or other agreement to sell or give a securityinterest 

 

12

----

 

in and any filing of or agreement to give anyfinancing statement under the Uniform Commercial Code (or equivalent statutes)of any jurisdiction.

 

 “*Letter of Transmittal*”means the letter of transmittal, or its electronic equivalent in accordancewith the Applicable Procedures, to be prepared by the Company and sent to allHolders of the Initial Notes or any Additional Notes for use by such Holders inconnection with an Exchange Offer.

 

“*Management Fees*”means any amounts payable by the Company or any Restricted Subsidiary inrespect of management or similar services.

 

“*Net Income*” means, with respect to any specified Person, thenet income (loss) of such Person, determined in accordance with GAAP and beforeany reduction in respect of Preferred Shares dividends, excluding, however:

 

(1)           any gain (or loss),together with any related provision for taxes on such gain (or loss), realizedin connection with: (a) any Asset Sale (without regard to the $1.0 millionlimitation set forth in the definition thereof) or (b) the disposition ofany securities by such Person or any of its Restricted Subsidiaries or theextinguishment of any Indebtedness of such Person or any of its RestrictedSubsidiaries; and

 

(2)           any extraordinarygain (or loss), together with any related provision for taxes on suchextraordinary gain (or loss).

 

“*Net Proceeds*” means the aggregate cash proceeds received bythe Company or any Restricted Subsidiary in respect of any Asset Sale(including, without limitation, any cash received upon the sale or otherdisposition of any non-cash consideration received in any Asset Sale), net of (a) thedirect costs relating to such Asset Sale, including, without limitation, legal,accounting and investment banking fees, and sales commissions, (b) anyrelocation expenses incurred as a result of the Asset Sale, (c) taxes paidor payable as a result of the Asset Sale, in each case, after taking intoaccount any available tax credits or deductions and any tax sharingarrangements, (d) amounts required to be applied to the repayment ofIndebtedness or other liabilities, secured by a Lien on the asset or assetsthat were the subject of such Asset Sale, or required to be paid as a result ofsuch sale, (e) any reserve for adjustment in respect of the sale price ofsuch asset or assets established in accordance with GAAP, and (f) alldistributions and other payments required to be made to minority interestholders in Subsidiaries or joint ventures of the Company or such RestrictedSubsidiary as a result of such Asset Sale.

 

“*Non-Recourse Debt*” means Indebtedness:

 

(1)           as to which neitherthe Company nor any Restricted Subsidiary (a) provides credit support ofany kind (including any undertaking, agreement or instrument that wouldconstitute Indebtedness), (b) is directly or indirectly liable as aguarantor or otherwise or (c) constitutes the lender;

 

(2)           no default withrespect to which (including any rights that the holders thereof may have totake enforcement action against an Unrestricted Subsidiary) would permit, uponnotice, lapse of time or both, any holder of any other Indebtedness (other thanthe Notes ) of the Company or any Restricted Subsidiary to declare a default onsuch other Indebtedness or cause the payment thereof to be accelerated orpayable prior to its Stated Maturity; and

 

(3)           as to which thelenders have been notified in writing that they will not have any recourse to thestock or assets of the Company or any Restricted Subsidiary.

 

“*Obligations*” means any principal, interest, penalties, fees,indemnifications, reimbursements, damages and other liabilities payable underthe documentation governing any Indebtedness.

 

13

----

 

“*Officer*” means the Chairman of the Board, the ChiefExecutive Officer, the President, the Chief Operating Officer, the ChiefFinancial Officer, the Treasurer, any Assistant Treasurer, the Controller, theSecretary or any Vice President of the Company.

 

“*Officers’ Certificate*” means a certificate signed by twoOfficers of the Company, at least one of whom shall be the principal executiveofficer, principal financial officer or the principal accounting officer of theCompany, and delivered to the Trustee.

 

“*Opinion of Counsel*” means a written opinion from legalcounsel who is reasonably acceptable to the Trustee.  The counsel may be an employee of or counselto the Company, an Affiliate of the Company or the Trustee.

 

“*Participant*” means, with respect to the Depositary,Euroclear or Clearstream, a Person who has an account with the Depositary,Euroclear or Clearstream, respectively, and, with respect to DTC, shall includeEuroclear and Clearstream.

 

“*Permitted Business*” means the businesses conducted by theCompany and its Restricted Subsidiaries in the cable and telecommunicationsindustry, including on-line internet services, telephony and the sale andrental of videocassettes, or anything related or ancillary thereto.

 

“*Permitted Holders*” means one or more of the followingpersons or entities:

 

(1)           Quebecor Inc.;

 

(2)           Quebecor Media;

 

(3)           any issue of the late PierrePéladeau;

 

(4)           any trust having asits sole beneficiaries one or more of the persons listed in clause (3) above;

 

(5)           any corporation,partnership or other entity controlled by one or more of the persons or trustsreferred to in clause (3) or (4) above or in this clause (5); and

 

(6)           CDP Capital d’AmériqueInvestissements Inc.

 

“*Permitted Investments*” means:

 

(1)           any Investment in the Company or in aRestricted Subsidiary;

 

(2)           any Investment in cash or CashEquivalents;

 

(3)           any Investment bythe Company or any Restricted Subsidiary in a Person, if as a result of suchInvestment:

 

(a)           such Person becomes a RestrictedSubsidiary; or

 

(b)           such Person is merged, consolidatedor amalgamated with or into, or transfers or conveys substantially all of itsassets to, or is liquidated into, the Company or any Restricted Subsidiary,

 

*provided*that, in each case, such Person’s primary business is a Permitted Business;

 

(4)           any Investment madeas a result of the receipt of non-cash consideration from an Asset Sale thatwas made pursuant to and in compliance with the provisions of Section 4.12hereof;

 

14

----

 

(5)           any acquisition ofassets solely in exchange for the issuance of Equity Interests (other thanDisqualified Stock or Back-to-Back Securities) of the Company;

 

(6)           Hedging Obligationsentered into in the ordinary course of business of the Company or anyRestricted Subsidiary and not for speculative purposes, and that do notincrease the Indebtedness of the obligor outstanding at any time other than asa result of fluctuations in interest rates or foreign currency exchange ratesor by reason of fees, indemnities and compensation payable thereunder;

 

(7)           payroll, travel andsimilar advances to officers, directors and employees of the Company and theRestricted Subsidiaries for business-related travel expenses, moving expensesand other similar expenses that are expected at the time of such advancesultimately to be treated as expenses in accordance with GAAP;

 

(8)           any Investment inconnection with Back-to-Back Transactions;

 

(9)           any Investment existing on October 8,2003; and

 

(10)         other Investments inany Person that is not an Affiliate of the Company (other than a RestrictedSubsidiary) having an aggregate fair market value (measured on the date eachsuch Investment was made and without giving effect to subsequent changes invalue), when taken together with all other Investments made pursuant to thisclause (10) since October 8, 2003 not to exceed US$50.0 million.

 

“*Permitted Liens*” means:

 

(1)           Liens on the assetsof the Company and any Restricted Subsidiaries securing Indebtedness and otherObligations of the Company and Restricted Subsidiaries under Credit Facilities,which Indebtedness was permitted by the terms of this Indenture to be incurred,*provided*, *however*,that the aggregate principal amount of such Indebtedness secured by such Liensshall not exceed an aggregate of Cdn$650.0 million at any one timeoutstanding;

 

(2)           Liens in favor ofthe Company or a Restricted Subsidiary;

 

(3)           Liens on property ofa Person existing at the time such Person is merged with or into orconsolidated or amalgamated with the Company or any Restricted Subsidiary, *provided* that such Liens were in existence prior to thecontemplation of such merger, consolidation or amalgamation and do not extendto any assets other than those of the Person merged into or consolidated oramalgamated with the Company or the Restricted Subsidiary;

 

(4)           Liens on propertyexisting at the time of acquisition thereof by the Company or any RestrictedSubsidiary, *provided* that such Liens were inexistence prior to the contemplation of such acquisition and do not extend toany assets other than such property;

 

(5)           Liens to secure theperformance of statutory obligations, surety or appeal bonds, performance bondsor other obligations of a like nature incurred in the ordinary course ofbusiness;

 

(6)           Liens to secureIndebtedness (including Capital Lease Obligations) permitted by Section 4.09(b)(4) hereofcovering only the assets acquired with such Indebtedness;

 

(7)           Liens existing on October 8,2003;

 

(8)           Liens for taxes,assessments or governmental charges or claims that are not yet delinquent orthat are being contested in good faith by appropriate proceedings promptlyinstituted and diligently concluded, *provided* thatany reserve or other appropriate provision as shall be required in conformitywith GAAP shall have been made therefor;

 

15

----

 

(9)           Liens securingPermitted Refinancing Indebtedness, *provided*thatany such Lien does not extend to or cover any property, Capital Stock orIndebtedness other than the property, shares or debt securing the Indebtednessso refunded, refinanced or extended;

 

(10)         attachment orjudgment Liens not giving rise to a Default or an Event of Default;

 

(11)         Liens incurred ordeposits made in the ordinary course of business in connection with workers’compensation, unemployment insurance and other types of social security;

 

(12)         Liens incurred ordeposits made to secure the performance of tenders, bids, leases, statutory orregulatory obligations, bankers’ acceptance, surety and appeal bonds,government contracts, performance and return-of-money bonds and otherobligations of a similar nature incurred in the ordinary course of business,exclusive of Obligations for the payment of borrowed money;

 

(13)         licenses, permits,reservations, servitudes, easements, rights-of-way and rights in the nature ofeasements (including, without limiting the generality of the foregoing,licenses, easements, rights-of-way and rights in the nature of easements for railways,sidewalks, public ways, sewers, drains, gas or oil pipelines, steam, gas andwater mains or electric light and power, or telephone and telegraph or cabletelevision conduits, poles, wires and cables, reservations, limitations,provisos and conditions expressed in any original grant from any governmentalentity or other grant of real or immovable property, or any interest therein)and zoning land use and building restrictions, by-laws, regulations andordinances of federal, provincial, regional, state, municipal and othergovernmental authorities in respect of real property not interfering,individually or in the aggregate, in any material respect with the use of theaffected real property for the ordinary conduct of the business of the Companyor any of its Restricted Subsidiaries at such real property;

 

(14)         Liens of franchisorsor other regulatory bodies arising in the ordinary course of business;

 

(15)         Liens securingreimbursement obligations with respect to letters of credit that encumberdocuments and other property relating to such letters of credit and theproducts and proceeds thereof;

 

(16)         Liens encumberingcustomary initial deposits and margin deposits, and other Liens that are withinthe general parameters customary in the industry and incurred in the ordinarycourse of business, in each case, securing Indebtedness under HedgingObligations and forward contracts, options, future contracts, future options orsimilar agreements or arrangements, including mark-to-market transactionsdesigned solely to protect the Company or any Restricted Subsidiary fromfluctuations in interest rates, currencies or the price of commodities;

 

(17)         Liens consisting ofany interest or title of licensor in the property subject to a license;

 

(18)         Liens arising fromsales or other transfers of accounts receivable which are past due or otherwisedoubtful of collection in the ordinary course of business;

 

(19)          anyextensions, substitutions, replacements or renewals of the foregoing clauses (2) through(18); and

 

(20)         Liens incurred in theordinary course of business of the Company or any Restricted Subsidiary withrespect to Obligations that do not exceed US$25 million at any one timeoutstanding.

 

“*Permitted Refinancing Indebtedness*” means any Indebtednessof the Company or any Restricted Subsidiary issued in exchange for, or the netproceeds of which are used to extend, refinance, renew, replace, defease orrefund other Indebtedness of the Company or any Subsidiary Guarantor (otherthan intercompany Indebtedness); *provided, however,*that:

 

16

----

 

(1)           the principal amount(or accreted value, if applicable) of such Permitted Refinancing Indebtednessdoes not exceed the principal amount (or accreted value, if applicable) of the Indebtednessso extended, refinanced, renewed, replaced, defeased or refunded (plus allaccrued interest thereon and the amount of any reasonably determined premiumnecessary to accomplish such refinancing and such reasonable expenses incurredin connection therewith);

 

(2)           such PermittedRefinancing Indebtedness has a final maturity date later than the finalmaturity date of, and has a Weighted Average Life to Maturity equal to orgreater than the Weighted Average Life to Maturity of, the Indebtedness beingextended, refinanced, renewed, replaced, defeased or refunded;

 

(3)           if the Indebtednessbeing extended, refinanced, renewed, replaced, defeased or refunded issubordinated in right of payment to the Notes or the Subsidiary Guarantees,such Permitted Refinancing Indebtedness is subordinated in right of payment to,the Notes on terms at least as favorable to the Holders of Notes as thosecontained in the documentation governing the Indebtedness being extended,refinanced, renewed, replaced, defeased or refunded;

 

(4)           if the Indebtednessbeing extended, refinanced, renewed, replaced, defeased or refunded is *pari passu* in right of payment with theNotes or any Subsidiary Guarantees, such Permitted Refinancing Indebtedness is *pari passu* with, or subordinated in rightof payment to, the Notes or such Subsidiary Guarantees; and

 

(5)           such Indebtedness isincurred either by the Company, a Subsidiary Guarantor or by the RestrictedSubsidiary who is the obligor on the Indebtedness being extended, refinanced,renewed, replaced, defeased or refunded.

 

“*Person*” means any individual, corporation, partnership,joint venture, association, joint-stock company, trust, unincorporatedorganization, limited liability company or government or other entity.

 

“*Predecessor Note*”**of any particular Note means every previous Noteevidencing all or a portion of the same Indebtedness as that evidenced by suchparticular Note; and any Note authenticated and delivered under Section 2.07in lieu of a lost, destroyed or stolen Note shall be deemed to evidence thesame Indebtedness as the lost, destroyed or stolen Note.

 

“*Preferred Shares*” means any Capital Stock of a Person,however designated, which entitles the holder thereof to a preference withrespect to the payment of dividends, or as to the distribution of assets uponany voluntary or involuntary liquidation or dissolution of such Person, overshares of any other class of Capital Stock issued by such Person.

 

“*Private Placement Legend*” means the legend set forth in Section 2.06(g)(i) hereofto be placed on all Notes issued under this Indenture except as otherwisepermitted by the provisions of this Indenture.

 

“*QIB*” means a “qualified institutional buyer” as defined in Rule 144A.

 

*“QMI Subordinated Loan”* means theIndebtedness owed by the Company to Quebecor Media pursuant to the SubordinatedLoan Agreement dated March 24, 2003 between the Company and QuebecorMedia, as amended.

 

“*Quebecor Media*” means Quebecor Media Inc., the parent of theCompany.

 

“*Registration Rights Agreement*” means the Registration RightsAgreement, dated as of the Issue Date, among the Company, each SubsidiaryGuarantor and the initial purchasers named therein, as such agreement may beamended, modified or supplemented from time to time and, with respect to anyAdditional Notes, one or more registration rights agreements between theCompany and the other parties thereto, as such agreement(s) may beamended, modified or supplemented from time to time, relating to rights givenby the Company to the purchasers of 

 

17

----

 

Additional Notes to register such Additional Notes, orexchange such Additional Notes for registered notes, under the Securities Act.

 

“*Regular Record Date*” for the interest payable on anyInterest Payment Date means the applicable date specified as a “Record Date” onthe face of the Note.

 

“*Regulation S*” means Regulation S promulgated under theSecurities Act.

 

“*Regulation S Global Note*” means a Global Note in the form ofExhibit A hereto bearing the Global Note Legend and the Private PlacementLegend and deposited with and registered in the name of the Depositary or itsnominee that will be issued in a denomination equal to the outstandingprincipal amount of the Notes sold for initial resale in reliance on Rule 904.

 

“*Related Party*” means:

 

(1)           any controllingshareholder, 80% (or more) owned Subsidiary, or immediate family member (in thecase of an individual) of any Permitted Holder, or

 

(2)           any trust,corporation, partnership or other entity, the beneficiaries, shareholders,partners, owners or Persons beneficially holding an 80% or more controllinginterest of which consist of any one or more Permitted Holder and/or such otherPersons referred to in the immediately preceding clause (1).

 

“*Responsible Officer*,” when used with respect to the Trustee,means any officer within the Corporate Trust Department of the Trustee (or anysuccessor group of the Trustee) with direct responsibility for theadministration of this Indenture and also means, with respect to a particularcorporate trust matter, any other officer to whom such matter is referredbecause of his or her knowledge of and familiarity with the particular subject.

 

“*Restricted Definitive Note*” means one or more DefinitiveNotes bearing the Private Placement Legend.

 

“*Restricted Global Notes*” means 144A Global Notes andRegulation S Global Notes.

 

“*Restricted Investment*”means an Investment other than a Permitted Investment.

 

“*Restricted Payment*” means:

 

(1)           the declaration or payment of anydividend or the making of any other payment or distribution on account of theCompany’s or any Restricted Subsidiary’s Equity Interests, including, withoutlimitation, any payment in connection with any merger or consolidationinvolving the Company or any Restricted Subsidiary, or to the direct orindirect holders of the Company’s or any Restricted Subsidiary’s EquityInterests in their capacity as such, other than dividends, payments ordistributions payable in Equity Interests (other than Disqualified Stock orBack-to-Back Securities) of the Company or to the Company or a RestrictedSubsidiary (and, if such Restricted Subsidiary is not a Wholly Owned RestrictedSubsidiary, to the other shareholders of such Restricted Subsidiary on a *pro rata* basis or on a basis that results in the receipt bythe Company or a Restricted Subsidiary of dividends or distributions of greatervalue than it would receive on a *pro rata*basis);

 

(2)           the purchase, redemption or otheracquisition or retirement for value, including, without limitation, inconnection with any merger or consolidation involving the Company, of anyEquity Interests of the Company, other than such Equity Interests of theCompany held by the Company or any of its Restricted Subsidiaries;

 

(3)           the making of any payment on or withrespect to, or the purchase, redemption, defeasance or other acquisition orretirement for value of any Back-to-Back Securities or Indebtedness that issubordinated to the Notes or the Subsidiary Guarantees, except, in the case ofIndebtedness that is 

 

18

----

 

subordinated tothe Notes or Subsidiary Guarantees (other than Back-to-Back Securities and theQMI Subordinated Loan), a payment of interest at the Stated Maturity of suchinterest or principal at or within one year of the Stated Maturity of principalof such Indebtedness; *provided*that any accretion or payment-in-kind of interest on the QMI Subordinated Loan,to the extent such accretion or payment is not made in cash, will not be aRestricted Payment;

 

(4)           any Restricted Investment; or

 

(5)           the payment of any amount ofManagement Fees (including Deferred Management Fees) to a Person other than theCompany or a Restricted Subsidiary.

 

“*Restricted Subsidiary*”means any Subsidiary of the Company that is not an Unrestricted Subsidiary.

 

“*Rule 144*” means Rule 144 promulgated under theSecurities Act.

 

“*Rule 144A*” means Rule 144A promulgated under theSecurities Act.

 

“*Rule 903*” means Rule 903 promulgated under theSecurities Act.

 

“*Rule 904*” means Rule 904 promulgated under theSecurities Act.

 

*“sale and leaseback transaction”* means,with respect to any Person, any transaction involving any of the assets orproperties of such Person whether now owned or hereafter acquired, whereby suchPerson sells or transfers such assets or properties and then or thereafterleases such assets or properties or any part thereof or any other assets orproperties which such Person intends to use for substantially the same purposeor purposes as the assets or properties sold or transferred.

 

“*Securities Act*” means the U.S. Securities Act of 1933, asamended, and the rules and regulations thereunder, including any successorlegislation and rules and regulations.

 

“*Shelf Registration Statement*” has the meaning set forth inany Registration Rights Agreement relating to registering Notes under theSecurities Act.

 

“*Significant Subsidiary*”means any Subsidiary that would be a “significant subsidiary” as defined in Article 1,Rule 1-02 of Regulation S-X, promulgated pursuant to the Securities Act,as such Regulation is in effect on October 8, 2003.

 

“*Special Interest*” has the meaning set forth in anyRegistration Rights Agreement and relating to amounts to be paid in the eventthe Company fails to satisfy certain conditions set forth therein.  For all purposes of this Indenture, the term “interest”shall include Special Interest, if any, with respect to the Notes.

 

“*Stated Maturity*” means, with respect to any installment ofinterest or principal on any series of Indebtedness, the date on which suchpayment of interest or principal was scheduled to be paid in the originaldocumentation governing such Indebtedness, and shall not include any contingentobligations to repay, redeem or repurchase any such interest or principal priorto the date originally scheduled for the payment thereof.

 

“*Subordinated Indebtedness*” means any Indebtedness of theCompany or any Subsidiary Guarantor (whether outstanding on October 8,2003 or thereafter incurred) that is subordinate or junior in right of payment tothe Notes or any Subsidiary Guarantee pursuant to a written agreement to thateffect.

 

“*Subsidiary*” means, with respect to any specified Person:

 

(1)           any corporation,association or other business entity of which more than 50% of the total votingpower of shares of Capital Stock entitled (without regard to the occurrence ofany contingency) to

 

19

----

 

vote in theelection of directors, managers or trustees thereof is at the time owned orcontrolled, directly or indirectly, by such Person or one or more of the otherSubsidiaries of that Person (or a combination thereof); and

 

(2)                                  anypartnership (a) the sole general partner or the managing general partnerof which is such Person or a Subsidiary of such Person or (b) the onlygeneral partners of which are such Person or one or more Subsidiaries of suchPerson (or any combination thereof).

 

“*Subsidiary Guarantee*” means a guarantee on the terms setforth in this Indenture by a Subsidiary Guarantor of the Company’s obligationswith respect to the Notes.

 

“*Subsidiary Guarantor*” means (1) each RestrictedSubsidiary on the Issue Date other than SETTE inc. and (2) any otherPerson that becomes a Subsidiary Guarantor pursuant to the provisions of Section 4.19hereof or who otherwise executes and delivers a supplemental indenture to theTrustee providing for a Subsidiary Guarantee, and in each case their respectivesuccessors and assigns until released from their obligations under theirSubsidiary Guarantees and this Indenture in accordance with the terms hereof.

 

“*Tax*” means any tax, duty, levy, impost, assessment or othergovernmental charge (including penalties, interest and any other liabilitiesrelated thereto).

 

“*Tax Benefit Transaction*” means, for so long as the Companyis a direct or indirect Subsidiary of Quebecor Inc., any transaction between aVideotron Entity and Quebecor Inc. or any of its Affiliates, the primarypurpose of which is to create tax benefits for any Videotron Entity or forQuebecor Inc. or any of its Affiliates; *provided, however,*that (1) the Videotron Entity involved in the transaction obtains afavorable tax ruling from a competent tax authority or a favorable tax opinionfrom a nationally recognized Canadian law or accounting firm having a taxpractice of national standing as to the tax efficiency of the transaction forsuch Videotron Entity; (2) the Company delivers to the Trustee (a) aresolution of the Board of Directors of the Company to the effect thetransaction will not prejudice the Holders and certifying that such transactionhas been approved by a majority of the disinterested members of such Board ofDirectors and (b) an opinion as to the fairness to such Videotron Entityof such transaction from a financial point of view issued by an accounting,appraisal or investment banking firm of national standing in the United Statesor Canada, *provided* that such anopinion shall not be required for Tax Benefit Transactions in amounts notexceeding Cdn$1.0 million (and not exceeding in the aggregate Cdn$10.0 millionfor the preceeding 12-month period); (3) such transaction is set forth inwriting; and (4) the Consolidated Cash Flow of the Company is not reducedafter giving *pro forma* effect to thetransaction as if the same had occurred at the beginning of the most recentlyended full fiscal quarter of the Company for which internal financialstatements are available; *provided, however*,that if such transaction shall thereafter cease to satisfy the precedingrequirements as a Tax Benefit Transaction, it shall thereafter cease to be aTax Benefit Transaction for purposes of this Indenture and shall be deemed tohave been effected as of such date and, if the transaction is not otherwisepermitted by this Indenture as of such date, the Company shall be in defaultunder this Indenture if such transaction does not comply with the precedingrequirements or is not otherwise unwound within 30 days of that date.

 

“*TIA*” means the U.S. Trust Indenture Act of 1939, as amended,and the rules and regulations thereunder, including any successorlegislation and rules and regulations.

 

“*Trustee*” means the Person named as the “Trustee” in thefirst paragraph of this Indenture until a successor Trustee shall have becomesuch pursuant to the applicable provisions of this Indenture, and thereafter “Trustee”shall mean such successor Trustee.

 

“*Unrestricted Definitive Notes*” means one or more DefinitiveNotes that do not and are not required to bear the Private Placement Legend.

 

“*Unrestricted Global Notes*” means one or more Global Notesthat do not and are not required to bear the Private Placement Legend and aredeposited with and registered in the name of the Depositary or its nominee.

 

20

----

 

“*Unrestricted Subsidiary*” means:

 

(1)                                  anySubsidiary of the Company that is designated after the Issue Date as anUnrestricted Subsidiary as permitted or required pursuant to the provisions of Section 4.17hereof and is not thereafter redesignated as a Restricted Subsidiary aspermitted pursuant thereto; and

 

(2)                                  anySubsidiary of an Unrestricted Subsidiary.

 

“*Videotron**Entity*” means any of the Companyor any of its Restricted Subsidiaries.

 

“*Voting Stock*”of any Person as of any date means the Capital Stock of such Person that is atthe time entitled to vote in the election of the Board of Directors of suchPerson.

 

“*Weighted Average Life toMaturity*” means, when applied to any Indebtedness at any date, thenumber of years obtained by dividing:

 

(1)                                                             thesum of the products obtained by multiplying (a) the amount of each thenremaining installment, sinking fund, serial maturity or other required paymentsof principal, including payment at final maturity, in respect thereof, by (b) thenumber of years (calculated to the nearest one-twelfth) that will elapsebetween such date and the making of such payment; by

 

(2)                                                             thethen outstanding principal amount of such Indebtedness.

 

“*Wholly Owned RestrictedSubsidiary*” of any specified Person means a Restricted Subsidiary ofsuch Person all of the outstanding Capital Stock or other ownership interestsof which (other than directors’ qualifying shares) will at the time be owned bysuch Person or by one or more Wholly Owned Restricted Subsidiaries of suchPerson.

 

*Section 1.02.*                                                 **OtherDefinitions**.

 
| ** **                            | ** ** | **Defined in** |
|---------------------------------------|------------|----------------|
| **Term**                              | ** ** | **Section**    |
| “Acceleration Notice”       |       | 6.02           |
| “Additional Amounts”        |       | 4.20(a)(3)     |
| “Affiliate Transaction”     |       | 4.14(a)        |
| “Asset Sale Offer”          |       | 4.12(e)        |
| “Authentication Order”      |       | 2.02(d)        |
| “Automatic Exchange”        |       | 2.06(b)        |
| “Automatic Exchange  Date”  |       | 2.06(b)        |
| “Base Currency”             |       | 12.13(a)       |
| “Benefited Party”           |       | 10.01          |
| “Change of Control  Offer”  |       | 4.18(a)        |
| “Change of Control  Amount” |       | 4.18(a)        |
| “Covenant Defeasance”       |       | 8.03           |
| “DTC”                       |       | 2.03(b)        |
| “Event of Default”          |       | 6.01           |
| “Excess Proceeds”           |       | 4.12           |
| “Excluded Holder”           |       | 4.20(b)        |
| “First Currency”            |       | 12.14          |
| “judgment currency”         |       | 12.13(a)       |
| “Legal Defeasance”          |       | 8.02           |
| “losses”                    |       | 7.07           |
| “Offer Amount”              |       | 3.09(b)(ii)    |
| “Offer Period”              |       | 3.09(c)        |
| “Offer to Purchase”         |       | 3.09(a)        |

 

21

----

 
| “Paying Agent”              |   | 2.03(a)    |
|---------------------------------------|--------|------------|
| “Payment Default”           |   | 6.01(v)(a) |
| “Permitted Debt”            |   | 4.09(b)    |
| “Purchase Date”             |   | 3.09(c)    |
| “rate(s) of  exchange” |   | 12.13      |
| “Registrar”                 |   | 2.03(a)    |
| “Security Register”         |   | 3.03       |
| “Surviving Company”         |   | 5.01(a)(1) |
| “Surviving Guarantor”       |   | 5.01(b)(1) |

 

*Section 1.03.*                                                 **Incorporationby Reference of Trust Indenture Act**.

* *

(a)          Wheneverthis Indenture refers to a provision of the TIA, the provision is incorporatedby reference in and made a part of this Indenture.

 

(b)         Thefollowing TIA terms used in this Indenture have the following meanings:

 

“*indenture securities*” means the Notes;

 

“*indenture security holder*” means a Holder of a Note;

 

“*indenture to be qualified*” means this Indenture;

 

“*indenture trustee*” or “*institutional trustee*”means the Trustee; and

 

*“obligor”*on the Notes means the Company and any successor obligor upon the Notes.

 

(c)          Allother terms used in this Indenture that are defined by the TIA, defined by TIAreference to another statute or defined by Commission rule under the TIAand not otherwise defined herein have the meanings so assigned to them.

 

*Section 1.04.*                                                 **Rules ofConstruction**.

* *

(a)          Unlessthe context otherwise requires:

 

(i)                         aterm has the meaning assigned to it;

 

(ii)                      anaccounting term not otherwise defined herein has the meaning assigned to it inaccordance with GAAP;

 

(iii)                   “or” is not exclusive;

 

(iv)                  wordsin the singular include the plural, and in the plural include the singular;

 

(v)                     allreferences in this instrument to “Articles,” “Sections” and other subdivisionsare to the designated Articles, Sections and subdivisions of this instrument asoriginally executed;

 

(vi)                  thewords “herein,” “hereof” and “hereunder” and other words of similar importrefer to this Indenture as a whole and not to any particular Article, Section orother subdivision.

 

(vii)               “including” means “including withoutlimitation;”

 

(viii)            provisions apply to successive events andtransactions; and

 

22

----

 

(ix)                    referencesto sections of or rules under the Securities Act, the Exchange Act or theTIA shall be deemed to include substitute, replacement or successor sections orrules adopted by the Commission from time to time thereunder.

 

**ARTICLE 2.**

** **

**THE NOTES**

** **

*Section 2.01.*                                                 **Form andDating**.

* *

(a)          ***General***.  The Notes and the Trustee’s certificate ofauthentication shall be substantially in the form included in Exhibit Ahereto, which is hereby incorporated in and expressly made part of thisIndenture.  The Notes may have notations,legends or endorsements required by law, exchange rule or usage inaddition to those set forth on Exhibit A. Each Note shall be dated the date of its authentication.  The Notes shall be in denominations ofUS$1,000 and integral multiples thereof. The terms and provisions contained in the Notes shall constitute a partof this Indenture, and the Company, the Subsidiary Guarantors and the Trustee,by their execution and delivery of this Indenture, expressly agree to such termsand provisions and to be bound thereby. To the extent any provision of any Note conflicts with the expressprovisions of this Indenture, the provisions of this Indenture shall govern andbe controlling.

 

(b)         ***Form of Notes***.  Notes shall be issued initially in globalform and shall be substantially in the form of Exhibit A attached hereto(including the Global Note Legend thereon and the “Schedule of Exchanges ofInterests in the Global Note” attached thereto).  Notes issued in definitive form shall be substantiallyin the form of Exhibit A attached hereto (but without the Global NoteLegend thereon and without the “Schedule of Exchanges of Interests in theGlobal Note” attached thereto).  EachGlobal Note shall represent such aggregate principal amount of the outstandingNotes as shall be specified therein and each shall provide that it shallrepresent the aggregate principal amount of outstanding Notes from time to timeendorsed thereon and that the aggregate principal amount of outstanding Notesrepresented thereby may from time to time be reduced or increased, asappropriate, to reflect exchanges and redemptions and transfers of intereststherein.  Any endorsement of a GlobalNote to reflect the amount of any increase or decrease in the aggregate principalamount of outstanding Notes represented thereby shall be made by the Trustee orthe Custodian, at the direction of the Trustee, in accordance with instructionsgiven by the Holder thereof as required by Section 2.06 hereof.

 

(c)          ***Book-Entry Provisions***.  This Section 2.01(c) shall applyonly to Global Notes deposited with the Trustee, as custodian for theDepositary.  Participants and IndirectParticipants shall have no rights under this Indenture or any Global Note withrespect to any Global Note held on their behalf by the Depositary or by theTrustee as custodian for the Depositary, and the Depositary shall be treated bythe Company, the Trustee and any agent of the Company or the Trustee as theabsolute owner of such Global Note for all purposes whatsoever.  Notwithstanding the foregoing, nothing hereinshall prevent the Company, the Trustee or any agent of the Company or theTrustee from giving effect to any written certification, proxy or otherauthorization furnished by the Depositary or impair, as between the Depositaryand its Participants or Indirect Participants, the Applicable Procedures or theoperation of customary practices of the Depositary governing the exercise ofthe rights of a holder of a beneficial interest in any Global Note.

 

(d)         ***Euroclear and Clearstream Procedures Applicable***.  The provisions of the “Operating Proceduresof the Euroclear System” and “Terms and Conditions Governing Use of Euroclear”and the “General Terms and Conditions of Clearstream” and “Customer Handbook”of Clearstream shall be applicable to transfers of beneficial interests inGlobal Notes that are held by Participants through Euroclear or Clearstream.

 

*Section 2.02.*                                                 **Execution andAuthentication**.

* *

(a)          OneOfficer shall execute the Notes on behalf of the Company by manual or facsimilesignature.

 

23

----

 

(b)         Ifan Officer whose signature is on a Note no longer holds that office at the timea Note is authenticated by the Trustee, the Note shall nevertheless be valid.

 

(c)          ANote shall not be valid until authenticated by the manual signature of theTrustee.  The signature shall beconclusive evidence that the Note has been authenticated under this Indenture.

 

(d)         TheTrustee shall, upon a written order of the Company signed by an Officer (an “*Authentication Order*”), authenticate Notes for originalissue.

 

(e)          TheTrustee may appoint an authenticating agent acceptable to the Company toauthenticate Notes.  Unless otherwiseprovided in such appointment, an authenticating agent may authenticate Noteswhenever the Trustee may do so.  Eachreference in this Indenture to authentication by the Trustee includesauthentication by such agent.  Anauthenticating agent shall have the same rights as an Agent with respect toHolders.

 

*Section 2.03.*                                                 **Registrar andPaying Agent**.

* *

(a)          TheCompany shall maintain an office or agency where Notes may be presented forregistration of transfer or for exchange (“*Registrar*”) andan office or agency where Notes may be presented for payment (“*Paying Agent*”).  TheRegistrar shall keep a register of the Notes and of their transfer andexchange.  The Company may appoint one ormore co-registrars and one or more additional paying agents.  The term “Registrar” includes anyco-registrar and the term “Paying Agent” includes any additional payingagent.  The Company may change any PayingAgent or Registrar without notice to any Holder.  The Company shall notify the Trustee inwriting of the name and address of any Agent not a party to thisIndenture.  If the Company fails toappoint or maintain another entity as Registrar or Paying Agent, the Trusteeshall act as such.  The Company or any ofits Subsidiaries may act as Paying Agent or Registrar.

 

(b)         TheCompany initially appoints The Depository Trust Company (“*DTC*”)to act as Depositary with respect to the Global Notes.

 

(c)          TheCompany initially appoints the Trustee to act as Registrar and Paying Agent andto act as Custodian with respect to the Global Notes, and the Trustee herebyagrees so to initially act.

 

*Section 2.04.*                                                 **Paying Agent toHold Money in Trust**.

* *

TheCompany shall require each Paying Agent other than the Trustee to agree inwriting that the Paying Agent shall hold in trust for the benefit of Holders orthe Trustee all money held by the Paying Agent for the payment of principal,premium, if any, or interest on the Notes, and shall notify the Trustee of anydefault by the Company in making any such payment.  While any such default continues, the Trusteemay require a Paying Agent to pay all funds held by it relating to the Notes tothe Trustee.  The Company at any time mayrequire a Paying Agent to pay all funds held by it relating to the Notes to theTrustee.  Upon payment over to theTrustee, the Paying Agent (if other than the Company or a Subsidiary) shallhave no further liability for such funds. If the Company or a Subsidiary acts as Paying Agent, it shall segregateand hold in a separate trust fund for the benefit of the Holders all funds heldby it as Paying Agent.  Upon any Event ofDefault under Sections 6.01(viii) and (ix) hereof relating to theCompany, the Trustee shall serve as Paying Agent for the Notes.

 

*Section 2.05.*                                                 **Holder Lists**.

* *

TheTrustee shall preserve in as current a form as is reasonably practicable themost recent list available to it of the names and addresses of all Holders andshall otherwise comply with TIA §312(a). If the Trustee is not the Registrar, the Company shall furnish to theTrustee at least seven Business Days before each Interest Payment Date and atsuch other times as the Trustee may request in writing, a list in such form andas of such date or such shorter time as the Trustee may allow, as the Trusteemay reasonably require of the names and addresses of the Holders and theCompany shall otherwise comply with TIA §312(a).

 

24

----

* *

*Section 2.06.*                                                 **Transfer andExchange**.

* *

(a)          ***Transfer and Exchange of Global Notes***.  A Global Note may not be transferred as awhole except by the Depositary to a nominee of the Depositary, by a nominee ofthe Depositary to the Depositary or to another nominee of the Depositary, or bythe Depositary or any such nominee to a successor Depositary or a nominee ofsuch successor Depositary.  The Companyshall exchange Global Notes for Definitive Notes if:  (1) the Company delivers to the Trusteea notice from the Depositary that the Depositary is unwilling or unable tocontinue to act as Depositary for the Global Notes or that it has ceased to bea clearing agency registered under the Exchange Act and, in either case, asuccessor Depositary is not appointed by the Company within 120 days after thedate of such notice from the Depositary; (2) the Company at its optiondetermines that the Global Notes shall be exchanged for Definitive Notes anddelivers a written notice to such effect to the Trustee; or (3) a Defaultor Event of Default shall have occurred and be continuing.  Upon the occurrence of any of the precedingevents in clauses (1), (2) or (3) above, Definitive Notes shall beissued in denominations of US$1,000 or integral multiples thereof and in suchnames as the Depositary shall instruct the Trustee in writing.  Global Notes also may be exchanged orreplaced, in whole or in part, as provided in Sections 2.07 and 2.10hereof.  Except as provided above, everyNote authenticated and delivered in exchange for, or in lieu of, a Global Noteor any portion thereof, pursuant to this Section 2.06 or Section 2.07or 2.10 hereof, shall be authenticated and delivered in the form of, and shallbe, a Global Note.  A Global Note may notbe exchanged for another Note other than as provided in this Section 2.06(a),and beneficial interests in a Global Note may not be transferred and exchangedother than as provided in Section 2.06(b), (c) or (f) hereof.

 

(b)         ***Transfer and Exchange of Beneficial Interests inthe Global Notes***.  Thetransfer and exchange of beneficial interests in the Global Notes shall beeffected through the Depositary in accordance with the provisions of thisIndenture and the Applicable Procedures. Beneficial interests in Restricted Global Notes shall be subject torestrictions on transfer comparable to those set forth herein to the extentrequired by the Securities Act. Transfers of beneficial interests in Global Notes also shall requirecompliance with either clause (i) or (ii) below, as applicable, aswell as one or more of the other following clauses, as applicable:

 

(i)             Transferof Beneficial Interests in the Same Global Note.  Beneficial interests in any Restricted GlobalNote may be transferred to Persons who take delivery thereof in the form of abeneficial interest in the same Restricted Global Note in accordance with thetransfer restrictions set forth in the Private Placement Legend and anyApplicable Procedures; *provided*, *however*, that prior to the expiration of the DistributionCompliance Period, transfers of beneficial interests in Regulation S GlobalNote may not be made to or for the account or benefit of a “U.S. Person” (asdefined in Rule 902(k) of Regulation S) (other than a “distributor”(as defined in Rule 902(d) of Regulation S)).  Beneficial interests in any UnrestrictedGlobal Note may be transferred to Persons who take delivery thereof in the formof a beneficial interest in an Unrestricted Global Note.  Except as may be required by any ApplicableProcedures, no written orders or instructions shall be required to be deliveredto the Registrar to effect the transfers described in this Section 2.06(b)(i).

 

(ii)          AllOther Transfers and Exchanges of Beneficial Interests in Global Notes.  In connection with all transfers andexchanges of beneficial interests that are not subject to Section 2.06(b)(i) above,the transferor of such beneficial interest must deliver to the Registrar either(A)(1) a written order from a Participant or an Indirect Participant givento the Depositary in accordance with the Applicable Procedures directing theDepositary to credit or cause to be credited a beneficial interest in anotherGlobal Note in an amount equal to the beneficial interest to be transferred orexchanged and (2) instructions given in accordance with the ApplicableProcedures containing information regarding the Participant account to becredited with such increase or (B) if permitted under Section 2.06(a) hereof,(1) a written order from a Participant or an Indirect Participant given tothe Depositary in accordance with the Applicable Procedures directing theDepositary to cause to be issued a Definitive Note in an amount equal to thebeneficial interest to be transferred or exchanged and (2) instructionsgiven by the Depositary to the Registrar containing information regarding thePerson in whose name such Definitive Note shall be registered to effect thetransfer or exchange referred to in (B)(1) above.  Upon consummation of an Exchange Offer by theCompany in accordance with Section 2.06(f) hereof, the requirementsof this Section 2.06(b)(ii) shall be deemed to have been satisfiedupon receipt by the Registrar of the instructions contained in the Letter ofTransmittal delivered by the Holder of such beneficial interests in theRestricted Global Notes.  Upon 

 

25

----

 

satisfaction ofall of the requirements for transfer or exchange of beneficial interests inGlobal Notes contained in this Indenture and the Notes or otherwise applicableunder the Securities Act, the Trustee shall adjust the principal amount of therelevant Global Note(s) pursuant to Section 2.06(h) hereof.

 

(iii)       Transferof Beneficial Interests in a Restricted Global Note to Another RestrictedGlobal Note.  A beneficial interestin any Restricted Global Note may be transferred to a Person who takes deliverythereof in the form of a beneficial interest in another Restricted Global Noteif the transfer complies with the requirements of Section 2.06(b)(ii) aboveand the Registrar receives the following:

 

(A)      if thetransferee will take delivery in the form of a beneficial interest in a 144AGlobal Note, then the transferor must deliver a certificate in the form of Exhibit Bhereto, including the certifications in item (1) thereof; and

 

(B)        if thetransferee will take delivery in the form of a beneficial interest in aRegulation S Global Note, then the transferor must deliver a certificatein the form of Exhibit B hereto, including the certifications in item (2) thereof.

 

(iv)      Transferand Exchange of Beneficial Interests in a Restricted Global Note for BeneficialInterests in an Unrestricted Global Note. A beneficial interest in any Restricted Global Note may be exchanged byany holder thereof for a beneficial interest in an Unrestricted Global Note ortransferred to a Person who takes delivery thereof in the form of a beneficialinterest in an Unrestricted Global Note only if the exchange or transfercomplies with the requirements of Section 2.06(b)(ii) above and:

 

(A)      such exchangeor transfer is effected pursuant to an Exchange Offer in accordance with aRegistration Rights Agreement and the holder of the beneficial interest to betransferred, in the case of an exchange, or the transferee, in the case of atransfer, makes any and all certifications in the applicable Letter ofTransmittal (or is deemed to have made such certifications if delivery is madethrough the Applicable Procedures) as may be required by such RegistrationRights Agreement;

 

(B)        suchtransfer is effected pursuant to a Shelf Registration Statement in accordancewith a Registration Rights Agreement;

 

(C)        suchtransfer is effected by a broker-dealer pursuant to an Exchange OfferRegistration Statement in accordance with a Registration Rights Agreement; or

 

(D)       the Registrarreceives the following:

 

(1)          if theholder of such beneficial interest in a Restricted Global Note proposes toexchange such beneficial interest for a beneficial interest in an UnrestrictedGlobal Note, a certificate from such holder in the form of Exhibit Chereto, including the certifications in item (1)(a) thereof; or

 

(2)          if theholder of such beneficial interest in a Restricted Global Note proposes totransfer such beneficial interest to a Person who shall take delivery thereofin the form of a beneficial interest in an Unrestricted Global Note, acertificate from such holder in the form of Exhibit B hereto, includingthe certifications in item (4) thereof;

 

and, in each suchcase set forth in this clause (D), if the Registrar so requests or if theApplicable Procedures so require, an Opinion of Counsel in form reasonablyacceptable to the Registrar to the effect that such exchange or transfer shallbe effected in compliance with the Securities Act and 

 

26

----

 

that therestrictions on transfer contained herein and in the Private Placement Legendshall no longer be required in order to maintain compliance with the SecuritiesAct.

 

If anysuch transfer is effected pursuant to clause (B) or (D) above at atime when an Unrestricted Global Note has not yet been issued, the Companyshall execute and, upon receipt of an Authentication Order in accordance with Section 2.02hereof, the Trustee shall authenticate one or more Unrestricted Global Notes inan aggregate principal amount equal to the aggregate principal amount ofbeneficial interests transferred pursuant to clause (B) or (D) above.

 

(v)         Transferor Exchange of Beneficial Interests in Unrestricted Global Notes for BeneficialInterests in Restricted Global Notes Prohibited.  Beneficial interests in an UnrestrictedGlobal Note may not be exchanged for, or transferred to Persons who takedelivery thereof in the form of, beneficial interests in a Restricted GlobalNote.

 

(vi)      AutomaticExchange of Beneficial Interests in a Restricted Global Note for BeneficialInterests in an Unrestricted Global Note. Beneficial interests in a Restricted Global Note will be automaticallyexchanged into beneficial interests in an Unrestricted Global Note without anyaction required by or on behalf of the Holder (the “*AutomaticExchange*”) on the date that is the 366th calendar day after (A) withrespect to the Initial Notes, the Issue Date or (B) with respect toAdditional Notes, if any, the issue date of such Additional Notes, or, in eachcase, if such day is not a Business Day, on the next succeeding Business Day(the “*Automatic Exchange Date*”).  At least 15 days but not more than30 days prior to the Automatic Exchange Date, the Company shall deliver anotice of Automatic Exchange (an “*Automatic Exchange Notice*”)to each Holder at such Holder’s address appearing in the Securities Register,with a copy to the Registrar and the Trustee. The Automatic Exchange Notice shall identify the Notes subject to theAutomatic Exchange and shall state: (w) the Automatic Exchange Date; (x) thesection of this Indenture pursuant to which the Automatic Exchange shall occur;(y) the “CUSIP” number of the Restricted Global Note from which suchHolders’ beneficial interests will be transferred and (z) the “CUSIP”number of the Unrestricted Global Note into which such Holders’ beneficialinterests will be transferred.  At theCompany’s request on no less than 5 days’ notice, the Trustee shall deliver, inthe Company’s name and at its expense, the Automatic Exchange Notice to eachHolder at such Holder’s address appearing in the Securities Register, with acopy to the Registrar; *provided, however*,that the Company shall have delivered to the Trustee an Officers’ Certificaterequesting that the Trustee give the Automatic Exchange Notice (in the name andat the expense of the Company) and setting forth the information to be statedin the Automatic Exchange Notice as provided in the preceding sentence.  As a condition to any Automatic Exchange, theCompany shall provide (i) an Officers’ Certificate in form reasonablyacceptable to the Registrar to the effect that no Affiliate of the Company is aholder of beneficial interests in such Restricted Global Note; and (ii) anOpinion of Counsel in form reasonably acceptable to the Registrar to the effectthat the Automatic Exchange shall be effected in compliance with the SecuritiesAct and that the restrictions on transfer contained herein and in the PrivatePlacement Legend shall no longer be required in order to maintain compliancewith the Securities Act.  The RestrictedGlobal Note from which beneficial interests are transferred pursuant to anAutomatic Exchange shall be cancelled following the Automatic Exchange.  If an Automatic Exchange is effected at atime when an Unrestricted Global Note has not yet been issued, the Companyshall execute and, upon receipt of an Authentication Order in accordance with Section 2.02hereof, the Trustee shall authenticate one or more Unrestricted Global Notes inan aggregate principal amount equal to the aggregate principal amount ofbeneficial interests transferred pursuant to the Automatic Exchange.

 

(c)          ***Transfer or Exchange of Beneficial Interests forDefinitive Notes***.

 

(i)             BeneficialInterests in Restricted Global Notes to Restricted Definitive Notes.  Subject to Section 2.06(a) hereof,if any holder of a beneficial interest in a Restricted Global Note proposes toexchange such beneficial interest for a Restricted Definitive Note or totransfer such beneficial interest to a Person who takes delivery thereof in theform of a Restricted Definitive Note, then, upon receipt by the Registrar ofthe following documentation:

 

27

----

 

(A)  if the holder of suchbeneficial interest in a Restricted Global Note proposes to exchange suchbeneficial interest for a Restricted Definitive Note, a certificate from suchholder in the form of Exhibit C hereto, including the certifications initem (2)(a) thereof;

 

(B)   if such beneficial interestis being transferred to a QIB in accordance with Rule 144A, a certificateto the effect set forth in Exhibit B hereto, including the certificationsin item (1) thereof;

 

(C)   if such beneficial interestis being transferred to a “non-U.S. Person” (as defined in Rule 902(k) ofRegulation S) in an offshore transaction in accordance with Rule 903or Rule 904, a certificate to the effect set forth in Exhibit Bhereto, including the certifications in item (2) thereof;

 

(D)  if such beneficial interestis being transferred pursuant to an exemption from the registrationrequirements of the Securities Act in accordance with Rule 144 under theSecurities Act, a certificate to the effect set forth in Exhibit B hereto,including the certifications in item (3)(a) thereof;

 

(E)   if such beneficial interestis being transferred to an Institutional Accredited Investor in reliance on anexemption from the registration requirements of the Securities Act other thanthose listed in clauses (B) through (D) above, a certificate to theeffect set forth in Exhibit B hereto, including the certifications,certificates and Opinion of Counsel required by item (3)(d) thereof, asapplicable; or

 

(F)   if such beneficial interestis being transferred to the Company or any of its Subsidiaries, a certificateto the effect set forth in Exhibit B hereto, including the certificationsin item (3)(b) thereof,

 

the Trustee shall reduceor cause to be reduced in a corresponding amount pursuant to Section 2.06(h) hereofthe aggregate principal amount of the applicable Restricted Global Note, andthe Company shall execute and, upon receipt of an Authentication Order inaccordance with Section 2.02 hereof, the Trustee shall authenticate anddeliver a Restricted Definitive Note in the appropriate principal amount to thePerson designated by the holder of such beneficial interest in instructionsdelivered to the Registrar by the Depositary and the applicable Participant orIndirect Participant on behalf of such holder. Any Restricted Definitive Note issued in exchange for a beneficialinterest in a Restricted Global Note pursuant to this Section 2.06(c)(i) shallbe registered in such name or names and in such authorized denomination ordenominations as the holder of such beneficial interest shall designate in suchinstructions.  The Trustee shall deliversuch Restricted Definitive Notes to the Persons in whose names such Notes areso registered.  Any Restricted DefinitiveNote issued in exchange for a beneficial interest in a Restricted Global Notepursuant to this Section 2.06(c)(i) shall bear the Private PlacementLegend and shall be subject to all restrictions on transfer contained therein.

 

(ii)   Beneficial Interests inRestricted Global Notes to Unrestricted Definitive Notes.  Subject to Section 2.06(a) hereof,a holder of a beneficial interest in a Restricted Global Note may exchange suchbeneficial interest for an Unrestricted Definitive Note or may transfer suchbeneficial interest to a Person who takes delivery thereof in the form of anUnrestricted Definitive Note only if:

 

(A)  such exchange or transfer iseffected pursuant to an Exchange Offer in accordance with a Registration RightsAgreement and the holder of such beneficial interest, in the case of anexchange, or the transferee, in the case of a transfer, makes any and allcertifications in the applicable Letter of Transmittal (or is deemed to havemade such certifications if delivery is made through the Applicable Procedures)as may be required by such Registration Rights Agreement;

 

28

----

 

(B)   such transfer is effectedpursuant to a Shelf Registration Statement in accordance with a RegistrationRights Agreement;

 

(C)   such transfer is effected bya broker-dealer pursuant to an Exchange Offer Registration Statement inaccordance with a Registration Rights Agreement; or

 

(D)  the Registrar receives thefollowing:

 

(1)   if the holder of suchbeneficial interest in a Restricted Global Note proposes to exchange suchbeneficial interest for an Unrestricted Definitive Note, a certificate fromsuch holder in the form of Exhibit C hereto, including the certificationsin item (1)(b) thereof; or

 

(2)   if the holder of suchbeneficial interest in a Restricted Global Note proposes to transfer suchbeneficial interest to a Person who shall take delivery thereof in the form ofan Unrestricted Definitive Note, a certificate from such holder in the form of Exhibit Bhereto, including the certifications in item (4) thereof;

 

and, in each such caseset forth in this clause (D), if the Registrar so requests or if the ApplicableProcedures so require, an Opinion of Counsel in form reasonably acceptable tothe Registrar to the effect that such exchange or transfer shall be effected incompliance with the Securities Act and that the restrictions on transfercontained herein and in the Private Placement Legend shall no longer berequired in order to maintain compliance with the Securities Act.

 

Upon satisfactionof the conditions of any of the clauses of this Section 2.06(c)(ii) theCompany shall execute, and, upon receipt of an Authentication Order inaccordance with Section 2.02 hereof, the Trustee shall authenticate anddeliver an Unrestricted Definitive Note in the appropriate principal amount tothe Person designated by the holder of such beneficial interest in instructionsdelivered to the Registrar by the Depositary and the applicable Participant orIndirect Participant on behalf of such holder, and the Trustee shall reduce orcause to be reduced in a corresponding amount pursuant to Section 2.06(h) hereofthe aggregate principal amount of the applicable Restricted Global Note.

 

(iii)  Beneficial Interests inUnrestricted Global Notes to Unrestricted Definitive Notes.  Subject to Section 2.06(a) hereof,if any holder of a beneficial interest in an Unrestricted Global Note proposesto exchange such beneficial interest for an Unrestricted Definitive Note or totransfer such beneficial interest to a Person who takes delivery thereof in theform of an Unrestricted Definitive Note, then, upon satisfaction of theapplicable conditions set forth in Section 2.06(b)(ii) hereof, theTrustee shall reduce or cause to be reduced in a corresponding amount pursuantto Section 2.06(h) hereof the aggregate principal amount of theapplicable Unrestricted Global Note, and the Company shall execute and, uponreceipt of an Authentication Order in accordance with Section 2.02 hereof,the Trustee shall authenticate and deliver an Unrestricted Definitive Note inthe appropriate principal amount to the Person designated by the holder of suchbeneficial interest in instructions delivered to the Registrar by theDepositary and the applicable Participant or Indirect Participant on behalf ofsuch holder.  Any Unrestricted DefinitiveNote issued in exchange for a beneficial interest pursuant to this Section 2.06(c)(iii) shallbe registered in such name or names and in such authorized denomination ordenominations as the holder of such beneficial interest shall designate in suchinstructions.  The Trustee shall deliversuch Unrestricted Definitive Notes to the Persons in whose names such Notes areso registered.  Any UnrestrictedDefinitive Note issued in exchange for a beneficial interest pursuant to this Section 2.06(c)(iii) shallnot bear the Private Placement Legend.

 

(d)   ***Transfer and Exchange of Definitive Notes forBeneficial Interests***.

 

(i)    Restricted DefinitiveNotes to Beneficial Interests in Restricted Global Notes.  If any holder of a Restricted Definitive Noteproposes to exchange such Note for a beneficial interest in a Restricted GlobalNote or to transfer such Restricted Definitive Notes to a Person who takesdelivery thereof in the 

 

29

----

 

form of abeneficial interest in a Restricted Global Note, then, upon receipt by theRegistrar of the following documentation:

 

(A)      if the holderof such Restricted Definitive Note proposes to exchange such Note for abeneficial interest in a Restricted Global Note, a certificate from such holderin the form of Exhibit C hereto, including the certifications in item (2)(b) thereof;

 

(B)        if suchRestricted Definitive Note is being transferred to a QIB in accordance with Rule 144A,a certificate to the effect set forth in Exhibit B hereto, including thecertifications in item (1) thereof; or

 

(C)        if suchRestricted Definitive Note is being transferred to a “non-U.S. Person” (asdefined in Rule 902(k) of Regulation S) in an offshoretransaction in accordance with Rule 903 or Rule 904, a certificate tothe effect set forth in Exhibit B hereto, including the certifications initem (2) thereof,

 

the Trustee shall cancelthe Restricted Definitive Note, increase or cause to be increased in acorresponding amount pursuant to Section 2.06(h) hereof the aggregateprincipal amount of, in the case of clause (A) above, the appropriateRestricted Global Note, in the case of clause (B) above, a 144A GlobalNote, and in the case of clause (C) above, a Regulation S GlobalNote.

 

(ii)          RestrictedDefinitive Notes to Beneficial Interests in Unrestricted Global Notes.  A holder of a Restricted Definitive Note mayexchange such Note for a beneficial interest in an Unrestricted Global Note ortransfer such Restricted Definitive Note to a Person who takes delivery thereofin the form of a beneficial interest in an Unrestricted Global Note only if:

 

(A)      such exchangeor transfer is effected pursuant to a Exchange Offer in accordance with aRegistration Rights Agreement and the holder of such beneficial interest, inthe case of an exchange, or the transferee, in the case of a transfer, makessuch certifications in the applicable Letter of Transmittal (or is deemed tohave made such certifications if delivery is made through the Applicable Procedures)as may be required by such Registration Rights Agreement;

 

(B)        suchtransfer is effected pursuant to a Shelf Registration Statement in accordancewith a Registration Rights Agreement;

 

(C)        suchtransfer is effected by a broker-dealer pursuant to an Exchange OfferRegistration Statement in accordance with a Registration Rights Agreement; or

 

(D)       the Registrarreceives the following:

 

(1)          if theholder of such Restricted Definitive Note proposes to exchange such Note for abeneficial interest in an Unrestricted Global Note, a certificate from suchholder in the form of Exhibit C hereto, including the certifications initem (1)(c) thereof; or

 

(2)          if theholder of such Restricted Definitive Note proposes to transfer such Note to aPerson who shall take delivery thereof in the form of a beneficial interest inan Unrestricted Global Note, a certificate from such holder in the form of Exhibit Bhereto, including the certifications in item (4) thereof;

 

30

----

 

and, in each such caseset forth in this clause (D), if the Registrar so requests or if the ApplicableProcedures so require, an Opinion of Counsel in form reasonably acceptable tothe Registrar to the effect that such exchange or transfer shall be effected incompliance with the Securities Act and that the restrictions on transfercontained herein and in the Private Placement Legend shall no longer berequired in order to maintain compliance with the Securities Act.

 

Uponsatisfaction of the conditions of any of the clauses in this Section 2.06(d)(ii),the Trustee shall cancel such Restricted Definitive Note and increase or causeto be increased in a corresponding amount pursuant to Section 2.06(h) hereofthe aggregate principal amount of the Unrestricted Global Note.

 

(iii)                               UnrestrictedDefinitive Notes to Beneficial Interests in Unrestricted Global Notes.  A holder of an Unrestricted Definitive Notemay exchange such Note for a beneficial interest in an Unrestricted Global Noteor transfer such Unrestricted Definitive Note to a Person who takes deliverythereof in the form of a beneficial interest in an Unrestricted Global Note atany time.  Upon receipt of a request forsuch an exchange or transfer, the Trustee shall cancel the applicableUnrestricted Definitive Note and increase or cause to be increased in acorresponding amount pursuant to Section 2.06(h) hereof the aggregateprincipal amount of one of the Unrestricted Global Notes.

 

(iv)                              Transferor Exchange of Unrestricted Definitive Notes to Beneficial Interests inRestricted Global Notes Prohibited. An Unrestricted Definitive Note may not be exchanged for, or transferredto Persons who take delivery thereof in the form of, beneficial interests in aRestricted Global Note.

 

(v)                                 Issuanceof Unrestricted Global Notes.  If anysuch exchange or transfer of a Definitive Note for a beneficial interest in anUnrestricted Global Note is effected pursuant to clause (ii)(B), (ii)(D) or(iii) above at a time when an Unrestricted Global Note has not yet been issued,the Company shall issue and, upon receipt of an Authentication Order inaccordance with Section 2.02 hereof, the Trustee shall authenticate one ormore Unrestricted Global Notes in an aggregate principal amount equal to theprincipal amount of Definitive Notes so transferred.

 

(e)          ***Transfer and Exchange of Definitive Notes forDefinitive Notes***.  Uponrequest by a holder of Definitive Notes and such holder’s compliance with theprovisions of this Section 2.06(e), the Registrar shall register thetransfer or exchange of Definitive Notes. Prior to such registration of transfer or exchange, the requestingholder shall present or surrender to the Registrar the Definitive Notes dulyendorsed or accompanied by a written instruction of transfer in form satisfactoryto the Registrar duly executed by such holder. In addition, the requesting holder shall provide any additionalcertifications, documents and information, as applicable, required pursuant tothe following provisions of this Section 2.06(e).

 

(i)             RestrictedDefinitive Notes to Restricted Definitive Notes.  Any Restricted Definitive Note may betransferred to and registered in the name of Persons who take delivery thereofin the form of a Restricted Definitive Note if the Registrar receives thefollowing:

 

(A)      if thetransfer will be made pursuant to Rule 144A, a certificate in the form of Exhibit Bhereto, including the certifications in item (1) thereof;

 

(B)        if thetransfer will be made pursuant to Rule 903 or Rule 904, a certificatein the form of Exhibit B hereto, including the certifications in item (2) thereof;and

 

(C)        if thetransfer will be made pursuant to any other exemption from the registrationrequirements of the Securities Act, a certificate in the form of Exhibit Bhereto, including the certifications, certificates and Opinion of Counselrequired by item (3) thereof, if applicable.

 

31

----

 

(ii)                                  RestrictedDefinitive Notes to Unrestricted Definitive Notes.  Any Restricted Definitive Note may be exchangedby the holder thereof for an Unrestricted Definitive Note or transferred to aPerson or Persons who take delivery thereof in the form of an UnrestrictedDefinitive Note only if:

 

(A)      such exchangeor transfer is effected pursuant to an Exchange Offer in accordance with aRegistration Rights Agreement and the holder of such beneficial interest, inthe case of an exchange, or the transferee, in the case of a transfer, makessuch certifications in the applicable Letter of Transmittal (or is deemed tohave made such certifications if delivery is made through the ApplicableProcedures) as may be required by such Registration Rights Agreement;

 

(B)        any suchtransfer is effected pursuant to a Shelf Registration Statement in accordancewith a Registration Rights Agreement;

 

(C)        any suchtransfer is effected by a broker-dealer pursuant to an Exchange OfferRegistration Statement in accordance with a Registration Rights Agreement; or

 

(D)       the Registrarreceives the following:

 

(1)          if theholder of such Restricted Definitive Notes proposes to exchange such Notes foran Unrestricted Definitive Note, a certificate from such holder in the form of Exhibit Chereto, including the certifications in item (1)(d) thereof; or

 

(2)          if theholder of such Restricted Definitive Notes proposes to transfer such Notes to aPerson who shall take delivery thereof in the form of an UnrestrictedDefinitive Note, a certificate from such holder in the form of Exhibit Bhereto, including the certifications in item (4) thereof;

 

and, in each such caseset forth in this clause (D), if the Registrar so requests, an Opinion ofCounsel in form reasonably acceptable to the Registrar to the effect that suchexchange or transfer shall be effected in compliance with the Securities Actand that the restrictions on transfer contained herein and in the PrivatePlacement Legend shall no longer be required in order to maintain compliancewith the Securities Act.

 

Upon satisfaction of theconditions of any of the clauses of Section 2.06(e)(ii) the Trusteeshall cancel the prior Restricted Definitive Note and the Company shallexecute, and, upon receipt of an Authentication Order in accordance with Section 2.02hereof, the Trustee shall authenticate and deliver an Unrestricted DefinitiveNote in the appropriate principal amount to the Person designated by the holderof such prior Restricted Definitive Note in instructions delivered to theRegistrar by such holder.

 

(iii)                               UnrestrictedDefinitive Notes to Unrestricted Definitive Notes.  A holder of Unrestricted Definitive Notes maytransfer such Notes to a Person who takes delivery thereof in the form of anUnrestricted Definitive Note.  Uponreceipt of a request to register such a transfer, the Registrar shall registerthe Unrestricted Definitive Notes pursuant to the instructions from the Holdersthereof.

 

(f)            ***Exchange Offer***.  Upon the occurrence of an Exchange Offer inaccordance with a Registration Rights Agreement, the Company shall issue and,upon receipt of an Authentication Order in accordance with Section 2.02hereof, the Trustee shall authenticate (i) one or more Unrestricted GlobalNotes in an aggregate principal amount equal to the principal amount of thebeneficial interests in the applicable Restricted Global Notes (A) tenderedfor acceptance by Persons that make any and all certifications in theapplicable Letters of Transmittal (or are deemed to have made suchcertifications if delivery is made through the Applicable Procedures) as may berequired by such Registration Rights Agreement, and (B) accepted forexchange in the Exchange Offer and 

 

32

----

 

(ii) Unrestricted Definitive Notes in anaggregate principal amount equal to the principal amount of the RestrictedDefinitive Notes tendered for acceptance by Persons who made the foregoingcertification and accepted for exchange in the Exchange Offer.  Concurrently with the issuance of such Notes,the Trustee shall reduce or cause to be reduced in a corresponding amount theaggregate principal amount of the applicable Restricted Global Notes, and theCompany shall execute and the Trustee shall authenticate and deliver to thePersons designated by the holders of Restricted Definitive Notes so acceptedUnrestricted Definitive Notes in the appropriate principal amount.

 

(g)         ***Legends***.  The following legends shall appear on theface of all Global Notes and Definitive Notes issued under this Indentureunless specifically stated otherwise in the applicable provisions of thisIndenture.

 

(i)             PrivatePlacement Legend.

 

(A)      Except aspermitted by clause (B) below, each Global Note and each Definitive Note(and all Notes issued in exchange therefor or substitution thereof) shall bearthe legend in substantially the following form:

 

“THISNOTE AND THE GUARANTEES ENDORSED HEREON HAVE NOT BEEN REGISTERED UNDER THESECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATESECURITIES LAWS.  NEITHER THIS NOTE NORTHE GUARANTEES ENDORSED HEREON NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BEOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSEDOF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPTFROM, OR NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.

 

THEHOLDER OF THIS NOTE AND THE GUARANTEES ENDORSED HEREON BY ITS ACCEPTANCE HEREOFAGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATEWHICH IS TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THELAST DATE ON WHICH VIDEOTRON LTD. (THE “COMPANY”) OR ANY AFFILIATE OF THECOMPANY WAS THE OWNER OF THIS NOTE AND THE GUARANTEES ENDORSED HEREON (OR ANYPREDECESSOR OF THIS NOTE AND THE GUARANTEES ENDORSED HEREON) (THE “RESALERESTRICTION TERMINATION DATE”) ONLY (A) TO THE COMPANY OR ANY SUBSIDIARYTHEREOF, (B) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THESECURITIES ACT, (C) FOR SO LONG AS THE NOTES ARE ELIGIBLE FOR RESALEPURSUANT TO RULE 144A UNDER THE SECURITIES ACT (“RULE 144A”), TO A PERSON ITREASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE144A) THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIEDINSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE INRELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES TO NON-U.S.PERSONS THAT OCCUR OUTSIDE THE UNITED STATES IN OFFSHORE TRANSACTIONS MEETINGTHE REQUIREMENTS OF RULE 904 OF REGULATION S UNDER THE SECURITIES ACT OR (E) PURSUANTTO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THESECURITIES ACT, SUBJECT TO THE COMPANY’S AND THE TRUSTEE’S RIGHT PRIOR TO ANYSUCH OFFER, SALE, OR TRANSFER (i) PURSUANT TO CLAUSE (D) OR (E) PRIORTO THE RESALE RESTRICTION TERMINATION DATE TO REQUIRE THE DELIVERY OF ANOPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACHOF THEM AND (ii) TO REQUIRE THAT A CERTIFICATE OF TRANSFER IN THE FORM APPEARINGON THIS NOTE IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE TRUSTEE. THISLEGEND WILL BE REMOVED UPON THE REQUEST OF A HOLDER AFTER THE RESALERESTRICTION TERMINATION DATE.”

 

(B)        Notwithstandingthe foregoing, any Global Note or Definitive Note issued pursuant to clauses(b)(iv), (b)(vi), (c)(ii), (c)(iii), (d)(ii), (d)(iii), (e)(ii), (e)(iii) or(f) to this Section 2.06 (and all Notes issued in exchange thereforor substitution thereof) shall not bear the Private Placement Legend.

 

(ii)          GlobalNote Legend.  Each Global Note shallbear a legend in substantially the following form:

 

33

----

 

“THISGLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNINGTHIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERSHEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPTTHAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BEREQUIRED PURSUANT TO SECTION 2.06 OF THE INDENTURE, (II) THIS GLOBALNOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OFTHE INDENTURE, (III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEEFOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE AND (IV) THISGLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIORWRITTEN CONSENT OF THE COMPANY.

 

UNLESSAND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVEFORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARYTO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THEDEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANYSUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSORDEPOSITARY UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THEDEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) (“DTC”), TO THECOMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANYNOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHERNAME AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANYPAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS MAY BE  REQUESTED BY AN AUTHORIZED REPRESENTATIVE OFDTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TOANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE &CO., HAS AN INTEREST HEREIN.”

 

(h)         ***Cancellation and/or Adjustment of Global Notes***.  At such time as all beneficial interests in aparticular Global Note have been exchanged for Definitive Notes or a particularGlobal Note has been redeemed, repurchased or cancelled in whole and not inpart, each such Global Note shall be returned to or retained and cancelled bythe Trustee in accordance with Section 2.11 hereof.  At any time prior to such cancellation, ifany beneficial interest in a Global Note is exchanged for or transferred to aPerson who will take delivery thereof in the form of a beneficial interest inanother Global Note or for Definitive Notes, the principal amount of Notesrepresented by such Global Note shall be reduced accordingly and an endorsementshall be made on such Global Note by the Trustee or by the Depositary at thedirection of the Trustee to reflect such reduction; and if the beneficialinterest is being exchanged for or transferred to a Person who will takedelivery thereof in the form of a beneficial interest in another Global Note,such other Global Note shall be increased accordingly and an endorsement shallbe made on such Global Note by the Trustee or by the Depositary at thedirection of the Trustee to reflect such increase.

 

(i)             ***GeneralProvisions Relating to Transfers and Exchanges***.

 

(i)                                     Noservice charge shall be made to a Holder of a beneficial interest in a GlobalNote or to a Holder of a Definitive Note for any registration of transfer orexchange, but the Company may require payment of a sum sufficient to cover anytransfer tax or similar governmental charge payable in connection therewith(other than any such transfer taxes or similar governmental charge payable uponexchange or transfer pursuant to Sections 2.10, 3.06, 4.12, 4.18 and 9.05hereof).

 

(ii)                                  AllGlobal Notes and Definitive Notes issued upon any registration of transfer orexchange of Global Notes or Definitive Notes shall be the valid obligations ofthe Company, evidencing the same Indebtedness, as the Global Notes orDefinitive Notes surrendered upon such registration of transfer or exchange andshall be entitled to all of the benefits of this Indenture equally andproportionately with all other Notes duly issued hereunder.

 

(iii)                               Neitherthe Registrar nor the Company shall be required (A) to issue, to registerthe transfer of or to exchange any Notes during a period beginning at theopening of business 15 days before the day of any selection of Notes forredemption under Section 3.02 hereof and ending at the close of businesson the date of selection, (B) to register the transfer of or to exchangeany Note so selected for redemption in whole 

 

34

----

 

or in part, exceptthe unredeemed portion of any Note being redeemed in part or (C) toregister the transfer of or to exchange a Note between a record date (includinga Regular Record Date) and the next succeeding Interest Payment Date.

 

(iv)      Prior to duepresentment for the registration of a transfer of any Note, the Trustee, anyAgent and the Company may deem and treat the Person in whose name any Note isregistered as the absolute owner of such Note for the purpose of receivingpayment of principal of and interest on such Note and for all other purposes,in each case regardless of any notice to the contrary.

 

(v)         Allcertifications, certificates and Opinions of Counsel required to be submittedto the Registrar pursuant to this Section 2.06 to effect a registration oftransfer or exchange may be submitted by facsimile.

 

(vi)      The Trustee ishereby authorized and directed to enter into a letter of representation withthe Depositary in the form provided by the Company and to act in accordancewith such letter.

 

*Section 2.07.*                                                 **ReplacementNotes**.

* *

If anymutilated Note is surrendered to the Trustee or the Company and the Trusteereceives evidence to its satisfaction of the destruction, loss or theft of anyNote, the Company shall issue and the Trustee, upon receipt of anAuthentication Order in accordance with Section 2.02 hereof, shallauthenticate a replacement Note.  Ifrequired by the Trustee or the Company, the Holder of such Note shall provideindemnity sufficient, in the judgment of the Trustee or the Company, asapplicable, to protect the Company, the Trustee, any Agent and anyauthenticating agent from any loss that any of them may suffer in connectionwith such replacement.  If required bythe Company, such Holder shall reimburse the Company for its reasonableexpenses in connection with such replacement.

 

Everyreplacement Note issued in accordance with this Section 2.07 shall be thevalid obligation of the Company evidencing the same Indebtedness as thedestroyed, lost or stolen Note and shall be entitled to all of the benefits ofthis Indenture equally and proportionately with all other Notes duly issuedhereunder.

 

*Section 2.08.*                                                 **OutstandingNotes**.

* *

(a)          TheNotes outstanding at any time shall be the entire principal amount of Notesrepresented by all the Global Notes and Definitive Notes authenticated by theTrustee except for those cancelled by it, those delivered to it forcancellation, those subject to reductions in beneficial interests effected bythe Trustee in accordance with Section 2.06 hereof, and those described inthis Section 2.08 as not outstanding. Except as set forth in Section 2.09 hereof, a Note shall not ceaseto be outstanding because the Company or an Affiliate of the Company holds theNote; *provided, however,* that Notes held bythe Company or a Subsidiary of the Company shall be deemed not to beoutstanding for purposes of Section 3.07(c) hereof.

 

(b)         Ifa Note is replaced pursuant to Section 2.07 hereof, it shall cease to beoutstanding unless the Trustee receives proof satisfactory to it that thereplaced Note is held by a bona fide purchaser.

 

(c)          Ifthe principal amount of any Note is considered paid under Section 4.01hereof, it shall cease to be outstanding and interest on it shall cease toaccrue.

 

(d)         Ifthe Paying Agent (other than the Company, a Subsidiary or an Affiliate of anythereof) holds, on a redemption date, a Purchase Date or maturity date, fundssufficient to pay Notes payable on that date, then on and after that date suchNotes shall be deemed to be no longer outstanding and shall cease to accrueinterest.

 

*Section 2.09.*                                                 **Treasury Notes**.

* *

Indetermining whether the Holders of the required principal amount of Notes haveconcurred in any direction, waiver or consent, Notes owned by the Company, orby any Affiliate of the Company, shall be 

 

35

----

 

considered as though not outstanding, except that forthe purposes of determining whether the Trustee shall be protected in relyingon any such direction, waiver or consent, only Notes that the Trustee knows areso owned shall be so disregarded.

 

*Section 2.10.*                                                 **Temporary Notes**.

* *

Untilcertificates representing Notes are ready for delivery, the Company may prepareand the Trustee, upon receipt of an Authentication Order in accordance with Section 2.02hereof, shall authenticate temporary Notes. Temporary Notes shall be substantially in the form of Definitive Notesbut may have variations that the Company considers appropriate for temporaryNotes and as shall be reasonably acceptable to the Trustee.  Without unreasonable delay, the Company shallprepare and the Trustee shall authenticate Global Notes or Definitive Notes inexchange for temporary Notes, as applicable.

 

Holdersof temporary Notes shall be entitled to all of the benefits of this Indentureequally and proportionately with all other Notes duly issued hereunder.

 

*Section 2.11.*                                                 **Cancellation**.

* *

TheCompany at any time may deliver Notes to the Trustee for cancellation.  The Registrar and Paying Agent shall forwardto the Trustee any Notes surrendered to them for registration of transfer,exchange or payment.  Upon sole directionof the Company, the Trustee shall cancel all Notes surrendered for registrationof transfer, exchange, payment, replacement or cancellation and shall destroycancelled Notes (subject to the record retention requirements of the ExchangeAct or other applicable laws). Certification of the destruction of all cancelled Notes shall bedelivered to the Company from time to time upon request.  The Company may not issue new Notes toreplace Notes that it has paid or that have been delivered to the Trustee forcancellation.

 

*Section 2.12.*                                                 **DefaultedInterest**.

* *

If theCompany defaults in a payment of interest on the Notes, it shall pay thedefaulted interest in any lawful manner plus, to the extent lawful, interestpayable on the defaulted interest, to the Persons who are Holders on asubsequent special record date, in each case at the rate provided in the Notesand in Section 4.01 hereof. The Company shall notify the Trustee inwriting of the amount of defaulted interest proposed to be paid on each Noteand the date of the proposed payment. The Company shall fix or cause to befixed each such special record date and payment date, *provided*that no such special record date shall be less than 10 days prior to therelated payment date for such defaulted interest. At least 15 days before thespecial record date, the Company (or, upon the written request of the Company,the Trustee in the name and at the expense of the Company) shall mail or causeto be mailed to Holders a notice that states the special record date, therelated payment date and the amount of such interest to be paid.

 

*Section 2.13.*                                                 **CUSIP or ISIN Numbers**.

* *

TheCompany in issuing the Notes may use “CUSIP” or “ISIN” numbers (if thengenerally in use), and, if so, the Trustee shall use “CUSIP” or “ISIN” numbersin notices of redemption as a convenience to Holders; *provided,however,* that any such notice may state that no representation ismade as to the correctness of such numbers either as printed on the Notes or ascontained in any notice of a redemption or notice of an Offer to Purchase andthat reliance may be placed only on the other identification numbers printed onthe Notes, and any such redemption or Offer to Purchase shall not be affectedby any defect in or omission of such numbers. The Company shall promptly notify the Trustee of any change in the “CUSIP”or “ISIN” numbers.

 

*Section 2.14.*                                                 **SpecialInterest**

* *

IfSpecial Interest is payable by the Company pursuant to a Registration RightsAgreement and paragraph 1 of the Notes, the Company shall deliver to theTrustee a certificate to that effect stating (i) the amount of suchSpecial Interest that is payable and (ii) the date on which such interestis payable pursuant to Section 4.01 hereof.  Unless and until a Responsible Officer of theTrustee receives such a certificate or instruction or direction 

 

36

----

 

from the Holders in accordance with the terms of thisIndenture, the Trustee may assume without inquiry that no Special Interest ispayable.  The foregoing shall notprejudice the rights of the Holders with respect to their entitlement toSpecial Interest as otherwise set forth in this Indenture or the Notes andpursuing any action against the Company directly or otherwise directing theTrustee to take any such action in accordance with the terms of this Indentureand the Notes.  If the Company has paidSpecial Interest directly to the Persons entitled to it, the Company shalldeliver to the Trustee an Officers’ Certificate setting forth the details ofsuch payment.

 

*Section 2.15.*                                                 **Issuance ofAdditional Notes**

* *

TheCompany shall be entitled, subject to its compliance with Section 4.09hereof, to issue Additional Notes under this Indenture which shall haveidentical terms as the Initial Notes issued on the date hereof, other than withrespect to the date of issuance, issue price and rights under a relatedRegistration Rights Agreement, if any. The Initial Notes issued on the date hereof, any Additional Notes andall Exchange Notes issued in exchange therefor shall be treated as a singleclass for all purposes under this Indenture, including without limitation,directions, waivers, consents, redemptions and Offers to Purchase.

 

Withrespect to any Additional Notes, the Company shall set forth in a BoardResolution and an Officers’ Certificate, a copy of each of which shall bedelivered to the Trustee, the following information:

 

(a)          theaggregate principal amount of such Additional Notes to be authenticated anddelivered pursuant to this Indenture;

 

(b)         theissue price, the issue date and the CUSIP and/or ISIN number of such AdditionalNotes; *provided, however,* that no AdditionalNotes may be issued at a price that would cause such Additional Notes to have “originalissue discount” within the meaning of Section 1273 of the Code; and

 

(c)          whethersuch Additional Notes shall be subject to the restrictions on transfer setforth in Section 2.06 hereof relating to Restricted Global Notes andRestricted Definitive Notes.

 

**ARTICLE 3.**

 

**REDEMPTIONAND PREPAYMENT**

** **

*Section 3.01.*                                                 **Notices toTrustee**.

* *

If theCompany elects to redeem Notes pursuant to the optional redemption provisionsof Section 3.07 hereof, it shall furnish to the Trustee, at least 45 daysbut not more than 60 days before a redemption date (or such shorter periodas allowed by the Trustee), an Officers’ Certificate setting forth (i) theapplicable section of this Indenture pursuant to which the redemption shalloccur, (ii) the redemption date, (iii) the principal amount of Notesto be redeemed and (iv) the redemption price.

 

*Section 3.02.*                                                 **Selection ofNotes to Be Redeemed**.

* *

Ifless than all of the Notes are to be redeemed at any time, the Trustee shallselect the Notes to be redeemed among the Holders of the Notes in compliancewith the requirements of the principal national securities exchange, if any, onwhich the Notes are listed or, if the Notes are not so listed, on a *pro rata* basis, by lot or in accordance with any othermethod the Trustee considers fair and appropriate.  In the event of partial redemption by lot,the particular Notes to be redeemed shall be selected, unless otherwise providedherein, not less than 30 nor more than 60 days prior to the redemptiondate by the Trustee from the outstanding Notes not previously called forredemption.

 

TheTrustee shall promptly notify the Company in writing of the Notes selected forredemption and, in the case of any Note selected for partial redemption, theprincipal amount thereof to be redeemed. Notes and portions of Notes selected shall be in amounts of US$1,000 orintegral multiples of US$1,000, except that if all of the Notes of a Holder areto be redeemed, the entire outstanding amount of Notes held by such Holder,even if not 

 

37

----

 

an integral multiple of US$1,000, shall beredeemed.  Except as provided in the preceding sentence, provisions ofthis Indenture that apply to Notes called for redemption also apply to portionsof Notes called for redemption.

 

*Section 3.03.*                                                 **Notice ofRedemption**.

* *

Atleast 30 days but not more than 60 days prior to a redemption date,the Company shall mail or cause to be mailed, by first class mail, a notice ofredemption to each Holder whose Notes are to be redeemed at such Holder’saddress appearing in the securities register maintained in respect of the Notesby the Registrar (the “*Security Register*”).

 

Thenotice shall identify the Notes to be redeemed and shall state:

 

(a)          theredemption date;

 

(b)         theredemption price or if the redemption is made pursuant to Section 3.07(b) hereofa calculation of the redemption price;

 

(c)          ifany Note is being redeemed in part, the portion of the principal amount of suchNote to be redeemed and that, after the redemption date upon surrender of suchNote, a new Note or Notes in principal amount equal to the unredeemed portionshall be issued upon cancellation of the original Note;

 

(d)         thename and address of the Paying Agent;

 

(e)          thatNotes called for redemption must be surrendered to the Paying Agent to collectthe redemption price;

 

(f)            that,unless the Company defaults in making such redemption payment, interest onNotes called for redemption ceases to accrue on and after the redemption date;

 

(g)         theapplicable section of this Indenture pursuant to which the Notes called forredemption are being redeemed; and

 

(h)         thatno representation is made as to the correctness of the CUSIP or ISIN numbers,if any, listed in such notice or printed on the Notes.

 

At theCompany’s request, the Trustee shall give the notice of redemption in theCompany’s name and at its expense; *provided, however*,that the Company shall have delivered to the Trustee, at least 45 days (or suchshorter period allowed by the Trustee) prior to the redemption date, anOfficers’ Certificate requesting that the Trustee give such notice (in the nameand at the expense of the Company) and setting forth the information to be statedin such notice as provided in this Section 3.03.

 

*Section 3.04.*                                                 **Effect ofNotice of Redemption**.

* *

Oncenotice of redemption is mailed in accordance with Section 3.03 hereof,Notes called for redemption shall become irrevocably due and payable on theredemption date at the redemption price. A notice of redemption may not be conditional.

 

*Section 3.05.*                                                 **Deposit ofRedemption Price**.

* *

On orprior to 11:00 a.m. Eastern time on the Business Day prior to anyredemption date, the Company shall deposit with the Trustee or with the PayingAgent money sufficient to pay the redemption price of and accrued and unpaidinterest on all Notes to be redeemed on that date.  The Trustee or the Paying Agent shallpromptly return to the Company any money deposited with the Trustee or thePaying Agent by the Company in excess of the amounts necessary to pay theredemption price of, and accrued and unpaid interest on, all Notes to beredeemed.

 

38

----

 

If theCompany complies with the provisions of the preceding paragraph, on and afterthe redemption date, interest shall cease to accrue on the Notes or theportions of Notes called for redemption in accordance with Section 2.08(d) hereof.  If a Note is redeemed on or after a RegularRecord Date but on or prior to the related Interest Payment Date, then anyaccrued and unpaid interest shall be paid to the Person in whose name such Notewas registered at the close of business on such Regular Record Date.  If any Note called for redemption shall notbe so paid upon surrender for redemption because of the failure of the Companyto comply with the preceding paragraph, interest shall be paid on the unpaidprincipal from the redemption date until such principal is paid, and to theextent lawful on any interest not paid on such unpaid principal, in each caseat the rate provided in the Notes and in Section 4.01 hereof.

 

*Section 3.06.*                                                 **Notes Redeemedin Part**.

* *

Uponsurrender of a Note that is redeemed in part, the Company shall issue and, uponthe Company’s written request, the Trustee shall authenticate for the Holder atthe expense of the Company a new Note equal in principal amount to theunredeemed portion of the Note surrendered.

 

*Section 3.07.*                                                 **OptionalRedemption**

* *

(a)          Exceptas set forth in clauses (b) and (c) of this Section 3.07, theNotes shall not be redeemable at the option of the Company prior to April 15,2013.  Beginning on April 15, 2013,the Company may redeem all or a part of the Notes, at once or over time, inaccordance with Section 3.03 hereof, at the redemption prices (expressedas percentages of principal amount) set forth below, plus accrued and unpaidinterest thereon on the Notes redeemed, to the applicable redemption date(subject to the right of Holders of record on the relevant Regular Record Dateto receive interest due on the relevant Interest Payment Date), if redeemedduring the twelve-month period commencing on April 15 of the yearsindicated below:

 
| **Redemption Year** | ** ** | **Percentage** | ** ** |
|--------------------------|------------|----------------|------------|
|                     |       |           |       |
| 2013                     |       | 104.563        | %          |
| 2014                     |       | 103.042        | %          |
| 2015                     |       | 101.521        | %          |
| 2016 and  thereafter     |       | 100.000        | %          |

 

(b)         At any time and fromtime to time prior to April 15, 2011, the Company mayon one or more occasions redeem up to 35% of the aggregate principal amount ofthe Notes issued under this Indenture at a redemption price (expressed as apercentage of principal amount) equal to 109.125% ofthe principal amount thereof, plus accrued and unpaid interest thereon to theredemption date (subject to the right of Holders of record on the relevantRegular Record Date to receive interest due on the relevant Interest PaymentDate) with the net cash proceeds of one or more Equity Offerings; *provided, however*, that (i) at least65% of the aggregate principal amount of the Notes issued under this Indenture(excluding Notes held by the Company and its Subsidiaries) remain outstandingimmediately following such redemption and (ii) any such redemption shallbe made within 90 days of the date of closing of any such Equity Offering.

 

(c)          Ifthe Company becomes obligated to pay any Additional Amounts because of a changein the laws or regulations of Canada or any Canadian Taxing Authority, or achange in any official position regarding the application or interpretationthereof, in either case that is publicly announced or becomes effective on orafter the Issue Date, the Company may, at any time, redeem all, but not part,of the Notes at a price equal to 100% of the principal amount thereof, plusaccrued and unpaid interest to the redemption date, *provided*that at any time that the aggregate principal amount of the Notes outstandingis greater than US$20.0 million, any Holder of the Notes may, to the extentthat it does not adversely affect the Company’s after-tax position, at itsoption, waive the Company’s compliance with the provisions of Section 4.20hereof with respect to such Holder’s Notes; *provided, further*,that if any Holder waives such compliance, the Company may not redeem thatHolder’s Notes pursuant to this Section 3.07(c).

 

39

----

 

(d)   Anyprepayment pursuant to this Section 3.07 shall be made pursuant to theprovisions of Sections 3.01 through 3.06 hereof.

 

*Section 3.08.               ***Mandatory Redemption**.

* *

Exceptas set forth in Sections 4.12 and 4.18 hereof, the Company shall not berequired to make mandatory redemption or sinking fund payments with respect to,or offers to purchase, the Notes.

 

*Section 3.09.               ***Offers To Purchase**.

* *

(a)   In theevent that, pursuant to Section 4.12 or 4.18 hereof, the Company shall berequired to commence an Asset Sale Offer or Change of Control Offer (each, an “*Offer to Purchase*”), it shall follow the proceduresspecified below.

 

(b)   The Companyshall commence the Offer to Purchase by sending, by first-class mail, with acopy to the Trustee, to each Holder, at such Holder’s address appearing in theSecurity Register a notice, the terms of which shall govern the Offer toPurchase, stating:

 

(i)    that the Offer to Purchaseis being made pursuant to this Section 3.09 and Section 4.12 or 4.18,as the case may be, and, in the case of a Change of Control Offer, that aChange of Control has occurred, the transaction or transactions that constitutethe Change of Control, and that a Change of Control Offer is being madepursuant to Section 4.18 hereof;

 

(ii)   the principal amount ofNotes required to be purchased pursuant to Section 4.12 or 4.18 hereof(the “*Offer Amount*”), the purchase price, theOffer Period and the Purchase Date (each as defined below);

 

(iii)  except as provided inclause (ix), that all Notes timely tendered and not withdrawn shall be acceptedfor payment;

 

(iv)  that any Note not tenderedor accepted for payment shall continue to accrue interest;

 

(v)   that, unless the Companydefaults in making such payment, any Note accepted for payment pursuant to theOffer to Purchase shall cease to accrue interest on or after the Purchase Date;

 

(vi)  that Holders electing tohave a Note purchased pursuant to the Offer to Purchase may elect to have Notespurchased in integral multiples of US$1,000 only;

 

(vii) that Holders electing tohave a Note purchased pursuant to the Offer to Purchase shall be required tosurrender the Note, with the form entitled “Option of Holder to Elect Purchase”on the reverse of the Note completed, or transfer by book-entry transfer, tothe Company, a Depositary, if appointed by the Company, or a Paying Agent atthe address specified in the notice at least three days before the PurchaseDate;

 

(viii) that Holders shall be entitled to withdraw their election if theCompany, the Depositary or the Paying Agent, as the case may be, receives, notlater than the expiration of the Offer Period, a telegram, facsimiletransmission or letter setting forth the name of the Holder, the principalamount of the Note (or portions thereof) the Holder delivered for purchase anda statement that such Holder is withdrawing his election to have such Notepurchased;

 

(ix)   that, in the case of anAsset Sale Offer, if the aggregate principal amount of Notes surrendered byHolders exceeds the Offer Amount, the Company shall select the Notes to bepurchased on a *pro rata* basis (with suchadjustments as may be deemed appropriate by the Company so that only Notes indenominations of US$1,000 or integral multiples thereof shall be purchased);

 

40

----

 

(x)    that Holders whose Noteswere purchased in part shall be issued new Notes equal in principal amount tothe unpurchased portion of the Notes surrendered (or transferred by book-entrytransfer)

 

(xi)   any other procedures thatHolders must follow in order to tender their Notes (or portions thereof) forpayment.

 

(c)           TheOffer to Purchase shall remain open for a period of at least 30 days but nomore than 60 days following its commencement, except to the extent that alonger period is required by applicable law (the “*Offer Period*”).  No later than five Business Days after thetermination of the Offer Period (the “*Purchase Date*”),the Company shall purchase the Offer Amount or, if less than the Offer Amounthas been tendered, all Notes tendered in response to the Offer toPurchase.  Payment for any Notes sopurchased shall be made in the same manner as interest payments are made.

 

(d)           On or prior to the Purchase Date, theCompany shall, to the extent lawful:

 

(i)    accept for payment (on a *pro rata* basis to the extent necessary in connection with anAsset Sale Offer) the Offer Amount of Notes or portions of Notes properlytendered pursuant to the Offer to Purchase, or if less than the Offer Amounthas been tendered, all Notes tendered;

 

(ii)   deposit with the PayingAgent an amount equal to the Offer Amount in respect of all Notes or portionsof Notes properly tendered; and

 

(iii)  deliver or cause to bedelivered to the Trustee the Notes so accepted together with an Officers’Certificate stating the aggregate principal amount of Notes or portions ofNotes being purchased by the Company and that such Notes or portions thereofwere accepted for payment by the Company in accordance with the terms of this Section 3.09.

 

(e)           TheCompany, the Depositary or the Paying Agent, as the case may be, shall promptly(but in any event not later than five Business Days after the Purchase Date)deliver to each tendering Holder of Notes properly tendered and accepted by theCompany for purchase the Purchase Amount for such Notes, and the Company shallpromptly execute and issue a new Note, and the Trustee, upon receipt of anAuthentication Order shall authenticate and deliver (or cause to be transferredby book-entry) such new Note to such Holder, in a principal amount equal to anyunpurchased portion of the Note surrendered*provided, however,*that each such new Note shall be in a principal amount of US$1,000 or anintegral multiple of US$1,000.  Any Notenot so accepted shall be promptly mailed or delivered by the Company to theHolder thereof.  The Company shallpublicly announce the results of the Offer to Purchase on or as soon aspracticable after the Purchase Date.

 

(f)            Ifthe Purchase Date is on or after a Regular Record Date and on or before therelated Interest Payment Date, any accrued and unpaid interest shall be paid tothe Person in whose name a Note is registered at the close of business on suchRegular Record Date, and no additional interest shall be payable to Holders whotender Notes pursuant to the Offer to Purchase.

 

(g)           TheCompany shall comply with the requirements of Rule 14e-1 under theExchange Act and any other securities laws and regulations thereunder to theextent those laws and regulations are applicable in connection with the Offerto Purchase.  To the extent that theprovisions of any securities laws or regulations conflict with Section 4.12or 4.18, as applicable, this Section 3.09 or other provisions of thisIndenture, the Company shall comply with the applicable securities laws andregulations and shall not be deemed to have breached its obligations under Section 4.12or 4.18, as applicable, this Section 3.09 or such other provision byvirtue of such conflict.

 

(h)   Other thanas specifically provided in this Section 3.09, any purchase pursuant tothis Section 3.09 shall be made in accordance with the provisions of Section 3.01through 3.06 hereof.

 

41

----

 

**ARTICLE 4.COVENANTS**

** **

*Section 4.01.               ***Payment of Notes**.

* *

TheCompany shall pay or cause to be paid the principal of, premium, if any, andinterest on, the Notes on the dates and in the manner provided in theNotes.  Principal, premium, if any, andinterest shall be considered paid on the date due if the Paying Agent, if otherthan the Company or a Subsidiary thereof, holds as of 11:00 a.m. EasternTime on the due date money deposited by the Company in immediately availablefunds and designated for and sufficient to pay all principal, premium, if any,and interest then due.  The Company shallpay Special Interest, if any, in the same manner, on the dates and in theamounts set forth in a Registration Rights Agreement, the Notes and thisIndenture.  If a payment date is a LegalHoliday at a place of payment, payment may be made at that place on the nextsucceeding day that is not a Legal Holiday, and no interest shall accrue onsuch payment for the intervening period.

 

TheCompany shall pay interest (including post-petition interest in any proceedingunder any Bankruptcy Law) on overdue principal and premium, if any, from timeto time on demand at a rate that is 1% per annum in excess of the rate then ineffect; it shall pay interest (including post-petition interest in anyproceeding under any Bankruptcy Law) on overdue installments of interest (withoutregard to any applicable grace periods), from time to time on demand at thesame rate to the extent lawful.

 

Interestshall be computed on the basis of a 360-day year of twelve 30-day months.  For the purposes of the *Interest Act*(Canada), the yearly rate of interest which is equivalent to the rate payablehereunder is the rate payable multiplied by the actual number of days in theyear and divided by 360.

 

*Section 4.02.               ***Maintenance of Office or Agency**.

* *

(a)   The Companyshall maintain an office or agency (which may be an office or drop facility ofthe Trustee or an affiliate of the Trustee, Registrar or co-registrar) whereNotes may be presented or surrendered for registration of transfer or forexchange and where notices and demands to or upon the Company in respect of theNotes and this Indenture may be served. The Company shall give prompt written notice to the Trustee of anychange in the location of such office or agency.  If at any time theCompany shall fail to maintain any such required office or agency or shall failto furnish the Trustee with the address thereof, such presentations,surrenders, notices and demands may be made or served at the Corporate TrustOffice of the Trustee, and the Company hereby appoints the Trustee as its agentto receive all such presentations, surrenders, notices and demands.

 

(b)   The Companymay also from time to time designate one or more other offices or agencieswhere the Notes may be presented or surrendered for any or all such purposesand may from time to time rescind such designations.  The Company shall give prompt written noticeto the Trustee of any such designation or rescission and of any change in thelocation of any such other office or agency.

 

(c)   The Companyhereby designates the Corporate Trust Office of the Trustee, as such office,drop facility or agency of the Company in accordance with Section 2.03hereof.

 

*Section 4.03.               ***Reports**.

* *

(a)   Notwithstandingthat the Company may not be subject to the reporting requirements of Section 13or 15(d) of the Exchange Act, so long as any Notes are outstanding theCompany shall file with the Commission, and shall furnish to the Holders andthe Trustee:

 

(1)                                  within120 days after the end of each fiscal year of the Company, annual reportson Form 20-F or 40-F, as applicable, or any successor form; and

 

42

----

 

(2)                                  (a) within45 days after the end of each of the first three fiscal quarters of eachfiscal year of the Company, reports on Form 10-Q or any successor form, or(b) within 60 days after the end of each of the first three fiscalquarters of each fiscal year of the Company, reports on Form 6-K, or anysuccessor form, which in each case, regardless of applicable requirements,shall, at a minimum, contain a “Management’s Discussion and Analysis ofFinancial Condition and Results of Operations,” and, with respect to any suchreports, a reconciliation to U.S. GAAP as permitted by the Commission forforeign private issuers.

 

(b)   For so longas any Notes remain outstanding, the Company shall furnish to the Holders, upontheir request, the information required to be delivered pursuant to Rule 144A(d)(4) underthe Securities Act.

 

(c)   If theCompany has designated any of its Subsidiaries as Unrestricted Subsidiaries,then the quarterly and annual financial information required by this Section shallinclude a reasonably detailed presentation, either on the face of the financialstatements or in the footnotes thereto, and in Management’s Discussion andAnalysis of Financial Condition and Results of Operations, of the financialcondition and results of operations of the Company and the RestrictedSubsidiaries separate from the financial condition and results of operations ofthe Unrestricted Subsidiaries of the Company.

 

*Section 4.04.               ***Compliance Certificate**.

* *

(a)   The Companyshall deliver to the Trustee, within 120 days after the end of each fiscalyear, beginning with the fiscal year ending December 31, 2008, an Officers’Certificate stating that a review of the activities of the Company and itsSubsidiaries during the preceding fiscal year has been made under thesupervision of the signing Officers with a view to determining whether theCompany and its Subsidiaries have kept, observed, performed and fulfilled theirobligations under this Indenture, and further stating, as to each such Officersigning such certificate, that to the best of his or her knowledge the Companyand its Subsidiaries have kept, observed, performed and fulfilled each andevery covenant contained in this Indenture and is not in default in theperformance or observance of any of the terms, provisions and conditions ofthis Indenture (or, if a Default or Event of Default shall have occurred,describing all such Defaults or Events of Default of which he or she may have knowledgeand what action the Company is taking or proposes to take with respect thereto)and that to the best of his or her knowledge no event has occurred and remainsin existence by reason of which payments on account of the principal of,premium, if any, or interest on the Notes is prohibited or if such event hasoccurred, a description of the event and what action the Company is taking orproposes to take with respect thereto.

 

(b)   The Companyshall otherwise comply with TIA §314(a)(2).

 

(c)   The Companyshall deliver to the Trustee, within 30 days after the occurrence thereof,written notice in the form of an Officers’ Certificate of any Default or Eventof Default, its status and what action the Company is taking or proposes totake with respect thereto.

 

*Section 4.05.               ***Taxes**.

* *

TheCompany shall pay, and shall cause each of its Subsidiaries to pay, prior todelinquency, all material taxes, assessments, and governmental levies, exceptsuch as are being contested in good faith and by appropriate proceedings orwhere the failure to effect such payment is not adverse in any material respectto the Holders.

 

*Section 4.06.               ***Stay, Extension and Usury Laws**.

* *

TheCompany covenants (to the extent that it may lawfully do so) that it shall notat any time insist upon, plead, or in any manner whatsoever claim or take thebenefit or advantage of, any stay, extension or usury law wherever enacted, nowor at any time hereafter in force, that may affect the covenants or theperformance of this Indenture; and the Company (to the extent that it maylawfully do so) hereby expressly waives all benefit or advantage of any suchlaw, and covenants that it shall not, by resort to any such law, hinder, delayor impede the 

 

43

----

 

execution of any power herein granted to the Trustee,but shall suffer and permit the execution of every such power as though no suchlaw has been enacted.

 

*Section 4.07.               ***Corporate Existence**.

* *

Subjectto Article 5 hereof, the Company shall do or cause to be done all thingsnecessary to preserve and keep in full force and effect (i) its corporateexistence, and the corporate, partnership or other existence of each RestrictedSubsidiary, in accordance with the respective organizational documents (as thesame may be amended from time to time) of the Company or any such RestrictedSubsidiary and (ii) the rights (charter and statutory), licenses andfranchises of the Company and the Restricted Subsidiaries; *provided,however*, that the Company shall not be required to preserve any suchright, license or franchise, or the corporate, partnership or other existenceof any Restricted Subsidiary, if the Board of Directors of the Company shalldetermine that the preservation thereof is no longer desirable in the conductof the business of the Company and the Restricted Subsidiaries, taken as awhole, and that the loss thereof is not adverse in any material respect to theHolders of the Notes, or that such preservation is not necessary in connectionwith any transaction not prohibited by this Indenture.

 

*Section 4.08.               ***Payments for Consent**.

* *

TheCompany shall not, and shall not permit any Restricted Subsidiary to, directlyor indirectly, pay or cause to be paid any consideration, to or for the benefitof any Holder for or as an inducement to any consent, waiver or amendment ofany of the terms or provisions of this Indenture or the Notes unless suchconsideration is offered to be paid and is paid to all Holders that consent,waive or agree to amend in the time frame set forth in the solicitationdocuments relating to such consent, waiver or agreement.

 

*Section 4.09.               ***Incurrence of Indebtedness andIssuance of Preferred Shares.**

* *

(a)   The Companyshall not, and shall not permit any of its Subsidiaries to, Incur, directly orindirectly, any Indebtedness, including Acquired Debt, and the Company shallnot issue any Disqualified Stock and shall not permit any of its Subsidiariesto issue any Preferred Shares; *provided, however,*that the Company may Incur Indebtedness, including Acquired Debt, or issueDisqualified Stock, and the Subsidiary Guarantors may Incur Indebtedness,including Acquired Debt, or issue Preferred Shares if the Company’s Debt toCash Flow Ratio at the time of Incurrence of such Indebtedness or the issuanceof such Disqualified Stock or Preferred Shares, after giving *pro forma* effect to such Incurrence or issuance as of suchdate and to the use of proceeds therefrom, taking into account anysubstantially concurrent transactions related to such Incurrence, as if thesame had occurred at the beginning of the most recently ended full fiscalquarter of the Company for which internal financial statements are available,would have been no greater than 5.5 to 1.0.

 

(b)   Paragraph (a) ofthis Section 4.09 shall not prohibit the Incurrence of any of thefollowing items of Indebtedness or issuances of Preferred Shares (each suchitem being referred to herein as “*Permitted Debt*”):

 

(1)                                  theIncurrence by the Company or a Subsidiary Guarantor of Indebtedness and lettersof credit under Credit Facilities in an aggregate principal amount at any onetime outstanding under this clause (1) (with letters of credit beingdeemed to have a principal amount equal to the maximum potential liability ofthe Company and the Restricted Subsidiaries thereunder) not to exceed an aggregate of Cdn$575.0million, *less* the aggregate amount of all NetProceeds of Asset Sales applied by the Company or any Restricted Subsidiariessubsequent to October 8, 2003 to permanently repay Indebtedness under aCredit Facility (and, in the case of any revolving credit Indebtedness, toeffect a corresponding commitment reduction thereunder) pursuant to theprovisions of Section 4.12 hereof;

 

(2)                                  theIncurrence by the Company and the Restricted Subsidiaries of the ExistingIndebtedness;

 

44

----

 

(3)                                  theIncurrence by (a) the Company of Indebtedness represented by the InitialNotes and the Exchange Notes to be issued in exchange for such Initial Notesand in exchange for any Additional Notes, and (b) the SubsidiaryGuarantors of Indebtedness represented by the Subsidiary Guarantees relating tothe Initial Notes and the guarantees issued in exchange for such SubsidiaryGuarantees and in exchange for the Subsidiary Guarantees relating to any AdditionalNotes;

 

(4)                                  theIncurrence by the Company or a Subsidiary Guarantor of Indebtedness representedby Capital Lease Obligations, mortgage financings or purchase moneyobligations, in each case, Incurred for the purpose of financing all or anypart of the purchase price or cost of construction or improvement of property,plant or equipment used in the business of the Company or such SubsidiaryGuarantor, in an aggregate principal amount, including all PermittedRefinancing Indebtedness incurred to refund, refinance or replace anyIndebtedness Incurred pursuant to this clause (4), not to exceedUS$40.0 million at any time outstanding;

 

(5)                                  theIncurrence by the Company or any Subsidiary Guarantor of Permitted RefinancingIndebtedness in exchange for, or the net proceeds of which are used to refund,refinance or replace Indebtedness, other than intercompany Indebtedness, thatwas permitted by this Indenture to be incurred under paragraph (a) orclauses (b)(2), (b)(3) and (b)(4) of this Section 4.09;

 

(6)                                  theIncurrence by the Company or any Subsidiary Guarantor of intercompanyIndebtedness between or among the Company and any Restricted Subsidiary; *provided, however,* that:

 

(i)                                     ifthe Company or any Subsidiary Guarantor is the obligor on such Indebtedness,such Indebtedness must be unsecured and expressly subordinated to the priorpayment in full in cash of all Obligations with respect to the Notes, in thecase of the Company, or the Subsidiary Guarantee, in the case of a SubsidiaryGuarantor, and

 

(ii)                                  (a) anysubsequent issuance or transfer of Equity Interests that results in any suchIndebtedness being held by a Person other than the Company or a RestrictedSubsidiary and (b) any sale or other transfer of any such Indebtedness toa Person that is not either the Company or a Restricted Subsidiary shall bedeemed, in each case, to constitute an Incurrence of such Indebtedness by theCompany or such Restricted Subsidiary, as the case may be, that was notpermitted by this clause (6);

 

(7)                                  theissuance by the Company or any Restricted Subsidiary of Preferred Shares solelyto or among the Company and any Restricted Subsidiaries; *provided,however,* that (a) any subsequent issuance or transfer of EquityInterests that results in any such Preferred Shares being held by a Personother than the Company or a Restricted Subsidiary and (b) any sale orother transfer of any such Preferred Shares to a Person that is not either theCompany or a Restricted Subsidiary shall be deemed, in each case, to constitutean issuance of such Preferred Shares by the Company or a Restricted Subsidiary,as the case may be, that was not permitted by this clause (7);

 

(8)                                  theIncurrence by the Company or any Restricted Subsidiary of Hedging Obligationsthat are Incurred in the ordinary course of business of the Company or suchRestricted Subsidiary and not for speculative purposes; *provided,however*, that, in the case of:

 

(i)                                     anyInterest Rate Agreement, the notional principal amount of such HedgingObligation does not exceed the principal amount of the Indebtedness to whichsuch Hedging Obligation relates; and

 

45

----

 

(ii)                                  anyCurrency Exchange Protection Agreement, such Hedging Obligation does notincrease the principal amount of Indebtedness of the Company or such RestrictedSubsidiary outstanding other than as a result of fluctuations in foreigncurrency exchange rates or by reason of fees, indemnities and compensationpayable thereunder;

 

(9)                                  theguarantee by the Company or a Subsidiary Guarantor of Indebtedness of theCompany or a Subsidiary Guarantor that was permitted to be Incurred by anotherprovision of this Section 4.09;

 

(10)                            theIncurrence by the Company or any Subsidiary Guarantors of Indebtedness in anaggregate principal amount at any time outstanding, including all PermittedRefinancing Indebtedness incurred to refund, refinance or replace anyIndebtedness incurred pursuant to this clause (10), not to exceed US$25.0million;

 

(11)                            theIncurrence by the Company or any Restricted Subsidiary of Indebtedness in anaggregate principal amount at any time outstanding, including all PermittedRefinancing Indebtedness Incurred to refund, refinance or replace anyIndebtedness Incurred pursuant to this clause (11), not to exceed US$25.0 million,*less* the aggregate amount of allNet Proceeds of Asset Sales applied by the Company or any Restricted Subsidiarysubsequent to October 8, 2003 to permanently repay such Indebtedness (and,in the case of any revolving credit Indebtedness, to effect a correspondingcommitment reduction thereunder) pursuant to the provisions of Section 4.12hereof;

 

(12)                            theissuance of Preferred Shares by the Company’s Unrestricted Subsidiaries or theIncurrence by the Company’s Unrestricted Subsidiaries of Non-Recourse Debt; *provided, however*, that if any such Indebtedness ceases tobe Non-Recourse Debt of an Unrestricted Subsidiary, that event shall be deemedto constitute an Incurrence of Indebtedness by a Restricted Subsidiary that wasnot permitted by this clause (12);

 

 (13)                         the issuance of Indebtednessor Preferred Shares in connection with a Tax Benefit Transaction.

 

(c)   The accrualof interest, the accretion or amortization of original issue discount, thepayment of interest on any Indebtedness in the form of additional Indebtednesswith the same terms, and the payment of dividends on Disqualified Stock in theform of additional shares of the same class of Disqualified Stock (to theextent provided for when the Indebtedness or Disqualified Stock on which suchinterest or dividend is paid was originally issued) shall not be deemed to bean Incurrence of Indebtedness or an issuance of Disqualified Stock for purposesof this Section 4.09; *provided*thatin each case the amount thereof is for all other purposes included in theConsolidated Interest Expense and Indebtedness of the Company or its RestrictedSubsidiary as accrued.

 

(d)   Neither theCompany nor any Subsidiary Guarantor shall Incur any Indebtedness, includingPermitted Debt, that is contractually subordinated in right of payment to anyother Indebtedness of the Company or such Subsidiary Guarantor, as applicable,unless such Indebtedness is also contractually subordinated in right of paymentto the Notes or the Subsidiary Guarantee, as applicable, on substantially identicalterms; *provided, however*, that no Indebtednessof the Company or a Subsidiary Guarantor shall be deemed to be contractuallysubordinated in right of payment to any other Indebtedness of the Company orsuch Subsidiary Guarantor, as applicable, solely by virtue of collateral orlack thereof.

 

(e)   Notwithstandingany other provision of this Section 4.09, the maximum amount ofIndebtedness that may be Incurred pursuant to this Section 4.09 will notbe deemed to be exceeded with respect to any outstanding Indebtedness duesolely to the result of fluctuations in the exchange rate of currencies.

 

(f)    Forpurposes of determining compliance with this Section 4.09, in the eventthat an item of proposed Indebtedness meets the criteria of more than one ofthe categories of Permitted Debt described in 

 

46

----

 

clauses (b)(1) through (13) above, oris entitled to be Incurred pursuant to paragraph (a) of this Section 4.09,the Company shall be permitted to classify such item of Indebtedness on thedate of its Incurrence or later reclassify all or a portion of such item ofIndebtedness, in any manner that complies with this Section.  Indebtedness under Credit Facilitiesoutstanding on the date on which Notes are first issued and authenticated underthis Indenture shall be deemed to have been Incurred on such date in relianceon the exception provided by clause (1) of paragraph (b) of thisSection 4.09.

 

*Section 4.10.               ***Restricted Payments**.

* *

                                                                (a) The Company shall not make, and shall not permit any Restricted Subsidiary tomake, directly or indirectly, any Restricted Payment, unless, at the time ofand after giving effect to such Restricted Payment,

 

(1)                                  noDefault or Event of Default has occurred and is continuing or would occur as aconsequence of such Restricted Payment; and

 

(2)                                  theCompany would, at the time of such Restricted Payment and after giving*pro forma* effect thereto as if suchRestricted Payment had been made at the beginning of the applicable fiscalquarter, have been permitted to Incur at least US$1.00 of additionalIndebtedness, other than Permitted Debt, pursuant to the Debt to Cash FlowRatio test set forth in Section 4.09(a) hereof; and

 

(3)                                  suchRestricted Payment, together with the aggregate amount of all other RestrictedPayments declared or made by the Company and its Restricted Subsidiaries after October 8,2003, excluding Restricted Payments made pursuant to clauses (2), (3),(4), (6), (7), (8), (9) and (10) of paragraph (b) below, shallnot exceed, at the date of determination, the sum, without duplication, of:

 

(a)                                  anamount equal to the Company’s Consolidated Cash Flow from October 1, 2003to the end of the Company’s most recently ended full fiscal quarter for whichinternal financial statements are available, taken as a single accountingperiod, less 1.5 times the Company’s Consolidated Interest Expense from the October 1,2003 to the end of the Company’s most recently ended full fiscal quarter forwhich internal financial statements are available, taken as a single accountingperiod (or, if such amount for such period is a deficit, minus 100% of suchdeficit); plus

 

(b)                                 anamount equal to 100% of Capital Stock Sale Proceeds, less any such CapitalStock Sale Proceeds used in connection with:

 

(i)                                     anInvestment made pursuant to clause (6) of the definition of “PermittedInvestments;” or

 

(ii)                                  anIncurrence of Indebtedness pursuant to Section 4.09(b)(8) hereof;plus

 

(c)                                  tothe extent that any Restricted Investment that was made after October 8,2003 is sold for cash or otherwise liquidated or repaid for cash (except to theextent any such payment or proceeds are included in the calculation ofConsolidated Cash Flow), the lesser of (i) the cash return of capital withrespect to such Restricted Investment, less the cost of disposition, if any,and (ii) the initial amount of such Restricted Investment; plus

 

(d)                                 tothe extent that the Board of Directors of the Company designates anyUnrestricted Subsidiary that was designated as such after October 8, 2003as a Restricted Subsidiary, the lesser of (i) the aggregate fair marketvalue of all 

 

47

----

 

Investments ownedby the Company and the Restricted Subsidiaries in such Subsidiary at the timesuch Subsidiary was designated as an Unrestricted Subsidiary and (ii) thethen aggregate fair market value of all Investments owned by the Company andthe Restricted Subsidiaries in such Unrestricted Subsidiary.

 

(b)           The provisions of paragraph (a) aboveshall not prohibit:

 

(1)                                  solong as no Default has occurred and is continuing or would be caused thereby,the payment of any dividend within 60 days after the date the dividend isdeclared, if at that date of declaration such payment would have complied withthe provisions of this Indenture; *provided, however*,that such dividend shall be included in the calculation of the amount ofRestricted Payments;

 

(2)                                  solong as no Default has occurred and is continuing or would be caused thereby,the redemption, repurchase, retirement, defeasance or other acquisition of anySubordinated Indebtedness of the Company or any Subsidiary Guarantor or of anyEquity Interests of the Company in exchange for, or out of the net cashproceeds of the substantially concurrent sale, other than to a Subsidiary ofthe Company or an employee stock ownership plan or to a trust established bythe Company or any Subsidiary of the Company for the benefit of its employees,of, Equity Interests of the Company (other than Disqualified Stock orBack-to-Back Securities); *provided*that the amount of any such net cash proceeds that are utilized for any suchredemption, repurchase, retirement, defeasance or other acquisition shall beexcluded from clause (a)(3)(b) above;

 

(3)                                  solong as no Default has occurred and is continuing or would be caused thereby,the defeasance, redemption, repurchase or other acquisition of SubordinatedIndebtedness of the Company or any Subsidiary Guarantor with the net cashproceeds from an Incurrence of Permitted Refinancing Indebtedness;

 

(4)                                  anypayment by the Company or a Restricted Subsidiary to any one of the other ofthem;

 

(5)                                  solong as no Default has occurred and is continuing or would be caused thereby,the repurchase, redemption or other acquisition or retirement for value by theCompany of any Equity Interests of the Company held by any member of themanagement of the Company or any of its Subsidiaries pursuant to any managementequity subscription agreement or stock option agreement in effect as of October 8,2003; *provided, however,* that the aggregateprice paid for all such repurchased, redeemed, acquired or retired EquityInterests shall not exceed US$2.0 million in any twelve-month period;

 

(6)                                  paymentsof any kind made in connection with or in respect of Back-to-Back Securities; *provided, however,* that to the extent such payments shall bemade to Affiliates of the Company (other than its Subsidiaries), allcorresponding payments required to be paid by such Affiliates pursuant to therelated Back-to-Back Securities shall be received, immediately prior to orconcurrently with any such payments, by all applicable Videotron Entities;

 

(7)                                  solong as no Default has occurred and is continuing or would be caused thereby,any Tax Benefit Transaction;

 

(8)                                  solong as no Default has occurred and is continuing or would be caused thereby,the payment of any Management Fees or other similar expenses by the Company toits direct or indirect parent company for bona fide services (includingreimbursement for expenses Incurred in connection with, or allocation ofcorporate expenses in relation to, providing such services) provided to, anddirectly related to the operations of, the Company and the 

 

48

----

 

RestrictedSubsidiaries, in an aggregate amount not to exceed 1.5% of ConsolidatedRevenues in any twelve-month period;

 

(9)                                  solong as no Default has occurred and is continuing or would be caused thereby,other Restricted Payments since October 8, 2003 in an aggregate amount notto exceed US$30.0 million; and

 

(10)                            solong as no Default has occurred and is continuing or would be caused therebyand the Debt to Cash Flow Ratio is no greater than 5.0 to 1 (calculated on a *pro forma* basis as if such payment,including any related financing transaction, had occurred at the beginning ofthe applicable fiscal quarter), the payment of dividends or distributions toQuebecor Media or the repayment of the QMI Subordinated Loan, in an aggregateamount not to exceed Cdn$200.0 million since October 8, 2003.

 

(c)           The amount of any Restricted Payment,other than those effected in cash, shall be the fair market value on the dateof the Restricted Payment of the asset(s) or securities proposed to betransferred or issued to or by the Company or such Restricted Subsidiary, asthe case may be, pursuant to the Restricted Payment.  The fair market value of any assets orsecurities that are required to be valued pursuant to this Section 4.10shall be determined by the Board of Directors of the Company whose resolutionwith respect thereto shall be delivered to the Trustee.  The determination of the Board of Directorsof the Company shall be based upon an opinion or appraisal issued by anaccounting, appraisal or investment banking firm of national standing in theUnited States or Canada if the fair market value exceeds US$25.0 million; *provided*, that the Board of Directors of the Company shallnot be required to obtain such an opinion or appraisal in connection with anypayments with respect to Back-to-Back Securities to the extent suchBack-to-Back Transactions were approved in accordance with the provisions of Section 4.14hereof.  Not later than the date ofmaking any Restricted Payment, the Company shall deliver to the Trustee  an Officers’ Certificate stating that suchRestricted Payment is permitted and setting forth the basis upon which thecalculations required by this Section 4.10 were computed, together with acopy of any fairness opinion or appraisal required by this Indenture.

 

(d)           For purposes of this Section 4.10,if (i) any Videotron  Entity ceasesto be the obligor under or issuer of any Back-to-Back Securities and a Personother than a Videotron Entity becomes the obligor thereunder (or the issuer ofany Back-to-Back Preferred Shares) or (ii) any Restricted Subsidiary thatis an obligor under or issuer of any Back-to-Back Securities ceases to be aRestricted Subsidiary other than by consolidation or merger with the Company oranother Restricted Subsidiary, then the Company or such Restricted Subsidiaryshall be deemed to have made a Restricted Payment in an amount equal to theaccreted value of such Back-to-Back Debt (or the subscription price of anyBack-to-Back Preferred Shares) at the time of the assumption thereof by suchother Person or at the time such Restricted Subsidiary ceases to be aRestricted Subsidiary.

 

*Section 4.11.               ***Liens**.

* *

TheCompany shall not, and shall not permit any Restricted Subsidiary to, directlyor indirectly, create, incur, assume or suffer to exist or become effective anyLien of any kind on any asset owned at October 8, 2003 or thereafteracquired, except Permitted Liens, unless the Company or such RestrictedSubsidiary has made or will make effective provision to secure the Notes andany applicable Subsidiary Guarantees equally and ratably with the obligationsof the Company or such Restricted Subsidiary secured by such Lien for so longas such obligations are secured by such Lien.

 

*Section 4.12.               ***Asset Sales**.

* *

(a)           The Company shall not, and shall notpermit any Restricted Subsidiary to, consummate an Asset Sale unless:

 

(1)                                  theCompany, or the Restricted Subsidiary, as the case may be, receivesconsideration at the time of the Asset Sale at least equal to the fair marketvalue of the assets or Equity Interests issued or sold or otherwise disposedof;

 

49

----

 

(2)                                  suchfair market value is determined by the Company’s Board of Directors andevidenced by a Board Resolution set forth in an Officers’ Certificate deliveredto the Trustee; and

 

(3)                                  atleast 75% of the consideration received in such Asset Sale by the Company orsuch Restricted Subsidiary is in the form of cash or Cash Equivalents.  For purposes of this clause (3), each of thefollowing shall be deemed to be cash:

 

(a)                                  anyIndebtedness or other liabilities, as shown on the Company’s or such RestrictedSubsidiary’s most recent balance sheet, of the Company or any RestrictedSubsidiary (other than contingent liabilities and Indebtedness that are bytheir terms *pari passu* with orsubordinated to the Notes or any Subsidiary Guarantee and liabilities to the extentowed to the Company or any Affiliate of the Company), that are assumed by thetransferee of any such assets pursuant to a written agreement that releases theCompany or such Restricted Subsidiary from further liability with respect tosuch Indebtedness or liabilities; and

 

(b)                                 anysecurities, notes or other obligations received by the Company or any suchRestricted Subsidiary from such transferee that are converted within60 days of the applicable Asset Sale by the Company or such RestrictedSubsidiary into cash, to the extent of the cash received in such conversion.

 

(b)           Notwithstanding the terms ofparagraph (a) above, the Company and the Restricted Subsidiaries mayengage in Asset Swaps if (i) immediately after giving effect to any suchAsset Swap, the Company would be permitted to Incur at least US$1.00 ofadditional Indebtedness pursuant to the Debt to Cash Flow Ratio test set forthin Section 4.09(a), and (ii) the Company or such RestrictedSubsidiary receives consideration at the time of such Asset Swap at least equalto the fair market value of the assets disposed of, which fair market valueshall be determined by the Board of Directors of the Company or the RestrictedSubsidiary, as the case may be, and evidenced by a Board Resolution set forth inan Officers’ Certificate delivered to the Trustee; *provided,however,* that the determination of the Board of Directors shall bebased upon an opinion or appraisal issued by an accounting, appraisal orinvestment banking firm of national standing in the United States or Canada ifthe fair market value exceeds US$25.0 million.

 

(c)           Within 360 days after the receipt ofany Net Proceeds from an Asset Sale, the Company may apply those Net Proceedsat its option:

 

(1)                                  topermanently repay or reduce Indebtedness, other than Subordinated Indebtedness,of the Company or a Subsidiary Guarantor secured by such assets, Indebtednessof the Company or a Subsidiary Guarantor under Credit Facilities orIndebtedness of a Restricted Subsidiary that is not a Subsidiary Guarantor,and, if the Indebtedness repaid is revolving credit Indebtedness, tocorrespondingly reduce commitments with respect thereto;

 

(2)                                  toacquire, or enter into a binding agreement to acquire, all or substantially allof the assets (other than cash, Cash Equivalents and securities) of any Personengaged in a Permitted Business; *provided, however,*that any such commitment shall be subject only to customary conditions (otherthan financing), and such acquisition shall be consummated no later than 180days after the end of such 360-day period;

 

(3)                                  toacquire, or enter into a binding agreement to acquire, Voting Stock of a Personengaged in a Permitted Business from a Person that is not an Affiliate of theCompany; *provided, however,* that such commitmentshall be subject only to customary conditions (other than financing) and suchacquisition shall be consummated no later than 180 days after the end of such360-day period; and *provided, further, however*,that (a) after giving effect thereto, the Person so acquired becomes aRestricted Subsidiary and (b) such acquisition is otherwise made inaccordance with this Indenture, including, without limitation, Section 4.10hereof; or

 

50

----

 

(4)                                  toacquire, or enter into a binding agreement to acquire, other long-term assets(other than securities) that are used or useful in a Permitted Business; *provided, however,* that such commitment shall be subjectonly to customary conditions (other than financing) and such acquisition shallbe consummated no later than 180 days after the end of such 360-day period.

 

Pending the finalapplication of any Net Proceeds, the Company may temporarily reduce revolvingcredit borrowings or otherwise invest the Net Proceeds in any manner that isnot prohibited by this Indenture.

 

(d)           Any Net Proceeds from Asset Salesthat are not applied, invested or segregated from the general funds of theCompany for investment in identified assets pursuant to a binding agreement, ineach case as provided in paragraph (c) above shall constitute ExcessProceeds; *provided, however,* that the amount ofany Net Proceeds that ceases to be so segregated as contemplated in paragraph (c) aboveshall also constitute “Excess Proceeds” at the time any such Net Proceeds ceaseto be so segregated; *provided further, however*,that the amount of any Net Proceeds that continues to be segregated forinvestment and that is not actually reinvested within twenty-four months fromthe date of the receipt of such Net Proceeds shall also constitute “ExcessProceeds.”

 

(e)           When the aggregate amount of ExcessProceeds exceeds US$35.0 million, the Company shall make an offer (an “*Asset Sale Offer*”) to all Holders of Notes and all holdersof other Indebtedness that is *pari passu* inright of payment with the Notes or any Subsidiary Guarantee containingprovisions similar to those set forth in this Indenture with respect to offersto purchase or redeem with the proceeds of sales of assets, to purchase themaximum principal amount of Notes and such other *pari passu*Indebtedness that may be purchased out of theExcess Proceeds in accordance with the procedures set forth in Section 3.09hereof.  The offer price in any AssetSale Offer shall be equal to 100% of principal amount of the Notes and suchother *pari passu*Indebtedness,plus accrued and unpaid interest to the date of purchase, and shall be payablein cash.  If any Excess Proceeds remainafter consummation of an Asset Sale Offer and all Holders of Notes have beengiven the opportunity to tender their Notes for purchase in accordance withsuch Asset Sale Offer and this Indenture, the Company may use such ExcessProceeds for any purpose not otherwise prohibited by this Indenture.  If the aggregate principal amount of Notesand such other *pari passu* Indebtedness tenderedinto such Asset Sale Offer exceeds the amount of Excess Proceeds, the Notes andsuch other *pari passu* Indebtedness shall bepurchased on a *pro rata*basis (subject to Notesbeing in denominations of US$1,000 or integral multiples thereof) based on theprincipal amount of Notes and such other *paripassu* Indebtedness tendered. Upon completion of each Asset Sale Offer, the amount of Excess Proceedsshall be reset at zero.

 

TheCompany shall comply with the requirements of Rule 14e-1 under theExchange Act and any other securities laws and regulations thereunder to theextent such laws and regulations are applicable in connection with eachrepurchase of Notes pursuant to an Asset Sale Offer.  To the extent that the provisions of any securitieslaws or regulations conflict with the Asset Sales provisions of this Indenture,the Company shall comply with the applicable securities laws and regulationsand shall not be deemed to have breached its obligations under the Asset Saleprovisions of this Indenture by virtue of such conflict.

 

*Section 4.13.               ***Dividend and Other PaymentRestrictions Affecting Subsidiaries**.

* *

(a)           The Company shall not, and shall notpermit any Restricted Subsidiary to, directly or indirectly, create or permitto exist or become effective any consensual encumbrance or restriction on theability of any Restricted Subsidiary to:

 

(1)                                  paydividends or make any other distributions on its Equity Interests to theCompany or any other Restricted Subsidiary, or with respect to any otherinterest or participation in, or measured by, its profits, or pay anyliabilities owed to the Company or any other Restricted Subsidiary;

 

(2)                                  makeloans or advances, or guarantee any such loans or advances, to the Company orany other Restricted Subsidiary; or

 

51

----

 

(3)                                  transferany of its properties or assets to the Company or any other RestrictedSubsidiary.

 

(b)           The restrictions set forth inparagraph (a) above shall not apply to encumbrances or restrictionsexisting under or by reason of:

 

(1)                                  agreementsgoverning Existing Indebtedness and Credit Facilities as in effect on October 8,2003 and any amendments, modifications, restatements, renewals, increases,supplements, refundings, replacements or refinancings thereof; *provided, however*, that such amendments, modifications,restatements, renewals, increases, supplements, refundings, replacement orrefinancings are no more restrictive, taken as a whole, with respect to suchdividend and other payment restrictions than those contained in such ExistingIndebtedness and Credit Facilities, as in effect on October 8, 2003;

 

(2)                                  thisIndenture and the Notes;

 

(3)                                  applicablelaw or any applicable rule, regulation or order;

 

(4)                                  anyinstrument governing Indebtedness or Capital Stock of a Person acquired by theCompany or any Restricted Subsidiary as in effect at the time of suchacquisition (except to the extent such Indebtedness or Capital Stock wasIncurred or issued in connection with or in contemplation of such acquisition),which encumbrance or restriction is not applicable to any Person, or theproperties or assets of any Person, other than the Person, or the property orassets of the Person, so acquired; *provided, however*,that, in the case of Indebtedness, such Indebtedness was permitted by the termsof this Indenture to be Incurred at the time of such acquisition;

 

(5)                                  customarynon-assignment provisions in leases entered into in the ordinary course ofbusiness and consistent with past practices;

 

(6)                                  purchasemoney obligations for property acquired in the ordinary course of business thatimpose restrictions on the property so acquired of the nature described inclause (3) of paragraph (a) above;

 

(7)                                  anyagreement for the sale or other disposition of a Restricted Subsidiary thatrestricts distributions by such Restricted Subsidiary pending its sale or otherdisposition;

 

(8)                                  PermittedRefinancing Indebtedness; *provided*, *however*, that any restrictions contained in the agreementsgoverning such Permitted Refinancing Indebtedness are no more restrictive,taken as a whole, than those contained in the agreements governing theIndebtedness being refinanced;

 

(9)                                  Lienssecuring Indebtedness that is permitted to be secured without also securing theNotes or the applicable Subsidiary Guarantee pursuant to Section 4.11hereof that limit the right of the debtor to dispose of the assets subject toany such Lien;

 

(10)                            provisionswith respect to the disposition or distribution of assets or property in jointventure agreements, asset sale agreements, stock sale agreements and othersimilar agreements entered into in the ordinary course of business;

 

(11)                            restrictionson cash or other deposits or net worth imposed by customers under contractsentered into in the ordinary course of business; and

 

(12)                            anyIndebtedness or any agreement pursuant to which such Indebtedness was issued ifthe encumbrance or restriction applies only upon a payment or financialcovenant default or event of default contained in such Indebtedness or agreementand (A) such encumbrance 

 

52

----

 

or restriction isnot materially more disadvantageous to the Holders than is customary incomparable financings (as determined in good faith by the Board of Directors ofthe Company) and (B) management of the Company delivers to the Trustee anOfficers’ Certificate evidencing its determination at the time such agreementis entered into, that such encumbrance or restriction will not materiallyimpair the Company’s ability to make payments on the Notes.

 

*Section 4.14.               ***Transactions with Affiliates**.

* *

(a)           The Company shall not, and shall notpermit any Restricted Subsidiary to, directly or indirectly, make any paymentto, or sell, lease, transfer, exchange or otherwise dispose of any of itsproperties or assets to, or purchase any property or assets from, or enter intoor make or amend any transaction or series of transactions, contract,agreement, understanding, loan, advance or guarantee with, or for the benefitof, any Affiliate, officer or director of the Company (each, an “*Affiliate Transaction*”) unless:

 

(1)                                  suchAffiliate Transaction is on terms that are no less favorable to the Company orthe relevant Restricted Subsidiary than those that would have been obtained ina comparable arm’s length transaction by the Company or such RestrictedSubsidiary with an unrelated Person; and

 

(2)                                  theCompany delivers to the Trustee:

 

(i)                                     withrespect to any Affiliate Transaction or series of related AffiliateTransactions involving aggregate consideration in excess ofUS$10.0 million, a Board Resolution of the Company set forth in anOfficers’ Certificate certifying that such Affiliate Transaction or series ofrelated Affiliate Transactions complies with this Section 4.14 and thatsuch Affiliate Transaction or series of related Affiliate Transactions has beenapproved by a majority of the disinterested members of the Board of Directorsof the Company; and

 

(ii)                                  withrespect to any Affiliate Transaction or series of related Affiliate Transactionsinvolving aggregate consideration in excess of US$40.0 million, an opinionas to the fairness to the Company or such Restricted Subsidiary of suchAffiliate Transaction or series of related Affiliate Transactions from afinancial point of view issued by an independent accounting, appraisal orinvestment banking firm of national standing in the United States or Canada.

 

(b)           The following items shall be deemednot to constitute Affiliate Transactions and, therefore, shall not be subjectto the provisions of paragraph (a) above:

 

(1)                                  anyemployment agreement entered into by the Company or any Restricted Subsidiaryin the ordinary course of business and consistent with the past practice of theCompany or such Restricted Subsidiary;

 

(2)                                  transactionsbetween or among the Company and/or the Restricted Subsidiaries;

 

(3)                                  transactionswith a Person that is an Affiliate of the Company solely because the Companyowns an Equity Interest in such Person, *provided*such transactions are on terms that are no less favorable to the Company or therelevant Restricted Subsidiary than those that would have been obtained in acomparable arm’s length transaction by the Company or such RestrictedSubsidiary with an unrelated Person;

 

(4)                                  paymentof reasonable directors fees to Persons who are not otherwise Affiliates of theCompany;

 

53

----

 

(5)                                  salesof Equity Interests of the Company, other than Disqualified Stock orBack-to-Back Securities, to Affiliates of the Company;

 

(6)                                  anyagreement or arrangement as in effect on October 8, 2003 or any amendmentthereto or any transaction contemplated thereby, including pursuant to anyamendment thereto, in any replacement agreement or arrangement thereto so longas any such amendment or replacement agreement or arrangement is not moredisadvantageous to the Company or the Restricted Subsidiaries, as the case maybe, in any material respect than the original agreement as in effect on October 8,2003;

 

(7)                                  RestrictedPayments that are permitted by the provisions of Section 4.10 hereof;

 

(8)                                  PermittedInvestments; and

 

(9)                                  anyTax Benefit Transaction.

 

*Section 4.15.               ***Sale and Leaseback Transactions**.

* *

TheCompany shall not, and shall not permit any of its Restricted Subsidiaries to,enter into any sale and leaseback transaction; *provided,however*, that the Company or any Restricted Subsidiary may enterinto a sale and leaseback transaction if:

 

(a)                                  theCompany or that Restricted Subsidiary, as applicable, could have (i) IncurredIndebtedness in an amount equal to the Attributable Debt relating to such saleand leaseback transaction under the Debt to Cash Flow Ratio test set forth in Section 4.09(a) hereofand (ii) created a Lien on such property securing Attributable Debtpursuant to the provisions of Section 4.11 hereof;

 

(b)                                 thenet cash proceeds of such sale and leaseback transaction are at least equal tothe fair market value, as determined in good faith by the Board of Directors ofthe Company and set forth in an Officers’ Certificate delivered to the Trustee,of the property that is the subject of that sale and leaseback transaction; and

 

(c)                                  thetransfer of assets in such sale and leaseback transaction is permitted by, andthe Company or such Restricted Subsidiary applies the proceeds of such transactionin compliance with, the provisions of Section 4.12 hereof.

 

*Section 4.16.               ***Issuances and Sales of EquityInterests in Subsidiaries**.

* *

(a)   The Companyshall not, and shall not permit any of its Restricted Subsidiaries to,transfer, convey, sell, lease or otherwise dispose of (including, withoutlimitation, by way of merger, amalgamation or otherwise) any Equity Interestsin any direct or indirect Restricted Subsidiary that constitutes a SignificantSubsidiary of the Company or any group of Restricted Subsidiaries which, whentaken as a whole, would constitute a Significant Subsidiary of the Company, toany Person (other than the Company or a Wholly Owned Restricted Subsidiarythereof or, in connection with a Tax Benefit Transaction, to Quebecor Inc. or adirect or indirect Subsidiary of Quebecor Inc.), unless:

 

(1)                                  suchtransfer, conveyance, sale, lease or other disposition (whether by way ofmerger, amalgamation or otherwise) is of all the Equity Interests of suchRestricted Subsidiary; and

 

(2)                                  theNet Proceeds from such transfer, conveyance, sale, lease or other disposition(whether by way of merger, amalgamation or otherwise) are applied in accordancewith the provisions of Section 4.12 hereof.

 

54

----

 

(b)   The Companyshall not permit any direct or indirect Restricted Subsidiary that constitutesa Significant Subsidiary or any group of Restricted Subsidiaries which, whentaken as a whole, would constitute a Significant Subsidiary of the Company, toissue any Equity Interests to any Person, other than, (1) if necessary,shares of Capital Stock constituting directors’ qualifying shares, (2) Back-to-BackSecurities or (3) to the Company or a Wholly Owned Restricted Subsidiarythereof.

 

*Section 4.17.               ***Designation of Restricted andUnrestricted Subsidiaries**.

* *

(a)           The Board of Directors of the Companymay designate any Subsidiary to be an Unrestricted Subsidiary if suchSubsidiary:

 

(1)                                  hasno Indebtedness other than Non-Recourse Debt;

 

(2)                                  doesnot own any Equity Interest of any Restricted Subsidiary, or hold any Liens onany property of the Company or any of its Restricted Subsidiaries;

 

(3)                                  isnot party to any agreement, contract, arrangement or understanding with theCompany or any Restricted Subsidiary unless the terms of any such agreement,contract, arrangement or understanding are no less favorable to the Company orsuch Restricted Subsidiary than those that might be obtained at the time fromPersons who are not Affiliates of the Company;

 

(4)                                  isa Person with respect to which neither the Company nor any RestrictedSubsidiary has any direct or indirect obligation (a) to subscribe foradditional Equity Interests or (b) to maintain or preserve such Person’sfinancial condition or to cause such Person to achieve any specified levels ofoperating results;

 

(5)                                  exceptin the case of a Subsidiary Guarantor that is designated as an UnrestrictedSubsidiary in accordance with this Indenture, has not guaranteed or otherwisedirectly or indirectly provided credit support for any Indebtedness of theCompany or any Restricted Subsidiary;

 

(6)                                  hasat least one director on its Board of Directors that is not a director orexecutive officer of the Company or any Restricted Subsidiary and has at leastone executive officer that is not a director or executive officer of theCompany or any Restricted Subsidiary; and

 

(7)                                  suchdesignation would not cause a Default or Event of Default.

 

(b)           Any designation of a Subsidiary ofthe Company as an Unrestricted Subsidiary shall be evidenced to the Trustee byfiling with the Trustee a certified copy of the Board Resolution giving effectto such designation and an Officers’ Certificate certifying that suchdesignation complied with the provisions of paragraph (a) above and waspermitted by the provisions of Section 4.10 hereof.  If, at any time, any Unrestricted Subsidiarywould fail to meet the requirements of the provisions of paragraph (a) above,it shall thereafter cease to be an Unrestricted Subsidiary for purposes of thisIndenture and any Preferred Shares of such Subsidiary shall be deemed to beissued and any Indebtedness of such Subsidiary shall be deemed to be Incurredby a Restricted Subsidiary as of such date and, if such Preferred Shares arenot permitted to be issued or such Indebtedness is not permitted to be Incurredas of such date under the provisions of Section 4.09 hereof, the Companyshall be in default of such Section.

 

(c)           If a Restricted Subsidiary isdesignated as an Unrestricted Subsidiary, the aggregate fair market value ofall outstanding Investments owned by the Company and the RestrictedSubsidiaries in the Subsidiary so designated shall be deemed to be anInvestment made as of the time of such designation and shall either reduce theamount available for Restricted Payments under Section 4.10(a) hereofor reduce the amount available for future Investments under one or more clausesof the definition of Permitted Investments, as the Company shalldetermine.  Such designation shall bepermitted only if such Investment would be permitted at such 

 

55

----

 

time and if such Restricted Subsidiary otherwise meetsthe requirements of the provisions of paragraph (a) above.  Upon designation of a Restricted Subsidiaryas an Unrestricted Subsidiary in compliance with this Section 4.17, suchSubsidiary shall be released from any Subsidiary Guarantee previously made bysuch Subsidiary in accordance with the provisions of Section 10.05 hereof.

 

(d)           The Board of Directors of the Companymay at any time designate any Unrestricted Subsidiary to be a RestrictedSubsidiary; *provided, however,* that (i) suchdesignation shall be deemed to be an Incurrence of Indebtedness by a RestrictedSubsidiary of any outstanding Indebtedness of such Unrestricted Subsidiary andsuch designation shall only be permitted if such Indebtedness is permittedunder the provisions of Section 4.09 hereof, calculated on a *pro forma* basis as if such designation had occurred at thebeginning of the most recently ended full fiscal quarter for which internalfinancial statements are available; (ii) all outstanding Investments ownedby such Unrestricted Subsidiary shall be deemed to be made as of the time ofsuch designation and such Investments shall only be permitted if such Investmentswould be permitted under the provisions of Section 4.10 hereof; (iii) allLiens upon property or assets of such Unrestricted Subsidiary existing at thetime of such designation would be permitted under the provisions of Section 4.11hereof; and (iv) no Default or Event of Default would be in existencefollowing such designation.

 

*Section 4.18.               ***Repurchase at the Option ofHolders Upon a Change of Control**.

* *

(a)   Upon theoccurrence of a Change of Control, the Company shall, within 30 days of aChange of Control, make an offer (the “*Change of Control Offer*”)pursuant to the procedures set forth in Section 3.09 hereof.  Each Holder shall have the right to acceptsuch offer and require the Company to repurchase all or any part (equal toUS$1,000 or an integral multiple of US$1,000) of such Holder’s Notes pursuantto the Change of Control Offer at a purchase price, in cash (the “*Change of Control Amount*”), equal to 101% of the aggregateprincipal amount of Notes repurchased, plus accrued and unpaid interest on theNotes repurchased to the purchase date.

 

(b)   The Companyshall not be required to make a Change of Control Offer upon a Change ofControl if a third party makes a Change of Control Offer in the manner, at thetimes and otherwise in compliance with the requirements set forth in thisIndenture applicable to a Change of Control Offer made by the Company andpurchases all Notes or portions of Notes properly tendered and not withdrawnunder the Change of Control Offer.

 

*Section 4.19.               ***Future Guarantors**.

* *

TheCompany shall cause each Person that becomes a Wholly Owned RestrictedSubsidiary of the Company following the Issue Date to become a SubsidiaryGuarantor and to execute a supplemental indenture and deliver an Opinion ofCounsel to the Trustee.  In addition, theCompany shall not permit any of its Restricted Subsidiaries, directly orindirectly, to guarantee any other Indebtedness (including any Back-to-BackDebt) of the Company or any of its Restricted Subsidiaries, unless suchRestricted Subsidiary is a Subsidiary Guarantor or simultaneously executes anddelivers a supplemental indenture providing for a Subsidiary Guarantee of thepayment of the Notes by such Restricted Subsidiary, which Subsidiary Guaranteeshall be senior to or *pari passu*with such Subsidiary’s guarantee of such other Indebtedness.  The form of the Subsidiary Guarantee isattached hereto as Exhibit E.

 

*Section 4.20.               ***Additional Amounts**.

* *

(a)   Allpayments made by or on behalf of the Company or the Subsidiary Guarantors on orwith respect to the Notes shall be made without withholding or deduction forany Taxes imposed by any Canadian Taxing Authority, unless required by law orthe interpretation or administration thereof by the relevant Canadian TaxingAuthority.  If the Company or any SubsidiaryGuarantor (or any other payor) is required to withhold or deduct any amount onaccount of Taxes from any payment made under or with respect to any Notes thatare outstanding on the date of the required payment, it shall:

 

(1)                                  makesuch withholding or deduction;

 

56

----

 

(2)                                  remitthe full amount deducted or withheld to the relevant government authority inaccordance with applicable law;

 

(3)                                  paythe additional amounts (“*Additional Amounts*”)as may be necessary so that the net amount received by each holder (includingAdditional Amounts) after such withholding or deduction will not be less thanthe amount the holder would have received if such Taxes had not been withheldor deducted;

 

(4)                                  furnishto the Holders, within 30 days after the date the payment of any Taxes isdue, certified copies of tax receipts evidencing such payment by the Company orsuch Subsidiary Guarantor;

 

(5)                                  indemnifyand hold harmless each Holder (other than an Excluded Holder, as defined inparagraph (b) below) for the amount of (a) any Taxes paid by eachsuch Holder as a result of payments made on or with respect to the Notes, (b) anyliability (including penalties, interest and expenses) arising from or withrespect to such payments and (c) any Taxes imposed with respect to anyreimbursement under the foregoing clauses (a) or (b), but excluding anysuch Taxes that are in the nature of Taxes on net income, taxes on capital,franchise taxes, net worth taxes and similar taxes; and

 

(6)                                  atleast 30 days prior to each date on which any payment under or with respect tothe Notes is due and payable, if the Company or any Subsidiary Guarantorbecomes obligated to pay Additional Amounts with respect to such payment,deliver to the Trustee an Officers’ Certificate stating the amounts so payableand such other information necessary to enable the Trustee to pay suchAdditional Amounts to Holders on the payment date.

 

(b)   Notwithstandingthe provisions of paragraph (a) above, no Additional Amounts shall bepayable to a Holder in respect of beneficial ownership of a Note (an “*Excluded Holder*”):

 

(1)                                  withwhich the Company or such Subsidiary Guarantor does not deal at arm’s-length,within the meaning of the *Income Tax Act*(Canada), at the time of making such payment;

 

(2)                                  whichis subject to such Taxes by reason of its being connected with Canada or anyprovince or territory thereof otherwise than by the mere acquisition, holdingor disposition of Notes or the receipt of payments thereunder; or

 

(3)                                  ifsuch Holder waives its right to receive Additional Amounts.

 

Anyreference, in any context in this Indenture, to the payment of principal,premium, if any, redemption price, Change of Control Amount, offer price andinterest or any other amount payable under or with respect to any Note, shallbe deemed to include the payment of Additional Amounts to the extent that, insuch context, Additional Amounts are, were or would be payable.

 

Theobligations described under this Section 4.20 will survive any termination,defeasance or discharge of this Indenture and will apply *mutatis mutandis* to any jurisdiction inwhich any successor Person to the Company or any Subsidiary Guarantor, asapplicable, is organized or any political subdivision or taxing authority oragency thereof or therein.

 

*Section 4.21.               ***Business Activities**.

* *

TheCompany shall not, and shall not permit any Restricted Subsidiary to, engage inany business other than the Permitted Businesses, except to such extent aswould not be material to the Company and its Restricted Subsidiaries taken as awhole.

 

57

----

 

**ARTICLE 5.****SUCCESSORS**

** **

*Section 5.01.               ***Merger, Consolidation and Saleof Assets of the Company and Subsidiary Guarantors**.

* *

(a)   The Companymay not directly or indirectly, (i) consolidate, merge or amalgamate withor into another Person, whether or not the Company is the survivingcorporation, or (ii) sell, assign, transfer, convey or otherwise disposeof all or substantially all of the properties or assets of the Company and theRestricted Subsidiaries, taken as a whole, in one or more related transactions,to another Person, unless, in either case,

 

(1)                                  either(a) the Company is the surviving corporation, or (b) the Personformed by or surviving any such consolidation, merger or amalgamation (if otherthan the Company) or to which such sale, assignment, transfer, conveyance orother disposition shall have been made (the “*SurvivingCompany*”) is a corporation organized or existing under the laws ofthe United States, any state of the United States, the District of Columbia,Canada or any province or territory of Canada;

 

(2)                                  theSurviving Company expressly assumes all the obligations of the Company underthe Notes, this Indenture and, if applicable, any Registration RightsAgreements, pursuant to agreements reasonably satisfactory to the Trustee;

 

(3)                                  immediatelyafter giving effect to such transaction no Default or Event of Default exists;and

 

(4)                                  theCompany or the Surviving Company shall, on the date of such transaction aftergiving *pro forma*effect thereto and any relatedfinancing transactions as if the same had occurred at the beginning of theapplicable fiscal quarter, be permitted to Incur at least US$1.00 of additionalIndebtedness pursuant to the Debt to Cash Flow Ratio test set forth in Section 4.09(a) hereof.

 

(b)   Unless inconnection with a disposition by the Company or a Subsidiary Guarantor of itsentire ownership interest in a Subsidiary Guarantor or all or substantially allthe assets of a Subsidiary Guarantor permitted by, and in accordance with theapplicable provisions of, this Indenture (including, without limitation, theprovisions of Section 4.12 hereof, the Company shall cause each SubsidiaryGuarantor not to directly or indirectly, (i) consolidate, merge oramalgamate with or into another Person, whether or not such SubsidiaryGuarantor is the surviving corporation, or (ii) sell, assign, transfer,convey or otherwise dispose of all or substantially all of the properties orassets of such Subsidiary Guarantor, in one or more related transactions, toanother Person, unless, in either case,

 

(1)                                  either(a) such Subsidiary Guarantor is the surviving corporation, or (b) thePerson formed by or surviving any such consolidation, merger or amalgamation(if other than such Subsidiary Guarantor) or to which such sale, assignment,transfer, conveyance or other disposition shall have been made (the “*Surviving Guarantor*”) is a corporation, limited liabilitycompany or limited partnership organized or existing under the laws of theUnited States, any state of the United States, the District of Columbia, Canadaor any province or territory of Canada;

 

(2)                                  theSurviving Guarantor expressly assumes all the obligations of such SubsidiaryGuarantor under its Subsidiary Guarantee, this Indenture and, if applicable,any Registration Rights Agreements, pursuant to agreements reasonablysatisfactory to the Trustee;

 

(3)                                  immediatelyafter giving effect to such transaction no Default or Event of Default exists;and

 

58

----

 

(4)                                  suchSubsidiary Guarantor or the Surviving Guarantor shall, on the date of suchtransaction after giving *pro forma*effect thereto and any related financing transactions as if the same hadoccurred at the beginning of the applicable fiscal quarter, be permitted toIncur at least US$1.00 of additional Indebtedness pursuant to the Debt to CashFlow Ratio test set forth in Section 4.09(a) hereof.

 

(c)   Inaddition, the Company shall not, and shall cause each Subsidiary Guarantor notto, directly or indirectly, lease all or substantially all of its properties orassets, in one or more related transactions, to any other Person.  Clauses (a)(4) and (b)(4) of this Section 5.01shall not apply to a merger, consolidation or amalgamation, or a sale,assignment, transfer, conveyance or other disposition of assets, between oramong the Company and any Restricted Subsidiary.

 

*Section 5.02.               ***Successor CorporationSubstituted**.

* *

EachSurviving Company and Surviving Guarantor shall succeed to, and be substitutedfor, and may exercise every right and power of the Company or a SubsidiaryGuarantor, as applicable, under this Indenture; *provided,however,* that in the case of:

 

(a)   a sale,transfer, assignment, conveyance or other disposition (unless such sale,transfer, assignment, conveyance or other disposition is of all orsubstantially all of the assets of the Company and the Restricted Subsidiaries,taken as a whole, or in the case of a Subsidiary Guarantor, such sale, transfer,assignment, conveyance or other disposition is of all or substantially all ofthe assets of such Subsidiary Guarantor or all of the Capital Stock of suchSubsidiary Guarantor to a Person that is not (either before or after givingeffect to such transactions) a Subsidiary of the Company), or

 

(b)   a lease,

 

the predecessor company shall not be released from any of theobligations or covenants under this Indenture, including with respect to thepayment of the Notes and obligations under the Subsidiary Guarantees.

 

**ARTICLE 6.****DEFAULTS AND REMEDIES**

** **

*Section 6.01.               ***Events of Default**.

* *

Eachof the following is an “Event of Default:”

 

(i)    default for 30 days inthe payment when due of interest on, including Additional Amounts or SpecialInterest, if any, or with respect to, the Notes;

 

(ii)   default in payment, whendue at Stated Maturity, upon acceleration, redemption, required repurchase orotherwise, of the principal of, or premium, if any, on the Notes;

 

(iii)  failure by the Company orany Restricted Subsidiary to comply with the provisions of Section 4.09,4.10, 4.12, 4.18 or 5.01 hereof;

 

(iv)  failure by the Company orany Restricted Subsidiary for 30 days after written notice thereof hasbeen given to the Company by the Trustee or to the Company and the Trustee bythe Holders of at least 25% of the aggregate principal amount of the Notesoutstanding to comply with any of its other covenants or agreements in thisIndenture;

 

(v)   default under any mortgage,indenture or instrument under which there may be issued or by which there maybe secured or evidenced any Indebtedness by the Company or any RestrictedSubsidiary,

 

59

----

 

or the payment ofwhich is guaranteed by the Company or any Restricted Subsidiary, whether suchIndebtedness or guarantee now exists, or is created after the Issue Date, ifthat default:

 

(a)                                  iscaused by a failure to pay principal of, or interest or premium, if any, on,such Indebtedness when due at the final maturity of such Indebtedness (a “*Payment Default*”); or

 

(b)                                 resultsin the acceleration of such Indebtedness prior to its Stated Maturity,

 

and, in each case,the principal amount of any such Indebtedness, together with the principalamount of any other such Indebtedness under which there has been a PaymentDefault or the maturity of which has been so accelerated, aggregatesUS$25.0 million or more;

 

(vi)  failure by the Company orany Restricted Subsidiary to pay final, non-appealable judgments aggregating inexcess of US$25.0 million, which judgments are not paid, discharged or stayedfor a period of 60 days;

 

(vii) any Subsidiary Guarantee ofa Significant Subsidiary ceases, or the Subsidiary Guarantees of any group ofSubsidiaries that, when taken together, would constitute a SignificantSubsidiary cease, to be in full force and effect (other than in accordance withthe terms of any such Subsidiary Guarantee) or any Subsidiary Guarantor that isa Significant Subsidiary denies or disaffirms its obligations under itsSubsidiary Guarantee, or a group of Subsidiary Guarantors that, when takentogether, would constitute a Significant Subsidiary deny or disaffirm theirobligations under their respective Subsidiary Guarantees;

 

(viii) the Company or any of its Significant Subsidiaries or any groupof Subsidiaries that, when taken together, would constitute a SignificantSubsidiary, pursuant to or within the meaning of any Bankruptcy Law:

 

(A)  commences a voluntary case orgives notice of intention to make a proposal under any Bankruptcy Law;

 

(B)   consents to the entry of anorder for relief against it in an involuntary case or consents to itsdissolution or winding up;

 

(C)   consents to the appointmentof a receiver, interim receiver, receiver and manager, liquidator, trustee orcustodian of it or for all or substantially all of its property;

 

(D)  makes a general assignmentfor the benefit of its creditors;

 

(E)   admits in writing itsinability to pay its debts as they become due or otherwise admits itsinsolvency; or

 

(F)   seeks a stay of proceedingsagainst it or proposes or gives notice or intention to propose a compromise,arrangement or reorganization of any of its debts or obligations under anyBankruptcy Law; and

 

(ix)   a court ofcompetent jurisdiction enters an order or decree under any Bankruptcy Law that:

 

(A)  is for relief against theCompany or any of its Significant Subsidiaries or any group of Subsidiariesthat, when taken together, would constitute a Significant Subsidiary, in aninvoluntary case; or

 

(B)   appoints a receiver, interimreceiver, receiver and manager, liquidator, trustee or custodian of the Companyor any of its Significant 

 

60

----

 

Subsidiaries orany group of Subsidiaries that, when taken together, would constitute aSignificant Subsidiary, or for all or substantially all of the property of theCompany or any of its Significant Subsidiaries or any group of Subsidiariesthat, when taken together, would constitute a Significant Subsidiary;

 

(C)   orders the liquidation ofthe Company or any of its Significant Subsidiaries or any group of Subsidiariesthat, when taken together, would constitute a Significant Subsidiary; or

 

(D)  orders the presentation ofany plan or arrangement, compromise or reorganization of the Company or any ofits Significant Subsidiaries or any group of Subsidiaries that, when takentogether, would constitute a Significant Subsidiary;

 

and such order ordecree remains unstayed and in effect for 60 consecutive days.

 

*Section 6.02.               ***Acceleration**.

* *

If any Event of Default (other than those of the typedescribed in Section 6.01(viii) or (ix) occurs and iscontinuing, the Trustee may, and the Trustee upon the request of Holders of 25%in principal amount of the outstanding Notes shall, or the Holders of at least25% in principal amount of outstanding Notes may, declare the principal of allthe Notes, together with all accrued and unpaid interest, premium, if any, tobe due and payable by notice in writing to the Company and the Trusteespecifying the respective Event of Default and that such notice is a notice ofacceleration (the “*Acceleration Notice*”),and the same shall become immediately due and payable.

 

In thecase of an Event of Default specified in Section 6.01(viii) or (ix) hereof, all outstanding Notes shallbecome due and payable immediately without further action or notice by theTrustee or the Holders.  Holders may notenforce this Indenture or the Notes except as provided in this Indenture.

 

At any time after a declaration of acceleration withrespect to the Notes, the Holders of a majority in principal amount of theNotes then outstanding (by notice to the Trustee) may rescind and cancel suchdeclaration and its consequences if:

 

(a)   the rescission would not conflict with any judgment or decree of acourt of competent jurisdiction;

 

(b)   all existing Defaults and Events of Default have been cured orwaived except nonpayment of principal of or interest on the Notes that hasbecome due solely by such declaration of acceleration;

 

(c)   to the extent the payment of such interest is lawful, interest (atthe same rate specified in the Notes) on overdue installments of interest andoverdue payments of principal which has become due otherwise than by suchdeclaration of acceleration has been paid;

 

(d)   the Company has paid the Trustee its reasonable compensation andreimbursed the Trustee for its reasonable expenses, disbursements and advances;and

 

(e)   in the event of the cure or waiver of an Event ofDefault of the type described in Section 6.01(viii) or (ix), theTrustee has received an Officers’ Certificate and Opinion of Counsel that suchEvent of Default has been cured or waived.

 

In thecase of an Event of Default with respect to the Notes occurring by reason ofany willful action or inaction taken or not taken by the Company or on theCompany’s behalf with the intention of avoiding payment of the premium that theCompany would have been required to pay if the Company had then elected toredeem the Notes pursuant to Section 3.07 hereof, an equivalent premiumshall also become and be immediately due 

 

61

----

 

and payable to the extent permitted by law upon theacceleration of the Notes.  If an Eventof Default occurs prior to April 15, 2013, by reason of any willful actionor inaction taken or not taken by the Company or on the Company’s behalf withthe intention of avoiding the prohibition on redemption of the Notes prior to April 15,2013, then the premium specified in Section 3.07(b) hereof shall alsobecome immediately due and payable to the extent permitted by law uponacceleration of the Notes.

 

*Section 6.03.               ***Other Remedies**.

* *

If anEvent of Default occurs and is continuing, the Trustee may pursue any availableremedy to collect the payment of principal, premium, if any, and interest onthe Notes or to enforce the performance of any provision of the Notes or thisIndenture.

 

TheTrustee may maintain a proceeding even if it does not possess any of the Notesor does not produce any of them in the proceeding.  A delay or omission bythe Trustee or any Holder in exercising any right or remedy accruing upon anEvent of Default shall not impair the right or remedy or constitute a waiver ofor acquiescence in the Event of Default. All remedies shall be cumulative to the extent permitted by law.

 

*Section 6.04.               ***Waiver of Past Defaults**.

* *

TheHolders of at least a majority in aggregate principal amount of the Notes thenoutstanding by notice to the Trustee may on behalf of the Holders of all of theNotes waive any existing Default or Event of Default, and its consequences,except a continuing Default or Event of Default (i) in the payment of theprincipal of or interest on the Notes and (ii) in respect of a covenant orprovision which under this Indenture cannot be modified or amended without theconsent of the Holder of each Note affected by such modification oramendment.  Upon any waiver of a Defaultor Event of Default such Default shall cease to exist, and any Event of Defaultarising therefrom shall be deemed cured for every purpose of this Indenture,but no such waiver shall extend to any subsequent or other Default or Event ofDefault or impair any right consequent thereon.

 

*Section 6.05.               ***Control by Majority**.

* *

Subjectto Section 7.01, Section 7.02(e) (including the Trustee’sreceipt of the security or indemnification described therein) and Section 7.07hereof, in case an Event of Default shall occur and be continuing, the Holdersof at least a majority in aggregate principal amount of the Notes thenoutstanding shall have the right to direct the time, method and place ofconducting any proceeding for any remedy available to the Trustee or exercisingany trust or power conferred on the Trustee with respect to the Notes; *provided, however,* the Trustee may refuse to follow any directionfrom the Holders of at least a majority in aggregate principal amount of theNotes then outstanding that conflicts with applicable law or this Indenture, orthat the Trustee determines in good faith may be unduly prejudicial to therights of the Holders not joining in the giving of such direction, and may takeany other action it deems proper that is not inconsistent with such direction.

 

*Section* 6.06.                **Limitation onSuits**.

* *

NoHolder shall have any right to institute any proceeding with respect to thisIndenture, or for the appointment of a receiver or trustee, or for any remedythereunder, unless:

 

(a)   such Holderhas previously given to the Trustee written notice of a continuing Event ofDefault,

 

(b)   Holders ofat least 25% in aggregate principal amount of the Notes then outstanding havemade written request and offered indemnity satisfactory to the Trustee toinstitute such proceeding as trustee, and

 

(c)   the Trusteeshall not have received from the Holders of a majority in aggregate principalamount of the Notes then outstanding a direction inconsistent with such requestand shall have failed to institute such proceeding within 60 days.

 

62

----

 

Thepreceding limitations shall not apply to a suit instituted by a Holder forenforcement of payment of principal of, and premium, if any, or interest on, aNote on or after the respective due dates for such payments set forth in suchNote.

 

AHolder may not use this Indenture to affect, disturb or prejudice the rights ofanother Holder or to obtain a preference or priority over another Holder.

 

*Section 6.07.               ***Rights of Holders to ReceivePayment**.

* *

Notwithstandingany other provision of this Indenture (including, without limitation, Section 6.06hereof), the right of any Holder to receive payment of principal, premium, ifany, and interest on the Notes held by such Holder, on or after the respectivedue dates expressed in the Notes (including in connection with an offer topurchase), or to bring suit for the enforcement of any such payment on or aftersuch respective dates, shall not be impaired or affected without the consent ofsuch Holder.

 

*Section 6.08.               ***Collection Suit by Trustee**.

* *

If anEvent of Default specified in Section 6.01 (i) or (ii) occursand is continuing, the Trustee is authorized to recover judgment in its ownname and as trustee of an express trust against the Company for the wholeamount of principal of, premium, if any, and interest then due and owing(together with interest on overdue principal and, to the extent lawful,interest) and such further amount as shall be sufficient to cover the costs andexpenses of collection, including the reasonable compensation, expenses,disbursements and advances of the Trustee, its agents and counsel.

 

*Section 6.09.               ***Trustee May File Proofs ofClaim**.

* *

TheTrustee shall be authorized to file such proofs of claim and other papers ordocuments as may be necessary or advisable in order to have the claims of theTrustee (including any claim for the reasonable compensation, expenses,disbursements and advances of the Trustee, its agents and counsel) and theHolders allowed in any judicial proceedings relative to the Company (or any otherobligor upon the Notes), its creditors or its property and shall be entitledand empowered to collect, receive and distribute any money or other propertypayable or deliverable on any such claims and any custodian in any suchjudicial proceeding is hereby authorized by each Holder to make such paymentsto the Trustee, and in the event that the Trustee shall consent to the makingof such payments directly to the Holders, to pay to the Trustee any amount dueto it for the reasonable compensation, expenses, disbursements and advances ofthe Trustee, its agents and counsel, and any other amounts due the Trusteeunder Section 7.07  hereof.  To the extent that the payment of any suchcompensation, expenses, disbursements and advances of the Trustee and its agentsand counsel, and any other amounts due the Trustee under Section 7.07hereof out of the estate in any such proceeding, shall be denied for anyreason, payment of the same shall be secured by a Lien on, and shall be paidout of, any and all distributions, moneys, securities and any other propertiesthat the Holders may be entitled to receive in such proceeding whether inliquidation or under any plan of reorganization or arrangement orotherwise.  Nothing herein containedshall be deemed to authorize the Trustee to authorize or consent to or acceptor adopt on behalf of any Holder any plan of reorganization, arrangement,adjustment or composition affecting the Notes or the rights of any Holder, orto authorize the Trustee to vote in respect of the claim of any Holder in anysuch proceeding.

 

*Section 6.10.               ***Priorities**.

* *

If theTrustee collects any money pursuant to this Article 6, it shall pay outthe money in the following order:

 

*First:*  to the Trustee, its agents and attorneys foramounts due under Section 7.07 hereof, including payment of allcompensation, expenses and liabilities incurred, and all advances made, by theTrustee and the costs and expenses of collection;

 

63

----

 

*Second:* to Holders for amounts due and unpaid on theNotes for principal, premium, if any, and interest ratably, without preferenceor priority of any kind, according to the amounts due and payable on the Notesfor principal, premium, if any, and interest, respectively; and

 

*Third:*  to the Company or to such party as a court ofcompetent jurisdiction shall direct.

 

TheTrustee may fix a record date and payment date for any payment to Holderspursuant to this Section 6.10.

 

*Section 6.11.               ***Undertaking for Costs**.

* *

In anysuit for the enforcement of any right or remedy under this Indenture or in anysuit against the Trustee for any action taken or omitted by it as a Trustee, acourt in its discretion may require the filing by any party litigant in suchsuit of an undertaking to pay the costs of such suit, and the court in itsdiscretion may assess reasonable costs, including reasonable attorneys’ fees,against any party litigant in such suit, having due regard to the merits andgood faith of the claims or defenses made by the party litigant.  This Section 6.11shall not apply to a suit by the Trustee, a suit by a Holder pursuant to Section 6.07hereof, or a suit by Holders of more than 10% in principal amount of the thenoutstanding Notes.

 

**ARTICLE 7.****TRUSTEE**

** **

*Section 7.01.               ***Duties of Trustee**.

* *

(a)   If an Eventof Default has occurred and is continuing, the Trustee shall exercise such ofthe rights and powers vested in it by this Indenture, and use the same degreeof care and skill in its exercise, as a prudent Person would exercise or useunder the circumstances in the conduct of such Person’s own affairs.

 

(b)   Exceptduring the continuance of an Event of Default:

 

(1)   the duties of the Trusteeshall be determined solely by the express provisions of this Indenture and theTrustee need perform only those duties that are specifically set forth in thisIndenture and no others, and no implied covenants or obligations shall be readinto this Indenture against the Trustee; and

 

(2)   in the absence of bad faithon its part, the Trustee may conclusively rely, as to the truth of thestatements and the correctness of the opinions expressed therein, uponcertificates or opinions furnished to the Trustee and conforming to therequirements of this Indenture.  However, the Trustee shall examine thecertificates and opinions to determine whether or not they conform to therequirements of this Indenture (but need not confirm or investigate theaccuracy of mathematical calculations or other facts stated therein).

 

(c)   The Trusteemay not be relieved from liabilities for its own negligent action, its ownnegligent failure to act, or its own willful misconduct, except that:

 

(1)   this paragraph does notlimit the effect of paragraph (b) of this Section;

 

(2)   the Trustee shall not beliable for any error of judgment made in good faith by a Responsible Officer,unless it is proved that the Trustee was negligent in ascertaining thepertinent facts; and

 

64

----

 

(3)   the Trustee shall not beliable with respect to any action it takes or omits to take in good faith inaccordance with a direction received by it pursuant to Section 6.05hereof.

 

(d)   Whether ornot therein expressly so provided, every provision of this Indenture that inany way relates to the Trustee is subject to paragraphs (a), (b) and (c) ofthis Section 7.01.

 

(e)   Noprovision of this Indenture shall require the Trustee to expend or risk its ownfunds or incur any liability.  TheTrustee shall be under no obligation to exercise any of its rights and powersunder this Indenture at the request of any Holders, unless such Holders, unlesssuch Holder shall have offered to the Trustee security and indemnitysatisfactory to it against any loss, liability or expense.

 

(f)    TheTrustee shall not be liable for interest on any money received by it except asthe Trustee may agree in writing with the Company.  Money held in trust by the Trustee need notbe segregated from other funds except to the extent required by law.

 

*Section 7.02.               ***Rights of Trustee**.

* *

(a)   The Trusteemay conclusively rely upon any document believed by it to be genuine and tohave been signed or presented by the proper Person.  The Trustee need notinvestigate any fact or matter stated in any such document.

 

(b)   Before theTrustee acts or refrains from acting, it may require an Officers’ Certificateor an Opinion of Counsel or both.  TheTrustee shall not be liable for any action it takes or omits to take in goodfaith in reliance on such Officers’ Certificate or Opinion of Counsel. The Trustee may consult with counsel and the written advice of such counsel orany Opinion of Counsel shall be full and complete authorization and protectionfrom liability in respect of any action taken, suffered or omitted by ithereunder in good faith and in reliance thereon.

 

(c)   The Trusteeshall not be liable for any action it takes or omits to take in good faith thatit believes to be authorized or within the rights or powers conferred upon itby this Indenture.

 

(d)   Unlessotherwise specifically provided in this Indenture, any demand, request,direction or notice from the Company shall be sufficient if signed by anOfficer of the Company.

 

(e)   The Trusteeshall be under no obligation to exercise any of the rights or powers vested init by this Indenture at the request or direction of any of the Holders unlesssuch Holders shall have offered to the Trustee reasonable security or indemnityagainst the costs, expenses and liabilities that might be incurred by it incompliance with such request or direction.

 

(f)    TheTrustee shall not be deemed to have notice of any Default or Event of Defaultunless a Responsible Officer of the Trustee has actual knowledge thereof orunless written notice of any event which is in fact such a Default or Event ofDefault is received by a Responsible Officer of the Trustee at the CorporateTrust Office of the Trustee from the Company or the Holders of 25% in aggregateprincipal amount of the outstanding Notes, and such notice references thespecific Default or Event of Default, the Notes and this Indenture.

 

(g)   The Trusteeshall not be required to give any bond or surety in respect of the performanceof its power and duties hereunder.

 

(h)   The Trusteeshall have no duty to inquire as to the performance of the Company’s covenantsherein.

 

(i)    TheTrustee may execute any of the trusts or powers hereunder or perform any dutieshereunder either directly or by or through agents or attorneys and the Trusteeshall not be responsible for any misconduct or negligence on the part of anyagent or attorney appointed with due care by it hereunder.

 

65

----

 

*Section 7.03.               ***Individual Rights of Trustee**.

* *

TheTrustee in its individual or any other capacity may become the owner or pledgeeof Notes and may otherwise deal with the Company or any Subsidiary Guarantor orany Affiliate of the Company with the same rights it would have if it were notTrustee.  However, in the event that theTrustee acquires any conflicting interest it must eliminate such conflictwithin 90 days, apply to the Commission for permission to continue as Trusteeor resign.  Any Agent may do the samewith like rights and duties.  The Trusteeshall also be subject to Sections 7.10 and 7.11 hereof.

 

*Section 7.04.               ***Trustee’s Disclaimer**.

* *

TheTrustee shall not be responsible for and makes no representation as to thevalidity or adequacy of this Indenture or the Notes, it shall not beaccountable for the Company’s use of the proceeds from the Notes or any moneypaid to the Company or upon the Company’s direction under any provision of thisIndenture, it shall not be responsible for the use or application of any moneyreceived by any Paying Agent other than the Trustee, and it shall not beresponsible for any statement or recital herein or any statement in the Notesor any other document in connection with the sale of the Notes or pursuant tothis Indenture other than its certificate of authentication.

 

*Section 7.05.               ***Notice of Defaults**.

* *

If aDefault or Event of Default occurs and is continuing and if it is known to theTrustee, the Trustee shall mail to Holders a notice of the Default or Event ofDefault within 90 days after it occurs. Except in the case of a Default or Event of Default in payment ofprincipal of, premium, if any, or interest on any Note, the Trustee maywithhold the notice if and so long as a committee of its Responsible Officersin good faith determines that withholding the notice is in the interests of theHolders.

 

*Section 7.06.               ***Reports by Trustee to Holders**.

* *

Within60 days after each April 15 beginning April 15, 2009, and for so longas Notes remain outstanding, the Trustee shall mail to the Holders a briefreport dated as of such reporting date that complies with TIA §313(a) (butif no event described in TIA §313(a) has occurred within the twelve monthspreceding the reporting date, no report need be transmitted).  The Trusteealso shall comply with TIA §313(b)(2). The Trustee shall also transmit by mail all reports as required by TIA§313(c).

 

A copyof each report at the time of its mailing to the Holders shall be mailed to theCompany and filed with the Commission and each stock exchange on which theNotes are listed in accordance with TIA §313(d).  The Company shallpromptly notify the Trustee when the Notes are listed on any stock exchange andany delisting thereof.

 

*Section 7.07.               ***Compensation and Indemnity**.

* *

TheCompany shall pay to the Trustee from time to time reasonable compensation forits acceptance of this Indenture and services hereunder.  The Trustee’s compensation shall not belimited by any law on compensation of a trustee of an express trust.  The Company shall reimburse the Trusteepromptly upon request for all reasonable disbursements, advances and expensesincurred or made by it in addition to the compensation for its services.  Such expenses shall include the reasonablecompensation, disbursements and expenses of the Trustee’s agents and counsel.

 

TheCompany shall indemnify the Trustee (in its capacity as Trustee) or anypredecessor Trustee (in its capacity as Trustee) against any and all losses,claims, damages, penalties, fines, liabilities or expenses, includingincidental and out-of-pocket expenses and reasonable attorneys fees (forpurposes of this Article 7, “*losses*”)incurred by it arising out of or in connection with the acceptance oradministration of its duties under this Indenture, including the costs andexpenses of enforcing this Indenture against the Company (including this Section 7.07)and defending itself against any claim (whether asserted by the Company or anyHolder or any other Person) or liability in connection with the exercise orperformance of any of its powers or duties hereunder, except to the 

 

66

----

 

extent such losses may be attributable to itsnegligence or bad faith.  The Trusteeshall notify the Company promptly of any claim for which it may seekindemnity.  Failure by the Trustee to so notify the Company shall notrelieve the Company of its obligations hereunder.  The Company shall defend the claim, and theTrustee shall cooperate in the defense. The Trustee may have separate counsel if the Trustee has been reasonablyadvised by counsel that there may be one or more legal defenses available to itthat are different from or additional to those available to the Company and inthe reasonable judgment of such counsel it is advisable for the Trustee toengage separate counsel, and the Company shall pay the reasonable fees andexpenses of such counsel.  The Company need not pay for any settlementmade without its consent, which consent shall not be unreasonablywithheld.  The Company need not reimburseany expense or indemnify against any loss incurred by the Trustee through theTrustee’s own negligence or bad faith.

 

Theobligations of the Company under this Section 7.07 shall survive thesatisfaction and discharge of this Indenture, the resignation or removal of theTrustee and payment in full of the Notes.

 

Tosecure the Company’s payment obligations in this Section, the Trustee shallhave a Lien prior to the Notes on all money or property held or collected bythe Trustee, except that held in trust to pay principal, premium, if any, andinterest on particular Notes.  Such Lienshall survive the satisfaction and discharge of this Indenture.

 

Whenthe Trustee incurs expenses or renders services after an Event of Defaultspecified in Section 6.01(viii) or (ix) hereof occurs, theexpenses and the compensation for the services (including the fees and expensesof its agents and counsel) are intended to constitute expenses of administrationunder any Bankruptcy Law.

 

*Section 7.08.               ***Replacement of Trustee**.

* *

Aresignation or removal of the Trustee and appointment of a successor Trusteeshall become effective only upon the successor Trustee’s acceptance ofappointment as provided in this Section 7.08.

 

TheTrustee may resign in writing at any time upon 30 days’ prior notice to theCompany and be discharged from the trust hereby created by so notifying theCompany.  The Holders of a majority inprincipal amount of the then outstanding Notes may remove the Trustee by sonotifying the Trustee and the Company in writing.  The Company may remove the Trustee if:

 

(a)   the Trusteefails to comply with Section 7.10 hereof;

 

(b)   the Trusteeis adjudged bankrupt or insolvent or an order for relief is entered withrespect to the Trustee under any Bankruptcy Law;

 

(c)   a custodianor public officer takes charge of the Trustee or its property; or

 

(d)   the Trusteebecomes incapable of acting.

 

If theTrustee resigns or is removed or if a vacancy exists in the office of Trusteefor any reason (the Trustee in such event being referred to herein as theretiring Trustee), the Company shall promptly appoint a successor Trustee.  Within one year after the successor Trusteetakes office, the Holders of a majority in principal amount of the thenoutstanding Notes may appoint a successor Trustee to replace the successorTrustee appointed by the Company.

 

If asuccessor Trustee does not take office within 30 days after the retiringTrustee resigns or is removed, the retiring Trustee, the Company, or theHolders of at least 10% in principal amount of the then outstanding Notes maypetition any court of competent jurisdiction for the appointment of a successorTrustee.

 

If theTrustee, after written request by any Holder who has been a Holder for at leastsix months, fails to comply with Section 7.10 hereof, such Holder maypetition any court of competent jurisdiction for the removal of the Trustee andthe appointment of a successor Trustee.

 

67

----

 

Asuccessor Trustee shall deliver a written acceptance of its appointment to theretiring Trustee and to the Company. Thereupon, the resignation or removal of the retiring Trustee shallbecome effective, and the successor Trustee shall have all the rights, powersand duties of the Trustee under this Indenture. The successor Trustee shall mail a notice of its succession toHolders.  Subject to the Lien provided for in Section 7.07 hereof,the retiring Trustee shall promptly transfer all property held by it as Trusteeto the successor Trustee *provided, however;*that all sums owing to the Trustee hereunder shall have been paid.  Notwithstanding replacement of the Trusteepursuant to this Section 7.08, the Company’s obligations under Section 7.07hereof shall continue for the benefit of the retiring Trustee.

 

*Section 7.09.               ***Successor Trustee by Merger, etc**.

* *

If theTrustee consolidates, merges or converts into, or transfers all orsubstantially all of its corporate trust business to, another corporation orbanking association, the successor corporation or banking association withoutany further act shall, if such successor corporation or banking association isotherwise eligible hereunder, be the successor Trustee.

 

*Section 7.10.               ***Eligibility; Disqualification**.

* *

Thereshall at all times be a Trustee hereunder that is a Person organized and doingbusiness under the laws of the United States of America or of any state thereofthat is authorized under such laws to exercise corporate trustee power, that issubject to supervision or examination by federal or state authorities and thathas a combined capital and surplus of at least US$50.0 million (or awholly-owned subsidiary of a bank or trust company, or of a bank holdingcompany, the principal subsidiary of which is a bank or trust company having acombined capital and surplus of at least US$50.0 million) as set forth in itsmost recent published annual report of condition.

 

ThisIndenture shall always have a Trustee who satisfies the requirements of TIA§310(a)(1), (2) and (5).  TheTrustee is subject to TIA §310(b).

 

*Section 7.11.               ***Preferential Collection ofClaims Against Company**.

* *

TheTrustee is subject to TIA §311(a), excluding any creditor relationship listedin TIA §311(b).  A Trustee who hasresigned or been removed shall be subject to TIA §311(a) to the extentindicated therein.

 

**ARTICLE 8.****LEGAL DEFEASANCE AND COVENANT DEFEASANCE**

** **

*Section 8.01.               ***Option to Effect LegalDefeasance or Covenant Defeasance**.

* *

TheCompany may, at its option and at any time, elect to have either Section 8.02or 8.03 hereof be applied to all outstanding Notes upon compliance with theconditions set forth in this Article 8.

 

*Section 8.02.               ***Legal Defeasance and Discharge**.

* *

Uponthe Company’s exercise under Section 8.01 hereof of the option applicableto this Section 8.02, the Company shall, subject to the satisfaction ofthe conditions set forth in Section 8.04 hereof, be deemed to have beendischarged from its obligations with respect to all outstanding Notes on the datethe conditions set forth below are satisfied (hereinafter, “*Legal Defeasance*”) and each Subsidiary Guarantor shall bereleased from all of its obligations under its Subsidiary Guarantee.  For this purpose, Legal Defeasance means thatthe Company shall be deemed to have paid and discharged the entire Indebtednessrepresented by the outstanding Notes, which shall thereafter be deemed to be “outstanding”only for the purposes of Section 8.05 hereof and the other Sections ofthis Indenture referred to in (a), (b) and (d) below, and to havesatisfied all its other obligations under the Notes and this Indenture (and theTrustee, on demand of and at the expense of the Company, shall execute properinstruments acknowledging the same), except for the following provisions whichshall survive until otherwise terminated or discharged hereunder:  (a) the rights of Holders of outstandingNotes to receive solely from the trust fund described 

 

68

----

 

in Section 8.04 hereof, and as more fully setforth in such Section, payments in respect of the principal of, premium, ifany, or interest and Additional Amounts on such Notes when such payments aredue, (b) the Company’s obligations with respect to such Notes under Article 2and Sections 4.01 and 4.02 hereof, (c) the rights, powers, trusts, dutiesand immunities of the Trustee hereunder and the Company’s obligations and theSubsidiary Guarantor’s in connection therewith and (d) this Article 8.  If the Company exercises under Section 8.01hereof the option applicable to this Section 8.02, subject to thesatisfaction of the conditions set forth in Section 8.04 hereof, paymentof the Notes may not be accelerated because of an Event of Default.  Subject to compliance with this Article 8,the Company may exercise its option under this Section 8.02notwithstanding the prior exercise of its option under Section 8.03hereof.

 

*Section 8.03.               ***Covenant Defeasance**.

* *

Uponthe Company’s exercise under Section 8.01 hereof of the option applicableto this Section 8.03, the Company shall, subject to the satisfaction ofthe conditions set forth in Section 8.04 hereof, be released from itsobligations under the covenants contained in Sections 4.05 and 4.06, 4.09through 4.19, and 4.21 hereof, and the operation of Sections 5.01(a)(4) and(b)(4) hereof, with respect to the outstanding Notes on and after the datethe conditions set forth in Section 8.04 hereof are satisfied(hereinafter, “*Covenant Defeasance*”) and eachSubsidiary Guarantor shall be released from all of its obligations under itsSubsidiary Guarantee with respect to such covenants in connection with suchoutstanding Notes and the Notes shall thereafter be deemed not “outstanding”for the purposes of any direction, waiver, consent or declaration or act ofHolders (and the consequences of any thereof) in connection with suchcovenants, but shall continue to be deemed “outstanding” for all other purposeshereunder (it being understood that such Notes shall not be deemed outstandingfor accounting purposes).  For thispurpose, Covenant Defeasance means that, with respect to the outstanding Notes,the Company may omit to comply with and shall have no liability in respect ofany term, condition or limitation set forth in any such covenant, whether directlyor indirectly, by reason of any reference elsewhere herein to any such covenantor by reason of any reference in any such covenant to any other provisionherein or in any other document and such omission to comply shall notconstitute a Default or an Event of Default under Section 6.01 hereof,but, except as specified above, the remainder of this Indenture and such Notesshall be unaffected thereby.  If theCompany exercises under Section 8.01 hereof the option applicable to this Section 8.03,subject to the satisfaction of the conditions set forth in Section 8.04hereof, payment of the Notes may not be accelerated because of an Event ofDefault specified in clause (iii) (with respect to the covenants containedin Sections 4.09, 4.10, 4.12 or 4.18 or Section 5.01(a)(4) or (b)(4) hereof),(iv) (with respect to Sections 4.05, 4.06, 4.11, 4.13 through 4.17, 4.19and 4.21 hereof), (v), (vi), (vii), (viii) and (ix) of such Section 6.01(but in the case of (viii) and (ix) of Section 6.01 hereof, withrespect to Significant Subsidiaries only) or because of the Company’s failureto comply with Section 5.01(a)(4) or (b)(4) hereof.

 

*Section 8.04.               ***Conditions to Legal or CovenantDefeasance**.

* *

Thefollowing shall be the conditions to the application of either Section 8.02or 8.03 hereof to the outstanding Notes.

 

Inorder to exercise Legal Defeasance or Covenant Defeasance:

 

(a)   the Companyshall irrevocably deposit with the Trustee, in trust, for the benefit of theHolders cash in U.S. dollars, non-callable Government Securities, or acombination thereof, in such amounts as will be sufficient, in the opinion of anationally recognized firm of independent public accountants, to pay theprincipal of, or interest and premium, if any, on the outstanding notes on theStated Maturity or on the applicable date of redemption, as the case may be,and the Company shall specify whether the Notes are being defeased to maturityor to a particular date of redemption;

 

(b)   in the caseof Legal Defeasance, the Company shall deliver to the Trustee an Opinion ofCounsel reasonably acceptable to the Trustee confirming that (i) theCompany has received from, or there has been published by, the Internal RevenueService a ruling or (ii) subsequent to the Issue Date, there has been achange in the applicable federal income tax law, in either case to the effectthat, and based thereon such Opinion of Counsel shall confirm that, the Holdersof the outstanding Notes will not recognize income, gain or loss for federalincome tax purposes as a result of such Legal Defeasance and will be subject tofederal income tax on the same amounts, in the same manner and at the sametimes as would have been the case if such Legal Defeasance had not occurred and

 

69

----

 

the Company shall have delivered to the Trustee anOpinion of Counsel in Canada reasonably acceptable to the Trustee confirmingthat the Holders of the outstanding Notes will not recognize income, gain orloss for Canadian federal, provincial or territorial income tax purposes as aresult of such Legal Defeasance and will be subject to Canadian federal,provincial or territorial income tax (including withholding tax) on the sameamounts, in the same manner and at the same times as would have been the case ifsuch Legal Defeasance had not occurred;

 

(c)   in the caseof Covenant Defeasance, the Company shall deliver to the Trustee an Opinion ofCounsel reasonably acceptable to the Trustee confirming that Holders of theoutstanding Notes will not recognize income, gain or loss for federal incometax purposes as a result of such Covenant Defeasance and will be subject tofederal income tax on the same amounts, in the same manner and at the sametimes as would have been the case if such Covenant Defeasance had not occurredand the Company shall have delivered to the Trustee an Opinion of Counsel inCanada reasonably acceptable to the Trustee confirming that Holders of theoutstanding Notes will not recognize income, gain or loss for Canadian federal,provincial or territorial income tax purposes as a result of such CovenantDefeasance and will be subject to Canadian federal, provincial or territorialincome tax (including withholding tax) on the same amounts, in the same mannerand at the same time as would have been the case if such Covenant Defeasancehad not occurred;

 

(d)   no Defaultor Event of Default shall have occurred and be continuing either (a) onthe date of such deposit, or (b) insofar as Events of Default frombankruptcy or insolvency events are concerned, at any time in the period endingon the 91st day after the date of deposit, other than, ineach case, a Default or Event of Default resulting from the borrowing of fundsto be applied to such deposit;

 

(e)   such LegalDefeasance or Covenant Defeasance shall not result in a breach or violation of,or constitute a default under any material agreement or instrument, to whichthe Company or any of its Subsidiaries is a party or by which the Company orany of its Subsidiaries is bound;

 

(f)    theCompany shall deliver to the Trustee an Opinion of Counsel to the effect that, (a) assumingno intervening bankruptcy of the Company or any Subsidiary Guarantor betweenthe date of deposit and the 91st day following such deposit and assuming thatno Holder is an “insider” of the Company under applicable Bankruptcy Law, afterthe 91st day following such deposit, the trust funds will not be subject to theeffect of any applicable bankruptcy, insolvency, reorganization or similar lawsaffecting creditors’ rights generally and (b) the creation of thedefeasance trust does not violate the Investment Company Act of 1940;

 

(g)   the Companyshall deliver to the Trustee an Officers’ Certificate stating that such depositwas not made by the Company with the intent of preferring the Holders of Notesover the other creditors of the Company with the intent of defeating,hindering, delaying or defrauding creditors of the Company or others;

 

(h)   if theNotes are to be redeemed prior to their Stated Maturity, the Company mustdeliver to the Trustee irrevocable instructions to redeem all of the Notes onthe specified redemption date; and

 

(i)    theCompany shall deliver to the Trustee an Officers’ Certificate and an Opinion ofCounsel, each stating that all conditions precedent relating to the LegalDefeasance or the Covenant Defeasance have been complied with.

 

*Section 8.05.*                                                 **Deposited Cashand Government Securities to be Held in Trust; Other Miscellaneous Provisions**.

* *

Subjectto Section 8.06 hereof, all cash and non-callable Government Securities(including the proceeds thereof) deposited with the Trustee (or otherqualifying trustee, collectively for purposes of this Section 8.05, the “*Trustee*”) pursuant to Section 8.04 hereof in respect ofthe outstanding Notes shall be held in trust and applied by the Trustee, inaccordance with the provisions of such Notes and this Indenture, to thepayment, either directly or through any Paying Agent (including the Companyacting as Paying Agent) as the Trustee may determine, to the Holders of allsums due and to become due thereon in respect of principal, premium, if any,and interest but such cash and securities need not be segregated from otherfunds except to the extent required by law.

 

70

----

 

TheCompany shall pay and indemnify the Trustee against any tax, fee or othercharge imposed on or assessed against the cash or non-callable GovernmentSecurities deposited pursuant to Section 8.04 hereof or the principal andinterest received in respect thereof other than any such tax, fee or othercharge which by law is for the account of the Holders of the outstanding Notes.

 

Anythingin this Article 8 to the contrary notwithstanding, the Trustee shalldeliver or pay to the Company from time to time upon the request of the Companyany cash or non-callable Government Securities held by it as provided in Section 8.04hereof which, in the opinion of a nationally recognized firm of independentcertified public accountants of recognized international standing expressed ina written certification thereof delivered to the Trustee (which may be thecertification delivered under Section 8.04(a) hereof), are in excessof the amount thereof that would then be required to be deposited to effect anequivalent Legal Defeasance or Covenant Defeasance.

 

*Section 8.06.               ***Repayment to Company**.

* *

Subjectto any applicable laws relating to abandoned property, any cash or non-callableGovernment Securities deposited with the Trustee or any Paying Agent, or thenheld by the Company, in trust for the payment of the principal, premium, ifany, or interest on any Note and remaining unclaimed for two years after suchprincipal, premium, if any, or interest has become due and payable shall bepaid to the Company on its request or (if then held by the Company) shall bedischarged from such trust; and the Holder shall thereafter, as an unsecuredcreditor, look only to the Company for payment thereof, and all liability ofthe Trustee or such Paying Agent with respect to such cash and securities, andall liability of the Company as trustee thereof, shall thereupon cease; *provided, however*, that the Trustee or such Paying Agent,before being required to make any such repayment, may at the expense of theCompany cause to be published once, in *The New York Times*and *The Wall Street Journal* (nationaledition), notice that such cash and securities remains unclaimed and that,after a date specified therein, which shall not be less than 30 days from thedate of such notification or publication, any unclaimed balance of such cashand securities then remaining shall be repaid to the Company.

 

*Section 8.07.               ***Reinstatement**.

* *

If theTrustee or Paying Agent is unable to apply any cash or non-callable GovernmentSecurities in accordance with Section 8.02 or 8.03 hereof, as the case maybe, by reason of any order or judgment of any court or governmental authorityenjoining, restraining or otherwise prohibiting such application, then theCompany’s obligations under this Indenture and the Notes shall be revived andreinstated as though no deposit had occurred pursuant to Section 8.02 or8.03 hereof until such time as the Trustee or Paying Agent is permitted toapply all such cash and securities in accordance with Section 8.02 or 8.03hereof, as the case may be; *provided, however*,that, if the Company makes any payment of principal of, premium, if any, orinterest on any Note following the reinstatement of its obligations, theCompany shall be subrogated to the rights of the Holders to receive suchpayment from the cash and securities held by the Trustee or Paying Agent.

 

**ARTICLE 9.****AMENDMENT, SUPPLEMENT AND WAIVER**

** **

*Section 9.01.               ***Without Consent of Holders ofNotes**.

* *

NotwithstandingSection 9.02 of this Indenture, the Company and the Trustee may amend orsupplement this Indenture or the Notes without the consent of any Holder to:

 

(a)   cure anyambiguity, defect or inconsistency;

 

(b)   provide foruncertificated Notes in addition to or in place of certificated Notes  (*provided* thatthe uncertificated Notes are issued in registered form for purposes of Section 163(f) ofthe Code, or in a manner such that the uncertificated Notes are described in Section 163(f)(2)(B) ofthe Code);

 

71

----

 

(c)   provide forthe assumption of the obligations of the Company and/or a Subsidiary Guarantorto Holders in the case of a merger, consolidation, or amalgamation or sale ofall or substantially all of the assets of the Company and/or a SubsidiaryGuarantor; *provided, however*, that the Companyshall deliver to the Trustee:

 

(i)           an Opinion ofCounsel to the effect that Holders will not recognize income, gain or loss forU.S. Federal income tax purposes as a result of such assumption by a successorcorporation and will be subject to U.S. federal income tax on the same amountand in the same manner and at the same times as would have been the case ifsuch assumption had not occurred, and

 

(ii)          an Opinion ofCounsel in Canada to the effect that Holders will not recognize income, gain orloss for Canadian federal, provincial or territorial tax purposes as a resultof such assumption by a successor corporation and will be subject to Canadianfederal, provincial or territorial taxes (including withholding taxes) on thesame amounts, in the same manner and at the same times as would have been thecase if such assumption had not occurred;

 

(d)   make anychange that would provide any additional rights or benefits to the Holders orthat does not adversely affect the legal rights under this Indenture of anysuch Holder;

 

(e)   addadditional guarantees with respect to the Notes or release SubsidiaryGuarantors from Subsidiary Guarantees as provided or permitted by the terms ofthis Indenture;

 

(f)    providefor the issuance of Additional Notes in accordance with this Indenture; or

 

(g)   comply withrequirements of the Commission in order to effect or maintain the qualificationof this Indenture under the TIA.

 

*Section 9.02.               ***With Consent of Holders of Notes**.

* *

Exceptas provided below in this Section 9.02, the Company and the Trustee mayamend or supplement this Indenture and the Notes with the consent of theHolders of at least a majority in principal amount of the Notes, includingAdditional Notes, if any, then outstanding voting as a single class (includingconsents obtained in connection with a purchase of or tender offer or exchangeoffer for the Notes), and, subject to Sections 6.04 and 6.07 hereof, anyexisting Default or Event of Default (except a continuing Default or Event ofDefault (i) in the payment of principal, premium, if any, or interest onthe Notes and (ii) in respect of a covenant or provision which under thisIndenture cannot be modified or amended without the consent of the Holder ofeach Note affected by such modification or amendment ) or compliance with anyprovision of this Indenture or the Notes may be waived with the consent of the Holders of at least a majority inprincipal amount of the Notes, including Additional Notes, if any, thenoutstanding voting as a single class (including consents obtained in connectionwith a purchase of or tender offer or exchange offer for the Notes).

 

Withoutthe consent of each Holder, an amendment or waiver under this Section 9.02may not (with respect to any Notes held by a non-consenting Holder):

 

(a)   reduce theprincipal amount of Notes whose Holders must consent to an amendment,supplement or waiver;

 

(b)   reduce theprincipal of or change the Stated Maturity of any Note or alter the provisionswith respect to the redemption of the Notes;

 

(c)   reduce therate of or change the time for payment of interest on any Note;

 

(d)   waive aDefault or Event of Default in the payment of principal of, or interest orpremium, if any, on the Notes, except a rescission of acceleration of the Notesby the Holders of at least a majority in aggregate principal amount of theNotes and a waiver of the payment default that resulted from such acceleration;

 

72

----

 

(e)   make anyNote payable in money other than that stated in the Notes;

 

(f)    make anychange in the provisions of this Indenture relating to waivers of past Defaultsor the rights of Holders of Notes to receive payments of principal of, orinterest or premium, if any, on the Notes, or to institute suit for theenforcement of any payment on or with respect to such Holders’ Notes or anySubsidiary Guarantee;

 

(g)   amend,change or modify the obligation of the Company to make and consummate an AssetSale Offer with respect to any Asset Sale in accordance with the provisions of Section 4.12 hereof after theobligation to make and consummate such Asset Sale Offer has arisen or theobligation of the Company to make and consummate a Change of Control Offer inthe event of a Change in Control in accordance with the provisions of Section 4.18hereof after such Change of Control has occurred, including, in each case,amending, changing or modifying any definition relating thereto;

 

(h)   except asotherwise permitted under the provisions of Section 5.01 hereof, consentto the assignment or transfer by the Company or any Subsidiary Guarantor of anyof their rights or obligations under this Indenture;

 

(i)    subordinatethe Notes or any Subsidiary Guarantee to any other obligation of the Company orthe applicable Subsidiary Guarantor;

 

(j)    amend ormodify the provisions of Section 4.20 hereof;

 

(k)   amend ormodify any Subsidiary Guarantee in a manner that would adversely affect theHolders of the Notes or release any Subsidiary Guarantor from any of itsobligations under its Subsidiary Guarantee or this Indenture (except inaccordance with the terms of this Indenture); or

 

(l)    make anychange in the preceding amendment and waiver provisions.

 

TheCompany may, but shall not be obligated to, fix a record date for the purposeof determining the Persons entitled to consent to any supplementalindenture.  If a record date is fixed,the Holders on such record date, or their duly designated proxies, and onlysuch Persons, shall be entitled to consent to such supplemental indenture,whether or not such Holders remain Holders after such record date; *provided* that unless such consent shall have becomeeffective by virtue of the requisite percentage having been obtained prior tothe date which is 120 days after such record date, any such consent previouslygiven shall automatically and without further action by any Holder be cancelledand of no further effect.

 

Itshall not be necessary for the consent of the Holders under this Section 9.02to approve the particular form of any proposed amendment or waiver, but itshall be sufficient if such consent approves the substance thereof.

 

Afteran amendment, supplement or waiver under this Section 9.02 becomeseffective, the Company shall mail to the Holder of each Note affected therebyto such Holder’s address appearing in the Security Register a notice brieflydescribing the amendment, supplement or waiver. Any failure of the Company to mail such notice, or any defect therein,shall not, however, in any way impair or affect the validity of any such amendedor supplemental indenture or waiver.

 

*Section 9.03.               ***Compliance with Trust IndentureAct**.

* *

Everyamendment or supplement to this Indenture or the Notes shall be set forth in anamended or supplemental indenture that complies with the TIA as then in effect.

 

73

----

 

*Section 9.04.               ***Revocation and Effect ofConsents**.

* *

Untilan amendment, supplement or waiver becomes effective, a consent to it by aHolder is a continuing consent by the Holder of a Note and every subsequentHolder of a Note or portion thereof that evidences the same debt as theconsenting Holder’s Note, even if notation of the consent is not made on anyNote.  However, any such Holder orsubsequent Holder may revoke the consent as to its Note or portion thereof ifthe Trustee receives written notice of revocation before the date the waiver,supplement or amendment becomes effective. An amendment, supplement or waiver shall become effective in accordancewith its terms and thereafter shall bind every Holder.

 

*Section 9.05.               ***Notation on or Exchange of Notes**.

* *

TheTrustee may place an appropriate notation about an amendment, supplement orwaiver on any Note thereafter authenticated.  The Company in exchange forall Notes may issue and the Trustee shall, upon receipt of an AuthenticationOrder, authenticate new Notes that reflect the amendment, supplement or waiver.

 

Failureto make the appropriate notation or issue a new Note shall not affect thevalidity and effect of such amendment, supplement or waiver.

 

*Section 9.06.               ***Trustee to Sign Amendments, etc.**

* *

TheTrustee shall sign any amended or supplemental indenture authorized pursuant tothis Article 9 if the amendment or supplement does not adversely affectthe rights, duties, liabilities or immunities of the Trustee.  The Companymay not sign an amendment or supplemental indenture until the Board ofDirectors approves it.  In executing anyamended or supplemental indenture, the Trustee shall be entitled to receive and(subject to Section 7.01 hereof) shall be fully protected in relying uponan Officers’ Certificate and an Opinion of Counsel stating that the executionof such amended or supplemental indenture is authorized or permitted by thisIndenture and that such amended or supplemental indenture is the legal, validand binding obligations of the Company enforceable against it in accordancewith its terms, subject to customary exceptions and that such amended orsupplemental indenture complies with the provisions hereof (including Section 9.03hereof).

 

**ARTICLE 10.SUBSIDIARY****GUARANTEES**

** **

*Section 10.01.             ***Guarantee**.

* *

Subjectto this Article 10, each of the Subsidiary Guarantors herebyunconditionally guarantees to each Holder of a Note authenticated and deliveredby the Trustee and to the Trustee and its successors and assigns (a) thedue and punctual payment of the principal of, premium, if any, and interest onthe Notes, subject to any applicable grace period, whether at maturity, byacceleration, redemption or otherwise, the due and punctual payment of intereston the overdue principal and premium, if any, and to the extent permitted bylaw, interest, and the due and punctual performance of all other obligations ofthe Company to the Holders or the Trustee hereunder or thereunder, all inaccordance with the terms hereof and thereof; and (b) in case of anyextension of time of payment or renewal of any Notes or any of such otherobligations, that same shall be promptly paid in full when due or performed inaccordance with the terms of the extension or renewal, whether at maturity, byacceleration pursuant to Section 6.02 hereof, redemption orotherwise.  Failing payment when due ofany amount so guaranteed or any performance so guaranteed for whatever reason,the Subsidiary Guarantors shall be jointly and severally obligated to pay thesame immediately.  Each SubsidiaryGuarantor agrees that this is a guarantee of payment and not a guarantee ofcollection.

 

EachSubsidiary Guarantor hereby agrees that its obligations with regard to itsSubsidiary Guarantee shall be joint and several, unconditional, irrespective ofthe validity or enforceability of the Notes or the obligations of the Companyunder this Indenture, the absence of any action to enforce the same, therecovery of any judgment against the Company or any other obligor with respectto this Indenture, the Notes or the Obligations of 

 

74

----

 

the Company under this Indenture or the Notes, anyaction to enforce the same or any other circumstances (other than completeperformance) which might otherwise constitute a legal or equitable discharge ordefense of a Subsidiary Guarantor.  EachSubsidiary Guarantor further, to the extent permitted by law, waives andrelinquishes all claims, rights and remedies accorded by applicable law toguarantors and agrees not to assert or take advantage of any such claims,rights or remedies, including but not limited to:  (a) any right to require any of theTrustee, the Holders or the Company (each a “*BenefitedParty*”), as a condition of payment or performance by such SubsidiaryGuarantor, to (1) proceed against the Company, any other guarantor(including any other Subsidiary Guarantor) of the Obligations under theSubsidiary Guarantees or any other Person, (2) proceed against or exhaustany security held from the Company, any such other guarantor or any otherPerson, (3) proceed against or have resort to any balance of any depositaccount or credit on the books of any Benefited Party in favor of the Companyor any other Person, or (4) pursue any other remedy in the power of anyBenefited Party whatsoever; (b) any defense arising by reason of theincapacity, lack of authority or any disability or other defense of the Companyincluding any defense based on or arising out of the lack of validity or theunenforceability of the Obligations under the Subsidiary Guarantees or anyagreement or instrument relating thereto or by reason of the cessation of theliability of the Company from any cause other than payment in full of theObligations under the Subsidiary Guarantees; (c) any defense based uponany statute or rule of law which provides that the obligation of a suretymust be neither larger in amount nor in other respects more burdensome thanthat of the principal; (d) any defense based upon any Benefited Party’serrors or omissions in the administration of the Obligations under theSubsidiary Guarantees, except behavior which amounts to bad faith; (e)(1) anyprinciples or provisions of law, statutory or otherwise, which are or might bein conflict with the terms of the Subsidiary Guarantees and any legal orequitable discharge of such Subsidiary Guarantor’s obligations hereunder, (2) thebenefit of any statute of limitations affecting such Subsidiary Guarantor’sliability hereunder or the enforcement hereof, (3) any rights to set-offs,recoupments and counterclaims and (4) promptness, diligence and anyrequirement that any Benefited Party protect, secure, perfect or insure anysecurity interest or lien or any property subject thereto; (f) notices,demands, presentations, protests, notices of protest, notices of dishonor andnotices of any action or inaction, including acceptance of the SubsidiaryGuarantees, notices of default under the Notes or any agreement or instrumentrelated thereto, notices of any renewal, extension or modification of theObligations under the Subsidiary Guarantees or any agreement related thereto,and notices of any extension of credit to the Company and any right to consentto any thereof; (g) to the extent permitted under applicable law, thebenefits of any “One Action” rule and (h) any defenses or benefitsthat may be derived from or afforded by law which limit the liability of orexonerate guarantors or sureties, or which may conflict with the terms of theSubsidiary Guarantees.  Except to theextent expressly provided herein, including Sections 8.02, 8.03 and 10.05hereof, each Subsidiary Guarantor hereby covenants that its SubsidiaryGuarantee shall not be discharged except by complete performance of theobligations contained in its Subsidiary Guarantee and this Indenture.

 

If anyHolder or the Trustee is required by any court or otherwise to return to theCompany, the Subsidiary Guarantors or any custodian, trustee, liquidator orother similar official acting in relation to either the Company or the SubsidiaryGuarantors, any amount paid by either to the Trustee or such Holder, thisSubsidiary Guarantee, to the extent theretofore discharged, shall be reinstatedin full force and effect.

 

EachSubsidiary Guarantor agrees that it shall not be entitled to any right ofsubrogation in relation to the Holders in respect of any obligations guaranteedhereby until payment in full of all obligations guaranteed hereby.  Each Subsidiary Guarantor further agreesthat, as between the Subsidiary Guarantors, on the one hand, and the Holdersand the Trustee, on the other hand, (x) the maturity of the obligationsguaranteed hereby may be accelerated as provided in Section 6.02 hereoffor the purposes of this Subsidiary Guarantee, notwithstanding any stay,injunction or other prohibition preventing such acceleration in respect of theobligations guaranteed hereby and (y) in the event of any declaration ofacceleration of such obligations as provided in Section 6.02 hereof, suchobligations (whether or not due and payable) shall forthwith become due andpayable by the Subsidiary Guarantors for the purpose of this SubsidiaryGuarantee.  The Subsidiary Guarantorsshall have the right to seek contribution from any non-paying Subsidiary Guarantorso long as the exercise of such right does not impair the rights of the Holdersunder the Subsidiary Guarantee.

 

*Section 10.02.             ***Limitation on Subsidiary Guarantor Liability**.

* *

EachSubsidiary Guarantor, and by its acceptance of Notes, each Holder, herebyconfirms that it is the intention of all such parties that the SubsidiaryGuarantee of such Subsidiary Guarantor not constitute a fraudulent transfer orconveyance for purposes of Bankruptcy Law, the Uniform Fraudulent ConveyanceAct, the 

 

75

----

 

Uniform Fraudulent Transfer Act or any similar federalor state law to the extent applicable to any Subsidiary Guarantee.  To effectuate the foregoing intention, theTrustee, the Holders and the Subsidiary Guarantors hereby irrevocably agreethat the obligations of such Subsidiary Guarantor under this Article 10shall be limited to the maximum amount as shall, after giving effect to suchmaximum amount and all other contingent and fixed liabilities of suchSubsidiary Guarantor that are relevant under such laws, including, ifapplicable, its guarantee of all obligations under the Credit Agreement, andafter giving effect to any collections from, rights to receive contributionfrom or payments made by or on behalf of any other Subsidiary Guarantor inrespect of the obligations of such other Subsidiary Guarantor under this Article 10,result in the obligations of such Subsidiary Guarantor under its SubsidiaryGuarantee not constituting a fraudulent transfer or conveyance.  In addition, the liability of each SubsidiaryGuarantor governed by the *Companies Act*(Quebec) under its Subsidiary Guarantee shall be limited to the maximum amountpermitted under Section 123.66 of the *CompaniesAct* (Quebec).  To that end,but only to the extent such obligations would otherwise be avoidable, theobligations of the Subsidiary Guarantor under this Article shall belimited to the maximum amount that, after giving effect to the incurrencethereof, would not render the Subsidiary Guarantor insolvent or unable to payits debts as they mature.

 

*Section 10.03.             ***Execution and Delivery of Subsidiary Guarantee**.

* *

Toevidence its Subsidiary Guarantee set forth in Section 10.01 hereof, eachSubsidiary Guarantor hereby agrees that a notation of such Subsidiary Guaranteein substantially the form included in****Exhibit Eattached hereto shall be endorsed by an Officer of such Subsidiary Guarantor oneach Note authenticated and delivered by the Trustee and that this Indentureshall be executed on behalf of such Subsidiary Guarantor by its President orone of its Vice Presidents.

 

EachSubsidiary Guarantor hereby agrees that its Subsidiary Guarantee set forth in Section 10.01hereof shall remain in full force and effect notwithstanding any failure toendorse on each Note a notation of such Subsidiary Guarantee.

 

If anOfficer whose signature is on this Indenture or on the Subsidiary Guarantee nolonger holds that office at the time the Trustee authenticates the Note onwhich a Subsidiary Guarantee is endorsed, the Subsidiary Guarantee shall bevalid nevertheless.

 

Thedelivery of any Note by the Trustee, after the authentication thereofhereunder, shall constitute due delivery of the Subsidiary Guarantee set forthin this Indenture on behalf of the Subsidiary Guarantors.

 

*Section 10.04.             ***Subsidiary Guarantors May Consolidate, etc., onCertain Terms**.

* *

Exceptas otherwise provided in Section 10.05 hereof, no Subsidiary Guarantor mayconsolidate, merge or amalgamate with or into (whether or not such SubsidiaryGuarantor is the Surviving Guarantor) another Person whether or not affiliatedwith such Subsidiary Guarantor unless:

 

(a)   subject to Section 10.05hereof, the Person formed by or surviving any such consolidation, merger oramalgamation (if other than a Subsidiary Guarantor or the Company)unconditionally assumes all the obligations of such Subsidiary Guarantor,pursuant to a supplemental indenture in form and substance reasonablysatisfactory to the Trustee, under this Indenture, the Subsidiary Guarantee andany Registration Rights Agreements on the terms set forth herein or therein;and

 

(b)   theSubsidiary Guarantor or the Surviving Guarantor, as applicable, complies withthe requirements of Article 5 hereof.

 

Incase of any such consolidation, merger, amalgamation, sale or conveyance andupon the assumption by the successor Person, by supplemental indenture,executed and delivered to the Trustee and satisfactory in form to the Trustee,of the Subsidiary Guarantee endorsed upon the Notes and the due and punctualperformance of all of the covenants and conditions of this Indenture to beperformed by the Subsidiary Guarantor, such successor Person shall succeed toand be substituted for the Subsidiary Guarantor with the same effect as if ithad been named herein as a Subsidiary Guarantor.  Such successor Person thereupon may cause tobe signed any or 

 

76

----

 

all of the Subsidiary Guarantees to be endorsed uponall of the Notes issuable hereunder which theretofore shall not have beensigned by the Company and delivered to the Trustee.  All the Subsidiary Guarantees so issued shallin all respects have the same legal rank and benefit under this Indenture asthe Subsidiary Guarantees theretofore and thereafter issued in accordance withthe terms of this Indenture as though all of such Subsidiary Guarantees hadbeen issued at the date of the execution hereof.

 

Exceptas set forth in Articles 4 and 5 hereof, and notwithstanding clauses (a) and(b) above, nothing contained in this Indenture or in any of the Notesshall prevent any consolidation, merger or amalgamation of a SubsidiaryGuarantor with or into the Company or another Subsidiary Guarantor, or shallprevent any sale or conveyance of the property of a Subsidiary Guarantor as anentirety or substantially as an entirety to the Company or another SubsidiaryGuarantor.

 

*Section 10.05.             ***Releases Following Sale of Assets**.

* *

In theevent of a sale or other disposition of all of the Capital Stock of anySubsidiary Guarantor (including by way of consolidation, merger or amalgamation),in each case to a Person that is not (either before or after giving effect tosuch transaction) an Affiliate of the Company, then such Subsidiary Guarantorshall be released and relieved of any obligations under its SubsidiaryGuarantee; *provided* that such sale or otherdisposition shall be subject to all applicable provisions of this Indenture,including without limitation Section 4.12 hereof.  If a Subsidiary Guarantor is designated as anUnrestricted Subsidiary in accordance with the provisions of Section 4.17hereof, such Subsidiary Guarantor shall be released and relieved of anyobligations under its Subsidiary Guarantee. Upon delivery by the Company to the Trustee of an Officers’ Certificateand an Opinion of Counsel to the effect that such sale or other disposition ordesignation was made by the Company in accordance with the provisions of thisIndenture, including without limitation Section 4.12 hereof, the Trusteeshall execute any documents reasonably required in order to evidence the releaseof any Subsidiary Guarantor from its obligations under its SubsidiaryGuarantee.

 

AnySubsidiary Guarantor not released from its obligations under its SubsidiaryGuarantee shall remain liable for the full amount of principal of and intereston the Notes and for the other obligations of any Subsidiary Guarantor underthis Indenture.

 

**ARTICLE 11.****SATISFACTION AND DISCHARGE**

** **

*Section 11.01.             ***Satisfaction and Discharge**.

* *

This Indenture shall be discharged and shall cease tobe of further effect, except as to surviving rights of registration of transferor exchange of the Notes, as to all Notes issued hereunder, when:

 

(a)   either:

 

(i)    all Notes that have beenpreviously authenticated (except lost, stolen or destroyed Notes that have beenreplaced or paid and Notes for whose payment money has previously beendeposited in trust or segregated and held in trust by the Company and isthereafter repaid to the Company or discharged from the trust) have beendelivered to the Trustee for cancellation; or

 

(ii)   all Notes that have notbeen previously delivered to the Trustee for cancellation (A) have becomedue and payable by reason of a making of a notice of redemption or otherwise or(B) will become due and payable within one year, and the Company or anySubsidiary Guarantor has irrevocably deposited or caused to be deposited withthe Trustee as trust funds in trust solely for the benefit of the Holders, cashin U.S. dollars, non-callable Government Securities, or a combination thereof,in such amounts as will be sufficient without consideration of any reinvestmentof interest, to pay and discharge the entire Indebtedness on the Notes notpreviously delivered to the Trustee for cancellation for principal, premium, if

 

77

----

 

any, and intereston the Notes to the date of deposit, in the case of Notes that have become dueand payable, or to the Stated Maturity or redemption date, as the case may be;

 

(b)   no Defaultor Event of Default shall have occurred and be continuing on the date of suchdeposit or shall occur as a result of such deposit and such deposit will notresult in a breach or violation of, or constitute a default under, any otherinstrument to which the Company or any Subsidiary Guarantor is a party or bywhich the Company or any Subsidiary Guarantor is bound;

 

(c)   the Companyor any Subsidiary Guarantor has paid or caused to be paid all other sumspayable by it under this Indenture;

 

(d)   the Companyshall have delivered irrevocable instructions to the Trustee to apply thedeposited money toward the payment of the Notes at maturity or the date ofredemption, as the case may be; and

 

(e)   the Companyshall have delivered to the Trustee an Officers’ Certificate and Opinion ofCounsel stating that all conditions precedent under this Indenture relating tothe satisfaction and discharge of this Indenture have been satisfied.

 

*Section 11.02.             ***Deposited Cash and Government Securities to be Heldin Trust; Other Miscellaneous Provisions**.

* *

Subjectto Section 11.03 hereof, all cash and non-callable Government Securities(including the proceeds thereof) deposited with the Trustee (or otherqualifying trustee, collectively for purposes of this Section 11.02, the “*Trustee*”) pursuant to Section 11.01 hereof in respectof the outstanding Notes shall be held in trust and applied by the Trustee, inaccordance with the provisions of such Notes and this Indenture, to thepayment, either directly or through any Paying Agent (including the Companyacting as Paying Agent) as the Trustee may determine, to the Holders of suchNotes of all sums due and to become due thereon in respect of principal,premium, if any, and interest but such cash and securities need not besegregated from other funds except to the extent required by law.

 

*Section 11.03.             ***Repayment to Company**.

* *

Subjectto any applicable laws relating to abandoned property, any cash or non-callableGovernment Securities deposited with the Trustee or any Paying Agent, or thenheld by the Company, in trust for the payment of the principal of, premium, ifany, or interest on, any Note and remaining unclaimed for two years after suchprincipal, and premium, if any, or interest has become due and payable shall bepaid to the Company on its request or (if then held by the Company) shall bedischarged from such trust; and the Holder shall thereafter, as an unsecuredcreditor, look only to the Company for payment thereof, and all liability ofthe Trustee or such Paying Agent with respect to such cash and securities, andall liability of the Company as trustee thereof, shall thereupon cease; *provided, however*, that the Trustee or such Paying Agent,before being required to make any such repayment, may at the expense of theCompany cause to be published once, in*The**New York Times* and*The Wall Street Journal*(national edition), notice that such cash and securities remains unclaimed andthat, after a date specified therein, which shall not be less than 30 days fromthe date of such notification or publication, any unclaimed balance of suchcash and securities then remaining shall be repaid to the Company.

 

**ARTICLE 12.****MISCELLANEOUS**

** **

*Section 12.01.             ***Trust Indenture Act Controls**.

* *

If anyprovision of this Indenture limits, qualifies or conflicts with anotherprovision which is required to be included in this Indenture by the TIA, theprovision required by the TIA shall control.

 

78

----

 

*Section 12.02.             ***Notices**.

* *

Anynotice or communication by the Company and/or a Subsidiary Guarantor or theTrustee to the other is duly given if in writing and delivered in person ormailed by first class mail (registered or certified, return receipt requested),facsimile transmission or overnight air courier guaranteeing next-day delivery,to the other’s address:

 

If to the Company or aSubsidiary Guarantor:

 

Videotron Ltd.

612 St. Jacques Street

Montréal, Québec, H3C 4M8

Canada

Attention:  Vice President, Legal Affairs

Facsimile No.:  (514) 985-8834

 

With a copy to:

 

Ogilvy Renault LLP

1981 McGill College Avenue

Suite 1100

Montreal, QC  H3A 3C1

Attention:  MarcLacourciere

Facsimile No.: (514) 286-5474

 

If to the Trustee:

 

Wells Fargo Bank,National Association

213 Court Street,Suite 703

Middletown, CT 06457

Attention:  Corporate Trust Services

Facsimile No.: (860)704-6219

 

TheCompany or the Trustee, by notice to the other, may designate additional ordifferent addresses for subsequent notices or communications.

 

Allnotices and communications (other than those sent to the Trustee) shall bedeemed to have been duly given: at the time delivered by hand, ifpersonally delivered; five Business Days after being deposited in the mail,postage prepaid, if mailed; when receipt acknowledged, if sent by facsimiletransmission; and the next Business Day after timely delivery to the courier,if sent by overnight air courier guaranteeing next-day delivery.  All notices and communications to the Trusteeshall be deemed duly given and effective only upon receipt.

 

Anynotice or communication to a Holder shall be mailed by first class mail,certified or registered, return receipt requested, or by overnight air courierguaranteeing next-day delivery to its address shown on the SecurityRegister.  Any notice or communication shall also be so mailed to anyPerson described in TIA § 313(c), to the extent required by the TIA.  Failure to mail a notice or communication toa Holder or any defect in it shall not affect its sufficiency with respect toother Holders.

 

If anotice or communication is mailed in the manner provided above within the timeprescribed, it is duly given, whether or not the addressee receives it.

 

If theCompany mails a notice or communication to Holders, it shall mail a copy to theTrustee and each Agent at the same time.

 

79

----

 

*Section 12.03.             ***Communication by Holders of Notes with Other Holdersof Notes**.

* *

Holdersmay communicate pursuant to TIA §312(b) with other Holders with respect totheir rights under this Indenture or the Notes.  The Company, the Trustee,the Registrar and anyone else shall have the protection of TIA §312(c).

 

*Section 12.04.             ***Certificate and Opinion as to Conditions Precedent**.

* *

Uponany request or application by the Company to the Trustee to take any actionunder any provision of this Indenture, the Company shall furnish to theTrustee:

 

(a)   an Officers’Certificate in form and substance reasonably satisfactory to the Trustee (whichshall include the statements set forth in Section 12.05 hereof) statingthat, in the opinion of the signers, all conditions precedent and covenants, ifany, provided for in this Indenture relating to the proposed action have beencomplied with; and

 

(b)   an Opinionof Counsel in form and substance reasonably satisfactory to the Trustee (whichshall include the statements set forth in Section 12.05 hereof) statingthat, in the opinion of such counsel, all such conditions precedent andcovenants have been complied with.

 

*Section 12.05.             ***Statements Required in Certificate or Opinion**.

* *

Eachcertificate or opinion with respect to compliance with a condition or covenantprovided for in this Indenture (other than a certificate provided pursuant toTIA §314(a)(4)) shall comply with the provisions of TIA §314(e) and shallinclude:

 

(a)   a statementthat the Person making such certificate or opinion has read such covenant orcondition;

 

(b)   a briefstatement as to the nature and scope of the examination or investigation uponwhich the statements or opinions contained in such certificate or opinion arebased;

 

(c)   a statementthat, in the opinion of such Person, he or she has made such examination orinvestigation as is necessary to enable such Person to express an informedopinion as to whether or not such covenant or condition has been complied with;and

 

(d)   a statementas to whether or not, in the opinion of such Person, such condition or covenanthas been complied with.

 

With respect to matters of fact, an Opinion of Counselmay rely on an Officers’ Certificate, certificates of public officials orreports or opinions of experts.

 

*Section 12.06.             ***Rules by Trustee and Agents**.

* *

TheTrustee may make reasonable rules for action by or at a meeting ofHolders.  The Registrar or Paying Agentmay make reasonable rules and set reasonable requirements for itsfunctions.

 

*Section 12.07.             ***No Personal Liability of Directors, Officers,Employees and Shareholders**.

* *

Nopast, present or future director, officer, employee, incorporator orstockholder of the Company or any Subsidiary Guarantor, as such, shall have anyliability for any obligations of the Company or of the Subsidiary Guarantorsunder the Notes, this Indenture, the Subsidiary Guarantees or for any claimbased on, in respect of, or by reason of, such obligations or theircreation.  Each Holder of Notes byaccepting a Note waives and releases all such liability.  The waiver and release are part of theconsideration for issuance of the Notes.

 

80

----

 

*Section 12.08.             ***Governing Law**.

* *

THEINTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THISINDENTURE AND THE NOTES.

 

*Section 12.09.             ***No Adverse Interpretation of Other Agreements**.

* *

ThisIndenture may not be used to interpret any other indenture, loan or debtagreement of the Company or its Subsidiaries or of any other Person.  Anysuch indenture, loan or debt agreement may not be used to interpret thisIndenture.

 

*Section 12.10.             ***Successors**.

* *

Allcovenants and agreements of the Company in this Indenture and the Notes shallbind its successors.  All covenants and agreements of the Trustee in this Indentureshall bind its successors.

 

*Section 12.11.             ***Severability**.

* *

Incase any provision in this Indenture or in the Notes shall be invalid, illegalor unenforceable, the validity, legality and enforceability of the remainingprovisions shall not in any way be affected or impaired thereby.

 

*Section 12.12.             ***Consent to Jurisdiction and Service of Process**

* *

(a)   Each of theCompany and each of the Subsidiary Guarantors irrevocably consents to thenon-exclusive jurisdiction of the courts of the State of New York and thecourts of the United States of America located in the Borough of Manhattan,City and State of New York over any suit, action or proceeding with respect tothis Indenture or the transactions contemplated hereby.  Each of the Company and each of the SubsidiaryGuarantors waives any objection that it may have to the venue of any suit,action or proceeding with respect to this Indenture or the transactionscontemplated hereby in the courts of the State of New York or the courts of theUnited States of America, in each case, located in the Borough of Manhattan,City and State of New York, or that such suit, action or proceeding brought inthe courts of the State of New York or the United States of America, in eachcase, located in the Borough of Manhattan, City and State of New York wasbrought in an inconvenient court and agrees not to plead or claim the same.

 

(b)   Each of theCompany and each of the Subsidiary Guarantors irrevocably appoints CTCorporation System, as its authorized agent in the State of New York upon whichprocess may be served in any such suit or proceedings, and agrees that serviceof process upon such agent, and written notice of said service to CTCorporation System, by the person serving the same to the address provided in Section 12.02hereof, shall be deemed in every respect effective service of process upon theCompany or any Subsidiary Guarantor in any such suit or proceeding.  Each of the Company and each of theSubsidiary Guarantors further agrees to take any and all action as may benecessary to maintain such designation and appointment of such agent in fullforce and effect for a period of ten years from the date of this Indenture.

 

*Section 12.13.             ***Conversion of Currency**.

* *

TheCompany covenants and agrees that the following provisions shall apply toconversion of currency in the case of the Notes and this Indenture.

 

(a)   (i)    If, for the purpose of obtaining judgment in, or enforcing thejudgment of, any court in any country, it becomes necessary to convert into acurrency (the “*judgment currency*”) an amount duein any other currency (the “*Base Currency*”),then the conversion shall be made at the rate of exchange prevailing on theBusiness Day before the day on which the judgment is given or the order ofenforcement is made, as the case may be (unless a court shall otherwisedetermine).

 

81

----

 

(ii)   If there is a change in therate of exchange prevailing between the Business Day before the day on whichthe judgment is given or an order of enforcement is made, as the case may be(or such other date as a court shall determine), and the date of receipt of theamount due, the Company shall pay such additional (or, as the case may be, suchlesser) amount, if any, as may be necessary so that the amount paid in thejudgment currency when converted at the rate of exchange prevailing on the dateof receipt will produce the amount in the Base Currency originally due.

 

(b)           Inthe event of the winding-up of the Company at any time while any amount or damagesowing under the Notes and this Indenture, or any judgment or order rendered inrespect thereof, shall remain outstanding, the Company shall indemnify and holdthe Holders and the Trustee harmless against any deficiency arising orresulting from any variation in rates of exchange between (1) the date asof which the equivalent of the amount in U.S. Dollars or Canadian Dollars, asthe case may be, due or contingently due under the Notes and this Indenture(other than under this paragraph (b)) is calculated for the purposes of suchwinding-up and (2) the final date for the filing of proofs of claim insuch winding-up.  For the purpose of thisparagraph (b), the final date for the filing of proofs of claim in thewinding-up of the Company shall be the date fixed by the liquidator orotherwise in accordance with the relevant provisions of applicable law as beingthe latest practicable date as at which liabilities of the Company may beascertained for such winding-up prior to payment by the liquidator or otherwisein respect thereto.

 

(c)           Theobligations contained in paragraph (a)(ii) and (b) of this Section 12.13shall constitute obligations of the Company separate and independent from itsother respective obligations under the Notes and this Indenture, shall giverise to separate and independent causes of action against the Company, shallapply irrespective of any waiver or extension granted by any Holder or theTrustee or any of them from time to time and shall continue in full force andeffect notwithstanding any judgment or order or the filing of any proof ofclaim in the winding-up of the Company for a liquidated sum in respect ofamounts due hereunder (other than under paragraph (b) above) or under anysuch judgment or order.  Any suchdeficiency as aforesaid shall be deemed to constitute a loss suffered by theHolders or the Trustee, as the case may be, and no proof or evidence of anyactual loss shall be required by the Company or the liquidator or otherwise orany of them.  In the case of paragraph (b) above,the amount of such deficiency shall not be deemed to be reduced by anyvariation in rates of exchange occurring between the said final date and thedate of any liquidating distribution.

 

(d)           Theterm “rate(s) of exchange” shall mean the rate of exchange quoted by RoyalBank of Canada at its central foreign exchange desk in its head office inMontréal at 12:00 noon (Montréal, Québec time) for purchases of the BaseCurrency with the judgment currency other than the Base Currency referred to inSubsections (a) and (b) above and includes any premiums and costs ofexchange payable.

 

(e)           TheTrustee shall have no duty or liability with respect to monitoring or enforcingthe Section 12.13.

 

*Section 12.14.             ***Currency Equivalent****.**

* *

Exceptas provided in Section 12.13, for purposes of the construction of theterms of this Indenture or of the Notes, in the event that any amount is statedherein in the currency of one nation (the “*First Currency*”),as of any date such amount shall also be deemed to represent the amount in thecurrency of any other relevant nation which is required to purchase such amountin the First Currency at the rate of exchange quoted by Royal Bank of Canada atits central foreign exchange desk in its head office in Montréal at 12:00 noon(Montréal, Québec time) on the date of determination.

 

*Section 12.15.             ***Counterpart Originals**

* *

Theparties may sign any number of copies of this Indenture.  Each signed copyshall be an original, but all of them together represent the same agreement.

 

82

----

 

*Section 12.16.             ***Table of Contents, Headings, etc**.

* *

TheTable of Contents, Cross-Reference Table and Headings in this Indenture havebeen inserted for convenience of reference only, are not to be considered apart of this Indenture and shall in no way modify or restrict any of the termsor provisions hereof.

 

*Section 12.17.             ***Qualification of this Indenture**.

* *

TheCompany shall qualify this Indenture under the TIA in accordance with the termsand conditions of any Registration Rights Agreements and shall pay allreasonable costs and expenses (including attorneys’ fees and expenses for theCompany, the Trustee and the Holders) incurred in connection therewith,including, but not limited to, costs and expenses of qualification of thisIndenture and the Notes and printing this Indenture and the Notes.  The Trustee shall be entitled to receive fromthe Company any such Officers’ Certificates, Opinions of Counsel or otherdocumentation as it may reasonably request in connection with any suchqualification of this Indenture under the TIA.

 

[Signatures onfollowing page]

 

83

----

 
|                              | SIGNATURES                              |
|-----------------------------------|-----------------------------------------|
|                              |                                    |
|                              |                                    |
| Dated as of  April 15, 2008. |                                    |
|                              |                                    |
|                              |                                    |
|                              | **COMPANY:**                            |
|                              |                                    |
|                              | VIDEOTRON  LTD.                         |
|                              |                                    |
|                              |                                    |
|                              | By:                                     | /s/  Jean-Francois Pruneau |
|                              |                                    | Name: |
|                              |                                    | Title: |
|                              |                                    |
|                              |                                    |
|                              | **SUBSIDIARY GUARANTORS:**              |
|                              |                                    |
|                              | LE SUPERCLUB VIDÉOTRON LTÉE   |
|                              |                                    |
|                              |                                    |
|                              | By:                                     | /s/  Jean-Francois Pruneau |
|                              |                                    | Name: |
|                              |                                    | Title: |
|                              |                                    |
|                              |                                    |
|                              | GROUPE DE DIVERTISSEMENT SUPERCLUB INC. |
|                              |                                    |
|                              |                                    |
|                              | By:                                     | /s/  Jean-Francois Pruneau |
|                              |                                    | Name: |
|                              |                                    | Title: |
|                              |                                    |
|                              |                                    |
|                              | SUPERCLUB  VIDÉOTRON CANADA INC.   |
|                              |                                    |
|                              |                                    |
|                              | By:                                     | /s/  Jean-Francois Pruneau |
|                              |                                    | Name: |
|                              |                                    | Title: |

 

----

 
|   | LES  PROPRIÉTÉS SUPERCLUB INC. |
|--------|------------------------------------------|
|   |                                     |
|   |                                     |
|   | By:                                      | /s/  Jean-Francois Pruneau |
|   |                                     | Name: |
|   |                                     | Title: |
|   |                                     |
|   |                                     |
|   | CF  CABLE TV INC.                        |
|   |                                     |
|   |                                     |
|   | By:                                      | /s/  Jean-Francois Pruneau |
|   |                                     | Name: |
|   |                                     | Title: |
|   |                                     |
|   |                                     |
|   | VIDEOTRON  US INC.                       |
|   |                                     |
|   |                                     |
|   | By:                                      | /s/ Joan L. Yori |
|   |                                     | Name:  Joan L. Yori |
|   |                                     | Title:  Secretary |

 

----

 
|   | **TRUSTEE:**                            |
|--------|-----------------------------------------|
|   |                                    |
|   |                                    |
|   | WELLS  FARGO BANK, NATIONAL ASSOCIATION |
|   |                                    |
|   |                                    |
|   | By:                                     | Joseph  P. O’Donnell |
|   |                                    | Name:  Joseph P. O’Donnell |
|   |                                    | Title:  Vice President |

 

----

 

**EXHIBITA**

** **

(Faceof Note)

 

**9**1/8%SENIOR NOTES DUE APRIL 15, 2018

** **
|    |   | CUSIP |
|---------|--------|-------|
|    |   | ISIN  |
| **No.** |   | US$   |

 

**VIDEOTRON LTD.**

** **

promises to pay to CEDE & CO., or its registered assigns, theprincipal sum of                                  Dollars(US$                            )on April 15, 2018.

 

Interest Payment Dates: June 15 and December 15, commencing June 15,2008.

 

Record Dates: June 1 and December 1.

 

INWITNESS WHEREOF, the Company has caused this Note to be signed by its dulyauthorized officer.

 
|   | VIDEOTRON  LTD. |
|--------|-----------------|
|   |            |
|   |            |
|   | By:             |   |
|   |            | Name: |
|   |            | Title: |

 

This is one of the[Global]

Notes referred to in the

within-mentionedIndenture:

 

WELLS FARGO BANK,NATIONAL ASSOCIATION,

as Trustee

 
| By:    |                 |   |
|--------|----------------------|--------|
|   | Authorized Signatory |

 

 

Dated                          ,2008

 

A-1

----

 

(Backof Note)

 

91/8% SENIOR NOTES DUE APRIL 15, 2018

 

[THIS NOTE AND THE GUARANTEES ENDORSED HEREON HAVE NOTBEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIESACT”), OR ANY STATE SECURITIES LAWS. NEITHER THIS NOTE NOR THE GUARANTEES ENDORSED HEREON NOR ANY INTEREST ORPARTICIPATION HEREIN MAY BE OFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED,ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION ORUNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATIONREQUIREMENTS OF THE SECURITIES ACT.

 

THE HOLDER OF THISNOTE AND THE GUARANTEES ENDORSED HEREON BY ITS ACCEPTANCE HEREOF AGREES TOOFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE WHICH IS TWOYEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ONWHICH VIDEOTRON LTD. (THE “COMPANY”) OR ANY AFFILIATE OF THE COMPANY WAS THEOWNER OF THIS NOTE AND THE GUARANTEES ENDORSED HEREON (OR ANY PREDECESSOR OFTHIS NOTE AND THE GUARANTEES ENDORSED HEREON) (THE “RESALE RESTRICTIONTERMINATION DATE”) ONLY (A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, (B) PURSUANTTO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, (C) FORSO LONG AS THE NOTES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THESECURITIES ACT (“RULE 144A”), TO A PERSON IT REASONABLY BELIEVES IS A “QUALIFIEDINSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A) THAT PURCHASES FOR ITS OWNACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE ISGIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANTTO OFFERS AND SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES INOFFSHORE TRANSACTIONS MEETING THE REQUIREMENTS OF RULE 904 OF REGULATION SUNDER THE SECURITIES ACT OR (E) PURSUANT TO ANOTHER AVAILABLE EXEMPTIONFROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THECOMPANY’S AND THE TRUSTEE’S RIGHT PRIOR TO ANY SUCH OFFER, SALE, OR TRANSFER (i) PURSUANTTO CLAUSE (D) OR (E) PRIOR TO THE RESALE RESTRICTION TERMINATION DATETO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHERINFORMATION SATISFACTORY TO EACH OF THEM AND (ii) TO REQUIRE THAT ACERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THIS NOTE IS COMPLETED ANDDELIVERED BY THE TRANSFEROR TO THE TRUSTEE. THIS LEGEND WILL BE REMOVED UPONTHE REQUEST OF A HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.]

 

**[I*f this note is a globalnote, insert*:]** THIS GLOBAL NOTE IS HELD BY THEDEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE INCUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOTTRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THETRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TOSECTION 2.06 OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY BEEXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OFTHE INDENTURE, (III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEEFOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE AND (IV) THISGLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIORWRITTEN CONSENT OF THE COMPANY.

 

UNLESS AND UNTILIT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE FORM, THISNOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO ANOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARYOR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEETO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY UNLESS THISNOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUSTCOMPANY (55 WATER STREET, NEW YORK, NEW YORK) (“DTC”), TO THE COMPANY OR ITSAGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY 

 

A-2

----

 

NOTEISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAMEAS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANYPAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS MAY BE  REQUESTED BY AN AUTHORIZED REPRESENTATIVE OFDTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TOANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE &CO., HAS AN INTEREST HEREIN.]

 

Capitalized termsused herein shall have the meanings assigned to them in the Indenture referredto below unless otherwise indicated.

 

1.             ***Interest***.  VideotronLtd., a company incorporated under the laws of Québec (the “*Company*”), promises to pay interest (as defined in theIndenture) on the principal amount of this Note at 9.125% per annum untilmaturity and shall pay Special Interest, if any, as provided in theRegistration Rights Agreement relating to these Notes.  The Company shall pay interest semi-annuallyon June 15 and December 15 of each year, or if any such day is not aBusiness Day, on the next succeeding Business Day (each an “*Interest Payment Date*”). Interest on the Notes shall accrue from the most recent date to whichinterest has been paid or, if no interest has been paid, from the date ofissuance; *provided, however*, that if there is noexisting Default in the payment of interest, and if this Note is authenticatedbetween a record date referred to on the face hereof and the next succeedingInterest Payment Date, interest shall accrue from such next succeeding InterestPayment Date; *provided*, *further*,that the first Interest Payment Date shall be June 15, 2008.  The Company shall pay interest (includingpost-petition interest in any proceeding under any Bankruptcy Law) on overdueprincipal and premium, if any, from time to time on demand at a rate that is 1%per annum in excess of the interest rate then in effect under the Indenture andthis Note; it shall pay interest (including post-petition interest in anyproceeding under any Bankruptcy Law) on overdue installments of interest(without regard to any applicable grace periods), from time to time on demandat the same rate to the extent lawful.  Interest shall be computed on thebasis of a 360-day year of twelve 30-day months.  For the purposes of the *Interest Act*(Canada), the yearly rate of interest which is equivalent to the rate payablehereunder is the rate payable multiplied by the actual number of days in theyear and divided by 360.

 

2.             ***Methodof Payment***.  The Company shall pay interest on the Notes (exceptdefaulted interest) to the Persons in whose name this Note (or one or morePredecessor Notes) is registered at the close of business on the June 1 orDecember 1 next preceding the Interest Payment Date, even if such Notesare cancelled after such record date and on or before such Interest PaymentDate, except as provided in Section 2.12 of the Indenture with respect todefaulted interest.  The Notes shall be payable as to principal, premium,if any, and interest at the office or agency of the Company maintained for suchpurpose, or, at the option of the Company, payment of interest may be made bycheck mailed to the Holders at their addresses set forth in the SecurityRegister; *provided*, *however*,that payment by wire transfer of immediately available funds shall be requiredwith respect to principal of and interest and premium, if any, on, all GlobalNotes and all other Notes the Holders of which shall have provided wiretransfer instructions to the Company or the Paying Agent.  Such payment shall be in such coin orcurrency of the United States of America as at the time of payment is legaltender for payment of public and private debts.

 

3.             ***PayingAgent and Registrar***.  Initially, Wells Fargo Bank,National Association, the Trustee under the Indenture, shall act as PayingAgent and Registrar.  The Company may change any Paying Agent or Registrarwithout notice to any Holder.  The Company or any of its Subsidiaries mayact in any such capacity.

 

4.             ***Indenture***.  The Company issued the Notes under an Indenturedated as of April 15, 2008 (“*Indenture*”)among the Company, the guarantors party thereto (the “*Subsidiary**Guarantors*”) and the Trustee.  Theterms of the Notes include those stated in the Indenture and those made part ofthe Indenture by reference to the Trust Indenture Act of 1939, as amended (15U.S. Code §§ 77aaa-77bbbb).  The Notes are subject to all suchterms, and Holders are referred to the Indenture and such Act for a statementof such terms.  To the extent any provision of this Note conflicts withthe express provisions of the Indenture, the provisions of the Indenture shallgovern and be controlling.

 

5.             ***OptionalRedemption***.

 

(a)   Except asset forth in clauses (b) and (c) of this Paragraph 5, the Notes shallnot be redeemable at the option of the Company prior to April 15,2013.  Beginning on April 15, 2013,the Company may 

 

A-3

----

 

redeem all or a part of the Notes, at once or overtime, in accordance with Section 3.03 of the Indenture, at the redemptionprices (expressed as percentages of principal amount) set forth below, plusaccrued and unpaid interest thereon on the Notes redeemed, to the applicableredemption date (subject to the right of Holders of record on the relevantRegular Record Date to receive interest due on the relevant Interest PaymentDate), if redeemed during the twelve-month period commencing on April 15of the years indicated below:

 
| **Redemption Year** | ** ** | **Percentage** | ** ** |
|--------------------------|------------|----------------|------------|
|                     |       |           |       |
| 2013                     |       | 104.563        | %          |
| 2014                     |       | 103.042        | %          |
| 2015                     |       | 101.521        | %          |
| 2016 and thereafter      |       | 100.000        | %          |

 

(b)   At any time and from time to time prior to April 15,2011,the Company may on one or more occasions redeem up to 35% of the aggregateprincipal amount of the Notes issued under this Indenture at a redemption price (expressed as apercentage of principal amount) equal to 109.125% of the principalamount thereof, plus accrued and unpaid interest thereon to the redemption date(subject to the right of Holders of record on the relevant Regular Record Date to receiveinterest due on the relevant Interest Payment Date) with the net cash proceeds of one or more EquityOfferings; *provided, however*, that (i) atleast 65% of the aggregate principal amount of the Notes issued under this Indenture (excludingNotes held by the Company and its Subsidiaries) remain outstanding immediatelyfollowing such redemption and (ii) any such redemption shall bemade within 90 days of the date of closing of any such Equity Offering.

 

(c)   If theCompany becomes obligated to pay any Additional Amounts because of a change inthe laws or regulations of Canada or any Canadian Taxing Authority, or a changein any official position regarding the application or interpretation thereof,in either case that is publicly announced or becomes effective on or after theIssue Date, the Company may, at any time, upon not less than 30 nor more than60 days’ notice, redeem all, but not part, of the Notes at a price equal to100% of the principal amount thereof, plus accrued and unpaid interest to theredemption date, *provided* that at any time thatthe aggregate principal amount of the Notes outstanding is greater than US$20.0million, any Holder of the Notes may, to the extent that it does not adverselyaffect the Company’s after-tax position, at its option, waive the Company’s compliancewith the provisions of Section 4.20 of the Indenture with respect to suchHolder’s Notes; *provided, further*, that if anyHolder waives such compliance, the Company may not redeem that Holder’s Notespursuant to this clause (c).

 

(d)   Anyprepayment pursuant to this paragraph 5 shall be made pursuant to theprovisions of Sections 3.01 through 3.06 of the Indenture.

 

6.             ***MandatoryRedemption***.  Except as setforth in Sections 4.12 and 4.18 of the Indenture, the Company shall not berequired to make mandatory redemption or sinking fund payments with respect tothe Notes.

 

7.             ***Repurchase at Option ofHolder***.

 

(a)   Upon the occurrence of a Change of Control,the Company shall make an offer to all Holders to repurchase all (equal toUS$1,000 or an integral multiple of US$1,000) of such Holder’s Notes at apurchase price in cash equal to 101% of the aggregate principal amount of theNotes repurchased, plus accrued and unpaid interest on the Notes repurchased tothe purchase date in accordance with the procedures set forth in Section 3.09of the Indenture.

 

(b)   If the Company or a Restricted Subsidiaryconsummates any Asset Sales, it shall notbe required to apply any Net Proceeds in accordance with the Indenture untilthe aggregate Excess Proceeds from all Asset Sales following the date the Notesare first issued exceeds US$35.0 million.Thereafter, the Company shall commence an Asset Sale Offer by applying theExcess Proceeds pursuant to Section 3.09 of the Indenture topurchase the maximum principal amount of Notes (including any Additional Notes)that may be purchased out of the Excess Proceeds at an offer price in cashequal to 100% of the principal amount thereof, plus accrued and unpaid interestand Special Interest, if any, to the Purchase Date in accordance with theprocedures set forth in Section 3.09 of the 

 

A-4

----

 

Indenture.  To the extent thatthe aggregate amount of Notes (including Additional Notes) tendered pursuant toan Asset Sale Offer is less than the Excess Proceeds, the Company (or suchRestricted Subsidiary) may apply such deficiency for any purpose not prohibitedby the Indenture.  If the aggregateprincipal amount of Notes surrendered by Holders thereof exceeds the amount ofExcess Proceeds, the Trustee shall select the Notes to be purchased on a *pro rata* basis.

 

8.             ***Noticeof Redemption***.  Notices of redemption shall be mailed atleast 30 days but not more than 60 days before the redemption date to eachHolder whose Notes are to be redeemed at its registered address.  Notes indenominations larger than US$1,000 may be redeemed in part but only in integralmultiples of US$1,000, unless all of the Notes held by a Holder are to beredeemed.  On and after the redemption date interest shall cease to accrueon Notes or portions thereof called for redemption.

 

9.             ***Denominations,Transfer, Exchange***.  The Notes are in registered formwithout coupons in denominations of US$1,000 and integral multiples ofUS$1,000.  This Note shall represent the aggregate principal amount ofoutstanding Notes from time to time endorsed hereon and the aggregate principalamount of Notes represented hereby may from time to time be reduced orincreased, as appropriate, to reflect exchanges and redemptions.  The transfer of Notes may be registered andNotes may be exchanged as provided in the Indenture.  The Registrar andthe Trustee may require a Holder, among other things, to furnish appropriateendorsements and transfer documents and the Company may require a Holder to payany taxes and fees required by law or permitted by the Indenture.  TheCompany need not exchange or register the transfer of any Note or portion of aNote selected for redemption, except for the unredeemed portion of any Notebeing redeemed in part.  Also, the Company need not exchange or registerthe transfer of any Notes for a period of 15 days before a selection of Notesto be redeemed or during the period between a record date and the correspondingInterest Payment Date.

 

10.           ***Persons Deemed Owners***. The registered Holder of a Note may be treated as its owner for all purposes.

 

11.           ***Amendment, Supplement and Waiver***. Subject to certain exceptions, the Company and the Trustee may amend orsupplement the Indenture or the Notes with the consent of the Holders of atleast a majority in principal amount of the then outstanding Notes, includingAdditional Notes, if any, voting as a single class (including consents obtainedin connection with a purchase of or tender offer or exchange offer for theNotes), and, subject to Sections 6.04 and 6.07 of the Indenture, any existingDefault or Event of Default (except a continuing Default or Event of Default (i) inthe payment of principal, premium, if any, interest or Special Interest orAdditional Amounts, if any, on the Notes and (ii) in respect of a covenantor provision which under the Indenture cannot be modified or amended withoutthe consent of the Holder of each Note affected by such modification oramendment) or compliance with any provision of the Indenture or the Notes maybe waived with the consent of the Holders of at least a majority in principalamount of the then outstanding Notes, including Additional Notes, if any, thenoutstanding voting as a single class (including consents obtained in connectionwith a purchase of or tender offer or exchange offer for the Notes).  Without the consent of any Holder, theCompany and the Trustee may amend or supplement the Indenture or the Notes to (a) cureany ambiguity, defect or inconsistency; (b) provide for uncertificated Notesin addition to or in place of certificated Notes  (*provided* thatthe uncertificated Notes are issued in registered form for purposes of Section 163(f) ofthe Code, or in a manner such that the uncertificated Notes are described in Section 163(f)(2)(B) ofthe Code); (c) provide for the assumption of the obligations of theCompany and/or a Subsidiary Guarantor to Holders in the case of a merger,consolidation, or amalgamation or sale of all or substantially all of theassets of the Company and/or a Subsidiary Guarantor; *provided,however*, that the Company shall deliver to the Trustee (i) anOpinion of Counsel to the effect that Holders will not recognize income, gainor loss for U.S. Federal income tax purposes as a result of such assumption bya successor corporation and will be subject to U.S. federal income tax on thesame amount and in the same manner and at the same times as would have been thecase if such assumption had not occurred, and (ii) an Opinion of Counselin Canada to the effect that Holders will not recognize income, gain or lossfor Canadian federal, provincial or territorial tax purposes as a result ofsuch assumption by a successor corporation and will be subject to Canadianfederal, provincial or territorial taxes (including withholding taxes) on thesame amounts, in the same manner and at the same times as would have been thecase if such assumption had not occurred; (d) make any change that wouldprovide any additional rights or benefits to the Holders or that does notadversely affect the legal rights under this Indenture of any such Holder; (e) addadditional guarantees with respect to the Notes or release SubsidiaryGuarantors from Subsidiary Guarantees as provided or permitted by the terms ofthe Indenture; (f) provide for the issuance of Additional Notes inaccordance 

 

A-5

----

 

with the Indenture; or (g) comply with requirements of theCommission in order to effect or maintain the qualification of this Indentureunder the TIA.

 

12.           ***Defaults and Remedies***.  Each ofthe following is an Event of Default under the Indenture: (a) default for30 days in the payment when due of interest on, including AdditionalAmounts or Special Interest, if any, or with respect to, the Notes; (b) defaultin payment, when due at Stated Maturity, upon acceleration, redemption,required repurchase or otherwise, of the principal of, or premium, if any, onthe Notes; (c) failure by the Company or any Restricted Subsidiary tocomply with the provisions of Section 4.09, 4.10, 4.12, 4.18 or 5.01 ofthe Indenture; (d) failure by the Company or any Restricted Subsidiary for30 days after written notice thereof has been given to the Company by theTrustee or to the Company and the Trustee by the Holders of at least 25% of theaggregate principal amount of the Notes outstanding to comply with any of itsother covenants or agreements in the Indenture; (e) default under anymortgage, indenture or instrument under which there may be issued or by whichthere may be secured or evidenced any Indebtedness by the Company or anyRestricted Subsidiary, or the payment of which is guaranteed by the Company orany Restricted Subsidiary, whether such Indebtedness or guarantee now exists,or is created after the Issue Date, if that default: (i) is caused by afailure to pay principal of, or interest or premium, if any, on, suchIndebtedness when due at the final maturity of such Indebtedness (a “*Payment Default*”); or (ii) results in the accelerationof such Indebtedness prior to its Stated Maturity, and, in each case, theprincipal amount of any such Indebtedness, together with the principal amountof any other such Indebtedness under which there has been a Payment Default orthe maturity of which has been so accelerated, aggregates US$25.0 millionor more; (f) failure by the Company or any Restricted Subsidiary to payfinal, non-appealable judgments aggregating in excess of US$25.0 million, whichjudgments are not paid, discharged or stayed for a period of 60 days; (g) anySubsidiary Guarantee of a Significant Subsidiary ceases, or the SubsidiaryGuarantees of any group of Subsidiaries that, when taken together, wouldconstitute a Significant Subsidiary cease, to be in full force and effect(other than in accordance with the terms of any such Subsidiary Guarantee) orany Subsidiary Guarantor that is a Significant Subsidiary denies or disaffirmsits obligations under its Subsidiary Guarantee, or a group of SubsidiaryGuarantors that, when taken together, would constitute a Significant Subsidiarydeny or disaffirm their obligations under their respective SubsidiaryGuarantees; and (h) certain events of bankruptcy, insolvency orreorganization affecting the Company or any of its Significant Subsidiaries.

 

If any Event of Default occurs and is continuing, theTrustee or the Holders of at least 25% in principal amount of the thenoutstanding Notes may declare all the Notes to be due and payable.  Notwithstanding the foregoing, in the case ofan Event of Default arising from certain events of bankruptcy or insolvencydescribed in the Indenture, all outstanding Notes shall become due and payablewithout further action or notice. Holders may not enforce the Indenture or the Notes except as provided inthe Indenture.  Subject to certainlimitations, Holders of at least a majority in aggregate principal amount ofthe then outstanding Notes may direct the Trustee in its exercise of any trustor power. The Trustee may withhold from Holders notice of any continuingDefault or Event of Default (except a Default or Event of Default relating tothe payment of principal, premium, if any, or interest or Special Interest orAdditional Amounts, if any) if it determines in good faith that withholdingnotice is in the interests of the Holders. The Holders of at least a majority in aggregate principal amount of theNotes then outstanding by notice to the Trustee may on behalf of the Holders ofall of the Notes waive any existing Default or Event of Default and itsconsequences under the Indenture except a continuing Default or Event ofDefault in the payment of principal, premium, if any, or interest or SpecialInterest or Additional Amounts, if any. The Company is required to deliver to the Trustee annually a statementregarding compliance with the Indenture, and the Company is required uponbecoming aware of any Default or Event of Default, to deliver to the Trustee astatement specifying such Default or Event of Default.

 

13.           ***Trustee Dealings withCompany***.  Subject tocertain limitations, the Trustee in its individual or any other capacity maybecome the owner or pledgee of Notes and may otherwise deal with the Company orany Subsidiary Guarantor or any Subsidiary Guarantor or any Affiliate of theCompany with the same rights it would have if it were not Trustee.

 

14.           ***No Recourse Against Others***. No past, present or future director, officer, employee, incorporator orstockholder of the Company or of any Subsidiary Guarantor, as such, shall haveany liability for any obligations of the Company or any Subsidiary Guarantor underthe Indenture, the Notes, the Subsidiary Guarantees or for any claim based on,in respect of, or by reason of, such obligations or their creation.  EachHolder by accepting a Note waives and releases all such liability.

 

A-6

----

 

15.           ***Authentication***. This Note shall not be valid until authenticated by the manual signature of theTrustee or an authenticating agent.

 

16.           ***Abbreviations***. Customary abbreviations may be used in the name of a Holder or an assignee, suchas:  TEN COM (= tenants in common), TEN ENT (= tenants by the entireties),JT TEN (= joint tenants with right of survivorship and not as tenants incommon), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).

 

17.           ***Additional Rights of Holdersof Restricted Global Notes and Restricted Definitive Notes***.  In addition to the rights provided to Holdersof Notes under the Indenture, Holders of Restricted Global Notes and RestrictedDefinitive Notes that are Initial Notes shall have all the rights set forth inthe Registration Rights Agreement, dated as of April 15, 2008, among theCompany and the parties named on the signature pages thereto or, in thecase of Additional Notes, Holders of Restricted Global Notes and RestrictedDefinitive Notes shall have the rights set forth in one or more RegistrationRights Agreements, if any, among the Company and the other parties thereto,relating to rights given by the Company to the purchasers of such AdditionalNotes.

 

18.           ***CUSIP Numbers***.  Pursuant to a recommendation promulgated bythe Committee on Uniform Security Identification Procedures, the Company hascaused CUSIP numbers to be printed on the Notes and has directed the Trustee touse CUSIP numbers in notices of redemption or notices of Offers to Purchase asa convenience to Holders.  Norepresentation is made as to the correctness of such numbers either as printedon the Notes or as contained in any notice of redemption or notice of an Offerto Purchase and reliance may be placed only on the other identification numbersprinted thereon and any such redemption or Offer to Purchase shall not beaffected by any defect in or omission of such numbers.

 

The Company shallfurnish to any Holder upon written request and without charge a copy of theIndenture.  Requests may be made to:  Videotron Ltd., 612 St. Jacques Street,Montréal, Québec H3C 4M8, Canada, Attention: Vice President, Legal Affairs.

 

19.         ***Governing Law***.  The internal law of the State of New Yorkshall govern and be used to construe this Note.

 

A-7

----

 

Optionof Holder to Elect Purchase

 

If you want to elect to have this Note purchased by the Companypursuant to Section 4.12 or 4.18 of the Indenture, check the box below:

 

o            Section 4.12

 

o            Section 4.18

 

If you want to elect to have only part of the Note purchased by theCompany pursuant to Section 4.12 or Section 4.18 of the Indenture,state the amount you elect to have purchased: US$

 
| Date:  |   |   | Your Signature:                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |
|--------|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|   |   |   | (Sign exactly as your name appears on the face of  this Note)                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   |   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   |   |   | Tax Identification No.:                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   |   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   |   |   | SIGNATURE GUARANTEE:                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   |   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   |   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   |   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   |   |   | Signatures must be guaranteed by an “eligible  guarantor institution” meeting the requirements of the Registrar, which  requirements include membership or participation in the Security Transfer  Agent Medallion Program (“STAMP”) or such other “signature guarantee program”  as may be determined by the Registrar in addition to, or in substitution for,  STAMP, all in accordance with the Securities Exchange Act of 1934, as  amended. |

 

A-8

----

 

**Assignment Form**

** **

To assign this Note, fill in the form below:

 

(I) or (we) assign and transfer this Note to

 

 

(Insertassignee’s social security or other tax I.D. no.)

 

 
|                                                        |
|-------------------------------------------------------------|
|                                                        |
|                                                        |
| (Print or type assignee’s name, address and zip  code) |

 

and irrevocablyappoint________________________________________________________________________________________

as agent to transfer thisNote on the books of the Company.  The agent may substitute another to actfor him.

 

 

Date: _________________

 

Your Signature: __________________________________

(Sign exactly as yourname appears on the face of this Note)

 

Signature Guarantee: ____________________________________________

 

Signatures must be guaranteed by an “eligibleguarantor institution” meeting the requirements of the Registrar, whichrequirements include membership or participation in the Security Transfer AgentMedallion Program (“STAMP”) or such other “signature guarantee program” as maybe determined by the Registrar in addition to, or in substitution for, STAMP,all in accordance with the Securities Exchange Act of 1934, as amended.

 

A-9

----

 

SCHEDULEOF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE

 

Thefollowing exchanges of a part of this Global Note for an interest in anotherGlobal Note or for a Definitive Note, or exchanges of a part of another GlobalNote or Definitive Note for an interest in this Global Note, have been made:

 
| **Date of Exchange** | ** ** | **Amount of  decrease in  Principal Amount  of this Global Note** | ** ** | **Amount of increase  in Principal Amount  of this Global Note** | ** ** | **Principal Amount  of this Global Note  following such  decrease (or  increase)** | ** ** | **Signature of  authorized signatory  of Trustee or  Note Custodian** |
|--------------------------------|------------|-------------------------------------------------------------------------------------------------|------------|-----------------------------------------------------------------------------------------------------|------------|------------------------------------------------------------------------------------------------------------------|------------|------------------------------------------------------------------------------------------------|
|                           |       |                                                                                            |       |                                                                                                |       |                                                                                                             |       |                                                                                           |
|                           |       |                                                                                            |       |                                                                                                |       |                                                                                                             |       |                                                                                           |
|                           |       |                                                                                            |       |                                                                                                |       |                                                                                                             |       |                                                                                           |

 

A-10

----

** **

**EXHIBIT B**

** **

**FORM OF CERTIFICATE OF TRANSFER**

** **

Videotron Ltd.612 St. Jacques StreetMontréal, Québec  H3C 4M8Canada

Attention:  Vice President, Legal Affairs

 

Wells Fargo Bank,National Association.213 Court Street, Suite 703

Middletown, CT 06457

Attention: CorporateTrust Services

Facsimile No.:  (860) 704-6219

 

Re:                               91/8% Senior Notes due April 15, 2018

 

Referenceis hereby made to the Indenture, dated as of April 15, 2008 (the “*Indenture*”), among Videotron Ltd., as issuer (the “*Company*”), the Subsidiary Guarantors party thereto and WellsFargo Bank, National Association, as trustee. Capitalized terms used but not defined herein shall have the meaningsgiven to them in the Indenture.

 

                                      ,(the “*Transferor*”) owns and proposes totransfer the Note[s] or interest in such Note[s] specified in Annex A hereto,in the principal amount ofUS$                      in such Note[s] or interests (the “*Transfer*”),to                                                       (the “*Transferee*”), as further specified inAnnex A hereto.  In connection with theTransfer, the Transferor hereby certifies that:

 

**[CHECK ALL THAT APPLY]**

** **

1.  o  Check ifTransferee will take delivery of a beneficial interest in the 144A Global Noteor a Definitive Note Pursuant to Rule 144A.  The Transfer is being effected pursuant toand in accordance with Rule 144A under the United States Securities Act of1933, as amended (the “*Securities Act*”),and, accordingly, the Transferor hereby further certifies that the beneficialinterest or Definitive Note is being transferred to a Person that theTransferor reasonably believed and believes is purchasing the beneficialinterest or Definitive Note for its own account, or for one or more accountswith respect to which such Person exercises sole investment discretion, andsuch Person and each such account is a “qualified institutional buyer” withinthe meaning of Rule 144A in a transaction meeting the requirements of Rule 144Aand such Transfer is in compliance with any applicable blue sky securities lawsof any state of the United States.  Uponconsummation of the proposed Transfer in accordance with the terms of theIndenture, the transferred beneficial interest or Definitive Note will besubject to the restrictions on transfer enumerated in the Private PlacementLegend printed on the 144A Global Note and/or the Definitive Note and in theIndenture and the Securities Act.

 

2.  o  Check ifTransferee will take delivery of a beneficial interest in the Regulation SGlobal Note or a Definitive Note pursuant to Regulation S.  The Transfer is being effected pursuant toand in accordance with Rule 903 or Rule 904 under the Securities Actand, accordingly, the Transferor hereby further certifies that (i) theTransfer is not being made to a Person in the United States and (x) at thetime the buy order was originated, the Transferee was outside the United Statesor such Transferor and any Person acting on its behalf reasonably believed andbelieves that the Transferee was outside the United States or (y) thetransaction was executed in, on or through the facilities of a designatedoffshore securities market and neither such Transferor nor any Person acting onits behalf knows that the transaction was prearranged with a buyer in the UnitedStates, (ii) no directed selling efforts have been made in contraventionof the requirements of Rule 903(b) or Rule 904(a) ofRegulation S under the Securities Act, (iii) the transaction is not partof a plan or scheme to evade the registration requirements of the SecuritiesAct and (iv) if the proposed transfer is being made prior to theexpiration of the Distribution Compliance Period, the transfer is not beingmade to a U.S. Person or for the account or benefit of a U.S. Person (otherthan an Initial Purchaser).  Uponconsummation of the proposed transfer in accordance with the terms of theIndenture, the 

 

B-1

----

 

transferred beneficial interest or Definitive Notewill be subject to the restrictions on Transfer enumerated in the PrivatePlacement Legend printed on the Regulation S Global Note, the TemporaryRegulation S Global Note and/or the Definitive Note and in the Indenture andthe Securities Act.

 

3.  o  Check andcomplete if Transferee will take delivery of a Definitive Note pursuant to anyprovision of the Securities Act other than Rule 144A or Regulation S.  The Transfer is being effected in compliancewith the transfer restrictions applicable to beneficial interests in RestrictedGlobal Notes and Restricted Definitive Notes and pursuant to and in accordancewith the Securities Act and any applicable blue sky securities laws of anystate of the United States, and accordingly the Transferor hereby furthercertifies that (check one):

 

(a)                                  o  such Transfer is being effected pursuant toand in accordance with Rule 144 under the Securities Act;

 

or

 

(b)                                 o  such Transfer is being effected to theCompany or a Subsidiary thereof;

 

or

 

(c)                                  o  such Transfer is being effected pursuant toan effective registration statement under the Securities Act and in compliancewith the prospectus delivery requirements of the Securities Act;

 

or

 

(d)                                 o  such Transfer is being effected to anInstitutional Accredited Investor and pursuant to an exemption from theregistration requirements of the Securities Act other than Rule 144A, Rule 144or Rule 904, and the Transferor hereby further certifies that it has notengaged in any general solicitation within the meaning of Regulation D underthe Securities Act and the Transfer complies with the transfer restrictionsapplicable to beneficial interests in a Restricted Global Note or RestrictedDefinitive Notes and the requirements of the exemption claimed, whichcertification is supported by (1) a certificate executed by the Transfereein the form of Exhibit D to the Indenture and (2) if such Transfer isin respect of a principal amount of Notes at the time of transfer of less thanUS$250,000, an Opinion of Counsel provided by the Transferor or the Transferee(a copy of which the Transferor has attached to this certification), to theeffect that such Transfer is in compliance with the Securities Act.  Upon consummation of the proposed transfer inaccordance with the terms of the Indenture, the transferred beneficial interestor Definitive Note will be subject to the restrictions on transfer enumeratedin the Private Placement Legend printed on the Definitive Notes and in theIndenture and the Securities Act.

 

4.  o  Check ifTransferee will take delivery of a beneficial interest in an UnrestrictedGlobal Note or of an Unrestricted Definitive Note.

 

(a) o  **Check if Transfer is pursuant to Rule 144**.  (i) The Transfer is being effectedpursuant to and in accordance with Rule 144 under the Securities Act andin compliance with the transfer restrictions contained in the Indenture and anyapplicable blue sky securities laws of any state of the United States and (ii) therestrictions on transfer contained in the Indenture and the Private PlacementLegend are not required in order to maintain compliance with the SecuritiesAct.  Upon consummation of the proposedTransfer in accordance with the terms of the Indenture, the transferredbeneficial interest or Definitive Note will no longer be subject to the restrictionson transfer enumerated in the Private Placement Legend printed on theRestricted Global Notes, on Restricted Definitive Notes and in the Indenture.

 

(b) o  **Check if Transfer is Pursuant to Regulation S**.  (i) The Transfer is being effectedpursuant to and in accordance with Rule 903 or Rule 904 under theSecurities Act and in compliance with the transfer restrictions contained inthe Indenture and any applicable blue sky securities laws of any state of theUnited States and (ii) the restrictions on transfer contained in theIndenture and the Private Placement Legend are not 

 

B-2

----

 

required in order to maintain compliance with theSecurities Act.  Upon consummation of theproposed Transfer in accordance with the terms of the Indenture, the transferredbeneficial interest or Definitive Note will no longer be subject to therestrictions on transfer enumerated in the Private Placement Legend printed onthe Restricted Global Notes, on Restricted Definitive Notes and in theIndenture.

 

(c) o  **Check if Transfer is Pursuant to Other Exemption**.  (i) The Transfer is being effectedpursuant to and in compliance with an exemption from the registrationrequirements of the Securities Act other than Rule 144, Rule 903 or Rule 904and in compliance with the transfer restrictions contained in the Indenture andany applicable blue sky securities laws of any State of the United States and (ii) therestrictions on transfer contained in the Indenture and the Private PlacementLegend are not required in order to maintain compliance with the SecuritiesAct.  Upon consummation of the proposedTransfer in accordance with the terms of the Indenture, the transferredbeneficial interest or Definitive Note will not be subject to the restrictionson transfer enumerated in the Private Placement Legend printed on theRestricted Global Notes or Restricted Definitive Notes and in the Indenture.

 

Thiscertificate and the statements contained herein are made for your benefit andthe benefit of the Company.

 
|   |                         |
|--------|------------------------------|
|   | [Insert  Name of Transferor] |
|   |                         |
|   |                         |
|   | By:                          |   |
|   |                         | Name: |
|   |                         | Title: |
|   |                         |   |
|   | Dated:                       |   |
|        |                              |  |  |

 

B-3

----

 

ANNEXA TO CERTIFICATE OF TRANSFER

 

1.                                       The Transferor owns and proposes to transfer thefollowing:

 

[CHECKONE OF (a) OR (b)]

 

(a)                                  o   a beneficialinterest in the:

 

  (i)                               o   144A Global Note (CUSIP                  ),or

 

  (ii)                            o   Regulation S Global Note (CUSIP                  );or

 

(b)                                 o   a RestrictedDefinitive Note.

 

2.                                       After the Transfer the Transferee will hold:

 

[CHECKONE OF (a), (b) OR (c)]

 

(a)                                  o   a beneficialinterest in the:

 

  (i)                               o   144A Global Note (CUSIP                  ),or

 

  (ii)                            o   Regulation S Global Note (CUSIP                  ),or

 

  (iii)                         o  Unrestricted Global Note (CUSIP                  );or

 

(b)                                 o   a RestrictedDefinitive Note; or

 

(c)                                  o   anUnrestricted Definitive Note,

 

in accordance with the terms of the Indenture.

 

B-4

----

** **

**EXHIBIT C**

** **

**FORM OF CERTIFICATE OF EXCHANGE**

** **

Videotron Ltd.

612 St. Jacques Street

Montréal, Québec  H3C 4M8 

Canada

Attention:  Vice President, LegalAffairs

 

Wells Fargo Bank,National Association.

213 Court Street, Suite 703

Middletown, CT 06457

Attention: CorporateTrust Services

Facsimile No.:  (860) 704-6219

 

Re:                               91/8% Senior Notes due April 15, 2018

 

Referenceis hereby made to the Indenture, dated as of April 15, 2008 (the “*Indenture*”), among Videotron Ltd., as issuer (the “*Company*”), the Subsidiary Guarantors party thereto and WellsFargo Bank, National Association, as trustee. Capitalized terms used but not defined herein shall have the meaningsgiven to them in the Indenture.

 

                                                    ,(the “*Owner*”) owns and proposes to exchangethe Note[s] or interest in such Note[s] specified herein, in the principalamount ofUS$                        in such Note[s] or interests (the “*Exchange*”).  In connection with the Exchange, the Ownerhereby certifies that:

 

1.                                       Exchange of Restricted Definitive Notes or BeneficialInterests in a Restricted Global Note for Unrestricted Definitive Notes orBeneficial Interests in an Unrestricted Global Note

 

(a) o  **Check if Exchange is from beneficial interest in a Restricted GlobalNote to beneficial interest in an Unrestricted Global Note**.  In connection with the Exchange of the Owner’sbeneficial interest in a Restricted Global Note for a beneficial interest in anUnrestricted Global Note in an equal principal amount, the Owner herebycertifies (i) the beneficial interest is being acquired for the Owner’sown account without transfer, (ii) such Exchange has been effected incompliance with the transfer restrictions applicable to the Restricted GlobalNote and pursuant to and in accordance with the United States Securities Act of1933, as amended (the “*Securities Act*”),(iii) the restrictions on transfer contained in the Indenture and thePrivate Placement Legend are not required in order to maintain compliance withthe Securities Act and (iv) the beneficial interest in an UnrestrictedGlobal Note is being acquired in compliance with any applicable blue skysecurities laws of any state of the United States.

 

(b) o** Check if Exchange is from beneficial interest in a Restricted GlobalNote to Unrestricted Definitive Note**.  In connectionwith the Exchange of the Owner’s beneficial interest in a Restricted GlobalNote for an Unrestricted Definitive Note, the Owner hereby certifies (i) theUnrestricted Definitive Note is being acquired for the Owner’s own accountwithout transfer, (ii) such Exchange has been effected in compliance withthe transfer restrictions applicable to the Restricted Global Note and pursuantto and in accordance with the Securities Act, (iii) the restrictions ontransfer contained in the Indenture and the Private Placement Legend are notrequired in order to maintain compliance with the Securities Act and (iv) theUnrestricted Definitive Note is being acquired in compliance with anyapplicable blue sky securities laws of any state of the United States.

 

(c) o** Check if Exchange is from Restricted Definitive Note to beneficialinterest in an Unrestricted Global Note**.  In connectionwith the Owner’s Exchange of a Restricted Definitive Note for a beneficialinterest in an Unrestricted Global Note, the Owner hereby certifies (i) thebeneficial interest is being acquired for the Owner’s own account withouttransfer, (ii) such Exchange has been effected in compliance with thetransfer restrictions applicable to Restricted Definitive Notes and pursuant toand in accordance with the Securities Act, (iii) the restrictions ontransfer contained in the Indenture and the Private Placement Legend are notrequired in 

 

C-1

----

 

order to maintain compliance with the Securities Actand (iv) the beneficial interest is being acquired in compliance with anyapplicable blue sky securities laws of any state of the United States.

 

(d) o  **Check if Exchange is from Restricted Definitive Note to UnrestrictedDefinitive Note**.  Inconnection with the Owner’s Exchange of a Restricted Definitive Note for anUnrestricted Definitive Note, the Owner hereby certifies (i) theUnrestricted Definitive Note is being acquired for the Owner’s own accountwithout transfer, (ii) such Exchange has been effected in compliance withthe transfer restrictions applicable to Restricted Definitive Notes andpursuant to and in accordance with the Securities Act, (iii) therestrictions on transfer contained in the Indenture and the Private PlacementLegend are not required in order to maintain compliance with the Securities Actand (iv) the Unrestricted Definitive Note is being acquired in compliancewith any applicable blue sky securities laws of any state of the United States.

 

2.                                       Exchange of Restricted Definitive Notes or BeneficialInterests in Restricted Global Notes for Restricted Definitive Notes orBeneficial Interests in Restricted Global Notes

 

(a) o** Check if Exchange is from beneficial interest in a Restricted GlobalNote to Restricted Definitive Note**.  In connectionwith the Exchange of the Owner’s beneficial interest in a Restricted GlobalNote for a Restricted Definitive Note with an equal principal amount, the Ownerhereby certifies that the Restricted Definitive Note is being acquired for theOwner’s own account without transfer. Upon consummation of the proposed Exchange in accordance with the termsof the Indenture, the Restricted Definitive Note issued will continue to besubject to the restrictions on transfer enumerated in the Private PlacementLegend printed on the Restricted Definitive Note and in the Indenture and theSecurities Act.

 

(b) o  **Check if Exchange is from Restricted Definitive Note to beneficialinterest in a Restricted Global Note**.  In connection with the Exchange of the Owner’sRestricted Definitive Note for a beneficial interest in the [CIRCLE ONE] 144AGlobal Note, Regulation S Global Note, IAI Global Note with an equal principalamount, the Owner hereby certifies (i) the beneficial interest is beingacquired for the Owner’s own account without transfer and (ii) suchExchange has been effected in compliance with the transfer restrictionsapplicable to the Restricted Definitive Note and pursuant to and in accordancewith the Securities Act, and in compliance with any applicable blue skysecurities laws of any state of the United States.  Upon consummation of the proposed Exchange inaccordance with the terms of the Indenture, the beneficial interest issued willbe subject to the restrictions on transfer enumerated in the Private PlacementLegend printed on the relevant Restricted Global Note and in the Indenture andthe Securities Act.

 

C-2

----

 

Thiscertificate and the statements contained herein are made for your benefit andthe benefit of the Company.

 
|   |                        |
|--------|-----------------------------|
|   | [Insert Name of Transferor] |
|   |                        |
|   |                        |
|   | By:                         |   |
|   |                        | Name: |
|   |                        | Title: |
|   |                        |   |
|   | Dated:                      |   |
|        |                             |  |  |

 

C-3

----

** **

**EXHIBIT D**

** **

**FORM OF CERTIFICATE FROMACQUIRING INSTITUTIONAL ACCREDITED INVESTOR**

** **

Videotron Ltd.

612 St. Jacques Street

Montréal, Québec  H3C 4M8

Canada

Attention:  Vice President, LegalAffairs

 

Wells Fargo Bank,National Association.

213 Court Street, Suite 703

Middletown, CT 06457

Attention: CorporateTrust Services

Facsimile No.:  (860) 704-6219

 

Re:                               91/8% Senior Notes due April 15, 2018

 

Referenceis hereby made to the Indenture, dated as of April 15, 2008 (the “*Indenture*”), among Videotron Ltd., as issuer (the “*Company*”), the Subsidiary Guarantors party thereto and WellsFargo Bank, National Association, as trustee. Capitalized terms used but not defined herein shall have the meaningsgiven to them in the Indenture.

 

Inconnection with our proposed purchase ofUS$                        aggregate principal amount of:

 

(a) o  abeneficial interest in a Global Note, or

 

(b) o  aDefinitive Note,

 

we confirm that:

 

1.                                       We understand that any subsequent transfer of theNotes or any interest therein is subject to certain restrictions and conditionsset forth in the Indenture and the undersigned agrees to be bound by, and notto resell, pledge or otherwise transfer the Notes or any interest thereinexcept in compliance with, such restrictions and conditions and the UnitedStates Securities Act of 1933, as amended (the “*SecuritiesAct*”).

 

2.                                       We understand that the offer and sale of the Noteshave not been registered under the Securities Act, and that the Notes and anyinterest therein may not be offered or sold except as permitted in thefollowing sentence.  We agree, on our ownbehalf and on behalf of any accounts for which we are acting as hereinafterstated, that if we should sell the Notes or any interest therein, we will do soonly (A) to the Company or any subsidiary thereof, (B) in accordancewith Rule 144A under the Securities Act to a “qualified institutionalbuyer” (as defined therein) that purchases for its own account or for theaccount of a qualified institutional buyer to whom notice is given that thetransfer is being made in reliance on Rule 144A under the Securities Act, (C) toan institutional “accredited investor” (as defined below) that, prior to suchtransfer, furnishes (or has furnished on its behalf by a U.S. broker-dealer) toyou and to the Company a signed letter substantially in the form of this letterand, such transfer is in respect of a minimum principal amount of Notes ofUS$250,000, (D) pursuant to offers and sales to non-U.S. Persons thatoccur outside the United States in accordance with Rule 904 of RegulationS under the Securities Act, (E) pursuant to any other available exemptionunder the Securities Act or (F) pursuant to an effective registrationstatement under the Securities Act, and we further agree to provide to anyPerson purchasing the Definitive Note or beneficial interest in a Global Notefrom us in a transaction meeting the requirements of clauses (A) through (E) ofthis paragraph a notice advising such purchaser that resales thereof arerestricted as stated herein.

 

3.                                       We understand that, on any proposed resale of theNotes or beneficial interest therein, we will be required to furnish to you andthe Company such certifications, legal opinions and other information as you 

 

D-1

----

 

and the Company may reasonably require to confirm thatthe proposed sale complies with the foregoing restrictions.  We further understand that the Notespurchased by us will bear a legend to the foregoing effect.

 

4.                                       We are an institutional “accredited investor” (asdefined in Rule 501(a)(1), (2), (3) or (7) of Regulation D underthe Securities Act) and have such knowledge and experience in financial andbusiness matters as to be capable of evaluating the merits and risks of ourinvestment in the Notes, and we and any accounts for which we are acting areeach able to bear the economic risk of our or its investment.  We have had access to such financial andother information and have been afforded the opportunity to ask such questionsof representatives of the Company and receive answers thereto, as we deemnecessary in connection with our decision to purchase the Notes.

 

5.                                       We are acquiring the Notes or beneficial interesttherein purchased by us for our own account, or for one or more accounts (eachof which is an institutional “accredited investor”) as to each of which weexercise sole investment discretion, for investment purposes only and are notacquiring the Notes with a view to any distribution thereof in a transactionthat would violate the Securities Act of the securities laws of any state ofthe United States or any other applicable jurisdiction.

 

Youand the Company are entitled to rely upon this letter and are irrevocablyauthorized to produce this letter or a copy hereof to any interested party inany administrative or legal proceedings or official inquiry with respect to thematters covered hereby.  This lettershall be governed by, and construed in accordance with, the laws of the Stateof New York.

 
|   |   |                                 |
|--------|--------|--------------------------------------|
|   |   | [Insert Name of Accredited Investor] |
|   |   |                                 |
|   |   |                                 |
|   |   | By:                                  |   |
|   |   |                                 | Name: |
|   |   |                                 | Title: |
|   |   |                                 |   |
| Dated: |   |                                 |   |
|        |        |                                      |  |  |

 

D-2

----

** **

**EXHIBIT E**

** **

**FORM OF NOTATION OF GUARANTEE**

** **

Forvalue received, each Subsidiary Guarantor (which term includes any successorPerson under the Indenture), jointly and severally, hereby unconditionallyguarantees, to the extent set forth in the Indenture and subject to theprovisions in the Indenture, dated as of April 15, 2008 (the “*Indenture*”), among Videotron Ltd., as issuer (the “*Company*”), the Subsidiary Guarantors listed on the signaturepages thereto and Wells Fargo Bank, National Association, as trustee (the “*Trustee*”), (a) the due and punctual payment of theprincipal of, premium, if any, and interest and Special Interest and AdditionalAmounts, if any, on the Notes, whether at maturity, by acceleration, redemptionor otherwise, the due and punctual payment of interest on overdue principal andpremium, if any, and, to the extent permitted by law, interest and SpecialInterest and Additional Amounts, if any, and the due and punctual performanceof all other obligations of the Company to the Holders or the Trustee under theNotes and the Indenture, all in accordance with the terms of the Notes and theIndenture; and (b) in case of any extension of time of payment or renewalof any Notes or any of such other obligations, that the same shall be promptlypaid in full when due or performed in accordance with the terms of theextension or renewal, whether at maturity, by acceleration pursuant to Section 6.02of the Indenture, redemption or otherwise. The obligations of the Subsidiary Guarantors to the Holders of Notes andto the Trustee pursuant to the Subsidiary Guarantee and the Indenture areexpressly set forth in Article 10 of the Indenture and reference is herebymade to the Indenture for the precise terms of the Subsidiary Guarantee.  Except to the extent provided in theIndenture, including Sections 8.02, 8.03 and 10.05 thereof, thisSubsidiary Guarantee shall not be discharged except by complete performance ofthe obligations contained herein and in the Indenture.  Each Holder of a Note, by accepting the sameagrees to and shall be bound by such provisions.  Capitalized terms used herein and not definedare used herein as so defined in the Indenture.

 
|   |   | [NAME  OF GUARANTOR] |
|--------|--------|----------------------|
|   |   |                 |
|   |   | By:                  |   |
|   |   |                 | Name: |
|   |   |                 | Title: |

 

E-1

----

 

**EXHIBITF**

 

**FORM OFSUBORDINATION AGREEMENT**

 

This SUBORDINATIONAGREEMENT is dated as of                                                                                                     (the “Agreement”).

 

To:                              Wells Fargo Bank, National Association.,for itself and as trustee under the Indenture referred to below for the holdersof the Notes (the “Trustee”)

 

[OBLIGOR] (the “Obligor”),as obligor under the obligation dated as of           madeor issued by the Obligor in favor of [HOLDER] (the “Subordinated Security”),and [HOLDER], as holder (the “Holder”) of the Subordinated Security, for tendollars and other good and valuable consideration received by each of theObligor and the Holder from the Trustee and any other Representative and byeach of the Obligor and the Holder from the other, agree as follows:

 

1.                                                                                       **Interpretation**.

 

(a)                                  “Cash, Property orSecurities”.  “Cash, Property orSecurities” shall not be deemed to include securities of the Obligor or anyother Person provided for by a plan of reorganization or readjustment, thepayment of which is subordinated at least to the extent provided herein withrespect to the Subordinated Security, to the payment of all Senior Indebtednesswhich may at the time be outstanding; provided, however, that (i) allSenior Indebtedness is assumed by the new Person, if any, resulting from anysuch reorganization or readjustment, and (ii) the rights of the holders ofthe Senior Indebtedness are not, without the consent of such holders, alteredby such reorganization or readjustment.

 

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

 

(c)                                  “Representative” meansthe agent (including an administrative agent), trustee or representative ofholders of Senior Indebtedness.

 

(d)                                 “Senior Indebtedness”.  “Senior Indebtedness” means,at any date, all indebtedness (including, without limitation, any and allamounts of principal, interest, special interest, additional amounts, premium,fees, penalties, indemnities and “post-petition interest” in bankruptcy and anyreimbursement of expenses) under (1) the Indenture, including, withoutlimitation, the “Notes,” the “Subsidiary Guarantees,” the “Exchange Notes,” the“Additional Notes” and any “guarantee” of the Exchange Notes or the AdditionalNotes (in each case, as defined in the Indenture), (2) the indenture,dated as of September 16, 2005, as supplemented by the first supplementalindenture, dated as of April **[15]**, 2008 (the“2005 Indenture”), among Videotron, the guarantors thereto and Wells FargoBank, National Association, as Trustee, including, without limitation, the “Notes,”the “Subsidiary Guarantees,” the “Exchange Notes,” the “Additional Notes” andany “guarantee” of the Exchange Notes or the Additional Notes (in each case, asdefined in the 2005 Indenture), (3) the indenture, dated as of October 8,2003, as supplemented by the first supplemental indenture, dated as of July 12,2004, the second supplemental indenture, dated as of July 15, 2005, andthe third supplemental indenture, dated as of April **[15]**,2008 (the “2003 Indenture”), among Videotron, the guarantors thereto and WellsFargo Bank, National Association, as Trustee, including, without limitation,the “Notes,” the “Subsidiary Guarantees,” the “Exchange Notes,” the “AdditionalNotes” and any “guarantee” of the Exchange Notes or the Additional Notes (in eachcase, as defined in the 2003 Indenture) and (4) any Credit Facilities (asdefined in the Indenture) of Videotron.

 

2.                                                                                       **AgreementEntered into Pursuant to Indenture**. The Obligor and the Holder are enteringinto this Agreement pursuant to the provisions of the Indenture, dated as of April 15,2008 (the “Indenture”;capitalized terms used herein without definition having the meanings set forththerein) among Videotron, the Subsidiary Guarantors and the Trustee.  Pursuant to the Indenture, Videotron has issued and the SubsidiaryGuarantors have guaranteed, 91/8% Senior Notes due April 15, 2018 of Videotron.

 

F-1

----

 

3.                                                                                       **Subordination**.  The indebtedness or obligation represented bythe Subordinated Security shall be subordinated as follows:

 

(a)                                  Agreement to Subordinate.  The Obligor, for itself and its successorsand assigns, and the Holder agree, that the indebtedness or obligationevidenced by the Subordinated Security (including, without limitation,principal, interest, premium, redemption or retraction amount, dividend, fees,penalties, indemnities and “post-petition interest” in bankruptcy and anyreimbursement of expenses) is subordinate and junior in right of payment, tothe extent and in the manner provided in this Section 3, to the priorpayment in full of all Senior Indebtedness. The provisions of this Section 3are for the benefit of the Trustee and/or other Representative acting on behalfof the holders from time to time of Senior Indebtedness, and such holders arehereby made obligees hereunder to the same extent as if their names werewritten herein as such, and they (collectively or singly) may proceed toenforce such provisions.

 

(b)                                 Liquidation, Dissolution or Bankruptcy.

 

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

 

(A)                              the holders of SeniorIndebtedness shall be entitled to receive payment in full of all SeniorIndebtedness before the Holder shall be entitled to receive any payment of anyamount owing in respect of the Subordinated Security (including, withoutlimitation, principal, interest, premium, redemption or retraction amount, ordividend);

 

(B)                                until payment in full of allSenior Indebtedness, any distribution of assets of the Obligor of any kind orcharacter to which the Holder would be entitled but for this Section 3 ishereby assigned absolutely to the holders of Senior Indebtedness (equally andratably among the holders of Senior Indebtedness) and shall be paid by theObligor or by any receiver, trustee in bankruptcy, liquidating trustee, agentsor other Persons making such payment or distribution to the Trustee and/orother Representative on behalf of the holders of Senior Indebtedness, as theirinterests may appear; and

 

(C)                                in the event that, notwithstandingthe foregoing, any payment or distribution of assets of the Obligor of any kindor character, whether in Cash, Property or Securities, shall be received by theHolder before all Senior Indebtedness is paid in full, such payment ordistribution shall be held in trust for the benefit of and shall be paid overto the Trustee and/or other Representative on behalf of the holders of SeniorIndebtedness (equally and ratably among the holders of Senior Indebtedness), astheir interests may appear, for application to the payment of all SeniorIndebtedness until all Senior Indebtedness shall have been paid in full aftergiving effect to any concurrent payment or distribution to the holders ofSenior Indebtedness in respect of such Senior Indebtedness.

 

(ii)          If (A) a bankruptcy, reorganization,insolvency, receivership or similar proceeding relating to the Obligor or itsproperty (a “Reorganization Proceeding”) is commenced and is continuing and (B) theHolder does not file proper claims or proofs of claim in the form required in aReorganization Proceeding prior to 45 days before the expiration of the time tofile such claims, then (1) upon the request of the Trustee, the Holdershall file such claims and 

 

F-2

----

 

proofs of claim in respect of the SubordinatedSecurity and execute and deliver such powers of attorney, assignments andproofs of claim or proxies as may be directed by the Trustee to enable it toexercise in the sole discretion of the Trustee any and all voting rightsattributable to the Subordinated Security which are capable of being voted(whether by meeting, written resolution or otherwise) in a ReorganizationProceeding and enforce any and all claims upon or in respect of theSubordinated Security and to collect and receive any and all payments ordistributions which may be payable or deliverable at any time upon or inrespect of the Subordinated Security, and (2) whether or not the Trusteeshall take the action described in clause (1) above, the Trustee shallnevertheless be deemed to have such powers of attorney as may be necessary toenable the Trustee to exercise such voting rights, file appropriate claims andproofs of claim and otherwise exercise the powers described above for and onbehalf of the Holder.

 

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

 

(i)             impair, as between the Obligor and theHolder, the obligation of the Obligor, which is absolute and unconditional,**to make the payments required by theSubordinated Security in accordance with its terms; or

 

(ii)          affect the relative rights of the Holderand creditors of the Obligor other than the holders of Senior Indebtedness; or

 

(iii)       affect the relative rights of the holdersof Senior Indebtedness among themselves; or

 

(iv)      prevent the Holder from exercising itsavailable remedies upon a default, subject to the rights of the holders ofSenior Indebtedness to receive cash, property or other assets otherwise payableto the Holder.

 

(d)                                 Subordination May Not Be Impaired.

 

(i)             No right of any holder of SeniorIndebtedness to enforce the subordination of indebtedness or obligationevidenced by the Subordinated Security shall in any way be prejudiced orimpaired by any act or failure to act by the Obligor or by any such holder orthe Trustee, or by any non-compliance by the Obligor with the terms, provisionsor covenants herein, regardless of any knowledge thereof which any such holderor the Trustee may have or be otherwise charged with. Neither the subordinationof the Subordinated Security as herein provided nor the rights of the holdersof Senior Indebtedness with respect hereto shall be affected by any extension,renewal or modification of the terms, or the granting of any security inrespect of, any Senior Indebtedness or any exercise or non-exercise of anyright, power or remedy with respect thereto.

 

(ii)          The Holder agrees that all indebtedness orobligation evidenced by the Subordinated Security will be unsecured by any Lienupon or with respect to any property of the Obligor.

 

(iii)       The Holder agrees not to exercise anyoffset or counterclaim or similar right in respect of the indebtedness orobligation evidenced by the Subordinated Security except to the extent paymentof such indebtedness or obligation is permitted and will not assign orotherwise dispose of the Subordinated Security or the 

 

F-3

----

 

indebtedness or obligation which it evidences unlessthe assignee or acquiror, as the case may be, agrees to be bound by the termsof this Agreement.

 

(e)                                  Holder Entitled to Rely.  Upon any payment or distribution pursuant tothis Section 3, the Holder shall be entitled to rely (i) upon anyorder or decree of a court of competent jurisdiction in which any proceedingsof the nature referred to in Section 3(b) are pending, (ii) upona certificate of the liquidating trustee or agent or other person in suchproceedings making such payment or distribution to the Holder or itsrepresentative, if any, or (iii) upon a certificate of the Trustee and/orother Representative (if any) of the holders of Senior Indebtedness for thepurpose of ascertaining the persons entitled to participate in such payment ordistribution, the holders of the Senior Indebtedness and other indebtedness ofthe Obligor, the amount thereof or payable thereon, the amount or amounts paidor distributed thereon and all other facts pertinent thereto or to this Section 3.

 

4.                                                                                       **Enforceability**.  Each of the Obligor and theHolder represents and warrants that this Agreement has been duly authorized,executed and delivered by each of the Obligor and the Holder and constitutes avalid and legally binding obligation of each of the Obligor and the Holder, enforceablein accordance with its terms, subject to bankruptcy, insolvency, fraudulenttransfer, reorganization, moratorium and similar laws of general applicabilityrelating to or affecting creditors’ rights and to general equity principles; and that, in thecase of a Subordinated Security made or issued by Videotron or a Subsidiary Guarantor, on the datehereof, the Holder shall deliver an opinion or opinions of counsel to sucheffect to the Trustee for the benefit of the holders of the Senior Indebtednessunder the Indenture.

 

5.                                                                                       **Miscellaneous**.

 

(a)                                  Until payment in full of allthe Senior Indebtedness, the Obligor and the Holder agree that no amendmentshall be made to the Subordinated Security which would affect the rights of theholders of the Senior Indebtedness hereunder.

 

(b)                                 This Agreement may not beamended or modified in any respect, nor may any of the terms or provisionshereof be waived, except by an instrument signed by the Obligor, the Holder andthe Trustee and/or other Representative (if any).

 

(c)                                  This Agreement shall bebinding upon each of the parties hereto and their respective successors andassigns and shall inure to the benefit of the Trustee and/or otherRepresentative (if any) and each and every holder of Senior Indebtedness andtheir respective successors and assigns.

 

(d)                                 This Agreement shall begoverned by and construed in accordance with the laws of the State of New York.

 

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

 

(f)                                    The Holder and the Obligorwill whenever and as often as reasonably requested to do so by the Trusteeand/or other Representative (if any), do, execute, acknowledge and deliver anyand all such other and further acts, assignments, transfers and any instrumentsof further assurance, approvals and consents as are necessary or proper inorder to give complete effect to this Agreement.

 

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

 

F-4

----

 

If tothe Obligor:

 

[                                            ]

 

If to the Holder:

 

[                                            ]

 

Each of the Holder and the Obligor furtheragrees to take any and all action as may be necessary to maintain suchdesignation and appointment of such agent in full force and effect so long asany Notes or Exchange Notes (including any Additional Notes) remainoutstanding.

 

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

 
| ** ** | **[OBLIGOR]** |
|------------|---------------|
| ** ** | ** **    |
|       | By            |   |
|       |          | Name: |
|       |          | Title: |
|       |          |   |
| ** ** | **[HOLDER]**  |
| ** ** | ** **    |
|       | By            |   |
|       |          | Name: |
|       |          | Title: |

 

F-5

----

 

**TABLE OF CONTENTS**

 

**Page**

 

**Table of Contents**

 
| ** **                                             | ** **                                             | **Page** |
|--------------------------------------------------------|--------------------------------------------------------|----------|
|                                                   |                                                   |
| ARTICLE 1. DEFINITIONS AND  INCORPORATION BY REFERENCE | 1                                                      |
| Section 1.01.                                     | **Definitions**                                        | 1        |
| Section 1.02.                                     | **Other Definitions**                                  | 21       |
| Section 1.03.                                     | **Incorporation by Reference of  Trust Indenture Act** | 22       |
| Section 1.04.                                     | **Rules of Construction**                         | 22       |
| ARTICLE 2. THE NOTES                                   | 23                                                     |
| Section 2.01.                                     | **Form and Dating**                               | 23       |
| Section 2.02.                                     | **Execution and Authentication**                       | 23       |
| Section 2.03.                                     | **Registrar and Paying Agent**                         | 24       |
| Section 2.04.                                     | **Paying Agent to Hold Money in  Trust**               | 24       |
| Section 2.05.                                     | **Holder Lists**                                       | 24       |
| Section 2.06.                                     | **Transfer and Exchange**                              | 25       |
| Section 2.07.                                     | **Replacement Notes**                                  | 35       |
| Section 2.08.                                     | **Outstanding Notes**                                  | 35       |
| Section 2.09.                                     | **Treasury Notes**                                     | 35       |
| Section 2.10.                                     | **Temporary Notes**                                    | 36       |
| Section 2.11.                                     | **Cancellation**                                       | 36       |
| Section 2.12.                                     | **Defaulted Interest**                                 | 36       |
| Section 2.13.                                     | **CUSIP or ISIN Numbers**                              | 36       |
| Section 2.14.                                     | **Special Interest**                                   | 36       |
| Section 2.15.                                     | **Issuance of Additional Notes**                       | 37       |
| ARTICLE 3. REDEMPTION AND PREPAYMENT                   | 37                                                     |
| Section 3.01.                                     | **Notices to Trustee**                                 | 37       |
| Section 3.02.                                     | **Selection of Notes to Be  Redeemed**                 | 37       |
| Section 3.03.                                     | **Notice of Redemption**                               | 38       |
| Section 3.04.                                     | **Effect of Notice of Redemption**                     | 38       |
| Section 3.05.                                     | **Deposit of Redemption Price**                        | 38       |
| Section 3.06.                                     | **Notes Redeemed in Part**                             | 39       |
| Section 3.07.                                     | **Optional Redemption**                                | 39       |
| Section 3.08.                                     | **Mandatory Redemption**                               | 40       |
| Section 3.09.                                     | **Offers To Purchase**                                 | 40       |
| ARTICLE 4. COVENANTS                                   | 42                                                     |

 

i

----

 

**TABLE OF CONTENTS**

**(continued)**

 
| ** **                       | ** **                                                                             | **Page** |
|----------------------------------|----------------------------------------------------------------------------------------|----------|
|                             | ** **                                                                             |     |
| Section 4.01.               | **Payment of Notes**                                                                   | 42       |
| Section 4.02.               | **Maintenance of Office or Agency**                                                    | 42       |
| Section 4.03.               | **Reports**                                                                            | 42       |
| Section 4.04.               | **Compliance Certificate**                                                             | 43       |
| Section 4.05.               | **Taxes**                                                                              | 43       |
| Section 4.06.               | **Stay, Extension and Usury Laws**                                                     | 43       |
| Section 4.07.               | **Corporate Existence**                                                                | 44       |
| Section 4.08.               | **Payments for Consent**                                                               | 44       |
| Section 4.09.               | **Incurrence of Indebtedness and  Issuance of Preferred Shares**                       | 44       |
| Section 4.10.               | **Restricted Payments**                                                                | 47       |
| Section 4.11.               | **Liens**                                                                              | 49       |
| Section 4.12.               | **Asset Sales**                                                                        | 49       |
| Section 4.13.               | **Dividend and Other Payment  Restrictions Affecting Subsidiaries**                    | 51       |
| Section 4.14.               | **Transactions with Affiliates**                                                       | 53       |
| Section 4.15.               | **Sale and Leaseback Transactions**                                                    | 54       |
| Section 4.16.               | **Issuances and Sales of Equity  Interests in Subsidiaries**                           | 54       |
| Section 4.17.               | **Designation of Restricted and  Unrestricted Subsidiaries**                           | 55       |
| Section 4.18.               | **Repurchase at the Option of  Holders Upon a Change of Control**                      | 56       |
| Section 4.19.               | **Future Guarantors**                                                                  | 56       |
| Section 4.20.               | **Additional Amounts**                                                                 | 56       |
| Section 4.21.               | **Business Activities**                                                                | 57       |
| ARTICLE 5. SUCCESSORS            | 58                                                                                     |
| Section 5.01.               | **Merger, Consolidation and Sale  of Assets of the Company and Subsidiary Guarantors** | 58       |
| Section 5.02.               | **Successor Corporation  Substituted**                                                 | 59       |
| ARTICLE 6. DEFAULTS AND REMEDIES | 59                                                                                     |
| Section 6.01.               | **Events of Default**                                                                  | 59       |
| Section 6.02.               | **Acceleration**                                                                       | 61       |
| Section 6.03.               | **Other Remedies**                                                                     | 62       |
| Section 6.04.               | **Waiver of Past Defaults**                                                            | 62       |
| Section 6.05.               | **Control by Majority**                                                                | 62       |
| Section 6.06.               | **Limitation on Suits**                                                                | 62       |
| Section 6.07.               | **Rights of Holders to Receive  Payment**                                              | 63       |
| Section 6.08.               | **Collection Suit by Trustee**                                                         | 63       |
| Section 6.09.               | **Trustee May File Proofs of  Claim**                                             | 63       |

 

ii

----

 

**TABLE OF CONTENTS**

**(continued)**

 
| ** **                                          | ** **                                                                                        | **Page** |
|-----------------------------------------------------|---------------------------------------------------------------------------------------------------|----------|
|                                                | ** **                                                                                        |     |
| Section 6.10.                                  | **Priorities**                                                                                    | 63       |
| Section 6.11.                                  | **Undertaking for Costs**                                                                         | 64       |
| ARTICLE 7. TRUSTEE                                  | 64                                                                                                |
| Section 7.01.                                  | **Duties of Trustee**                                                                             | 64       |
| Section 7.02.                                  | **Rights of Trustee**                                                                             | 65       |
| Section 7.03.                                  | **Individual Rights of Trustee**                                                                  | 66       |
| Section 7.04.                                  | **Trustee’s Disclaimer**                                                                     | 66       |
| Section 7.05.                                  | **Notice of Defaults**                                                                            | 66       |
| Section 7.06.                                  | **Reports by Trustee to Holders**                                                                 | 66       |
| Section 7.07.                                  | **Compensation and Indemnity**                                                                    | 66       |
| Section 7.08.                                  | **Replacement of Trustee**                                                                        | 67       |
| Section 7.09.                                  | **Successor Trustee by Merger,  etc**.                                                            | 68       |
| Section 7.10.                                  | **Eligibility; Disqualification**                                                                 | 68       |
| Section 7.11.                                  | **Preferential Collection of  Claims Against Company**                                            | 68       |
| ARTICLE 8. LEGAL DEFEASANCE AND COVENANT DEFEASANCE | 68                                                                                                |
| Section 8.01.                                  | **Option to Effect Legal  Defeasance or Covenant Defeasance**                                     | 68       |
| Section 8.02.                                  | **Legal Defeasance and Discharge**                                                                | 68       |
| Section 8.03.                                  | **Covenant Defeasance**                                                                           | 69       |
| Section 8.04.                                  | **Conditions to Legal or Covenant  Defeasance**                                                   | 69       |
| Section 8.05.                                  | **Deposited Cash and Government  Securities to be Held in Trust; Other Miscellaneous Provisions** | 70       |
| Section 8.06.                                  | **Repayment to Company**                                                                          | 71       |
| Section 8.07.                                  | **Reinstatement**                                                                                 | 71       |
| ARTICLE 9. AMENDMENT, SUPPLEMENT AND WAIVER         | 71                                                                                                |
| Section 9.01.                                  | **Without Consent of Holders of  Notes**                                                          | 71       |
| Section 9.02.                                  | **With Consent of Holders of  Notes**                                                             | 72       |
| Section 9.03.                                  | **Compliance with Trust Indenture  Act**                                                          | 73       |
| Section 9.04.                                  | **Revocation and Effect of  Consents**                                                            | 74       |
| Section 9.05.                                  | **Notation on or Exchange of  Notes**                                                             | 74       |
| Section 9.06.                                  | **Trustee to Sign Amendments,  etc.**                                                             | 74       |
| ARTICLE 10. SUBSIDIARY GUARANTEES                   | 74                                                                                                |
| Section 10.01.                                 | **Guarantee**                                                                                     | 74       |
| Section 10.02.                                 | **Limitation on Subsidiary  Guarantor Liability**                                                 | 75       |
| Section 10.03.                                 | **Execution and Delivery of  Subsidiary Guarantee**                                               | 76       |
| Section 10.04.                                 | **Subsidiary Guarantors  May Consolidate, etc., on Certain Terms**                           | 76       |

 

iii

----

 

**TABLE OF CONTENTS**

**(continued)**

 
| ** **                             | ** **                                                                                        | **Page** |
|----------------------------------------|---------------------------------------------------------------------------------------------------|----------|
|                                   | ** **                                                                                        |     |
| Section 10.05.                    | **Releases Following Sale of  Assets**                                                            | 77       |
| ARTICLE 11. SATISFACTION AND DISCHARGE | 77                                                                                                |
| Section 11.01.                    | **Satisfaction and Discharge**                                                                    | 77       |
| Section 11.02.                    | **Deposited Cash and Government  Securities to be Held in Trust; Other Miscellaneous Provisions** | 78       |
| Section 11.03.                    | **Repayment to Company**                                                                          | 78       |
| ARTICLE 12. MISCELLANEOUS              | 78                                                                                                |
| Section 12.01.                    | **Trust Indenture Act Controls**                                                                  | 78       |
| Section 12.02.                    | **Notices**                                                                                       | 79       |
| Section 12.03.                    | **Communication by Holders of  Notes with Other Holders of Notes**                                | 80       |
| Section 12.04.                    | **Certificate and Opinion as to  Conditions Precedent**                                           | 80       |
| Section 12.05.                    | **Statements Required in  Certificate or Opinion**                                                | 80       |
| Section 12.06.                    | **Rules by Trustee and  Agents**                                                             | 80       |
| Section 12.07.                    | **No Personal Liability of  Directors, Officers, Employees and Shareholders**                     | 80       |
| Section 12.08.                    | **Governing Law**                                                                                 | 81       |
| Section 12.09.                    | **No Adverse Interpretation of  Other Agreements**                                                | 81       |
| Section 12.10.                    | **Successors**                                                                                    | 81       |
| Section 12.11.                    | **Severability**                                                                                  | 81       |
| Section 12.12.                    | **Consent to Jurisdiction and  Service of Process**                                               | 81       |
| Section 12.13.                    | **Conversion of Currency**                                                                        | 81       |
| Section 12.14.                    | **Currency Equivalent**                                                                           | 82       |
| Section 12.15.                    | **Counterpart Originals**                                                                         | 82       |
| Section 12.16.                    | **Table of Contents, Headings,  etc**.                                                            | 83       |
| Section 12.17.                    | **Qualification of this Indenture**                                                               | 83       |

 

| EXHIBIT A: |   | FORM OF NOTE                                                          |
|------------|--------|----------------------------------------------------------------------------|
| EXHIBIT B: |   | FORM OF CERTIFICATE  OF TRANSFER                                      |
| EXHIBIT C: |   | FORM OF  CERTIFICATE OF EXCHANGE                                      |
| EXHIBIT D: |   | FORM OF  CERTIFICATE FROM ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR |
| EXHIBIT E: |   | FORM OF NOTATION  OF GUARANTEE                                        |
| EXHIBIT F: |   | FORM OF  SUBORDINATION AGREEMENT                                      |

 

iv

----

 

CROSS-REFERENCETABLE

 
| **TIA Section   Reference** |   | **Indenture    Section** |
|----------------------------------|--------|--------------------------|
|                             |   |                     |
| 310(a)(1)                        |   | 7.10                     |
| (a)(2)                           |   | 7.10                     |
| (a)(3)                           |   | N.A.                     |
| (a)(4)                           |   | N.A.                     |
| (a)(5)                           |   | 7.10                     |
| (b)                              |   | 7.08, 7.10               |
| (c)                              |   | N.A.                     |
| 311(a)                           |   | 7.11                     |
| (b)                              |   | 7.11                     |
| (c)                              |   | N.A.                     |
| 312(a)                           |   | 2.05                     |
| (b)                              |   | 12.03                    |
| (c)                              |   | 12.03                    |
| 313(a)                           |   | 7.06                     |
| (b)(1)                           |   | N.A.                     |
| (b)(2)                           |   | 7.06, 7.07               |
| (c)                              |   | 7.06, 12.02              |
| (d)                              |   | 7.06                     |
| 314(a)                           |   | 4.03, 4.04, 12.02        |
| (b)                              |   | N.A.                     |
| (c)(1)                           |   | 12.04                    |
| (c)(2)                           |   | 12.04                    |
| (c)(3)                           |   | N.A.                     |
| (d)                              |   | N.A.                     |
| (e)                              |   | 12.05                    |
| 315(a)                           |   | 7.01                     |
| (b)                              |   | 7.05, 12.02              |
| (c)                              |   | 7.01                     |
| (d)                              |   | 7.01                     |
| (e)                              |   | 6.11                     |
| 316(a) (last  sentence)     |   | 2.09                     |
| (a)(1)(A)                        |   | 6.05                     |
| (a)(1)(B)                        |   | 6.04                     |
| (a)(2)                           |   | N.A.                     |
| (b)                              |   | 6.07                     |
| 317(a)(1)                        |   | 6.08                     |
| (a)(2)                           |   | 6.09                     |
| (b)                              |   | 2.04                     |
| 318(a)                           |   | 12.01                    |

 

N.A. means NotApplicable.

 

Note:  This Cross-Reference Table shall not, for anypurpose, be deemed to be part of this Indenture.

 

----