Document:

BFAM-12.09.14-8K-EXHIBIT - JOINDER AGREEMENT

EXHIBIT 10.1
Execution Version

INCREMENTAL JOINDER TO CREDIT AGREEMENT
This INCREMENTAL JOINDER TO CREDIT AGREEMENT, dated as of December 9, 2014 (this “Incremental Joinder”), is entered into by and among BRIGHT HORIZONS FAMILY SOLUTIONS LLC, a Delaware limited liability company (the “Borrower”), GOLDMAN SACHS BANK USA (“GS Bank”), as administrative agent (in such capacity, the “Administrative Agent”) and the Lenders and Additional Lenders party hereto (collectively, the “Term B-1 Lenders”) and amends the Credit Agreement, dated as of January 30, 2013 (as amended by Amendment No. 1, dated as of November 19, 2014, among the Borrower and the Lenders party thereto, the “Credit Agreement”), by and among the Borrower, BRIGHT HORIZONS CAPITAL CORP., a Delaware corporation (“Holdings”), GS Bank, as Administrative Agent, Swing Line Lender and L/C Issuer, the Lenders and the other parties party thereto from time to time.  Capitalized terms not otherwise defined in this Incremental Joinder have the meanings ascribed to such terms in the Credit Agreement.
W I T N E S S E T H:
WHEREAS, the Borrower, Holdings, the Lenders, and the Administrative Agent are party to the Credit Agreement;
WHEREAS, in accordance with Section 2.16 of the Credit Agreement, the Borrower has notified the Administrative Agent that it is requesting to establish Incremental Term Loans in the form of Term B-1 Loans in the aggregate principal amount of $165,000,000 on the terms and conditions set forth in this Incremental Joinder;
NOW, THEREFORE, in consideration of the premises and the covenants and obligations contained herein, the parties hereto agree as follows:
SECTION 1.Incremental Amendment
(a)This Incremental Joinder constitutes an “Incremental Amendment” pursuant to which a new Incremental Series (as defined in the Credit Agreement as amended hereby) and a new Class of Incremental Term Loans is established pursuant to Section 2.16 of the Credit Agreement upon the occurrence of the Effective Date (as defined below) (the Credit Agreement as amended by this Incremental Joinder is referred to herein as the “Amended Credit Agreement”).
(b)Subject to the terms and conditions set forth herein and the occurrence of the Effective Date (i) there is hereby established under the Amended Credit Agreement a new Class of Incremental Term Loans entitled the “Term B-1 Loans” and (ii) each Term B-1 Lender severally agrees to make to the Borrower a single loan denominated in Dollars in a principal amount equal to the amount set forth opposite such Term B-1 Lender’s name in Annex I (collectively, the “Term B-1 Commitments”) on the Effective Date.  Amounts borrowed under this Section 1(b) and repaid or prepaid may not be reborrowed.  Term B-1 Loans may be Base Rate Loans or Eurocurrency Rate Loans, as further provided in the Amended Credit Agreement.  
(c)The Borrower agrees to pay on the Effective Date to each Term B-1 Lender party to this Incremental Joinder as a Term B-1 Lender on the Effective Date a closing fee in an amount equal to 1.00% of the stated principal amount (as applicable) of such Term B-1 Lender’s Term B-1 Loan, payable to such Term B-1 Lender from the proceeds of the Term B-1 Loans as and when funded on the Effective Date.  Such closing fees shall be in all respects fully earned, due and payable on the Effective Date and non-refundable and non-creditable for any reason whatsoever thereafter.

Incremental Joinder to Credit Agreement
Bright Horizons Family Solutions LLC 

(d)The All-In-Yield for the Term B-1 Loans as of the Effective Date, as determined by the Borrower and the Term B-1 Lenders, shall be 4.50% per annum.  
SECTION 2.Amendments to the Credit Agreement
(a)    Section 1.01 of the Credit Agreement is hereby amended by inserting the following new definitions in the appropriate alphabetical order:
“2014 Incremental Amendment” means that certain Incremental Joinder to Credit Agreement, dated as of December 9, 2014, among the Borrower, the Lenders party thereto and the Administrative Agent.  
“2014 Incremental Amendment Effective Date” means the “Effective Date” as such term is defined in the 2014 Incremental Amendment.  
“Incremental Series” means all Incremental Term Loans, Incremental Revolving Loans, Incremental Term Commitments or Incremental Revolving Credit Commitments that are established pursuant to the same Incremental Amendment (or any subsequent Incremental Amendment to the extent that such Incremental Amendment expressly provides that the Incremental Term Loans, Incremental Revolving Loans, Incremental Term Commitments or Incremental Revolving Credit Commitments provided for therein are intended to be a part of any previously established Incremental Series) and that provide for identical terms, including the same All-In Yield and amortization schedule.
“Term B Commitments” means, as to each Term B Lender, its obligation to make a Term B Loan to the Borrower pursuant to Section 2.01(a) in an aggregate amount not to exceed the amount specified opposite such Lender’s name in Schedule 2.01 hereto under the caption “Term Commitment” or in the Assignment and Assumption Agreement pursuant to which such Term B Lender becomes a party hereto, as applicable, as such commitment may be (a) reduced from time to time pursuant to Section 2.07 and (b) reduced or increased from time to time pursuant to (i) assignments by or to such Term B Lender pursuant to an Assignment and Assumption Agreement, (ii) an Incremental Amendment, (iii) a Refinancing Amendment or (iv) an Extension.  The initial amount of each Term B Lender’s Term B Commitment is specified in Schedule 2.01 hereto under the caption “Term Commitment” or, otherwise, in the Assignment and Assumption Agreement, Incremental Amendment, Refinancing Amendment or Extension Amendment, pursuant to which such Lender shall have assumed its Commitment, as the case may be.  The initial aggregate amount of the Term B Commitments is $790,000,000.
“Term B Lender” means, at any time, any Lender that has a Term B Commitment or an outstanding Term B Loan at such time.
“Term B-1 Commitment” means, as to each Term B-1 Lender, its obligation to make a Term B-1 Loan to the Borrower pursuant to the 2014 Incremental Amendment in an aggregate amount not to exceed the amount specified opposite such Term B-1 Lender’s name in Annex I thereto or in the Assignment and Assumption Agreement pursuant to which such Term B-1 Lender becomes a party hereto, as applicable, as such commitment may be (a) reduced from time to time pursuant to Section 2.07 and (b) reduced or increased from time to time pursuant to (i) assignments by or to such Term B-1 Lender pursuant to an Assignment and Assumption Agreement, (ii) an Incremental Amendment, (iii) a Refinancing Amendment or (iv) an Extension.  

Incremental Joinder to Credit Agreement
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“Term B-1 Lender” means, at any time, any Lender that has a Term B-1 Commitment or an outstanding Term B-1 Loan at such time.
“Term B-1 Loan” means the Term B-1 Loans made by the Term B-1 Lenders on the 2014 Incremental Amendment Effective Date pursuant to the 2014 Incremental Amendment.  
“Term B-1 Repricing Transaction” means (i) any prepayment, refinancing, substitution or replacement of all or a portion of the Term B-1 Loans with the incurrence by Holdings, the Borrower or any Subsidiary of any debt financing (including any Replacement Term Loans) the primary purpose of which is to reduce the All-In Yield of such debt financing relative to the All-In Yield of such Term B-1 Loans so repaid, refinanced, substituted or replaced and (ii) any amendment to this Agreement the primary purpose of which is to reduce the All-In Yield applicable to the Term B-1 Loans; but excluding, in any such case, any refinancing of Term B-1 Loans in connection with a Change of Control.
(b)    The definition of “Applicable Rate” in Section 1.01 of the Credit Agreement is hereby amended by: (i) replacing the text “Term Loans” in each place it appears in clause (a) of such definition with the text “Term B Loans” and (ii) adding the following new clause (d) immediately after clause (c) of such definition:
(d)  with respect to Term B-1 Loans, (i) until delivery of financial statements for the first fiscal quarter of the Borrower ending after the 2014 Incremental Amendment Effective Date (A) for Eurocurrency Rate Loans, 3.25% and (B) for Base Rate Loans, 2.25%, and (ii) thereafter, the following percentages per annum based upon the Consolidated First Lien Net Leverage Ratio as set forth in the most recent Compliance Certificate received by the Administrative Agent pursuant to Section 6.02(a):
	
					
	 
	Pricing Level
	Consolidated First Lien Net Leverage Ratio
	Eurocurrency Rate for Term B-1 Loans
	Base Rate for Term B-1 Loans

	 
	 
	 
	 
	 

	 
	1
	Greater than 3.50:1.00
	3.50%
	2.50%

	 
	2
	Equal to or less than 3.50:1.00
	3.25%
	2.25%

	 
	 
	 
	 
	 

(c)    The definition of “Base Rate” in Section 1.01 of the Credit Agreement is hereby amended by replacing the text “Term Loan” with the text “Term B Loan or Term B-1 Loan”.
(d)    The definition of “Class” in Section 1.01 of the Credit Agreement is hereby amended and restated in its entirety as follows:
“Class” (a) when used with respect to Lenders, refers to whether such Lenders have Loans or Commitments with respect to a particular Class of Loans or Commitments, (b) when used with respect to Commitments, refers to whether such Commitments are Term B Commitments, Incremental Term Commitments of a given Incremental Series, Commitments in respect of a Class of Loans to be made pursuant to a given Extension Series, Other Term Loan Commitments of a given Refinancing Series, Revolving Credit Commitments, Incremental Revolving Credit Commitments of a given Incremental Series or Other Revolving Credit Commitments, in each case not designated part of another existing Class and (c) when used with 

Incremental Joinder to Credit Agreement
Bright Horizons Family Solutions LLC 

respect to Loans or a Borrowing, refers to whether such Loans, or the Loans comprising such Borrowing, are Term B Loans, Incremental Term Loans made pursuant to a given Incremental Series, Extended Term Loans, Other Term Loans made pursuant to a given Refinancing Series, Revolving Credit Loans, Incremental Revolving Loans of a given Incremental Series, Extended Revolving Credit Loans or Other Revolving Credit Loans in each case not designated part of another existing Class.  Commitments (and, in each case, the Loans made pursuant to such Commitments) that have different terms and conditions shall be construed to be in different Classes.  Commitments (and, in each case, the Loans made pursuant to such Commitments) that have the same terms and conditions shall be construed to be in the same Class.
(e)    The definition of “Commitment” in Section 1.01 of the Credit Agreement is hereby amended by inserting: (i) the text “Term B Commitment,” immediately after the text “Term Commitment” and (ii) the text “of a given Incremental Series” immediately after the text “Incremental Term Commitment” and after the text “Incremental Revolving Credit Commitment”.
(f)    The definition of “Eurocurrency Rate” in Section 1.01 of the Credit Agreement is hereby amended by replacing the text “Term Loans” with the text “Term B Loans and Term B-1 Loans”.
(g)    The definition of “Maturity Date” in Section 1.01 of the Credit Agreement is hereby amended and restated in its entirety as follows:
“Maturity Date” means (a) with respect to the Revolving Credit Facility and Swing Line Loans, the fifth anniversary of the Closing Date; (b) with respect to the Term B Loans, the seventh anniversary of the Closing Date, (c) with respect to the Term B-1 Loans, January 30, 2020, (d) with respect to any Class of Extended Term Loans or Extended Revolving Credit Commitments, the final maturity date as specified in the applicable Extension Request accepted by the respective Lender or Lenders, (e) with respect to any Other Term Loans or Other Revolving Credit Commitments, the final maturity date as specified in the applicable Refinancing Amendment and (f) with respect to any Incremental Loans or Incremental Revolving Credit Commitments, the final maturity date as specified in the applicable Incremental Amendment; provided that, in each case, if such day is not a Business Day, the applicable Maturity Date shall be the Business Day immediately succeeding such day.
(h)    The definition of “Repricing Transaction” in Section 1.01 of the Credit Agreement is hereby amended by replacing the text “Term Loans” in each place it appears in such definition with the text “Term B Loans”.
(i)    The definition of “Term Commitment” in Section 1.01 of the Credit Agreement is hereby amended and restated in its entirety as follows:
“Term Commitment” means a Term B Commitment, an Incremental Term Commitment of a given Incremental Series, an Extended Term Loan Commitment of a given Extension Series or an Other Term Loan Commitment, as the context may require.
(j)    The definition of “Term Loan” in Section 1.01 of the Credit Agreement is hereby amended by inserting the text “(including, without limitation, the Term B-1 Loans)” after the text “any Incremental Term Loan”.
(k)    Section 2.06(a)(i) of the Credit Agreement is hereby amended by: (i) replacing the text “Term Loans” in the last sentence of Section 2.06(a)(i) with the text “Term B Loans”, (ii) replacing the 

Incremental Joinder to Credit Agreement
Bright Horizons Family Solutions LLC 

text “Section 2.10(b)” with “Section 2.10(b)(i)” and (iii) adding the following sentence immediately at the end of Section 2.06(a)(i):
Any prepayment of Term B-1 Loans made on or prior to the date that is six (6) months after the 2014 Incremental Amendment Effective Date in connection with a Term B-1 Repricing Transaction shall be accompanied by the payment by the Borrower of the fee set forth in Section 2.10(b)(ii).
(l)    Section 2.06(b)(viii) of the Credit Agreement is hereby amended by: (i) adding the text “to the extent expressly provided in any such Refinancing Amendment, Term Loan Extension Request or Incremental Amendment” immediately after the first reference to “any Incremental Amendment” in such Section, (ii) replacing the text “Term Loans” in the last sentence of Section 2.06(b)(viii) with the text “Term B Loans”, (iii) replacing the text “Section 2.10(b)” with “Section 2.10(b)(i)” and (iv) adding the following sentence immediately at the end of Section 2.06(b)(viii):
Any prepayment of Term B-1 Loans made on or prior to the date that is six (6) months after the 2014 Incremental Amendment Effective Date pursuant to Section 2.06(b)(iii) as part of a Term B-1 Repricing Transaction shall be accompanied by the fee set forth in Section 2.10(b)(ii).
(m)    Section 2.07(b) of the Credit Agreement is hereby amended by: (i) replacing the text “Term Commitment”, “Term Lender” and “Term Loans” in the first sentence of Section 2.07(b) with the text “Term B Commitment”, “Term B Lender” and “Term B Loans”, respectively and (ii) adding the following sentence immediately after the first sentence of such Section 2.07(b):
The Term B-1 Commitment of each Term B-1 Lender shall be automatically and permanently reduced to $0 upon the making of such Term B-1 Lender’s Term B-1 Loans pursuant to the 2014 Incremental Amendment.
(n)    Section 2.08(a) of the Credit Agreement is hereby amended by: (i) inserting the text “(A)” at the beginning of clause (i) thereof, (ii) replacing the text “Term Lenders” and “Term Loans” with the text “Term B Lenders” and Term B Loans”, respectively and (iii) inserting the following new clause (i)(B) after clause (i)(A):
(B)  The Borrower shall repay to the Administrative Agent for the ratable account of the Term B-1 Lenders (A) on the last Business Day of each March, June, September and December, commencing with the last Business Day of March, 2015, an aggregate amount equal to 0.25% of the aggregate principal amount of all Term B-1 Loans outstanding on the Incremental Amendment Effective Date (which payments shall be reduced as a result of the application of prepayments in accordance with the order of priority set forth in Section 2.06 and Section 10.07(n)) and (B) on the Maturity Date for the Term B-1 Loans, the aggregate principal amount of all Term B-1 Loans outstanding on such date.  
(o)    Section 2.10(b) of the Credit Agreement is hereby amended by: (i) inserting the text “(i)” at the beginning of clause (b) thereof, (ii) replacing the text “Term Lender” and “Term Loans” with the text “Term B Lenders” and “Term B Loans”, respectively and (iii) inserting the following new clause (ii) after clause (i):
(ii)    At the time of the effectiveness of any Term B-1 Repricing Transaction that is consummated on or prior to the date that is six months after the 2014 Incremental Amendment Effective Date, the Borrower agrees to pay to the Administrative Agent, for the ratable account of each Term B-1 Lender with Term B-1 Loans that are either prepaid, refinanced, substituted, replaced or otherwise subjected 

Incremental Joinder to Credit Agreement
Bright Horizons Family Solutions LLC 

to a pricing reduction in connection with such Term B-1 Repricing Transaction (including each Term B-1 Lender that withholds its consent to such Term B-1 Repricing Transaction and is replaced as a Term B-1 Lender, or whose outstanding Term B-1 Loans are repaid in full, under Section 3.07(a)), a fee in an amount equal to 1.0% of (x) in the case of a Term B-1 Repricing Transaction described in clause (i) of the definition thereof, the aggregate principal amount of all Term B-1 Loans prepaid, refinanced, substituted or replaced in connection with such Term B-1 Repricing Transaction and (y) in the case of a Term B-1 Repricing Transaction described in clause (ii) of the definition thereof, the aggregate principal amount of all Term B-1 Loans outstanding on such date that are subject to an effective pricing reduction pursuant to such Term B-1 Repricing Transaction.  Such fees shall be earned, due and payable upon the date of the effectiveness of such Term B-1 Repricing Transaction.
SECTION 3.    Conditions Precedent to the Effectiveness of this Incremental Joinder
This Incremental Joinder shall become effective when each of the following conditions precedent shall have been satisfied (the “Effective Date”):
(a)    The Administrative Agent shall have received each of the following, each dated the Effective Date:
(i)    this Incremental Joinder, duly executed by the Borrower, the Administrative Agent and the Term B-1 Lenders; 
(ii)    a Committed Loan Notice;
(iii)    a written opinion of Ropes & Gray LLP, counsel for the Borrower, in form and substance reasonably satisfactory to the Administrative Agent (and the Borrower hereby instructs such counsel to deliver such opinion to Administrative Agent);
(iv)    certificates of good standings (including bring down certificates) from the applicable secretary of state of the state of organization of each Loan Party, certificates of resolutions or other action, incumbency certificates and/or other certificates of Responsible Officers of each Loan Party as the Administrative Agent may reasonably require evidencing the identity, authority and capacity of each Responsible Officer thereof authorized to act as a Responsible Officer in connection with this Agreement and the other Loan Documents to which such Loan Party is a party or is to be a party on the Effective Date;
(v)    the Guarantor Acknowledgment to Incremental Joinder to Credit Agreement, duly executed by each Guarantor in the form attached hereto as Exhibit A; 
(vi)    at least two (2) days prior to the Effective Date (or such shorter period as the Administrative Agent may agree in its sole discretion), all documentation and other information about the Borrower and the Guarantors required under applicable “know your customer” and anti-money laundering rules and regulations, including the PATRIOT Act, that has been requested by the Administrative Agent at least five (5) Business Days prior to the Effective Date; and
(vii)    a certificate of a Responsible Officer of the Borrower certifying as to the matters specified in Section 4 (Representations and Warranties) and clauses (b) and (c) below.
(b)    no Event of Default shall exist after giving effect to the Term B-1 Commitments;

Incremental Joinder to Credit Agreement
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(c)    the representations and warranties of each Loan Party set forth in Article V of the Amended Credit Agreement and in each other Loan Document shall be true and correct in all material respects on and as of the Effective Date with the same effect as though made on and as of such date, except to the extent such representations and warranties expressly relate to an earlier date, in which case they shall be true and correct in all material respects as of such earlier date; provided that any representation and warranty that is qualified as to “materiality”, “Material Adverse Effect” or similar language shall be true and correct (after giving effect to any qualification therein) in all respects on such respective dates; and
(d)    The Borrower shall have paid all amounts referred to in Section 5 (Fees and Expenses) of this Incremental Joinder.
SECTION 4.    Representations and Warranties
On and as of the Effective Date, the Borrower hereby represents and warrants that 
(a)    this Incremental Joinder has been duly authorized, executed and delivered by the Borrower and constitutes a legal, valid and binding obligation of the Borrower, enforceable against the Borrower in accordance with its terms, subject to Debtor Relief Laws and general principles of equity (whether considered in a proceeding in equity or law) and an implied covenant of good faith and fair dealing, and the Amended Credit Agreement constitutes the legal, valid and binding obligation of the Borrower, enforceable against the Borrower in accordance with its terms, subject to Debtor Relief Laws and general principles of equity (whether considered in a proceeding in equity or law) and an implied covenant of good faith and fair dealing and
(b)    on the Effective Date after giving effect to the funding of the Term B-1 Loans and the application thereof on such date, the Borrower and its Restricted Subsidiaries, on a consolidated basis, are Solvent. 
SECTION 5.    Fees and Expenses
The Borrower shall pay in accordance with the terms of Section 10.04 of the Credit Agreement all costs and expenses of the Administrative Agent in connection with the preparation, negotiation, syndication, execution and delivery of this Incremental Joinder (including, without limitation, the reasonable fees and out-of-pocket expenses of counsel for the Administrative Agent with respect thereto) and any other fees separately agreed between the Borrower and GS Bank and, in each case, which are invoiced at least two Business Days prior to the Effective Date.
SECTION 6.    Reference to the Effect on the Loan Documents
(a)    As of the Effective Date, (i) each reference in the Credit Agreement to “this Agreement,” “hereunder,” “hereof,” “herein,” or words of like import, and each reference in the other Loan Documents to the Credit Agreement (including, without limitation, by means of words like “thereunder”, “thereof” and words of like import), shall mean and be a reference to the Amended Credit Agreement, and this Incremental Joinder and the Credit Agreement shall be read together and construed as a single instrument, (ii) each Person executing this Incremental Joinder in its capacity as a Term B-1 Lender shall become (or, if already a Term Lender prior to the Effective Date, continue as) a “Lender”, a “Term Lender” and a “Term B-1 Lender” under the Amended Credit Agreement for all purposes of the Amended Credit Agreement and the other Loan Documents and shall be bound by the provisions of the Amended Credit Agreement as a Lender holding Incremental Term Commitments, Term B-1 Loans and Loans, (iii) the Term B-1 Commitments of the Term B-1 Lenders shall become “Incremental Term Commitments” and “Term B-1 

Incremental Joinder to Credit Agreement
Bright Horizons Family Solutions LLC 

Commitments” for all purposes of the Amended Credit Agreement and the other Loan Documents and (iv) the Term B-1 Loans shall become “Incremental Term Loans” for all purposes of the Amended Credit Agreement and the other Loan Documents.   
(b)    The Borrower hereby reaffirms all its liens and other obligations granted or incurred pursuant to the Loan Documents, all of which liens and obligations shall remain in full force and effect (as amended and otherwise expressly modified by this Incremental Joinder).
(c)    Except as expressly amended hereby or specifically waived above, all of the terms and provisions of the Credit Agreement and all other Loan Documents are and shall remain in full force and effect and are hereby ratified and confirmed.
(d)    The execution, delivery and effectiveness of this Incremental Joinder shall not, except as expressly provided herein, operate as a waiver of any right, power or remedy of the Lenders or the Administrative Agent under any of the Loan Documents, nor constitute a waiver or amendment of any other provision of any of the Loan Documents or for any purpose except as expressly set forth herein.
(e)    This Incremental Joinder is a Loan Document.
SECTION 7.    Execution in Counterparts
This Incremental Joinder may be executed in any number of counterparts, each of which when so executed and delivered shall be deemed an original, but all such counterparts together shall constitute but one and the same instrument.  Signature pages may be detached from multiple separate counterparts and attached to a single counterpart so that all signature pages are attached to the same document.  Delivery of an executed counterpart by telecopy, .pdf or other electronic transmission shall be effective as delivery of a manually executed counterpart of this Incremental Joinder.
SECTION 8.    Governing Law
This Incremental Joinder shall be governed by and construed in accordance with the law of the State of New York.
SECTION 9.    Section Titles
The section titles contained in this Incremental Joinder are and shall be without substantive meaning or content of any kind whatsoever and are not a part of the agreement between the parties hereto, except when used to reference a section.  Any reference to the number of a clause, sub-clause or subsection of any Loan Document immediately followed by a reference in parenthesis to the title of the section of such Loan Document containing such clause, sub-clause or subsection is a reference to such clause, sub-clause or subsection and not to the entire section; provided, however, that, in case of direct conflict between the reference to the title and the reference to the number of such section, the reference to the title shall govern absent manifest error.  If any reference to the number of a section (but not to any clause, sub-clause or subsection thereof) of any Loan Document is followed immediately by a reference in parenthesis to the title of a section of any Loan Document, the title reference shall govern in case of direct conflict absent manifest error.
SECTION 10.    Notices
All communications and notices hereunder shall be given as provided in the Credit Agreement.

Incremental Joinder to Credit Agreement
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SECTION 11.    Severability
In case any provision in or obligation under this Incremental Joinder shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations, or of such provision or obligation in any other jurisdiction, shall not in any way be affected or impaired thereby.
SECTION 12.    Successors
The terms of this Incremental Joinder shall be binding upon, and shall inure to the benefit of, the parties hereto and their respective successors and assigns permitted by the Credit Agreement.
SECTION 13.    Waiver of Jury Trial
EACH PARTY TO THIS INCREMENTAL JOINDER HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER THIS INCREMENTAL JOINDER OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO THIS INCREMENTAL JOINDER, OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS INCREMENTAL JOINDER MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION 13 WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY. 

[SIGNATURE PAGES FOLLOW]

EXHIBIT 10.1
Execution Version

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

	
				
	 
	BRIGHT HORIZONS FAMILY SOLUTIONS LLC

	 
	 
	 

	 
	By:
	 
	/s/ Elizabeth Boland

	 
	Name:
	 
	Elizabeth Boland

	 
	Title:
	 
	Chief Financial Officer

[SIGNATURE PAGE TO INCREMENTAL JOINDER TO CREDIT AGREEMENT]

EXHIBIT 10.1
Execution Version

	
				
	 
	GOLDMAN SACHS BANK USA, as Administrative Agent and a Term B-1 Lender

	 
	 
	 

	 
	By:
	 
	/s/ Anisha Malhotra

	 
	Name:
	 
	Anisha Malhotra

	 
	Title:
	 
	Authorized Signatory

[SIGNATURE PAGE TO INCREMENTAL JOINDER TO CREDIT AGREEMENT]

EXHIBIT 10.1
Execution Version

Exhibit A
GUARANTOR ACKNOWLEDGMENT TO
INCREMENTAL JOINDER
TO
CREDIT AGREEMENT

Each of the undersigned hereby acknowledges the terms of the Incremental Joinder to Credit Agreement, dated as of the date hereof (the “Incremental Joinder”), which amends the Credit Agreement, dated as of January 30, 2013 (as amended by Amendment No. 1, dated as of November 19, 2014, among the Borrower and the Lenders party thereto, the “Credit Agreement”; capitalized terms not otherwise defined herein shall have the meaning ascribed to them in the Credit Agreement), by and among the Borrower, BRIGHT HORIZONS CAPITAL CORP., a Delaware corporation (“Holdings”), GOLDMAN SACHS BANK USA, as Administrative Agent, Swing Line Lender and L/C Issuer, the Lenders and the other parties party thereto from time to time) and agrees that the terms of the Incremental Joinder shall not affect in any way its guarantees, obligations, liabilities and liens granted or incurred by it under the Loan Documents, all of which guarantees, obligations, liabilities and liens shall remain in full force and effect and each of which is hereby reaffirmed.
This acknowledgment may be executed in any number of counterparts, each of which when so executed and delivered shall be deemed an original, but all such counterparts together shall constitute but one and the same instrument.  Signature pages may be detached from multiple separate counterparts and attached to a single counterpart so that all signature pages are attached to the same document.  Delivery of an executed counterpart by telecopy, .pdf or other electronic transmission shall be effective as delivery of a manually executed counterpart of this consent.  Notices to parties hereto shall be given as provided in the Credit Agreement.
The terms of the Incremental Joinder shall be binding upon, and shall inure to the benefit of, the parties hereto and their respective successors and assigns.
This acknowledgment shall be governed by and construed in accordance with the law of the State of New York. 
This acknowledgment is a Loan Document.
Dated as of December 9, 2014.
[SIGNATURE PAGES FOLLOW]

EXHIBIT 10.1
Execution Version

Acknowledged and agreed as of the date of the Incremental Joinder:
	
				
	 
	BRIGHT HORIZONS CAPITAL CORP.

	 
	BRIGHT HORIZONS LLC

	 
	BRIGHT HORIZONS CHILDREN'S CENTERS LLC

	 
	CORPORATE FAMILY SOLUTIONS LLC

	 
	RESOURCES IN ACTIVE LEARNING

	 
	 
	 

	 
	By:
	 
	 

	 
	Name:
	 
	 

	 
	Title:
	 
	 

47559188_6
SECURE_ENV:\95130079\5\71620.0054

EXHIBIT 10.1
Execution Version

Annex I

	
		
	Term B-1 Lender
	Term B-1 Commitment

	Goldman Sachs Bank USA
	$165,000,000Quebec - Exhibit 4.1 - Filed by newsfilecorp.com

Exhibit 4.1 

 

 

QUÉBEC 

 

•% GLOBAL NOTES SERIES • 

DUE • 

 

	FISCAL AGENCY AGREEMENT

FISCAL AGENCY AGREEMENT 

           
THIS AGREEMENT, dated as of •, 

	BETWEEN: 	QUÉBEC, as issuer 
	 	 
	  	(the “Issuer”), 
	 	 
	AND: 	•, a New York banking
      corporation, as fiscal agent, registrar, principal paying agent and
      transfer agent 
	 	 
	  	(in all such capacities, the
      “Fiscal Agent”), 

            WHEREAS
pursuant to a terms agreement (the “Terms Agreement”), dated •, among the
Issuer, on the one hand, and • and •, each acting jointly on behalf of
themselves and the several Underwriters named therein, on the other hand, which
incorporates by reference all of the provisions of the Québec Underwriting
Agreement Standard Provisions (Debt Securities), dated •, the Issuer has agreed
to create, issue and sell U.S.$• aggregate principal amount of •% Global Notes
Series • due • (herein collectively called the “Notes” or, individually, a
“Note”); 

           
WHEREAS the sale of the Notes pursuant to the Terms 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 certificates (the “Global Notes”) registered in the name of
Cede & Co., as nominee of The Depository Trust Company, New York (“DTC”),
and held by •, as custodian for DTC (the “Custodian”), with beneficial interests
in the Notes represented, with limited exceptions, through book-entry accounts
of financial institutions acting on behalf of owners of such beneficial
interests as direct and indirect participants in DTC; 

           
WHEREAS owners of beneficial interests in the Notes are not, except in
limited circumstances described in Section 5 (Replacements, Exchange and
Transfer of the Global Notes and the Certificated Notes), entitled to
receive Notes represented by physical certificates or to have Notes registered
in their names; and 

           
WHEREAS all Notes are recorded in a register held by the Fiscal Agent, and are registered in the name of Cede & Co., for the
benefit of holders of Notes through DTC via its direct and indirect
participants, including Euroclear SA/NV (“Euroclear”) and Clearstream Banking
société anonyme (“Clearstream, Luxembourg”) (together, the “Clearing Systems”);

           
NOW THEREFORE it is hereby agreed as follows: 

1.       
Definitions 

(1) Terms and expressions defined in the terms and conditions
of the Notes attached as Schedule B shall have the same meaning when used in
this Agreement unless otherwise defined herein or unless the context otherwise
requires. “Noteholders” or “holders of Notes” or “holders”
or “registered holders” refers to persons entered in the Register as
registered holders of Notes. 

(2) “Corporate Trust Office of the Fiscal Agent” will be
at the address of the Fiscal Agent specified in Section 21 (General)
hereof or such other address as to which the Fiscal Agent may give notice to the
Issuer. 

(3) “Responsible Officer” means any officer within the
Corporate Trust Office of the Fiscal Agent, including any director, vice
president, assistant vice president, assistant secretary, assistant treasurer,
trust officer or any other officer of the Fiscal Agent customarily performing
functions similar to those performed by any of the above designated officers and
also means, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of his knowledge of and
familiarity with the particular subject and in each case who shall have direct
responsibility for the administration of this Agreement. 

2.       
Appointment 

The Issuer hereby appoints • as its registrar, fiscal agent,
transfer agent and principal paying agent in respect of the Notes upon and
subject to the terms and conditions herein and therein contained and • hereby
accepts such appointments. 

3.       
Issue of the Notes 

(1) The Notes shall 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 shall be executed by the Issuer. The Global Notes will be substantially
in the form attached as Schedule A, with such changes as may be agreed between
the Issuer and the Fiscal Agent. The aggregate principal amount of Notes to be
issued and outstanding at any time in the form of the Global Notes or physical
certificates (the “Certificated Notes”) issued in accordance with Section
5 (Replacements, Exchange and Transfer of the Global Notes and the
Certificated Notes) shall not exceed U.S.$• except to the extent that Notes
are further issued in accordance with Section 19 (Further Issues).
Forthwith after such execution, the Global Notes shall be delivered to the
Fiscal Agent and shall be authenticated by the Fiscal Agent (or by such other
person as the Fiscal Agent may appoint for such purpose with the consent of the
Issuer), and delivered to or to the order of the Issuer pursuant to a written
direction of the Issuer. 

(2) Owners of beneficial interests in the Global Notes will
not, except in the limited circumstances described in Section 5
(Replacements, Exchange and Transfer of the Global Notes and the Certificated
Notes), be entitled to receive Notes represented by Certificated Notes or to
have Notes registered in their names and will not be considered holders thereof under this Agreement or the Notes. The
Certificated Notes, if any, will be substantially in the form of the Global
Notes attached as Schedule A with the appropriate changes thereto (and including
a summary of terms and condition of the Notes), consistent with the provisions
of this Agreement, as may be agreed between the Issuer and the Fiscal Agent.

-2- 

(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
the Issuer in accordance with Section 5 (Replacements, Exchange and Transfer
of the Global Notes and the Certificated Notes). The Global Notes shall be
in the principal amount from time to time endorsed thereon. The Fiscal Agent
shall cause DTC to establish on its book-entry Clearing System an account in the
name of the Fiscal Agent, as registrar and transfer agent for the Notes (the
“Fiscal Agent Segregated Account”), for the purpose of facilitating the initial
distribution of Notes in accordance with procedures previously agreed to by the
Issuer, the Fiscal Agent and DTC. The Fiscal Agent Segregated Account is
maintained exclusively for book-keeping purposes and for purposes of
facilitating timely transfers of Notes, and the Fiscal Agent shall not be deemed
the owner or holder of the Notes recorded therein for any purpose under this
Agreement or under the terms of the Notes. The Issuer acknowledges and agrees
that the Fiscal Agent Segregated Account will be subject to the agreements,
rules and procedures from time to time governing DTC participant accounts
(collectively, the “DTC Agreements”). 

(4) So long as Cede & Co., as nominee of DTC, is the
registered owner of the Global Notes and subject to applicable law, DTC or its
nominee, as the case may be, will be considered the sole owner or holder of the
Notes represented by the Global Notes for all purposes under this Fiscal Agency
Agreement and the Notes, notwithstanding any notice to the contrary, and neither
the Issuer 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 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) by the Minister of Finance or the
Deputy Minister of Finance or any other authorized representative of the Issuer,
and shall be authenticated by the Fiscal Agent upon written authorization of the
Issuer (or by such other person as the Fiscal Agent may appoint for such purpose
with the consent of the Issuer). 

4.       
The Register and Transfers 

(1) The Fiscal Agent, as registrar and transfer agent of the
Issuer, shall maintain at its principal office in New York, a Register for (i)
registering and maintaining a record of the holdings of Notes, (ii) registering
transfers between holders of Notes, (iii) registering and maintaining a record
of holders of Certificated Notes in the event any are issued in the limited
circumstances described in Section 5 (Replacements, Exchange and Transfer of
the Global Notes and the Certificated Notes), (iv) registering transfers of
Certificated Notes in the event any are issued in the limited circumstances
described in Section 5 (Replacements, Exchange and Transfer of the Global Notes and
the Certificated Notes) and (v) registering and maintaining a record of any
further issues of Notes pursuant to Section 19 (Further Issues) and any
subsequent transfers thereof and shall be responsible for transmitting to the
Issuer any notices from holders of Notes. 

-3- 

(2) In the event Certificated Notes are issued in exchange for
the Global Notes under the limited circumstances described in Section 5
(Replacements, Exchange and Transfer of the Global Notes and the Certificated
Notes), the Fiscal Agent shall (i) register and maintain a record of holders
of Certificated Notes and (ii) register transfers of Notes among holders of
Certificated Notes and between holders of Certificated Notes and participants in
DTC, in accordance with such procedures as the Fiscal Agent shall deem
reasonable upon consultation with the Issuer. 

(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) within Euroclear or Clearstream, Luxembourg or between
Euroclear and Clearstream, Luxembourg participants, or (ii) between DTC
participants. 

(4) No service charge shall be payable by the presenter for any
registration, registration of transfer or exchange of the Notes provided that
the Fiscal Agent may require payment by the transferee of a sum sufficient to
cover any stamp or other tax or governmental charge in connection therewith.

(5) The Register shall at all reasonable times during regular
business hours be open for inspection by the Issuer and any agent of the Issuer.
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 the Issuer nor the Fiscal Agent shall be required
(i) to register the transfer or exchange of any Notes on any Interest Payment
Date (as such term is defined in the Note) 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 Interest Payment Date and ending on
such Interest Payment Date; (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 the Issuer 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. 

(7) Subject to applicable law, the Issuer, the Fiscal Agent or
any other agents of the Issuer 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 any Notes on the direction of the holder thereof, whether named as trustee or
otherwise, as though that person were the beneficial owner thereof. 

(8) The parties hereto acknowledge that in order to help the
United States government fight the funding of terrorism and money laundering activities,
pursuant to Federal regulations that became effective on October 1, 2003
(Section 326 of the USA PATRIOT Act) requires all financial institutions to
obtain, verify, record and update information that identifies each person
establishing a relationship or opening an account. The parties to this Agreement
agree that they will provide to the Fiscal Agent such information as it may
request, from time to time, in order for the Fiscal Agent to satisfy the
requirements of the USA PATRIOT Act, including but not limited to the name,
address, tax identification number and other information that will allow it to
identify the individual or entity who is establishing the relationship or
opening the account and may also ask for formation documents such as articles of
incorporation or other identifying documents to be provided. 

-4- 

(9) The Fiscal Agent shall not incur any liability for not
performing any act or fulfilling any duty, obligation or responsibility
hereunder by reason of any occurrence of a superior force beyond the control of
the Fiscal Agent (including but not limited to any act or provision of any
present or future law or regulation or governmental authority, any act of God or
war, civil unrest, local or national disturbance or disaster, any act of
terrorism, or the loss or malfunction of utilities, computer (hardware or
software) or communications services, or unavailability of the Federal Reserve
Bank wire or facsimile or other wire or communication facility or any other
event that is unforeseeable or irresistible). 

(10)      The duties, responsibilities
and obligations of Fiscal Agent shall be limited to those expressly set forth in
this Agreement and no duties, responsibilities or obligations arising out of the
Terms Agreement and the Underwriting Agreement Standard Provisions (or any other
agreements relating to the Notes) shall be inferred or implied against the
Fiscal Agent. The Fiscal Agent shall not be required to expend or risk any of
its own funds or otherwise incur any liability, financial or otherwise, in the
performance of any of its duties hereunder. 

(11)      The Fiscal Agent may consult
with legal counsel of its own choosing, at the expense of the Issuer, as to any
matter relating to this Agreement, and the Fiscal Agent shall not incur any
liability in acting in good faith in accordance with any advice from such
counsel.

(12)      The Fiscal Agent may employ,
with the prior written authorization of the Issuer, a custodian, agent, nominee
or delegate to transact or concur in transacting any business and to do or
concur in doing any acts required to be done by the Fiscal Agent (including the
receipt and payment of money) and shall not be responsible for the misconduct or
negligence of any such agent appointed with due care. 

5.       
Replacements, Exchange and Transfer of the Global Notes and the
Certificated 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 5 to authenticate and deliver: 

      
(a)        the Global Notes or the
Certificated Notes, as the case may be, in exchange for or in lieu of the Global Notes or the Certificated Notes,
as the case may be, 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) surrendered to the Fiscal Agent any
mutilated or defaced Global Notes or Certificated Notes, as the case may be, to
be replaced; and (iii) in the case of lost, stolen or destroyed Global Notes or
Certificated Notes, as the case may be, furnished the Fiscal Agent with such
evidence (including evidence as to the serial number of the Global Notes or the
Certificated Notes in question) and indemnity in respect thereof as the Issuer
and the Fiscal Agent may require; 

-5- 

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

      
(c)        upon any registration of a
transfer, a new Global Note or, as the case may be, a new Certificated Note
which shall be issued to the new holder in replacement of the existing Global
Note or Certificated Note thus transferred. Such new Global Note or, as the case
may be, new Certificated Note, shall be duly authenticated by the Fiscal Agent.
Each new Global Note or Certificated Note authenticated and delivered upon any
registration of transfer or exchange for or in lieu of the whole or any part of
any Global Note or Certificated 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 Global Note or Certificated Note, and notwithstanding
anything to the contrary herein contained, such new Global Note or Certificated
Note shall be dated the date of the authentication of such Global Note or
Certificated Note. 

(2) The Issuer will issue or cause to be issued Certificated
Notes upon registration of transfer of, or in exchange for, Notes represented by
the Global Notes (i) if DTC notifies the Issuer that it is unwilling or unable
to continue as depository in connection with the Global Notes or ceases to be a
clearing agency registered under the United States Securities Exchange Act of
1934, as amended, at a time when it is required to be so registered and a
successor depository is not appointed by the Issuer within 90 days after
receiving such notice or becoming aware that DTC is no longer so registered;
(ii) if the Issuer, in its sole discretion at any time, determines not to have
any of the Notes represented by the Global Notes; or (iii) upon request by DTC
to the Fiscal Agent, acting on direct or indirect instructions of the registered
holder of a Global Note or any owner of beneficial interests in the Global Note,
but only after an event of default entitling the registered holders to give the
Issuer written notice that such holders elect to declare the principal amount of
the Notes held by them and represented by the Global Note to be due and payable
has occurred and is continuing, or, if DTC is unwilling or does not promptly
make that request to the Issuer, then any beneficial owner of an interest in
such Global Note shall be entitled to make such request with respect to such
interest. The Issuer shall bear the costs and expenses of printing or preparing
any Certificated Notes. 

-6- 

(3) Upon any such issuance pursuant to Section 5(2) of the
Certificated Notes in exchange for all the Notes represented by the Global
Notes, (i) the Issuer shall promptly make available to the Fiscal Agent a
reasonable supply of Certificated Notes in blank form to proceed with such
issuance, (ii) DTC shall cause the Global Notes to be delivered 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 the Global Notes to be exchanged for
such Certificated Notes, (iv) the Fiscal Agent shall cancel the 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 Cede & Co. on the Register. The Fiscal Agent
shall have at least 30 days from the date of its receipt of Certificated Notes
and registration information to authenticate and deliver such Certificated
Notes. Such Certificated Notes shall be registered in such names and in such
denominations as DTC, pursuant to instructions from direct or indirect
participants, shall direct and 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 be a valid obligation of the Issuer, 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 due and prior
to the date of such payment. 

(4) The Issuer expressly acknowledges that if Certificated
Notes are not promptly issued to the owners of beneficial interests in a Global
Note in accordance with this Section 5, then an owner of a beneficial interest
will be entitled to pursue any remedy under this Agreement, the Global Notes or
applicable law with respect to the portion of the Global Note representing that
owner’s interest in the Global Note as if Certificated Notes had been issued.

(5) Unless the Global Notes are presented by an authorized
representative of DTC to the Issuer, the Fiscal Agent or their respective agents
for registration of transfer, exchange or payment, and any replacement Global
Notes are registered in the name of a nominee of DTC and any payment is made to
such nominee, any transfer, pledge or other use of the Global Notes for value or
otherwise shall be wrongful since the registered holders of the Global Notes
have an interest in the Notes evidenced by the Global Notes.

6.       
Paying Agents and Transfer Agents 

            The
Fiscal Agent shall act as the principal paying agent and transfer agent for the
Issuer in connection with the Notes. The Issuer may appoint any additional
paying agents or transfer agents or terminate the appointment of any paying
agents or transfer agents, except that if Certificated Notes are issued and for
so long as the Notes are listed on the Euro MTF Market of the Luxembourg Stock
Exchange and if the rules of such stock exchange so require, the Issuer will
appoint and maintain a paying agent and transfer agent in Luxembourg (the
“Luxembourg Paying Agent”) to act on its behalf. The Issuer will also ensure
that, to the extent possible, it maintains a paying agent in a Member State of
the European Union that is not obliged to withhold or deduct tax pursuant to
European Council Directive 2003/48/EC or any other law implementing or
complying with, or introduced in order to conform to, such Directive. 

-7- 

7.       
  Payments by the Issuer to the Fiscal Agent 

(1) The Issuer agrees to provide to the Fiscal Agent by 10:00
a.m., New York time, on each date on which a payment of principal or interest
(and any Additional Amounts) in respect of the Notes is due (each a “Payment
Date”) pursuant to the terms and conditions of the Notes such amount as is
required to be paid on such date in immediately available funds in U.S. dollars
to an account in New York designated by the Fiscal Agent. 

(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 the Issuer 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 the Issuer 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 and the Fiscal Agent shall apply such amount
for payment of principal 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 monies that are due and payable. Subject to any relevant unclaimed property
laws, the Fiscal Agent shall, to the extent permitted by law, return to the
Issuer 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; thereafter, the holders of Notes shall look only
to the Issuer for any payment of such funds.

(4) The Fiscal Agent is authorized by the Issuer to open an
account for the purposes contemplated in this Section 7. Such account will not
bear any interest or investment income on funds deposited unless otherwise
agreed to in writing by the Fiscal Agent and the Issuer. The Fiscal Agent shall
provide to the Issuer monthly statements identifying transactions, transfers or
holdings of the account and each such statement shall be deemed to be correct
and final upon receipt thereof by the Issuer unless the Fiscal Agent is notified
in writing by the Issuer to the contrary within thirty (30) business days of the
date of such statement. The requirements of this Section 7(4) shall be performed
by the Fiscal Agent by granting the Issuer online read-only access to the
account.

8.       
Payment of Notes 

(1) All payments in respect of the Notes represented by Global
Notes or Certificated Notes will be made by the Fiscal Agent, as paying agent of
the Issuer, to the registered holders of such Global Notes or Certificated Notes
after receipt of such payments from the Issuer as provided in Section 7 (Payments by the Issuer to
the Fiscal Agent) and as set forth in the terms and conditions of the Notes. 

-8- 

(2) The Fiscal Agent, as paying agent and registrar of the
Issuer, shall maintain at its principal office in New York, a Register for
ensuring that payments of principal and interest in respect of the Notes
received by the Fiscal Agent from the Issuer are duly credited to Cede & Co. 

(3) The Issuer shall have the right to require a holder of a
Note, as a condition of payment of the principal of, or interest (and any
Additional Amounts) on a Note, to deliver to the Fiscal Agent a certificate in
such form as the Issuer may from time to time prescribe in order to enable the
Issuer to determine its duties and liabilities with respect to (i) any taxes,
assessments or governmental charges which the Issuer, the Fiscal Agent or the
paying agent may be required to deduct or withhold from payments in respect of
such Note under any present or future law of Canada or any regulation thereunder
and (ii) any reporting or other requirements under such law or regulation. The
Issuer shall 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, the Issuer,
the Fiscal Agent and any other agent of the Issuer 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 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 shall discharge the liability of the Issuer or
the Fiscal Agent and any other agent of the Issuer or the Fiscal Agent on such
Note to the extent of the sum or sums so paid. 

(5) The registered holder of any Note shall be entitled to the
payments of principal of, and interest, and any Additional Amounts on such Note,
free from all rights of set-off or counterclaim between the Issuer 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 the Issuer 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 the Issuer and his transferor
or any previous holder thereof, save in respect to rights of which the Issuer is
required to take notice by statute or by order of a court of competent
jurisdiction. Delivery to the Issuer or the Fiscal Agent by a Noteholder of a
Note or the receipt by such holder of the principal, interest and any Additional
Amounts in respect of such Note shall be a valid discharge to the Issuer 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.

-9- 

(6) Where a Note is registered in more than one name, the
principal 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 the Issuer, the Fiscal
Agent and any other agent of the Issuer or the Fiscal Agent. 

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

9.       
Cancellation of Notes 

            All
Certificated Notes that are presented for transfer pursuant to Section 4(1), all
Notes that are presented for replacement, exchange or registration of transfer
pursuant to Section 5 (Replacements, Exchange and Transfer of the Global
Notes and the Certificated Notes) or repaid on maturity or redeemed or
purchased shall, upon such registration of transfer, replacement or exchange or
upon payment being made, be cancelled by the Fiscal Agent. The Fiscal Agent
shall, as soon as reasonably possible after the date of any such registration of
transfer, replacement, exchange, redemption, purchase or payment, furnish the
Issuer 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. Unless
otherwise instructed by the Issuer, the Fiscal Agent shall destroy the cancelled
Notes in its possession in accordance with its customary procedure and provide
the Issuer with a destruction certificate duly signed by a representative of the
Fiscal Agent. 

10.     
Maturity, Redemption and Purchase 

(1) 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 •. 

(2) In accordance with the terms and conditions of the Notes,
upon receipt of a notice of intention to redeem as contemplated in the
provisions under “Maturity, Redemption and Purchases” in the terms and
conditions of the Notes, not less than 30 days nor more than 60 days prior to
the date fixed for redemption, the Issuer shall cause to be given to the Holders
(with a copy to the Fiscal Agent), in accordance with the provisions under
“Notices” in the terms and conditions of the Notes, a notice of redemption
stating: (i) the date fixed for redemption,(ii) the CUSIP Number; (iii) the
redemption price and (iv) if applicable, the place or places of surrender of the
Notes to be redeemed. The Issuer may request the Fiscal Agent to deliver such
notice of redemption to Holders on its behalf provided that the Issuer has given
such request to the Fiscal Agent at least five (5) Business Days prior to the
last day on which notice of redemption may be given to the Holders. 

(3) The Issuer may, if not in default under the Notes ,
purchase Notes at any time in any manner and at any price. If the purchases are made by tender,
tenders must be available to all holders of the Notes alike.

-10- 

11.      Availability
of Documents 

            The
Fiscal Agent shall make copies of the Fiscal Agency Agreement and the Form of
Notes available for inspection, free of charge, by Noteholders during regular
business hours at the principal office of the Fiscal Agent.

12.     
Fees 

            The
Issuer shall pay to the Fiscal Agent such fees and expenses (including but not
limited to fees, expenses and disbursements of counsel and agents) for its
services hereunder as are agreed separately by the Issuer and the Fiscal Agent,
including any applicable value added or equivalent tax. 

13.     
Further Reports 

            The
Fiscal Agent shall provide the Issuer upon written request such information
regarding the administration of the Notes expressed in such form as the Issuer
may reasonably require. The Fiscal Agent shall transmit to the Issuer promptly
any notices or other communications addressed to the Issuer that a Responsible
Officer may receive in connection with the Notes, including any notice of any
legal action or proceeding which may be brought against the Issuer. 

14.      Meetings
of Holders of Notes 

(1) The Fiscal Agent shall, on receipt of a written request of
the Issuer or a written request signed in one or more counterparts by the
beneficial holders of not less than 10% of the principal amount of the Notes
then outstanding and upon being indemnified to its satisfaction by the Issuer or
the beneficial 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 satisfactory to it,
the Issuer or such beneficial holders of Notes, as the case may be, may convene
such meeting. Every such meeting shall be held in 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 the Global Notes or
  Certificated Notes, as the case may be, in the manner provided pursuant to the
  provisions under “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 it, and to the Issuer, unless the meeting has been called by the
  Issuer. 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 prior to 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 the Issuer or (ii) in the case of Notes being represented
by the Global Notes, 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. 

-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. All notices of meetings to the
holder of a Global Note 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 the 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 the Global Notes in accordance with the applicable
procedure of the Clearing Systems. For greater certainty, it is acknowledged
that none of the Issuer, 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 the Notes with meeting materials and voting
rights as if such non-registered holders of Notes were registered holders
thereof. 

(4) Some 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 some person present to be chairman,
and, failing such choice, the Issuer 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 such business day following thereafter) at
  the same time and place unless the chairman shall appoint some other place, day
  or time of which not less than seven days’ notice shall be given in the manner
  provided above. At any adjourned meeting called by the Issuer 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. 

-12- 

(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.

(8) In 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 U.S.$1,000 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 is present in person or by proxy, only one of them may vote in respect of
each U.S.$1,000 principal amount of Notes of which they are joint holders. 

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

(10)        Subject to
Section 16 (Amendments), 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 the Issuer; provided that, to the extent
that such modification or amendment may affect the rights, duties, protections,
indemnities and immunities of the Fiscal Agent, the Issuer shall not propose
such modification or amendment and such power shall not be exercised, without
the prior written consent of the Fiscal Agent; 

(b)              
power 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 any default on the part of the Issuer in complying with any
provisions of this Agreement or the Notes or 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; 

-13- 

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, (a) without the consent of the holder of each such Note affected
thereby: (i) change the stated maturity or interest payment date(s) 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; (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; or (b) without
the consent of the Fiscal Agent, alter the rights, duties, protections,
indemnities or immunities of the Fiscal Agent. 

(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 66 2/3% 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 the 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 66 2/3% of the aggregate principal amount of the Notes
represented at the meeting in person or by proxy or as an instrument in writing
signed by the holders of not less than 66 2/3% in 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 the Issuer 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 Section 14(11) shall be
binding upon all the holders of Notes (whether or not a signatory). Subject to
the provisions for its satisfactory indemnity herein contained, the Fiscal Agent
shall be bound to give effect accordingly to every such Extraordinary
Resolution. 

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

-14- 

(a)              
for the deposit of instruments appointing proxies at such place as the Fiscal
Agent, the Issuer 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 the Issuer 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; and 

(c)              
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 of 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) The Issuer agrees to indemnify and hold harmless the Fiscal
Agent against all claims, actions, demands, damages, costs, liabilities,
expenses and losses arising out of or relating to the Fiscal Agent’s duties as
fiscal agent, registrar, transfer agent and principal paying agent hereunder for
the Issuer, except such as may result from the Fiscal Agent’s gross negligence,
willful misconduct or bad faith (i.e., intentional or gross fault) or that of
its directors, officers, employees or representatives. 

(2) This Section 15 shall survive the termination of this
agreement, payment in full of all obligations of the Notes and under this
Agreement, whether by redemption, repayment or otherwise and the resignation or
removal of the Fiscal Agent. 

16.     
Amendments 

(1) This Agreement and the Notes may be amended by the Issuer
and the Fiscal Agent without notice to or the consent of the holders of Notes,
for the purposes of: (i) curing any ambiguity; (ii) curing, correcting or
supplementing any defective provisions contained herein or therein; (iii)
effecting the issue of further Notes of the Issuer pursuant to Section 19
(Further Issues); or (iv) in any other manner in which the Issuer, on the
one hand, and the Fiscal Agent, on the other hand, acting on the advice of
counsel, may deem necessary or desirable and which will not be inconsistent with this
Agreement or the Notes and which in the reasonable opinion of the Issuer, on the
one hand, and the Fiscal Agent, on the other hand, will not adversely affect the
interests of the holders of Notes.

-15- 

(2) This Agreement may also be amended by Extraordinary
Resolution of the holders of the Notes as specified in Section 14 (Meetings
of Holders of Notes) of this Agreement and in the terms and conditions of
the Notes. 

17.     
The Fiscal Agent 

(1) In acting under this Agreement and in connection with the
Notes, the Fiscal Agent is acting solely as agent of the Issuer and does not
assume any obligation or relationship of agency 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 (i.e., as mandatary) for
the holders of the Notes in a separate account or accounts for payment to the
holders of Notes. The Fiscal Agent shall not be liable to pay interest or
investment income to the Issuer on any moneys received from the Issuer for the
purposes of payment pursuant to Section 7 (Payments by the Issuer to the
Fiscal Agent).

(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 they would have if the Fiscal Agent was not acting as agent
hereunder, and may engage or be interested in any financial or other transaction
with the Issuer, and may act on behalf of, or as a depository, trustee or agent
for, any committee or body of holders of Notes or holders of other obligations
of the Issuer as freely as if the Fiscal Agent was 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, telecopier 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. 

18.     
Resignation or Replacement of Fiscal Agent 

(1) The Issuer agrees that there shall at all times be a
registrar, fiscal agent, transfer agent, and principal paying agent hereunder
until the earlier of (i) there being no Notes outstanding, or (ii) the Issuer
having established to the satisfaction of the Fiscal Agent that the Issuer may
avail itself of defenses under all relevant laws for the prescription of actions
in respect of any outstanding Notes. 

-16- 

(2) The Fiscal Agent may resign at any time by sending at least
ninety days’ written notice by registered mail to the Issuer. Upon receipt of such notice,
the Issuer shall appoint another financial institution or institutions as
successor registrar, fiscal agent, transfer agent and principal paying agent
under this Agreement. Subject to the provisions hereof, the Issuer 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 registrar, fiscal agent, transfer agent and principal
paying agent under this Agreement provided that it gives the Fiscal Agent not
less than ninety 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 registrar, fiscal agent, transfer agent and
principal paying 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 registrar, fiscal agent, transfer agent and
principal paying agent all funds of the Issuer then held by it and the Issuer
shall pay to the Fiscal Agent all amounts owed by the Issuer to the Fiscal
Agent, pursuant to this Agreement up to the said effective date. If within 30
days of receipt of the notice of such resignation by the Fiscal Agent, no
successor registrar, fiscal agent, transfer agent and principal paying agent
shall have been appointed by the Issuer, then the Fiscal Agent may petition any
court of competent jurisdiction for the appointment of a successor registrar,
fiscal agent, transfer agent and principal paying agent at the expense of the
Issuer. 

(3) If the Fiscal Agent shall be adjudged a 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 registrar, fiscal agent, transfer agent
and principal paying agent shall be appointed by the Issuer. Upon such an
appointment of a successor registrar, fiscal agent, transfer agent and principal
paying 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 registrar, fiscal agent,
transfer agent and principal paying agent shall have been appointed by the
Issuer, any holder of a Note, on behalf of itself and all other holders of
Notes, or the Fiscal Agent, may petition any court of competent jurisdiction for
the appointment of a successor registrar, fiscal agent, transfer agent and
principal paying agent. 

(4) Any appointment by the Issuer of a paying agent or transfer
agent under this Section 18 shall be subject to Section 6 hereof. 

19.     
Further Issues 

            The
Issuer may from time to time, without the consent of the holders of the Notes,
create and issue further notes having the same terms and conditions as the Notes
(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 thereon), and
such further notes shall be consolidated and form a single series with the
Notes. Any further notes forming a single series with the outstanding Notes
shall be issued with the benefit of and subject to an agreement supplemental to
this Agreement. 

-17- 

20.      Rights
and Limitations of Liability of Fiscal Agent 

(1) In no event shall the Fiscal Agent be responsible or liable
for special, indirect, punitive or consequential loss or damage of any kind
whatsoever (including, but not limited to, loss of profit) irrespective of
whether the Fiscal Agent has been advised of the likelihood of such loss or
damage and regardless of the form of action (i.e., for greater certainty, any
liability shall be limited to direct and immediate damages). 

(2) The Fiscal Agent may not be relieved from liabilities for
its own gross negligence, bad faith or willful misconduct (i.e., intentional or
gross fault), except that: 

(a)        the Fiscal Agent
will not be liable for any error of judgment made in good faith by a Responsible
Officer, unless it is provided that the Fiscal Agent was negligent in
ascertaining the pertinent facts; and 

(b)        the Fiscal Agent
will not be liable with respect to any action it takes or omits to take in good
faith in accordance with a direction received by it at the direction of the
Issuer or the requisite number of Noteholders, as the case may be. 

(3) The Fiscal Agent may conclusively rely upon any document
believed by it to be genuine and to have been signed or presented by the proper
person.

(4) The Fiscal Agent shall not be charged with knowledge of
documents to which it is not a party and delivery of any reports or information
to the Fiscal Agent do not constitute actual knowledge of the Fiscal Agent of
the information contained in such reports or information. 

21.     
General 

(1) Any notice pursuant to this Agreement shall be in writing
in English. Any notice pursuant to this Agreement shall be deemed to have been
duly given upon the dispatch of such notice by registered mail, “pdf” attachment
to an e-mail or telecopier (receipt confirmation requested), addressed to the
Issuer or to the Fiscal Agent as follows: 

	Issuer: 	Address: 	Ministère des Finances 
	  	  	8, rue Cook, 2e étage 
	  	  	Québec, Québec G1R 0A4 
		 	Canada
	  	Attention: 	Direction générale des opérations
      bancaires 
	  	  	et financières et des relations
      avec les agences 
	  	  	de notation 
	  	Fax No: 	(418) 528-1240 
	  	Telephone No: 	(418) 528-1479

-18- 

	With a copy to: 	  	  
	  	  	  
	  	Address: 	Ministère des Finances 
	  	  	12 rue St-Louis, bureau 2.27
  
	  	  	Québec, Québec G1R 5L3 
	  	Attention: 	Direction générale du financement
      des 
	  	  	organismes publics et de la
      documentation 
	  	  	financière 
	  	Fax No: 	(418) 643-4700 
	  	Telephone No: 	(418) 643-8141 
	  	  	  
	  	  	  
	Fiscal Agent: 	Address: 	• 
	 	 	• 
		 	• 
		 	• 
	  	Fax No: 	• 

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) All notices to the holders will be valid (i) in the case of
Certificated Notes, if sent by first class mail (or equivalent) or, if posted to
an overseas address, by airmail, or if delivered, to each holder (or the first
named of joint holders) at each such holder’s address as it appears in the
Register held by the Fiscal Agent; (ii) in the case of Notes represented by a
Global Note, if delivered to DTC for communication by it to the persons shown in
its records as having interests therein and (iii) in either case, if and so long
as the Notes are admitted to trading on, and listed on any stock exchange or are
admitted to trading by another relevant authority, if in accordance with the
rules and regulations of the relevant stock exchange or other relevant
authority. As long as the Notes are listed on the Luxembourg Stock Exchange, and
the rules of the Luxembourg Stock Exchange so require, notices will be published
in a leading newspaper having general circulation in Luxembourg (which is
expected to be the Luxemburger Wort) or on the Luxembourg Stock Exchange
website at www.bourse.lu. Any such notice shall be deemed to have been given on
the date of such delivery (or, if delivered more than once or on different
dates, on the first date on which delivery is made) or, in the case of mailing,
on the fourth weekday following such mailing and, in the case of publication, 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.

(3) The Fiscal Agent shall be entitled to treat a facsimile,
pdf or e-mail communication or communication by other similar electronic means
in a form satisfactory to the Fiscal Agent (“Electronic Methods”) from a
person purporting to be (and whom the Fiscal Agent, acting reasonably, believes
in good faith to be) an authorized signatory of the Issuer as sufficient
instructions and authority of the Issuer to act and shall have no duty to verify
or confirm that person is so authorized. The Fiscal Agent shall
have no liability for any losses, liabilities, costs or expenses incurred by it
as a result of such reliance upon or compliance with such instructions or
directions. 

-19- 

(4) The Issuer acknowledges and agrees that it is fully
informed of the risks associated with Electronic Methods of transmitting
instructions to the Fiscal Agent and that there may be more secure methods of
transmitting instructions than the method(s) selected by it, but that it is
assuming all risks arising out of the use of Electronic Methods or other methods
selected by it to submit instructions and directions to the Fiscal Agent,
including without limitation the risk of the Fiscal Agent acting on unauthorized
instructions, and the risk of interception and misuse by third parties. The
Issuer shall use all reasonable endeavors to ensure that instructions
transmitted to the Fiscal Agent pursuant to this Agreement are complete and
correct. 

(5) This Agreement shall be governed by and interpreted in
accordance with the laws of Québec and the laws of Canada applicable therein.

(6) This Agreement shall extend to and inure to the benefit of
and be binding upon the Issuer, the Fiscal Agent and their respective successors
and assigns. 

(7) 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. 

22.      Jurisdiction
of Courts 

            The
Issuer hereby appoints the person from time to time who holds the position of
Delegate General of Québec in New York, One Rockefeller Plaza, 26th Floor, New
York, New York 10020-2102, as its authorized agent (the “Authorized Agent”) upon
whom process may be served in any action arising from this Agreement which may
be instituted in any State or Federal court in The City of New York, and
expressly accepts the non-exclusive jurisdiction of any such court in respect of
such action. The Issuer hereby irrevocably waives any immunity to service of
process in respect of any such action to which the Authorized Agent might
otherwise be entitled. Such appointment shall be irrevocable as long as any of
the Notes remain outstanding, except that, if for any reason the Authorized
Agent ceases to be able to act as agent or no longer has an address in The City
of New York, the Issuer will appoint another person or persons in The City of
New York, selected in its discretion, as Authorized Agent(s) and will notify the
Fiscal Agent in writing of such successor Authorized Agent. The Issuer will take
any and all action, including the filing of any and all documents and
instruments that may be necessary to continue such appointment or appointments
in full force and effect as aforesaid. Service of process upon the Authorized
Agent, together with written notice of such service mailed or delivered to the
Issuer at its address set forth in Section 21, shall be deemed in every respect
effective service of process upon the Issuer. Notwithstanding the foregoing, any
action arising from this Agreement may be instituted in any competent court in
Québec. The Issuer hereby waives, to the fullest extent permitted by applicable
law, any immunity to jurisdiction to which it might otherwise be entitled in any
action based on this Agreement which may be instituted as provided in this Section in any
State or Federal court in The City of New York or in any competent court in
Québec. 

-20- 

23.      Waiver
of Jury Trial 

            Each
of the Issuer and the Fiscal Agent hereby irrevocably waives, to the fullest
extent permitted by applicable law, any and all right to trial by jury in any
legal proceeding arising out of or relating to this Agreement, the Notes or the
transaction contemplated hereby. 

-21- 

QUÉBEC 

by:
_____________________________
      
Name:
       Title: 

• 

by:
_____________________________
       Name: 
      
Title: 

SCHEDULE A 

FORM OF GLOBAL NOTE 

Unless this certificate is presented by an authorized
representative of The Depository Trust Company, a New York corporation (“DTC”),
to 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 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. 

Note No. [   ]

QUÉBEC 

 

•% Global Notes Series • due • 

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 securities referred to above (the “Notes”) of Québec,
and which is issued pursuant to a Fiscal Agency Agreement, dated as of •,
between Québec and • 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 also represents any further
notes which Québec may issue, from time to time, pursuant to Section 19
(Further Issues) of the Fiscal Agency Agreement. In the event such
further notes are issued, the word “Note” 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 meanings ascribed
to them in the Fiscal Agency Agreement. Copies of the Fiscal Agency Agreement
are available for inspection during regular business hours and may be obtained
free of charge at the principal office of the Fiscal Agent. 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, 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 on •, 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 Québec at any time default in the payment of any of
the Principal Amount 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
and interest in respect of this Global Note or the 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 • (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 Additional Amounts, if any,
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. 

SUMMARY OF TERMS AND CONDITIONS 

The following constitutes a summary of the terms and conditions
of this Global Note and the Notes and is qualified in its entirety by the more
detailed terms and conditions contained in Schedule B to the Fiscal Agency
Agreement

Form, Denomination and Registration 

The Notes will be issued in the form of one or more fully
registered global notes and all Notes will be recorded in a Register held by a
Fiscal Agent all as more fully set forth in the Fiscal Agency Agreement which
also contains detailed provisions concerning transfers of Notes. 

This Global Note is registered in the name of a nominee of DTC.
This Global Note is exchangeable for Notes registered in the name of a person
other than DTC or its nominee only in the limited circumstances hereinafter
described. Unless and until it is exchanged in whole or in part for Certificated
Notes, this Global Note may not be transferred except as a whole by DTC to a
nominee of DTC or by a nominee of DTC to DTC or another nominee of DTC or by DTC
or any such nominee to a successor of DTC or a nominee of such successor. 

-2- 

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 (i)
if DTC notifies Québec that it is unwilling or unable to continue as depository
in connection with the Global Notes or ceases to be a clearing agency registered
under the United States Securities Exchange Act of 1934, as amended, at a time
when it is required to be so registered and a successor depository is not
appointed by Québec within 90 days after receiving such notice or becoming aware
that DTC is no longer so registered; (ii) if Québec, in its sole discretion at
any time, determines not to have any of the Notes represented by the Global
Notes; or (iii) upon request by DTC to the Fiscal Agent, acting on direct or
indirect instructions of any owner of a beneficial interest in a Global Note,
after an event of default entitling the holder to accelerate the stated maturity
of the Global Note has occurred and is continuing, or, if DTC does not promptly
make that request, then any owner of a beneficial interest in such Global Note
shall be entitled to make such request with respect to such interest. 

Québec
  expressly acknowledges that if Certificated Notes are not promptly issued to the
  owners of beneficial interests in a Global Note as described above, then an
  owner of a beneficial interest will be entitled to pursue any remedy under the
  Fiscal Agency Agreement, the Global Note or applicable law with respect to the
  portion of the Global Note representing that owner’s interest in the Global Note
  as if Certificated Notes had been issued. 

Interest 

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 consisting 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 determined on the basis of a year of 360 days,
when expressed as an annual rate, is equivalent to the applicable rate based on
such period multiplied by a fraction the numerator of which is the actual number
of days in the calendar year in which the period for which such interest is
payable ends and the denominator of which is 360. 

Payments 

Principal of, and interest on the Notes and Additional Amounts,
if any, are payable by Québec in lawful money of the United States of America
(“U.S.$”) to the person registered at the close of business on the relevant
record date in the register held by the Fiscal Agent. With respect to Notes held
by Cede & Co. for DTC participants, Euroclear and Clearstream, Luxembourg,
payment will be made to beneficial owners of the Notes in accordance with
customary procedures established from time to time by DTC, Euroclear and
Clearstream, Luxembourg. 

If any date for payment to the registered holder hereof is not
a Business Day in the applicable place of payment, such registered holder 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. 

-3- 

If Certificated Notes are issued and for so long as the Notes
are listed on the Luxembourg Stock Exchange and the rules of such stock exchange
so require, Québec will appoint and maintain a paying and transfer agent in
Luxembourg. Québec will also maintain a paying agent in a Member State of the
European Union that is not obliged to withhold or deduct tax pursuant to
European Council Directive 2003/48/EC or any other law implementing or complying
with, or introduced in order to conform to, such Directive. 

Payment of Additional Amounts 

All payments of  principal and interest by Québec will be made without withholding or deduction  for, or on account of, any present or future taxes, duties, assessments or  charges of whatever nature imposed or levied by or on behalf of the Government  of Canada or any province, territory or political division thereof or any  authority or agency therein or thereof having power to tax, unless the  withholding or deduction of such taxes, duties, assessments or charges is  required by law or by the interpretation or administration thereof.  In that event, Québec will, subject to its  redemption rights pursuant to the Fiscal Agency Agreement and the Notes, pay  such additional amounts (the “Additional Amounts”) as may be necessary in order  that the net amounts receivable by the
beneficial holder after such withholding or  deduction shall equal the respective amounts of principal or interest which  would have been receivable in respect of the Notes in the absence of such  withholding or deduction; except that no such Additional Amount shall be  payable with respect to any Note: (i) to, or to a third party on behalf of, a beneficial holder who is liable to such taxes, duties, assessments or  charges in respect of such Note by reason of that person having some connection  with Canada other than the mere holding or use outside Canada, or ownership as  a non-resident of Canada, of such Note; or (ii) presented for payment more than  30 days after the Relevant Date (as defined below) except to the extent that  the beneficial holder thereof would have been entitled to such Additional  Amounts on presenting the same for payment on or before such thirtieth day; or  (iii) 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 law implementing or complying with, or introduced in  order to conform to, such Directive; or (iv) presented for payment by or on  behalf of a beneficial 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. As used herein, “Relevant Date” means: (A)  the date on which such payment first becomes due; or (B) if the full amount of  the moneys payable has not been received by the Fiscal Agent on or prior to  such date, the date on which, the full amount of such moneys having been so  received, notice to that effect is duly given to the holders of the Notes in  accordance with the notice procedures described under “Notices” below.

-4- 

Redemption and Purchases 

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 (other than Québec) 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 Québec that
it would be required at, or at any time prior to, maturity of the Notes to pay
Additional Amounts as hereinabove described, the Notes may be redeemed in whole
but not in part at the option of Québec on not less than 30 days’ nor more than
60 days’ published notice in accordance with the provisions set forth below
under “Notices”, at the Principal Amount thereof together with accrued interest.

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

Status of the Notes 

The Notes will be direct, unsecured and unconditional
obligations of Québec for the payment and performance of which the full faith
and credit of Québec will be pledged and will not be secured. The Notes will
rank equally among themselves and with all notes, debentures or other similar
debt securities issued by Québec and outstanding at the date of the issue of the
Notes or issued in the future. 

Events of Default 

In the event that (a) Québec shall default in the payment of
the principal of, 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 45 days or (b) default shall be made in the due performance or observance by
Québec of any covenant or agreement contained in the Notes, other than the
payment of principal, interest or Additional Amounts, or the Fiscal Agency
Agreement and such default shall continue for a period of 60 days or (c) Québec
shall default in the payment of any principal of, or premium or interest, or
additional amounts, if any, 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 45 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 U.S.$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 Québec 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 note or notes representing 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 15th day after delivery of such notice, or, in the cases falling within
(b) above, on the 30th 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. 

-5- 

Notices 

All notices to the holders will be valid (i) in the case of
Certificated Notes, if sent by first class mail (or equivalent) or (if posted to
an overseas address) by airmail, or if delivered, to each holder (or the first
named of joint holders) at each such holder’s address as it appears in the
Register held by the Fiscal Agent; (ii) in the case of Notes represented by a
Global Note, if delivered to DTC for communication by it to the persons shown in
its records as having interests therein and (iii) in either case, if and so long
as the Notes are admitted to trading on, and listed on any stock exchange or are
admitted to trading by another relevant authority, if in accordance with the
rules and regulations of the relevant stock exchange or other relevant
authority. Any such notice shall be deemed to have been given on the date of
such delivery or, in the case of mailing, on the fourth weekday following such
mailing. 

Prescription 

Under current Québec law, an action to enforce a right to
payment under the Notes may be prescribed if it is not exercised within three
years of the date the payment is due. 

Modification 

The Fiscal Agency Agreement contains provisions with respect to
modifying or amending said Agreement and the Notes either without notice to or
the consent of the holder of any Note or by Extraordinary Resolution (as defined
in the Fiscal Agency Agreement) of the holders of Notes and with respect to
convening meetings of registered holders of Notes for such purposes. 

Governing Law 

The Fiscal Agency Agreement and the Notes 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,
enforcement or execution against any property of any order or judgment) made or
given in connection with any proceedings arising out of or in connection with
the Fiscal Agency Agreement and the Notes. 

-6- 

Executed in New York on behalf of Québec as of •.

QUÉBEC 

By:_____________________________
Name: 
Title: 

Authenticated by: 
[   ] 
(as Fiscal
Agent) 
Authentication Date: • 

By:_____________________________
Name: 
Title:

-7- 

SCHEDULE TO THE GLOBAL NOTE 

NO. [   ] 

QUÉBEC 

 

•% Global Notes Series • due • 

 

	Initial Principal 	Additional 	Aggregate 	  
	Amount 	Principal Amount 	Principal Amount 	Authorization 
	  	  	  	  
	  	US$ 	US$ 	  
	  	US$ 	US$ 	  
	  	US$ 	US$ 	  

SCHEDULE B 

TERMS AND CONDITIONS OF THE NOTES 

Status of the Notes 

The Notes will be direct and unconditional obligations of
Québec for the payment and performance of which the full faith and credit of
Québec will be pledged and will not be secured. The Notes will rank equally
among themselves and with all notes, debentures or other similar securities
issued by Québec and outstanding at the date hereof or in the future. 

Form, Denomination and Registration 

The Notes will be issued in the form of one or more fully
registered global notes (the “Global Notes”) registered in the name of Cede
& Co., as nominee of The Depository Trust Company (“DTC”), and held by •, as
custodian for DTC. Beneficial interests in the Notes will be represented through
book-entry accounts of financial institutions acting on behalf of beneficial
owners as direct and indirect participants of DTC, Euroclear SA/NV (“Euroclear”)
or Clearstream Banking, société anonyme (“Clearstream, Luxembourg” and,
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. Beneficial owners of Notes will not, except in
limited circumstances described herein, be entitled to receive Notes represented
by physical certificates or to have Notes registered in their names, and will
not be considered holders thereof under the Fiscal Agency Agreement. See
“Certificated Notes”. Subject to applicable law and the terms of the Fiscal
Agency Agreement, Québec and the Fiscal Agent shall deem and treat registered
holders of the Notes as the absolute owners thereof for all purposes whatsoever
notwithstanding any notice to the contrary; and all payments to, or on the order
of, the registered holders shall be valid and shall discharge the liability of
Québec and the Fiscal Agent on the Notes to the extent of the sum or sums so
paid. 

The Notes will only be sold in denominations of U.S.$5,000 and
in multiples of U.S.$1,000 in excess thereof. 

The Fiscal Agent will be responsible for (i) maintaining a
record of the aggregate holdings of Notes, (ii) ensuring that payments of
principal and interest in respect of the Notes received by the Fiscal Agent from
Québec are duly credited to DTC; and (iii) transmitting to Québec any notices
from beneficial owners of 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, beneficial owners of 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. 

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 on
•. Interest on the Notes will cease to accrue on the maturity date (or the date
fixed for redemption or repayment) unless, upon due presentation of the Notes,
payment of principal 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 consisting 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. 

Payments 

Principal of, and interest and Additional Amounts (as defined
below under “Payment of Additional Amounts”), if any, on, the Notes are payable
by Québec in U.S. dollars to the person registered at the close of business on
the relevant record date in the register held by the Fiscal Agent. With respect
to Notes held by Cede & Co. for DTC participants, Euroclear and Clearstream,
Luxembourg, payment will be made to beneficial owners in accordance with
customary procedures established from time to time by DTC, Euroclear and
Clearstream, Luxembourg. The Fiscal Agent will act as Québec’s principal paying
agent for the Notes pursuant to the Fiscal Agency Agreement. 

If any date for payment in respect of any Note is not a
Business Day in the applicable place of payment, 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 and
interest and Additional Amounts, if any, on the Notes will be as of 5:00 p.m.,
New York City time, on the fourteenth calendar day preceding the maturity date
or any interest payment date, as applicable. Ownership positions within each
Clearing System will be determined in accordance with the normal conventions
observed by such system. 

Payment of Additional Amounts 

All payments of principal and interest by Québec will be made without withholding or deduction for, or on account of, any present or future taxes, duties, assessments or charges of whatever nature imposed or levied by or on behalf of the Government of Canada, or any province, territory or political division thereof or any authority or agency therein or thereof having power to tax, unless the withholding or deduction of such taxes, duties, assessments or charges is required by law or by the interpretation or administration thereof. In that event, Québec will, subject to its redemption rights pursuant to the Fiscal Agency Agreement and the Notes, pay such additional amounts (the “Additional Amounts”) as may be necessary in order that the net amounts receivable by the
beneficial holder after such withholding or deduction shall equal the respective amounts of principal or interest which would have been receivable in respect of the Notes in the absence of such withholding or deduction; except that no such Additional Amount shall be payable with respect to any Note: (i) to, or to a third party on behalf of, a beneficial holder who is liable to such taxes, duties, assessments or charges in respect of such Note by reason of that person having some connection with Canada other than the mere holding or use outside Canada, or ownership as a non-resident of Canada, of such Note; or (ii) presented for payment more than 30 days after the Relevant Date (as defined below) except to the extent that the beneficial holder thereof would have been entitled to such Additional Amounts on presenting the same for payment on or before such thirtieth day; or (iii) 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 law implementing or complying with, or introduced in order to conform to, such Directive; or (iv) presented for payment by or on behalf of a beneficial 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. As used herein, “Relevant Date” means: (A) the date on which such payment first becomes due; or (B) if the full amount of the moneys payable has not been received by the Fiscal Agent on or prior to such date, the date on which, the full amount of such moneys having been so received, notice to that effect is duly given to the holders of the Notes in accordance with the notice procedures described under “Notices” below.

-2- 

Maturity, Redemption and Purchases 

Unless previously redeemed for tax reasons as provided below,
or purchased, the principal amount 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 (other than Québec) 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 Québec that
it would be required at, or at any time prior to, maturity of the Notes to pay
Additional Amounts as described under “Payment of Additional Amounts”, the Notes
may be redeemed in whole but not in part at the option of Québec on not less
than 30 days’ nor more than 60 days’ published notice in accordance with
“Notices” below, at the principal amount thereof together with accrued interest.

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

-3- 

Transfers 

Transfers between participants within Euroclear and
Clearstream, Luxembourg, and between Euroclear and Clearstream, Luxembourg
participants, will be effected in accordance with procedures established for
this purpose from time to time by Euroclear and Clearstream, Luxembourg. Notes
may be transferred between DTC participants in accordance with procedures
established for this purpose from time to time by DTC. 

Certificated Notes 

Québec will issue or cause to be issued Notes represented by
fully registered physical certificates (“Certificated Notes”) upon registration
of transfer of, or in exchange for, Notes represented by the Global Notes (i) if
DTC notifies Québec that it is unwilling or unable to continue as depository in
connection with the Global Notes or ceases to be a clearing agency registered
under the United States Securities Exchange Act of 1934, as amended, at a time
when it is required to be so registered and a successor depository is not
appointed by Québec within 90 days after receiving such notice or becoming aware
that DTC is no longer so registered; (ii) if Québec, in its sole discretion at
any time, determines not to have any of the Notes represented by the Global
Notes; or (iii) upon request by DTC to the Fiscal Agent, acting on direct or
indirect instructions of the registered holder of a Global Note or any owner of
beneficial interests in the Global Note, but only after an event of default
entitling the registered holders to give the Issuer written notice that such
holders elect to declare the principal amount of the Notes held by them and
represented by the Global Note to be due and payable, or, if DTC does not
promptly make that request, then any beneficial owner of an interest in such
Global Note shall be entitled to make such request with respect to such
interest. The Issuer shall bear the costs and expenses of printing or preparing
any Certificated Notes. 

Upon any such issuance pursuant to the preceding paragraph of
Certificated Notes in exchange for all the Notes represented by the Global
Notes, (i) Québec shall promptly make available to the Fiscal Agent a reasonable
supply of Certificated Notes in blank form to proceed with such issuance, (ii)
DTC shall cause the Global Notes to be delivered 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 the Global Notes to be exchanged for such Certificated Notes, (iv) the
Fiscal Agent shall cancel the 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 Cede & Co. on the register held by the Fiscal Agent. The Fiscal
Agent shall have at least 30 days from the date of its receipt of Certificated
Notes and registration information to authenticate and deliver such Certificated
Notes. Such Certificated Notes shall be registered in such names and in such
denominations as DTC, pursuant to instructions from direct or indirect
participants, shall direct and 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 be a valid obligation of the Issuer, 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 dates for any payment and prior to
the date of such payment. 

Québec expressly acknowledges that if Certificated Notes are
not promptly issued to the owners of beneficial interests in a Global Note as
described above, then an owner of a beneficial interest will be entitled to
pursue any remedy under the Fiscal Agency Agreement, the Global Note or
applicable law with respect to the portion of the Global Note representing that
owner’s interest in the Global Note as if Certificated Notes had been issued. 

-4- 

If Certificated Notes are issued and for so long as the Notes
are listed on the Euro MTF Market of the Luxembourg Stock Exchange and if the
rules of such stock exchange so require, Québec will appoint and maintain a
paying agent and transfer agent in Luxembourg (the “Luxembourg Paying Agent”) to
act on its behalf. Québec will also ensure that, to the extent possible, it
maintains a paying agent in a Member State of the European Union that is not
obliged to withhold or deduct tax pursuant to European Council Directive
2003/48/EC or any other law implementing or complying with, or introduced in
order to conform to, such Directive. 

Modification 

The Fiscal Agency Agreement and the Notes may be amended by
Québec 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 Issue”, or (iv) in any
other manner which Québec and the Fiscal Agent, acting on the advice of counsel,
may deem necessary or desirable and which will not be inconsistent with the
Fiscal Agency Agreement or the Notes and which, in the reasonable opinion of
Québec, will not adversely affect the interests of the holders of Notes. 

The Fiscal Agency Agreement will contain provisions for
convening meetings of registered holders of Notes to modify or amend by
Extraordinary Resolution (as defined below), 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 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 may, without the consent
of the holder of each such Note affected thereby: (i) change the stated maturity
or interest payment date(s) 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; (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; and provided, further, that to the extent that such
modification or amendment may affect the rights, duties, protections,
indemnities and immunities of the Fiscal Agent, the Issuer shall not propose such modification or
amendment and such power shall not be exercised, without the prior written
consent of the Fiscal Agent. 

-5- 

The term “Extraordinary Resolution” is defined in the Fiscal
Agency Agreement as a resolution passed at a meeting of holders of Notes by the
affirmative vote of the holders of not less than 66 2/3% of the 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 66 2/3% in principal amount of
the outstanding Notes. The quorum at any such meeting for passing an
Extraordinary Resolution will be two or more persons holding or representing at
least a majority in principal amount of the Notes at the time outstanding, or at
any adjourned meeting called by Québec or the Fiscal Agent, two or more persons
being or representing holders of Notes whatever the principal amount of the
Notes so held or represented. 

Governing Law 

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

Québec will irrevocably consent to the fullest extent permitted
by law to the giving of any relief (including, without limitation, the making,
enforcement or execution against any property of any order or judgment) made or
given in connection with any proceedings arising out of, or in connection with,
the Fiscal Agency Agreement and the Notes. 

Events of Default 

In the event that (a) Québec shall default in the payment of
the principal of, 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 45 days or (b) default shall be made in the due performance or observance by
Québec of any covenant or agreement contained in the Notes, other than the
payment of principal, interest or Additional Amounts, or the Fiscal Agency
Agreement and such default shall continue for a period of 60 days or (c) Québec
shall default in the payment of any principal of, or premium or interest, or
additional amounts, if any, 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 45 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 U.S.$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 Québec at Ministère des Finances, c/o
Direction générale des opérations bancaires et financières et des relations avec
les agences de notation, 8, rue Cook, 2e étage, Québec, Québec, G1R 0A4, 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 note or
notes representing 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
15th day after delivery of such notice, or, in the cases falling within (b)
above, on the 30th 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. 

-6- 

Notices 

All notices to the holders will be valid (i) in the case of
Certificated Notes, if sent by first class mail (or equivalent) or, if posted to
an overseas address, by airmail, or if delivered, to each holder (or the first
named of joint holders) at each such holder’s address as it appears in the
Register held by the Fiscal Agent; (ii) in the case of Notes represented by a
Global Note, if delivered to DTC for communication by it to the persons shown in
its records as having interests therein and (iii) in either case, if and so long
as the Notes are admitted to trading on, and listed on any stock exchange or are
admitted to trading by another relevant authority, if in accordance with the
rules and regulations of the relevant stock exchange or other relevant
authority. As long as the Notes are listed on the Luxembourg Stock Exchange, and
the rules of the Luxembourg Stock Exchange so require, notices will be published
in a leading newspaper having general circulation in Luxembourg (which is
expected to be the Luxemburger Wort) or on the Luxembourg Stock Exchange
website at www.bourse.lu. Any such notice shall be deemed to have been given on
the date of such delivery (or, if delivered more than once or on different
dates, on the first date on which delivery is made) or, in the case of mailing,
on the fourth weekday following such mailing and, in the case of publication, 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 Issue 

Québec may from time to time without the consent of the holders
of the Notes create and issue further notes having the same terms and conditions
as the Notes (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 thereon), and such further notes shall be consolidated and form a
single series with the Notes. Any further notes forming a single series with the
outstanding Notes shall be issued with the benefit of, and subject to, an
agreement supplemental to the Fiscal Agency Agreement. 

Prescription 

Under current Québec law, an action to enforce a right to
payment under the Notes may be prescribed if it is not exercised within three
years of the date the payment is due. 

-7-

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