Document:

EXHIBIT 10.2

 

HORMEL FOODS CORPORATION

2009 NONEMPLOYEE DIRECTOR DEFERRED STOCK PLAN 

(Plan Adopted November 24, 2008)

 

1.                                       Introduction.

 

1.1.                              Plan
History.  The Hormel Foods
Corporation 2009 Nonemployee Director Deferred Stock Plan (the “Plan”) is
adopted November 24, 2008.   The
Plan is intended to replace the Hormel Foods Corporation Nonemployee Director
Deferred Stock Plan which was first adopted October 4, 1999, and amended
and restated November 24, 2003, September 18, 2006, and January 1,
2008 (the “Prior Plan”).  Deferred
compensation credited under the Prior Plan shall continue to be governed by the
terms of the Prior Plan.

 

1.2.                              Purpose.  The purpose of the Plan is to provide an
opportunity for nonemployee members of the Board of Directors (the “Board”) of
Hormel Foods Corporation (the “Company”) to increase their ownership of shares
of the common stock of the Company, and thereby align their interest in the
long-term success of the Company with that of the other stockholders of the
Company.  This will be accomplished by
allowing each participating director to elect voluntarily to defer all or a
portion of his or her retainer and meeting fees into the right to receive
shares of common stock, par value $.0586 per share, of the Company (“Common
Stock”) at a later date pursuant to elections made by such director under this
Plan.

 

2.                                       Eligibility.  Each individual who is a member of the Board
(a “Director”) and who is not also an officer or other employee of the Company
or its subsidiaries is eligible to participate in this Plan (an “Eligible
Director”).

 

3.                                       Administration.  This Plan will be administered by the
Compensation Committee of the Board (the “Committee”), which is composed solely
of two or more Nonemployee Directors (as defined in Rule 16b-3 promulgated
under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)).  All questions of interpretation of this Plan
will be determined by the Committee, and each determination, interpretation or
other action that the Committee makes or takes pursuant to the provisions of
this Plan will be conclusive and binding for all purposes and on all
persons.  The Committee will not be
liable for any action or determination made in good faith with respect to this
Plan.

 

4.                                       Election
to Defer Receipt of Retainer and Fees.

 

4.1.                              Election
to Defer Cash Compensation.  Each
Eligible Director who decides to participate in this Plan (a “Participating
Director”) may irrevocably elect to defer receipt of cash equal to 25%, 50%,
75% or 100% of the annual cash retainer (“Retainer”) payable to that Director
for services to be rendered as a Director in the “Plan Year” (as defined below)
following such election and 25%, 50%, 75% or 100% of the meeting fees payable
for attendance at Board meetings or meetings of Committees of the Board (“Meeting
Fees”) otherwise payable to such Director for services performed after the
effective date of the Deferral Election (as defined in Section 4.2).  As of the date of adoption of this Plan,
Eligible Directors are customarily paid the Retainer one-half on February 1
and one-half on August 1 of each year, and Meeting Fees are paid on the
day of the meeting.  As used herein, “Plan
Year” means the 12-month period which runs from January 1 through December 31.  Each deferral represents a voluntary election
to forego the receipt of Retainer and/or Meeting Fees in return for the right
to receive shares of Common Stock at a later date (such right being referred to
as a “Stock Unit”).  The amounts to be
deferred will be in the form of Stock Units credited to an account for the
Participating Director (a “Deferred Stock Account”).

 

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No shares of Common Stock will be issued to a Participating Director
until he or she receives a payment under the Plan pursuant to Section 6.

 

4.2.                              Manner
of Making Deferral Election.  A
Participating Director may elect to defer payment of Retainer and Meeting Fees
pursuant to this Plan by filing, no later than December 31 of each year
(or by such earlier date as the Committee shall determine), an irrevocable
election with the Committee on a form provided for that purpose (“Deferral
Election”).  The Deferral Election shall
be effective with respect to the Retainer and Meeting Fees otherwise payable
for services performed during the following Plan Year unless the Participating
Director shall revoke or change the election in accordance with the procedure
set forth in Section 4.6.  The
Deferral Election form shall specify an amount to be deferred expressed as a
percentage of the Participating Director’s Retainer and Meeting Fees.

 

4.3.                              Credits
to Deferred Stock Account for Deferrals. 
On the last business day of each calendar quarter of the Plan Year (the “Credit
Date”), a Participating Director shall receive a credit to his or her Deferred
Stock Account.  The amount credited shall
be in the form of Stock Units in a number equal to the number of shares of
Common Stock (rounded to the nearest one-hundredth of a share) determined by
dividing (i) the product of an amount equal to the Retainer and Meeting
Fees specified for deferral that would otherwise have been paid to the
Participating Director for the applicable calendar quarter multiplied by 105%
by (ii) the Fair Market Value of one share of Common Stock on the Credit
Date.

 

4.4.                              Dividend
Credit.  Each time a dividend is paid
on shares of Common Stock, the Participating Director shall receive a credit of
Stock Units to his or her Deferred Stock Account equal to either the number of
shares (if a stock dividend is paid) or that number of shares of Common Stock
(rounded to the nearest one-hundredth of a share) having a Fair Market Value on
the dividend payment date (if a cash dividend is paid) equal to the amount of
the dividend that would have been payable on the number of shares of Common
Stock equal to the number of Stock Units credited to the Participating Director’s
Deferred Stock Account on the dividend record date.

 

4.5.                              Fair
Market Value.  For purposes of
converting dollar amounts into shares of Common Stock, the Fair Market Value of
each share of Common Stock shall be equal to the closing price of one share of
the Company’s Common Stock on the New York Stock Exchange-Composite
Transactions (or such other principal stock exchange on which the Common Stock
may then be listed) on the last business day of the applicable calendar quarter
of the Plan Year for credits under Section 4 or the applicable payment
date pursuant to Section 6.

 

4.6.                              Change
in Election.  Prior to the first day
of the Plan Year for which a Deferral Election is to become effective, each
Participating Director may irrevocably elect in writing to change a Deferral
Election, either to change the percentage of such Director’s Retainer and
Meeting Fees to be deferred or to discontinue making deferrals and currently
receive the entire Retainer and Meeting Fees in cash (an “Amended Election”).  Once a Deferral Election becomes effective as
of the first day of a Plan Year, such election shall be irrevocable, and an
Amended Election may only be made with respect to Retainer and Meeting Fees
paid for services performed on or after the first day of the Plan Year
commencing after the date of receipt of such Amended Election by the Company.

 

5.                                       Shares
Available for Issuance.

 

5.1.                              Maximum
Number of Shares Available.  Subject
to adjustment pursuant to Section 5.2, the maximum number of shares of
Common Stock that shall be available for issuance under this Plan shall be
200,000.  Shares issuable under this Plan
may be either authorized but unissued shares, shares held in the treasury of
the Company or shares acquired on the open market or otherwise.

 

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5.2.                              Adjustments
to Shares.  In the event of any
reorganization, merger, consolidation, recapitalization, liquidation,
reclassification, stock dividend, stock split, combination of shares, rights
offering, divestiture or extraordinary dividend, an appropriate adjustment will
be made by the Committee in the number and/or kind of securities available for
issuance under this Plan to prevent either the dilution or the enlargement of
the rights of the Eligible Directors and Participating Directors.

 

6.                                       Deferral
Payment.

 

6.1.                              Deferral
Payment Election.  At the time of
making the Deferral Election, each Participating Director shall also complete a
deferral payment election specifying one of the payment options described in
Sections 6.2 and 6.3, and the year following his or her Separation from Service
(as that term is defined in Section 6.5 below) in which amounts credited
to the Participating Director’s Deferred Stock Account shall be paid in a lump
sum pursuant to Section 6.2, or in which installment payments shall
commence pursuant to Section 6.3. 
The deferral payment election shall be irrevocable as to all amounts
credited to the Participating Director’s Deferred Stock Account.  The Participating Director may change the
deferral payment election by means of a subsequent deferral payment election in
writing that will take effect for deferrals credited for Plan Years after the
date the Company receives such subsequent deferral payment election.

 

6.2.                              Payment
of Deferred Stock Accounts in a Lump Sum. 
Unless a Participating Director elects to receive payment of his or her
Deferred Stock Account in installments as described in Section 6.3,
credits to a Participating Director’s Deferred Stock Account shall be payable
in full on February 15 of the year following the Participating Director’s
Separation from Service (or the first business day thereafter) or such other
later date as elected by the Participating Director pursuant to Section 6.1.  All payments shall be made in shares of
Common Stock, with one share of Common Stock issued for each Stock Unit
credited to the Participating Director’s Deferred Stock Account, plus cash in
lieu of any fractional share.

 

6.3.                              Payment
of Deferred Stock Accounts in Installments. 
A Participating Director may elect to have his or her Deferred Stock
Account paid in annual installments commencing the year following Separation
from Service or commencing in a later year as elected by the Participating
Director pursuant to Section 6.1. 
All payments shall be made in shares of Common Stock, with one share of
Common Stock issued for each Stock Unit credited to the Participating Directors
Deferred Stock Account, plus cash in lieu of any fractional share.  All installment payments shall be made
annually on February 15 of each year (or the first business day
thereafter).  The amount of each
installment payment shall be computed as the number of shares credited to the
Participating Director’s Deferred Stock Account on the relevant installment
payment date, multiplied by a fraction, the numerator of which is one and the
denominator of which is the total number of installments elected (not to exceed
ten) minus the number of installments previously paid.  Amounts paid prior to the final installment
payment shall be rounded to the nearest whole number of shares; the final
installment payment shall be for the whole number of Stock Units then credited
to the Participating Director’s Deferred Stock Account, together with cash in
lieu of any fractional share.

 

6.4.                              Change
of Control.  Notwithstanding the
foregoing, in the event of a Participating Director’s Separation from Service
within six months following a Change of Control (as defined below), credits to
a Participating Director’s Deferred Stock Account shall be paid in a lump sum
(notwithstanding any prior election to the contrary) to the Participating
Director or the Participating Director’s beneficiary or estate, as the case may
be, in whole shares of Common Stock (together with cash in lieu of a fractional
share).  “Change of Control” means the
occurrence of a “change in the ownership of the Company,” “change in effective
control of the Company,” and/or a “change in the ownership of a substantial
portion of the Company’s assets” as defined under Treasury Regulation §
1.409A-3(i)(5).

 

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6.5.                              Separation
from Service.  For purposes of this Section 6,
a “Separation from Service” shall mean a complete severance of a Director’s
relationship as a director of the Company and all affiliates, if any, and as an
independent contractor of the Company and all affiliates, if any, for any
reason.   A Director may have a
Separation from Service upon resignation as a director even if the Director
then becomes an employee.   Separation
from Service shall be construed to have a meaning consistent with the term “separation
from service” as used and defined in Section 409A of the Internal Revenue
Code of 1986, as amended (the “Code”). 
If a Director is a “specified employee” (as that term is defined under Section 409A
of the Code), the any amount that becomes payable upon the Director’s
Separation from Service shall be made on the first day of the seventh month following
such Separation from Service.

 

7.                                       Limitation
on Rights of Eligible and Participating Directors.

 

7.1.                              Service
as a Director.  Nothing in this Plan
will interfere with or limit in any way the right of the Company’s Board or its
stockholders to remove an Eligible Director or Participating Director from the
Board.  Neither this Plan nor any action
taken pursuant to it will constitute or be evidence of any agreement or
understanding, express or implied, that the Company’s Board or its stockholders
have retained or will retain an Eligible Director or Participating Director for
any period of time or at any particular rate of compensation.

 

7.2.                              Nonexclusivity
of the Plan.  Nothing contained in
this Plan is intended to effect, modify or rescind any of the Company’s
existing compensation plans or programs or to create any limitations on the
Board’s power or authority to modify or adopt compensation arrangements as the
Board may from time to time deem necessary or desirable.

 

8.                                       Plan
Amendment, Modification and Termination. 
The Board may suspend or terminate this Plan at any time.  The Board may amend this Plan from time to
time in such respects as the Board may deem advisable in order that this Plan
will conform to any change in applicable laws or regulations or in any other
respect that the Board may deem to be in the Company’s best interests.  If there is a termination of the Plan with
respect to all Participants, the Board shall have the right, in its sole
discretion, and notwithstanding any elections made by the Participant, to amend
the Plan to immediately pay all benefits in a lump sum following such Plan
termination, to the extent permissible under Section 409A of the Code.

 

9.                                       Effective
Date and Duration of the Plan.  This
Plan shall become effective as of November 24, 2008, subject to approval
by the stockholders of the Company within six months thereafter, and will
continue until the earlier to occur of (i) the termination of the Plan by
Board or (ii) November 23, 2018.

 

10.                                 Participants
Are General Creditors of the Company. 
The Participating Directors and beneficiaries thereof shall be general,
unsecured creditors of the Company with respect to any payments to be made
pursuant to this Plan and shall not have any preferred interest by way of
trust, escrow, lien or otherwise in any specific assets of the Company.  Although the Company expects to set aside
monies or other assets to meet its obligations hereunder (there being no
obligation to do so), the same shall, nevertheless, be regarded as a part of
the general assets of the Company subject to the claims of its general
creditors, and neither any Participating Director nor any beneficiary thereof
shall have a legal, beneficial or security interest therein.

 

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11.                                 Miscellaneous.

 

11.1.                        Securities Law and Other
Restrictions.  Notwithstanding any
other provision of this Plan or any Deferral Election or Amended Election
delivered pursuant to this Plan, the Company will not be required to issue any
shares of Common Stock under this Plan and a Participating Director may not
sell, assign, transfer or otherwise dispose of shares of Common Stock issued
pursuant to this Plan, unless (a) there is in effect with respect to such
shares a registration statement under the Securities Act of 1933, as amended
(the “Securities Act”) and any applicable state securities laws or an exemption
from such registration under the Securities Act and applicable state securities
laws and (b) there has been obtained any other consent, approval or permit
from any other regulatory body that the Committee, in its sole discretion,
deems necessary or advisable.  The
Company may condition such issuance, sale or transfer upon the receipt of any
representations or agreements from the parties involved, and the placement of
any legends on certificates representing shares of Common Stock, as may be
deemed necessary or advisable by the Company, in order to comply with such
securities law or other restriction.

 

11.2.                        Governing Law.  The validity, construction, interpretation,
administration and effect of this Plan and any rules, regulations and actions
relating to this Plan will be governed by and construed exclusively in
accordance with the internal laws (without regard to conflict of laws
principles) of the State of Delaware.

 

5Exhibit 4.1

 

VIDÉOTRON
LTÉE, as Borrower

 

-and-

 

RBC
DOMINION SECURITIES INC., as Lead Arranger and Bookrunner

 

-and-

 

BANK OF AMERICA, N.A., CANADA BRANCH

 

BMO NESBITT BURNS INC.

 

THE TORONTO-DOMINION BANK

 

THE BANK OF NOVA SCOTIA

 

as Co-Arrangers

 

-and-

 

THE FINANCIAL
INSTITUTIONS NAMED

ON THE SIGNATURE PAGES HERETO

 

as Lenders

 

ROYAL
BANK OF CANADA, as Administrative Agent

 

as of

 

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

 

 

$450,000,000

 

CREDIT AGREEMENT

 

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

 

 

 

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

 

	
  AMONG:

  	
   

  	
  VIDÉOTRON
  LTÉE, a company
  constituted in accordance with the laws of Quebec, having its registered
  office at 300 Viger Street East, 6th floor, in the
  City of Montreal, Province of Quebec (hereinafter called the “Borrower”)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  PARTY
  OF THE FIRST PART

  
	
   

  	
   

  	
   

  
	
  AND:

  	
   

  	
  THE FINANCIAL INSTITUTIONS NAMED ON THE
  SIGNATURE PAGE HEREOF OR FROM TIME TO TIME PARTIES HERETO (the “Lenders”)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  PARTIES
  OF THE SECOND PART

  
	
   

  	
   

  	
   

  
	
  AND:

  	
   

  	
  ROYAL  BANK OF CANADA, AS
  ADMINISTRATIVE AGENT FOR THE LENDERS, a Canadian bank, having a
  place of business at 200 Bay Street, 12th floor, South
  Tower, Royal Bank Plaza, in the City of Toronto, Province of Ontario
  (hereinafter called the “Agent”)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  PARTY
  OF THE THIRD PART

  

 

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

 

NOW THEREFORE, THE PARTIES HERETO HAVE AGREED AS
FOLLOWS:

 

1.             INTERPRETATION

 

1.1           Definitions

 

The following words and expressions, when used in this
Agreement or in any agreement supplementary hereto, unless the contrary is
stipulated, have the following meaning:

 

 

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

 

1.1.2                  “Additional Offering”  means an
Offering of unsecured Debt incurred or issued by the Borrower having a maturity
date (meaning the date on which repayment can be required by the lender, not
the date of any initial maturity leading to an automatic conversion or
replacement) expiring after the expiry of the Term, the terms and conditions of
which Offering (including any automatic conversion or replacement as aforesaid
and excluding, for greater certainty, (a) pricing, and (b) the right
to require a replacement via an unsecured term loan or an offering of unsecured
high yield Debt in an amount equal to the Additional Offering being replaced (“AO Replacement Debt”)) are no more
favourable to the Persons providing such Debt, in all material respects, than
the provisions hereof; for greater certainty, for the purposes of paragraph (j) of
Section 13.8, any such AO Replacement Debt will not be considered a new
incurrence of Debt;

 

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

 

1.1.4                  “Affiliate” has
the meaning ascribed thereto in the Canada Business Corporations Act and, with
respect to any Lender that is a fund that invests in bank loans, includes any
other fund that invests in bank loans and is advised or managed by the same
investment advisor as such Lender or by an Affiliate of such investment
advisor;

 

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

 

1.1.6                  “Agent” means
Royal Bank of Canada in its capacity as agent for all of the Lenders;

 

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

 

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

 

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

 

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

 

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

 

1.1.11                “Associate” has
the meaning ascribed thereto in the Canada Business Corporations Act;

 

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

 

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

 

	
   

  	
   

  	
  1

  	
   

  
	
   

  	
   

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

  	
   

  

 

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

 

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

 

3

 

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

 

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

 

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

 

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

 

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

 

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

 

in each case on terms whereby:

 

(i)            the aggregate redemption amount
applicable to the preferred shares issued to or by such member of the VL Group
is identical:

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

5

 

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

 

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

 

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

 

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

 

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

 

established in accordance
with its normal practices in amounts equal to the Selected Amount, having an
identical Designated Period to that of the proposed Bankers’ Acceptances to be
issued on such day;

 

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

 

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

 

6

 

1.1.24                “Business Day”
means any day, except Saturdays, Sundays and other days which in Montreal or
Toronto (Canada) are holidays or a day upon which banking institutions are not
authorized or required by law or by local proclamation to close;

 

1.1.25                “Canadian Dollars”
or “Cdn. $” means the lawful currency of
Canada;

 

1.1.26                “Capital Expenditures”
means the aggregate amount actually paid in cash in any period by the VL Group
for or in connection with the acquisition or maintenance of assets required to
be capitalized, including expenditures of the type described in the last
sentence of Section 13.9, determined on a Consolidated basis and otherwise
in accordance with GAAP other than, for greater certainty, expenditures for
Acquisitions permitted by Section 13.7;

 

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

 

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

 

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

 

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

 

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

 

7

 

USA and not
referred to in subsections 1.1.28.1, 1.1.28.2 or 1.1.28.4, and maturing within
364 days from the date of issuance which, at the time of acquisition, is
accorded a short-term credit rating of at least A-1 by S & P or at
least Prime-1 by Moody’s or the equivalent thereof from DBRS;

 

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

 

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

 

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

 

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

 

1.1.32                “Charge” means
any right to any property, or the income or benefits flowing therefrom, which
secures an obligation due to a Person or a claim of such Person, whether such
interest is based on the common law, statute or contract, and 

 

8

 

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

 

1.1.33                “Closing Date”
means November 28, 2000;

 

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

 

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

 

1.1.36                “Consolidated”
means produced by aggregating the relevant financial statements or accounts of
the VL Group on a line-by-line basis (i.e.: adding together corresponding items
of assets, liabilities, revenues and expenses), eliminating inter-company
balances and transactions and providing for any minority interest, all as
otherwise (i.e. except for the fact that the financial information in question
relates to the members of the VL Group, all of which are owned, directly or
indirectly, by the same Person, Quebecor Media Inc., but are not themselves
Subsidiaries of one another) determined in accordance with GAAP;

 

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

 

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

 

1.1.39                “Credit” means
the aggregate amount available to the Borrower under the Revolving Facility;

 

1.1.40                “CRTC” means the Canadian Radio-television and
Telecommunications Commission, or a successor regulatory body, commission or
agency;

 

9

 

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

 

1.1.42                “Debenture Pledge” means the pledge of the Debenture in
favour of the Agent or any designated collateral agent by the Borrower and the
Guarantors;

 

1.1.43                “Debt” includes, for any Person,

 

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

 

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

 

1.1.43.3                                                     obligations
representing the deferred purchase price of goods and services, other than such
obligations incurred in the ordinary course of business of the VL Group and
payable within a period not exceeding 120 days from the date of their
incurrence,

 

1.1.43.4                                                     the
obligations, whether or not assumed, which are secured by Charges on the
property belonging to such Person or payable out of the proceeds flowing
therefrom,

 

1.1.43.5                                                     Contingent
Obligations;

 

1.1.43.6                                                     obligations
under Capital Leases and Synthetic Leases, and

 

1.1.43.7                                                     obligations
under letters of credit, letters of guarantee, bankers’ acceptances or
Guarantees,

 

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

 

1.1.44                “Default” means an event or circumstances, the occurrence or
non-occurrence of which would, with the giving of a notice, lapse of time or
combination 

 

10

 

thereof, constitute an
Event of Default unless remedied within the prescribed delays or renounced to
in writing by the Agent, as authorized by the Lenders;

 

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

 

1.1.46                “Derivative Obligations” means obligations of the Borrower to
one or more Lenders under Derivative Instruments;

 

1.1.47                “Designated Period” means, with respect to a Libor Advance or
a BA Advance, a period designated by the Borrower in accordance with Sections
4.2, 6.1 and 6.4, respectively;

 

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

 

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

 

1.1.50                “EBITDA” means, during a financial period, earnings of the VL
Group before non-controlling interests, earnings from equity-accounted
investments, extraordinary items, non-recurring gains or losses on debt
extinguishment and asset sales and restructuring, Interest Expense, taxes,
depreciation and amortization, foreign exchange translation gains or losses not
involving the payment of cash and other non-cash financial charges, without
taking into account any goodwill adjustments, calculated on a Consolidated
basis, and otherwise in accordance with GAAP; for greater certainty, there
shall be excluded from the calculation of EBITDA, to the extent included in
such calculation, the amount of any income or expense relating to Back-to-Back
Securities and the costs arising out of the termination of the Derivative
Instruments associated with Term Facility B upon its repayment, in an
approximate amount of $8,000,000;

 

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

 

1.1.52                “Excess Cash Flow” means the VL Group’s EBITDA calculated as
at the end of each financial quarter, plus an amount equal to any spread paid
to the 

 

11

 

Borrower resulting from
Back-to-Back Securities, to the extent not previously included in EBITDA, and
less

 

1.1.52.1                  the amount of
taxes paid or otherwise due during the period in question;

 

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

 

1.1.52.3                  the amount of
all voluntary prepayments of Debt, other than (a) payments under the
Revolving Facility or under the unsecured cash management facility not
exceeding $10,000,000 permitted hereunder, (b) voluntary prepayments using
the proceeds of Asset Dispositions and Offerings, and (c) voluntary
prepayments of the QMI Subordinated Debt made in accordance with Section 13.10
hereof;

 

1.1.52.4                  the amount of
extraordinary items not included in earnings but which required the payment of
cash;

 

1.1.52.5                  the amount of
any mandatory principal repayment (other than Mandatory Repayments under
subsections 8.2.1 and 8.2.2) of Debt that is permitted hereunder; and

 

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

 

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

 

1.1.53                “Existing Credit Agreement” means the $800,000,000 credit
agreement, dated as of December 11, 1997, among the Borrower, CF Cable TV
Inc., 

 

12

 

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

 

1.1.54                “Event of Default” means one or more of the events described
in Section 14.1;

 

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

 

1.1.56                “Facility Fee” has the meaning ascribed to it in subsection
5.11.1;

 

1.1.57                “Fees” means the fees payable to the Agent and to the Lenders
in accordance with the provisions of Section 5.11;

 

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

 

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

 

1.1.60                “Generally Accepted Accounting Principles” or “GAAP” means the generally accepted accounting principles
acknowledged by the Canadian Institute of Chartered Accountants and published
in the Canadian Institute of Chartered Accountants’ Handbook;

 

1.1.61                “Guarantees” by any Person means all obligations (other than
endorsements in the ordinary course of business of negotiable instruments for
deposit or collection) of such Person guaranteeing, or in effect guaranteeing,
any Indebtedness, dividend or other obligation of any other Person (the “Primary Obligor”) in any manner, whether directly or
indirectly, including all obligations incurred through an agreement, contingent
or otherwise, by such Person: (a) to purchase such Indebtedness or
obligation or any property or assets constituting security therefor, (b) to
advance or supply funds (i) for the purchase or payment of such
Indebtedness or obligation, or (ii) to maintain working capital or other
balance sheet condition or otherwise to advance or make available funds for the
purchase or payment of such Indebtedness or obligation against loss, (c) to
lease property or to purchase securities or other property or services
primarily for the purpose of assuring the owner of such Indebtedness or
obligation, or (d) otherwise to assure the owner of the Indebtedness or
obligation of the Primary Obligor against loss in respect thereof.  For the purposes of all computations made
under this Agreement, a Guarantee in respect of any Indebtedness for borrowed
money, and a Guarantee in respect of any other obligation or liability or any
dividend, shall be deemed to be Indebtedness equal to the maximum aggregate
amount of such obligation, liability or dividend, unless the Guarantee is
limited in amount, in which case such limit shall be used for such computation;

 

13

 

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

 

1.1.63                “GVL” means Le
Groupe Vidéotron ltée;

 

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

 

1.1.65                “Initial VL Group Guarantors” has the meaning ascribed to it
in the definition of “Guarantors”;

 

1.1.66                “Indebtedness” of any Person means (without duplication) all
obligations of such Person which in accordance with GAAP should be classified
upon a balance sheet of such Person as liabilities of such Person, and in any
event includes all Debt of such Person;

 

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

 

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

 

1.1.69                “Interest Expense” for any period means all interest and all
amortization of debt discount and expense (excluding fees and expenses relating
to the Transaction and the financing thereof or to the HYD Offering, any
Additional Offering or to any other future financing) on any particular
Indebtedness for which such calculations are being made in respect of the VL
Group, excluding interest on
the Back-to-Back Debt to the extent offset by an equal amount of dividends on
the Back-to-Back Preferred Shares, as well as any interest not paid in cash or other 

 

14

 

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

 

1.1.70                “Investments” means all investments, in cash or by delivery
of property, made directly or indirectly in any Person, whether by acquisition
of shares of capital stock, Indebtedness or other obligations or securities or
by loan, advance, capital contribution or otherwise; provided,
however, that “Investments” shall not mean or include investments in
cash or Cash Equivalents or routine investments in inventory, equipment and
supplies to be used or consumed, or trade credit granted, in the ordinary
course of business;

 

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

 

1.1.72                “Issuing Lender” means Royal Bank of Canada
as the issuer of Letters of Credit (in that capacity), or any successor issuer
of Letters of Credit.  For greater
certainty, where the context requires, references to “Lenders” herein include
the Issuing Lender;

 

1.1.73                “Joinder Agreement” means an agreement substantially in the
form of Schedule “O”.

 

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

 

1.1.75                “LC Fees” has the meaning ascribed to such
term in subsection 4.3.2;

 

1.1.76                “Lender” or “Lenders” means
the Revolving Facility Lenders listed in Schedule “A”, together with any
Assignee(s), or, as the context permits, any of them alone.  When used in connection with “Derivative
Instruments”, the term “Lender” shall include any Affiliate of a Lender.  When used in connection with the Security,
the term “Lender” shall include any counterparty to a Derivative Instrument,
provided that the counterparty was a Lender or an Affiliate of a Lender at the
time any such Derivative Instrument was entered into;

 

1.1.77                “Letter of Credit” means any stand-by letter
of credit or letter of guarantee issued by the Issuing Lender in connection
with the Spectrum Auction and Purchase in accordance with the provisions
hereof;

 

15

 

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

 

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

 

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

 

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

 

1.1.82                “Libor Reference Lenders” means any two Lender(s) appointed
by the Agent with the consent of such Lenders and the Borrower, acting
reasonably;

 

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

 

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

 

1.1.85                “Majority Lenders”  means Lenders
having at least 51% of the Commitments;

 

16

 

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

 

1.1.87                “Margin” means, for Prime Rate Advances, Stamping Fees, LC
Fees and Facility Fees, as well as Libor Advances by Foreign Lenders, under the
Revolving Facility, the following annual percentages depending on the VL Group’s
then-applicable Leverage Ratio, determined at the times and in the manner set
out below the table:

 

	
  Leverage Ratio

  	
   

  	
  Facility Fees

  	
   

  	
  Prime Rate plus

  	
   

  	
  Stamping Fees or Cdn$ Libor plus or LC Fee

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

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

 

17

 

Letters of Credit,
will be deducted from the LC Fees otherwise payable by the Borrower on the next
LC Fee payment date contemplated by Section 4.3.2, and (d) if no
interest or Stamping Fees are payable during that period, the Lenders shall
remit the necessary amounts to the Agent for payment to the Borrower;

 

1.1.88                “Material Adverse Change” means a material adverse change in (i) the
business, assets, liabilities, financial position, operating results or
business prospects of the VL Group, taken as a whole, or (ii) in the
ability of the Borrower and the Guarantors to perform any of their obligations
hereunder or under the Security Documents, or (iii) the validity or enforceability of this
Agreement or the Security Documents or of the rights and remedies of the Agent
or the Lenders hereunder or under the Security Documents;

 

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

 

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

 

1.1.90.1                  the gross amount
of proceeds payable to any member of the VL Group in cash or Cash Equivalents
arising from the sale, lease, transfer, assignment or other disposition or
alienation of any of the property (including shares, capital stock and
ownership interests) of any member of the VL Group (an “Asset
Disposition”), less amounts payable to discharge or radiate
Permitted Charges on the assets being disposed of, and less the amount of taxes
arising from each such Asset Disposition and which cannot be offset against
losses, depreciation or otherwise such that same must actually be paid in cash;  and

 

1.1.90.2                  the gross amount
of proceeds payable to any member of the VL Group in cash or Cash Equivalents
from any public or private offering of equity securities or Debt permitted
hereunder of any member of the VL Group (herein called an “Offering”);

 

18

 

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

 

1.1.91                “Ninth Amendment Closing
Date” means April 7, 2008;

 

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

 

1.1.93                “Offering” has the meaning ascribed to it in the definition
of “Net Proceeds”;

 

1.1.94                “Permitted Charges” means the Charges created by the Security
Documents and, with respect to any Person:

 

1.1.94.1                  any Charge
created by law that is assumed in the ordinary course of business and in order
to exercise same, which, in the case of construction Charges in favour of
contractors, sub-contractors, workmen, suppliers of materials, engineers and
architects, has not at such date been registered in accordance with applicable
Laws against such Person, which relates to obligations which are not yet due or
delinquent, which is not related to any loan of money or obtention of credit
and which, in the aggregate, do not affect in a material way the use, the
income or the benefits flowing from the property so charged in the conduct of
the business of such Person; any Charge resulting from judgments or decisions
which such Person has, at such date, appealed or in respect of which it has
sought revision and obtained a suspension of execution pending the appeal or
the revision; any Charge for taxes, assessments or governmental claims or other
impositions not yet due or matured or in respect of which the validity at such
date has been contested in good faith by such Person before a competent
tribunal or other governmental body in accordance with the provisions of Section 12.7;
or which relates to a deposit of monies or securities in the ordinary course of
business with respect to any Charge referred to in this paragraph, or to secure
workmen’s compensation, surety or appeal bonds or security for costs of
litigation; or any Charge in favour of a landlord on movable or personal
property to secure the payment of rent and other amounts owing under leases for
immovable or real property, provided the Charge is limited to property situated
on the leased premises;

 

19

 

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

 

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

 

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

 

1.1.94.5                  title defects, homologated
lines, zoning and building by-laws, ordinances, regulations and other
governmental restrictions on the use of property, or servitudes, easements or
other similar encumbrances, provided that none of the foregoing adversely
affect the value or marketability of such Person’s immovable property in any
material respect;

 

1.1.94.6                  Charges to
secure the payment of the purchase price incurred in connection with the
acquisition after the Closing Date of assets to be used in carrying on the Core
Business, including Charges existing on such assets at the time of the
acquisition thereof or at the time of the acquisition by a member of the VL
Group of any business entity then owning such assets, whether or not such
existing Charges were given to secure the payment of the purchase price of the
assets to which they attach, provided that such Charges are limited to the
assets purchased and that the amount guaranteed by such Charges does not exceed
100% of the acquisition price of the assets so acquired, and, in the aggregate,
$10,000,000 outstanding at any time;

 

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

 

20

 

ranking Charge until the Phase II Date, and which thereafter will rank
ahead of the Charges on such shares in favour of the Lenders until all amounts
owed under the Quebecor Media Credit Facility have been paid in full and the
said credit facility cancelled;

 

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

 

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

 

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

 

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

 

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

 

1.1.99                “Prime Rate Basis” means the basis of calculation of interest
on the Prime Rate Advances, or any part thereof, made in accordance with the
provisions of Sections 5.1 and 5.2;

 

1.1.100              “QMI Subordinated
Debt” has the meaning ascribed to it in Section 13.8;

 

21

 

1.1.101              “Quebecor Media Guarantee” has the meaning ascribed to it in
subsection 9.1.1;

 

1.1.102              “Quebecor Media Credit
Facility” means the
credit facility in the amount of $2,090,000,000 established pursuant to the
credit agreement entered into on October 23, 2000 by Quebecor Media Inc.
as borrower, Quebecor Communications Inc., GVL, Quebecor New Media Inc., Canoe:
Canadian Online Explorer Inc., Quebecor New Media Limited Partnership,
9076-1883 Quebec Inc., 9076-1859 Quebec Inc. and 3588386 Canada Inc. as
guarantors, the financial institutions named therein as lenders, RBC Dominion
Securities Inc. as lead arranger and bookrunner, Bank of America Canada, BMO
Nesbitt Burns Inc. and The Toronto-Dominion Bank as co-arrangers and Royal Bank
of Canada as administrative agent, as amended, supplemented or restated from
time to time, or as
replaced from time to time by another credit facility in an amount not
exceeding Cdn. $1,905,000,000 minus the proceeds of any high-yield debt
securities issued by Quebecor
Media Inc. on or before October 22, 2002;

 

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

 

1.1.104              “Revolving Facility” or “Facility” means
the Credit available pursuant to Section 2.1;

 

1.1.105              “Revolving Facility Lender” means a Lender having a
Commitment under the Revolving Facility;

 

1.1.106              “Rollover Date” means, with respect to a Libor Advance or a
BA Advance, the date of any such Advance, or the first day of any Designated
Period;

 

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

 

1.1.108              “Security Documents” means all of the security documents
described in Article 9, and “Security” means
the security created thereby;

 

1.1.109              “Selected Amount” means

 

1.1.109.1                with respect to a
BA Advance, the amount of the Advances in Canadian Dollars which the Borrower
has asked to obtain by the issuance of Bankers’ Acceptances in accordance with Section 6.1,
and

 

22

 

 

1.1.109.2                with respect to a
Libor Advance, the amount in respect of which the Borrower is deemed to have
asked, in accordance with Section 4.2, that the interest payable thereon
be calculated on the Libor Basis;

 

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

 

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

 

1.1.112              “Share Pledge” has the meaning ascribed to it in subsection
9.2.3;

 

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

 

1.1.114              “Spectrum Auction and Purchase” means the
process described in Industry Canada’s “Notice
No. DGRB-011-07 — Licensing Framework for the Auction for Spectrum Licences for Advanced Wireless Services and other
Spectrum in the 2 GHz Range”;

 

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

 

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

 

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

 

1.1.118              “Subsidiary” means any Person in respect of which the
majority of the issued and outstanding capital stock (including securities
convertible into voting shares and options to purchase voting shares) granting
a right to vote in all circumstances is at the relevant time owned by a member
of the VL Group or one or more of its Subsidiaries or by a member of the VL
Group and one or more of its Subsidiaries, and includes a limited partnership
that would be an Affiliate;

 

23

 

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

 

1.1.120              “Tax Benefit Transaction” means, for so long as the Borrower
is a direct or indirect Subsidiary of Quebecor Inc. (“Quebecor”),
any transaction between a member of the VL Group and Quebecor or any of its
Affiliates, the primary purpose of which is to create tax benefits for any
member of the VL Group or for Quebecor or any of its Affiliates; provided, however, that (1) the member of the VL Group
involved in the transaction obtains a favorable tax ruling from a competent tax
authority or a favorable tax opinion from a nationally recognized Canadian law
or accounting firm having a tax practice of national standing as to the tax
efficiency of the transaction for such member of the VL Group; (2) the
Borrower delivers to the Agent (a) a resolution of the board of directors
of the Borrower to the effect the transaction will not prejudice the Lenders
and certifying that such transaction has been approved by a majority of the
disinterested members of such board of directors and (b) an opinion as to
the fairness to such member of the VL Group of such transaction from a
financial point of view issued by an accounting, appraisal or investment
banking firm of national standing in the United States or Canada, except in
respect of any Tax Benefit Transaction in an amount of less than $1,000,000
each, provided that the aggregate of all Tax Benefit Transactions for amounts
of less than $1,000,000 does not exceed $10,000,000 in the aggregate in any 12
month period; (3) such transaction is set forth in writing; (4) such
transaction either (a) causes all of the Security creating a Charge on any
transferred assets to remain in full force and effect, or (b) provides for
the replacement of such assets by different assets of a value, nature and kind
acceptable to each of the Lenders, and which shall in any event be subject to
the Security (and the assets so transferred that were previously Charged shall
be released); and (5) the Consolidated EBITDA of the VL Group is not
reduced after giving pro forma
effect to the transaction as if the same had occurred at the beginning of the
most recently ended four fiscal quarter period of the VL Group for which
internal financial statements are available; provided,
however, that if such transaction shall thereafter cease to satisfy
the preceding requirements as a Tax Benefit Transaction, it shall thereafter
cease to be a Tax Benefit Transaction for purposes of this Agreement and shall
be deemed to have been effected as of such date and, if the transaction is not
otherwise permitted by this Agreement as of such date, the Borrower will be in
Default hereunder if such transaction does not comply with the preceding
requirements or is not otherwise unwound within 30 days of that date;

 

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

 

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

 

24

 

1.1.123              “Term Facility B” means the portion of the Credit previously
available under this Credit Agreement which was repaid in full by the Borrower
concurrently with any Advances hereunder on and after the Sixth Amendment
Closing Date;

 

1.1.124              “Term Facility C” means the portion of the Credit previously
available under this Credit Agreement which was repaid in full by the Borrower
concurrently with the initial Advance hereunder on or after the Seventh
Amending Closing Date;

 

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

 

1.1.126              “Transfer Agreement” means a form of transfer agreement
substantially in the form annexed hereto as Schedule “C”;

 

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

 

1.1.128              “VL Group” means the Borrower, the Guarantors (other than
Quebecor Media Inc. and GVL) and their respective Subsidiaries, and a reference
to a “member of the VL Group” means any of them; provided, however, that for
the purposes of all Back-to-Back Transactions alone, until the CF Cable Notes
have been repaid in full, CF Cable TV Inc. and its Subsidiaries shall not be
considered to be part of the VL Group in the context of any Back-to-Back
Transaction with another member of the VL Group.  However, CF Cable TV Inc. and its
Subsidiaries shall be considered members of the VL Group in the context of a
Back-to-Back Transaction with an Affiliate of the Borrower that is not a member
of the VL Group.  A list of the members
of the VL Group as of the Seventh Amendment Closing Date is provided in
Schedule “M” hereto.

 

1.2           Interpretation

 

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

 

25

 

1.3           Currency

 

Unless
the contrary is indicated, all amounts referred to herein are expressed in
Canadian Dollars.

 

1.4           Generally Accepted Accounting Principles

 

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

 

1.5           Division and Titles

 

The division of this
Agreement into Articles, Sections and subsections and the insertion of titles
are for convenience of reference only and shall not affect the meaning or
interpretation of this Agreement.

 

2.             THE CREDIT

 

2.1           Credit Facility

 

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

 

2.2           The Revolving Facility

 

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

 

2.3           Increase in Revolving Facility

 

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

 

26

 

“Increased Commitment”) in accordance with
the provisions of this Section.

 

2.3.2                  The aggregate
amount of any such New Lender Commitments and Increased Commitments shall not
exceed $75,000,000 and shall not be less than $25,000,000 per New Lender (or
such lesser amount as may be approved by the Agent).  Such Increase Notice shall specify (a) the
date (the “Increased
Amount Date”) on
which the Borrower proposes that the New Lender Commitments and/or Increased
Commitments shall be effective, which shall be a date not less than 10 Business
Days after the date on which such notice is delivered to the Agent, (b) the
amount of the increase in the Revolving Facility, (c) the identity of each
New Lender, and/or of each existing Lender that is prepared to provide an
Increased Commitment, and (d) the proposed allocation of such New Lender
Commitments to each New Lender and/or the amount of each Increased
Commitment.  Such New Lender Commitments
and/or Increased Commitments shall become effective as of the Increased Amount
Date; provided that (1) no Default or Event of Default shall exist on the
Increased Amount Date before or after giving effect to such New Lender
Commitments and/or Increased Commitments; (2) the Borrower shall be in
compliance with each of the covenants set forth in Section 12.11 as of the
last day of the most recently ended fiscal quarter after taking into account
such New Lender Commitments and/or Increased Commitments, on a pro forma basis; (3) the New Lender
Commitments shall be effected pursuant to one or more Joinder Agreements
executed and delivered by the Borrower, each New Lender and the Agent, and each
of which shall be recorded in the register maintained by the Agent in respect
of Assignments; (4) Increased Commitments shall be effected in accordance
with the last sentence of subsection 2.3.5; and (5) the Borrower shall
deliver or cause to be delivered any legal opinions or other documents
reasonably requested by the Agent in connection with any such transaction.

 

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

 

27

 

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

 

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

 

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

 

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

 

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

 

3.             PURPOSE

 

3.1           Purpose of the Advances

 

All Advances made by the
Lenders to the Borrower under the Revolving Facility in accordance with the
provisions hereof from and after the Eighth Amendment Closing Date shall be
used by the Borrower for general corporate purposes, including, without
limitation, to issue Letters of Credit solely in connection with the Spectrum
Auction and Purchase and

 

28

 

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

 

4.                                      ADVANCES,
CONVERSIONS AND OPERATION OF ACCOUNTS

 

4.1           Notice
of Borrowing - Direct Advances

 

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

 

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

 

4.2           LIBOR
Advances and Conversions

 

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

 

29

 

4.3           Letters
of Credit for Spectrum Auction and Purchase

 

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

 

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

 

4.3.3                                  Reimbursement
Obligations.  In the event of any
drawing under a Letter of Credit, the Issuing Lender shall promptly notify the
Borrower who shall immediately reimburse the amount to the Issuing Lender in
same day funds.  In the event that the
Borrower fails to reimburse the Issuing Lender immediately upon a drawing and
fails to provide a Notice of Borrowing with a different option, the Borrower
shall be deemed to have requested from the Agent a Canadian Prime Rate Advance
on the date and in the amount of the drawing, the proceeds of which will be
used to satisfy the reimbursement obligations of the Borrower to the Lenders in
respect of the drawing.  The
reimbursement obligations of the Borrower hereunder shall be absolute,
unconditional and irrevocable and shall be performed strictly in accordance
with the terms of this Agreement under any and all circumstances whatsoever and
irrespective of:

 

30

 

4.3.3.1                                                             any
lack of validity or enforceability of any Letter of Credit or this Agreement or
any term or provision therein or herein;

 

4.3.3.2                                                             the
existence of any claim, set-off, compensation, defence or other right that the
Borrower, any Guarantor or other member of the VL Group or any other Person may
at any time have against the beneficiary under any Letter of Credit, the
Issuing Lender, the Agent, any Lender or any other Person, whether in
connection with this Agreement or any other related or unrelated agreement or
transaction;

 

4.3.3.3                                                             any
draft or other document presented under a Letter of Credit proving to be
forged, fraudulent or invalid in any respect or any statement therein being
untrue or inaccurate in any respect;

 

4.3.3.4                                                             any
dispute between or among the members of the VL Group and any beneficiary of any
Letter of Credit or any other party to which such Letter of Credit may be
transferred or any claims whatsoever of the members of the VL Group against any
beneficiary of such Letter of Credit or any such transferee; and

 

4.3.3.5                                                             the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any Letter of Credit or any of the rights or
benefits thereunder or proceeds thereof in whole or in part, which may prove to
be invalid or ineffective for any reason.

 

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

 

In furtherance and extension and not in limitation of the specific
provisions of this Section 4.3, (A) any action taken or omitted by
the Issuing Lender or any of its respective correspondents under or in connection
with any of the Letters of Credit, if taken or omitted in good faith and
without gross or intentional fault, as determined by a final judgment of a
court of competent jurisdiction, shall be binding upon the Borrower and shall
not put the Issuing Lender or its respective correspondents under any resulting
liability to the Borrower and (B) the Issuing Lender may, without gross or
intentional fault as determined by a final judgment of a court of competent
jurisdiction, accept documents that appear on their face to be in substantial
compliance with the terms of a Letter of Credit, without responsibility for
further investigation, regardless of any notice or information to the contrary
(other than an injunction granted by a court of competent jurisdiction during
the period for which such injunction is enforced), and may make payment upon
presentation of documents that appear on their face to be in substantial
compliance with the terms of such Letter of Credit, 

 

31

 

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

 

4.3.4                                  Indemnification.

 

4.3.4.1                                                            The
Borrower agrees to indemnify and hold harmless the Issuing Lender and each of
its officers, directors, affiliates, employees, advisors and agents (the “Indemnitees”) from and against any and all
losses, claims, damages and liabilities which the Indemnitees may incur (or
which may be claimed against any Indemnitee) by any Person by reason of or in
connection with the issuance or transfer of or payment or failure to pay under
any Letter of Credit, provided that the foregoing indemnity will not, as to an
Indemnitee, apply to losses, claims, damages, liabilities or related expenses
to the extent they are found by a final, non-appealable judgment of a court to
arise from the gross or intentional fault of such Indemnitee.

 

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

 

4.3.4.3                                                            Neither
the Issuing Lender nor the Agent or any other Lender shall, in any way, be
liable for any failure by the Issuing Lender or anyone else to pay any drawing
under any Letter of Credit as a result of any action by any governmental
authority or any other cause beyond the control of the Issuing Lender.

 

4.3.4.4                                                            The
obligations of the Borrower under this Section 4.3 shall survive the
termination of this Agreement.  No acts
or omissions of any current or prior beneficiary of a Letter of Credit shall in
any way affect or impair the rights of the Issuing Lender to enforce any right,
power or benefit under this Agreement.

 

4.3.5                                  LC
Escrowed Funds.  Upon the occurrence
and continuance of an Event of Default, or if a Mandatory Repayment to be made
would require the repayment of outstanding Letters of Credit prior to their
maturity, the Borrower will forthwith, upon request from the Issuing
Lender or the Agent, pay to the Agent for deposit into an escrow account
maintained by and in the name of the Agent, (i) in the case of the
occurrence and the continuance of an Event of Default, the amount equal to the
Issuing Lender’s maximum potential exposure under the then outstanding Letters
of Credit or (ii) in the case of a Mandatory Repayment requiring the
repayment of outstanding Letters of Credit prior to their maturity, the amount
equal to the proportion of such Mandatory Repayment that would require Letters
of Credit to be repaid prior to their maturity (in each case, the “LC Escrowed Funds”).  The LC Escrowed Funds will be held by the
Agent for compensation 

 

32

 

or set-off against future Indebtedness owing by the Borrower to the
Issuing Lender in respect of such Letters of Credit and pending such
application will bear interest at the rate declared by the Agent from time to
time as that payable by it in respect of deposits for such amount and for the
period from the date of deposit to the maturity date of the Letters of
Credit.  If such Event of Default is
either waived or cured in compliance with the terms of this Agreement, then the
remaining LC Escrowed Funds, if any, together with any accrued interest to the
date of release, will be released to the Borrower.  The deposit of the LC Escrowed Funds by the
Borrower with the Agent as herein provided will not operate as a repayment on
account of the Loan Obligations until such time as the LC Escrowed Funds are
actually paid to the Issuing Lender as a repayment of principal hereunder.  The Borrower shall sign and remit as Security
with regard thereto all appropriate documents that the Agent or the Issuing Lender
might judge necessary or desirable.

 

4.3.6                                  Resignation.  The Issuing Lender may resign as such (a “Resigning Issuing Lender”) upon 15 days’
prior written notice to the Agent and the Borrower, in which event the Borrower
shall designate another Lender as Issuing Lender.  Upon acceptance by another Lender of the
appointment as Issuing Lender (the “Successor
Issuing Lender”), the Successor Issuing Lender shall succeed to the
rights, powers and duties of the Resigning Issuing Lender and shall have all
the rights and obligations of the Resigning Issuing Lender under this Agreement
and the other Loan Documents.  Upon
request by any of the Resigning Issuing Lender, the Successor Issuing Lender,
the Agent or the Borrower, each of the Resigning Issuing Lender, the Agent, the
Borrower and the Successor Issuing Lender shall enter into an agreement
evidencing the appointment of the Successor Issuing Lender and dealing with
such other matters as the parties may agree including any reallocation of fees
paid in relation to outstanding Letters of Credit which may be necessary.  Following the resignation of the Resigning
Issuing Lender, the Resigning Issuing Lender shall continue to have all the
rights and obligations of an Issuing Lender under this Agreement and the other
Loan Documents with respect to Letters of Credit issued by it prior to such
resignation, but the Resigning Issuing Lender shall not be required to issue
additional Letters of Credit.  For
avoidance of doubt, the provisions of this Agreement relating to the Issuing
Lender shall inure to the benefit of the Resigning Issuing Lender as to any
actions taken or omitted to be taken by it (a) while it was the Issuing
Lender under this Agreement or (b) at any time with respect to Letters of
Credit issued by the Issuing Lender.

 

4.4           Cash
Management Facilities

 

Subject to the terms and conditions of this Agreement, the Lender that
provides the Cash Management Facilities (the “Cash
Management Lender”) shall make Advances to the Borrower in
accordance with the terms and conditions of the agreements governing the Cash
Management Facilities, the purpose of which shall be to provide the Borrower
with a deemed Prime Rate Advance in connection with any negative balance in a
consolidation account, and shall issue letters of credit subject to the
Borrower executing the Cash Management Lender’s standard documentation with
respect thereto.  The fee for each such
letter of credit shall be equal to the then applicable Stamping Fee.  The Borrower and each of the Lenders agrees
that any amounts due to the Cash Management Lender under the Cash

 

33

 

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

 

4.5           Operation
of Accounts

 

The Agent shall maintain in its books at the Agency Branch a record of
the Loan, including the Bankers’ Acceptances issued by the Borrower, attesting
as to the total of the Borrower’s indebtedness to the Lenders in accordance
with the provisions hereof and with the provisions of the Security
Documents.  These accounts or registers
shall constitute, in the absence of manifest error, prima facie
proof of the total amount of the indebtedness of the Borrower to the Lenders in
accordance with the provisions hereof and of the Security Documents, of the
date of any Advance made to the Borrower and of the total of all amounts paid
by the Borrower from time to time with respect to principal and interest owing
on the Loan and the fees and other sums exigible in accordance with the
provisions hereof or of the Security Documents.

 

4.6           Apportionment
of Advances

 

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

 

4.7           Limitations
on Advances

 

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

 

4.8           Notices
Irrevocable

 

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

 

4.9           Market
for Bankers’ Acceptances and Libor Advances

 

If at any time or from time to time: (a) there no longer exists a
market for Bankers’ Acceptances or, (b) as a result of market conditions, (i) there
exists no appropriate or reasonable method to establish LIBOR, for a Selected
Amount or a Designated Period, or (ii) Canadian Dollar deposits are not
available to the Foreign Lenders in such market in the ordinary course of
business in amounts sufficient to permit them to make the Libor 

 

34

 

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

 

4.10         Suspension
of BA Advance and Libor Advance Option

 

If a notice has been given by the Agent in accordance with Section 4.9
and except as provided in the next sentence of this Section, the BA Advance or
the Libor Advance, or any part thereof, as the case may be, shall not be made
(whether as an Advance, a conversion or an extension) by the Lenders and the
right of the Borrower to choose that Advances be made or, once made, be
converted or extended into the BA Advance or the Libor Advance, as the case may
be, shall be suspended until such time as the Agent has determined that the
circumstances having given rise to such suspension no longer exist, in respect
of which determination the Agent shall advise the Borrower within a reasonable
delay.  If sufficient Canadian Dollar
funds are not available to the Foreign Lenders, the Foreign Lenders shall be
relieved from their obligation to make an Advance until such time as such funds
become available in sufficient amounts, but they shall comply with the
provisions of Section 4.12 hereof.

 

4.11         Limits
on BA Advances, Letters of Credit and Libor Advances

 

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

 

4.12         Specific
Clause with Regard to Foreign Lenders

 

In the event of a
suspension of the Borrower’s right to request Advances (including conversions
and extensions) from one or more Foreign Lenders under Sections 4.9 and 4.10
hereof (each an “Affected Lender”), each Affected
Lender shall, concurrently with the notice described in Section 4.9, seek
alternative sources of funding Cdn. $ Advances and, if sufficient funds are
obtained, shall notify the Borrower as to when such funds will be available for
Advances.  On the date indicated in such
notice, the Affected Lender shall be deemed to have made an Advance with
interest payable on the Prime Rate Basis.

 

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

 

35

 

4.12.1                                               The
Incapable Lender shall make US$ Advances on the Libor Basis, and the parties
will negotiate such amendments hereto as may be required to give full effect to
such intention, it being understood that the Borrower alone will bear all
foreign exchange risks; and

 

4.12.2                                               Sections
4.9 and 4.10 hereof shall apply without reference to this Section 4.12
and, upon the expiration of the Designated Period of any existing Libor
Advance, the provisions of Section 5.8 hereof shall apply to such Libor
Advances.

 

5.                                      INTEREST
AND FEES

 

5.1           Interest
on the Prime Rate Basis

 

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

 

5.2           Payment
of Interest on the Prime Rate Basis

 

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

 

5.3           Interest
on the Libor Basis

 

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

 

36

 

5.4           Payment
of Interest on the Libor Basis

 

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

 

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

 

5.4.2                                                     when
the Designated Period exceeds 3 months, on the last Business Day of each period
of 3 months during such Designated Period and on the last day of the Designated
Period.

 

5.5           Limits
to the Determination of LIBOR

 

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

 

5.6           Fixing
of LIBOR

 

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

 

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

 

5.6.2                                                     the
relevant Rollover Date.

 

5.7           Hedging

 

The Borrower shall enter into agreements with one or
more Lenders providing for, at all times during the Term, foreign exchange
protection to the Borrower with respect to 50% of the Debt under the HYD
Offering (and any Additional Offering if in US$), by way of Derivative
Instruments acceptable to the Agent, with an amortization schedule coincidental
with the amortization of the Debt under the HYD Offering and covering the full
term of the HYD Offering (and any Additional Offering if in US$).

 

The Borrower agrees that any amounts due to the Agent
or the Lenders under any Derivative Instruments of the nature described in this
Section 5.7 shall be deemed to form part of the Loan and shall be secured
by the Security.

 

5.8           Interest
on the Loan

 

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

 

37

 

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

 

5.9                                 Arrears
of Interest

 

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

 

5.10                           Maximum
Interest Rate

 

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

 

5.11                           Fees

 

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

 

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

 

5.11.2                                               for the
Agent, an annual agency fee in the amount and payable in accordance with the
provisions of a letter agreement dated as of August 9, 2000, entered into
between inter alia, Quebecor Media Inc. and the
Agent, and consented to by the Borrower.

 

5.12                           Interest
Act

 

5.12.1                                               For the
purposes of the Interest Act (Canada), any amount
of interest or fees calculated herein using 360, 365 or 366 days per year and
expressed as an annual rate is equal to the said rate of interest or fees
multiplied by the actual number of days comprised within the calendar year,
divided by 360, 365 or 366, as the case may be.

 

38

 

5.12.2                                               The
parties agree that all interest in this Agreement will be calculated using the
nominal rate method and not the effective rate method, and that the deemed
re-investment principle shall not apply to such calculations.  In addition, the parties acknowledge that
there is a material distinction between the nominal and effective rates of
interest and that they are capable of making the calculations necessary to
compare such rates.

 

6.                                       BANKERS’
ACCEPTANCES

 

6.1                                 Advances
by Bankers’ Acceptances and Conversions into Bankers’ Acceptances

 

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

 

6.1.2                                                     Prior
to making any BA Request, the Borrower shall deliver:

 

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

 

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

 

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

 

39

 

in whole or in part, to the failure of the Borrower to give appropriate
instructions to the Agent on a timely basis, nor shall the Agent or any Lender
be liable for any damage, loss or other claim arising by reason of any loss or
improper use of any such instrument except a loss or improper use arising by
reason of the gross negligence or wilful misconduct of the Agent, such Lender,
or their respective employees.  In order
to facilitate issuances of Bankers’ Acceptances pursuant hereto, in accordance
with the instructions given from time to time by the Borrower, the Borrower
hereby authorizes each Lender, and for this purpose appoints each Lender its
lawful attorney, to complete and sign Bankers’ Acceptances on behalf of the
Borrower, in handwritten or facsimile or mechanical signature or otherwise, and
once so completed, signed and endorsed, and following acceptance of them as
Bankers’ Acceptances, to purchase, discount or negotiate such Bankers’
Acceptances in accordance with the provisions of this Article 6, and to
provide the Available Proceeds (as defined in subsection 6.2.4 (d)) to the
Agent in accordance with the provisions hereof. 
Drafts so completed, signed, endorsed and negotiated on behalf of the
Borrower by any Lender shall bind the Borrower as fully and effectively as if
so performed by an authorized officer of the Borrower.  Each Lender shall maintain a record with
respect to such instruments (i) received by it hereunder, (ii) voided
by it for any reason, (iii) accepted by it hereunder and (iv) cancelled
at their respective maturities.  Each
Lender agrees to provide such records to the Borrower promptly upon request
and, at the request of the Borrower, to cancel such instruments which have been
so completed and executed and which are held by such Lender and have not yet
been issued hereunder.

 

6.2                                 Acceptance
Procedure

 

With respect to any BA Advance:

 

6.2.1                                                     The
Agent shall promptly notify in writing each Lender of the details of the
proposed issue, specifying:

 

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

 

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

 

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

 

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

 

40

 

(a)           the
Bankers’ Acceptance Discount Rate;

 

(b)           the
amount of the Stamping Fee applicable to those Bankers’ Acceptances to be
accepted by such Lender on the Acceptance Date, calculated by multiplying the
appropriate percentage set out in the definition of “Stamping Fee” by the face
amount of each Bankers’ Acceptance (taking into account the number of days in
the Designated Period), any such Lender being authorized by the Borrower to
collect the Stamping Fee out of the BA Proceeds of those Bankers’ Acceptances;

 

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

 

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

 

6.2.5                                                     Not
later than 1:00 P.M. on the Acceptance Date, each Lender shall make
available to the Agent its Available Proceeds.

 

6.2.6                                                     Not
later than 4:00 P.M. on the Acceptance Date, the Agent shall transfer the
Available Proceeds to the Borrower in accordance with Section 8.9 and
shall notify the Borrower on such day either by telex, fax or telephone (if by
telephone, to be confirmed subsequently in writing) of the details of the
issue.

 

6.3                                 Purchase
of Bankers’ Acceptances and Discount Notes

 

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

 

6.3.1                                                     are
BA Lenders shall, on the Acceptance Date, accept the Bankers’ Acceptances by
inserting the appropriate principal amount, Acceptance Date and maturity date
in accordance with the BA Request relating thereto and affixing their
acceptance stamps thereto, and shall purchase or sell same; and

 

6.3.2                                                     are
Non-BA Lenders shall, on the Acceptance Date, complete the Discount Notes by
inserting the appropriate principal amount, Acceptance Date and maturity date
in accordance with the BA Request relating thereto.

 

6.4                                 Maturity
Date of Bankers’ Acceptances

 

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

 

41

 

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

 

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

 

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

 

6.5                                 Deemed
Conversions on the Maturity Date

 

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

 

6.6                                 Conversion
and Extension Mechanism

 

If under the conditions

 

6.6.1                                                     of
subsection 6.4.1 and of Section 6.5, the Borrower requests or is deemed to
have requested, as the case may be, that the Agent convert the portion of the
BA Advance which is maturing into a Prime Rate Advance, the Lenders shall pay
the Bankers’ Acceptances which are outstanding and maturing.  Such payments by the Lenders will constitute
an Advance within the meaning of this Agreement and the interest thereon shall
be calculated and payable as the Borrower may request or may be deemed to have
requested;

 

6.6.2                                                     of
subsection 6.4.3, the Borrower makes a deposit in its account, without limiting
in any way the generality of Section 17.5, the Borrower hereby expressly
and irrevocably authorizes the Agent to make any debits necessary in its
account in order to pay the Bankers’ Acceptances which are outstanding and
maturing.

 

42

 

6.7                                 Amounts
given to the Lenders do not constitute a prepayment

 

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

 

6.8                                 Prepayment
of Bankers’ Acceptances

 

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

 

6.9                                 Apportionment
Amongst the Lenders

 

The Agent is authorized by the Borrower and each Lender to allocate
amongst the Lenders (other than Foreign Lenders who cannot make BA Advances)
the Bankers’ Acceptances to be issued and purchased in such manner and amounts
as the Agent may, in its sole discretion, but acting reasonably, consider
necessary, so as to ensure that no Lender is required to accept and purchase a
Bankers’ Acceptance for a fraction of $100,000, and in such event, the Lenders’
respective Commitments in any such Bankers’ Acceptances and repayments thereof
shall be altered accordingly.  Further,
the Agent is authorized by the Borrower and each Lender to cause the
proportionate share of one or more Lender’s Advances (calculated based on its
Commitment) to be exceeded by no more than $100,000 each as a result of such
allocations provided that the principal amount of outstanding Advances,
including Bankers’ Acceptances, shall not thereby exceed the maximum amount of
the respective Commitment of each Lender.  Any
resulting amount by which the requested face amount of any such Bankers’
Acceptance shall have been so reduced shall be advanced, converted or
continued, as the case may be, as a Prime Rate Advance, to be made
contemporaneously with the BA Advance.

 

6.10                           Cash
Deposits

 

Each Lender may, in its discretion, at any time, in the absence of any
demand by the Borrower to such effect, grant an Advance to the Borrower, the
amount of which shall be equivalent to the face value of all Bankers’
Acceptances then in circulation which have been accepted, which Advance shall
not bear interest.  The amount of the
Advance shall not be taken into account in order to calculate the amount of the
Credit used pursuant hereto.  The Agent
shall retain the amount of the Advance in a non-interest bearing cash
collateral account as security, for the benefit of the Borrower, which amount
may be entirely set-off against the amount of the Advance and the amount of the
Bankers’ Acceptances in circulation which such Lender has accepted and may be
imputed, in the Lender’s discretion, to the payment of the Bankers’ Acceptances
at their maturity.  The Borrower shall
sign and remit as security with regard thereto all appropriate documents which
the Lenders might judge necessary or desirable, specifically including an
assignment of the credit balance of the deposit account held as security.

 

43

 

6.11                           Days
of Grace

 

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

 

6.12                           Obligations Absolute

 

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

 

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

 

6.12.2                                             the
existence of any claim, set-off, defence or other right which the Borrower may
have at any time against the holder of a Bankers’ Acceptance, the Lenders, or
any other person or entity, whether in connection with this Agreement or
otherwise.

 

6.13                           Depository
Bills and Notes Act

 

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

 

7.                                      ILLEGALITY,
INCREASED COSTS AND INDEMNIFICATION

 

7.1                                 Illegality,
Increased Costs

 

If a Lender, acting reasonably, determines (which determination shall
be attested to by a certificate submitted to the Borrower by the Lender with a
copy to the Agent and which shall be final and binding between the parties
hereto in the absence of manifest error) that (a) the adoption by a
governmental or international authority (including the Bank for International
Settlements (the “BIS”)) of a
law, directive, requirement or guideline, whether or not having the force of
law, (b) any modification to a law, directive or guideline, whether or not
having the force of law, or to the interpretation or application of same by a
tribunal or governmental or international authority (including the BIS) or
other body charged with such interpretation or application, or (c) any
quashing by a tribunal or other governmental or 

 

44

 

international authority or body (including the BIS) of an
interpretation of any law, directive, requirement or guideline, whether or not
having the force of law:

 

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

 

7.1.2                                                     Such
conversion or reimbursement shall be made at the expiry of the relevant
Designated Period of any then outstanding Libor Advances or BA Advances, as the
case may be, or, if in the judgment of the Lender expressed to the Agent in the
certificate referred to above, an immediate conversion or reimbursement is
necessary, immediately upon demand by the Agent, subject to the payment by the
Borrower of breakage costs, if any; or

 

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

 

45

 

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

 

7.2                                 Indemnity

 

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

 

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

 

8.                                      PAYMENT,
REPAYMENT AND PREPAYMENT

 

8.1                                 Repayment
of the Loan

 

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

 

8.2                                 Amount
and Apportionment of Mandatory Repayments

 

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

 

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

 

46

 

the non-material assets referred to in Section 13.3), unless same
are reinvested within 12 months following any such Asset Disposition to acquire
capital assets used in the Core Business, payable within 5 Business Days
following the expiry of such 12 month period; plus

 

8.2.2                                                     Any
amounts payable to the Agent for the Lenders in accordance with the provisions
of Section 12.6, provided that insurance proceeds received by the
Borrower, up to an amount of $50,000,000 in the aggregate, will be exempt from
the imputation rules set out in this Section 8.2 and may be retained
by the Borrower.

 

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

 

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

 

8.3                                 Voluntary
Repayment and Prepayment of the Loan or Cancellation of the Credit

 

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

 

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

 

47

 

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

 

8.4                                 Payment
of Losses Resulting From a Prepayment or a Mandatory Repayment

 

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

 

8.5                                 Currency
of Payments

 

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

 

8.5.1                                                     of
principal under the Loan, or any part thereof, shall be made in the same
currency as that in which they are outstanding;

 

8.5.2                                                     of
interest, shall be made in the same currency as the principal amount
outstanding to which they relate;

 

8.5.3                                                     of
Fees, shall be made in Canadian Dollars alone; and

 

8.5.4                                                     of
the amounts referred to in Section 7.2, shall be made in the same currency
as the losses, costs and expenses suffered or incurred by the Lenders.

 

8.6                                 Payments
by the Borrower to the Agent

 

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

 

48

 

8.7           Payment
on a Business Day

 

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

 

8.8           Payments by the Lenders to the Agent

 

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

 

8.9           Payments
by the Agent to the Borrower

 

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

 

8.10         Netting

 

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

 

8.11         Application of Payments

 

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

 

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

 

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

 

(b)                 to
all amounts due under Article 5 hereunder;

 

49

 

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

 

(d)                 to
any other amounts due pursuant to this Agreement.

 

8.12         No Set-Off or Counterclaim by Borrower

 

All payments by the Borrower shall be made free and clear of and
without any deduction for or on account of any set-off or counterclaim.

 

8.13         Debit
Authorization

 

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

 

8.14         Withholding
Taxes

 

8.14.1                All payments to be made hereunder by
the Borrower shall be made free and clear of, and without deduction or
withholding for or on account of, any present or future tax, levy, impost,
duty, charge, assessment or fee (including interest, penalties and additions
thereto) (herein “Taxes”), but
excluding net income taxes and franchise taxes (imposed in lieu of income
taxes) imposed on any Lender as a result of a present or former connection
between such Lender and the jurisdiction imposing such tax (other than any such
connection arising solely from such Lender having executed, delivered or
performed its obligations under, or received a payment under, or enforced this
Agreement or any Guarantee).  If any
Taxes are required to be withheld from any payment hereunder, the Borrower
shall (a) increase the amount of such payment so that the Lenders will
receive a net amount (after deduction and withholding of all Taxes) equal to
the amount otherwise due hereunder; (b) pay such Taxes to the appropriate
taxing authority for the account of the relevant Lenders and (c) as
promptly as possible thereafter, send the Agent and the Lenders an original
receipt showing payment thereof, together with such additional documentary
evidence as the Lenders may from time to time reasonably require.

 

8.14.2                Each Lender other than a Foreign Lender
agrees to use reasonable measures to avoid or to minimize any amounts which
might otherwise be payable pursuant to this Section 8.14, but no Lender
shall be required 

 

50

 

to disclose any information about its taxes to the Borrower that is not
publicly available.

 

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

 

9.             SECURITY

 

9.1           Security
for Advances Prior to the Phase II Date

 

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

 

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

 

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

 

9.2           Security
for Advances Following the Phase II Date

 

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

 

51

 

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

 

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

 

9.2.2                  cause to be executed by Quebecor
Media Inc. a limited-recourse Guarantee agreement with the Agent for the
Lenders, which will be substantially in the form of Schedule “D” but will
provide that (A) the recourse of the Lenders under such Guarantee shall be
limited to the pledge, if any, of the shares referred to in subsection 9.1.2,
which pledge shall remain in effect but shall rank second to the Permitted
Charge referred to in subsection 1.1.94.7 until the Quebecor Media Credit
Facility has been repaid in full and cancelled, and (B) the restrictions
contained in the Quebecor Media Credit Facility and incorporated by reference
in the Guarantee referred to in subsection 9.1.1 shall no longer be so
incorporated;

 

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

 

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

 

52

 

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

 

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

 

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

 

9.2.7                  execute and cause to be executed by
each of the Guarantors (other than Quebecor Media Inc. and GVL), a
first-ranking assignment, by way of collateral security, of the contracts
governing or evidencing intellectual property rights (subject to Permitted
Charges, and to the extent not prohibited by the terms of the agreements
governing such rights) in favour of the Agent on behalf of the Lenders,
provided that any Security created by CF Cable TV Inc. and its Subsidiaries
shall be limited to the extent contemplated by the provisions of the CF Cable
Notes;

 

9.2.8                  cause the Agent on behalf of the
Lenders to be named in all insurance policies protecting the members of the VL
Group and their movable property, activities, business interruption and third
party liability against any form of loss as a named insured as its interest may
appear, and deliver to the Agent certificates of insurance in form and
substance satisfactory to the Agent;

 

53

 

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

 

9.2.10                if the Borrower elects to use Spectrum
Co. as the bidder on behalf of the Borrower and others in the Spectrum Auction
and Purchase, execute and cause to be executed by the Borrower and any of its
Subsidiaries holding shares or other equity interests in Spectrum Co., from the
date on which any of same are acquired, an agreement pledging such shares and
equity interests to the Agent on behalf of the Lenders by way of a
first-ranking pledge (subject only to Permitted Charges), which agreement shall
be substantially in the form of the Share
Pledge.

 

9.3           Limitations
on Guarantees and Security for Advances

 

The liability of each
Guarantor governed by the Companies Act
(Quebec) under its Guarantee (other than each of the Initial VL Group
Guarantors, the liability of whom is unlimited) (each an “Applicable
Guarantor”) shall be limited as follows, but only to the
extent that the provisions of Section 123.66 of the Companies
Act (Quebec) apply thereto:

 

9.3.1                  on the Phase II Date, the liability of each Applicable Guarantor shall
be limited to the amount of the book value or the realization value of its
assets, whichever is greater, less the sum of its liabilities and its issued
and paid-up share capital account on such date (the “Initial
Liability”);

 

9.3.2                  every  day thereafter that its Guarantee
remains in effect and until the date of determination on which it is then able
to discharge its liabilities when due, each Applicable Guarantor shall be
deemed to have granted a new Guarantee in an amount equal to the increase in
the aggregate amount of the Guarantee that such Applicable Guarantor can
provide on such day (calculated in accordance with the provisions of
subsection 9.3.1);

 

9.3.3                  the liability of each Applicable Guarantor may never be less than its
Initial Liability; and

 

9.3.4                  if ever the restriction provided by Law with respect to each Applicable
Guarantor’s ability to execute a Guarantee is repealed, each of the Applicable
Guarantors shall be deemed to have granted an unlimited Guarantee on the date
such repeal came into force.

 

54

 

The relevant amounts on the Phase II Date, as
determined by the directors of the Applicable Guarantor, will be set forth in a
certificate in the form set out in Schedule  “K”, to be
delivered within 5 Business Days following the Phase II Date.

 

9.4           Further
Limitations on Guarantees and Security for Advances

 

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

 

9.4.1                  on the Phase II Date, the liability of each Relevant Guarantor under its
Guarantee and the Security Documents shall constitute First Priority
Debt within the meaning and to the extent permitted by the trust indenture
dated as of July 11, 1995 among the Guarantors party thereto and The Chase
Manhattan Bank, as Trustee, providing for the issue of notes, including the
aggregate of US$100,000,000 of 12 year notes of CF Cable TV Inc. designated as
9 1/8% Senior Secured First Priority Notes due 2007 (the “Trust
Indenture”) and thereafter shall constitute Second Priority Debt
within the meaning and to the extent permitted by the Trust Indenture (the “Initial
Liability”);

 

9.4.2                  every  day thereafter that its Guarantee
remains in effect and until the provisions of subsection 9.4.4 apply, each
Relevant Guarantor shall be deemed to have granted a new Guarantee by
incurring additional First Priority Debt and additional Second Priority Debt to
the extent permitted by the Trust Indenture in amounts equal to the increase in the aggregate amount
of the Guarantee that such Relevant Guarantor can provide on such day (by
way of First Priority Debt and Second Priority Debt under the Trust Indenture);

 

9.4.3                  the liability of each Relevant Guarantor may never be less than its
Initial Liability;

 

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

 

9.4.5                  the Security Documents shall oblige
each Relevant Guarantor to provide additional security in the event that its
liability is increased in accordance with the foregoing.

 

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

 

55

 

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

 

10.          CONDITIONS PRECEDENT

 

10.1         Initial
Advance under the Revolving Facility and Term Facility A-1

 

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

 

10.1.1                certified copies of all of the
constating documents, borrowing by-laws and resolutions of the Borrower, of
Quebecor Media Inc., of GVL and of each member of the VL Group shall have been
provided to the Agent;

 

10.1.2                the Borrower shall have provided an
irrevocable direction of payment to the Agent pursuant to which the Borrower
instructs the Agent, contemporaneously with the first Advance hereunder and
using the proceeds thereof, to repay all amounts due under the Existing Credit
Agreement and the Existing Credit Agreement shall have been cancelled;

 

10.1.3                all Charges on the property of each
member of the VL Group, other than Permitted Charges, shall have been
discharged;

 

10.1.4                each of this Agreement and the Security
Documents contemplated by Section 9.1 shall have been executed, delivered,
issued or assigned and registered or published, as the case may be, wherever
required;

 

10.1.5                the Agent shall have received copies of
all existing title and search reports prepared by lawyers or notaries with
respect to any immovable property owned by the VL Group and with respect to any
network pertaining to the Core Business, together with an undertaking to update
same prior to the Phase II Date;

 

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

 

56

 

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

 

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

 

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

 

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

 

10.1.10              the Borrower shall have delivered to the
Agent a certificate in the form of Schedule “F” signed by an officer
stipulating and certifying that:

 

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

 

(b)        no
Default or Event of Default has occurred or exists hereunder;

 

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

 

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

 

10.1.11              nothing shall have occurred which would
constitute a Material Adverse Change;

 

10.1.12              the Borrower shall have delivered to the
Agent the favourable legal opinion of counsel to the Borrower and to the
Guarantors, addressed to the Lenders, the Agent and its counsel, substantially
in the form set forth in Schedule “G” and covering as well such other ancillary
matters as 

 

57

 

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

 

10.2         Initial
Advance under the Revolving Facility After the Ninth Amendment Closing Date

 

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

 

10.2.1                certified copies of all of the
constating documents, borrowing by-laws and resolutions of the Borrower, each
other member of the VL Group and Spectrum Co. (if the Borrower elects to use
Spectrum Co. to act as bidder on behalf of the Borrower and others in the
Spectrum Auction and Purchase) not previously provided to the Agent shall have
been provided to the Agent;

 

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

 

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

 

10.2.4                the Borrower shall have delivered to
the Agent a certificate in the form of Schedule “F” signed by an officer
stipulating and certifying that:

 

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

 

(b)        no
Default or Event of Default has occurred or exists hereunder;

 

(c)        the
corporate structure of the VL Group is as set out in the diagram attached to
the certificate;

 

(d)        each
member of the VL Group holds the permits, Licences, licences and authorizations
required in order to permit it to possess its property and its real estate and
to carry on its business in the manner in which it is being carried on at
present; and

 

58

 

(e)        all
property to be charged by the Security Documents is located in the
jurisdictions described in a schedule thereto;

 

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

 

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

 

10.3         Conditions
Precedent to any Advance

 

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

 

10.3.1                the representations and warranties
contained in this Agreement shall continue to be true and correct (except where
stated to be made as at a particular date);

 

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

 

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

 

10.3.4                no Default shall have occurred and be continuing
and no Event of Default shall have occurred.

 

10.4         Waiver of Conditions
Precedent

 

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

 

10.5         Release of Quebecor
Media Guarantee

 

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

 

59

 

11.          REPRESENTATIONS AND
WARRANTIES

 

For so long as the
Loan remains outstanding and unpaid, or the Borrower is entitled to borrow
hereunder (whether or not the conditions precedent to such borrowing have been
or may be satisfied), the Borrower hereby represents and warrants to the
Lenders that:

 

11.1         Incorporation

 

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

 

11.2         Authorization

 

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

 

11.3         Compliance with Laws
and Contracts

 

The execution and delivery of and performance of the obligations under
this Agreement and each of the Security Documents by the Borrower and each
other member of the VL Group, as the case may be, in accordance with their
respective terms and the completion of the transactions contemplated therein
and herein by the Borrower and each other member of the VL Group, as the case
may be, do not require any consents or approvals, do not violate any Laws, do
not conflict with, violate or constitute a breach under the documents of
incorporation or by-laws of any member of the VL Group or under any agreements,
contracts or deeds to which any member of the VL Group is a party or binding
upon it or its assets and do not result in or require the creation or
imposition of any Charge whatsoever on the assets of any member of the VL
Group, whether presently owned or hereafter acquired, save for the Permitted
Charges.

 

60

 

11.4         Current Business

 

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

 

11.5         Financial Statements

 

The Consolidated financial statements provided from time to time
hereunder are prepared in accordance with GAAP applied on a consistent basis
throughout the periods specified (except as noted thereon) and are an accurate
representation of the financial position of the VL Group as of the respective
dates specified and the results of their operations and cash flows for the
respective periods specified.

 

11.6         Contingent Liabilities
and Indebtedness

 

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

 

11.7         Title to Assets

 

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

 

11.8         Litigation

 

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

 

61

 

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

 

11.9         Taxes

 

Each member of the VL Group has filed within the prescribed delays all
federal, provincial or other tax returns which it is required by Law to file
and all taxes, assessments and other duties levied by the various governmental
authorities with respect to each member of the VL Group have been paid when
due, except to the extent that (a) payment thereof is being contested in
good faith by such member of the VL Group in accordance with the appropriate
procedures, for which adequate reserves have been established in the books of
the relevant member of the VL Group, and (b) the outcome of such
contestation would not reasonably be expected to result in a Material Adverse
Change.

 

11.10       Insurance

 

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

 

11.11       No Adverse Change

 

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

 

11.12       Regulatory Approvals

 

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

 

11.13       Compliance with Laws and
Licences

 

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

 

11.14       Pension and Employment
Liabilities

 

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

 

62

 

11.15       Priority

 

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

 

11.16       Complete
and Accurate Information

 

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

 

11.17       Share Capital

 

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

 

11.18       Absence of Default

 

There exists no Default or Event of Default hereunder.

 

11.19       Agreements with Third
Parties

 

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

 

11.20       Environment

 

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

 

63

 

11.20.2              To the best of the knowledge of the
Borrower, after due enquiry:

 

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

 

(b)        the
business of each member of the VL Group is being carried on so as to respect in
all material ways the Laws applicable to environmental and health and safety
matters; and

 

(c)        no
contaminant, pollutant, toxic substance or material or dangerous waste has been
spilled or emitted into the environment from any property owned, operated or
controlled by any member of the VL Group for which such member of the VL Group
could have any material liability.

 

11.21       Survival of
Representations and Warranties

 

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

 

12.          COVENANTS

 

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

 

12.1         Preservation of
Juridical Personality

 

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

 

12.2         Preservation of
Licences

 

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

 

64

 

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

 

12.3         Compliance with
Applicable Laws

 

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

 

12.4         Maintenance of Assets

 

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

 

12.5         Business

 

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

 

12.6         Insurance

 

It shall maintain insurance coverage with responsible insurers, in
amounts and against risks normally insured by owners of similar businesses or
assets in areas which are generally similar to those in which the members of
the VL Group are engaged.  By no later
than the Phase II Date, all such policies of insurance will contain a standard “mortgage
clause” acceptable to the Agent providing that no such policy may be cancelled
without the insurer providing not less than 30 days’ prior written notice to
the Agent.  The insurance policies
confirming the insurance required hereunder shall not contain any co-insurance
provisions except to the extent such co-insurance provisions would normally
appear in policies covering other Persons engaged in similar businesses and
owning similar properties as the VL Group, and consistent with prudent business
practices.

 

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

 

65

 

12.7         Payment of Taxes and
Duties

 

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

 

12.8         Access and Inspection

 

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

 

12.9         Maintenance of Account

 

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

 

12.10       Performance of
Obligations

 

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

 

12.11       Maintenance of Ratios

 

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

 

66

 

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

 

	
  Quarter Ending

  	
   

  	
  Maximum Leverage Ratio

  
	
  August 31, 2001  

  	
   

  	
   

  
	
  December 31, 2001  

  	
   

  	
  5.0:1

  
	
  March 31, 2002  

  	
   

  	
   

  
	
  June 30, 2002  

  	
   

  	
   

  
	
  September 30, 2002

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  December 31, 2002  

  	
   

  	
   

  
	
  March 31, 2003  

  	
   

  	
  4.5:1

  
	
  June 30, 2003

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  September 30, 2003  

  	
   

  	
   

  
	
  December 31, 2003  

  	
   

  	
  5.0:1

  
	
  March 31, 2004  

  	
   

  	
   

  
	
  June 30,
  2004

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  September 30, 2004  

  	
   

  	
   

  
	
  December 31, 2004  

  	
   

  	
  4.75:1

  
	
  March 31, 2005  

  	
   

  	
   

  
	
  June 30,
  2005

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Thereafter

  	
   

  	
  4.5:1

  

 

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

 

	
  Quarter Ending

  	
   

  	
  Minimum Interest Coverage 

  Ratio

  
	
  August 31, 2001

  	
   

  	
   

  
	
  December 31, 2001

  	
   

  	
  1.75:1

  
	
   

  	
   

  	
   

  
	
  March 31, 2002

  	
   

  	
   

  
	
  June 30, 2002

  	
   

  	
  2.00:1

  
	
  September 30, 2002

  	
   

  	
   

  
	
  December 31, 2002

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  March 31, 2003

  	
   

  	
   

  
	
  June 30, 2003

  	
   

  	
   

  
	
  September 30, 2003

  	
   

  	
  2.50:1

  
	
  December 31, 2003

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  March 31, 2004

  	
   

  	
   

  
	
  and thereafter

  	
   

  	
  3.00:1

  

 

12.11.3              Senior Secured Debt
Coverage Ratio.  A Senior
Secured Debt Coverage Ratio of not more than 2.5:1.

 

For greater
certainty and without limiting any provision of this Agreement, the Borrower
acknowledges that the failure to respect any of the foregoing financial ratios
at any time during the Term constitutes a material breach of this Agreement.

 

67

 

12.12       Mandatory Repayments

 

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

 

12.13       Maintenance of Security

 

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

 

12.14       Payment of Legal Fees
and Other Expenses

 

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

 

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

 

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

 

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

 

12.15       Financial Reporting

 

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

 

68

 

agrees to provide or
cause to be provided to the Agent, with sufficient copies for the Agent and
each Lender, and so undertakes:

 

12.15.1                                         Quarterly Statements

 

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

 

(a)                        the
unaudited Consolidated balance sheet of the VL Group as at the end of such
quarter and the related Consolidated statements of earnings and cash flows, for
the period then ended, in each case with comparative figures for the same
period for the immediately preceding financial year and in respect of the
preceding financial year end; and

 

(b)                       the
unaudited consolidated balance sheet of the Borrower as at the end of such
quarter and the related consolidated statements of earnings and cash flows of
the Borrower, determined in accordance with GAAP, for the period then ended, in
each case with comparative figures for the same period for the immediately
preceding financial year and in respect of the preceding financial year end;
and

 

(c)                        a
Compliance Certificate of the chief financial officer of the Borrower in the
form of Schedule “J” and setting forth the information necessary to determine
whether the Borrower has complied with the covenants contained in Section 12.11,
as well as a reconciliation of the financial statements prepared in accordance
with GAAP to the information used in determining compliance with the financial
covenants using GAAP as at the Sixth Amendment Closing Date, certifying that
the Borrower is in compliance with all of its covenants hereunder and that no
Default or Event of Default has come to the attention of the officer of the
Borrower signing the certificate, after due inquiry, or if a Default or an
Event of Default has occurred, setting out the relevant particulars thereof,
the period of existence thereof and what action the Borrower has taken or
proposes to take with respect thereto (a “Compliance Certificate”).

 

12.15.2                                         Annual Statements

 

(a)                     Within
120 days following the end of each financial year of the Borrower, the audited
Consolidated balance sheet of the VL Group as at the end of such year and the
related Consolidated statements of earnings and cash flows for such financial
year, together with comparative figures for the immediately preceding 

 

69

 

year, the whole as certified without qualification by the current
auditors of the Borrower or otherwise by another reputable firm of independent
chartered accountants acceptable to the Agent, together with the unaudited
consolidated balance sheet of the Borrower as at the end of such year and the
related consolidated statements of earnings and changes in financial position
for such financial year, determined in accordance with GAAP, together with
comparative figures for the immediately preceding year, and any audited
statements of any other member of the VL Group that may be prepared; and

 

(b)                    Within
75 days following the end of each financial year of the Borrower, a Compliance
Certificate, based on unaudited financial information, to be updated and
replaced by a second Compliance Certificate to be provided along with the
audited financial statements referred to in paragraph (a) above.

 

12.15.3                                         Other Information

 

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

 

(b)                    Within
75 days following the end of each financial quarter of the Borrower, a
certificate of its Chief Financial Officer certifying a detailed calculation of
Excess Cash Flow (in such form and providing such detail as the Agent may
reasonably require) during such quarter (the “Excess Cash
Flow Certificate”); and

 

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

 

12.16                     Notice of Certain Events

 

The Borrower shall
advise the Agent forthwith upon the occurrence of any of the following events:

 

12.16.1                                     The commencement
of any proceeding or investigation by or before any governmental body and any
action or proceeding before any court or arbitrator against any member of the
VL Group, or any of its property, assets or activities which could reasonably
be expected to result in a Material Adverse Change;

 

70

 

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

 

12.16.3                                     Any Default or
Event of Default, specifying in each case the relevant details and the action
contemplated in this respect.

 

12.17                 CF Cable
Inter-Creditor Agreement

 

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

 

12.18                 Accuracy of
Reports

 

All information, reports, statements and other documents and data
provided to the Agent or the Lenders, whether pursuant to this Article or
any other provisions of this Agreement shall, at the time same shall be
provided, be true, complete and accurate in all material respects to the extent
necessary to provide the Lenders with a true and accurate understanding of
their effect.

 

12.19                 Transfer of
Licences from Spectrum Co. to the VL Group

 

The Borrower shall cause
Spectrum Co. to transfer to a member of the VL Group that has provided
unlimited Guarantees and Security to the Agent for the benefit of the Agent and
the Lenders, all of the licences and rights it obtains in the Spectrum
Auction and Purchase in
respect of the Province of Quebec (and for any other area to the extent that
the licences and rights for such area were acquired using a Letter of Credit
issued hereunder or were otherwise paid for by a member of the VL Group) as soon
as reasonably possible after any Letter of Credit issued in support of the said
Spectrum Auction and Purchase is presented for payment or payment is otherwise
made to acquire such licences.  The
Borrower shall take all steps required by the Agent to ensure that the
transferred assets are subject to the Security.

 

13.                               NEGATIVE
COVENANTS

 

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

 

13.1                        Liquidation
and Amalgamation

 

Liquidate or dissolve or take any steps to amalgamate, consolidate or
effect any restructuring or corporate or capital reorganization, or change its
head or registered office, 

 

71

 

except where (i) (a) the
surviving entity of any such amalgamation or merger assumes all of the
obligations hereunder and (b) the transaction in question is between a
member of the VL Group and its wholly-owned Subsidiaries or is among
wholly-owned Subsidiaries of the same member of the VL Group; or (ii) in all other cases, the transaction in question,
in the sole opinion of the Lenders, acting reasonably, does not have a
detrimental effect on the financial condition of the VL Group or on the
position of the Lenders and their Security under the Security Documents or
otherwise.  Notwithstanding the
foregoing, no member of the VL Group may become a Subsidiary of (i) CF
Cable TV Inc. until the CF Cable Notes have been repaid in full, or (ii) a
Person who is a non-resident of Canada within the meaning of the Income Tax Act (Canada), without the prior written consent
of the Lenders. For greater certainty, the Lenders hereby consent to the Merger
pursuant to this Section13.1 (ii), subject to compliance with the conditions
precedent set out in Sections 10.2 and 10.3, and subject to the following:

 

13.1.1                                            All of the
representations and warranties and covenants contained herein shall apply to
VTL as and from the date of the Merger;

 

13.1.2                                            VTL shall
become a member of the VL Group as and from the date of the Merger;

 

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

 

13.1.4                                            The
Borrower shall have delivered to the Agent a certificate in the form of
Schedule “F” signed by an officer stipulating and certifying that:

 

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

 

(b)                    no
Default or Event of Default has occurred or exists hereunder;

 

(c)                     the
corporate structure of the VL Group is as set out in the diagram attached to
the certificate;

 

(d)                    Videotron
Telecom Ltd. has no Debt as of the date of the Merger, and has no material
liabilities other than those that have been disclosed to the Lenders in the
financial statements provided to the Lenders immediately prior to the Seventh
Amendment Closing Date and liabilities incurred in the ordinary course of
business since that date;

 

72

 

(e)                     each
member of the VL Group holds the permits, Licences, licences and authorizations
required in order to permit it to possess its property and its real estate and
to carry on its business in the manner in which it is being carried on at
present, including all Regulatory Approvals; and

 

(f)                       all
property to be charged by the Security Documents is located in the
jurisdictions described in a schedule thereto;

 

13.2                        Charges

 

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

 

13.3                        Asset
Dispositions

 

The VL Group shall not permit an Asset Disposition of all or any part
of their property or assets (whether presently held or subsequently acquired),
other than sales at fair market value, and, in such case, only if (a) at
the time of the proposed Asset Disposition, there is no Default or Event of
Default hereunder and the proposed Asset Disposition will not cause such a
Default or Event of Default, (b) the Net Proceeds of such Asset
Disposition are dealt with in accordance with the provisions of Section 8.2,
and (c) the amount of (A) EBITDA generated during the preceding 12
months by the assets comprised in any such Asset Disposition, plus (B) the
aggregate 12-month trailing EBITDA generated by all other assets comprised in
all previous Asset Dispositions made during the Term (calculated as of the date
of the applicable Asset Disposition), does not exceed 15% of the VL Group’s
EBITDA for the 12 months ending on the last day of the month immediately
preceding the date of the proposed Asset Disposition; provided that the VL
Group shall be permitted to make (i) dispositions of inventory in the
ordinary course of business, (ii) dispositions of machinery, equipment,
spare parts and materials, appliances or vehicles, if same are no longer
necessary or useful to the operation of the business or have become obsolete,
worn out, surplus, damaged or unusable, as well as the non-material assets
listed in Schedule “I” consisting of surplus real estate of the VL Group, which
are excluded from the Security and not subject to any Charge thereunder, (iii) exchanges
of assets between members of the VL Group that have provided unlimited
Guarantees and Security to the Agent for the Lenders. In the event of any such
permitted Asset Disposition to a Person other than a member of the VL Group,
the Security on the assets so disposed of shall be discharged by the Agent
without any requirement to obtain the consent of the Lenders.  In addition, any member of the VL Group
(other than VTL until it has provided Security on all of its assets) shall be
permitted to dispose of Back-to-Back Preferred Shares in order to repay
Back-to-Back Debt, and shall also be permitted to dispose of property as part
of a Tax Benefit Transaction, provided that (A) no Default or Event of
Default exists at the time and (B) disposing of such Back-to-Back
Preferred Shares or property as part of a Tax Benefit Transaction will not
cause a Default or an Event of Default.

 

73

 

13.4                        Preservation
of Capital

 

Neither the Borrower nor any of the Guarantors (other than Quebecor
Media Inc.) shall: (a) return any capital to its shareholders or purchase,
redeem, repurchase or otherwise acquire, directly or indirectly, for
consideration, any shares of any class of its capital stock now or subsequently
issued, or any other equity security issued by it of any nature (including
warrants and options), (b) declare, pay or set aside for payment any
dividend or distribution whatsoever in respect of any share of the capital
stock of the Borrower or any of the Initial VL Group Guarantors (provided that (x) a
dividend or other distribution in an amount of approximately $150,000,000 paid
by the Borrower to GVL to permit GVL to repay certain Debt to the Borrower (the
“GVL Distribution”), (y) distributions
arising under Back-to-Back Transactions and Tax Benefit Transactions, and (z) distributions
consisting of (1) a quarterly payment equal to (aa) 100% of Excess Cash
Flow if the Leverage Ratio, calculated on a pro forma basis after taking into account the payment
proposed, is greater than 3.5:1 but less than or equal to 4.0:1, or (bb) 50% of
Excess Cash Flow if the Leverage Ratio, calculated on a pro forma basis after
taking into account the payment proposed, is more than 4.0:1, and (2) a
maximum of $50,000,000 net during the Term (provided that no Advance for such
purpose shall be made if the amount of the Credit available under the Revolving
Facility, after the disbursement of such Advance, would be less than
$50,000,000), by way of loans, dividends, return of capital or share
repurchases will be permitted under this paragraph (b) without complying
with the provisions of paragraphs (i) and (ii) below), or (c) set
aside any funds for any of the purposes proscribed in paragraphs (a) or
(b).  However, transactions of the nature
described in paragraphs (a), (b) and (c) will be permitted (i) if
all amounts so paid under such provisions are paid to the Borrower or to a
Guarantor that has provided an unlimited Guarantee and the Security to the
Agent on behalf of the Lenders, or (ii) if the Leverage Ratio, calculated
on a pro forma basis after taking into
account the payment proposed, is less than or equal to 3.5:1; provided that,
with respect to any of the transactions described in paragraphs (a), (b) or
(c), (A) no Default or Event of Default exists at the time and (B) making
the payment of such amount will not cause a Default or Event of Default.

 

13.5                        Restrictions
on Subsidiaries

 

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

 

13.6                        Issuance
and Transfer of Shares

 

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

 

74

 

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

 

13.7                        Acquisitions

 

Make any Acquisition, in any manner whatsoever, directly or indirectly,
other than an Acquisition required for the purpose of carrying on its business
in the ordinary course, or permit any Subsidiary or Subsidiaries to be
constituted otherwise than in accordance with the provisions of Section 13.11,
except that (A) the members of the VL Group shall be permitted to make
Acquisitions in the Core Business and to create Subsidiaries if: (a) no
Default or Event of Default exists at the time, (b) paying the purchase
price in respect of such Acquisition will not cause a Default or Event of
Default, and (c) any Person which is Acquired or created as a Subsidiary
becomes a member of the VL Group and provides the Security contemplated by Article 9,
and (B) any member of the VL Group shall be permitted to acquire
Back-to-Back Securities in an amount not exceeding the amount of the
corresponding Back-to-Back Securities, and shall also be permitted to acquire
property as part of a Tax Benefit Transaction, provided that (A) no
Default or Event of Default exists at the time and (B) acquiring such
Back-to-Back Preferred Shares or property as part of a Tax Benefit Transaction
will not cause a Default or an Event of Default.

 

13.8                        Debt
and Guarantees

 

Incur or assume Debt, provide Guarantees or render itself liable in any
manner whatsoever, directly or indirectly, for any Indebtedness or obligation
whatsoever of another Person, except (a) hereunder for the purposes set
forth in Section 3.1; (b) under the CF Cable Notes, limited to the
amount outstanding thereunder at the Closing Date, or any Debt incurred on the
refinancing of the CF Cable Notes by a member of the VL Group, which
refinancing shall be only on an unsecured basis and for an amount not in excess
of US$100,000,000; (c) that a member of the VL Group may provide financial
assistance to another member of the VL Group that has provided an unlimited
Guarantee and the Security to the Agent on behalf of the Lenders; (d) under
the Cash Management Agreements; (e) in connection with the Acquisition of
Consortium Câble-Axion Digitel Inc., in respect of which not more than $20,000,000
will be due; (f) in connection with the Borrower’s existing commercial
paper program which will be terminated on or before December 31, 2000; (g) in
connection with Debt incurred or assumed that is secured by Permitted Charges,
and within the limits applicable thereto; (h) in connection with
Back-to-Back Transactions and Tax Benefit Transactions (including by way of
unsecured daylight loans); (i) in connection with the HYD Offering; (j) that
the Borrower may incur or assume Debt by way of Additional Offerings, and that
the members of the VL Group may provide unsecured Guarantees in respect of
obligations of the Borrower under any such Debt outstanding at any time, to the
extent that the Borrower complies with the applicable Leverage Ratio calculated
on a pro forma basis; (k) the Borrower
may borrow Subordinated Debt from Quebecor Media Inc. in an initial principal
amount of up to $150,000,000, with interest at a rate not exceeding the three
month bankers’ acceptance rate quoted on Reuter’s Services, page CDOR, as
at approximately 10:00 a.m. on such day plus 1.5% per annum (together with
interest accrued thereon or paid in kind, the “QMI
Subordinated Debt”); (l) in connection with an unsecured cash
management credit facility limited to a maximum amount of $10,000,000, 

 

75

 

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

 

13.9                        Financial
Assistance by the VL Group

 

Make any loan or advance to any party other than (a) as
contemplated by Sections 13.4 and 13.7, or (b) to another member of the VL
Group that has provided an unlimited Guarantee and the Security to the Agent on
behalf of the Lenders and has fully guaranteed the obligations of the Borrower
hereunder, or (c) by way of Back-to-Back Transactions or Tax Benefit
Transactions, or (d) under the Cash Management Facilities.  Notwithstanding the foregoing, the VL Group
shall be entitled to provide financial assistance to their customers in the
ordinary course of the Core Business by way of subsidizing consumer equipment
purchases and leases and similar transactions.

 

13.10                 Subordinated
Debt

 

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

 

13.11                 Members of the
VL Group, Related Party Transactions

 

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

 

76

 

shall be entered into by any member of the VL Group with any Associate
of any member of the VL Group except on fair market terms and conditions as
would be contracted by Persons dealing at arms’ length, provided that this last sentence
shall not apply to the transactions expressly permitted by paragraph (h) of
Section 13.8; provided, however, for greater certainty, that to the
extent payments made in connection with or in respect of the Back-to-Back
Transactions are made to any Affiliates of the Borrower that are not members of
the VL Group, all corresponding payments required to be paid by such Affiliates
pursuant to the related Back-to-Back Securities are received, immediately prior
to, concurrently with or immediately subsequent to any such payments, by all
applicable members of the VL Group, and each such payment by a member of the VL
Group shall be conditional upon receipt of an equal or greater amount from such
non-member of the VL Group that is an Affiliate.  Finally, payment of a management fee or other
similar expense by the Borrower to its direct or indirect parent company shall
be permitted for bona fide services (including reimbursement for expenses
incurred in connection with, or allocation of corporate expenses in relation
to, providing such services) provided to, and directly related to the
operations of, the VL Group, in an aggregate annual amount not to exceed 1.25%
of consolidated revenues (being gross revenues of the VL Group calculated in
accordance with GAAP, less any amounts derived from Subsidiaries that are not
members of the VL Group, and save that any portion of such gross revenues
derived from a Person that is not a Subsidiary of the Borrower accounted for by
the equity method of accounting shall be included in such calculation only to
the extent of the amount of dividends or distributions actually paid to a
member of the VL Group by such Person) in any twelve-month period.

 

13.12                 Derivative
Instruments

 

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

 

14.                               EVENTS
OF DEFAULT AND REALIZATION

 

14.1                        Event
of Default

 

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

 

14.1.1                                            If the
Borrower fails to make any payment of interest or principal with respect to the
Loan when due; or

 

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

 

14.1.3                                            If the
Borrower or any Guarantor fails to respect any of its other obligations and
undertakings hereunder or under the Security Documents or another undertaking
of the Borrower or any other 

 

77

 

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

 

14.1.4                                            If (a) the
Borrower or any Guarantor commits an act of bankruptcy within the meaning of
the Bankruptcy and Insolvency Act, makes an assignment in favour of its creditors,
consents to the filing of a petition for a receiving order against it, files a
proposal within the meaning of the Bankruptcy and Insolvency Act, or makes a
motion to a tribunal to name, or consents to, approves or accepts the
appointment of a trustee, receiver, liquidator or sequestrator with respect to
itself or its property, commences any other proceeding with respect to itself
or its property under the provisions of any law contemplating reorganizations,
proposals, rectifications, compromises or liquidations in connection with
insolvent Persons, in any jurisdiction whatsoever; or (b) a trustee,
receiver, liquidator or sequestrator is named with respect to the Borrower, any
Guarantor or its property, or the Borrower or any Guarantor is judged insolvent
or bankrupt; or (c) a proceeding seeking to name a trustee, receiver,
liquidator or sequestrator, or to force the Borrower or any Guarantor into
bankruptcy, is commenced against the Borrower or any Guarantor and is not
settled or withdrawn within a delay of 30 
days; or

 

14.1.5                                            If the
Borrower or any Guarantor is in default with respect to any Indebtedness (other
than amounts due to the Lenders hereunder) which has resulted in Indebtedness
in excess of an amount of $10,000,000 ($25,000,000 in the case of Quebecor
Media Inc.) becoming payable prior to its stated maturity or scheduled
repayment date; or

 

14.1.6                                            If one or
more judgments is rendered by a competent tribunal against the Borrower or any
Guarantor in an aggregate amount in excess of $10,000,000 ($25,000,000 in the
case of Quebecor Media Inc.) (net of applicable insurance coverage pursuant to
which liability is acknowledged in writing by the insurer, with a copy promptly
provided to the Agent on behalf of the Lenders) and remains undischarged or
unsatisfied for a period ending on the earlier of (a) 25 days from such
judgment, or (b) the 5th day prior to the date on which such judgment
becomes executory; or

 

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

 

78

 

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

 

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

 

14.1.9                                            If in the
opinion of the Lenders, acting in good faith, there occurs a Material Adverse
Change and the situation has not been remedied within 15 days following the
earlier of the date on which (a) the Agent gave notice thereof to the
Borrower, or (b) the Borrower gave notice to the Agent in accordance with
subsection 12.16.3; or

 

14.1.10                                      If a Change in
Control occurs; or

 

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

 

14.2                        Remedies

 

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

 

14.2.1                                            the entire
amount of the Loan, including the amount corresponding to the principal amount
of the BA Advances then outstanding, in principal and interest, notwithstanding
the fact that one or more of the holders of the Bankers’ Acceptances issued
pursuant to the provisions hereof have not demanded payment in whole or in part
or have demanded only partial payment from the Lenders, and the amount of the
Negative Value of Derivative Instruments. 
The Borrower shall not have the right to 

 

79

 

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

 

14.2.2                                            an amount
equal to the amount of losses, costs and expenses assumed by the Lenders and
referred to in Section 7.2; and

 

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

 

14.3                        Bankruptcy
and Insolvency

 

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

 

14.4                        Notice

 

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

 

14.5                        Costs

 

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

 

80

 

14.6                        Relations
with the Borrower

 

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

 

14.7                        Application
of Proceeds

 

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

 

15.                               JUDGMENT
CURRENCY

 

15.1                        Rules of
Conversion

 

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

 

81

 

15.2                        Determination
of an Equivalent Currency

 

If, in their discretion, the Lenders or the Agent choose or, pursuant
to the terms of this Agreement, are obliged to choose the equivalent in
Canadian Dollars of any securities or amounts expressed in US Dollars or the
equivalent in US Dollars of any securities or amounts expressed in Canadian
Dollars, the Agent, in accordance with the conversion rules as stipulated
in Section 15.1

 

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

 

15.2.2                                            at any
other time which in the opinion of the Lenders is desirable;

 

may, using the spot rate of the Agent on such date, determine the
equivalent in Canadian Dollars or in US Dollars, as the case may be, of any
security or amount expressed in the other currency pursuant to the terms
hereof.  Immediately following such
determination, the Agent shall inform the Borrower of the conclusion which the
Lenders have reached.

 

16.                               ASSIGNMENT

 

16.1                        Assignment
by the Borrower

 

The rights of the Borrower under the provisions hereof are purely
personal and may not be transferred or assigned, and the Borrower may not
transfer or assign any of its obligations, such assignment being null and of no
effect opposite the Lenders and rendering any balance outstanding of the
amounts referred to in Section 14.2 immediately due and exigible at the
option of the Lenders and further releasing the Lenders from any obligation to
make any further Advances under the provisions hereof.

 

16.2                        Assignments
and Transfers by the Lenders

 

16.2.1                                            Each Lender
may, at its own cost, assign or transfer to a Person entitled to lend money in
Canada or any other Person consented to by the Borrower, the Agent and the
Issuing Lender, or, to the extent permitted under Section 17.15, to a
Foreign Lender (the “Assignee”) in
accordance with this Article 16 up to 100% of its rights, benefits and
obligations hereunder (provided that its aggregate retained Commitment, if any,
under the Revolving Facility is not less than $5,000,000) with the prior
consent of the Borrower, which shall not be unreasonably withheld or
delayed.  The Borrower may not refuse to
consent to an assignment or transfer on the sole grounds that the Assignee is a
Foreign Lender, provided the provisions of Section 17.15 are
respected.  After the occurrence of a
Default, any Lender may transfer all or any part of its rights, benefits and
obligations hereunder to any Person, without the 

 

82

 

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

 

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

 

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

 

16.3                        Transfer
Agreement

 

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

 

16.3.1                                            such Lender
shall be released from further obligations to the Borrower with respect to the
portion of the obligations of such Lender assumed by the Assignee;

 

16.3.2                                            the
Assignee shall assume the obligations of such Lender and acquire the rights of
such Lender in respect of the Borrower, without novation of the Borrower’s
obligations;

 

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

 

16.3.4                                            the
Borrower, the Agent and such Lenders shall all execute such documents and
perform such acts as may be required to give effect to the transfer or
assignment.

 

83

 

16.4                        Notice

 

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

 

16.5                        Sub-Participations

 

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

 

16.6                        General

 

Notwithstanding anything contained in this Article:

 

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

 

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

 

16.6.3                                            any Lender
(a “Granting Lender”) may grant to a
special purpose funding vehicle (an “SPV”),
identified as such from time to time by the Granting Lender to the Agent and
the Borrower, the option to provide to the Borrower all or any part of an
Advance that such Granting Lender would otherwise be required to make
hereunder; provided that (a) nothing herein shall constitute a commitment
by any SPV to make any Advance, and (b) if an SPV does not make such
Advance, the Granting Lender shall remain liable to do so.  Any Advance by an SPV shall be made using the
Commitment of the Granting Lender as if the Advance in question had been made
by such Granting Lender.  Each party
hereto agrees that no SPV shall be liable for any indemnity or other payment
hereunder, all of which liability shall remain with the Granting Lender.  Accordingly, each party further agrees (which
agreement will survive the termination hereof) that it shall not institute any
insolvency or other proceeding against the SPV until a date that is not less
than one year and one day following the repayment of all of such SPV’s
commercial paper and other senior Indebtedness. 
In addition, any SPV may (a) assign all 

 

84

 

or any portion of its interests in any Loans (i) with notice to,
but without the consent of the Borrower or the Agent, and without paying any
fees therefor, to the Granting Lender or (ii) to any financial
institution, with the consent of the Borrower and the Agent providing liquidity
and/or credit support to or for the account of such SPV to support the funding
and maintenance of Advances; and (b) disclose on a confidential basis any
non-public information relating to the Loans to any rating agency, commercial
paper dealer or provider of any surety, guarantee or credit or liquidity
enhancement to such SPV.

 

17.                               MISCELLANEOUS

 

17.1                        Notices

 

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

 

17.2                        Amendment
and Waiver

 

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

 

17.3                        Determinations
Final

 

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

 

85

 

17.4                        Entire
Agreement

 

The entire agreement between the parties is expressed herein, and no
variation or modification of its terms shall be valid unless expressed in
writing and signed by the parties.  All
previous agreements, promises, proposals, representations, understandings and
negotiations between the parties hereto which relate in any way to the subject
matter of this Agreement are hereby deemed to be null other than those
contained in a letter by the Borrower to the Agent dated December 21, 2005
and confirmed by the Agent on March 1, 2006, and a letter by the Borrower
to the Agent dated February 28, 2006 and confirmed by the Agent on the
same date.

 

17.5                        Indemnification
and Compensation

 

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

 

17.6                        Benefit
of Agreement

 

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

 

17.7                        Counterparts

 

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

 

17.8                        Applicable
Law

 

This Agreement, its interpretation and its application shall be
governed by the Laws of the Province of Quebec and the Laws of Canada
applicable therein.

 

86

 

17.9                        Severability

 

Each provision of this Agreement is separate and distinct from the
others, such that any decision of a court or tribunal to the effect that any
provision of this Agreement is null or unenforceable shall in no way affect the
validity of the other provisions of this Agreement or the enforceability
thereof.  Any provision of this agreement
which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate
or render unenforceable such provision in any other jurisdiction.  To the extent permitted by applicable Laws,
the Borrower hereby waives any provision of any Laws which renders any
provision hereof prohibited or unenforceable in any respect.

 

17.10                 Further
Assurances

 

The Borrower covenants and agrees on its own behalf and on behalf of
each member of the VL Group that, at the request of the Agent, the Borrower and
each other member of the VL Group will at any time and from time to time
execute and deliver such further and other documents and instruments and do all
acts and things as the Agent in its absolute discretion requires in order to
evidence the indebtedness of the Borrower under this Agreement or otherwise, including
under any Derivative Instruments, and to confirm and perfect, and maintain
perfection of, the Security.

 

17.11                 Good Faith and
Fair Consideration

 

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

 

17.12                 Responsibility
of the Lenders

 

Each Lender shall be solely responsible for the performance of its own
obligations hereunder.  Accordingly, no
Lender is in any way jointly and severally or solidarily responsible for the
performance of the obligations of any other Lender.

 

17.13                 Indemnity

 

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

 

87

 

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

 

17.13.1                                      the fees and
disbursements of counsel;

 

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

 

17.13.3                                      other than
losses, liabilities, claims, damages or expenses incurred by reason of the
gross negligence or willful misconduct of the indemnified party, as determined
by a final judgment of a court of competent jurisdiction.

 

17.14                 Language

 

The parties acknowledge that they have required that the present
agreement, as well as all documents, notices and legal proceedings entered
into, given or instituted pursuant hereto or relating directly or indirectly
hereto be drawn up in English.  Les parties reconnaissent avoir
exigé la rédaction en anglais de la présente convention ainsi que de tous
documents exécutés, avis donnés et procédures judiciaires intentées,
directement ou indirectement, relativement ou à la suite de la présente
convention.

 

17.15                 Foreign
Lenders

 

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

 

17.15.1                                      the Arrangers (as
hereinafter defined) may solicit and receive Commitments from any Person who is
a non-resident of Canada (within the meaning of the Income Tax
Act (Canada)) and who is authorized by law to lend money (“Foreign Lenders”) to the extent of $11,000,000 of the
Revolving Facility;

 

17.15.2                                      in such case, the
Affiliates of the Arrangers may make the required Assignments to such Foreign
Lenders; and

 

17.15.3                                      upon compliance
with the provisions of Article 16, such Foreign Lenders may further assign
and transfer their Commitments to any other Foreign Lender.

 

88

 

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

 

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

 

18.                               THE
AGENT AND THE LENDERS

 

18.1         Authorization of Agent

 

18.1.1                                               Each
Lender hereby irrevocably appoints and authorizes the Agent to act for all
purposes as its agent hereunder and under the Security Documents with such
powers as are expressly delegated to the Agent by the terms of this Agreement,
together with such other powers as are reasonably incidental thereto and
undertakes not to take any action on its own. 
Notwithstanding the provisions of the Civil Code of Quebec relating to
contracts generally and to mandate, the Agent shall have no duties or
responsibilities except those expressly set forth in this Agreement.  As to any matters not expressly provided for
by this Agreement, the Agent shall act hereunder or in connection herewith in
accordance with the instructions of the Lenders in accordance with the
provisions of this Article 18, but, in the absence of any such instructions,
the Agent may (but shall not be obliged to) act as it shall deem fit in the
best interests of the Lenders, and any such instructions and any action taken
by the Agent in accordance herewith shall be binding upon each Lender.  The Agent shall not, by reason of this
Agreement, be deemed to be a trustee for the benefit of any Lender, the
Borrower or any other Person. Neither the Agent nor any of its directors,
officers, employees or agents shall be responsible to the Lenders for any
recitals, statements, representations or warranties contained in this Agreement
or in any certificate or other document referred to, or provided for in, or
received by any of them under, this Agreement, for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement, or
any other document referred to or provided for herein or any collateral
provided for hereby or for any failure by the Borrower to perform its
obligations hereunder.  The Agent may
employ agents and attorneys-in-fact and shall not be responsible for the
negligence or misconduct of any such agents or attorneys-in-fact selected by it
with reasonable care.  Neither the Agent
nor any of its directors, officers, employees or agents shall be responsible
for any 

 

89

 

action taken or omitted to be taken by it or them under or in
connection herewith, except for its or their own gross negligence or wilful
misconduct.

 

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

 

18.2         Agent’s Responsibility

 

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

 

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

 

90

 

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

 

18.2.3                                               The
Agent shall have no responsibility, (a) to the Borrower on account of the
failure of any Lender to perform its obligations hereunder, or (b) to any
Lender on account of the failure of the Borrower to perform its obligations
hereunder.

 

18.2.4                                               Each
Lender severally represents and warrants to the Agent that it has made its own
independent investigation of the financial condition and affairs of the
Borrower in connection with the making and continuation of its Commitment in
the Loan hereunder and has not relied on any information provided to such
Lender by the Agent in connection herewith, and each Lender represents and
warrants to the Agent that it shall continue to make its own independent
appraisal of the creditworthiness of the Borrower while the Loan is outstanding
or the Lenders have any obligations hereunder.

 

18.3         Rights of Agent as Lender

 

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

 

18.4         Indemnity

 

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

 

91

 

Agreement, the Security Documents or any other documents contemplated
by or referred to herein or therein or the transactions contemplated hereby or
thereby (excluding, unless a Default or Event of Default is apprehended or has
occurred and is continuing, normal administrative costs and expenses incidental
to the performance of its agency duties hereunder) or the enforcement of any of
the terms hereof or of any such other documents, provided that no Lender shall
be liable for any of the foregoing to the extent they arise from the Agent’s
gross negligence or wilful misconduct.

 

18.5         Notice by Agent to Lenders

 

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

 

18.6         Protection of Agent

 

18.6.1                                               The
Agent shall not be required to keep itself informed as to the performance or
observance by the Borrower of this Agreement or any other document referred to
or provided for herein or therein or to inspect the properties or books of the
Borrower.  Except (in the case of the
Agent) for notices, reports and other documents and information expressly
required to be furnished to the Lenders by the Agent hereunder, the Agent shall
have no duty or responsibility to provide any Lender with any credit or other
information concerning the affairs or financial condition of the Borrower which
may come to the attention of the Agent, except where provided to the Agent for
the Lenders, provided that such information does not confer any advantage to
the Agent as a Lender over the other Lenders. 
Nothing in this Agreement shall oblige the Agent to disclose any
information relating to the Borrower if such disclosure would or might, in the
opinion of the Agent, constitute a breach of any Laws or duty of secrecy or
confidence.

 

18.6.2                                               Unless
the Agent shall have been notified in writing or by telegraph, telex or
telecopier by any Lender prior to the date of an Advance requested hereunder
that such Lender does not intend to make available to the Agent such Lender’s
proportionate share of such Advance, based on its Commitment, the Agent may
assume that such Lender has made such Lender’s Commitment in such Advance
available to the Agent on the date of such Advance and the Agent may, in
reliance upon such assumption, make available to the Borrower a corresponding
amount.  If such corresponding amount is
not in fact made available to the Agent by such Lender, the Agent shall be
entitled to recover such amount (together with interest thereon at the rate
determined by the Agent as being its cost of funds in the circumstances) on
demand from such Lender or, if such Lender fails to reimburse the Agent for
such amount on demand, from the Borrower.

 

92

 

18.6.3                                               Unless
the Agent shall have been notified in writing or by telegraph, telex or
telecopier by the Borrower prior to the date on which any payment is due
hereunder that the Borrower does not intend to make such payment, the Agent may
assume that the Borrower has made such payment when due and the Agent may, in
reliance upon such assumption, make available to each Lender on such payment
date an amount equal to such Lender’s pro rata share
of such assumed payment.  If it is
established that the Borrower has not in fact made such payment to the Agent,
each Lender shall forthwith on demand repay to the Agent the amount made
available to such Lender (together with interest at the rate determined by the
Agent as being its cost of funds in the circumstances).

 

18.7         Notice by Lenders to Agent

 

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

 

18.8         Sharing Among the Lenders

 

Each Lender agrees that as amongst themselves, except as otherwise
provided for by the provisions of this Agreement, all amounts received by the
Agent, in its capacity as agent of the Lenders pursuant to this Agreement or
any other document contemplated hereby (whether received by voluntary payment,
by the exercise of the right of set-off or compensation or by counterclaim,
cross-claim, separate action or as proceeds of realization of any security,
other than agency fees), and all amounts received by any Lender in relation to this Agreement
shall be shared by each Lender pro rata, in
accordance with their respective Commitment and each Lender undertakes to do
all such things as may be reasonably required to give full effect to this Section 18.8.
 If any amount which is so shared is
later recovered from the Lender who originally received it, each other Lender
shall restore its proportionate share of such amount to such Lender, without
interest.

 

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

 

93

 

other right which such Lender may have against the Agent, the Borrower
or any other Person for any reason whatsoever; (2) the occurrence or
continuance of any Default or Event of Default; (3) any adverse change in
the condition (financial or otherwise) of the Borrower or any other Person; (4) any
breach of this Agreement by the Borrower or any other Person; or (5) any other
circumstance, happening or event whatsoever, whether or not similar to any of
the foregoing.  If any Lender does not
make available the amount required hereunder, the Agent shall be entitled to
recover such amount on demand from such Lender, together with interest thereon
at the Prime Rate from the date of non-payment until such amount is paid in
full.

 

18.9         Derivative Obligations

 

18.9.1                                               The
Derivative Obligations shall be secured by the Security provided that the
related Derivative Instruments:

 

(a)           are
governed by an ISDA Master Agreement; and

 

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

 

18.9.2                                               Each
Lender shall confirm to the Agent and to the Borrower, upon request, quarterly
on or about the last day of each financial quarter of each financial year of
the Borrower, the Negative Value of the Derivative Instruments issued by it or
contracted through it, calculated on a net as well as on a gross basis where
several Derivative Instruments are governed by the same Master Agreement, as
well as the Credit Facility in respect of which such Derivative Instruments
apply.

 

18.10       Procedure with respect to
Advances

 

Subject to the provisions of this Agreement, upon receipt of a Notice
of Borrowing from the Borrower, the Agent shall, without delay, advise each
Lender of the receipt of such notice, of the date of such Advance, of its
proportionate share of the amount of each Advance and of the relevant details
of the Agent’s account(s).  Each Lender
shall disburse its proportionate share of each Advance, taking into account its
Commitment, and shall make it available to the Agent (no later than 10:00 A.M.)
on the date of the Advance fixed by the Borrower, by depositing its
proportionate share of the Advance in the Agent’s account in Canadian Dollars
or US Dollars, as the case may be.  Once
the Borrower has fulfilled the conditions stipulated in this Agreement, the
Agent will make such amounts available to the Borrower on the date of the
Advance, at the Branch, and, in the absence of other arrangements made in
writing between the Agent and the Borrower, by transferring or causing to be
transferred an equivalent amount in the case of a direct Advance, and the
Available Proceeds (as defined in subsection 6.2.4 (d)) in the case of Banker’s
Acceptances, in accordance with the instructions of the Borrower which appear
in the Notice of Borrowing with respect to each Advance; however, the
obligation of the Agent with respect hereto is limited to taking the steps
judged commercially reasonable in order to follow such instructions, and once
undertaken, such steps shall constitute conclusive evidence that the 

 

94

 

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

 

18.11       Accounts kept by each
Lender

 

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

 

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

 

18.12       Binding Determinations

 

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

 

18.13       Amendment of Article 18

 

The provisions of this Article 18 relating to the rights and
obligations of the Lenders and the Agent inter se may be
amended or added to, from time to time, by the execution by the Agent and the
Lenders of an instrument in writing and such instrument in writing shall
validly and effectively amend or add to any or all of the provisions of this Article 
affecting the Lenders without requiring the execution of such instrument in
writing by the Borrower.

 

18.14       Decisions, Amendments and
Waivers of the Lenders

 

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

 

95

 

18.15       Authorized Waivers,
Variations and Omissions

 

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

 

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

 

Without limiting the
powers of the Agent hereunder or under the Security Documents and to the extent
applicable, each of the Lenders hereby acknowledges that the Agent (or a
collateral agent designated by the Agent) shall, for the purposes of holding
any security granted under the hypothecs described in Section 9.2.3 or
granted under Section 9.2.9 hereof to secure payment of the Debentures, be
the holder of an irrevocable power of attorney (fondé de
pouvoir) (within the meaning of Article 2692 of the Civil Code of Quebec) for all present and future Lenders and
in particular for all present and future holders of the Debentures.  Each of the Lenders hereby constitutes, to
the extent necessary, the Agent (or such designated collateral agent) as the
holder of such irrevocable power of attorney in order to hold security granted
under such hypothecs to secure the Debentures. 
Each Assignee shall be deemed to have confirmed and ratified the
constitution of the Agent as the holder of such irrevocable power of attorney
by execution of the relevant Transfer Agreement.  Notwithstanding the provisions of Section 32
of the An Act respecting the Special Powers of
Legal Persons  (Quebec), the Borrower, the Guarantors and the Lenders
irrevocably agree that the Agent may acquire and be the holder of a
Debenture.  By executing a Debenture, the
issuer of the Debenture shall be deemed to have acknowledged that the Debenture
constitutes a title of indebtedness, as such term is used in Article 2692
of the Civil Code of Quebec.

 

18.17       Provisions for the Benefit
of Lenders Only

 

The provisions of this Article 18 relating to the rights and
obligations of the Lenders and Agent inter se shall
be operative as between the Lenders and Agent only, and the Borrower shall not
have any rights or obligations under or be entitled to rely for any purposes
upon 

 

96

 

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

 

18.18       Resignation of Agent

 

18.18.1                                         Notwithstanding
the irrevocable appointment of the Agent, a majority of Lenders holding not
less than 66.67% of the Commitments may (with the consent of the Borrower),
upon giving the Agent thirty (30) days prior written notice to such effect,
terminate the Agent’s appointment hereunder provided that a successor Agent has
been appointed at or prior to the expiry of such notice.

 

18.18.2                                         The Agent may
resign its appointment hereunder at any time without giving any reason therefor
by giving written notice to such effect to each of the other parties
hereto.  Such resignation shall not be
effective until a successor Agent has been appointed.

 

18.18.3              In the event
of any such termination or resignation, the Lenders shall appoint a successor
Agent that is willing to accept such role and is acceptable to the Borrower
within thirty (30) days therefrom, deliver copies of all accounts to such
successor and the retiring Agent shall be discharged from any further
obligations hereunder but shall remain entitled to the benefit of the provisions
of this Article 18 and the Agent’s successor and each of the other parties
hereto shall have the same rights and obligations among themselves as they
would have had if such successor originally had been a party hereto as Agent.

 

18.19       No Novation

 

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

 

19.                               FORMAL
DATE

 

19.1         Formal Date

 

For the purposes of convenience, this Agreement may be referred to as
bearing the Formal Date of November 28, 2000 notwithstanding its actual
date of signature.

 

97

 

IN WITNESS WHEREOF
THE PARTIES HERETO HAVE SIGNED THIS AGREEMENT ON THE DATE AND AT THE PLACE
FIRST HEREINABOVE MENTIONED.

 

 

	
  VIDÉOTRON LTÉE

  	
   

  	
  ROYAL BANK OF CANADA

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Per:

  	
   

  	
   

  	
  Per:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Per:

  	
   

  	
   

  	
  Per:

  	
   

  
	
   

  	
   

  	
   

  
	
  Address: 300 Viger St. East

  	
   

  	
  Address: 1 Place Ville Marie

  
	
  6th floor

  	
   

  	
  4th floor

  
	
  Montreal, Quebec

  	
   

  	
  Montreal, Quebec

  
	
  H2X 3W4

  	
   

  	
  H3B 4R8

  
	
   

  	
   

  	
   

  
	
  Attention: Treasurer

  	
   

  	
  Attention: Managing Director Corporate Credit

  
	
   

  	
   

  	
   

  
	
  Telephone: (514) 380-1912

  	
   

  	
  Telephone: 878-7214

  
	
  Fax: (514) 380-1983

  	
   

  	
  Fax: (514) 878-7220

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  THE TORONTO-DOMINION BANK

  	
   

  	
  BANK OF MONTREAL

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Per:

  	
   

  	
   

  	
  Per:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Per:

  	
   

  	
   

  	
  Per:

  	
   

  
	
   

  	
   

  	
   

  
	
  Address: Corporate and Investment Banking

  	
   

  	
  Address: Loan Products Group

  
	
  500 St. Jacques, 9th floor

  	
   

  	
  Investment and Corporate Banking

  
	
  Montreal, Quebec

  	
   

  	
  1 First Canadian Place, 4th floor

  
	
  H2Y 1S1

  	
   

  	
  Toronto, Ontario M5X 1H3

  
	
   

  	
   

  	
   

  
	
  Attention: Manager

  	
   

  	
  Attention: Vice-President

  
	
   

  	
   

  	
   

  
	
  Tel: (514) 289-0102

  	
   

  	
  Tel: (416) 359-6873

  
	
  Fax: (514) 289-0788

  	
   

  	
  Fax: (416) 359-7796

  

 

98

 

	
  BANK OF AMERICA, N.A.

  	
   

  	
  ROYAL BANK OF CANADA, as Agent

  
	
  CANADA BRANCH

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Per:

  	
   

  	
   

  	
  Per:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Per:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Address: Global Corporate and Investment

  	
   

  	
  Address: 200 Bay Street, 12th floor

  
	
  Banking

  	
   

  	
  South Tower, Royal Bank Plaza

  
	
  200 Front St. West, Suite 2700

  	
   

  	
  Toronto, Ontario

  
	
  Toronto, Ontario

  	
   

  	
  M5J 2W7

  
	
  M5V 3L2

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Attention: Vice-President

  	
   

  	
  Attention:

  
	
  Tel: (416) 349-5352

  	
   

  	
  Tel: (416) 842-3901

  
	
  Fax: (416) 349-4283

  	
   

  	
  Fax: (416) 842-4023

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  CANADIAN IMPERIAL BANK OF

  	
   

  	
  THE BANK OF NOVA SCOTIA

  
	
  COMMERCE

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Per:

  	
   

  	
   

  	
  Per:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Per:

  	
   

  	
   

  	
  Per:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Address: 161 Bay Street, 8th Floor

  	
   

  	
  Address: P.O. Box 4085, Station A

  
	
  BCE Place

  	
   

  	
  40 King St. West, Scotia Plaza

  
	
  Toronto, Ontario

  	
   

  	
  62nd floor

  
	
  M5J 2S8

  	
   

  	
  Toronto, Ontario, M5W 2X6

  
	
   

  	
   

  	
   

  
	
  Attention: Director

  	
   

  	
  Attention: Director

  
	
   

  	
   

  	
   

  
	
  Telephone: (416) 594-8246

  	
   

  	
  Telephone: (416) 933-1873

  
	
  Fax: (416) 956-3816

  	
   

  	
  Fax: (416) 866-2010

  

 

99

 

	
  CITIBANK N.A., CANADIAN BRANCH

  	
   

  	
  CREDIT SUISSE FIRST BOSTON,

  
	
   

  	
   

  	
  TORONTO BRANCH

  
	
   

  	
   

  	
   

  
	
  Per:

  	
   

  	
   

  	
  Per:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Per:

  	
   

  	
   

  	
  Per:

  	
   

  
	
   

  	
   

  	
   

  
	
  Address: Citibank Place

  	
   

  	
  Address: One First Canadian Place

  
	
  123 Front Street West, Suite 1900

  	
   

  	
  Suite 3000, P.O. Box 301

  
	
  Toronto, Ontario

  	
   

  	
  Toronto, Ontario

  
	
  M5J 2M3

  	
   

  	
  M5X 1C9

  
	
   

  	
   

  	
   

  
	
  Attention: Manager

  	
   

  	
  Attention: Director

  
	
   

  	
   

  	
   

  
	
  Tel: (416) 947-4171

  	
   

  	
  Telephone: (416) 352-4527

  
	
  Fax: (416) 947-5802

  	
   

  	
  Fax: (416) 352-4576

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  CAISSE CENTRALE DESJARDINS

  	
   

  	
  BANK OF TOKYO-MITSUBISHI

  
	
   

  	
   

  	
  (CANADA)

  
	
   

  	
   

  	
   

  
	
  Per:

  	
   

  	
   

  	
  Per:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Per:

  	
   

  	
   

  	
  Per:

  	
   

  
	
   

  	
   

  	
   

  
	
  Address: 1 Complexe Desjardins

  	
   

  	
  Address: 600 de la Gauchetière West

  
	
  Suite 2822

  	
   

  	
  Suite 2780

  
	
  Montreal, Quebec

  	
   

  	
  Montreal, Quebec

  
	
  H5B 1B3

  	
   

  	
  H3B 4L8

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Attention:

  	
   

  	
   

  	
  Attention:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Telephone: (514) 281-7791

  	
   

  	
  Telephone: (514) 875-9261

  
	
  Fax: (514) 281-7083

  	
   

  	
  Fax: (514) 875-9392

  
							

 

100

 

	
  LAURENTIAN BANK OF CANADA

  	
   

  	
  NATIONAL BANK OF CANADA

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Per:

  	
   

  	
   

  	
  Per:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Per:

  	
   

  	
   

  	
  Per:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Address: 1981 McGill College Avenue

  	
   

  	
  Address: 1155 Metcalfe

  
	
  Suite 1980

  	
   

  	
  5th floor

  
	
  Montreal, Quebec

  	
   

  	
  Montreal, Quebec

  
	
  H3A 3K3

  	
   

  	
  H3B 4B9

  
	
   

  	
   

  	
   

  
	
  Attention:

  	
   

  	
   

  	
  Attention: Vice President

  
	
   

  	
   

  	
   

  	
   

  
	
  Telephone: (514) 284-4500, # 4732

  	
   

  	
  Telephone: (514) 390-7508

  
	
  Fax: (514) 284-4551

  	
   

  	
  Fax: (514) 390-7860

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  HSBC BANK CANADA

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Per:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Per:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Address:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  2001 McGill College Avenue, Suite 300

  	
   

  	
   

  
	
  Montreal, Quebec, Canada, H3A 1G1

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Attention: Global Relationship Manager, Corporate

  	
   

  	
   

  
	
  & Institutional Banking

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Telephone: (514) 286-5332

  	
   

  	
   

  
	
  Fax: (514)
  286-5330

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  [Société
  Générale?]

  	
   

  	
   

  
						

 

101

 

SCHEDULE
“A” - LIST OF LENDERS AND COMMITMENTS

 

The
Revolving Facility

 

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

 

Balance of
Revolving Facility:

 

	
  Lender

  	
   

  	
  Commitment ($)

  	
   

  	
  Commitment (%)

  	
   

  
	
  Royal Bank of Canada

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  The Bank of Nova Scotia

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  The Toronto-Dominion Bank

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Bank of America N.A., Canada Branch

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Citibank N.A., Canadian Branch

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Bank of Montreal

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Canadian Imperial Bank of Commerce

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  National Bank of Canada

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Caisse centrale Desjardins

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Laurentian Bank of Canada

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  HSBC Bank Canada

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sumitomo Mitsui Banking Corporation of Canada

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
  $

  	
  575,000,000

  	
   

  	
  100

  	
  %

  
							

 

 

TABLE OF CONTENTS

 

	
  1.

  	
  INTERPRETATION

  	
   

  	
  1

  
	
   

  	
  1.1

  	
  Definitions

  	
   

  	
  1

  
	
   

  	
  1.2

  	
  Interpretation

  	
   

  	
  25

  
	
   

  	
  1.3

  	
  Currency

  	
   

  	
  26

  
	
   

  	
  1.4

  	
  Generally Accepted Accounting Principles

  	
   

  	
  26

  
	
   

  	
  1.5

  	
  Division and Titles

  	
   

  	
  26

  
	
  2.

  	
  THE CREDIT

  	
   

  	
  26

  
	
   

  	
  2.1

  	
  Credit Facility

  	
   

  	
  26

  
	
   

  	
  2.2

  	
  The Revolving Facility

  	
   

  	
  26

  
	
   

  	
  2.3

  	
  Increase in Revolving Facility

  	
   

  	
  26

  
	
  3.

  	
  PURPOSE

  	
   

  	
  28

  
	
   

  	
  3.1

  	
  Purpose of the Advances

  	
   

  	
  28

  
	
  4.

  	
  ADVANCES, CONVERSIONS AND OPERATION OF
  ACCOUNTS

  	
   

  	
  29

  
	
   

  	
  4.1

  	
  Notice of Borrowing - Direct Advances

  	
   

  	
  29

  
	
   

  	
  4.2

  	
  LIBOR Advances and Conversions

  	
   

  	
  29

  
	
   

  	
  4.3

  	
  Letters of Credit for Spectrum Auction and Purchase

  	
   

  	
  30

  
	
   

  	
  4.4

  	
  Cash Management Facilities

  	
   

  	
  33

  
	
   

  	
  4.5

  	
  Operation of Accounts

  	
   

  	
  34

  
	
   

  	
  4.6

  	
  Apportionment of Advances

  	
   

  	
  34

  
	
   

  	
  4.7

  	
  Limitations on Advances

  	
   

  	
  34

  
	
   

  	
  4.8

  	
  Notices Irrevocable

  	
   

  	
  34

  
	
   

  	
  4.9

  	
  Market for Bankers’ Acceptances and Libor Advances

  	
   

  	
  34

  
	
   

  	
  4.10

  	
  Suspension of BA Advance and Libor Advance Option

  	
   

  	
  35

  
	
   

  	
  4.11

  	
  Limits on BA Advances, Letters of Credit and Libor
  Advances

  	
   

  	
  35

  
	
   

  	
  4.12

  	
  Specific Clause with Regard to Foreign Lenders

  	
   

  	
  35

  
	
  5.

  	
  INTEREST AND FEES

  	
   

  	
  36

  
	
   

  	
  5.1

  	
  Interest on the Prime Rate Basis

  	
   

  	
  36

  
	
   

  	
  5.2

  	
  Payment of Interest on the Prime Rate Basis

  	
   

  	
  36

  
	
   

  	
  5.3

  	
  Interest on the Libor Basis

  	
   

  	
  36

  
	
   

  	
  5.4

  	
  Payment of Interest on the Libor Basis

  	
   

  	
  37

  
	
   

  	
  5.5

  	
  Limits to the Determination of LIBOR

  	
   

  	
  37

  
	
   

  	
  5.6

  	
  Fixing of LIBOR

  	
   

  	
  37

  
	
   

  	
  5.7

  	
  Hedging

  	
   

  	
  37

  
	
   

  	
  5.8

  	
  Interest on the Loan

  	
   

  	
  37

  
	
   

  	
  5.9

  	
  Arrears of Interest

  	
   

  	
  38

  
	
   

  	
  5.10

  	
  Maximum Interest Rate

  	
   

  	
  38

  
	
   

  	
  5.11

  	
  Fees

  	
   

  	
  38

  
	
   

  	
  5.12

  	
  Interest Act

  	
   

  	
  38

  
	
  6.

  	
  BANKERS’ ACCEPTANCES

  	
   

  	
  39

  
	
   

  	
  6.1

  	
  Advances by Bankers’ Acceptances and Conversions
  into Bankers’ Acceptances

  	
   

  	
  39

  
	
   

  	
  6.2

  	
  Acceptance Procedure

  	
   

  	
  40

  
	
   

  	
  6.3

  	
  Purchase of Bankers’ Acceptances and Discount Notes

  	
   

  	
  41

  
	
   

  	
  6.4

  	
  Maturity Date of Bankers’ Acceptances

  	
   

  	
  41

  
	
   

  	
  6.5

  	
  Deemed Conversions on the Maturity Date

  	
   

  	
  42

  
	
   

  	
  6.6

  	
  Conversion and Extension Mechanism

  	
   

  	
  42

  
	
   

  	
  6.7

  	
  Amounts given to the Lenders do not constitute a
  prepayment

  	
   

  	
  43

  
	
   

  	
  6.8

  	
  Prepayment of Bankers’ Acceptances

  	
   

  	
  43

  
	
   

  	
  6.9

  	
  Apportionment Amongst the Lenders

  	
   

  	
  43

  

 

 

	
   

  	
  6.10

  	
  Cash Deposits

  	
   

  	
  43

  
	
   

  	
  6.11

  	
  Days of Grace

  	
   

  	
  44

  
	
   

  	
  6.12

  	
  Obligations Absolute

  	
   

  	
  44

  
	
   

  	
  6.13

  	
  Depository Bills and Notes Act

  	
   

  	
  44

  
	
  7.

  	
  ILLEGALITY, INCREASED COSTS AND
  INDEMNIFICATION

  	
   

  	
  44

  
	
   

  	
  7.1

  	
  Illegality, Increased Costs

  	
   

  	
  44

  
	
   

  	
  7.2

  	
  Indemnity

  	
   

  	
  46

  
	
  8.

  	
  PAYMENT, REPAYMENT AND PREPAYMENT

  	
   

  	
  46

  
	
   

  	
  8.1

  	
  Repayment of the Loan

  	
   

  	
  46

  
	
   

  	
  8.2

  	
  Amount and Apportionment of Mandatory Repayments

  	
   

  	
  46

  
	
   

  	
  8.3

  	
  Voluntary Repayment and Prepayment of the Loan or
  Cancellation of the Credit

  	
   

  	
  47

  
	
   

  	
  8.4

  	
  Payment of Losses Resulting From a Prepayment or a
  Mandatory Repayment

  	
   

  	
  48

  
	
   

  	
  8.5

  	
  Currency of Payments

  	
   

  	
  48

  
	
   

  	
  8.6

  	
  Payments by the Borrower to the Agent

  	
   

  	
  48

  
	
   

  	
  8.7

  	
  Payment on a Business Day

  	
   

  	
  49

  
	
   

  	
  8.8

  	
  Payments by the Lenders to the Agent

  	
   

  	
  49

  
	
   

  	
  8.9

  	
  Payments by the Agent to the Borrower

  	
   

  	
  49

  
	
   

  	
  8.10

  	
  Netting

  	
   

  	
  49

  
	
   

  	
  8.11

  	
  Application of Payments

  	
   

  	
  49

  
	
   

  	
  8.12

  	
  No Set-Off or Counterclaim by Borrower

  	
   

  	
  50

  
	
   

  	
  8.13

  	
  Debit Authorization

  	
   

  	
  50

  
	
   

  	
  8.14

  	
  Withholding Taxes

  	
   

  	
  50

  
	
  9.

  	
  SECURITY

  	
   

  	
  51

  
	
   

  	
  9.1

  	
  Security for Advances Prior to the Phase II Date

  	
   

  	
  51

  
	
   

  	
  9.2

  	
  Security for Advances Following the Phase II Date

  	
   

  	
  51

  
	
   

  	
  9.3

  	
  Limitations on Guarantees and Security for Advances

  	
   

  	
  54

  
	
   

  	
  9.4

  	
  Further Limitations on Guarantees and Security for Advances

  	
   

  	
  55

  
	
  10.

  	
  CONDITIONS PRECEDENT

  	
   

  	
  56

  
	
   

  	
  10.1

  	
  Initial Advance under the Revolving Facility and
  Term Facility A-1

  	
   

  	
  56

  
	
   

  	
  10.2

  	
  Initial Advance under the Revolving Facility After
  the Ninth Amendment Closing Date

  	
   

  	
  58

  
	
   

  	
  10.3

  	
  Conditions Precedent to any Advance

  	
   

  	
  59

  
	
   

  	
  10.4

  	
  Waiver of Conditions Precedent

  	
   

  	
  59

  
	
   

  	
  10.5

  	
  Release of Quebecor Media Guarantee

  	
   

  	
  59

  
	
  11.

  	
  REPRESENTATIONS AND WARRANTIES

  	
   

  	
  60

  
	
   

  	
  11.1

  	
  Incorporation

  	
   

  	
  60

  
	
   

  	
  11.2

  	
  Authorization

  	
   

  	
  60

  
	
   

  	
  11.3

  	
  Compliance with Laws and Contracts

  	
   

  	
  60

  
	
   

  	
  11.4

  	
  Current Business

  	
   

  	
  61

  
	
   

  	
  11.5

  	
  Financial Statements

  	
   

  	
  61

  
	
   

  	
  11.6

  	
  Contingent Liabilities and Indebtedness

  	
   

  	
  61

  
	
   

  	
  11.7

  	
  Title to Assets

  	
   

  	
  61

  
	
   

  	
  11.8

  	
  Litigation

  	
   

  	
  61

  
	
   

  	
  11.9

  	
  Taxes

  	
   

  	
  62

  
	
   

  	
  11.10

  	
  Insurance

  	
   

  	
  62

  
	
   

  	
  11.11

  	
  No Adverse Change

  	
   

  	
  62

  
	
   

  	
  11.12

  	
  Regulatory Approvals

  	
   

  	
  62

  
	
   

  	
  11.13

  	
  Compliance with Laws
  and Licences

  	
   

  	
  62

  
	
   

  	
  11.14

  	
  Pension and Employment
  Liabilities

  	
   

  	
  62

  

 

ii

 

	
   

  	
  11.15

  	
  Priority

  	
   

  	
  63

  
	
   

  	
  11.16

  	
  Complete and Accurate
  Information

  	
   

  	
  63

  
	
   

  	
  11.17

  	
  Share Capital

  	
   

  	
  63

  
	
   

  	
  11.18

  	
  Absence of Default

  	
   

  	
  63

  
	
   

  	
  11.19

  	
  Agreements with Third
  Parties

  	
   

  	
  63

  
	
   

  	
  11.20

  	
  Environment

  	
   

  	
  63

  
	
   

  	
  11.21

  	
  Survival of
  Representations and Warranties

  	
   

  	
  64

  
	
  12.

  	
  COVENANTS

  	
   

  	
  64

  
	
   

  	
  12.1

  	
  Preservation of Juridical Personality

  	
   

  	
  64

  
	
   

  	
  12.2

  	
  Preservation of Licences

  	
   

  	
  64

  
	
   

  	
  12.3

  	
  Compliance with Applicable Laws

  	
   

  	
  65

  
	
   

  	
  12.4

  	
  Maintenance of Assets

  	
   

  	
  65

  
	
   

  	
  12.5

  	
  Business

  	
   

  	
  65

  
	
   

  	
  12.6

  	
  Insurance

  	
   

  	
  65

  
	
   

  	
  12.7

  	
  Payment of Taxes and Duties

  	
   

  	
  66

  
	
   

  	
  12.8

  	
  Access and Inspection

  	
   

  	
  66

  
	
   

  	
  12.9

  	
  Maintenance of Account

  	
   

  	
  66

  
	
   

  	
  12.10

  	
  Performance of Obligations

  	
   

  	
  66

  
	
   

  	
  12.11

  	
  Maintenance of Ratios

  	
   

  	
  66

  
	
   

  	
  12.12

  	
  Mandatory Repayments

  	
   

  	
  68

  
	
   

  	
  12.13

  	
  Maintenance of Security

  	
   

  	
  68

  
	
   

  	
  12.14

  	
  Payment of Legal Fees and Other Expenses

  	
   

  	
  68

  
	
   

  	
  12.15

  	
  Financial Reporting

  	
   

  	
  68

  
	
   

  	
  12.16

  	
  Notice of Certain Events

  	
   

  	
  70

  
	
   

  	
  12.17

  	
  CF Cable Inter-Creditor Agreement

  	
   

  	
  71

  
	
   

  	
  12.18

  	
  Accuracy of Reports

  	
   

  	
  71

  
	
   

  	
  12.19

  	
  Transfer of Licences from Spectrum Co. to the VL
  Group

  	
   

  	
  71

  
	
  13.

  	
  NEGATIVE COVENANTS

  	
   

  	
  71

  
	
   

  	
  13.1

  	
  Liquidation and Amalgamation

  	
   

  	
  71

  
	
   

  	
  13.2

  	
  Charges

  	
   

  	
  73

  
	
   

  	
  13.3

  	
  Asset Dispositions

  	
   

  	
  73

  
	
   

  	
  13.4

  	
  Preservation of Capital

  	
   

  	
  74

  
	
   

  	
  13.5

  	
  Restrictions on Subsidiaries

  	
   

  	
  74

  
	
   

  	
  13.6

  	
  Issuance and Transfer of Shares

  	
   

  	
  74

  
	
   

  	
  13.7

  	
  Acquisitions

  	
   

  	
  75

  
	
   

  	
  13.8

  	
  Debt and Guarantees

  	
   

  	
  75

  
	
   

  	
  13.9

  	
  Financial Assistance by the VL Group

  	
   

  	
  76

  
	
   

  	
  13.10

  	
  Subordinated Debt

  	
   

  	
  76

  
	
   

  	
  13.11

  	
  Members of the VL
  Group, Related Party Transactions

  	
   

  	
  76

  
	
   

  	
  13.12

  	
  Derivative Instruments

  	
   

  	
  77

  
	
  14.

  	
  EVENTS OF DEFAULT AND REALIZATION

  	
   

  	
  77

  
	
   

  	
  14.1

  	
  Event of Default

  	
   

  	
  77

  
	
   

  	
  14.2

  	
  Remedies

  	
   

  	
  79

  
	
   

  	
  14.3

  	
  Bankruptcy and Insolvency

  	
   

  	
  80

  
	
   

  	
  14.4

  	
  Notice

  	
   

  	
  80

  
	
   

  	
  14.5

  	
  Costs

  	
   

  	
  80

  
	
   

  	
  14.6

  	
  Relations with the Borrower

  	
   

  	
  81

  
	
   

  	
  14.7

  	
  Application of Proceeds

  	
   

  	
  81

  
	
  15.

  	
  JUDGMENT CURRENCY

  	
   

  	
  81

  

 

iii

 

	
   

  	
  15.1

  	
  Rules of Conversion

  	
   

  	
  81

  
	
   

  	
  15.2

  	
  Determination of an Equivalent Currency

  	
   

  	
  82

  
	
  16.

  	
  ASSIGNMENT

  	
   

  	
  82

  
	
   

  	
  16.1

  	
  Assignment by the Borrower

  	
   

  	
  82

  
	
   

  	
  16.2

  	
  Assignments and Transfers by the Lenders

  	
   

  	
  82

  
	
   

  	
  16.3

  	
  Transfer Agreement

  	
   

  	
  83

  
	
   

  	
  16.4

  	
  Notice

  	
   

  	
  84

  
	
   

  	
  16.5

  	
  Sub-Participations

  	
   

  	
  84

  
	
   

  	
  16.6

  	
  General

  	
   

  	
  84

  
	
  17.

  	
  MISCELLANEOUS

  	
   

  	
  85

  
	
   

  	
  17.1

  	
  Notices

  	
   

  	
  85

  
	
   

  	
  17.2

  	
  Amendment and Waiver

  	
   

  	
  85

  
	
   

  	
  17.3

  	
  Determinations Final

  	
   

  	
  85

  
	
   

  	
  17.4

  	
  Entire Agreement

  	
   

  	
  86

  
	
   

  	
  17.5

  	
  Indemnification and Compensation

  	
   

  	
  86

  
	
   

  	
  17.6

  	
  Benefit of Agreement

  	
   

  	
  86

  
	
   

  	
  17.7

  	
  Counterparts

  	
   

  	
  86

  
	
   

  	
  17.8

  	
  Applicable Law

  	
   

  	
  86

  
	
   

  	
  17.9

  	
  Severability

  	
   

  	
  87

  
	
   

  	
  17.10

  	
  Further Assurances

  	
   

  	
  87

  
	
   

  	
  17.11

  	
  Good Faith and Fair
  Consideration

  	
   

  	
  87

  
	
   

  	
  17.12

  	
  Responsibility of the
  Lenders

  	
   

  	
  87

  
	
   

  	
  17.13

  	
  Indemnity

  	
   

  	
  87

  
	
   

  	
  17.14

  	
  Language

  	
   

  	
  88

  
	
   

  	
  17.15

  	
  Foreign Lenders

  	
   

  	
  88

  
	
  18.

  	
  THE AGENT AND THE LENDERS

  	
   

  	
  89

  
	
   

  	
  18.1

  	
  Authorization of Agent

  	
   

  	
  89

  
	
   

  	
  18.2

  	
  Agent’s Responsibility

  	
   

  	
  90

  
	
   

  	
  18.3

  	
  Rights of Agent as Lender

  	
   

  	
  91

  
	
   

  	
  18.4

  	
  Indemnity

  	
   

  	
  91

  
	
   

  	
  18.5

  	
  Notice by Agent to Lenders

  	
   

  	
  92

  
	
   

  	
  18.6

  	
  Protection of Agent

  	
   

  	
  92

  
	
   

  	
  18.7

  	
  Notice by Lenders to Agent

  	
   

  	
  93

  
	
   

  	
  18.8

  	
  Sharing Among the Lenders

  	
   

  	
  93

  
	
   

  	
  18.9

  	
  Derivative Obligations

  	
   

  	
  94

  
	
   

  	
  18.10

  	
  Procedure with respect
  to Advances

  	
   

  	
  94

  
	
   

  	
  18.11

  	
  Accounts kept by each Lender

  	
   

  	
  95

  
	
   

  	
  18.12

  	
  Binding Determinations

  	
   

  	
  95

  
	
   

  	
  18.13

  	
  Amendment of
  Article 18

  	
   

  	
  95

  
	
   

  	
  18.14

  	
  Decisions, Amendments
  and Waivers of the Lenders

  	
   

  	
  95

  
	
   

  	
  18.15

  	
  Authorized Waivers,
  Variations and Omissions

  	
   

  	
  96

  
	
   

  	
  18.16

  	
  Provisions for the
  Benefit of Lenders Only - Power of Attorney for Quebec Purposes

  	
   

  	
  96

  
	
   

  	
  18.17

  	
  Provisions for the
  Benefit of Lenders Only

  	
   

  	
  96

  
	
   

  	
  18.18

  	
  Resignation of Agent

  	
   

  	
  97

  
	
   

  	
  18.19

  	
  No Novation

  	
   

  	
  97

  
	
  19.

  	
  FORMAL DATE

  	
   

  	
  97

  
	
   

  	
  19.1

  	
  Formal Date

  	
   

  	
  97

  
	
  [Previously delivered]

  	
   

  	
   

  

 

iv

 

	
   

  	
   

  	
  SCHEDULE “I” – PROPERTY OF THE VL GROUP

  	
   

  	
   

  
	
   

  	
  No

  	
   

  	
   

  	
   

  
	
  Adresse de
  l'immeuble

  	
   

  	
   

  
	
  3.

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

  	
   

  	
   

  
	
   

  	
  (g)   Holder Entitled to Rely.

  	
   

  	
   

  
	
   

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

  	
   

  	
   

  
	
   

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

  	
   

  	
   

  
	
   

  	
  5.   Miscellaneous.

  	
   

  	
   

  

 

v

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00155-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00155-of-00352.parquet"}]]