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Exhibit 4.8    
    

ITV plc  

 

Granada plc  

 

Carlton Communications Plc  

 

Lazard & Co., Limited  

 

UBS Limited  

 SPONSORS AGREEMENT
  

  
 

    Contents    
    

	1.	 	Definitions and Interpretation	 	2
	2.	 	Appointments	 	2
	3.	 	Applications for Admission	 	3
	4.	 	Delivery of Documents	 	3
	5.	 	Undertakings of the Company, Granada and Carlton	 	3
	6.	 	Representations, Warranties and Undertakings	 	3
	7.	 	Exclusions of Liability	 	5
	8.	 	Indemnities	 	5
	9.	 	Termination	 	7
	10.	 	Withholding and Grossing-up	 	8
	11.	 	CREST	 	9
	12.	 	General Provisions	 	9
	13.	 	Post-Admission Matters	 	10
	14.	 	Counterparts	 	10
	15.	 	Entire Agreement	 	10
	16.	 	Notices	 	10
	17.	 	Governing Law and Jurisdiction	 	13
	Schedule 1	 	14
	 	 	Definitions and Interpretation	 	14
	Schedule 2	 	18
	 	 	Delivery of Documents	 	18
	 	 	Part 1:	 	Documents to be delivered to Joint Sponsors (the Company)	 	18
	 	 	Part 2:	 	Documents to be delivered to Joint Sponsors (Granada)	 	21
	 	 	Part 3:	 	Documents to be delivered to Joint Sponsors (Carlton)	 	22
	 	 	Part 4:	 	Documents to be prepared by Joint Sponsors	 	23
	 	 	Part 5:	 	Additional Documents required by the UK Listing Authority and London Stock Exchange (48 hour documents)	 	

24
	 	 	Part 6:	 	Documents to be delivered to the Joint Sponsors immediately prior to Admission	 	25
	Schedule 3	 	26
	 	 	Undertakings	 	26
	Schedule 4	 	28
	 	 	Representations, Warranties and Undertakings	 	28

   
THIS AGREEMENT is made on 5th December 2003 

BETWEEN:

	(1)
	ITV PLC, a public limited company incorporated in England and Wales with registered number 4875222 and whose registered office is at
The London Television Centre, Upper Ground, London, SE1A 9LT (the "Company");

	(2)
	GRANADA PLC, a public limited company incorporated in England and Wales with registered number 3962410 and whose registered office is
at The London Television Centre, Upper Ground, London, SE1A 9LT ("Granada");

	(3)
	CARLTON COMMUNICATIONS PLC, a public limited company incorporated in England and Wales with registered number 348312 and whose
registered office is at 25 Knightsbridge, London, SW1X 7RZ ("Carlton");

	(4)
	LAZARD & CO., LIMITED of 50 Stratton Street, London, W1J 8LL ("Lazard"); and

	(5)
	UBS LIMITED of 1 Finsbury Avenue, London, EC2M 2PP ("UBS"). 

WHEREAS

	(A)
	The
ordinary shares of Granada and Carlton and the preference shares of Carlton are listed on the London Stock Exchange.

	(B)
	Pursuant
to a Merger Agreement, it is proposed that Granada and Carlton will merge by means of inter-conditional schemes of arrangement under Section 425 of the Companies Act
whereby the Company will become the holding company of both Granada and Carlton and the ordinary shares of both Granada and Carlton and the preference shares of Carlton will be de-listed.

	(C)
	Under
the terms of the Merger:

	(a)
	pursuant
to the Granada Scheme, the whole of the issued share capital of Granada will be cancelled. Out of the reserve thereby created, Granada will make a capitalisation issue of
ordinary shares to ITV;

	(b)
	pursuant
to the Carlton Schemes, the whole of the issued ordinary share capital of Carlton (other than the ordinary shares in the capital of Carlton held by ITV) will be redesignated
as A ordinary shares and then cancelled and the whole of the issued preference share capital of Carlton will be cancelled. Out of the reserves thereby created, Carlton will make capitalisation issues
of ordinary shares to the Company;

	(c)
	in
consideration, the Company shall allot and issue, credited as fully paid, the Ordinary Shares to Granada and Carlton shareholders, on the basis of:

	(i)
	for
each Granada ordinary share, 1 Ordinary Share; and

	(ii)
	for
each Carlton ordinary share, 1.9386 Ordinary Shares and 0.1835 Convertible Shares, 

and
for each Carlton preference share, shall pay the sum of 102 pence plus accrued dividend to the date of cancellation. 

	(D)
	The
Company has requested that Lazard and UBS act as joint sponsors to the Admission.

	(E)
	Lazard
and UBS have agreed to act as joint sponsors to the Company in connection with its application for Admission, on the terms and subject to the conditions set out in this
Agreement. 

1

 

NOW
IT IS HEREBY AGREED as follows: 

1.     Definitions and Interpretation  

	1.1
	Each
word and expression used in this Agreement (including the Recitals and Schedules to it), except insofar as the context requires otherwise, has the meaning (if any) given to it in
Schedule 1.

	1.2
	This
Agreement (and the Recitals and Schedules to it) are to be construed and interpreted in accordance with Schedule 1.

	1.3
	The
Recitals and Schedules to this Agreement are to have effect as parts of this Agreement. 

2.     Appointments  

	2.1
	The
Company hereby confirms the appointment of each of Lazard and UBS as joint sponsor in connection with the applications for Admission to act on behalf of the Company in connection
therewith including liaising with the UK Listing Authority and the London Stock Exchange in relation to any matter arising out of or in connection with Admission and each of Lazard and UBS hereby
accepts such appointment and agrees so to act. The Joint Sponsors shall comply with their obligations under the Listing Rules including (without limitation) their obligations under Listing
Rule 2.10 and further shall, on behalf of the Company, use all reasonable endeavours to assist the Company to procure that:

	(a)
	the
Listing Particulars are approved by the UK Listing Authority in accordance with the Listing Rules by not later than midnight at the end of 8 December 2003 or such other
date as the Company and the Joint Sponsors may agree;

	(b)
	the
Listing Particulars are published and made available in accordance with the Listing Rules by no later than close of business on 8 December 2003 or such other date as the
Company and the Joint Sponsors may agree; and

	(c)
	the
Formal Notice is placed in the Financial Times by no later than 10 December 2003 or such other date as the Joint Sponsors and the Company may agree.

	2.2
	The
appointments in Clause 2.1 give each of Lazard and UBS all powers, authorities and discretions which are necessary for, or reasonably incidental to, the proper performance
of its functions as joint sponsor, the publication of the Listing Particulars (and any communications or negotiations with, and the delivery of documents to, the UK Listing Authority and/or the London
Stock Exchange) and obtaining Admission. The Company (and, if relevant, Granada and Carlton) shall ratify and confirm all action which Lazard or UBS takes in connection with this Agreement, other than
any action which it would be unlawful to ratify.

	2.3
	Each
of the Company, Granada and Carlton severally undertakes to each of the Joint Sponsors that it will at any time before or after the date of Admission, provide or procure the
provision to the Joint Sponsors of all information and assistance reasonably requested by the Joint Sponsors or that may be required by the Joint Sponsors to satisfy their obligations under the
Listing Rules, including to provide to the UK Listing Authority and/or the London Stock Exchange any information or explanation as the UK Listing Authority and/or the London Stock Exchange may require
for the purpose of verifying whether the Listing Rules or the Admission and Disclosure Standards are being and have been complied with by each of the Joint Sponsors or by the Company.

	2.4
	The
Joint Sponsors shall give the Company, Granada and Carlton all assistance which each of them reasonably requires in connection with Admission. 

2

 

3.     Applications for Admission  

	3.1
	The
Company confirms that it has made the formal applications for Admission to the UK Listing Authority and the London Stock Exchange.

	3.2
	So
far as is within its power, each of the Company, Granada and Carlton severally undertakes to each of the Joint Sponsors to execute or cause to be executed all such documents, to
provide or cause to be provided all such information, and to do or cause to be done everything required by or necessary to comply with the requirements of the UK Listing Authority and the London Stock
Exchange in connection with such applications and to use reasonable endeavours to secure Admission not later than 8.00 a.m. on 2 February 2004 (or such later time and/or date as Carlton
and Granada may agree with the Joint Sponsors). 

4.     Delivery of Documents

	4.1
	Each
of the Company, Granada and Carlton shall severally procure that there are delivered to the Joint Sponsors the documents specified in Parts 1, 2 and 3 of Schedule 2 on the
date of this Agreement (and, in the case of the documents specified in Parts 5 and 6 of Schedule 2, before Admission) and, as soon as reasonably practicable following the making of a request in
writing therefor by the Joint Sponsors to the Company or to Granada or to Carlton, the Company or Granada or Carlton (as the case may be) shall deliver to the Joint Sponsors all such further
information and documents (including any executed documents) as the Joint Sponsors may reasonably require for the purpose of fulfilling its obligations under this Agreement or as may be necessary to
comply with the requirements of the UK Listing Authority or the London Stock Exchange or any other regulatory body in connection with any matter contemplated by the Listing Particulars, the Admission
and Disclosure Standards or this Agreement.

	4.2
	One
set of each of the documents required to be delivered in accordance with Clause 4.1 shall be delivered to each of the Joint Sponsors.

	4.3
	The
Joint Sponsors are hereby authorised and undertake to deliver:

	(a)
	(subject
to the Joint Sponsors receiving the documents listed in Parts 1, 2, 3 and, as appropriate, 5 and 6 of Schedule 2) the documents referred to in Parts 4, 5 and 6 of
Schedule 2 to the UK Listing Authority; and

	(b)
	any
other such information or document to the UK Listing Authority, the London Stock Exchange or any other regulatory body if and to the extent required for such purpose.

	4.4
	Each
of Granada, Carlton and (so far as it is able) the Company severally agrees to use all reasonable endeavours to procure that, subject to the Listing Particulars having been
formally approved by the UK Listing Authority and delivered to the Registrar of Companies for registration pursuant to Section 83 of the FSMA, the Scheme Document and the Listing Particulars
are posted to all registered shareholders of Granada and Carlton by 11.59 pm on 8 December 2003. 

5.     Undertakings of the Company, Granada and Carlton

The
provisions of Schedule 3 to this Agreement shall have effect as several undertakings, on the part of the persons specified in the relevant paragraphs of Schedule 3, to each of the
Joint Sponsors on and from the date of this Agreement. 

6.     Representations, Warranties and Undertakings

	6.1
	The
Company represents, warrants and undertakes to each of the Joint Sponsors in the terms of the Warranties set out in Schedule 4. The Company accepts that each of the Joint
Sponsors is entering into this Agreement in reliance upon each of such representations, warranties and undertakings. 

3

 
	6.2
	Granada
(other than in relation to Carlton or the Carlton Scheme) represents, warrants and undertakes to each of the Joint Sponsors in the terms of the Warranties set out in
Schedule 4. Granada accepts that each of the Joint Sponsors is entering into this Agreement in reliance upon each of such representations, warranties and undertakings.

	6.3
	Carlton
(other than in relation to Granada or the Granada Scheme) represents, warrants and undertakes to each of the Joint Sponsors in the terms of the Warranties set out in
Schedule 4. Carlton accepts that each of the Joint Sponsors is entering into this Agreement in reliance upon each of such representations, warranties and undertakings.

	6.4
	Each
of the Warranties shall be construed separately and shall not be limited or restricted by reference to or inference from the terms of any other of them or any other term of this
Agreement.

	6.5
	The
representations, warranties and undertakings given pursuant to Clause 6.1 are given as at the date of this Agreement and shall be deemed to be repeated and given as at and
on the date of publication by the Company pursuant to Section 81 of the FSMA of any Supplementary Listing Particulars and as at and on the day of Admission by reference to the facts and
circumstances then existing.

	6.6
	Each
of the Warranties shall be qualified to the extent of any facts or information disclosed in the Listing Documents (including, for the avoidance of doubt, any information
disclosed in any Supplementary Listing Particulars).

	6.7
	Where
any of the Warranties is expressed to be qualified by a reference to awareness and/or knowledge and/or information and/or belief, that reference shall be deemed to include a
statement to the effect that it has been given after due and careful enquiry, including due and careful enquiry of and by each of the ITV Directors, the Granada Directors or the Carlton Directors (as
the case may be).

	6.8
	If,
at any time prior to Admission, the Joint Sponsors become aware that any of the Warranties was, is, has become or is reasonably likely to become, untrue, inaccurate or misleading
in any respect which, in the reasonable opinion of the Joint Sponsors, acting jointly, is material in the context of Admission, the Joint Sponsors may (without prejudice to the Joint Sponsors right to
terminate this Agreement pursuant to Clause 9), after consultation to the extent reasonably practicable with Granada and Carlton, acting reasonably in the light of all relevant requirements,
require the Company at its own expense promptly to amend, update or supplement the Listing Particulars and/or any Supplementary Listing Particulars (the form and content of any such amendment, update
or supplement to be approved by the Joint Sponsors (such approval not to be unreasonably withheld or delayed)) and/or require the Company and/or Granada and/or Carlton at its own expense promptly to
make such announcements and/or despatch such communications and/or take such other steps as they, after consultation with Granada and Carlton to the extent reasonably practicable, reasonably consider
necessary in connection with the material untruth, inaccuracy or misleading nature of the Warranty concerned.

	6.9
	If
any Supplementary Listing Particulars are published, references in this Agreement to the Listing Particulars are, as the context permits, to be read as references to the
Supplementary Listing Particulars. 

4

 

7.     Exclusions of Liability

	7.1
	The
Company hereby agrees with each of the Joint Sponsors (for itself and on trust for each other member of the Lazard Group and the UBS Group, as appropriate, and each of the
directors, partners, officers, employees or agents of any such person (each of the Joint Sponsors and each of the foregoing, an Indemnified Person))
that no Claim shall be made against any Indemnified Person by the Company or by any of its subsidiary undertakings or associates or by any director, officer, employee or agent of any such body
corporate in respect of any and all actions, claims, losses, liabilities, damages, costs, charges and expenses which any such person may suffer or incur relating to the carrying out by any Indemnified
Person of obligations or services in connection with this Agreement or any other agreements relating to Admission or in connection with Admission, save to the extent that the same shall have arisen
directly as a result of (i) the negligence or wilful default of the relevant Indemnified Person; or (ii) a breach by that Indemnified Person of its duties or obligations under the FSMA
or under the rules of the Financial Services Authority; or (iii) a material breach of its obligations under this Agreement or a material breach of its Relevant Obligations (other than, in any
of the above cases, any such breach which has arisen as a result of any matter or event beyond the Indemnified Person's reasonable control) and provided that the exceptions in (i), (ii) and
(iii) of this Clause 7.1 shall not apply to the extent that any Claim arises out of, or is attributable to, any matters referred to in Clause 8.3(a).

	7.2
	Notwithstanding
any rights or claims which the Company may have or assert against either of the Joint Sponsors in connection with this Agreement or Admission, no claim will be brought
by the Company or by any of its subsidiary undertakings or associates or by any director, officer, employee or agent of any such body corporate against any director or any other officer and/or
employee of either of the Joint Sponsors in respect of any conduct, action or omission by the individual concerned in connection with this Agreement or Admission. 

8.     Indemnities

	8.1
	Carlton
acknowledges and agrees that the activities of UBS as joint sponsor under the terms of this Agreement form part of their activities under the UBS Engagement Letter and
accordingly fall within the scope of the indemnity and the exclusion of liability set out in Clauses 9 and 10 of, and the Schedule to, the UBS Engagement Letter, subject to the limitations set out
therein.

	8.2
	Granada
acknowledges that the activities of Lazard as joint sponsor under the terms of this Agreement form part of their activities under the Lazard Engagement Letter and accordingly
fall within the scope of the indemnity and the exclusion of liability set out therein, subject to the limitations set out therein.

	8.3
	Subject
to clause 8.7, the Company hereby agrees and undertakes to each of the Joint Sponsors (for itself and on trust for each other Indemnified Person) to indemnify each
Indemnified Person against all or any Claims asserted or established against that Indemnified Person in any jurisdiction by any person whatsoever and against all Expenses which that Indemnified Person
may suffer or incur (including, but not limited to, all Expenses suffered or incurred in investigating, preparing for or disputing any Claim and/or in establishing a right to be indemnified pursuant
to this Clause 8.3 and/or in seeking advice regarding any Claim or in any way related to or in connection with this indemnity) if the Claim or Expense arises under, out of, or in connection
with, directly or indirectly, Admission or this Agreement, including but not limited to:

	(a)
	the
Listing Documents or any of them not containing or fairly presenting, or being alleged not to contain or not fairly to present, all information required to be contained therein or
any statement therein being or being alleged to be in any respect untrue, inaccurate, incomplete, misleading or not based on reasonable grounds; and/or 

5

 

	(b)
	the
distribution, issue or approval of the Listing Documents or any of them or other documents or materials in connection with Admission (including the issue or approval for the
purpose of Section 21 of the FSMA of any invitation or inducement to engage in investment activity); and/or

	(c)
	any
breach or alleged breach by the Company or Granada or Carlton or any of any of its obligations (including the Warranties) in this Agreement or any other agreement to be entered
into by it in connection with Admission or this Agreement; and/or

	(d)
	any
failure or alleged failure by the Company or Granada or Carlton or any of its agents, employees or advisers to comply with the FSMA or the Listing Rules or the Admission and
Disclosure Standards, or any other legal or regulatory requirements in relation to the proposed Admission or this Agreement, 

save
that an Indemnified Person shall not be entitled to any indemnity under this Clause 8.3 in relation to any Claim or Expense to the extent that the Claim or Expense concerned shall have
arisen directly from (i) the negligence or wilful default of the relevant Indemnified Person; or (ii) from a material breach by that Indemnified Person of his or its obligations under
this Agreement or from a material breach of its Relevant Obligations (other than, in any of the above cases, any such breach which has arisen as a result of any matter or event beyond the Indemnified
Person's reasonable control) provided that the exceptions in (i) and (ii) in this Clause 8.3 shall not apply to the extent any Claims or Expenses arise out of, or are attributable
to, any of the matters referred to in Clause 8.3(a). 

	8.4
	Where
one or more Indemnified Persons is the subject of a claim alleging liability in respect of any damage or loss arising from or in any way connected with Admission or this
Agreement, then the total amount of such damage or loss recoverable from any such Indemnified Persons shall be limited to such proportion of the damage or loss as is finally determined to be just and
equitable, having regard to the relative responsibility of (i) each Indemnified Person so liable and (ii) any other person (including, for the avoidance of doubt and without limitation,
each of the Company, Granada, Carlton, any of their respective subsidiary undertakings or associates and any director, officer, employee or agent of any such body corporate and any other person
unrelated to the Company or Granada or Carlton) who is jointly or severally liable for the damage or loss or any part thereof (a Third Party). For the
avoidance of doubt, any limitation or exclusion or restriction on the liability of any Third Party under any jurisdiction, whether arising under statute or contract or resulting from death, bankruptcy
or insolvency (a Liability Limitation) shall be ignored for the purposes of determining the extent of responsibility of that Third Party under
(ii) above.

	8.5
	Without
prejudice to Clause 8.4 above, where:

	(a)
	notwithstanding
anything in Clause 7 above, it has been finally determined that one or more Indemnified Persons is liable to the Company or Granada or Carlton for any damage or
loss; and

	(b)
	any
Third Party has the benefit of a limitation or exclusion or restriction of liability arising under a contract with the Company or Granada or Carlton (the  Contractual Liability Limitation),

then
the total liability of any such Indemnified Person to the Company or Granada or Carlton in respect of the relevant damage or loss shall not exceed the maximum amount which the Company or Granada
or Carlton could recover from such Indemnified Person after deducting such sums as that Indemnified Person, the Company, Granada and Carlton would in aggregate have been entitled to recover from any
Third Party in respect of the relevant damage or loss, but is prevented from recovering as a result of the Contractual Liability Limitation. 

6

 
	8.6
	Each
of the Joint Sponsors shall have regard to any reasonable request which the Company (following Admission) or Granada or Carlton (prior to Admission) may make in relation to any
Claim asserted against either of the Joint Sponsors, subject to the Company or Granada or Carlton (as the case may be) indemnifying and securing each of the Joint Sponsors in a manner satisfactory to
the Joint Sponsors against any and all costs, charges and expenses incurred by either of them in complying with any such request. Where each of the Joint Sponsors reasonably believes that a Claim may
be established against it, the Company, Granada and Carlton shall (so far as each is able) comply with any reasonable request from each of the Joint Sponsors in relation to such Claim and, in
particular, the Company, Granada and Carlton shall promptly provide copies of, or access to, all documents so requested.

	8.7
	The
obligations of the Company to indemnify each Indemnified Person pursuant to this Clause 8 shall only have effect to the extent that such Indemnified Person is unable to
obtain full indemnity against all relevant Claims and for all relevant Expenses under the indemnities contained in the Lazard Engagement Letter and/or the UBS Engagement Letter (as appropriate) having
used all reasonable endeavours to do so.

	8.8
	This
Clause 8 shall be without prejudice to any other rights or remedies either of the Joint Sponsors may have and shall, subject to Clause 8.7, be in addition to and
not in substitution for, the rights and remedies under the Lazard Engagement Letter and the UBS Engagement Letter and shall survive any termination of the agreements and arrangements contained in this
Agreement. 

9.     Termination

	9.1
	If
at any time on or before Admission:

	(a)
	it
shall come to the notice of the Joint Sponsors that any statement contained in any Listing Document is or has become untrue, incorrect or misleading in any material respect, or any
matter has arisen, which would, if Admission occurred at that time, constitute a material omission from the Listing Documents, or any of them, and which the Joint Sponsors, acting jointly, in good
faith and reasonably, consider to be material in the context of Admission; or

	(b)
	any
of the representations, warranties and undertakings contained, or referred to, in this Agreement is not, or has ceased to be, true and accurate in all material respects by
reference to the facts and circumstances subsisting at that time or that a matter has arisen which might reasonably be expected to give rise to a claim under Clause 8 and which, in any such
case, the Joint Sponsors, acting jointly, in good faith and reasonably, consider to be material in the context of Admission; or

	(c)
	the
Company, Granada or Carlton has not complied or cannot comply with any of its obligations under this Agreement or otherwise relating to the Admission and which the Joint Sponsors,
acting jointly, in good faith and reasonably, consider to be material in the context of Admission;

	(d)
	the
Lazard Engagement Letter or the UBS Engagement Letter is terminated; or

	(e)
	the
Joint Sponsors are of the opinion, acting in good faith, that the Company is unsuitable for listing on the Official List as a result of any material adverse change in the
business, financial or trading position of Granada or Carlton which would, in the reasonable opinion of the Joint Sponsors having regard to the approach of the Panel to such matters, entitle either
Granada or Carlton to invoke the condition set out in paragraph 1.4(i)(ii) or 1.4(j)(ii) of Part Three of the Scheme Document, whether or not Granada or Carlton do so, 

7

 

the
Joint Sponsors, acting jointly, may, in their absolute discretion, by notice in writing given to the Company, any of the Directors, Granada and Carlton, terminate this Agreement, except to the
extent specified in Clause 9.3. Prior to giving such notice, the Joint Sponsors will use all reasonable endeavours to consult with the Company, Granada and Carlton but a failure to do so will
not invalidate any notice given under this Clause 9.1. 

	9.2
	The
Joint Sponsors shall be entitled to, and will if so required by Granada, Carlton or the Company, at any time following termination of this Agreement, on behalf of the Company,
withdraw any application to the Listing Authority and the London Stock Exchange for Admission and require the Company and/or Granada and/or Carlton to make (or, failing which, the Joint Sponsors will
themselves be entitled to make) an announcement of such withdrawal.

	9.3
	The
termination of this Agreement (save to the extent specified in this Clause 9.3) pursuant to Clause 9.1 shall be without prejudice to:

	(a)
	the
terms of the Lazard Engagement Letter and the UBS Engagement Letter (as the case may be); and

	(b)
	the
provisions of Clauses 1, 7 to 10, 12 and 14 to 17 and paragraph 5 of Schedule 3 concerning announcements, which will continue to apply. 

10.   Withholding and Grossing-up

	10.1
	All
sums payable to either or both of the Joint Sponsors or any other Indemnified Person (for the purposes of this Clause 10 only, each a  payee) under this Agreement shall be paid free and clear
of all deductions or withholdings unless the deduction or withholding is required by law, in
which event the person liable under this Agreement to make such payment or withholding shall pay such additional amounts as shall be required to ensure that the total net amount received by the payee
will equal the full amount which would have been received by it had no such deduction or withholding been made.

	10.2
	If
any Tax authority brings into charge to Tax (or into any computation of income, profit or gains for the purposes of any charge to Tax or would bring into charge to Tax in the
absence of any relief available to the payee) any sum payable to a payee under this Agreement or any sum withheld in accordance with Clause 10.1 from any payment made to such a person under
this Agreement the person liable under this Agreement to make such payment or withholding shall pay to the payee such additional amounts as shall be required to ensure that the total net amount left
in the hands of the payee after any such charge to Tax (or such amount as would have been left in the hands of the payee after such charge if any reliefs available to the payee were ignored) will
equal the full amount which would have been left in the hands of that payee had no such charge to Tax been made (or such amount as would have been left in the hands of the payee had no such charge
been made where any reliefs available to the payee were ignored) (such additional payments being made by the later of three Business Days after the payee has served notice that additional payments are
required and five Business Days before the Tax to which the additional payments relate is due without interest becoming payable (or would have been so due but for the availability of relief).

	10.3
	If
and to the extent that a payee receives an additional amount under Clause 10.1 and the payee receives and realises the benefit of a refund of Tax or credit against Tax on
its overall net income which is solely and directly attributable to the Tax that was withheld or deducted, then the payee shall reimburse to the person who paid the additional amount such amount as
the payee shall determine so as to leave that payee, after that reimbursement, in no better or worse position than it would have been in if payment of the additional amount had not been required.

	10.4
	No
payee shall be obliged to disclose any information regarding its Tax affairs or computations to any person. 

8

 

11.   CREST

	11.1
	The
Company will ensure that on or before 30 January 2004:

	(a)
	all
necessary filings are made with the Registrar of Companies to facilitate the transfer of shares through CREST;

	(b)
	securities
application forms are submitted by the Company to CRESTCo and the Ordinary Shares and Convertible Shares are admitted into CREST as Participating Securities with effect
from Admission; and

	(c)
	the
Registrar confirms to CRESTCo that it is the registrar for the Ordinary Shares and Convertible Shares. 

12.   General Provisions

	12.1
	This
Agreement shall operate for the benefit of and be binding upon the parties hereto and (in relation to Clauses 7 and 8) the Indemnified Persons and their respective
successors or legal personal representatives.

	12.2
	The
respective agreements, representations, warranties, undertakings, indemnities and other statements contained in or made pursuant to this Agreement will remain in full force and
are to have effect, irrespective of anything revealed in any investigation made by or on behalf of any person, and will survive Admission.

	12.3
	The
provisions of this Agreement are without prejudice to any liabilities which any of the parties may have under any rule of law or equity (including, without limitation, the FSMA
and the US Securities Act).

	12.4
	Subject
to Clause 8.7, the indemnities set out or referred to in this Agreement shall be in addition to and shall not limit, affect or prejudice any other right or remedy
available to any Indemnified Person against any person (whether or not a party to this Agreement) including any right or remedy available to any party under or in relation to any other agreement with
any other party hereto.

	12.5
	No
neglect, delay or indulgence on the part of either of the Joint Sponsors or any other Indemnified Person in enforcing or invoking any provision of this Agreement shall operate as
a waiver or release.

	12.6
	Notwithstanding
any other rule of law or equity, any release, waiver or compromise or any other arrangement of any kind whatsoever which either of the Joint Sponsors may adopt or
effect in connection with this Agreement shall not affect any right or privilege of any other party to this Agreement nor any other rights or privileges of any such party at law, in equity or
otherwise.

	12.7
	No
party may assign any of its rights under this Agreement without the consent of the other party.

	12.8
	The
rights and obligations of each of the Joint Sponsors under this Agreement are several. Each Joint Sponsor shall (save as otherwise agreed between them) have the right to protect
and enforce its rights without joining the other Joint Sponsor in any proceedings.

	12.9
	The
failure by one of the Joint Sponsors to perform its obligations hereunder shall not affect the obligations of the Company, Granada or Carlton to the other Joint Sponsor and
neither of the Joint Sponsors shall be liable to any other person for the failure by the other Joint Sponsor to perform its obligations hereunder.

	12.10
	Save
as provided in Clause 12.1, a person who is not a party to this Agreement shall have no rights, whether under the Contracts (Rights of Third Parties) Act 1999 or
otherwise, to rely on or enforce any of its terms. 

9

 

13.   Post-Admission Matters

	13.1
	The
Company undertakes to each of the Joint Sponsors that it will:

	(a)
	procure
the issue to the persons registered as members of the Company of definitive share certificates in respect of their holdings of Ordinary Shares and/or Convertible Shares or the
settlement of such transactions within CREST if the relevant shareholders so wish in accordance with the terms of the Scheme described in the Scheme Document;

	(b)
	procure
the delivery to the UK Listing Authority of a duly executed declaration in the form set out in Schedule 6 to the Listing Rules and any other documents the UK Listing
Authority may reasonably require;

	(c)
	procure
the delivery to the London Stock Exchange of any documents required by the London Stock Exchange in accordance with the Admission and Disclosure Standards and any other
documents the London Stock Exchange may reasonably require; and 

procure
the payment to the UK Listing Authority of any additional listing charges payable as a result of the price at which the Ordinary Shares and/or Convertible Shares open on the day Admission
becomes effective. 

14.   Counterparts

This
Agreement may be executed by any one of the parties hereto in any number of counterparts, each of which shall be deemed to be an original, but all such counterparts shall together constitute the
same instrument. 

15.   Entire Agreement

Save
for the Lazard Engagement Letter and the UBS Engagement Letter, this Agreement constitutes the entire agreement between the parties hereto in connection with the matters contemplated hereby. In
particular, each of the parties hereto hereby acknowledges that it is not entering into this Agreement in reliance on any warranties, representations or undertakings howsoever or to or by whomsoever
made except insofar as such are embedded in the warranties, representations and undertakings contained in this Agreement. 

16.   Notices

	16.1
	Save
as otherwise provided in this Agreement, any notice, demand or other communication to be served under this Agreement shall be in writing and shall be served upon any party
hereto only by posting by first class post (if to an address in the same country) or air mail (if to an address in a different country) or delivering the same to its address given or referred to in
this Clause 16 or sending the same by facsimile transmission to the number given in this Clause 16 for the addressee or at such other address or number as it may from time to time notify
in writing in accordance with this Clause 16. 

10

 
	16.2
	A
notice or demand served by first class post shall be deemed duly served on an addressee in the same country forty-eight hours (disregarding days which are not Business Days) after
posting, a notice or demand served by air mail shall be deemed duly served on an addressee in a different country on receipt and a notice or demand delivered personally or sent by facsimile
transmission shall be deemed duly served at the time of delivery or transmission (save that if the delivery or transmission occurs after 6 p.m. on a Business Day or on a day which is not a
Business Day the notice or demand shall be deemed duly served at 8.30 a.m. on the next Business Day following delivery or transmission) and in proving service of the same it will be sufficient
to prove, in the case of a letter, that such letter was left at or delivered to the correct address of the party to be served as provided in this Agreement or in the case of properly stamped or
franked first class post, addressed to the address of the party to be served given in this Clause 16 and placed in the post and, in the case of a facsimile transmission, that such facsimile was
duly transmitted to the number of the party to be served given in this Clause 16 and an electronic acknowledgement was received. 

11

 
	16.3
	All
notices, demands or other communications given under this Agreement, shall be given to the following addresses and numbers: 

	 	If to the Company to:	 	ITV PLC

The London Television Centre

Upper Ground

London

SE1A 9LT
	

 	

 	
 	

For the attention of: Company Secretary
	

 	

 	
 	

Fax Number: 020 7620 2864
	

 	

 	
 	

Telephone Number: 020 7620 1620
	

 	

If to Granada to:	
 	

Granada plc

The London Television Centre

Upper Ground

London

SE1A 9LT
	

 	

 	
 	

For the attention of: Company Secretary
	

 	

 	
 	

Fax Number: 020 7620 2864
	

 	

 	
 	

Telephone Number: 020 7620 1620
	

 	

If to Carlton:	
 	

Carlton Communications Plc

25 Knightsbridge

London

SW1X 7RZ
	

 	

 	
 	

For the attention of: Company Secretary
	

 	

 	
 	

Fax Number: 020 7663 6300
	

 	

 	
 	

Telephone Number: 020 7663 6363
	

 	

If to Lazard:	
 	

Lazard & Co., Limited

50 Stratton Street

London

W1J 8LL
	

 	

 	
 	

For the attention of:

Legal and Compliance Department
	

 	

 	
 	

Fax Number: 020 7072 6404
	

 	

 	
 	

Telephone Number: 020 7187 2000
	

 	

If to UBS:	
 	

UBS Limited

1 Finsbury Avenue

London

EC2M 2PP
	

 	

 	
 	

For the attention of:

Equity Capital Markets Group
	

 	

 	
 	

Fax Number: 020 7568 1081
	

 	

 	
 	

Telephone Number: 020 7567 8000

12

 

17.   Governing Law and Jurisdiction

	17.1
	This
Agreement and the relationship among the parties to it shall be governed by and interpreted in accordance with English law.

	17.2
	The
parties agree that the courts of England are to have exclusive jurisdiction to settle any dispute (including claims for set-off and counter claims) which may arise in
connection with the creation, validity, effect, interpretation, or performance of, or of legal relationships established by, this Agreement or otherwise arising in connection with this Agreement and
for such purposes irrevocably submit to the jurisdiction of the English courts.

	17.3
	The
parties irrevocably agree that a judgment order of any court referred to in this Clause in connection with this Agreement is to be conclusive and binding on it and may be
enforced against it in the courts of any other jurisdiction. 

        IN
WITNESS WHEREOF this Agreement has been entered into the day and year first above written. 

13

  

 
 

Schedule 1
  Definitions and Interpretation    
    

	1.
	In
this Agreement, the following expressions shall have the meanings set out below: 

Admission means the admission of the whole of the Company's ordinary share capital and/or convertible share capital (as the case may be) to the Official
List becoming effective in accordance with the Listing Rules and admission of the whole of the Company's ordinary share capital and/or convertible share capital (as the case may be) to trading on the
London Stock Exchange's market for listed securities becoming effective in accordance with the Admission and Disclosure Standards; 

Admission and Disclosure Standards means the Admission and Disclosure Standards of the London Stock Exchange; 

associate means, in relation to a party to this Agreement, a company or undertaking in which the party has or, at the relevant time to which any
provision of this Agreement in which the term is used relates, had a direct or indirect interest entitling it to receive, or to include or reflect in its accounts, more than 30 per cent, of the annual
income or profits of the company or undertaking concerned or in relation to which the relevant party to this Agreement is able to remove directors (or their equivalent) able to cast the majority of
votes on any material matter; 

Business Day means a day (excluding Saturdays and Sundays) on which banks are generally open for normal banking business in the City of London; 

Claim means any claim (whether or not successful, compromised or settled), action, liability, demand, proceeding or judgment; 

Companies Act means the Companies Act 1985; 

Contractual Liability Limitation has the meaning given in Clause 8.5; 

Carlton ADRs means American depository receipts evidencing Carlton American depository shares, each representing five ordinary shares of 5 pence each in
the capital of Carlton; 

Carlton Directors means the directors of Carlton, as described in the Listing Particulars; 

Carlton Ordinary Share Scheme means the proposed scheme of arrangement under Section 425 of the Companies Act between Carlton and the holders of
ordinary shares of Carlton described in the Scheme Document; 

Carton Preference Share Scheme means the proposed scheme of arrangement under Section 425 of the Companies Act between Carlton and the holders of
preference shares of Carlton described in the Scheme Document; 

Carlton Schemes means the Carlton Ordinary Share Scheme and the Carlton Preference Share Scheme; 

Carlton Working Capital Memorandum means the working capital board memorandum in the agreed form in respect of Carlton prepared by the Carlton
Directors, including any updates and supplements thereto; 

Constitutional Documents means, in relation to any company, the memorandum of association and articles of association of the company concerned from time
to time in force; 

Convertible Shares means the convertible shares of 10 pence each in the capital of the Company; 

CREST means the system of paperless settlement of trades and the holding of uncertificated shares administered by CRESTCo; 

CRESTCo means CRESTCo Limited, a company incorporated under the laws of England and Wales; 

14

 

Expense means any losses, costs, penalties, charges or expenses (including legal fees properly incurred) and taxes (other than corporation tax incurred
by the relevant Indemnified Person on its actual net income, profit or gains); 

Formal Notice means the formal notice to be published in connection with Admission as required under paragraph 8.7 of the Listing Rules; 

FSMA means the Financial Services and Markets Act 2000; 

Granada Directors means the directors of Granada, as described in the Listing Particulars; 

Granada Scheme means the proposed scheme of arrangement under Section 425 of the Companies Act between Granada and the shareholders of Granada
described in the Scheme Document; 

Granada Working Capital Memorandum means the working capital board memorandum in the agreed form in respect of Granada prepared by the Granada
Directors, including any updates and supplements thereto; 

Group means the Company and its subsidiary undertakings and associates immediately following Admission; 

Indemnified Person has the meaning given in Clause 7.1; 

ITV Directors means the directors of the Company, as described in the Listing Particulars; 

ITV Working Capital Memorandum means the working capital board memorandum in the agreed form in respect of the report prepared by the ITV Directors,
including any updates and supplements thereto; 

Joint Sponsors means Lazard and UBS; 

KPMG means KMPG Audit Plc of PO Box 486, 1 Puddle Dock, London EC4V 3PD; 

KPMG Report means the accountants' report on the Group prepared by KPMG and set out in Part 5 of the Listing Particulars; 

Lazard Engagement Letter means the letters dated 28 November 2002 and 15 October 2002 exchanged between Granada and Lazard relating, inter
alia, to the Merger; 

Lazard Group means Lazard LLC and its subsidiary, controlling, associated and affiliated undertakings, together with any subsidiary or associated
undertakings of any such undertakings, from time to time; 

Liability Limitation has the meaning given in Clause 8.4; 

Listing Documents means the Listing Particulars, the Formal Notice, the press announcement issued by the Company dated 16 October 2002, any
Supplementary Listing Particulars and any amendments or supplements to any such documents; 

Listing Particulars means the listing particulars in the agreed form to be published by the Company in relation to Admission and dated the same date as
this Agreement and including any amendments or supplements thereto; 

Listing Rules means the Listing Rules of the UK Listing Authority; 

London Stock Exchange means London Stock Exchange plc; 

Lovells means Lovells of 50 Holborn Viaduct, London EC1A 2FG; 

material means, when used in Schedule 4, material to an informed assessment of the assets, liabilities, profits, losses, financial position and
prospects of the Company and the Group taken as a whole or material in the context of Admission; 

15

 

material adverse effect means any adverse effect upon, or any adverse change in, the condition, financial or otherwise, or in the earnings, business
affairs or prospects of the Group, whether or not arising in the ordinary course of business, which is material in the context of Admission or the arrangements contemplated by the Listing Particulars
or this Agreement; 

Merger means the merger of Granada and Carlton to be effected pursuant to the Schemes; 

Merger Agreement means the agreement dated 16 October 2002 between Granada and Carlton relating to the Merger; 

NASDAQ means The Nasdaq Stock Market, Inc.; 

Official List means the Official List of the UK Listing Authority; 

Ordinary Shares means the ordinary shares of 10 pence each in the capital of the Company; 

Participating Securities has the meaning given in the Uncertificated Securities Regulations 2001; 

PricewaterhouseCoopers means PricewaterhouseCoopers of 1 Embankment Place, London WC2A 6RH; 

Relevant Obligations means the obligation of Lazard or UBS (as the case may be) arising in connection with its agreement to act as Joint Sponsor to the
Company in connection with the Admission arising under the Lazard Engagement Letter or the UBS Engagement Letter, respectively; 

Resolutions means the resolutions to be proposed at the extraordinary general meetings and the court meetings of Granada and Carlton, respectively, as
set out in the Scheme Document; 

Scheme Document means the circular in the agreed form to be issued by Granada and Carlton to their shareholders in connection with the Schemes,
including any amendments or supplements thereto; 

Schemes means the Granada Scheme and the Carlton Schemes; 

Slaughter and May means Slaughter and May of One Bunhill Row, London, EC1Y 8YY; 

subsidiary has the meaning given in Section 736 of the Companies Act; 

subsidiary undertaking has the meaning given in Section 258 of the Companies Act; 

Supplementary Listing Particulars means any supplementary listing particulars required to be published by the Company pursuant to Section 81 of
the FSMA and the Listing Rules; 

Tax means all taxes, levies, imposts, duties, charges or withholdings of any nature whatsoever together with all penalties, charges and interest
relating to any of the foregoing and regardless of whether the person concerned is primarily liable or not, including (without limitation) corporation tax, advance corporation tax, income tax, capital
gains tax, value added tax, national insurance contributions, capital duty, stamp duty, stamp duty reserve and all other taxes on gross or net income, profits or gains, distributions, receipts, sales,
use, occupation, franchise, value added, and personal property; 

Tax authority means any tax or other authority (whether within or outside the United Kingdom) competent to impose any liability to Tax or responsible
for the administration and/or collection of Tax or enforcement of any law in relation to Tax; 

Third Party has the meaning given in Clause 8.4; 

Transaction Documents means the Listing Documents and the Scheme Document; 

UBS Engagement Letter means the letter dated 11 October 2002 exchanged between Carlton and UBS relating to UBS' appointments as financial advisor
to Carlton in relation, inter alia, to the Merger; 

UBS Group means UBS AG and any subsidiary, branch or affiliate; 

16

 

UK Listing Authority means the Financial Services Authority acting in its capacity as the competent authority for the purposes Part VI of the
FSMA; 

Warranty means a representation, warranty or undertaking given pursuant to Clause 6 and/or set out in Schedule 4; and 

Working Capital Memoranda means the ITV Working Capital Memorandum, the Granada Working Capital Memorandum and the Carlton Working Capital Memorandum,
or any of them, as appropriate. 

	2.
	References
in this Agreement to any Recital, Clause or Schedule are to recitals of, clauses of, and schedules to, this Agreement (except where the context otherwise requires).

	3.
	Headings
in this Agreement shall not affect its interpretation.

	4.
	In
this Agreement, words incorporating the singular only shall include the plural and vice versa and references to persons shall include
individuals, bodies corporate (wherever incorporated), unincorporated associations and partnerships (including limited partnerships) and wherever any such associations or partnerships are formed or
organised.

	5.
	References
to any statute, regulation or part thereof in this Agreement shall be construed as references thereto as amended or re-enacted (whether before or after the date
of this Agreement) or as the application thereof is modified by other provisions prior to the date hereof or subsequently (PROVIDED THAT no modification subsequent to the date of this Agreement shall
increase or extend the liability of any party under this Agreement), shall be construed as including references to any provision of which they are re-enactments (whether with or without
modification) and shall be construed as including references to any order, instrument, regulation or other subordinate legislation made pursuant thereto.

	6.
	References
in this Agreement to times and dates are to London times and dates.

	7.
	References
in this Agreement to any document expressed to be in the agreed form means a document in the form initialled, for the purpose
of identification only, by the respective legal advisers to the parties to this Agreement subject to any changes which the Company, Granada, Carlton and the Joint Sponsors may agree; no such
initialling shall imply approval of all or any part of its contents by or on behalf of the person initialling it or either of the parties to this Agreement.

	8.
	References
in this Agreement to any document being a certified copy means a copy of such document certified by a Director or the
Secretary of the Company, Granada or Carlton, as the case may be.

	9.
	Each
reference in this Agreement to a breach of any of its provisions includes a reference to any of the warranties given in this Agreement being inaccurate or misleading.

	10.
	Each
reference in this Agreement to the subsidiary undertakings or associates of the Company includes a reference to undertakings of that nature immediately following Admission. 

17

  

 
 

SCHEDULE 2    
    

Delivery of Documents  

Part 1: Documents to be delivered to Joint Sponsors

(the Company)  

	Document
 
	 	 
	 	No of copies
 
	 	Execution requirements
 

	1.	 	Application for admission to the Official List (Schedule 3A)	 	3	 	Signed original (for UKLA), together with 2 certified copies
	

2.	
 	

Responsibility letter from each ITV Director relating to the Listing Particulars together with powers of attorney (as applicable)	
 	

3	
 	

3 certified copies
	

3.	
 	

Listing Particulars bearing evidence of the formal approval of the UK Listing Authority, pursuant to the Listing Rules	
 	

2	
 	

Certified copies
	

4.	
 	

Evidence that copies of the Listing Particulars have been delivered to the Registrar of Companies for registration pursuant to Section 83 of the FSMA	
 	

2	
 	

In a form satisfactory to the Joint Sponsors
	

5.	
 	

Listing Particulars and each of the other Listing Documents	
 	

3	
 	

One copy of the Listing Particulars to be signed by each of the ITV Directors (or by their agents or attorneys duly authorised in writing, in which case, together with three certified copies of any such authorisation)
	

6.	
 	

Minutes of the meetings of the board of directors of the Company, or a duly authorised committee thereof, approving the Listing Documents and (where appropriate) the other documents referred to in this Agreement and authorising the steps to be taken
by the Company in connection with its application for Admission, including the execution of this Agreement, in the agreed form	
 	

2	
 	

Certified copies
	

7.	
 	

Minutes of a meeting of the Board of Directors of the Company appointing any committee such as is referred to in paragraph 7 above	
 	

2	
 	

Certified copies
	

8.	
 	

Memoranda and/or letters each in the agreed form prepared by KPMG:	
 	

2 of each	
 	

Copies (or originals to the extent that they are addressed to Joint Sponsors)

18

 

	

 	
 	

(a)	
 	

confirming the correct extraction of certain financial information in the Listing Particulars	
 	

 	
 	

 
	

 	
 	

(b)	
 	

confirming that the Company's statement relating to paragraph 2.15 of the Listing Rules has been made after due and careful enquiry	
 	

 	
 	

 
	

 	
 	

(c)	
 	

providing comfort on there being no significant change in the financial position of the Company	
 	

 	
 	

 
	

 	
 	

(d)	
 	

providing comfort on there being no significant/material change in the financial and trading position of Granada	
 	

 	
 	

 
	

 	
 	

(e)	
 	

concerning the omission of information from the Listing Particulars in accordance with paragraph 6.E.11(d) of the Listing Rules	
 	

 	
 	

 
	

 	
 	

(f)	
 	

in relation to the pro forma net asset statement included in the Listing Particulars (paragraph 12.35)	
 	

 	
 	

 
	

 	
 	

(g)	
 	

in relation to Granada's schedule of indebtedness	
 	

 	
 	

 
	

 	
 	

(h)	
 	

in relation to the narrative description of GAAP differences included in the Listing Particulars	
 	

 	
 	

 
	

 	
 	

(i)	
 	

in relation to KPMG's independence of the Company (paragraph 3.5 of the Listing Rules)	
 	

 	
 	

 
	

9.	
 	

Memoranda and/or letters each in the agreed form prepared by PwC:	
 	

2 of each	
 	

Copies
	

 	
 	

(a)	
 	

confirming the omission of information from the Listing Particulars in accordance with paragraph 6.E.11(d) of the Listing Rules	
 	

 	
 	

 
	

 	
 	

(b)	
 	

providing comfort on there being no significant change in the financial and trading position of Carlton and accurate extraction of financial information	
 	

 	
 	

 
	

10.	
 	

Memoranda and/or letters each in the agreed form prepared jointly by KPMG and PwC:	
 	

2 of each	
 	

Copies (or originals to the extent that they are addressed to Joint Sponsors)
	

 	
 	

(a)	
 	

providing comfort on the ITV Working Capital Memorandum	
 	

 	
 	

 

19

 

	

 	
 	

(b)	
 	

providing comfort on the merger benefit statements in the Listing Particulars	
 	

 	
 	

 
	

11.	
 	

ITV Working Capital Memorandum	
 	

3	
 	

Signed original and certified copies
	

12.	
 	

Company's Constitutional Documents	
 	

3	
 	

Certified copies
	

13.	
 	

KPMG Report	
 	

3	
 	

Signed original x1 (and 2 certified copies for Joint Sponsors)
	

14.	
 	

Letters of consent from KPMG and PricewaterhouseCoopers referred to in the Listing Particulars	
 	

2 of each	
 	

Signed originals and certified copies
	

15.	
 	

Letters addressed to the Joint Sponsors duly signed by KPMG, PricewaterhouseCoopers, Hoare Govett, Lovells and Slaughter and May in relation to paragraph 2.12 of the Listing Rules and dated the same date as the Listing Particulars, each in the agreed
form	
 	

2 of each	
 	

Originals
	

16.	
 	

Letter to the UK Listing Authority duly signed by each of the Directors in the terms of paragraph 5.5 of the Listing Rules and dated the same date as the Listing Particulars, in the agreed form	
 	

3	
 	

Original (x1) (for UKLA) and certified copies for Joint Sponsors
	

17.	
 	

Formal Notice bearing evidence of the formal approval thereof by the UK Listing Authority	
 	

3	
 	

Original (for UKLA) and 2 copies for Joint Sponsor
	

18.	
 	

Letters addressed to the Joint Sponsors from the Company pursuant to paragraphs 2.13, 2.15, 2.18 and 2.20 of the Listing Rules and dated the same date as the Listing Particulars, each in the agreed form	
 	

2 of each	
 	

Signed originals
	

19.	
 	

Letters to the UK Listing Authority duly signed by Hoare Govett in the terms of paragraph 6.E.11 of the Listing Rules and dated the same date as the Listing Particulars, each in the agreed form	
 	

3 of each	
 	

Copies
	

20.	
 	

The other documents stated in the Listing Particulars as being available for inspection	
 	

2 of each	
 	

Copies
	

21.	
 	

Press announcement on date of publication of Listing Particulars	
 	

2	
 	

Copies

20

  

 
 

Part 2: Documents to be delivered to Joint Sponsors
  (Granada)    
    

	Document
 
	 	 
	 	No of copies
 
	 	Execution requirements
 

	1.	 	Scheme Document (in conjunction with Carlton)	 	2	 	Copies
	

2.	
 	

Responsibility letter from each Granada Director relating to the Scheme Document (together with Powers of Attorney)	
 	

3	
 	

Original and 2 certified copies
	

3.	
 	

Extract of minutes of a meeting of the board of directors of Granada, or a duly authorised committee thereof, authorising the execution of this Agreement, in the agreed form	
 	

2	
 	

Certified copies
	

4.	
 	

Letter addressed to the Joint Sponsors and ITV from Granada pursuant to paragraph 2.12 of the Listing Rules and dated the same date as the Listing Particulars	
 	

2	
 	

Signed originals
	

5.	
 	

Granada Working Capital Memorandum	
 	

2	
 	

Original
	

6.	
 	

Letter from KPMG dated the date of the Scheme Document providing comfort on the Granada standalone working capital position	
 	

2 of each	
 	

Signed copies

21

 
 
 

Part 3: Documents to be delivered to Joint Sponsors
  (Carlton)    
    

	Document
 
	 	 
	 	No of copies
 
	 	Execution requirements
 

	1.	 	Scheme Document (in conjunction with Granada)	 	2	 	Copies
	

2.	
 	

Responsibility letter from each Carlton Director relating to the Scheme Document together with Powers of Attorney	
 	

 	
 	

 
	

3.	
 	

Minutes of a meeting of the board of directors of Carlton, or a duly authorised committee thereof, approving the Scheme Document and (where appropriate) the other documents referred to in this Agreement, authorising their issue and authorising the
execution of this Agreement	
 	

2	
 	

Certified copies
	

4.	
 	

Extract of minutes of the meeting of the Board of Directors of Carlton appointing any committee such as is referred to in paragraph 1 above	
 	

2	
 	

Certified copies
	

5.	
 	

Letter addressed to the Joint Sponsors from Carlton pursuant to paragraph 2.12 of the Listing Rules and dated the same date as the Listing Particulars	
 	

2	
 	

Signed originals
	

6.	
 	

Carlton Working Capital Report	
 	

2	
 	

Originals
	

7.	
 	

Letter from PwC to ITV concerning the extraction of financial information relating to Carlton	
 	

3	
 	

Original (for ITV) and 2 certified copies
	

8.	
 	

PwC Report contained in Part 4 of the Listing Particulars	
 	

2	
 	

Signed originals
	

9.	
 	

Letters from PwC dated the date of the Scheme Document	
 	

2 of each	
 	

Signed copies
	

 	
 	

(a)	
 	

containing a report on the Carlton Working Capital Report	
 	

 	
 	

 
	

 	
 	

(b)	
 	

providing comfort on the Carlton standalone working capital position	
 	

 	
 	

 
	

 	
 	

(c)	
 	

statement of adjustments re the Carlton accountants' report	
 	

 	
 	

 
	

 	
 	

(d)	
 	

providing comfort on there being no significant change in the financial and trading position of Carlton	
 	

 	
 	

 

22

 
 
 

Part 4: Documents to be prepared by Joint Sponsors    
    

	Document
 
	 	 
	 	No of copies
 
	 	Execution requirements
 

	1.	 	Joint Sponsors working capital letter in accordance with paragraph 2.18 of the Listing Rules	 	1	 	Copy
	

2.	
 	

Consent letter (Listing Particulars and Scheme Document)	
 	

1 of each	
 	

Originals
	

3.	
 	

Joint Sponsors Schedule 4A declarations	
 	

1 of each	
 	

Copies
	

4.	
 	

Schedule 1A confirmation of independence	
 	

2 of each	
 	

Copies and Originals
	

5.	
 	

Paragraph 2.24 letter	
 	

2	
 	

Copies and Original

23

 
 
 

Part 5: Additional Documents required by the UK Listing Authority and
  London Stock Exchange (48 hour documents)    
    

	Document
 
	 	 
	 	No of copies
 
	 	Execution requirements
 

	1.	 	Board resolution of the Company allotting shares pursuant to the Schemes	 	3	 	Certified copies (for UKLA and Joint Sponsors)
	

2.	
 	

Certificate of Incorporation of the Company	
 	

3	
 	

Certified copies
	

3.	
 	

Copy of the newspaper containing the Formal Notice	
 	

3	
 	

Certified copies
	

4.	
 	

Copy of the certificate of registration issued by the Registrar of Companies in relation to the Scheme	
 	

3	
 	

Certified copies
	

5.	
 	

Application for Admission to Trading (Form 1 of the Standards) for the Company	
 	

3	
 	

Signed original (x1) and 2 certified copies
	

6.	
 	

Shareholder Statement (Schedule 2)	
 	

1	
 	

Original
	

7.	
 	

Schedule 6 Declaration	
 	

3	
 	

Signed original (for UKLA), together with 2 certified copies

24

 
 
 

Part 6: Documents to be delivered to the Joint Sponsors immediately prior to Admission    
    

	Document
 
	 	 
	 	No of copies
 
	 	Execution requirements
 

	1.	 	The Company's CREST application form	 	3	 	Signed original (for CRESTCo) and 2 certified copies
	

2.	
 	

The Company's CREST enablement letter	
 	

3	
 	

Signed original (for CRESTCo) and 2 certified copies
	

3.	
 	

Letter from the Company to the Registrars confirming their appointment to act as Registrars	
 	

2	
 	

Certified copies

25

  

 
 

Schedule 3    
    

Undertakings

	1.
	The
Company shall promptly provide to each of the Joint Sponsors, during the period commencing on the date hereof and ending on the date that is 60 days after Admission, as many
copies of the Listing Particulars and any supplements or amendments thereto as it may reasonably request.

	2.
	The
Company shall procure that each of the Listing Documents is published in accordance with the Listing Rules and the Admission and Disclosure Standards (insofar as they apply) and
that:

	(a)
	a
press release in the agreed form is delivered to a Regulatory Information Service in time for release not later than 7.30 am on the date of this Agreement (or such later time and/or
date as Carlton and Granada may agree with the Joint Sponsors);

	(b)
	sufficient
copies of the Listing Particulars are made available at the appropriate times and places to the public;

	(c)
	sufficient
copies of the Listing Particulars are made available to the UK Listing Authority and the London Stock Exchange, in accordance with the requirements of the UK Listing
Authority and the London Stock Exchange;

	(d)
	the
documents described in the Listing Particulars as being available for inspection are made available as described; and

	(e)
	the
Formal Notice shall be published in the Financial Times (or other national newspaper approved by the Joint Sponsors and published in the United Kingdom) no later than the Business
Day after the date of publication of the Listing Particulars.

	3.
	Each
of the Company, Granada and Carlton severally undertakes that, insofar as it has power to do so, it will ensure that (a) the Listing Particulars are delivered to the
Registrar of Companies on the date of this Agreement and (b) Section 81 of the FSMA is fully complied with in connection with Admission.

	4.
	Each
of the Company, Granada and Carlton severally undertakes to bring to the notice of each of the Joint Sponsors as soon as reasonably practicable any significant change or
significant new matter of which it is, or becomes, aware (each as defined in Section 81 of the FSMA) and that every such change or matter shall be dealt with in accordance with
Section 81 of the FSMA, the Listing Rules and the Admission and Disclosure Standards.

	5.
	Each
of the Company, Granada and Carlton severally undertake to make no public announcement or communication (other than the Listing Particulars) concerning themselves or any of them
which may be material in the context of Admission without prior consultation with the Joint Sponsors (save in the case of any public announcement or communication which refers directly or indirectly
to either or both of the Joint Sponsors, which shall only be made with the consent of the Joint Sponsors) between the date hereof and the date which is 60 days after Admission or the date on
which this Agreement is terminated in accordance with Clause 9, whichever is earlier.

	6.
	Each
of the Company, Granada and Carlton severally undertakes to execute or to procure to be executed all such documents, to provide or procure to be provided all such information and
to do or procure to be done all such things as it shall have the right or power to provide or procure to be provided or to do or procure to be done (i) as may be reasonably required by the
Joint Sponsors to enable the Joint Sponsors to discharge their obligations under this Agreement or pursuant to or in connection with Admission or (ii) as may be required by, or necessary to
comply with the requirements of, the UK Listing Authority or the London Stock Exchange or any applicable law or regulation for the purposes of, or in connection with, Admission or any relevant
continuing obligations from time to time following Admission. 

26

 
	7.
	Each
of the Company, Granada and Carlton severally undertake, save as required by law, the Listing Rules or the Admission and Disclosure Standards, that:

	(a)
	without
the prior consent of the Joint Sponsors (such consent not to be unreasonably withheld), between the date hereof and Admission; or

	(b)
	without
first consulting with the Joint Sponsors in the period of 30 calendar days following Admission, 

each
will not, and will procure that none of their respective subsidiaries will, allot, issue or grant, or enter into any agreement, commitment, or arrangement to allot, issue or grant, any rights in
respect of any securities of the Company (except for (i) the allotment and issue of the Ordinary Shares pursuant to the Schemes; (ii) the issue of Ordinary Shares by the Company (or
ordinary shares in the share capital of Granada or Carlton by Granada or Carlton, respectively) upon the exercise of an option or warrant or the conversion of a security outstanding on the date hereof
and as fairly disclosed in the Listing Particulars; and (iii) the grant of options under, or allotment and issue of shares pursuant to options under, any employee share scheme of the Company,
Granada or Carlton and, in each case, in accordance with normal practice). 

	8.
	Each
of the Company, Granada and Carlton severally undertakes immediately to notify the Joint Sponsors if it comes to its knowledge at any time on or before Admission that any of the
representations or warranties given by it in this Agreement was (or may have been) untrue, inaccurate or misleading in any respect when given or has ceased (or may have ceased) to be true and accurate
or has become (or may have become) misleading in any respect or if it becomes aware of any circumstance which would or might cause any of those representations or warranties to become untrue,
inaccurate or misleading in any respect if they were repeated at any time on or before Admission or if it becomes aware, prior to such date, that a matter has arisen which might reasonably be
considered to give rise to a claim under any of the indemnities referred to in Clause 8. 

27

  

 
 

Schedule 4    
    

Representations, Warranties and Undertakings  

 1.     Public Documents

	1.1
	The
Listing Documents do not contain any material untrue or inaccurate statement of fact or omit to state any material fact necessary in order to make the statements made therein, in
the light of the circumstances under which they were made, not misleading; all forecasts, estimates and expressions of opinion, intention or expectation contained in such documents are truly and
honestly held and made on reasonable grounds and after due and careful inquiry and consideration and all expressions of opinion, intention or expectation attributed to any other person are considered
by the Company to be fair and not misleading.

	1.2
	The
Listing Documents have been properly verified by persons reasonably believed by the Company, Granada and Carlton to have appropriate knowledge and responsibility and contain all
particulars and information required by, and will comply with, the Companies Act, the FSMA, the Listing Rules (save for those items of information for which derogations have been obtained pursuant to
the Listing Rules), the Admission and Disclosure Standards and all other relevant laws and regulations in any jurisdiction and, having regard to the particular nature of the Company and the Group and
the Company's share capital and the other matters referred to in Sections 80(2), (3) and (4) of the FSMA, the Listing Particulars contain all such information as investors and their
professional advisers would reasonably require, and reasonably expect to find therein, for the purpose of making an informed assessment of the matters specified in Section 80(1) of the FSMA in
relation to the Company and the Group.

	1.3
	Without
limitation to Warranties 1.1 and 1.2:

	(a)
	the
statements contained in the Listing Particulars relating to the Group's material contingent liabilities and any significant change in the financial or trading position of the
Group since 4 December 2003 in relation to the Company and 30 September 2003 in relation to Granada and Carlton are true and accurate in all material respects and not misleading in any
material respect; and

	(b)
	the
statements in the Listing Particulars relating to the Group's current trading, prospects and working capital represent the true and honest belief of the ITV Directors and are made
on reasonable grounds.

	1.4
	All
statements made in writing by or on behalf of the Company in connection with any application to the UK Listing Authority for certain information to be omitted from the Listing
Particulars are true and accurate in all material respects and are not materially misleading and there are no material facts which have not been disclosed to the UK Listing Authority in connection
therewith which by their omission make any such statements misleading in any material respect or which, on the basis of discussions with its advisers, the Company considers are material for disclosure
to the UK Listing Authority.

	1.5
	There
are no matters other than those disclosed in the Listing Particulars which should be taken into account by the UK Listing Authority or the London Stock Exchange in considering
the suitability for listing of the Ordinary Shares the subject of Admission. 

28

 
	1.6
	No
statements of fact contained in any Supplementary Listing Particulars will contain any material untrue or inaccurate statement of fact or omit to state any material fact necessary
in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading; all forecasts, estimates and expressions of opinion, intention or
expectation contained in such documents will be truly and honestly held and made on reasonable grounds and after due and careful inquiry and consideration; and all expressions of opinion, intention or
expectation attributed to any other person will be considered by the Company to be fair and not misleading.

	1.7
	If
any Supplementary Listing Particulars are published in accordance with Section 81 of the FSMA, then the Listing Particulars, together with such Supplementary Listing
Particulars, will contain all such information as investors and their professional advisers would reasonably require, and reasonably expect to find therein, for the purpose of making an informed
assessment of the matters specified in Section 80 of the FSMA in relation to the Company and the Group.

	1.8
	The
Formal Notice complies with the Listing Rules and is true and accurate in all material respects.

	1.9
	Each
statement of fact contained in the Scheme Document is true and accurate in all material respects and not misleading. Each forecast, estimate and expression of opinion, intention
or expectation contained in the Scheme Document is made on reasonable grounds, is honestly held and has been made after due and careful enquiry and consideration.

	1.10
	No
information has been omitted from the Scheme Document which might make any statement in the Scheme Document untrue, inaccurate or misleading or which, in the context of the
Merger, is material for disclosure in Document.

	1.11
	The
Scheme Document complies in all respects with the Companies Act, the relevant requirements of the UK Listing Authority, the London Stock Exchange and all other relevant laws and
regulations in any jurisdiction. 

2.     Authorisations and Capacity

	2.1
	This
Agreement has been, or will be, duly authorised, executed and delivered by the Company, Granada and Carlton and will constitute a legal, valid and binding agreement of the
Company, Granada and Carlton enforceable in accordance with its terms.

	2.2
	The
Merger Agreement has been duly authorised and executed and delivered by Granada and Carlton and constitutes a legal, valid and binding agreement of Carlton and Granada enforceable
in accordance with its terms.

	2.3
	The
Company has the requisite power and authority under its Constitutional Documents and pursuant to resolutions passed in general meeting to allot and issue the Ordinary Shares to be
issued in connection with the Merger and pursuant to the Schemes, to effect the Schemes and to perform its obligations under this Agreement in accordance with its terms and, subject to the approval of
the Court, without any further sanction or consent.

	2.4
	Subject
to the passing of the Resolutions, Granada and Carlton have the requisite power under their respective Constitutional Documents to effect, and in all other respects may
lawfully effect, the Merger and may perform their respective obligations under this Agreement and, subject to the approval of the Court, without any further sanction or consent.

	2.5
	The
Company is a public limited company incorporated and validly existing under English law and has been in continuous existence since its incorporation. It has, since incorporation,
never traded (other than in relation to liabilities incurred in connection with the transactions referred to in the Listing Particulars) or owned any assets and has the right, power and authority to
carry on its activities in the ordinary course of business. 

29

 
	2.6
	The
Ordinary Shares will, when issued as contemplated in the Listing Particulars, be fully paid and not subject to any lien, encumbrance or restriction on transfer imposed by the
Company (other than as set out in the Company's Constitutional Documents) and will confer upon any holder of such Ordinary Shares the rights and restrictions set out or referred to in the
Constitutional Documents of the Company or the Listing Particulars.

	2.7
	The
ITV Directors are all of the present directors of the Company and it is not currently proposed that any other person will be a director of the Company.

	2.8
	The
Merger, and each action taken or to be taken in connection therewith, complies in all respects with all applicable laws and regulations. 

3.     Working Capital Memoranda

Each
of the ITV Working Capital Memorandum, the Granada Working Capital Memorandum and the Carlton Working Capital Memorandum has been approved by the ITV Directors, the Granada Directors and the
Carlton Directors, respectively, and has been prepared with due care and consideration and on the bases and assumptions stated therein which the Company, Granada and Carlton, as appropriate, believe
to be reasonable. Each expression of opinion, intention or expectation contained in each of the Working Capital Memoranda is made on reasonable grounds, is honestly held and is fairly based. There is
no other material fact known to either of the Company, Granada or Carlton, as appropriate, and no other assumption which ought reasonably to have been taken into account in preparing each of the
Working Capital Memoranda. 

4.     Repayment of Borrowings and Default

No
material outstanding indebtedness of the Company, Granada or Carlton or any of their respective subsidiaries (each a Group Company) has become
repayable before its stated maturity, nor has any security in respect of such indebtedness become enforceable by reason of default by a Group company and no event has occurred or is, to the best of
the knowledge, information and belief of each of the Company, Granada or Carlton (having made due and careful enquiry), impending which, with the lapse of time or the fulfilment of any condition or
the giving of notice or the compliance with any other formality, may result in any such indebtedness becoming so payable or any such security becoming enforceable and no person to whom any
indebtedness of a Group company which is repayable on demand is owed, has demanded or to the best of the knowledge, information and belief of each of the Company, Granada or Carlton (having made due
and careful enquiry) threatened to demand repayment of, or to take any steps to enforce any security for, the same. 

5.     Contracts and Arrangements

	5.1
	The
implementation of the Merger will not result in the termination, rescission or repudiation, and will not give rise to any grounds for such termination, rescission, or repudiation
(a termination right), of any contract which is material to the Group as a whole.

	5.2
	Neither
the Company, Granada or Carlton or any of their respective subsidiaries is, in relation to any contract which is material to the Group as a whole, in default in respect of an
obligation where such default gives rise to a termination right on the part of any other party to that contract. 

30

 

6.     Licences  

The
Group has all the material licences, authorisations, permissions and consents necessary or desirable to continue to run its business after Admission. Carlton and Granada have at all times in the
previous 12 months complied in all material respects with all such material licences, authorisations, permissions and consents and neither Carlton nor Granada has received any notice that any
such material licence, authorisation, permission and consent will be revoked or materially prejudicially amended in or is aware of any circumstances from which it is reasonable to conclude that such a
material revocation or amendment may be proposed. 

7.     ITV name  

The
Company has the exclusive right to use the name "ITV plc". 

8.     No registration  

It
is not necessary in connection with the issuance of Ordinary Shares to the shareholders of Granada or to the shareholders of Carlton to register the Ordinary Shares under the United States
Securities Act of 1933. 

31

  

	SIGNED by	 	)	 	 
	for and on behalf of	 	)	 	HENRY STAUNTON
	ITV PLC	 	)	 	 
	

SIGNED by for and on behalf of	
 	

)	
 	

GRAHAM PARROTT
	GRANADA PLC	 	)	 	 
	

SIGNED by	
 	

)	
 	

 
	for and on behalf of	 	)	 	PAUL MURRAY
	CARLTON COMMUNICATIONS PLC	 	)	 	 
	

SIGNED by	
 	

)	
 	

 
	for and on behalf of	 	)	 	EDWARD MASON
	LAZARD & CO., LIMITED	 	)	 	 
	

SIGNED by	
 	

)	
 	

 
	for and on behalf of	 	)	 	MYLES JOHNSON
	UBS LIMITED	 	)	 	 
	

SIGNED by	
 	

)	
 	

 
	for and on behalf of	 	)	 	INNA SIDOROVA
	UBS LIMITED	 	)	 	 

CE040150068

32

QuickLinks

Exhibit 4.8

Contents

Schedule 1 Definitions and Interpretation

SCHEDULE 2

Part 2: Documents to be delivered to Joint Sponsors (Granada)

Part 3: Documents to be delivered to Joint Sponsors (Carlton)

Part 4: Documents to be prepared by Joint Sponsors

Part 5: Additional Documents required by the UK Listing Authority and London Stock Exchange (48 hour documents)

Part 6: Documents to be delivered to the Joint Sponsors immediately prior to Admission

Schedule 3

Schedule 4QuickLinks
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Exhibit 4.1  

Hydro-Québec  

 US$[    ] [    ]% [    ] Series [    ] due
[    ]  

 Guaranteed unconditionally by Québec  

 FORM OF FISCAL AGENCY AGREEMENT  

	 

 
 

FISCAL AGENCY AGREEMENT    
    

THIS AGREEMENT dated as of [    ]. 

A M O N G:

HYDRO-QUÉBEC, a body corporate duly incorporated and validly existing under the Hydro-Québec
Act, as issuer, 

("Hydro-Québec") 

-and
- 

QUÉBEC, as guarantor 

(the
"Guarantor") 

-and
- 

DEUTSCHE BANK TRUST COMPANY AMERICAS, a New York banking corporation with an office at 60 Wall Street, MS NYC 60-2515,
New York, New York 10005, as fiscal agent, registrar, transfer agent and principal paying agent, 

        (the
"Fiscal Agent") 

        WHEREAS pursuant to an underwriting agreement (the "Underwriting Agreement"), dated as of  [    ],
between Hydro-Québec, Québec (the
"Guarantor") and Merrill Lynch, Pierce, Fenner & Smith Incorporated, Credit Suisse First Boston LLC, CIBC World Markets Corp., Citigroup
Global Markets Inc., J.P. Morgan Securities Inc., Putnam Lovell NBF Securities Inc., RBC Dominion Securities Corporation and Scotia Capital (USA) Inc.,
Hydro-Québec has agreed to create, issue and sell $[    ] in lawful money of the United States of America
("U.S. dollars" or "US$" or "$") aggregate
principal amount of [    ]% [    ]Series [    ] due [    ]
(herein collectively called the "Notes"), guaranteed unconditionally by the Guarantor as to payments of principal, [premium] and
interest and Additional Amounts, if any (the "Guarantee"); 

        WHEREAS the sale of the Notes pursuant to the Underwriting Agreement has taken place as described in a Prospectus Supplement dated
[    ], which contains a description of the Notes and the clearing and settlement procedures related thereto; 

        WHEREAS the Notes are issuable in the form of one or more fully registered global Notes as provided herein (such fully registered global
Notes and any fully registered global Notes issued upon any transfer or exchange thereof or in replacement therefor are hereinafter each referred to as a "Global
Note" and collectively referred to as the "Global Notes") and the Global Notes are to be registered in the name of
Cede & Co., as nominee of The Depository Trust Company, New York ("DTC"), and held by Deutsche Bank Trust Company Americas, as
custodian for DTC (the "Custodian"); 

 

        WHEREAS as long as DTC or its nominee is the registered holder of the Global Notes it shall be considered the absolute owner of the Notes
for all purposes notwithstanding any notice to the contrary, and none of Hydro-Québec, the Guarantor or the Fiscal Agent will have any responsibility or liability for any aspect of the
records of DTC, Euroclear Bank S.A./N.V., as operator of the Euroclear System ("Euroclear"), or Clearstream Banking,
société anonyme ("Clearstream, Luxembourg") (collectively, the "Clearing
Systems") relating to or payments made by any of the Clearing Systems on account of beneficial interests in the Global Notes; 

        WHEREAS investors may hold interests in the Global Notes directly through any of the Clearing Systems if they are participants of such
systems, or indirectly through organizations which are participants in such systems; 

        WHEREAS all Notes are recorded in a register held by the Fiscal Agent (the "Register"),
and are registered in the name of Cede & Co., for the benefit of owners of beneficial interests in the Notes through DTC, Euroclear and Clearstream, Luxembourg; and 

        WHEREAS owners of beneficial interests in Notes are not, except in limited circumstances, entitled to receive Certificated Notes (as
hereinafter defined). 

        NOW THEREFORE it is hereby agreed as follows: 

1.     Definitions  

        Terms and expressions defined in the "Terms and Conditions" of the Notes contained in the form of Global Notes set
forth in Schedule A shall have the same meaning when used in this Agreement unless otherwise defined herein or unless the context otherwise requires. "Note
holders" or "holders of Notes" or "holders" or
"registered holders" refers to persons entered in the Register as registered holders of Notes. 

2.     Appointment  

        Hydro-Québec hereby appoints the Fiscal Agent as its registrar, fiscal agent, transfer agent and principal paying agent in respect of the Notes
upon and subject to the terms and conditions contained herein and in the Terms and Conditions of the Notes and the Fiscal Agent hereby accepts such appointments. The Fiscal Agent shall have the powers
and authority granted to and conferred upon it hereby and in the Notes and such further powers and authority to act on behalf of Hydro-Québec as Hydro-Québec may
hereafter grant to or confer upon it with the written concurrence of the Fiscal Agent. 

3.     Issue of the Notes  

	(1)
	The
Notes shall be issued in the form one or more Global Notes registered in the name of Cede & Co., as nominee of DTC, and shall be executed by
Hydro-Québec substantially in the form attached as Schedule A with such changes as may be agreed among Hydro-Québec, the Guarantor and the Fiscal Agent. The
Guarantee of the Guarantor shall be endorsed on the Global Notes. The aggregate principal amount of Notes to be issued and outstanding at any time whether in the form of the Global Notes or
Certificated Notes issued in accordance with Section 5, shall not exceed $[    ], except to the extent further Notes are issued in accordance with
Section 19. Forthwith after such execution, the Global Notes shall be delivered to the Fiscal Agent and shall be authenticated by the Fiscal Agent upon the written order of
Hydro-Québec (or by such other person as the Fiscal Agent may appoint for such purpose with the consent of Hydro-Québec), and shall be held by the Fiscal Agent as
Custodian. 

2

 

	(2)
	Owners
of beneficial interests in the Global Notes will not, except in the limited circumstances described in Section 5, be entitled to receive certificates representing Notes
(the "Certificated Notes") or to have Notes registered in their names, nor will they be considered owners or holders of Notes under this Agreement. The
Certificated Notes which may be issued in such limited circumstances will be in fully registered form and substantially in the form of the Global Notes, with the appropriate adjustments and changes
(and including the use of a summary of the Terms and Conditions of the Notes), consistent with the provisions of this Agreement, as may be agreed upon by Hydro-Québec, the Guarantor and
the Fiscal Agent. The Guarantee of the Guarantor shall be endorsed on the Certificated Notes.

	(3)
	The
Global Notes shall be issued and delivered only to or to the order of Cede & Co., as nominee for DTC, or its successor appointed by Hydro-Québec in
accordance with Subsection 5(2). The Global Notes shall be in the principal amount from time to time endorsed thereon.

	(4)
	So
long as Cede & Co., as nominee of DTC, with respect to the Global Notes, is the registered owner of the Global Notes, and subject to applicable law, DTC, or its
nominee, as the case may be, will be deemed to be, and will be treated as, the absolute owner of the Notes represented by the Global Notes for all purposes, notwithstanding any notice to the contrary.
None of Hydro-Québec, the Guarantor or the Fiscal Agent will have any responsibility or liability for any aspect of the records of the Clearing Systems relating to or payments made by
the Clearing Systems on account of beneficial ownership interests in the Global Notes or for maintaining, supervising or reviewing any records of the Clearing Systems relating to such beneficial
ownership interests.

	(5)
	The
Global Notes and the Certificated Notes shall be signed (either manually or by facsimile signature), in the case of the Global Notes, by the Chief Financial Officer or the
Corporate Treasurer or the Director, Financial Operations or the Coordinator, Documentation of Hydro-Québec or any other authorized representative of Hydro-Québec and, in
the case of Certificated Notes, by two of the following authorized representatives: (i) either the President and the Chief Executive Officer, the Chief Financial Officer or the Corporate
Treasurer of Hydro-Québec and (ii) the Director, Financial Operations of Hydro-Québec, and shall be authenticated by the Fiscal Agent upon the written
authorization of Hydro-Québec (or by such other person as the Fiscal Agent may appoint for such purpose with the consent of Hydro-Québec). The Guarantee shall be endorsed
on the Global Notes and on the Certificated Notes and shall be signed (either manually or by facsimile signature) by the Minister of Finance or any other authorized representative of the Guarantor
authorized to conclude and to sign on behalf of the Minister of Finance, any borrowings or any documents related thereto. 

3

 

4.     The Register and Transfers  

	(1)
	The
Fiscal Agent, as registrar and transfer agent of Hydro-Québec, shall be responsible for (i) maintaining a record of the aggregate holdings of the Global
Notes of Cede & Co. in the Register; (ii) ensuring that payments of principal [, premium, if any,] and interest in respect of the Notes
received by the Fiscal Agent from Hydro-Québec are duly credited to Cede & Co.; (iii) transmitting to Hydro-Québec any notices from holders of Notes;
and (iv) maintaining at its principal office in The City of New York, New York (the "New York Office") a register for the
following: (a) registering transfers between holders of Notes, (b) registering and maintaining a record of any further issues of Notes pursuant to Section 19 and any
subsequent transfers thereof.

	(2)
	In
the event Certificated Notes are issued in exchange for the Global Notes under the limited circumstances described in Section 5, the Fiscal Agent shall (a) register
and maintain a record of holders of Certificated Notes and (b) register transfers of Notes among holders of Certificated Notes in accordance with such procedures as the Fiscal Agent shall deem
reasonable upon consultation with Hydro-Québec.

	(3)
	The
Fiscal Agent shall not be required to inquire into, or take any action in respect of transfers of beneficial ownership interests in the Global Notes (i) between DTC
participants, (ii) within Euroclear or Clearstream, Luxembourg, or (iii) between DTC, Euroclear and Clearstream, Luxembourg participants.

	(4)
	The
Fiscal Agent will not impose any fees in respect of the Notes, other than reasonable fees for the replacement of lost, stolen, mutilated or destroyed Notes as set out in
Section 5.

	(5)
	The
Register shall at all reasonable times be open for inspection by Hydro-Québec, the Fiscal Agent and any agent of Hydro-Québec or the Fiscal Agent. In
the event of any discrepancy between the principal amount of the Global Notes and the aggregate principal amount of Notes held by Cede & Co., as shown on the Register, the aggregate
principal amount of Notes as shown on the Register shall prevail.

	(6)
	Neither
Hydro-Québec nor the Fiscal Agent shall be required (i) to register the transfer or exchange of any Notes on any Interest Payment Date or during a period
commencing at the close of business of the New York Office of the Fiscal Agent on the 14th calendar day immediately preceding any such date and ending on such date; or (ii) to register
the transfer or exchange of any Notes during the period commencing at the close of business of the New York Office of the Fiscal Agent on the record date of any notice by
Hydro-Québec of any Notes to be redeemed or purchased through the date the notice of redemption or purchase is given; or (iii) to register the transfer or exchange of any Notes
called for redemption unless upon due presentation thereof such Notes called for redemption shall not be redeemed. 

4

 

	(7)
	Subject
to applicable law, Hydro-Québec, the Fiscal Agent or any other agents of Hydro-Québec or the Fiscal Agent shall not be charged with notice of or
be bound to see to the execution of any trust, whether express, implied or constructive, in respect of any Notes and may register the transfer of all or part of the Notes on the direction of the
holder thereof, whether named as trustee or otherwise, as though that person were the beneficial owner thereof. 

5.     Replacement, Exchange and Transfer of Notes  

	(1)
	The
Fiscal Agent, or an agent duly authorized by the Fiscal Agent, is hereby authorized from time to time, in accordance with the provisions of the Notes and of this Section, to
authenticate and deliver:

	(a)
	Notes
in exchange for or in lieu of Notes outstanding on the Register with the same maturity and of like form which have become mutilated, defaced, destroyed, stolen or lost, provided
that the applicant therefor shall have (i) paid such costs as may have been incurred in connection therewith; (ii) (in the case of a lost, stolen or destroyed Note) furnished the Fiscal
Agent with such evidence (including evidence as to the serial number of the Notes in question) and indemnity in respect thereof as Hydro-Québec and the Fiscal Agent may require; and
(iii) surrendered to the Fiscal Agent any mutilated or defaced Notes to be replaced; and

	(b)
	Notes
of an authorized form and denomination in exchange for a like aggregate principal amount of Notes. 

Each
new Note authenticated and delivered upon any registration of transfer or exchange for or in lieu of the whole or any part of any Note shall carry all the rights to interest, if any, accrued and
unpaid and to accrue which were carried by the whole or such part of such latter Note, and notwithstanding anything to the contrary herein contained, such new Note shall be dated the date of the
authentication of such Note. 

	(2)
	Hydro-Québec
will issue or cause to be issued Certificated Notes upon registration of transfer of, or in exchange for, Notes represented by the Global Notes if DTC
i) notifies Hydro-Québec that it is unwilling or unable to continue as depositary in connection with the Global Notes; ii) ceases to be a clearing agency registered under
the Securities Exchange Act of 1934, as amended, at a time when it is required to be and a successor depository is not appointed by
Hydro-Québec within 90 days after receiving such notice or becoming aware that DTC is no longer so registered; or iii) acting on direct or indirect instructions of a one
or more holders of a Global Note or any beneficial owner of an interest in a Global Note, requests in writing from Hydro-Québec the exchange, in whole or in part, of such Global Note
for Certificated Notes, but only after an event of default entitling the holders to give Hydro-Québec written notice that such holders elect to declare the principal amount of the Notes
held by them and represented by such Global Note to be due and payable has occurred and is continuing; provided that if DTC is unwilling or does not
promptly make such request to Hydro- Québec, then any beneficial owner of an interest in such Global Note shall be entitled to make such request with respect to such interest. 

5

 

	(3)
	Hydro-Québec
may also at any time and in its sole discretion notify the Fiscal Agent that all of the Notes held in the form of the Global Notes are to be exchanged for
Certificated Notes and, in such event, Hydro-Québec will issue or cause to be issued Certificated Notes upon registration of transfer of or in exchange for, such Global Notes.

	(4)
	In
respect of any such issuance of Certificated Notes, pursuant to Subsections 5(2) or 5(3) above, (i) Hydro-Québec shall promptly provide the
Fiscal Agent with a sufficient number of Certificated Notes in blank form to proceed with such issuance, (ii) DTC shall cause any such Global Notes to be delivered by the Custodian to the
Fiscal Agent and provide the Fiscal Agent with the necessary registration information for such Certificated Notes, (iii) the Fiscal Agent shall authenticate and deliver such Certificated Notes
in an aggregate principal amount equal to the principal amount of any such Global Notes to be exchanged for such Certificated Notes, (iv) the Fiscal Agent shall cancel any such Global Notes and
in the case of a partial exchange, issue and deliver to or to the order of DTC new Global Notes equal to the unexchanged portion of any such Global Notes partially exchanged for Certificated Notes and
(v) the Fiscal Agent shall reduce accordingly the holdings of the holders on the Register. Such Certificated Notes shall be delivered as directed by the persons in whose names such Certificated
Notes are to be registered. All Notes represented by Certificated Notes issued upon any such issuance in exchange for the Notes represented by the Global Notes, shall have the Guarantee of the
Guarantor endorsed thereon (which Guarantee shall be a valid obligation of the Guarantor), shall be a valid obligation of Hydro-Québec, shall be entitled to the same benefits under this
Agreement as the Global Notes, and shall be so exchanged without charge to the Fiscal Agent, DTC or the transferee. On or after any such exchange, the Fiscal Agent shall direct all payments in respect
of such Certificated Notes to the registered holders thereof, including when such exchange occurred after the record date for any payment and prior to the date of such payment.

	(5)
	Hydro-Québec
expressly acknowledges that if a Certificated Note is not promptly issued to a beneficial owner of an interest in a Global Note in accordance with the
terms of this Section 5, then such beneficial owner shall be entitled to pursue any remedy under this Agreement, the Notes or applicable law with respect to the portion of the Global Note that
represents such beneficial owner's interest therein as if such Certificated Note had been issued. 

6

 

	(6)
	If
Certificated Notes are issued and the Notes are at such time listed on the Luxembourg Stock Exchange, and the rules of the Luxembourg Stock Exchange so require, then
Hydro-Québec will appoint and maintain a transfer agent in Luxembourg for as long as the Notes continue to be listed on the Luxembourg Stock Exchange. 

6.     Paying Agent  

	(1)
	The
Fiscal Agent shall act as the principal paying agent for Hydro-Québec in connection with the Notes. Hydro-Québec may appoint additional
co-paying agents or terminate the appointment of existing co-paying agents at any time. 

7.     Payments by Hydro-Québec to the Fiscal Agent  

	(1)
	Hydro-Québec
shall, on each date on which payment of principal [(and premium, if any)] or interest (and any Additional Amounts) in respect of
the Notes is due and payable as specified in the Terms and Conditions of the Notes under the headings "Interest" and "Maturity, Redemption and Purchases", transfer or cause to be transferred to the
corporate trust account in same-day funds in The City of New York, New York designated by the Fiscal Agent such amount in U.S. dollars as is necessary to make all
payments due with respect to the Notes on such due date as required by the terms of the Notes and the Fiscal Agent shall apply such monies to such payment.

	(2)
	All
monies paid to the Fiscal Agent pursuant to and for the payment of the amounts referred to in this Section 7 shall be received and held by the Fiscal Agent as agent for
Hydro-Québec and shall be applied to the payment of the appropriate U.S. dollar amounts at the time and in the manner provided in this Agreement and the Notes.

	(3)
	All
monies paid to the Fiscal Agent pursuant to this Agreement shall be held by the Fiscal Agent in a separate account, under arrangements agreed upon separately by
Hydro-Québec and the Fiscal Agent from the moment when such monies are received until the time of actual payment, for the benefit of the holders of the Notes to apply the said monies
for payment of principal [(and premium, if any)] and interest (and any Additional Amounts) due in respect of the Notes. If for any reason the amounts paid to the Fiscal Agent
pursuant to this paragraph are insufficient to satisfy all such claims for interest payable in respect of all Notes, the Fiscal Agent shall not be obliged to pay any such claims until the Fiscal Agent
has received the full amount of the moneys then due and payable. The Fiscal Agent shall, to the extent permitted by law, return to Hydro-Québec any funds transferred to it for payments
with respect to the Notes that are not so paid by the Fiscal Agent at the expiration of three years after the due date for payment thereof. 

7

 

8.     Payment of Notes  

	(1)
	All
payments in respect of the Notes represented by the Global Notes will be made by the Fiscal Agent to the registered holder of the Global Notes as set forth in the Terms and
Conditions of the Notes.

	(2)
	Payments
of principal, [premium, if any,] interest [and Additional Amounts, if any,] in respect of Certificated Notes will be
made by the Fiscal Agent after receipt of such payment from Hydro-Québec as provided in Section 7 and as provided in the Terms and Conditions of the Notes. 

Neither
Hydro-Québec nor the Fiscal Agent shall have any responsibility or liability for any aspect of the records of the Clearing Systems relating to the payments made by such Clearing
Systems on account of beneficial interests in the Global Notes or for maintaining, supervising or reviewing any records of such Clearing Systems relating to such beneficial interests. 

	(3)
	Hydro-Québec
and the Guarantor shall have the right to require a holder of a Note, as a condition of payment of the principal of [and premium,
if any,] or interest [and any Additional Amounts] on a Note, to deliver to the Fiscal Agent a certificate in such form as Hydro-Québec
or the Guarantor may from time to time prescribe in order to enable Hydro-Québec or the Guarantor to determine its duties and liabilities with respect to (i) any taxes,
assessments or governmental charges which Hydro-Québec, the Guarantor or the Fiscal Agent may be required to deduct or withhold from payments in respect of such Note under any present
or future law of Canada or Québec or any regulation thereunder and (ii) any reporting or other requirements under such law or regulation. Hydro-Québec and the
Guarantor shall each be entitled to determine its duties and liabilities with respect to such deduction, withholding, reporting or other requirements on the basis of information contained in such
certificate or, if no certificate shall be presented, on the basis of any presumption created by any such law or regulation, and shall be entitled to act in accordance with such determination.

	(4)
	Subject
to applicable law and the terms hereof, Hydro-Québec, the Guarantor, the Fiscal Agent and any other agent of Hydro-Québec, the Guarantor or the
Fiscal Agent shall deem and treat the person whose name appears in the Register as the registered holder of a Note as the absolute owner thereof for all purposes whatsoever notwithstanding any notice
to the contrary and any payment in U.S. dollars of or on account of the principal of [and premium, if any,] and interest and any Additional Amounts on such
Note shall be made only to or to the order in writing of such holder, and such payment shall be valid and effectual to discharge the liability of Hydro-Québec, the Guarantor, the Fiscal
Agent and any other agent of Hydro-Québec, the Guarantor or the Fiscal Agent on such Note to the extent of the sum or sums so paid. 

8

 

	(5)
	The
registered holder of any Note shall be entitled to the payments of principal of [, premium, if any,] and interest [and any
Additional Amounts] on such Note, free from all rights of set-off or counterclaim between Hydro-Québec, the Guarantor and the original or any intermediate holder
thereof and all persons may act accordingly and a transferee of a Note shall, after the appropriate form of transfer is lodged with the Fiscal Agent or other agent of Hydro-Québec or
the Fiscal Agent for the purpose and upon compliance with all other conditions relating thereto required by this Agreement or by any conditions contained in such Note or by law, be entitled to be
entered on the Register as the owner of such Note free from all rights of set-off or counterclaim between Hydro-Québec, the Guarantor and his transferor or any previous
holder thereof, save in respect to rights of which Hydro-Québec is required to take notice by statute or by order of a court of competent jurisdiction. The delivery to
Hydro-Québec, the Guarantor or the Fiscal Agent by a holder of a Note or the receipt by such holder of the principal, [premium, if any,] interest
[and any Additional Amounts] in respect of such Note shall be a good discharge to Hydro-Québec, the Guarantor and the Fiscal Agent, which shall not be
bound to inquire into the title of such holder, save as ordered by a court of competent jurisdiction or as required by statute.

	(6)
	Where
a Note is registered in more than one name, the principal [premium, if any,] and interest [and any Additional
Amounts] from time to time payable in respect thereof shall be paid to or to the order of all the joint holders thereof, failing written instructions to the contrary from all such joint
holders, and such payment shall be a valid discharge to Hydro-Québec, the Guarantor or the Fiscal Agent and to any other agent of Hydro-Québec, the Guarantor or the
Fiscal Agent.

	(7)
	In
the case of the death of one or more joint holders, the principal of [and premium, if any,] and interest [and any Additional
Amounts] on any Notes registered in their names may, notwithstanding Section 8(4), be paid to the survivor or survivors of such holders whose receipt therefor shall constitute a
valid discharge to Hydro-Québec, the Guarantor or the Fiscal Agent and to any other agent of Hydro-Québec, the Guarantor or the Fiscal Agent. 

9.     Cancellation of Notes  

        All Notes that are presented for replacement, exchange or transfer pursuant to Section 5 or repaid on maturity or upon redemption or purchased shall
upon such transfer, replacement, exchange, repayment or purchase being made, be cancelled by the Fiscal Agent. The Fiscal Agent shall, as soon as reasonably possible after the date of any such
transfer, replacement, exchange, repayment or purchase, furnish Hydro-Québec with a certificate or certificates stating: (i) the serial numbers and total number of Notes so
transferred, replaced, exchanged, redeemed, purchased or repaid; and (ii) the amount, if any, paid in respect of such Notes. All Notes canceled and retired by the Fiscal Agent pursuant to this
Section shall be destroyed from time to time in a manner consistent with the Fiscal Agent's securities destruction policy and applicable law and upon the issuance of a certificate of destruction of
the Notes, duly signed by a representative of the Fiscal Agent, to Hydro-Québec. 

9

 

10.   Maturity, Redemption and Purchases  

        Unless previously redeemed for tax reasons as provided in the Terms and Conditions of the Notes, or purchased, the principal amount of the Notes shall be due and
payable on [    ] or, if [    ] is not a Business Day, on the next following Business Day. 

        [Add
any redemption provisions] 

        Upon
receipt of a written notice of intention to redeem, not less than 45 days prior to the date fixed for redemption, the Fiscal Agent shall cause to be given on behalf of
Hydro-Québec, in accordance with the provisions under the heading "Notices" in the Terms and Conditions of the Notes, a notice of redemption stating: (i) the date fixed for
redemption; (ii) the redemption price; and (iii) if applicable, the place or places of surrender of the Notes to be redeemed. 

        Hydro-Québec
may, if not in default under the Notes, at any time purchase Notes in any manner and at any price. [If purchases are made by tender,
tenders must be available to all holders of Notes alike.] 

11.   Financial Documents  

        For so long as any of the Notes are outstanding, (i) each of Hydro-Québec and the Guarantor, for its own part, agrees to supply, upon
request, the Fiscal Agent with printed copies of all documents required to be available by any stock exchange on which the Notes are for the time being listed, (ii) Hydro-Québec
agrees to supply, upon request, the Fiscal Agent with printed copies of the latest interim financial statements and annual reports of Hydro-Québec as filed on
Form 18-K and (iii) the Guarantor agrees to supply, upon request, the Fiscal Agent with printed copies of the Guarantor's latest consolidated statements of its revenues and
expenditures and annual budget as soon as practicable after the publication thereof for inspection by holders of Notes at the Fiscal Agent's New York Office. Notwithstanding anything herein
contained, the obligations of each of Hydro-Québec and the Guarantor under this Section will terminate on such date as all amounts required to be paid to the holders of Notes by
Hydro-Québec under the Notes have been paid in full. The Fiscal Agent, subject to its being provided with copies of the documents referred to above, undertakes to make them available to
holders of Notes at its New York Office during the term of the Notes. All financial documents of Hydro-Québec and the Guarantor referred to in this Section will also be made
available from the Electronic Document Gathering and Retrieval System, which is commonly known by the acronym EDGAR, through the Securities and Exchange Commission's website (http://www.sec.gov). 

12.   Fees  

        Hydro-Québec shall pay to the Fiscal Agent such fees for its services hereunder as are agreed upon separately by and between
Hydro-Québec and the Fiscal Agent. The obligations of Hydro-Québec pursuant to this Section shall survive the resignation or removal of the Fiscal Agent and the
satisfaction or termination of this Agreement and payment of the Notes. 

10

   13.   Further Reports  

        Within 60 days after each May 15 beginning with May 15 following the date of this Agreement, the Fiscal Agent will provide to
Hydro-Québec and the Guarantor information regarding the financial servicing of the Notes expressed in such form as Hydro-Québec and the Guarantor may reasonably require.
The Fiscal Agent shall inform Hydro-Québec and the Guarantor promptly of any notice or other communication addressed to Hydro-Québec or the Guarantor in connection with
the Notes, including any notice of any legal action or proceeding which may be brought against Hydro-Québec or the Guarantor and of which the Fiscal Agent has notice. 

14.   Meetings of Holders of Notes  

	(1)
	The
Fiscal Agent shall, on receipt of a written request of Hydro-Québec or a written request signed in one or more counterparts by the holders of not less than 10% of
the principal amount of the Notes then outstanding and upon being indemnified to its reasonable satisfaction by Hydro-Québec or the holders of Notes signing such request against the
costs which may be incurred in connection with the calling and holding of such meeting, convene a meeting of the holders of Notes for any lawful purpose affecting their interests. If the Fiscal Agent
fails to give notice convening such meeting within 30 days after receipt of such request and indemnity, Hydro-Québec or such holders of Notes, as the case may be, may convene
such meeting. Every such meeting shall be held in The City of New York, New York or such other place as may be approved or determined by the Fiscal Agent.

	(2)
	At
least 21 days' notice of any meeting shall be given to the holders of Global Notes or Certificated Notes, as the case may be, in the manner provided pursuant to the
provisions under the heading "Notices" in the Terms and Conditions of the Notes and a copy thereof shall be sent by post to the Fiscal Agent unless the meeting has been called by the Fiscal Agent, to
Hydro-Québec, unless the meeting has been called by Hydro-Québec, and to the Guarantor. Such notice shall state the day, time, place and purpose of the meeting and the
general nature of the business to be transacted thereat, and shall include a statement to the effect that, prior to 48 hours before the time fixed for the meeting, (i) in the limited
circumstances in which Certificated Notes have been issued, those holders of Certificated Notes who deposit such Notes with the Fiscal Agent or any other person authorized for such purpose by the
Fiscal Agent or Hydro-Québec or (ii) in the case of Notes being represented by a Global Note, those persons recorded in the Register, shall be entitled to obtain voting
certificates for appointing proxies, but it shall not be necessary for any such notice to set out the terms of any resolution to be proposed at such meeting or any other provisions. All notices of
meetings shall contain a requirement that the Clearing Systems must notify Clearing Systems participants and, if known, owners of beneficial interests in the Global Notes of the meeting in accordance
with procedures established from time to time by such Clearing Systems. The registered holders of Notes shall seek voting instructions on the matters to be raised at such meeting from the Clearing
Systems participants or, if known, from the owners of beneficial interests in Notes in accordance with the applicable procedure of the Clearing Systems. For greater certainty, it is acknowledged that
none of Hydro-Québec, the Fiscal Agent, any clearing agency or any intermediary or participant shall be required to comply with the time limits set out in the applicable procedure of
the Clearing Systems but shall use all reasonable efforts to otherwise comply with such procedure and attempt to provide non-registered holders of Notes with meeting materials and voting
rights as if such non-registered holders of Notes were registered holders thereof. 

11

 

	(3)
	A
holder of Notes may appoint any person by instrument in writing as the holder's proxy in respect of a meeting of the holders of Notes or any adjournment of such meeting, and such
proxy shall have all rights of the holder of Notes in respect of such meeting.

	(4)
	A
person, who need not be a holder of Notes, nominated in writing by the Fiscal Agent shall be chairman of the meeting and if no person is so nominated or if the person so nominated
is not present within 15 minutes from the time fixed for the holding of the meeting, the holders of the Notes present in person or by proxy shall choose a person present to be chairman, and, failing
such choice, Hydro-Québec may appoint a chairman.

	(5)
	At
a meeting of holders of Notes, a quorum shall consist of two or more holders of Notes present in person or by proxy who represent at least a majority in aggregate principal amount
of the Notes at the time outstanding. If a quorum of the holders of Notes shall not be present within one-half hour after the time fixed for holding any meeting, the meeting, if convened
by or at the request of holders of Notes, shall be dissolved, but if otherwise convened the meeting shall stand adjourned without notice to the same day in the next week (unless such day is not a
business day in the place where the meeting is to take place in which case it shall stand adjourned until the next business day thereafter) at the same time and place unless the chairman shall appoint
some other place, day or time of which not less than 7 days' notice shall be given in the manner provided above. At any adjourned meeting called by Hydro-Québec or the Fiscal
Agent two or more holders of Notes present in person or by proxy shall constitute a quorum and may transact the business for which the meeting was originally convened notwithstanding that they may not
represent at least a majority in aggregate principal amount of the Notes then outstanding.

	(6)
	The
chairman of any meeting at which a quorum of the holders of Notes is present may, with the consent of the holder(s) of a majority in aggregate principal amount of the Notes
represented thereat, adjourn any such meeting and no notice of such adjournment need be given except such notice, if any, as the meeting may prescribe.

	(7)
	Every
motion or question submitted to a meeting shall be decided by Extraordinary Resolution (as hereinafter defined) and in the first place by the votes given on a show of hands. At
any such meeting, unless a poll is duly demanded as herein provided, a declaration by the chairman that a resolution has been carried or carried unanimously or by a particular majority or lost or not
carried by a particular majority shall be conclusive of the fact. On any question submitted to a meeting when ordered by the chairman or demanded by a show of hands by one or more holders of Notes
acting in person or by proxy and holding at least 2% in aggregate principal amount of the Notes then outstanding, a poll shall be taken in such manner as the chairman shall direct. 

12

 

	(8)
	On
a poll each holder of Notes present in person or represented by a proxy duly appointed by an instrument in writing shall be entitled to one vote in respect of each US$1,000, or its
equivalent, principal amount of Notes then held by such holder. A proxy need not be a holder of Notes. In the case of Notes held jointly, any one of the joint holders present in person or by proxy may
vote in the absence of the other or others; but in case more than one of them be present in person or by proxy, only one of them may vote in respect of each US$1,000, or its equivalent, principal
amount of Notes of which they are joint holders.

	(9)
	Hydro-Québec,
the Fiscal Agent and the Guarantor, by their respective officers, directors and representatives, and the legal advisors of Hydro-Québec,
the Fiscal Agent and the Guarantor, may attend any meeting of the holders of Notes, but shall have no vote as such.

	(10)
	Subject
to Section 16 hereof, in addition to all other powers conferred upon them by any other provision of this Agreement or by law, holders of Notes at a meeting shall have
the following powers, any one or combination of which may be exercised from time to time by Extraordinary Resolution:

	(a)
	power
to confirm any modification or amendment of this Agreement or the terms and conditions of the Notes proposed by Hydro-Québec;

	(b)
	power
to direct or authorize the Fiscal Agent to exercise any power, right, remedy or authority given to it by this Agreement or the Notes in any manner specified in such
Extraordinary Resolution or to refrain from exercising any such power, right, remedy or authority;

	(c)
	power
to waive and direct the Fiscal Agent to waive any default on the part of Hydro-Québec in complying with any provisions of this Agreement or the Notes or to waive
and direct the Fiscal Agent to waive future compliance with any provision or provisions of this Agreement or the Notes; and

	(d)
	power
to repeal, modify or amend any Extraordinary Resolution previously passed by the holders of Notes. 

Provided
however, that no such modification nor amendment to this Agreement or to the terms and conditions of the Notes or any other action taken may, without the consent of the holder of each such
Note affected thereby: (i) change the stated maturity or interest payment date of any such Note; (ii) reduce the principal amount of or rate of interest on any such Note;
(iii) change the currency of payment of any such Note; (iv) impair the right to institute suit for the enforcement of any payment on or with respect to such Note or the Guarantee;
(v) reduce the percentage of the holders of Notes necessary to modify or amend this Agreement or the terms and conditions of the Notes or reduce the percentage of votes required for the taking
of action or the quorum required at any meeting of holders of Notes; or (vi) reduce the percentage of outstanding Notes necessary to waive any future compliance or past default. 

13

 

	(11)
	All
actions that may be taken and all powers that may be exercised by the holders of Notes at a meeting held as hereinbefore provided may also be taken and exercised by the holders
of not less than 662/3 percent of the aggregate principal amount of the Notes at the time outstanding by an instrument in writing signed in one or more counterparts and the
expression "Extraordinary Resolution" when used in this Agreement shall include an instrument so signed.

	(12)
	The
term "Extraordinary Resolution" means a resolution proposed to be passed at a meeting of holders of Notes duly convened for the
purpose and held in accordance with the provisions of this Agreement, and passed by the affirmative vote of the holders of not less than 662/3 percent of the aggregate principal
amount of Notes represented at the meeting in person or by proxy, or as an instrument in writing signed by the holders of not less than 662/3 percent of the aggregate principal
amount of the outstanding Notes.

	(13)
	Minutes
of all resolutions and proceedings at every meeting of holders of Notes held in accordance with the provisions of this Agreement shall be made and entered in books to be from
time to time provided for that purpose by the Fiscal Agent at the expense of Hydro-Québec and any such minutes, if signed by the chairman of the meeting at which such resolutions were
passed or proceedings taken, or by the chairman of the next succeeding meeting of the holders of Notes, shall be prima facie evidence of the matters
therein stated and, until the contrary is proved, every such meeting, in respect of the proceedings of which minutes shall have been made, shall be deemed to have been duly held and convened, and all
resolutions passed and proceedings taken thereat to have been duly passed and taken.

	(14)
	Every
Extraordinary Resolution passed in accordance with the provisions of this Agreement at a meeting of holders of Notes shall be binding upon all the holders of Notes, whether
present at or absent from such meeting, and every instrument in writing signed by holders of Notes in accordance with Subsection 14(11) of this Agreement shall be binding upon all the holders
of Notes (whether or not a signatory). Subject to the provisions for its indemnity herein contained, the Fiscal Agent shall be bound to give effect accordingly to every such Extraordinary Resolution. 

14

 

	(15)
	The
Fiscal Agent, or Hydro-Québec with the approval of the Fiscal Agent, may from time to time make and from time to time vary such regulations as it shall deem fit:

	(a)
	for
the deposit of instruments appointing proxies at such place as the Fiscal Agent, Hydro-Québec or the holders of Notes convening a meeting, as the case may be, may
in the notice convening such meeting direct;

	(b)
	for
the deposit of instruments appointing proxies at some approved place or places other than the place at which the meeting is to be held and enabling particulars of such instruments
appointing proxies to be mailed or sent by any other means of recorded communication before the meeting to Hydro-Québec or to the Fiscal Agent at the place where the same is to be held
and for the voting of proxies so deposited as though the instruments themselves were produced at the meeting. 

Any
regulation so made shall be binding and effective and votes given in accordance therewith shall be valid and shall be counted. Save as such regulations may provide, the only persons who shall be
entitled to vote at a meeting of holders of Notes shall be the holders thereof or their duly appointed proxies. 

	(16)
	The
powers and any combination of the powers in this Agreement stated to be exercisable by the holders of Notes by Extraordinary Resolution may be exercised from time to time and the
exercise of any one or more such powers or any combination of powers from time to time shall not be deemed to exhaust the right of the holders of Notes to exercise such power or powers or combination
of powers then or any power or powers or combination of powers thereafter from time to time. 

15.   Indemnities  

	(1)
	Hydro-Québec
agrees to indemnify and hold harmless the Fiscal Agent against all claims, actions, demands, damages, suits, judgements costs and losses (including all
reasonable legal fees and expenses) arising out of or relating to the Fiscal Agent's duties as fiscal agent, registrar, transfer agent and principal paying agent for Hydro-Québec with
respect to the Notes, except such as may result from the Fiscal Agent's gross negligence, wilful misconduct or bad faith.

	(2)
	The
Fiscal Agent agrees to indemnify and hold harmless Hydro-Québec and the Guarantor against all claims, actions, demands, damages, suits, judgements, costs and losses
(including all reasonable legal fees and expenses) arising out of or relating to the Fiscal Agent's gross negligence, wilful misconduct or bad faith.

	(3)
	This
Section 15 shall survive the payment in full of all obligations of the Notes, whether by redemption, repayment or otherwise. 

15

 

16.   Modifications  

        This Agreement and the Notes may be amended by Hydro-Québec, the Guarantor and the Fiscal Agent without notice to or the consent of the holders of
Notes, for the purpose of (i) curing any ambiguity, (ii) curing, correcting or supplementing any defective provisions contained herein, (iii) effecting the issue of further Notes
of Hydro-Québec pursuant to Section 19 or (iv) in any other manner in which Hydro-Québec, the Guarantor and the Fiscal Agent, acting on the advice of
independent counsel, may deem necessary or desirable, which will not be inconsistent with this Agreement or the Notes and which, in the reasonable opinion of Hydro-Québec, the Guarantor
and the Fiscal Agent, will not adversely affect the interest of the holders of Notes. 

        This
Agreement may also be amended by Extraordinary Resolution of the holders of the Notes as specified in Section 14 of this Agreement and in the Terms and Conditions of the
Notes under the heading "Modifications." 

17.   The Fiscal Agent  

	(1)
	Subject
to Subsection 7(3), in acting under this Agreement and in connection with the Notes, the Fiscal Agent is acting solely as agent of Hydro-Québec and does
not assume any obligation or relationship of agency, administration of the property of others or trust with any of the holders of Notes, except that all amounts received and held by the Fiscal Agent
for payment in respect of the Notes shall be held in trust for the holders of the Notes in a separate account or accounts for payment to the holders of Notes as provided herein.

	(2)
	The
Fiscal Agent shall be protected and shall incur no liability for action taken or not taken, or suffered to be taken or not taken, with respect to all legal matters upon which it
has received advice from counsel in good faith and in accordance with the opinions and advice of such counsel.

	(3)
	The
Fiscal Agent and its officers, directors and employees may become the owners of, or acquire an interest in, any Notes, with the same rights that it or they would have if the
Fiscal Agent were not acting as agent hereunder, and may engage or be interested in any financial or other transaction with Hydro-Québec, and may act on behalf of, or as a depositary,
trustee or agent for, any committee or body of holders of Notes or holders of other obligations of Hydro-Québec as freely as if the Fiscal Agent were not acting as agent hereunder.

	(4)
	The
Fiscal Agent may rely and shall be protected in acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, letter, telegram,
facsimile transmission or other paper or document believed by it to be genuine and to have been signed, sent or presented by or on behalf of the proper party or parties and in particular, may rely and
shall be protected in acting on the basis of any such notice which is given in accordance with the provisions hereof. 

16

 

18.   Resignation or Replacement of Fiscal Agent  

	(1)
	Hydro-Québec
agrees that there shall at all times be a registrar, fiscal agent, transfer agent and principal paying agent hereunder until (i) all of the Notes
authenticated and delivered hereunder shall have been delivered to the Fiscal Agent for cancellation or become due and payable, and moneys sufficient to pay the principal of and interest on such Notes
shall have been made available for payment and either paid or returned to Hydro-Québec as provided herein or (ii) Hydro-Québec having established to the
satisfaction of the Fiscal Agent that Hydro-Québec may avail itself of defenses under all relevant laws for the prescription of actions in respect of any outstanding Notes.

	(2)
	The
Fiscal Agent may resign at any time by sending at least 90 days' written notice by registered mail to Hydro-Québec and the Guarantor. Upon receipt of such
notice, Hydro-Québec shall appoint another financial institution or institutions as successor registrar, fiscal agent, transfer agent and principal paying agent (the
"Successor Fiscal Agent") under this Agreement. Subject to the provisions hereof, Hydro-Québec may terminate the appointment of the
Fiscal Agent as registrar, fiscal agent, transfer agent and principal paying agent and appoint another financial institution or institutions as Successor Fiscal Agent under this Agreement;  provided that
it give the Fiscal Agent not less than 90 days' written notice of termination. Neither the resignation nor the termination of the
appointment of the Fiscal Agent as registrar, fiscal agent, transfer agent and principal paying agent shall take effect until the appointment of the Successor Fiscal Agent becomes effective. On the
effective date of the resignation of the Fiscal Agent or of the termination of its appointment as registrar, fiscal agent, transfer agent and principal paying agent, the Fiscal Agent shall deliver to
the Successor Fiscal Agent all funds of Hydro-Québec then held by it to the extent such funds relate to the appointment being transferred and all documents relating to the Notes to the
extent such documents relate to the appointment being transferred, and Hydro-Québec shall pay to the Fiscal Agent all amounts owed by Hydro-Québec to the Fiscal Agent
pursuant to this Agreement up to the said effective date. After the resignation or removal of the Fiscal Agent, the provisions of Section 17 hereof shall inure to its benefit as to any action
taken or omitted to be taken by it while it was the Fiscal Agent hereunder.

	(3)
	If
the Fiscal Agent shall be adjudged bankrupt or insolvent, or shall file a voluntary petition in bankruptcy or makes an assignment for the benefit of its creditors or
consents to the appointment of a receiver or custodian of all or any substantial part of its property, or shall admit in writing of its inability to pay or meet its debts as they mature, or if a
receiver or custodian of it or of all or any substantial part of its property shall be appointed or if any public officer shall have taken charge or control of it or of its property or affairs, for
the purposes of rehabilitation, conservation or liquidation, a Successor Fiscal Agent shall be appointed by Hydro-Québec. Upon such an appointment of a Successor Fiscal Agent, the
Fiscal Agent shall cease to be a registrar, fiscal agent, transfer agent and principal paying agent hereunder whether or not notice of such termination shall have been given. If no Successor Fiscal
Agent shall have been appointed by Hydro-Québec, any holder of a Note, on behalf of itself and all other holders of a Note, or the Fiscal Agent, may petition any court of competent
jurisdiction for the appointment of a Successor Fiscal Agent. 

17

 

	(4)
	Any
Successor Fiscal Agent appointed hereunder shall execute, acknowledge and deliver to its predecessor and to Hydro-Québec an instrument accepting such appointment
hereunder, and thereupon such Successor Fiscal Agent, without any further act, deed or conveyance, shall become vested with all the authority, rights, powers, trusts, immunities, duties and
obligations of such predecessor, with like effect as if originally named as the Fiscal Agent hereunder, and such predecessor Fiscal Agent, upon payment of its charges and disbursements then unpaid,
shall thereunder become obligated to transfer, deliver and pay over, and such Successor Fiscal Agent shall be entitled to receive, all moneys, securities and other property on deposit with or held by
such predecessor Fiscal Agent hereunder. Hydro-Québec will give prompt written notice to each other agent named pursuant to Section 2 hereof of the appointment of a Successor
Fiscal Agent and shall give notice to holders of the Notes.

	(5)
	Any
corporation or bank into which the Fiscal Agent may be merged or converted or any corporation or bank with which the Fiscal Agent may be consolidated, or any corporation or bank
resulting from any merger, conversion or consolidation to which the Fiscal Agent shall be a party, or any corporation or bank to which the Fiscal Agent shall sell or otherwise transfer all or
substantially all of the corporate trust business of the Fiscal Agent shall be a Successor Fiscal Agent under this Agreement without the execution or filing of any paper or any further act on the part
of any of the parties hereto; provided that such Successor Fiscal Agent shall be qualified as elsewhere provided in this Agreement. 

19.   Further Issues  

        Hydro-Québec may from time to time, without notice to or consent of the holders of the Notes, create and issue further notes ranking equally with
the Notes in all respects (or in all respects except for the payment of interest accruing prior to the issue date of such further notes or except for the first payment of interest following the issue
date of such further notes) so that such further notes shall be consolidated and form a single series with the Notes and shall have the same terms as to status, redemption or otherwise as the
Notes. Any further notes shall be issued pursuant to an agreement supplemental to or amending this Agreement. 

18

 

20.   Prescription  

        Under current Québec law, Hydro-Québec's obligation to make any payment on the Notes shall be extinguished three years after the
date such payment is due unless such right to payment is judicially exercised prior to the expiration of such three-year period. 

21.   General  

	(1)
	Any
notice pursuant to this Agreement shall be deemed to have been duly given upon the dispatch of such notice by registered mail or telecopier (to be confirmed in writing by
registered mail), addressed to (a) Hydro-Québec, (b) the Guarantor or (c) the Fiscal Agent as follows: 

19

 

Hydro-Québec:

Hydro-Québec

75 René-Lévesque Boulevard West

6th Floor

Montréal (Québec)

CANADA H2Z 1A4 

Attention:
Corporate Treasurer

Telecopier No: (514) 289-5409

Telephone No: (514) 289-4284 

the Guarantor: 

Québec

Ministère des Finances

Direction de l'émission des emprunts

12, rue Saint-Louis

Québec (Québec)

CANADA G1R 5L3 

Attention:
Le directeur

Telecopier No: (418) 643-4700

Telephone No: (418) 643-8141 

Fiscal Agent:

Deutsche
Bank Trust Company Americas

60 Wall Street

MS NYC 60-2515

New York, New York 10005 

Attention:
Corporate Trust & Services Agency

Telecopier No: (212) 454-2223

Telephone No: (212) 454-4219 

or
to any other address or number of which either of the parties shall have notified the other in writing in accordance with this provision. 

	(2)
	THIS AGREEMENT SHALL BE GOVERNED BY AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF QUÉBEC AND THE LAWS OF CANADA APPLICABLE
THEREIN. 

Hydro-Québec
and the Guarantor hereby irrevocably consent to the fullest extent permitted by law to the giving of any relief (including, without limitation, the making or enforcement of
any order or judgment) made or given in connection with any proceedings arising out of or in connection with this Agreement and the Notes; 

20

 

	(3)
	This
Agreement shall extend to and enure to the benefit of and be binding upon Hydro-Québec, the Guarantor and the Fiscal Agent and their respective successors and
assigns.

	(4)
	This
Agreement may be executed in separate counterparts, and each such counterpart, when so executed and delivered, shall be deemed to be an original. Such counterparts shall together
constitute one and the same agreement. 

21

  

        IN WITNESS WHEREOF, this Agreement has been executed in New York as of the date first above written. 

	 	 	HYDRO-QUÉBEC
	
 	
 	

 
	 	 	/s/
 Authorized Representative
	
 	
 	

 
	 	 	QUÉBEC
	
 	
 	

 
	 	 	/s/
 Authorized Representative
	
 	
 	

 
	 	 	DEUTSCHE BANK TRUST COMPANY AMERICAS
	
 	
 	

 
	 	 	/s/
 Authorized Officer

22

 
 
 

SCHEDULE A
  
    FORM OF GLOBAL NOTE    

        Unless
this Global Note is presented by an authorized representative of The Depository Trust Company, 55 Water Street, New York, New York, a New York corporation
("DTC"), to Hydro-Québec or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the
name of Cede & Co. or in such other name as requested by an authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested
by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL, inasmuch as the registered owner hereof,
Cede & Co., has an interest herein. 

	Series [        ]	 	Certificate No. [        ]
	 	 	

CUSIP [        ]

HYDRO-QUÉBEC

[        ]% Notes Series [        ]

due [        ]

Guaranteed unconditionally by Québec

        This
Global Note, registered in the name of Cede & Co., as nominee of DTC (the "Global Note"), is a permanent Global Note in
respect of the duly authorized issue of notes referred to above (the "Notes") of Hydro-Québec, a body corporate validly existing under
the Hydro-Québec Act, (Revised Statutes of Québec, Chapter H-5), payment of which is unconditionally
guaranteed subject to the guarantee given by Québec (the "Guarantee"), as guarantor (the
"Guarantor"), and which is issued pursuant to a fiscal agency agreement, dated as of [    ], among Hydro-
Québec, the Guarantor and Deutsche Bank Trust Company Americas as registrar, fiscal agent, transfer agent and principal paying agent (the "Fiscal
Agent" which term includes any successor registrar, fiscal agent, transfer agent and principal paying agent under the Fiscal Agency Agreement) as such agreement may be
supplemented or amended, as the case may be (the "Fiscal Agency Agreement"). This Global Note or any other Global Note in this form and so registered
may also represent any further notes which Hydro-Québec may issue, from time to time, pursuant to the Terms and Conditions hereof and Section 19 of the Fiscal Agency Agreement.
In the event such further notes are issued, the word "Notes" as defined above shall be deemed to also refer to such further notes. 

        This
Global Note and all the rights of the holder hereof are expressly subject to the Fiscal Agency Agreement, and this Global Note and the Fiscal Agency Agreement constitute a contract
to all of the terms and conditions of which the holder by acceptance hereof assents, is bound by and is deemed to have notice. All defined terms unless defined herein have the meaning ascribed to them
in the Fiscal Agency Agreement. Copies of the Fiscal Agency Agreement are available for inspection at the principal office of the Fiscal Agent and from the Electronic Document Gathering and Retrieval
System, which is commonly known by the acronym EDGAR, through the Securities and Exchange Commission's website (http://www.sec.gov). 

23

 

        This
is a fully registered Global Note without coupons attached. In certain limited circumstances, as described in Section 5 of the Fiscal Agency Agreement, it is exchangeable in
whole or in part, at the office of the Fiscal Agent, for Certificated Notes. 

        FOR VALUE RECEIVED, Hydro-Québec hereby promises to pay to Cede & Co. or its registered assigns in the manner
hereinafter mentioned on [    ] (or on such earlier date as the Principal Amount (as hereinafter defined) may become payable in accordance with the terms hereof) the
principal sum set forth in Schedule I hereto from time to time (the "Principal Amount") in lawful money of the United States of
America, on presentation and surrender of this Global Note, and to pay interest in arrears on the said Principal Amount at the rate of [    ]% per annum, from
[    ], or from the most recent Interest Payment Date to which interest has been paid or duly provided for, in [two equal
semi-annual] installments on [    ] and [    ] in each year (each an "Interest
Payment Date"), commencing [    ], until the Principal Amount is paid in full or duly made available for payment, in each case together with
such further sum, if any, as may be payable by way of Additional Amounts in accordance with the provisions set forth herein and should Hydro-Québec at any time default in the payment of
any of the Principal Amount [and premium, if any,] or interest on this Global Note or any Additional Amounts, to pay interest on the amount in default (before as well as after
judgment) at the same rate, in like money, on the same dates. References herein to principal [, premium, if any] and interest in respect of this Global Note or the Certificated
Notes shall be deemed also to refer to any Additional Amounts which may be payable concurrently therewith, unless the context otherwise requires. Interest will cease to accrue on this Global Note on
[    ], subject to a change of such date as hereinabove mentioned (or on such earlier date as the Principal Amount may become payable in accordance with the terms
hereof), unless, upon due presentation of this Global Note, payment of the Principal Amount or any [premium or] Additional Amounts is improperly withheld or refused. 

        This
Global Note shall not become valid and obligatory for any purpose unless and until this Global Note has been authenticated by the Fiscal Agent or its authorized representative. 

 
 

TERMS AND CONDITIONS    
    

Status of the Notes and Guarantee  

        The Notes will be direct, unsecured and unconditional obligations of Hydro-Québec. The Notes will rank equally among themselves and with all other
unsecured debt securities issued by Hydro-Québec and outstanding at the date hereof or issued thereafter. 

        The
Guarantor will unconditionally guarantee the due and punctual payment of the principal of [, premium, if any,] and interest and any Additional Amounts on the
Notes upon default in payment by Hydro-Québec, when and as the same shall respectively become due and payable, at maturity, upon call for redemption prior to maturity, by acceleration
or otherwise. The Guarantee will be endorsed on the certificates representing the Notes. Any funds required for the Guarantee shall be taken out of the Consolidated Revenue Fund of
Québec. The Guarantee will be a direct, unconditional and unsecured obligation of the Guarantor and will rank equally in right of payment with all other unsecured obligations for
borrowed money of the Guarantor outstanding at the date hereof or in the future. 

24

 

Form, Denomination and Registration  

        The Notes will be issued in the form of one or more fully registered Global Notes registered in the name of Cede & Co., as nominee of DTC, and held
by Deutsche Bank Trust Company Americas, as custodian for DTC (the "Custodian"). Beneficial interests in the Global Notes will be represented through
book-entry accounts of financial institutions acting on behalf of owners of such beneficial interests as direct and indirect participants in DTC, Euroclear Bank S.A./N.V., as
operator of the Euroclear System ("Euroclear") and Clearstream Banking, société anonyme ("Clearstream, Luxembourg") (collectively, the Clearing Systems). The Clearing
Systems will be responsible for establishing and maintaining book-entry accounts for their participants having interests in the Notes. Owners of beneficial interests in Notes will not,
except in limited circumstances described herein, be entitled to receive certificates representing Notes ("Certificated Notes") or to have Notes
registered in their names, and will not be considered holders thereof under the Fiscal Agency Agreement. 

        The
Notes will only be sold in denominations of US$1,000 or integral multiples thereof. 

        The
Fiscal Agent will be responsible for (i) maintaining a record of the aggregate holdings of Notes, (ii) ensuring that payments of principal[,
premium] and interest in respect of the Notes received by the Fiscal Agent from Hydro-Québec are duly credited to DTC, and (iii) transmitting to
Hydro-Québec any notices from owners of beneficial interests in Notes. The Fiscal Agent will not impose any fees in respect of the Notes, other than reasonable fees for the replacement
of lost, stolen, mutilated or destroyed Notes. However, owners of beneficial interests in Notes may incur fees payable in respect of the maintenance and operation of the book-entry
accounts in which such Notes are held with the Clearing Systems. 

Certificated Notes  

        No owner of a beneficial interest in a Note will be entitled to receive a Certificated Note in definitive form except in the limited circumstances described
herein. 

        Hydro-Québec
will issue or cause to be issued Certificated Notes upon registration of, transfer of, or in exchange for Notes represented by this Global Note if DTC
(i) notifies Hydro-Québec that it is unwilling or unable to continue as depositary in connection with the Global Notes; (ii) ceases to be a clearing agency registered
under the Securities Exchange Act of 1934, as amended, at a time when it is required to be and a successor depositary is not appointed by
Hydro-Québec within 90 days after receiving such notice or becoming aware that DTC is no longer so registered; or (iii) acting on direct or indirect instructions of one or
more registered holders of this Global Note or any beneficial owner of an interest in this
Global Note, requests in writing from Hydro-Québec the exchange, in whole or in part, of this Global Note for Certificated Notes, but only after an event of default entitling the
registered holders to give Hydro-Québec written notice that such holders elect to declare the principal amount of the Notes held by them and represented by this Global Note to be due
and payable has occurred and is continuing; provided that if DTC is unwilling or does not promptly make such request to Hydro-Québec,
then any beneficial owner of an interest in this Global Note shall be entitled to make such request with respect to such interest. Hydro-Québec may also at any time and in its sole
discretion notify the Fiscal Agent that all of the Notes held in the form of the Global Notes are to be exchanged for Certificated Notes and, in such event, Hydro-Québec will issue or
cause to be issued Certificated Notes upon registration of, transfer of, or in exchange for such Global Notes. If Certificated Notes are issued and the Notes are at such time listed on the Luxembourg
Stock Exchange, and the rules of the Luxembourg Stock Exchange so require, then Hydro-Québec will appoint and maintain a transfer agent in Luxembourg for so long as the Notes continue
to be listed on the Luxembourg Stock Exchange. A publication will be made in accordance with "Notices" below describing how payments on Certificated Notes will be made. 

25

 

        In
respect of any such issuance of Certificated Notes, (i) Hydro-Québec shall promptly provide the Fiscal Agent with a sufficient number of Certificated Notes in
blank form to proceed with such issuance, (ii) DTC shall cause this Global Note to be delivered by the Custodian to the Fiscal Agent and provide the Fiscal Agent with the necessary registration
information for such Certificated Notes, (iii) the Fiscal Agent shall authenticate and deliver such Certificated Notes in an aggregate principal amount equal to the principal amount of this
Global Note to be exchanged for such Certificated Notes, (iv) the Fiscal Agent shall cancel this Global Note and in the case of a partial exchange, issue and deliver to or to the order of DTC a
new Global Note equal to the unexchanged portion of this Global Note partially exchanged for Certificated Notes and (v) the Fiscal Agent shall reduce accordingly the holdings of the registered
holder on the Register. Such Certificated Notes shall be delivered as directed by the persons in whose names such Certificated Notes are to be registered. All Notes represented by Certificated Notes
issued upon any such issuance in exchange for the Notes represented by this Global Note shall have the Guarantee of the Guarantor endorsed thereon (which Guarantee shall be a valid obligation of the
Guarantor), shall be a valid obligation of Hydro-Québec, shall be entitled to the same benefits under the Fiscal Agency Agreement as the Global Notes, and shall be so exchanged without
charge to the Fiscal Agent, DTC or the transferee. On or after any such exchange, the Fiscal Agent shall direct all payments in respect of such Certificated Notes to the registered holders thereof,
including when such exchange occurred after the record date for any payment and prior to the date of such payment. 

        Hydro-Québec
expressly acknowledges that if a Certificated Note is not promptly issued to a beneficial owner of an interest in this Global Note as contemplated herein,
then such beneficial owner shall be entitled to pursue any remedy under the Fiscal Agency Agreement, the Notes or applicable law with respect to the portion of this Global Note that represents such
beneficial owner's interest therein as if such Certificated Note had been issued. 

Title  

        Subject to applicable law and the terms of the Fiscal Agency Agreement, Hydro-Québec, the Guarantor and the Fiscal Agent will deem and treat the
persons in whose name the Global Notes are registered, initially Cede & Co., as the absolute owners thereof for all purposes whatsoever notwithstanding any notice to the contrary. All
payments to or on the order of the registered holders shall be valid and effectual to discharge the liability of Hydro-Québec, the Guarantor and the Fiscal Agent on the Notes to the
extent of the sum or sums so paid. 

26

 

Interest  

        The Notes will bear interest from [        ] at a rate of [        ]% per annum, payable in
[two equal semi-annual] installments in arrears on [        ] and [        ], commencing
[            ]. Interest on the Notes will cease to accrue on the date fixed for redemption or repayment unless, upon due presentation of the Notes, payment of principal
[and premium, if any,] is improperly withheld or refused. 

        Whenever
it is necessary to compute any amount of interest in respect of the Notes, other than with respect to regular [semi-annual] payments, such
interest shall be calculated on the basis of a 360-day year of twelve 30-day months. The rate of interest specified in the Notes is a nominal rate and all interest payments and
computations are to be made without allowances or deductions for deemed reinvestment. 

        For
purposes of disclosure pursuant to the Interest Act (Canada), the rate of interest payable on any basis other than a full calendar
year may be determined by multiplying the applicable annual interest rate by a fraction the numerator of which is the actual number of days in the period for which interest is payable and the
denominator of which is 365 days or 366 days, as the case may be. 

Payments  

        Principal of [and premium, if any,] and interest and any Additional Amounts on the Notes are payable by Hydro-Québec in
lawful money of the United States of America ("U.S. dollars", "US$"  or "$") to the person registered at the close of business on the relevant record date in the register
held by the Fiscal Agent. The Fiscal Agent will act as Hydro-Québec's principal paying agent for the Notes pursuant to the Fiscal Agency Agreement. Neither Hydro-Québec
nor the Fiscal Agent will have any responsibility or liability for any aspect of the records of the Clearing Systems relating to or payments made by such Clearing Systems on account of beneficial
interests in the Global Notes or for maintaining, supervising or reviewing any records of such Clearing Systems relevant to such beneficial interests. 

        If
any date for payment in respect of any Notes is not a Business Day, the holder thereof shall not be entitled to payment until the next following Business Day, and no further interest
shall be paid in respect of the delay in such payment. In this paragraph, "Business Day" means a day on which banking institutions in The City of New York and in any other applicable place of
payment are not authorized or obligated by law or executive order to be closed. 

Record Date  

        The record date for purposes of payments of principal of [and premium, if any,] and interest and any Additional Amounts on the Notes will
be as of 5:00 p.m., New York time, on the fourteenth calendar day preceding the maturity date or any interest payment date, as applicable. 

27

 

[Payment of Additional Amounts  

        The principal of and [premium, if any, and] interest on the Notes will be paid to any holder, who as to Canada or any province, political
subdivision or taxing authority therein or thereof is a non-resident, without deduction for or on account of any present taxes or duties of whatsoever nature, imposed or levied by or
within Canada, or any province, political subdivision or taxing authority therein or thereof. If as a result of any change in, or amendment to, or in the official application of, the laws of Canada or
the regulations of any taxing authority therein or thereof or any change in, or in the official application of, or execution of, or amendment to, any treaty or treaties affecting taxation to which
Canada is a party, Hydro-Québec or the Guarantor shall be required to withhold any taxes or duties from any payments due respectively under the Notes, Hydro-Québec or the
Guarantor will pay such additional amounts (the "Additional Amounts") as may be necessary in order that every net payment of the principal of and
[premium, if any, and] interest on the Notes to any such holder will be not less than the amount provided for in the Notes. Hydro-Québec or the Guarantor shall
not, however, be obliged to pay such Additional Amounts on account of any such taxes or duties to which any holder is subject otherwise than by reason of his ownership of Notes or the receipt of
income therefrom or which become payable as a result of any Note being presented for payment on a date more than ten days after the date on which the same becomes due and payable, or the date on which
payment thereof is duly provided for whichever is later.] 

        In
addition, Hydro-Québec and Québec shall also not be obliged to pay any Additional Amounts where such withholding or deduction is imposed on a payment to
an individual and is required to be made pursuant to European Council Directive 2003/48/EC or any other Directive implementing the conclusions of the ECOFIN Council meeting of
26-27 November 2000 on the taxation of savings income, or any law implementing or complying with, or introduced in order to conform to, such Directive or presented for
payment by or on behalf of a holder who would have been able to avoid such withholding or deduction by presenting the relevant Note to another paying agent in a Member State of the European Union. 

Maturity, Redemption and Purchases  

        Unless previously redeemed for tax reasons as provided below, or purchased, the Principal Amount (at par) of the Notes shall be due and payable on
[        ]. 

        [If
as a result of any change in, or amendment to, or in the official application of, the laws of Canada or the regulations of any taxing authority therein or thereof or any
change in, or in the official application of, or execution of, or amendment to, any treaty or treaties affecting taxation to which Canada is a party, which change or amendment shall have become
effective after [        ], it is determined by Hydro-Québec or the Guarantor that Hydro-Québec or the Guarantor, as the case may be, would
be required at, or at any time prior to, maturity of the Notes to pay Additional Amounts as described above under the heading "Payment of Additional
Amounts", the Notes may be redeemed in whole but not in part at the option of Hydro-Québec on not less than 30 days', nor more than 45 days'
published notice in accordance with the provisions of the heading " Notices" below, at the principal amount thereof together with accrued
interest.] 

28

 

        Hydro-Québec
may, if not in default under the Notes, purchase Notes at any time, in any manner and at any price. 

Modifications  

        The Fiscal Agency Agreement and the Notes may be amended by Hydro-Québec, the Guarantor and the Fiscal Agent without notice to or the consent of
the holder of any Note, for the purpose of (i) curing any ambiguity, (ii) curing, correcting or supplementing any defective provisions contained therein, (iii) effecting the issue
of further notes as described below under "Further Issues" or (iv) in any other manner which Hydro-Québec, the Guarantor and the Fiscal Agent, acting
on the advice of independent counsel, may deem necessary or desirable and which will not be inconsistent with the Notes and which, in the reasonable opinion of Hydro-Québec, the
Guarantor and the Fiscal Agent, will not adversely affect the interest of the holders of Notes. 

        The
Fiscal Agency Agreement contains provisions for convening meetings of registered holders of Notes to modify or amend by Extraordinary Resolution the Fiscal Agency Agreement (except
as provided in the immediately preceding paragraph) and the Notes (including the terms and conditions thereof) or waive future compliance therewith or past default thereon by
Hydro-Québec. An Extraordinary Resolution duly passed at any such meeting shall be binding on all holders of Notes, whether present or not;  provided, however, that no such modification or amendment to the Fiscal Agency Agreement or to the terms
and conditions of the Notes or any other action taken may, without the consent of the holder of each such Note affected thereby, (i) change the stated maturity or interest payment date of any
such Note, (ii) reduce the principal amount of or rate of interest on any such Note, (iii) change the currency of payment of any such Note, (iv) impair the right to institute suit
for the enforcement of any payment on or with respect to such Note or the Guarantee, (v) reduce the percentage of the holders of Notes necessary to modify or amend the Fiscal Agency Agreement
or the terms and conditions of the Notes or reduce the percentage of votes required for the taking of action or the quorum required at any meeting of holders of Notes, or (vi) reduce the
percentage of outstanding Notes necessary to waive any future compliance or past default. 

Governing Law  

        The Fiscal Agency Agreement, the Notes and the Guarantee shall be construed in accordance with and governed by the laws of Québec and the laws of
Canada applicable in Québec. 

        Each
of Hydro-Québec and the Guarantor irrevocably consents to the fullest extent permitted by law to the giving of any relief (including, without limitation, the making
or enforcement of any order or judgment) made or given in connection with any proceedings arising out of or in connection with the Fiscal Agency Agreement, the Notes and the Guarantee. 

Events of Default  

        In the event that (a) Hydro-Québec shall default in the payment of any principal of or premium, interest or Additional Amounts, if any, on
the Notes, as the same shall become due and payable, and such default shall continue for a period of 30 days or (b) default shall be made in the due performance or observance by
Hydro-Québec of any covenant or agreement contained in the Notes, other than the payment of principal, [premium, if any,] interest or Additional Amounts, or in
the Fiscal Agency Agreement, and such default shall continue for a period of 60 days or (c) Hydro-Québec shall default in the payment of any principal of [or
premium, if any,] or interest or any Additional Amounts on any indebtedness (direct or under a guarantee) for borrowed money, other than the Notes, as the same shall become due and
payable, and such default shall continue for a period of 30 days, provided that the foregoing shall not be taken into account so long as the aggregate principal amount of all such indebtedness
(direct or under a guarantee) for borrowed money with respect to which the foregoing has occurred does not exceed US$50,000,000 (or its equivalent in other currencies), then at any time thereafter and
during continuance of such default, the registered holder of any Note (or its proxy) may deliver or cause to be delivered to Hydro-Québec at its registered office in
Montréal, Québec, Canada a written notice that such registered holder elects to declare the principal amount of the Notes held by him (the serial number or numbers of the
Notes which represent such Notes and the principal amount of the Notes owned by him and the subject of such declaration being set forth in such notice) to be due and payable and, in the cases falling
within either (a) or (c) above, on the fifteenth day after delivery of such notice, or, in the cases falling within (b) above, on the thirtieth day after delivery of such notice,
the principal of the Notes referred to in such notice plus accrued interest thereon shall become due and payable, unless prior to that time all such defaults theretofore existing shall have been
cured. 

29

 

Notices  

        All notices to the holders of Notes will be published (in English in London, England in the Financial Times, in
Luxembourg in the Luxemburger Wort (as long as the Notes are listed on the Luxembourg Stock Exchange)), in New York, New York in  The Wall Street Journal (and in Toronto, Ontario, in The Globe & Mail and in French in
Montréal, Québec, in La Presse). If at any time publication in any such newspaper is not practicable, notices will be
valid if published in an English language newspaper (or, if in Québec, a French language newspaper), with general circulation in the respective market regions which
Hydro-Québec, with the approval of the Fiscal Agent, shall determine. Any such notice shall be deemed to have been given on the date of such publication or, if published more than once
or on different dates, on the first date on which publication is made. 

Further Issues  

        Hydro-Québec may from time to time without the consent of the holders of the Notes create and issue further notes ranking equally in all respects
(or in all respects save for the first payment of interest thereon) and such further notes shall be consolidated and form a single series with the outstanding Notes. Any further notes forming a
single series with the outstanding Notes shall be issued pursuant to an agreement supplemental to the Fiscal Agency Agreement. 

Prescription  

        Under current Québec law, Hydro-Québec's obligation to make any payment on the Notes shall be extinguished three years after the
date such payment is due unless such right to payment is judicially exercised prior to the expiration of such three-year period. 

30

 

        IN
WITNESS WHEREOF, HYDRO-QUÉBEC has caused this Global Note to be signed by its duly authorized Representative as of  [        ] in New York,
New York. 

	 	 	HYDRO-QUÉBEC
	
 	
 	

By:	
 	

/s/
 Authorized Representative

Authenticated by: 

DEUTSCHE
BANK TRUST COMPANY AMERICAS

(as Fiscal Agent) 

	
 By:	
 	

/s/
 Authorized Officer	
 	

 

Authentication Date: 

31

 

GUARANTEE BY QUÉBEC 

        By
virtue of the powers conferred by the Parlement du Québec and of the authorization of the Government of Québec by an Order in Council dated  [        ], Québec hereby irrevocably and unconditionally guarantees to the registered holder of this
Global Note and pledges its full faith and credit for the due and punctual payment, upon default in payment by Hydro-Québec, of the principal of this Global Note and the
[premium, if any, and] interest thereon together with Additional Amounts, if any, as and when the same shall respectively become due and payable (without taking into account
any applicable grace period or notice period set out in the terms and conditions of the Notes), whether at stated maturity or upon previous call for redemption or by acceleration or otherwise; and
hereby expressly waives the benefits of discussion and division and any prior notice or protest to, demand upon or action against Hydro-Québec or Québec. 

        This
Guarantee shall be construed in accordance with and governed by the laws of Québec and the laws of Canada applicable therein. 

        Québec
irrevocably consents to the fullest extent permitted by law to the giving of any relief (including, without limitation, the making or enforcement of any order or
judgment) made or given in connection with any proceedings arising out of or in connection with this Guarantee. 

        Dated
the [        ] day of [        ]. 

Executed
on behalf of Québec in New York, New York. 

	
 /s/
 Delegate General of Québec in New York	
 	

 

32

 
 
 

SCHEDULE ONE TO THE GLOBAL NOTE NO.                
    

          HYDRO-QUÉBEC

[        ]% Global Notes Series [        ] due [        ]

	Initial Principal Amount
 
	 	Additional Principal Amount
 
	 	Aggregate Principal Amount
 
	 	Authorization
 

	US$	 	
	 	US$	 	
	 	US$	 	
	 	

	 	 	 	 	US$	 	
	 	US$	 	
	 	

	 	 	 	 	US$	 	
	 	US$	 	
	 	

33

QuickLinks

FISCAL AGENCY AGREEMENT

SCHEDULE A FORM OF GLOBAL NOTE

TERMS AND CONDITIONS

SCHEDULE ONE TO THE GLOBAL NOTE NO.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00060-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00060-of-00352.parquet"}]]