EXHIBIT 10.2
SEVENTH AMENDING AGREEMENT to the Credit Agreement dated as of November 28,
2000, as amended by a First Amending Agreement dated January 5, 2001, a Second
Amending Agreement dated as of June 29, 2001, a Third Amending Agreement dated
as of December 21, 2001, a Fourth Amending Agreement dated as of December 23,
2002, a Fifth Amending Agreement dated as of March 24, 2003 and a Sixth Amending
Agreement dated as of October 8, 2003, entered into in the City of Montreal,
Province of Quebec, as of November 19, 2004
AMONG: VIDEOTRON LTEE, a company constituted in accordance with the
laws of Quebec, having its registered office at 000 Xxxxx
Xxxxxx Xxxx, 0xx floor, in the City of Montreal, Province of
Quebec (hereinafter called the "BORROWER")
PARTY OF THE FIRST PART
AND: THE LENDERS, AS DEFINED IN THE CREDIT AGREEMENT
(the "LENDERS")
PARTIES OF THE SECOND PART
AND: ROYAL BANK OF CANADA, AS ADMINISTRATIVE AGENT FOR THE
LENDERS, a Canadian bank, having a place of business at 000
Xxx Xxxxxx, 00xx xxxxx, Xxxxx Xxxxx, Xxxxx Bank Plaza, in
the City of Toronto, Province of Ontario (hereinafter called
the "AGENT")
PARTY OF THE THIRD PART
WHEREAS the parties hereto are parties to a
Credit Agreement dated as of
November 28, 2000, as amended by a First Amending Agreement dated January 5,
2001, a Second Amending Agreement dated as of June 29, 2001, a Third Amending
Agreement dated as of December 21, 2001, a Fourth Amending Agreement dated as of
December 23, 2002, a Fifth Amending Agreement dated as of March 24, 2003 and a
Sixth Amending Agreement dated as of October 8, 2003 (as so amended, the "PRIOR
CREDIT AGREEMENT");
WHEREAS the Borrower has requested certain amendments to the Prior
Credit
Agreement to provide it with greater flexibility and, in particular, to allow it
to repay Term Facility C, to increase the Credit under the Revolving Facility,
and to make certain amendments to pricing and to other covenants; and
WHEREAS the parties hereto wish to amend and restate the Prior
Credit
Agreement, as amended pursuant to this Seventh Amending Agreement, in its
entirety, the whole without novation;
WHEREAS the requisite majority of the Lenders has agreed with the Borrower
to the amendments contemplated hereby, and as such, the Lenders have complied
with the provisions of Section 18.14 of the
Credit Agreement, as evidenced by
the signature of each Lender and of the Agent on this Agreement;
NOW THEREFORE, THE PARTIES HERETO AGREE AS FOLLOWS:
I. INTERPRETATION
1. All of the words and expressions which are capitalized herein shall have
the meanings ascribed to them in the Prior
Credit Agreement unless otherwise
indicated herein.
2. The parties have agreed to indicate the amendments to the Prior
Credit
Agreement by showing all (a) additions, by using double-underlined text, and
(b) deletions, by striking out the deleted text.
II. AMENDMENTS
All amendments are shown on the Amended and Restated
Credit Agreement
attached as Schedule 1. A clean, unmarked version of the Amended and Restated
Credit Agreement is also attached as Schedule 2, which clean version will become
the new Credit Agreement (the "CREDIT AGREEMENT") once all conditions precedent
hereunder and in Section 10.2 of the attached Amended and Restated Credit
Agreement have been met.
III. EFFECTIVE DATE AND CONDITIONS
1. This Seventh Amending Agreement shall become effective as of
November 19, 2004 (the "EFFECTIVE DATE"), subject to the fulfilment of all
conditions precedent set out herein and in Section 10.2 of the attached Amended
and Restated Credit Agreement.
2. On the Effective Date, the new Credit Agreement shall supersede the
Prior Credit Agreement in its entirety, except as provided in this section. The
parties hereto agree that the changes to the terms and conditions of the Prior
Credit Agreement set out herein and the execution hereof shall not constitute
novation and all the Security shall continue to apply to the Prior Credit
Agreement, as amended and restated by the Credit Agreement, and all other
obligations secured thereby. Without limiting the generality of the foregoing
and to the extent necessary, (i) the Lenders and the Agent reserve all of their
rights under each of the Security Documents, and (ii) each of the Borrower and
the Guarantors obligates itself again in respect of all present and future
obligations under, INTER ALIA, the Prior Credit Agreement, as amended and
restated by the Credit Agreement.
3. The Borrower shall pay all fees and costs, including legal fees
associated with this Agreement incurred by the Agent as contemplated and
restricted by the provisions of Section 12.14 of the Credit Agreement.
4. The Borrower shall provide the opinion of its counsel, in form and
substance acceptable to the Agent and the Lenders' counsel, with respect to the
power, capacity, and authority of the Borrower and each of the Guarantors to
enter into or intervene in this Seventh Amending Agreement and to perform its
obligations hereunder, as well as with respect to the enforceability of this
Seventh Amending Agreement and the attached Amended and Restated Credit
Agreement in accordance with its terms, and the continued enforceability
(unaffected hereby) of all of the Security.
5. The Borrower undertakes to integrate VTL into it, by way of amalgamation
or otherwise, on or before January 1, 2006 (the "MERGER").
6. The Borrower undertakes to provide the opinion of its counsel, in form
and substance acceptable to the Agent and the Lenders' counsel, with respect to
the power, capacity, and authority of the Borrower to enter into and to perform
its obligations under the Security created or registered following the
occurrence of the Merger as well as with respect to the enforceability of such
Security.
IV. MISCELLANEOUS
1. All of the provisions of the Prior Credit Agreement which are not
amended hereby shall remain in full force and effect.
2. This Agreement shall be governed by and construed in accordance with the
Laws of the Province of
Quebec.
3. The parties acknowledge that they have required that the present
agreement, as well as all documents, notices and legal proceedings entered into,
given or instituted pursuant hereto or relating directly or indirectly hereto be
drawn up in English. Les parties reconnaissent avoir exige la redaction en
anglais de la presente convention ainsi que de tous documents executes, xxxx
xxxxxx et procedures judiciaires intentees, directement ou indirectement,
relativement ou a la suite de la presente convention.
2
IN WITNESS WHEREOF THE PARTIES HERETO HAVE SIGNED THIS AGREEMENT ON THE DATE
AND AT THE PLACE FIRST HEREINABOVE MENTIONED.
VIDEOTRON LTEE ROYAL BANK OF CANADA,
AS AGENT FOR THE LENDERS
Per: /s/ XXXXXXX XXXXXXXX Per: /s/ XXXX XXXXXX
------------------------------------ ------------------------------------
Manager, Agency
Per: Per:
ROYAL BANK OF CANADA THE TORONTO-DOMINION BANK
Per:/s/ XXXXXXX XXXX-COEUR Per: /s/ (ILLEGIBLE)
------------------------------------ ------------------------------------
Authorized Signatory Per: /s/ (ILLEGIBLE)
------------------------------------
Per:
BANK XX XXXXXXXX XXXX XX XXXXXXX, X.X.,
XXXXXX BRANCH
Per: /s/ (ILLEGIBLE) Per: /s/ XXXXXX XXX
------------------------------------ ------------------------------------
Vice President
Per: Per:
CANADIAN IMPERIAL BANK OF COMMERCE THE BANK OF NOVA SCOTIA
Per: /s/ XXXX XXXXXXX Per: /s/ (ILLEGIBLE)
------------------------------------ ------------------------------------
Director
Per: /s/ XXXXX XXXXXXXXX Per: /s/ (ILLEGIBLE)
------------------------------------ ------------------------------------
Managing Director
CITIBANK N.A., CREDIT SUISSE FIRST BOSTON
CANADIAN BRANCH TORONTO BRANCH
Per: /s/ (ILLEGIBLE) Per: /s/ XXXXX XXXXXX
------------------------------------ ------------------------------------
Director
Per: Per:/s/ XXXXX XXXXXXX
------------------------------------
Vice President
3
CAISSE CENTRALE XXXXXXXXXX BANK OF TOKYO-MITSUBISHI (CANADA)
Per: /s/ (ILLEGIBLE) Per: /s/ XXXX X. XXXXXXX
------------------------------------ ------------------------------------
Senior Vice President and General Manager
Per: /s/ (ILLEGIBLE) Per:
------------------------------------
LAURENTIAN BANK OF CANADA NATIONAL BANK OF CANADA
Per: /s/ XXXXX XXXXXXX Per: /s/ XXXXXXX XXXXXXX
------------------------------------ ------------------------------------
Per: /s/ XXXXXX XXXXXXX Per: /s/ (ILLEGIBLE)
------------------------------------ ------------------------------------
HSBC BANK CANADA
Per: /s/ XXXX XXXXXXXXXX
------------------------------------
Per:
4
The undersigned acknowledge having taken cognizance of the provisions of the
foregoing Seventh Amending Agreement and agree that the Guarantees and Security
executed by them (A) remain enforceable against them in accordance with their
terms, and (B) continue to guarantee or secure, as applicable, all of the
obligations of the Persons specified in such Guarantees and Security Documents
in connection with the Prior Credit Agreement, as amended by a First Amending
Agreement dated as of January 5, 2001, a Second Amending Agreement dated as of
June 29, 2001, a Third Amending Agreement dated as of December 21, 2001, a
Fourth Amending Agreement dated as of December 23, 2002, a Fifth Amending
Agreement dated as of March 24, 2003, a Sixth Amending Agreement dated as of
October 8, 2003 and by this Seventh Amending Agreement, and as amended and
restated pursuant to the Credit Agreement:
LE SUPERCLUB VIDEOTRON LTEE GROUPE DE DIVERTISSEMENT SUPERCLUB INC.
Per: /s/ XXXXXXX XXXXXXXX Per: /s/ XXXXXXX XXXXXXXX
------------------------------------ ------------------------------------
VIDEOTRON (1998) LTEE CF CABLE TV INC.
Per: /s/ XXXXXXX XXXXXXXX Per: /s/ XXXXXXX XXXXXXXX
------------------------------------ ------------------------------------
VIDEOTRON (REGIONAL) LTD 0000-0000 XXXXXX INC.
Per: /s/ XXXXXXX XXXXXXXX Per: /s/ XXXXXXX XXXXXXXX
------------------------------------ ------------------------------------
VIDEOTRON TVN INC. LES PROPRIETES SUPERCLUB INC./
(FORMERLY 0000-0000 XXXXXX INC.) SUPERCLUB PROPERTIES INC.
Per: /s/ XXXXXXX XXXXXXXX Per: /s/ XXXXXXX XXXXXXXX
------------------------------------ ------------------------------------
SUPERCLUB VIDEOTRON CANADA INC.
Per: /s/ XXXXXXX XXXXXXXX
------------------------------------
5
The undersigned acknowledges having taken cognizance of the provisions of
the foregoing Seventh Amending Agreement and agrees that the pledge of the
shares of the Borrower executed by GVL pursuant to subsection 9.1.2 of the
Credit Agreement and assumed by it (A) remains enforceable against it in
accordance with its terms, and (B) continues to secure all of the obligations of
the Persons specified in such Security Document in connection with the Prior
Credit Agreement, as amended by a First Amending Agreement dated as of
January 5, 2001, a Second Amending Agreement dated as of June 29, 2001, a Third
Amending Agreement dated as of December 21, 2001, a Fourth Amending Agreement
dated as of December 23, 2002, a Fifth Amending Agreement dated as of March 24,
2003, a Sixth Amending Agreement dated October 8, 2003 and by this Seventh
Amending Agreement, and as amended and restated pursuant to the Credit
Agreement:
QUEBECOR MEDIA INC.
Per: /s/ XXXXXXX XXXXXXXX
------------------------------------
6
SCHEDULE 2
VIDEOTRON LTEE, AS BORROWER
-and-
RBC DOMINION SECURITIES INC., AS LEAD ARRANGER AND BOOKRUNNER
-and-
BANK OF AMERICA, N.A., CANADA BRANCH
BMO XXXXXXX XXXXX INC.
THE TORONTO-DOMINION BANK
THE BANK OF NOVA SCOTIA
as Co-Arrangers
-and-
THE FINANCIAL INSTITUTIONS NAMED
ON THE SIGNATURE PAGES HERETO
as Lenders
ROYAL BANK OF CANADA, AS ADMINISTRATIVE AGENT
as of
November 28, 2000, as amended
--------------------------------------------------------------------------------
$450,000,000
CREDIT AGREEMENT
(AS AMENDED BY A FIRST AMENDING AGREEMENT DATED AS OF JANUARY 5,
2001, A SECOND AMENDING AGREEMENT DATED AS OF JUNE 29, 2001, A THIRD
AMENDING AGREEMENT DATED DECEMBER 12, 2001 AND ACCEPTED BY THE
LENDERS AS OF DECEMBER 21, 2001, A FOURTH AMENDING AGREEMENT DATED AS
OF DECEMBER 23, 2002, A FIFTH AMENDING AGREEMENT DATED AS OF
MARCH 24, 2003, A SIXTH AMENDING AGREEMENT DATED AS OF OCTOBER 8,
2003 AND A SEVENTH AMENDING AGREEMENT DATED AS OF NOVEMBER 19, 2004)
--------------------------------------------------------------------------------
XXXXXX BLAIKIE LLP
0000 Xxxx-Xxxxxxxx Xxxx. Xxxx
Xxxxx 0000
Xxxxxxxx (Xxxxxx) X0X 0X0
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
TABLE OF CONTENTS
PAGE
--------
1. INTERPRETATION............................................................. 1
1.1 Definitions................................................. 1
1.2 Interpretation.............................................. 16
1.3 Currency.................................................... 16
1.4 Generally Accepted Accounting Principles.................... 16
1.5 Division and Titles......................................... 16
2. THE CREDIT................................................................. 16
2.1 The Facility................................................ 16
2.2 The Revolving Facility...................................... 16
3. PURPOSE.................................................................... 17
3.1 Purpose of the Advances..................................... 17
4. ADVANCES, CONVERSIONS AND OPERATION OF ACCOUNTS............................ 17
4.1 Notice of Borrowing -- Direct Advances...................... 17
4.2 LIBOR Advances and Conversions.............................. 17
4.3 Cash Management Facilities.................................. 17
4.4 Operation of Accounts....................................... 18
4.5 Apportionment of Advances................................... 18
4.6 Limitations on Advances..................................... 18
4.7 Notices Irrevocable......................................... 18
4.8 Market for Bankers' Acceptances and Libor Advances.......... 18
4.9 Suspension of BA Advance and Libor Advance Option........... 18
4.10 Limits on BA Advances and Libor Advances.................... 19
4.11 Specific Clause with Regard to Foreign Lenders.............. 19
5. INTEREST AND FEES.......................................................... 19
5.1 Interest on the Prime Rate Basis............................ 19
5.2 Payment of Interest on the Prime Rate Basis................. 19
5.3 Interest on the Libor Basis................................. 19
5.4 Payment of Interest on the Libor Basis...................... 20
5.5 Limits to the Determination of LIBOR........................ 20
5.6 Fixing of LIBOR............................................. 20
5.7 Hedging..................................................... 20
5.8 Interest on the Loan........................................ 20
5.9 Arrears of Interest......................................... 20
5.10 Maximum Interest Rate....................................... 20
5.11 Fees........................................................ 21
5.12 Interest Act................................................ 21
6. BANKERS' ACCEPTANCES....................................................... 21
6.1 Advances by Bankers' Acceptances and Conversions into 21
Bankers' Acceptances........................................
6.2 Acceptance Procedure........................................ 22
6.3 Purchase of Bankers' Acceptances and Discount Notes......... 23
6.4 Maturity Date of Bankers' Acceptances....................... 23
6.5 Deemed Conversions on the Maturity Date..................... 23
6.6 Conversion and Extension Mechanism.......................... 23
6.7 Amounts given to the Lenders do not constitute a 23
prepayment..................................................
6.8 Prepayment of Bankers' Acceptances.......................... 24
6.9 Apportionment Amongst the Lenders........................... 24
6.10 Cash Deposits............................................... 24
6.11 Days of Grace............................................... 24
i
PAGE
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6.12 Obligations Absolute........................................ 24
6.13 Depository Bills and Notes Act.............................. 25
7. ILLEGALITY, INCREASED COSTS AND INDEMNIFICATION............................ 25
7.1 Illegality, Increased Costs................................. 25
7.2 Indemnity................................................... 26
8. PAYMENT, REPAYMENT AND PREPAYMENT.......................................... 26
8.1 Repayment of the Loan....................................... 26
8.2 Amount and Apportionment of Mandatory Repayments............ 26
8.3 Voluntary Repayment and Prepayment of the Loan or 26
Cancellation of the Credit..................................
8.4 Payment of Losses Resulting From a Prepayment or a Mandatory 27
Repayment...................................................
8.5 Currency of Payments........................................ 27
8.6 Payments by the Borrower to the Agent....................... 27
8.7 Payment on a Business Day................................... 28
8.8 Payments by the Lenders to the Agent........................ 28
8.9 Payments by the Agent to the Borrower....................... 28
8.10 Netting..................................................... 28
8.11 Application of Payments..................................... 28
8.12 No Set-Off or Counterclaim by Borrower...................... 28
8.13 Debit Authorization......................................... 28
8.14 Withholding Taxes........................................... 29
9. SECURITY................................................................... 29
9.1 Security for Advances Prior to the Phase II Date............ 29
9.2 Security for Advances Following the Phase II Date........... 30
9.3 Limitations on Guarantees and Security for Advances......... 31
9.4 Further Limitations on Guarantees and Security for 32
Advances....................................................
10. CONDITIONS PRECEDENT....................................................... 32
10.1 Initial Advance under the Revolving Facility and Term 32
Facility A-1................................................
10.2 Initial Advance under the Revolving Facility................ 34
10.3 Conditions Precedent to any Advance......................... 35
10.4 Waiver of Conditions Precedent.............................. 35
10.5 Release of Quebecor Media Guarantee......................... 35
11. REPRESENTATIONS AND WARRANTIES............................................. 35
11.1 Incorporation............................................... 35
11.2 Authorization............................................... 35
11.3 Compliance with Laws and Contracts.......................... 36
11.4 Current Business............................................ 36
11.5 Financial Statements........................................ 36
11.6 Contingent Liabilities and Indebtedness..................... 36
11.7 Title to Assets............................................. 36
11.8 Litigation.................................................. 36
11.9 Taxes....................................................... 37
11.10 Insurance................................................... 37
11.11 No Adverse Change........................................... 37
11.12 Regulatory Approvals........................................ 37
11.13 Compliance with Laws and Licences........................... 37
11.14 Pension and Employment Liabilities.......................... 37
11.15 Priority.................................................... 37
11.16 Complete and Accurate Information........................... 37
11.17 Share Capital............................................... 37
11.18 Absence of Default.......................................... 38
ii
PAGE
--------
11.19 Agreements with Third Parties............................... 38
11.20 Environment................................................. 38
11.21 Survival of Representations and Warranties.................. 38
12. COVENANTS.................................................................. 38
12.1 Preservation of Juridical Personality....................... 38
12.2 Preservation of Licences.................................... 39
12.3 Compliance with Applicable Laws............................. 39
12.4 Maintenance of Assets....................................... 39
12.5 Business.................................................... 39
12.6 Insurance................................................... 39
12.7 Payment of Taxes and Duties................................. 39
12.8 Access and Inspection....................................... 40
12.9 Maintenance of Account...................................... 40
12.10 Performance of Obligations.................................. 40
12.11 Maintenance of Ratios....................................... 40
12.12 Mandatory Repayments........................................ 41
12.13 Maintenance of Security..................................... 41
12.14 Payment of Legal Fees and Other Expenses.................... 41
12.15 Financial Reporting......................................... 42
12.16 Notice of Certain Events.................................... 43
12.17 CF Cable Inter-Creditor Agreement........................... 43
12.18 Accuracy of Reports......................................... 43
13. NEGATIVE COVENANTS......................................................... 43
13.1 Liquidation and Amalgamation................................ 43
13.2 Charges..................................................... 44
13.3 Asset Dispositions.......................................... 44
13.4 Preservation of Capital..................................... 45
13.5 Restrictions on Subsidiaries................................ 45
13.6 Issuance and Transfer of Shares............................. 45
13.7 Acquisitions................................................ 46
13.8 Debt and Guarantees......................................... 46
13.9 Financial Assistance by the VL Group........................ 46
13.10 Subordinated Debt........................................... 47
13.11 Members of the VL Group, Related Party Transactions......... 47
13.12 Derivative Instruments...................................... 47
14. EVENTS OF DEFAULT AND REALIZATION.......................................... 48
14.1 Event of Default............................................ 48
14.2 Remedies.................................................... 49
14.3 Bankruptcy and Insolvency................................... 49
14.4 Notice...................................................... 49
14.5 Costs....................................................... 50
14.6 Relations with the Borrower................................. 50
14.7 Application of Proceeds..................................... 50
15. JUDGMENT CURRENCY.......................................................... 50
15.1 Rules of Conversion......................................... 50
15.2 Determination of an Equivalent Currency..................... 50
16. ASSIGNMENT................................................................. 51
16.1 Assignment by the Borrower.................................. 51
16.2 Assignments and Transfers by the Lenders.................... 51
16.3 Transfer Agreement.......................................... 51
iii
PAGE
--------
16.4 Notice...................................................... 52
16.5 Sub-Participations.......................................... 52
16.6 General..................................................... 52
17. MISCELLANEOUS.............................................................. 53
17.1 Notices..................................................... 53
17.2 Amendment and Waiver........................................ 53
17.3 Determinations Final........................................ 53
17.4 Entire Agreement............................................ 53
17.5 Indemnification and Compensation............................ 53
17.6 Benefit of Agreement........................................ 54
17.7 Counterparts................................................ 54
17.8 Applicable Law.............................................. 54
17.9 Severability................................................ 54
17.10 Further Assurances.......................................... 54
17.11 Good Faith and Fair Consideration........................... 54
17.12 Responsibility of the Lenders............................... 54
17.13 Indemnity................................................... 54
17.14 Language.................................................... 55
17.15 Foreign Lenders............................................. 55
18. THE AGENT AND THE LENDERS.................................................. 55
18.1 Authorization of Agent...................................... 55
18.2 Agent's Responsibility...................................... 56
18.3 Rights of Agent as Lender................................... 57
18.4 Indemnity................................................... 57
18.5 Notice by Agent to Lenders.................................. 57
18.6 Protection of Agent......................................... 57
18.7 Notice by Lenders to Agent.................................. 58
18.8 Sharing Among the Lenders................................... 58
18.9 Derivative Obligations...................................... 59
18.10 Procedure with respect to Advances.......................... 59
18.11 Accounts kept by each Lender................................ 59
18.12 Binding Determinations...................................... 60
18.13 Amendment of Article 18..................................... 60
18.14 Decisions, Amendments and Waivers of the Lenders............ 60
18.15 Authorized Waivers, Variations and Omissions................ 60
18.16 Provisions for the Benefit of Lenders Only -- Power of 60
Attorney for Quebec Purposes................................
18.17 Provisions for the Benefit of Lenders Only.................. 61
18.18 Resignation of Agent........................................ 61
18.19 No Novation................................................. 61
19. FORMAL DATE................................................................ 61
19.1 Formal Date................................................. 61
SCHEDULE "A" -- LIST OF LENDERS AND COMMITMENTS
SCHEDULE "B" -- NOTICE OF BORROWING AND CERTIFICATE
SCHEDULE "B-1" -- NOTICE OF REPAYMENT
SCHEDULE "C" -- TRANSFER AGREEMENT
SCHEDULE "D" -- GUARANTEE
SCHEDULE "E" -- SHARE PLEDGE
SCHEDULE "F" -- OFFICER'S CERTIFICATE
SCHEDULE "G" -- LEGAL OPINION (Initial Closing)
SCHEDULE "G-1" -- LEGAL OPINION (Post Regulatory Approval)
iv
SCHEDULE "H" -- EXISTING SECURITY
SCHEDULE "I" -- PROPERTY OF THE VL GROUP
SCHEDULE "I" -- PROPERTY OF THE VL GROUP
SCHEDULE "J" -- OFFICER'S COMPLIANCE CERTIFICATE
SCHEDULE "K" -- LIMITS TO CERTAIN GUARANTEES AS AT THE PHASE II DATE
SCHEDULE "K" (Part 2, subsection 10.2.5) -- LIMITS TO CERTAIN GUARANTEES AS AT THE
SEVENTH AMENDMENT CLOSING DATE
SCHEDULE "L" -- GUARANTORS AS AT JUNE 29, 2001
SCHEDULE "M" -- MEMBERS OF THE VL GROUP AS AT THE SEVENTH AMENDMENT CLOSING DATE;
GUARANTORS AS AT THE SEVENTH AMENDMENT CLOSING DATE
SCHEDULE "N" -- FORM OF SUBORDINATION AGREEMENT FOR BACK-TO-BACK SECURITIES
v
AMENDED AND RESTATED CREDIT AGREEMENT entered into in the City of Montreal,
Province of
Quebec, as of November 28, 2000, as amended by a First Amending
Agreement dated as of January 5, 2001, a Second Amending Agreement dated as of
June 29, 2001, a Third Amending Agreement dated December 12, 2001 and accepted
by the Lenders as of December 21, 2001, a Fourth Amending Agreement dated as of
December 23, 2002, a Fifth Amending Agreement dated as of March 24, 2003, a
Sixth Amending Agreement dated as of October 8, 2003 and a Seventh Amending
Agreement dated as of November 19, 2004.
AMONG: VIDEOTRON LTEE, a company constituted in accordance with the
laws of
Quebec, having its registered office at 000 Xxxxx
Xxxxxx Xxxx, 0xx floor, in the City of Montreal, Province of
Quebec (hereinafter called the "BORROWER")
PARTY OF THE FIRST PART
AND: THE FINANCIAL INSTITUTIONS NAMED ON THE SIGNATURE PAGE
HEREOF OR FROM TIME TO TIME PARTIES HERETO (the "LENDERS")
PARTIES OF THE SECOND PART
AND: ROYAL BANK OF CANADA, AS ADMINISTRATIVE AGENT FOR THE
LENDERS, a Canadian bank, having a place of business at 000
Xxx Xxxxxx, 00xx xxxxx, Xxxxx Xxxxx, Xxxxx Bank Plaza, in
the City of Toronto, Province of Ontario (hereinafter called
the "AGENT")
PARTY OF THE THIRD PART
WHEREAS the Borrower wishes to borrow certain amounts from the Lenders and
the Lenders have agreed to lend such amounts to the Borrower, subject to and in
accordance with the provisions hereof;
NOW THEREFORE, THE PARTIES HERETO HAVE AGREED AS FOLLOWS:
1. INTERPRETATION
1.1 DEFINITIONS
The following words and expressions, when used in this Agreement or in any
agreement supplementary hereto, unless the contrary is stipulated, have the
following meaning:
1.1.1 "ACQUISITION" means, with respect to any Person, any transaction
or series of related transactions whereby such Person acquires, directly
or indirectly, (a) a business, division, or all or a substantial portion
of the assets of any other Person; (b) any Investment; or (c) by way of
reorganization, consolidation, amalgamation, winding-up, merger,
transfer, sale, lease or other combination, the assets or shares of any
other Person; and "ACQUIRE" and "ACQUIRED" have meanings correlative
thereto;
1.1.2 "ADDITIONAL OFFERING" means an Offering of unsecured Debt
incurred or issued by the Borrower having a term expiring after the
expiry of the Term, the terms and conditions of which Offering will be
substantially the same as those of the HYD Offering, unless otherwise
approved by the Lenders; provided that if the Additional Offering permits
more prepayments than the HYD Offering, unanimous Lender approval will be
required;
1.1.3 "ADVANCE" means any advance by a Lender under this Agreement,
including direct Advances by way of Prime Rate Advances and indirect
Advances by way of BA Advances (or, in the case of Lenders who are
Foreign Lenders who cannot make such forms of Advances, Libor Advances in
Cdn. $, or, in the circumstances set out in Section 4.11, Libor Advances
in US$);
1.1.4 "AFFILIATE" has the meaning ascribed thereto in the Canada
Business Corporations Act and, with respect to any Lender that is a fund
that invests in bank loans, includes any other fund that invests in bank
loans and is advised or managed by the same investment advisor as such
Lender or by an Affiliate of such investment advisor;
1
1.1.5 "AGENCY BRANCH" means the branch of the Agent located at Xxxxx
Xxxx Xxxxx, Xxxxx Xxxxx, 00xx Xxxxx, in the City of Toronto, Province of
Xxxxxxx, X0X 0X0, or such other address in Canada of which the Agent may
notify the Borrower from time to time;
1.1.6 "AGENT" means Royal Bank of Canada in its capacity as agent for
all of the Lenders;
1.1.7 "AGREEMENT", "CREDIT AGREEMENT", "THESE PRESENTS", "HEREIN",
"HEREBY", "HEREUNDER" and other similar expressions refer collectively to
this Credit Agreement and the Schedules and appendices hereto as same may
be amended or amended and restated from time to time, and include any
deed or document which is supplementary or accessory or which is made in
order to complete this Agreement, as all of same may subsequently be
amended, amended and restated, modified, supplemented or replaced from
time to time;
1.1.8 "ANNUAL BUSINESS PLAN" means, for any financial year,
(a) detailed projected balance sheets, income statements, statements of
cash flows and Capital Expenditures budgets of the VL Group, prepared on
a Consolidated basis, in respect of such financial year and each
financial quarter therein and in respect of, and as at the last day of,
each of the next two following financial years, in each case supported by
appropriate explanations, notes and information and commentary; and
(b) a detailed narrative of the businesses of the VL Group for the
financial year then ended and for the following financial year which
shall include a management discussion and analysis, in sufficient detail,
all as approved by the board of directors of the Borrower;
1.1.9 "ASSET DISPOSITION" has the meaning ascribed to it in
subsection 1.1.85.1;
1.1.10 "ASSIGNMENT" means an assignment of all or a portion of a
Lender's rights and obligations under this Agreement in accordance with
Sections 16.2 and 16.3, and "Assignee" has the meaning ascribed to it in
subsection 16.2.1;
1.1.11 "ASSOCIATE" has the meaning ascribed thereto in the Canada
Business Corporations Act;
1.1.12 "BA ADVANCE" means at any time the part of the Advances under
the Revolving Facility which the Borrower has chosen to borrow by
Bankers' Acceptances, calculated based on the face amount of such
Bankers' Acceptances;
1.1.13 "BA PROCEEDS" means, (a) for any Bankers' Acceptance issued
hereunder, an amount calculated on the applicable Acceptance Date (as
defined in subsection 6.1.1) by multiplying: i) the face amount of the
Bankers' Acceptance by ii) the following fraction:
1
__________________________________________________________________
(1+ (Bankers' Acceptance Discount Rate X Designated Period (in
days) DIVIDED BY 365)),
with such fraction being rounded up or down to the fifth decimal place
and .00005 being rounded up; and (b) with respect to Assignees that are
not banks or that do not accept Bankers' Acceptances, the face amount of
Discount Notes issued to them, less a discount established in the same
manner as provided in (a) above (with references to "Bankers'
Acceptances" being replaced by references to "Discount Notes");
1.1.14 "BA SCHEDULE I REFERENCE LENDER" means Royal Bank of Canada or
such other Lender which is a Schedule I bank under the BANK ACT (Canada)
appointed by the Agent with the consent of the Borrower in replacement of
the said Lender;
1.1.15 "BA SCHEDULE II REFERENCE LENDERS" means Bank of America, N.A.
Canada Branch and Credit Suisse First Boston, Toronto Branch, or such
other Lenders which are Schedule II or Schedule III banks under the BANK
ACT (Canada) appointed by the Agent with the consent of the Borrower in
replacement of such Lenders;
1.1.16 "BACK-TO-BACK DEBT" means any loans made or debt instruments
issued as part of a Back-to-Back Transaction and in which each party to
such Back-to-Back Transaction, other than a member of the VL Group,
executes a subordination agreement in favor of the Agent in substantially
the form attached hereto as Schedule "N";
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1.1.17 "BACK-TO-BACK PREFERRED SHARES" means preferred shares issued:
(a) to a member of the VL Group by an Affiliate of the Borrower in
circumstances where, immediately prior to the issuance of such
preferred shares, an Affiliate of such member of the VL Group has
loaned on an unsecured basis to such member of the VL Group, or an
Affiliate of such member of the VL Group has subscribed for preferred
shares of such member of the VL Group in an amount equal to, the
requisite subscription price for such preferred shares;
(b) by a member of the VL Group to one of its Affiliates in circumstances
where, immediately prior to or immediately after, as the case may be,
the issuance of such preferred shares, such member of the VL Group
has loaned an amount equal to the proceeds of such issuance to an
Affiliate on an unsecured basis; or
(c) by a member of the VL Group to one of its Affiliates in circumstances
where, immediately after the issuance of such preferred shares, such
member of the VL Group has used all of the proceeds of such issuance
to subscribe for preferred shares issued by an Affiliate;
in each case on terms whereby:
(i) the aggregate redemption amount applicable to the preferred
shares issued to or by such member of the VL Group is
identical:
(A) in the case of (a) above, to the principal amount of the loan
made or the aggregate redemption amount of the preferred
shares subscribed for by such Affiliate prior to the issuance
thereof;
(B) in the case of (b) above, to the principal amount of the loan
made to such Affiliate with the proceeds of the issuance
thereof; or
(C) in the case of (c) above, to the aggregate redemption amount
of the preferred shares issued by such Affiliate with the
proceeds of the issuance thereof;
(ii) the dividend payment date applicable to the preferred shares
issued to or by such member of the VL Group will:
(A) in the case of (a) above, be immediately prior to the interest
payment date relevant to the loan made or the dividend payment
date on the preferred shares subscribed for by such Affiliate
immediately prior to the issuance thereof;
(B) in the case of (b) above, be immediately after the interest
payment date relevant to the loan made to such Affiliate with
the proceeds of the issuance thereof; or
(C) in the case of (c) above, be immediately after the dividend
payment date on the preferred shares issued by such Affiliate
with the proceeds of the issuance thereof;
(iii) the amount of dividends provided for on any payment date in
the share conditions attaching to the preferred shares issued:
(A) to a member of the VL Group in the case of (a) above, will be
equal to or in excess of the amount of interest payable in
respect of the loan made or the amount of dividends provided
for in respect of the preferred shares subscribed for by such
Affiliate prior to the issuance thereof;
(B) by a member of the VL Group in the case of (b) above, will be
equal to or less than the amount of interest payable in
respect of the loan made to such Affiliate with the proceeds
of the issuance thereof; or
(C) by a member of the VL Group in the case of (c) above, will be
equal to the amount of dividends in respect of the preferred
shares issued by such Affiliate with the proceeds of the
issuance thereof.
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Provided, for greater certainty, that in all cases, (I) the redemption of
any preferred shares by a member of the VL Group, (II) the repayment of
any Back-to-Back Debt by a member of the VL Group, (III) the payment of
any dividends by a member of the VL Group in respect of its preferred
shares, and (IV) the payment of any interest on Back-to-Back Debt of a
member of the VL Group, may, in each case, be made by a member of the
VL Group solely by delivering the relevant Back-to-Back Securities to the
Affiliate in question, or by paying to the Affiliate an amount in cash
not in excess of the amount already received in cash from such Affiliate;
1.1.18 "BACK-TO-BACK SECURITIES" means the Back-to-Back Preferred
Shares or the Back-to-Back Debt or both, as the context requires;
1.1.19 "BACK-TO-BACK TRANSACTIONS" means any of the transactions
described under the definition of Back-to-Back Preferred Shares;
1.1.20 "BANKERS' ACCEPTANCE" means a non-interest bearing draft or xxxx
of exchange in Canadian Dollars drawn and endorsed by the Borrower and
accepted by a Lender in accordance with the provisions of Article 6,
and includes a Discount Note where the context permits. Subject to the
Lenders electing to use a clearing house as contemplated by the
Depository Bills and Notes Act (S.C. 1998 c. 13) (the "Act"), "Bankers'
Acceptance" shall mean a depository xxxx (as defined in the Act) in
Canadian Dollars signed by the Borrower and accepted by a Lender. Drafts
or bills of exchange that become depository bills may nevertheless be
referred to herein as "drafts";
1.1.21 "BANKERS' ACCEPTANCE DISCOUNT RATE" means (a) in respect of
Bankers' Acceptances to be purchased by the Lenders which are Schedule I
banks under the BANK ACT (Canada), the average rate for Canadian Dollar
bankers' acceptances having Designated Periods of 1, 2, 3, or 6 months
quoted on Reuters Service, page CDOR "Canadian Interbank Bid BA Rates"
(the "CDOR RATE"), having an identical Designated Period to that of the
Bankers' Acceptance to be issued on such day, and (b) in respect of
Bankers' Acceptances to be purchased by the Lenders which are
Schedule II or Schedule III banks under the BANK ACT (Canada) and in
respect of Discount Notes, the lesser of (i) the arithmetic average
(rounded upward to the nearest one hundredth of one percent (.01%)) of
the discount rates for Canadian Dollar bankers' acceptances quoted by the
BA Schedule II Reference Lenders, and (ii) the rate specified in
(a) above plus 10 basis points (.10%) (in each of cases (a) and (b), the
"DISCOUNT RATES"). In all cases, the Discount Rates shall be quoted at
approximately 10:00 a.m. (Montreal time) on the Acceptance Date
calculated on the basis of a year of 365 days.
In the absence of any such quote, the Bankers' Acceptance Discount Rate
which would have been determined in accordance with paragraph (a) or
paragraph (b) above, respectively, shall be equal to the rate determined
from time to time by the Agent as the discount rates for bankers'
acceptances of
(A) in the case of paragraph (a), the BA Schedule I Reference
Lender; and
(B) in the case of paragraph (b), the BA Schedule I Reference Lender
plus 10 basis points (.10%);
established in accordance with its normal practices in amounts equal to
the Selected Amount, having an identical Designated Period to that of the
proposed Bankers' Acceptances to be issued on such day;
1.1.22 "BANKING DAY" means any day which is at the same time a Business
Day and a day on which banking institutions are not authorized by law or
by local proclamation to close for business in New York (USA) and in
London (England);
1.1.23 "BRANCH" means the branch of Royal Bank of Canada located at 1
Place Ville Xxxxx, or any other branch designated by the Agent from time
to time by notice to the Borrower;
1.1.24 "BUSINESS DAY" means any day, except Saturdays, Sundays and
other days which in Xxxxxxxx xx Xxxxxxx (Xxxxxx) are holidays or a day
upon which banking institutions are not authorized or required by law or
by local proclamation to close;
1.1.25 "CANADIAN DOLLARS" or "CDN. $" means the lawful currency of
Canada;
4
1.1.26 "CAPITAL EXPENDITURES" means the aggregate amount actually paid
in cash in any period by the VL Group for or in connection with the
acquisition or maintenance of assets required to be capitalized,
including expenditures of the type described in the last sentence of
Section 13.9, determined on a Consolidated basis and otherwise in
accordance with GAAP other than, for greater certainty, expenditures for
Acquisitions permitted by Section 13.7;
1.1.27 "CAPITAL LEASE" means any lease (a) which is required to be
capitalized on a balance sheet of the lessee in accordance with GAAP, or
(b) for which the amount of the asset and liability thereunder should be
disclosed in a note to such balance sheet as if so capitalized in
accordance with GAAP;
1.1.28 "CASH EQUIVALENTS" means, as of the date of any determination
thereof, instruments of the following types:
1.1.28.1 obligations of or unconditionally guaranteed by the
governments of Canada or the United States of America ("USA"), or
any agency of any of them backed by the full faith and credit of
the governments of Canada or the USA, respectively, maturing
within 364 days of acquisition;
1.1.28.2 marketable direct obligations of the governments of one
of the provinces of Canada, one of the states of the USA, or any
agency thereof, or of any county, department, municipality or
other political subdivision of Canada or the USA, the payment or
guarantee of which constitutes a full faith and credit obligation
of such province, state, municipality or other political
subdivision, which matures within 364 days of acquisition and
which is currently accorded a short-term credit rating of at least
A-1 by Standard & Poor's Rating Services, a division of The
XxXxxx-Xxxx Companies, Inc. ("S & P") or at least Prime-1 by
Xxxxx'x Investors Service, Inc. ("MOODY'S") or the equivalent
thereof from Dominion Bond Rating Service Inc. ("DBRS");
1.1.28.3 commercial paper, bonds, notes, debentures and bankers'
acceptances issued by a Person residing in Canada or the USA and
not referred to in subsections 1.1.28.1, 1.1.28.2 or 1.1.28.4, and
maturing within 364 days from the date of issuance which, at the
time of acquisition, is accorded a short-term credit rating of at
least A-1 by S & P or at least Prime-1 by Moody's or the
equivalent thereof from DBRS;
1.1.28.4 (a) certificates of deposit maturing within 364 days from
the date of issuance thereof, issued by a bank or trust company
organized under the laws of the USA, any state thereof, or Canada
or any province thereof, or (b) US Dollar certificates of deposit
maturing within 364 days of acquisition and issued by a bank in
western Europe or the United Kingdom, in all cases having capital,
surplus and undivided profits aggregating at least US $500,000,000
(or its equivalent in Canadian Dollars) and whose short-term
credit rating is, at the time of acquisition thereof, rated A-1 or
better by S & P or Prime-1 or better by Moody's (or the equivalent
thereof from DBRS);
1.1.29 "CASH MANAGEMENT FACILITIES" means the cash management
facilities described in the two agreements (the "CASH MANAGEMENT
AGREEMENTS") entered into among Videotron Telecom Ltee, the Borrower,
Groupe de Divertissement Superclub Videotron Ltee, Le Superclub Videotron
Ltee, Protectron Inc., Videotron TVN Inc., CF Cable TV Inc., 0000-0000
Xxxxxx Inc., 0000-0000 Xxxxxx Inc., 9028-9778 Quebec Inc., 2516527
Canada Inc., Videotron Incotel Ltee, Videotron (1998) Ltee, Videotron
Communications Inc., Videotron Telecom (1998) Ltee, as participants, the
Borrower as concentrator and The Toronto-Dominion Bank dated August 9,
1999, providing for an aggregate maximum net daily overdraft of
$20,000,000 (which amount has been decreased to $15,000,000), as same has
or may be amended or replaced from time to time;
1.1.30 "CF CABLE NOTES" means the US $94,675,000 9 1/8% Senior Secured
First Priority Notes issued by CF Cable TV Inc.;
1.1.31 "CHANGE IN CONTROL" means (a) the acquisition by any Person or
group of Persons acting in concert (other than Quebecor Media Inc. or any
of its wholly-owned Subsidiaries) of a majority of the
5
votes attached to the outstanding voting shares of the Borrower or any of
the Initial VL Group Guarantors, or (b) any event which results in more
than a majority of the votes attached to the outstanding shares of
Quebecor Media Inc. being held by a Person other than Quebecor Inc. and
its Subsidiaries;
1.1.32 "CHARGE" means any right to any property, or the income or
benefits flowing therefrom, which secures an obligation due to a Person
or a claim of such Person, whether such interest is based on the common
law, statute or contract, and includes any security interest, hypothec,
pledge, pawn, mortgage, privilege, prior claim, lien, charge, assignment,
transfer, cession, encumbrance, Capital Lease, Synthetic Lease,
instalment sale, conditional sale or trust receipt or a consignment or
bailment for security purposes. The term "Charge" shall include
reservations, exceptions, encroachments, easements, servitudes,
rights-of-way, covenants, conditions, restrictions and other title
exceptions and encumbrances (including, with respect to stock,
stockholder agreements having the effect of restricting the ability, in
any material respect, of a Person to fulfill its obligations hereunder,
voting trust agreements and all similar arrangements) affecting property,
but shall exclude, for greater certainty, the rights of lessors under
operating leases (but not Synthetic Leases). Solely for the purposes of
determining whether a Charge exists for the purposes of this Agreement, a
Person shall be deemed to be the owner of any property which it has
acquired or holds subject to a conditional sale agreement, Capital Lease
or other arrangement pursuant to which title to the property has been
retained by or vested in some other Person for security purposes and such
retention or vesting shall constitute a Charge;
1.1.33 "CLOSING DATE" means November 28, 2000;
1.1.34 "COMMITMENT" means the portion of the Credit for which a Lender
is responsible, as set out in Schedule "A" hereof;
1.1.35 "COMPLIANCE CERTIFICATE" has the meaning ascribed to it in
subsection 12.15.1;
1.1.36 "CONSOLIDATED" means produced by aggregating the relevant
financial statements or accounts of the VL Group on a line-by-line basis
(i.e.: adding together corresponding items of assets, liabilities,
revenues and expenses), eliminating inter-company balances and
transactions and providing for any minority interest, all as otherwise
(i.e. except for the fact that the financial information in question
relates to the members of the VL Group, all of which are owned, directly
or indirectly, by the same Person, Quebecor Media Inc., but are not
themselves Subsidiaries of one another) determined in accordance
with GAAP;
1.1.37 "CONTINGENT OBLIGATION" of any Person means all contingent
liabilities required to be included in the financial statements of such
Person in accordance with GAAP, excluding any notes thereto;
1.1.38 "CORE BUSINESS" means the business described in Section 11.4;
1.1.39 "CREDIT" means the aggregate amount available to the Borrower
under the Revolving Facility;
1.1.40 "CRTC" means the Canadian Radio-television and
Telecommunications Commission, or a successor regulatory body, commission
or agency;
1.1.41 "DEBENTURE" means the Debenture to be issued in favour of each
Lender (or in favour of a collateral agent designated by the Agent) by
the Borrower and the Guarantors after the Phase II Date in accordance
with the provisions of subsection 9.2.4 or 9.2.9;
1.1.42 "DEBENTURE PLEDGE" means the pledge of the Debenture in favour
of the Agent or any designated collateral agent by the Borrower and the
Guarantors;
1.1.43 "DEBT" includes, for any Person,
1.1.43.1 obligations in respect of borrowed money, whether or not
evidenced by notes, bonds, debentures or similar evidences of
indebtedness of such Person;
1.1.43.2 obligations in respect of borrowed money and the Negative
Value of Derivative Instruments, but without duplication of any
underlying Debt that may be hedged by same, and,
6
in particular, without taking into account the currency hedging in
respect of the US$ denominated Debt referred to in the final
paragraph of this definition;
1.1.43.3 obligations representing the deferred purchase price of
goods and services, other than such obligations incurred in the
ordinary course of business of the VL Group and payable within a
period not exceeding 120 days from the date of their incurrence,
1.1.43.4 the obligations, whether or not assumed, which are
secured by Charges on the property belonging to such Person or
payable out of the proceeds flowing therefrom,
1.1.43.5 Contingent Obligations;
1.1.43.6 obligations under Capital Leases and Synthetic Leases,
and
1.1.43.7 obligations under letters of credit, letters of guarantee,
bankers' acceptances or Guarantees,
but shall not include Debt under the Back-to-Back Securities. In
addition, any Debt denominated in US$ which is validly and effectively
hedged through the use of one or more Derivative Instruments will be
calculated at the exchange rate applicable to such US$ Debt under the
applicable Derivative Instrument;
1.1.44 "DEFAULT" means an event or circumstances, the occurrence or
non-occurrence of which would, with the giving of a notice, lapse of time
or combination thereof, constitute an Event of Default unless remedied
within the prescribed delays or renounced to in writing by the Agent, as
authorized by the Lenders;
1.1.45 "DERIVATIVE INSTRUMENT" means an agreement entered into from
time to time by a Person in order to control, fix or regulate currency
exchange fluctuations, or the rate of interest payable on borrowings,
including a rate swap transaction, basis swap, forward rate transaction,
commodity swap, commodity option, equity or index equity swap, equity or
index equity option, bond option, interest rate option, foreign exchange
transaction, cap transaction, floor transaction, collar transaction,
currency swap transaction, cross-currency rate swap transaction, currency
option or any other similar transaction (including any option with
respect to any of these transactions and any combination of these
transactions);
1.1.46 "DERIVATIVE OBLIGATIONS" means obligations of the Borrower to
one or more Lenders under Derivative Instruments;
1.1.47 "DESIGNATED PERIOD" means, with respect to a Libor Advance or a
BA Advance, a period designated by the Borrower in accordance with
Sections 4.2, 6.1 and 6.4, respectively;
1.1.48 "DISBURSEMENT PERIOD" means, with respect to the Revolving
Facility, the period from the Closing Date until the expiry of the Term,
subject to satisfying the applicable conditions precedent set out in
Article 10;
1.1.49 "DISCOUNT NOTE" means a non-interest bearing promissory note
denominated in Canadian Dollars issued by the Borrower to a Lender or a
sub-participant which is a Non-BA Lender (as defined in subsection 6.1.2
(b)), such note to be in the form normally used by such Lender or
sub-participant;
1.1.50 "EBITDA" means, during a financial period, earnings of the
VL Group before non-controlling interests, extraordinary items, Interest
Expense, taxes, depreciation and amortization, foreign exchange
translation gains or losses not involving the payment of cash and other
non-cash financial charges, without taking into account any goodwill
adjustments, calculated on a Consolidated basis, and otherwise in
accordance with GAAP; for greater certainty, there shall be excluded from
the calculation of EBITDA, to the extent included in such calculation,
the amount of any income or expense relating to Back-to-Back Securities
and the costs arising out of the termination of the Derivative
Instruments associated with Term Facility B upon its repayment, in an
approximate amount of $8,000,000;
1.1.51 "EXCESS CASH FLOW" means the VL Group's EBITDA calculated as at
the end of each financial quarter, plus an amount equal to any spread
paid to the Borrower resulting from Back-to-Back Securities, to the
extent not previously included in EBITDA, and less
1.1.51.1 the amount of taxes paid or otherwise due during the
period in question;
7
1.1.51.2 the amount of any Interest Expense paid in cash (and not
accrued); however, for the purposes of this definition alone,
"Interest Expense" shall include all fees and expenses relating to
the HYD Offering, any Additional Offering and all other future
Debt Offerings, except to the extent that the fees and expenses in
question are paid for out of the proceeds of such Debt Offerings
and not out of the VL Group's cash flow;
1.1.51.3 the amount of all voluntary prepayments of Debt, other
than (a) payments under the Revolving Facility or under the
unsecured cash management facility not exceeding $10,000,000
permitted hereunder, (b) voluntary prepayments using the proceeds
of Asset Dispositions and Offerings, and (c) voluntary prepayments
of the QMI Subordinated Debt made in accordance with
Section 13.10 hereof;
1.1.51.4 the amount of extraordinary items not included in
earnings but which required the payment of cash;
1.1.51.5 the amount of any mandatory principal repayment (other
than Mandatory Repayments under subsections 8.2.1 and 8.2.2) of
Debt that is permitted hereunder; and
1.1.51.6 the sum of (1) the amount of Capital Expenditures made
during such period that have not been financed separately out of
(i) the proceeds of Debt permitted hereunder; (ii) equity obtained
after the date hereof; or (iii) the Net Proceeds arising out of
Asset Dispositions made during the period which are not used to
make Mandatory Repayments under subsection 8.2.1 and (2) the
amount, if any, by which $18,750,000 exceeds the actual Capital
Expenditures made during such period;
provided, however, that no amount will be so deducted if such amount has
already been deducted from the VL Group's EBITDA;
1.1.52 "EXISTING CREDIT AGREEMENT" means the $800,000,000 credit
agreement, dated as of December 11, 1997, among the Borrower, CF Cable
TV Inc., Xxxxxxxxx.Xxx Ltee and the lenders named therein, as amended
prior to the Closing Date;
1.1.53 "EVENT OF DEFAULT" means one or more of the events described in
Section 14.1;
1.1.54 "FACILITY" or "REVOLVING FACILITY" means the Credit available
pursuant to Section 2.1;
1.1.55 "FACILITY FEE" has the meaning ascribed to it in
subsection 5.11.1;
1.1.56 "FEES" means the fees payable to the Agent and to the Lenders in
accordance with the provisions of Section 5.11;
1.1.57 "FIRST CURRENCY" has the meaning ascribed to it pursuant to
Section 15.1;
1.1.58 "FOREIGN LENDERS" has the meaning ascribed to it in
Section 17.15;
1.1.59 "GENERALLY ACCEPTED ACCOUNTING PRINCIPLES" or "GAAP" means the
generally accepted accounting principles acknowledged by the Canadian
Institute of Chartered Accountants and published in the Canadian
Institute of Chartered Accountants' Handbook;
1.1.60 "GUARANTEES" by any Person means all obligations (other than
endorsements in the ordinary course of business of negotiable instruments
for deposit or collection) of such Person guaranteeing, or in effect
guaranteeing, any Indebtedness, dividend or other obligation of any other
Person (the "PRIMARY OBLIGOR") in any manner, whether directly or
indirectly, including all obligations incurred through an agreement,
contingent or otherwise, by such Person: (a) to purchase such
Indebtedness or obligation or any property or assets constituting
security therefor, (b) to advance or supply funds (i) for the purchase or
payment of such Indebtedness or obligation, or (ii) to maintain working
capital or other balance sheet condition or otherwise to advance or make
available funds for the purchase or payment of such Indebtedness or
obligation against loss, (c) to lease property or to purchase securities
or other property or services primarily for the purpose of assuring the
owner of such Indebtedness or obligation, or (d) otherwise to assure the
owner of the Indebtedness or obligation of the Primary Obligor against
loss in respect thereof. For the purposes of all computations made under
this Agreement, a Guarantee in respect
8
of any Indebtedness for borrowed money, and a Guarantee in respect of any
other obligation or liability or any dividend, shall be deemed to be
Indebtedness equal to the maximum aggregate amount of such obligation,
liability or dividend, unless the Guarantee is limited in amount, in
which case such limit shall be used for such computation;
1.1.61 "GUARANTORS" means, (a) prior to the Phase II Date, Videotron
(1998) ltee, Le SuperClub Videotron ltee and 0000-0000 Xxxxxx Inc.
(successor to the business of Videotron TVN Inc.) (collectively the
"INITIAL VL GROUP GUARANTORS"), as well as GVL and Quebecor Media Inc.,
and (b) following the Phase II Date, (i) Quebecor Media Inc. but only as
specified in Section 10.5, (ii) GVL, if not amalgamated with or wound up
into Quebecor Media Inc. or another wholly-owned Subsidiary of Quebecor
Media Inc. at such time, (iii) the Initial VL Group Guarantors, and
(iv) all of the wholly-owned Subsidiaries of the Borrower and of the
Initial VL Group Guarantors, excluding Consortium Cable-Axion
Digitel Inc. and its Subsidiaries, and including, (a) after the CF Cable
Notes have been paid or as permitted thereunder, CF Cable TV Inc. and its
Subsidiaries, and (b) all Subsidiaries of the Initial VL Group Guarantors
created or acquired after the Closing Date. A list of the Guarantors as
of June 29, 2001 is provided in Schedule "L" hereto, and as of the
Seventh Amendment Closing Date is provided in Schedule "M" hereto;
1.1.62 "GVL" means Le Groupe Videotron ltee;
1.1.63 "HYD OFFERING" means the Offering by the Borrower of
approximately US$335,000,000 in senior unsecured notes due January 15,
2014 which shall have occurred on the Sixth Amendment Closing Date, the
terms and conditions of which Offering will be satisfactory to the
Lenders;
1.1.64 "INITIAL VL GROUP GUARANTORS" has the meaning ascribed to it in
the definition of "Guarantors";
1.1.65 "INDEBTEDNESS" of any Person means (without duplication) all
obligations of such Person which in accordance with GAAP should be
classified upon a balance sheet of such Person as liabilities of such
Person, and in any event includes all Debt of such Person;
1.1.66 "INTER-CREDITOR AGREEMENT" means that certain Inter-Creditor
Agreement dated as of June 29, 2001 executed by the Agent on behalf of
the Lenders, The Chase Manhattan Bank, as trustee, CF Cable TV Inc. and
others in relation to the rights of various creditors of CF Cable
TV Inc. and its Subsidiaries, as same may be amended or replaced from
time to time;
1.1.67 "INTEREST COVERAGE RATIO" means, for any period, the ratio of
EBITDA to Interest Expense in respect of the VL Group for such period;
1.1.68 "INTEREST EXPENSE" for any period means all interest and all
amortization of debt discount and expense (excluding fees and expenses
relating to the Transaction and the financing thereofor to the
HYD Offering, any Additional Offering or to any other future financing)
on any particular Indebtedness for which such calculations are being made
in respect of the VL Group, excluding interest on the Back-to-Back Debt
to the extent offset by an equal amount of dividends on the Back-to-Back
Preferred Shares, as well as any interest not paid in cash or other
assets of the Borrower on the QMI Subordinated Debt, calculated on a
Consolidated basis, including the interest component of Capital Leases,
and discounts and fees payable in respect of bankers' acceptances or
accounts receivable sold in connection with any asset securitization
program approved by the Lenders;
1.1.69 "INVESTMENTS" means all investments, in cash or by delivery of
property, made directly or indirectly in any Person, whether by
acquisition of shares of capital stock, Indebtedness or other obligations
or securities or by loan, advance, capital contribution or otherwise;
PROVIDED, HOWEVER, that "Investments" shall not mean or include
investments in cash or Cash Equivalents or routine investments in
inventory, equipment and supplies to be used or consumed, or trade credit
granted, in the ordinary course of business;
1.1.70 "ISDA MASTER AGREEMENT" means the 1992 ISDA Master Agreement
(Multi-Currency -- Cross Border) as published by the International Swaps
and Derivatives Association, Inc. and, where the context permits or
requires, includes all schedules, supplements, annexes and confirmations
attached
9
thereto or incorporated therein, as such agreement may be amended,
supplemented or replaced from time to time;
1.1.71 "LAWS" or "LAW" means all applicable provisions of all laws,
ordinances, decrees, orders, rules, regulations and directives of
governmental bodies, and all applicable provisions of treaties, as well
as all rulings, orders and other decrees of tribunals and arbitrators;
1.1.72 "LENDER" or "LENDERS" means the Revolving Facility Lenders
listed in Schedule "A", together with any Assignee(s), or, as the context
permits, any of them alone. When used in connection with "Derivative
Instruments", the term "Lender" shall include any Affiliate of a Lender.
When used in connection with the Security, the term "Lender" shall
include any counterparty to a Derivative Instrument, provided that the
counterparty was a Lender or an Affiliate of a Lender at the time any
such Derivative Instrument was entered into;
1.1.73 "LEVERAGE RATIO" means, as of any date of determination, the
ratio of Debt (excluding the QMI Subordinated Debt) as of such date to
EBITDA for the preceding four quarters ending on such date;
1.1.74 "LIBOR" means, with respect to any Designated Period of 1, 2, 3
or 6 months relating to a Libor Advance, the average rate for deposits in
Cdn. $ for Foreign Lenders under the Revolving Facility (except in the
circumstances described in Section 4.11, in which case the applicable
rate will be for US$ deposits) for a period comparable to the Designated
Period which, if in US $, is quoted on Libor01 Page of Reuters, and if in
Cdn. $, is quoted on Libor02 Page of Reuters or, in case of the
unavailability of either such page, which is quoted on the British
Bankers Association Libor Rates Telerate (page 3750 for US $ or 3740 for
Cdn. $, or other applicable page), in either case at or about 11:00 a.m.
(London, England time), determined two Banking Days prior to the date on
which a Libor Advance is to be made in accordance with Section 5.6; if
neither of such quotes is available, then LIBOR shall be determined by
the Agent as the average of the rate at which deposits in US$ or Cdn. $,
as the case may be, for a period similar to the Designated Period and in
amounts comparable to the amount of such Libor Advance are offered by the
Libor Reference Lenders to prime banks in the London inter-bank market at
or about 11:00 a.m. London, England time on the date of such
determination;
1.1.75 "LIBOR ADVANCE" means, at any time, any Cdn. $ Advances made by
Foreign Lenders, or, in the circumstances described in Section 4.11, US$
Advances made by Foreign Lenders;
1.1.76 "LIBOR BASIS" means the basis of calculation of interest on
Libor Advances, or any part thereof, made in accordance with the
provisions of Sections 5.3 and 5.4;
1.1.77 "LIBOR REFERENCE LENDERS" means any two Lender(s) appointed by
the Agent with the consent of such Lenders and the Borrower, acting
reasonably;
1.1.78 "LICENCES" means all licences, permits and authorizations issued
to the VL Group by the CRTC pursuant to the BROADCASTING ACT (Canada) and
the orders, rules, regulations and directions promulgated pursuant to
such Act;
1.1.79 "LOAN" means, at any time, the aggregate of the Advances
outstanding in accordance with the provisions hereof, including the face
amount of any Bankers' Acceptances issued in accordance with the
provisions hereof, together with all unpaid interest thereon and any
other amount in principal, interest and accessory costs payable to the
Agent or the Lenders by the Borrower pursuant hereto, including, for
greater certainty, amounts contemplated by Section 5.7;
1.1.80 "MAJORITY LENDERS" means Lenders having at least 51% of the
Commitments;
1.1.81 "MANDATORY REPAYMENT" means the repayment of all or any part of
the Loan which the Borrower is obliged to effect in accordance with
Section 8.2;
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1.1.82 "MARGIN" means, for Prime Rate Advances, Stamping Fees and
Facility Fees, as well as Libor Advances by Foreign Lenders, under the
Revolving Facility, the following annual percentages depending on the VL
Group's then-applicable Leverage Ratio, determined at the times and in
the manner set out below the table:
----------------------------------------------------------------------
STAMPING FEES OR
LEVERAGE RATIO FACILITY FEES PRIME RATE PLUS CDN$ LIBOR PLUS
----------------------------------------------------------------------
X 0.50% 0.50% 1.50%
greater than or equal to4
----------------------------------------------------------------------
4> X greater than or equal to3.50 0.375% 0.375% 1.375%
----------------------------------------------------------------------
3.5> X greater than or equal to3.00 0.375% 0.125% 1.125%
----------------------------------------------------------------------
3.0> X greater than or equal to2.00 0.375% 0.00% 0.875%
----------------------------------------------------------------------
X < 2.0 0.375% 0.00% 0.625%
----------------------------------------------------------------------
Each change resulting from a change in the Leverage Ratio shall be
effective with respect to all outstanding Loans retroactively from the
first day of each fiscal quarter of the Borrower, and shall be based on
the VL Group's financial statements and Compliance Certificates required
by subsections 12.15.1 and 12.15.2, as applicable, and the Leverage Ratio
derived from such financial statements. Thus, the financial statements
and Compliance Certificates which shall be delivered 60 days after
quarter-end and 75 days after year-end (based on unaudited results and
subject to readjustment upon delivery of a second Compliance Certificate
in accordance with the provisions of subsection 12.15.2 (b)) will be used
to calculate the Leverage Ratio applicable from the first day of the
quarter in which such financial statements and Compliance Certificates
were to be delivered. For example, the financial statements and
Compliance Certificates to be delivered in respect of the quarter ending
May 31 of any year of the Term shall be delivered by July 30 of that
year, and shall be used to calculate the Leverage Ratio for the period
from June 1 of that year to August 31 of that year. If, as a result of an
increase in the Leverage Ratio, the Margin has increased, the Agent will
advise the Borrower and the Lenders and the Borrower will pay all
additional amounts that may be due to the Lenders within 2 Business Days
of being advised of the amount due. If, as a result of a reduction in the
Leverage Ratio, the Margin has been reduced, the Agent shall advise the
Borrower and the Lenders and the amounts owed to the Borrower (a) will be
deducted from the Stamping Fees otherwise payable in the case of a BA
Advance, on the next Rollover Date of the relevant BA Advance or (b) in
the case of Prime Rate Advances, will be deducted from the interest
otherwise payable by the Borrower on the next interest payment date
contemplated by Section 5.2, and (c) if no interest or Stamping Fees are
payable during that period, the Lenders shall remit the necessary amounts
to the Agent for payment to the Borrower;
1.1.83 "MATERIAL ADVERSE CHANGE" means a material adverse change in
(i) the business, assets, liabilities, financial position, operating
results or business prospects of the VL Group, taken as a whole, or
(ii) in the ability of the Borrower and the Guarantors to perform any of
their obligations hereunder or under the Security Documents, or
(iii) the validity or enforceability of this Agreement or the Security
Documents or of the rights and remedies of the Agent or the Lenders
hereunder or under the Security Documents;
1.1.84 "NEGATIVE VALUE OF DERIVATIVE INSTRUMENTS" means the aggregate
amount that would be payable to all Persons by the Borrower on the date
of determination pursuant to Section 6(e)(ii)(2)(A) of each ISDA Master
Agreement between the Borrower and such Persons as if all Derivative
Instruments under such ISDA Master Agreements were being terminated on
that day; provided that, with respect to the Derivative Instruments
between each Lender and the Borrower, each Lender will determine Market
Quotation (as such term is defined in the ISDA Master Agreement) using
its estimates at mid-market of the amounts that would be paid for
Replacement Transactions (as such term is defined in the ISDA Master
Agreement);
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1.1.85 "NET PROCEEDS" means, for the purposes of Section 8.2, 13.3,
13.4 and 13.11:
1.1.85.1 the gross amount of proceeds payable to any member of the
VL Group in cash or Cash Equivalents arising from the sale, lease,
transfer, assignment or other disposition or alienation of any of
the property (including shares, capital stock and ownership
interests) of any member of the VL Group (an "ASSET DISPOSITION"),
less amounts payable to discharge or radiate Permitted Charges on
the assets being disposed of, and less the amount of taxes arising
from each such Asset Disposition and which cannot be offset
against losses, depreciation or otherwise such that same must
actually be paid in cash; and
1.1.85.2 the gross amount of proceeds payable to any member of the
VL Group in cash or Cash Equivalents from any public or private
offering of equity securities or Debt permitted hereunder of any
member of the VL Group (herein called an "OFFERING");
in each case, minus reasonable out-of-pocket costs, fees and expenses
incurred in connection with such Asset Disposition or Offering, including
commissions but excluding any amounts paid to Affiliates;
1.1.86 "NOTICE OF BORROWING" means a notice substantially in the form
of Schedule "B" transmitted to the Agent by the Borrower in accordance
with the provisions of Sections 4.1 or 4.2, or of subsection 6.1.1;
1.1.87 "OFFERING" has the meaning ascribed to it in the definition of
"Net Proceeds";
1.1.88 "PERMITTED CHARGES" means the Charges created by the Security
Documents and, with respect to any Person:
1.1.88.1 any Charge created by law that is assumed in the ordinary
course of business and in order to exercise same, which, in the
case of construction Charges in favour of contractors,
sub-contractors, workmen, suppliers of materials, engineers and
architects, has not at such date been registered in accordance
with applicable Laws against such Person, which relates to
obligations which are not yet due or delinquent, which is not
related to any loan of money or obtention of credit and which, in
the aggregate, do not affect in a material way the use, the income
or the benefits flowing from the property so charged in the
conduct of the business of such Person; any Charge resulting from
judgments or decisions which such Person has, at such date,
appealed or in respect of which it has sought revision and
obtained a suspension of execution pending the appeal or the
revision; any Charge for taxes, assessments or governmental claims
or other impositions not yet due or matured or in respect of which
the validity at such date has been contested in good faith by such
Person before a competent tribunal or other governmental body in
accordance with the provisions of Section 12.7; or which relates
to a deposit of monies or securities in the ordinary course of
business with respect to any Charge referred to in this paragraph,
or to secure workmen's compensation, surety or appeal bonds or
security for costs of litigation; or any Charge in favour of a
landlord on movable or personal property to secure the payment of
rent and other amounts owing under leases for immovable or real
property, provided the Charge is limited to property situated on
the leased premises;
1.1.88.2 any right of a municipality, governmental body or other
public authority pursuant to any lease, license, franchise, grant
or permit obtained by such Person, or any right resulting from a
legislative provision, to terminate such lease, license,
franchise, grant or permit, or requiring an annual or periodic
payment as a condition of its extension;
1.1.88.3 Charges in favour of a public body, or to a municipal or
governmental authority or public utility, or which may be imposed
by one or the other, when required by such body or authority with
respect to the operations of such Person or in the ordinary course
of its business;
1.1.88.4 Charges granted in favour of municipal authorities or
public utilities on immovables acquired from time to time by such
Person which do not adversely affect the value or marketability of
such Person 's immovable property in any material respect;
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1.1.88.5 title defects, homologated lines, zoning and building
by-laws, ordinances, regulations and other governmental
restrictions on the use of property, or servitudes, easements or
other similar encumbrances, provided that none of the foregoing
adversely affect the value or marketability of such Person's
immovable property in any material respect;
1.1.88.6 Charges to secure the payment of the purchase price
incurred in connection with the acquisition after the Closing Date
of assets to be used in carrying on the Core Business, including
Charges existing on such assets at the time of the acquisition
thereof or at the time of the acquisition by a member of the VL
Group of any business entity then owning such assets, whether or
not such existing Charges were given to secure the payment of the
purchase price of the assets to which they attach, provided that
such Charges are limited to the assets purchased and that the
amount guaranteed by such Charges does not exceed 100% of the
acquisition price of the assets so acquired, and, in the
aggregate, $10,000,000 outstanding at any time;
1.1.88.7 Charges on the shares of the Borrower and the Initial VL
Group Guarantors in favour of the lenders under the Quebecor Media
Credit Facility, which shall be a second-ranking Charge until the
Phase II Date, and which thereafter will rank ahead of the Charges
on such shares in favour of the Lenders until all amounts owed
under the Quebecor Media Credit Facility have been paid in full
and the said credit facility cancelled;
1.1.88.8 Charges disclosed in Schedule "H", including any
extension, renewal or refinancing thereof provided the amount
secured by such Charge does not exceed the amount so secured
immediately prior to such extension, renewal or refinancing
thereof, and provided that the property subject to such Charge is
not extended;
1.1.89 "PERSON" means a legal person, a natural person, a joint
venture, a partnership, a trust, an entity without juridical personality,
a government or any ministry, organization or intermediary of such
government;
1.1.90 "PHASE II DATE" means the date on which all of the conditions
precedent to an Advance under the previously existing Term Facility A-2
and Term Facility B were met and the initial Advance under the said Term
Facility A-2 was made, such that the Quebecor Media Guarantee may be
released by the Agent on behalf of the Lenders three months and one day
later, in accordance with the provisions of Section 10.5 hereof;
1.1.91 "PRIME RATE" means, on any day, the reference rate of interest,
expressed as an annual rate, publicly announced or posted from time to
time by Royal Bank of Canada as being its reference rate then in effect
for determining interest rates on demand commercial loans granted in
Canada in Canadian Dollars to its clients (whether or not any such loans
are actually made); provided that in the event that the Prime Rate is, at
any time, less than the average one month Bankers' Acceptance rate quoted
on Reuters Service, page CDOR, as at approximately 10:00 a.m. on such day
plus 1% (the "BA RATE"), "Prime Rate" shall be equal to the BA Rate;
1.1.92 "PRIME RATE ADVANCE" means, at any time, the portion of the
Advances in Canadian Dollars with respect to which the Borrower has
chosen, or, in accordance with the provisions hereof, is obliged, to pay
interest on the Prime Rate Basis;
1.1.93 "PRIME RATE BASIS" means the basis of calculation of interest on
the Prime Rate Advances, or any part thereof, made in accordance with the
provisions of Sections 5.1 and 5.2;
1.1.94 "QMI SUBORDINATED DEBT" has the meaning ascribed to it in
Section 13.8;
1.1.95 "QUEBECOR MEDIA GUARANTEE" has the meaning ascribed to it in
subsection 9.1.1;
1.1.96 "QUEBECOR MEDIA CREDIT FACILITY" means the credit facility in
the amount of $2,090,000,000 established pursuant to the credit agreement
entered into on October 23, 2000 by Quebecor Media Inc. as borrower,
Quebecor Communications Inc., GVL, Quebecor New Media Inc., Canoe:
Canadian Online Explorer Inc., Quebecor New Media Limited Partnership,
0000-0000 Xxxxxx Inc., 0000-0000 Xxxxxx Inc. and 3588386 Canada Inc. as
guarantors, the financial institutions named therein as lenders, RBC
13
Dominion Securities Inc. as lead arranger and bookrunner, Bank of America
Canada, BMO Xxxxxxx Xxxxx Inc. and The Toronto-Dominion Bank as
co-arrangers and Royal Bank of Canada as administrative agent, as
amended, supplemented or restated from time to time, or as replaced from
time to time by another credit facility in an amount not exceeding Cdn.
$1,905,000,000 minus the proceeds of any high-yield debt securities
issued by Quebecor Media Inc. on or before October 22, 2002;
1.1.97 "REGULATORY APPROVAL" means the obtention of all material
approvals of all governmental bodies having jurisdiction which are
required to be obtained in connection with the Transaction including,
without limitation, the approval of the CRTC and all other approvals set
forth in the New Offers to Purchase for Cash referred to in the
definition "Transaction";
1.1.98 "REVOLVING FACILITY" or "FACILITY" means the Credit available
pursuant to Section 2.1;
1.1.99 "REVOLVING FACILITY LENDER" means a Lender having a Commitment
under the Revolving Facility;
1.1.100 "ROLLOVER DATE" means, with respect to a Libor Advance or a BA
Advance, the date of any such Advance, or the first day of any Designated
Period;
1.1.101 "SECOND CURRENCY" has the meaning ascribed to it pursuant to
Section 15.1;
1.1.102 "SECURITY DOCUMENTS" means all of the security documents
described in Article 9, and "SECURITY" means the security created
thereby;
1.1.103 "SELECTED AMOUNT" means
1.1.103.1 with respect to a BA Advance, the amount of the Advances
in Canadian Dollars which the Borrower has asked to obtain by the
issuance of Bankers' Acceptances in accordance with Section 6.1,
and
1.1.103.2 with respect to a Libor Advance, the amount in respect
of which the Borrower is deemed to have asked, in accordance with
Section 4.2, that the interest payable thereon be calculated on
the Libor Basis;
1.1.104 "SENIOR SECURED DEBT COVERAGE RATIO" means, for any period, the
ratio of (a) the Consolidated Debt of the VL Group owing under (i) this
Credit Agreement, plus (ii) the CF Cable Notes, plus (iii) the Negative
Value of Derivative Instruments entered into with a Lender, plus
(iv) any other Debt supported by a Charge to secure its repayment, to
(b) EBITDA;
1.1.105 "SEVENTH AMENDMENT CLOSING DATE" means November 19, 2004;
1.1.106 "SHARE PLEDGE" has the meaning ascribed to it in
subsection 9.2.3;
1.1.107 "SIXTH AMENDMENT CLOSING DATE" means October 8, 2003;
1.1.108 "STAMPING FEES" means, with respect to BA Advances, the fee
calculated by (a) multiplying the percentage referred to in the
definition of "Margin" by the face amount of the Bankers' Acceptances
being issued and stamped in connection with the BA Advance being made,
(b) dividing the product so obtained by 365 or, in a leap year, 366, and
(c) multiplying the result so obtained by the number of days in the
relevant Designated Period;
1.1.109 "SUBORDINATED DEBT" means, in respect of any Person, unsecured
Debt of such Person that has no required redemption provisions and
matures at least 6 months after the expiry of the Term hereof and that
has been subordinated in right of payment to the obligations of the VL
Group hereunder and under the Security Documents in form and substance
acceptable to the Lenders and their counsel;
1.1.110 "SUBSIDIARY" means any Person in respect of which the majority
of the issued and outstanding capital stock (including securities
convertible into voting shares and options to purchase voting shares)
granting a right to vote in all circumstances is at the relevant time
owned by a member of the VL Group or one or more of its Subsidiaries or
by a member of the VL Group and one or more of its Subsidiaries, and
includes a limited partnership that would be an Affiliate;
14
1.1.111 "SYNTHETIC LEASE" means any synthetic lease or similar
off-balance sheet financing product where such transaction is considered
borrowed money for tax purposes but is classified as an operating lease
in accordance with GAAP;
1.1.112 "TAX BENEFIT TRANSACTION" means, for so long as the Borrower is
a direct or indirect Subsidiary of Quebecor Inc. ("QUEBECOR"), any
transaction between a member of the VL Group and Quebecor or any of its
Affiliates, the primary purpose of which is to create tax benefits for
any member of the VL Group or for Quebecor or any of its Affiliates;
PROVIDED, HOWEVER, that (1) the member of the VL Group involved in the
transaction obtains a favorable tax ruling from a competent tax authority
or a favorable tax opinion from a nationally recognized Canadian law or
accounting firm having a tax practice of national standing as to the tax
efficiency of the transaction for such member of the VL Group; (2) the
Borrower delivers to the Agent (a) a resolution of the board of directors
of the Borrower to the effect the transaction will not prejudice the
Lenders and certifying that such transaction has been approved by a
majority of the disinterested members of such board of directors and
(b) an opinion as to the fairness to such member of the VL Group of such
transaction from a financial point of view issued by an accounting,
appraisal or investment banking firm of national standing in the
United States or Canada, except in respect of any Tax Benefit Transaction
in an amount of less than $1,000,000 each, provided that the aggregate of
all Tax Benefit Transactions for amounts of less than $1,000,000 does not
exceed $10,000,000 in the aggregate in any 12 month period; (3) such
transaction is set forth in writing; (4) such transaction either
(a) causes all of the Security creating a Charge on any transferred
assets to remain in full force and effect, or (b) provides for the
replacement of such assets by different assets of a value, nature and
kind acceptable to each of the Lenders, and which shall in any event be
subject to the Security (and the assets so transferred that were
previously Charged shall be released); and (5) the Consolidated EBITDA of
the VL Group is not reduced after giving PRO FORMA effect to the
transaction as if the same had occurred at the beginning of the most
recently ended four fiscal quarter period of the VL Group for which
internal financial statements are available; PROVIDED, HOWEVER, that if
such transaction shall thereafter cease to satisfy the preceding
requirements as a Tax Benefit Transaction, it shall thereafter cease to
be a Tax Benefit Transaction for purposes of this Agreement and shall be
deemed to have been effected as of such date and, if the transaction is
not otherwise permitted by this Agreement as of such date, the Borrower
will be in Default hereunder if such transaction does not comply with the
preceding requirements or is not otherwise unwound within 30 days of that
date;
1.1.113 "TERM" means the period commencing on the Closing Date and
terminating, with respect to the Revolving Facility, on November 18,
2009;
1.1.114 "TERM FACILITY A-1" means the portion of the Credit previously
available under this Credit Agreement, which was repaid in full out of
the HYD Offering and out of Advances made under Term Facility C;
1.1.115 "TERM FACILITY B" means the portion of the Credit previously
available under this Credit Agreement which was repaid in full by the
Borrower concurrently with any Advances hereunder on and after the Sixth
Amendment Closing Date;
1.1.116 "TERM FACILITY C" means the portion of the Credit previously
available under this Credit Agreement which will have been repaid in full
by the Borrower concurrently with the initial Advance hereunder on or
after the Seventh Amending Closing Date;
1.1.117 "TRANSACTION" means the acquisition by Quebecor Media Inc. of
all of the issued and outstanding multiple voting shares and subordinate
voting shares (including subordinate voting shares issuable upon the
exercise of options) of GVL as well as the investments in Quebecor
Media Inc. to be made by Capital Communications CDPQ Inc. and
Quebecor Inc. and the transfer of assets to Quebecor Media Inc. to be
made by Quebecor Inc. as described in the document entitled "New Offers
to Purchase for Cash" dated September 27, 2000 made by Quebecor
Media Inc. with respect to the shares of GVL;
1.1.118 "TRANSFER AGREEMENT" means a form of transfer agreement
substantially in the form annexed hereto as Schedule "C";
15
1.1.119 "US DOLLARS" or "US $" means the lawful currency of the
United States of America in same day immediately available funds or, if
such funds are not available, the currency of the United States of
America which is ordinarily used in the settlement of international
banking operations on the day on which any payment or any calculation
must be made pursuant to this Agreement;
1.1.120 "VL GROUP" means the Borrower, the Guarantors (other than
Quebecor Media Inc. and GVL) and their respective Subsidiaries, and a
reference to a "member of the VL Group" means any of them; provided,
however, that for the purposes of all Back-to-Back Transactions alone,
until the CF Cable Notes have been repaid in full, CF Cable TV Inc. and
its Subsidiaries shall not be considered to be part of the VL Group in
the context of any Back-to-Back Transaction with another member of the VL
Group. However, CF Cable TV Inc. and its Subsidiaries shall be considered
members of the VL Group in the context of a Back-to-Back Transaction with
an Affiliate of the Borrower that is not a member of the VL Group. A list
of the members of the VL Group as of the Seventh Amendment Closing Date
is provided in Schedule "M" hereto.
1.2 INTERPRETATION
Unless stipulated to the contrary, the words used herein which indicate the
singular include the plural and vice versa and the words indicating
masculine include the feminine and vice versa. In addition, the word
"INCLUDES" (or "INCLUDING") shall be interpreted to mean "includes (or
including) without limitation". Finally, any reference to a time shall mean
local time in the City of Montreal, Province of Quebec.
1.3 CURRENCY
Unless the contrary is indicated, all amounts referred to herein are
expressed in Canadian Dollars.
1.4 GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
Unless the Lenders shall otherwise expressly agree or unless otherwise
expressly provided herein (for example, in connection with the definition of
"Consolidated"), all of the terms of this Agreement which are defined under
the rules constituting Generally Accepted Accounting Principles shall be
interpreted, and all financial statements and reports to be prepared
hereunder shall be prepared, in accordance with Generally Accepted
Accounting Principles in effect from time to time, and with respect to the
financial ratios, those in effect as of October 8, 2003.
1.5 DIVISION AND TITLES
The division of this Agreement into Articles, Sections and subsections and
the insertion of titles are for convenience of reference only and shall not
affect the meaning or interpretation of this Agreement.
2. THE CREDIT
2.1 CREDIT FACILITY
Subject to the provisions hereof, and in particular, to the provisions of
Article 3, each Lender agrees to make available to the Borrower,
individually and not jointly and severally or solidarily, its Commitment in
the Credit, which Credit consists of the Revolving Facility in a maximum
amount equal to $450,000,000 minus the maximum amount that can be borrowed
under the Cash Management Facilities, which form part of the Revolving
Facility.
2.2 THE REVOLVING FACILITY
All Advances under the Revolving Facility shall be in Canadian Dollars alone
and may be repaid and re-borrowed by the Borrower at all times during the
Term.
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3. PURPOSE
3.1 PURPOSE OF THE ADVANCES
All Advances made by the Lenders to the Borrower under the Revolving
Facility in accordance with the provisions hereof from and after the Seventh
Amendment Closing Date shall be used by the Borrower for general corporate
purposes, including, without limitation, to repay the CF Cable Notes and to
pay dividends to QMI from time to time, subject to and in accordance with
the terms and conditions of this Agreement.
4. ADVANCES, CONVERSIONS AND OPERATION OF ACCOUNTS
4.1 NOTICE OF BORROWING_--_DIRECT ADVANCES
Subject to the applicable provisions of this Agreement, on any Business Day
during the Disbursement Period, the Borrower shall be entitled to request
Advances under the Revolving Facility, on one or more occasions, up to the
maximum amount of the Credit, by way of Prime Rate Advances in minimum
amounts of $1,000,000 and whole multiples thereof, provided that at least
one (1) Business Day prior to the day on which any Prime Rate Advance is
required (other than an Advance under the Cash Management Facilities, which
shall be made in accordance with the provisions of the agreements pertaining
thereto referred to in Section 4.3), the Borrower shall have provided to the
Agent an irrevocable telephone notice at or before 10:00 A.M. on any
Business Day, followed by the immediate delivery of a written Notice of
Borrowing. Notices of Borrowing in respect of BA Advances shall be given in
accordance with the provisions of Section 6.1.
In the event that some of the Revolving Facility Lenders are Foreign Lenders
who cannot make Prime Rate Advances or BA Advances, prior to giving a Notice
of Borrowing to the Agent as provided above or in Section 6.1, the Borrower
shall give notice to the Agent that it wishes the Foreign Lenders to make a
Libor Advance, the whole in accordance with Section 4.2. In such event, the
Advance to be made by all Lenders shall be made on the last day of the
longest applicable notice period.
4.2 LIBOR ADVANCES AND CONVERSIONS
Subject to the applicable provisions of this Agreement, on any Business Day
during the Disbursement Period, upon an irrevocable telephone notice to the
Agent given prior to 10:00 A.M., at least three Banking Days prior to the
date of a proposed Libor Advance or a Rollover Date, followed by the
immediate delivery of a written Notice of Borrowing, the Borrower may
request that a Libor Advance be made by a Foreign Lender or that a Libor
Advance by a Foreign Lender or any part thereof be converted into a new
Libor Advance, in circumstances where the Foreign Lender cannot provide
Bankers' Acceptances. The Agent shall determine the LIBOR which will be in
effect on the date of the Advance or the Rollover Date, as the case may be
(which in such case must be a Banking Day), with respect to the Selected
Amount or to each of the Selected Amounts, as the case may be, having a
maturity of 10 to 180 days (subject to availability) from the date of the
Advance or the Rollover Date, as the case may be. However, if the Borrower
has not delivered a notice to the Agent in a timely manner in accordance
with the provisions of this Section 4.2, the Borrower shall be deemed to
have chosen to have the interest on the amount of such Advance calculated on
the Prime Rate Basis.
4.3 CASH MANAGEMENT FACILITIES
Subject to the terms and conditions of this Agreement, the Lender that
provides the Cash Management Facilities (the "CASH MANAGEMENT LENDER") shall
make Advances to the Borrower in accordance with the terms and conditions of
the agreements governing the Cash Management Facilities, the purpose of
which shall be to provide the Borrower with a deemed Prime Rate Advance in
connection with any negative balance in a consolidation account, and shall
issue letters of credit subject to the Borrower executing the Cash
Management Lender's standard documentation with respect thereto. The fee for
each such letter of credit shall be equal to the then applicable Stamping
Fee. The Borrower and each of the Lenders agrees that any amounts due to the
Cash Management Lender under the Cash Management Facilities shall be deemed
to form part of the Loan under the Revolving Facility and shall be secured
by the Security. For greater certainty, only the net Loan under the Cash
Management Facilities (including outstanding letters of credit) will be
treated as Advances hereunder at the end of any particular day. The Cash
Management Lender shall advise the Agent of any outstanding Advances upon
the request of the Agent.
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4.4 OPERATION OF ACCOUNTS
The Agent shall maintain in its books at the Agency Branch a record of the
Loan, including the Bankers' Acceptances issued by the Borrower, attesting
as to the total of the Borrower's indebtedness to the Lenders in accordance
with the provisions hereof and with the provisions of the Security
Documents. These accounts or registers shall constitute, in the absence of
manifest error, PRIMA FACIE proof of the total amount of the indebtedness of
the Borrower to the Lenders in accordance with the provisions hereof and of
the Security Documents, of the date of any Advance made to the Borrower and
of the total of all amounts paid by the Borrower from time to time with
respect to principal and interest owing on the Loan and the fees and other
sums exigible in accordance with the provisions hereof or of the Security
Documents.
4.5 APPORTIONMENT OF ADVANCES
The amount of each Advance will be apportioned among the Lenders by the
Agent by reference to the Commitment of each Lender, as such Commitment
shall be immediately prior to the making of any Advance, subject to the
provisions of Section 6.9 hereof with respect to BA Advances. If any amount
is not in fact made available to the Agent by a Lender, the Agent shall be
entitled to recover such amount (together with interest thereon at the rate
determined by the Agent as being its cost of funds in the circumstances) on
demand from such Lender or, if such Lender fails to reimburse the Agent for
such amount on demand, from the Borrower.
4.6 LIMITATIONS ON ADVANCES
The undrawn Credit available under the Revolving Facility shall cease to be
available at the expiry of the Disbursement Period.
4.7 NOTICES IRREVOCABLE
Any notice given to the Agent in accordance with Articles 4 or 6 may not be
revoked or withdrawn.
4.8 MARKET FOR BANKERS' ACCEPTANCES AND LIBOR ADVANCES
If at any time or from time to time: (a) there no longer exists a market for
Bankers' Acceptances or, (b) as a result of market conditions, (i) there
exists no appropriate or reasonable method to establish LIBOR, for a
Selected Amount or a Designated Period, or (ii) Canadian Dollar deposits are
not available to the Foreign Lenders in such market in the ordinary course
of business in amounts sufficient to permit them to make the Libor Advance,
for a Selected Amount or a Designated Period, such Lenders shall so advise
the Agent and, subject to the provisions of Section 4.11 hereof with regard
to the Foreign Lenders, any such Lenders shall not be obliged to accept
drafts of the Borrower presented to such Lenders pursuant to the provisions
of this Agreement nor to honour any notices of borrowing in connection with
any Libor Advances, and the Borrower's option to request BA Advances or
Libor Advances, as the case may be, shall thereupon be suspended upon notice
by the Agent to the Borrower.
4.9 SUSPENSION OF BA ADVANCE AND LIBOR ADVANCE OPTION
If a notice has been given by the Agent in accordance with Section 4.8
and except as provided in the next sentence of this Section, the BA Advance
or the Libor Advance, or any part thereof, as the case may be, shall not be
made (whether as an Advance, a conversion or an extension) by the Lenders
and the right of the Borrower to choose that Advances be made or, once made,
be converted or extended into the BA Advance or the Libor Advance, as the
case may be, shall be suspended until such time as the Agent has determined
that the circumstances having given rise to such suspension no longer exist,
in respect of which determination the Agent shall advise the Borrower within
a reasonable delay. If sufficient Canadian Dollar funds are not available to
the Foreign Lenders, the Foreign Lenders shall be relieved from their
obligation to make an Advance until such time as such funds become available
in sufficient amounts, but they shall comply with the provisions of
Section 4.11 hereof.
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4.10 LIMITS ON BA ADVANCES AND LIBOR ADVANCES
Nothing in this Agreement shall be interpreted as authorizing the Borrower
to issue Bankers' Acceptances or borrow by way of Libor Advances for a
Designated Period expiring on a date which results in a situation where the
Credit cannot be reduced as required by this Agreement, or on a date which
is after the expiry of the Term.
4.11 SPECIFIC CLAUSE WITH REGARD TO FOREIGN LENDERS
In the event of a suspension of the Borrower's right to request Advances
(including conversions and extensions) from one or more Foreign Lenders
under Sections 4.8 and 4.9 hereof (each an "AFFECTED LENDER"), each Affected
Lender shall, concurrently with the notice described in Section 4.8, seek
alternative sources of funding Cdn. $ Advances and, if sufficient funds are
obtained, shall notify the Borrower as to when such funds will be available
for Advances. On the date indicated in such notice, the Affected Lender
shall be deemed to have made an Advance with interest payable on the Prime
Rate Basis.
If within 5 Business Days following the notice described in Section 4.8,
there remain one or more Affected Lenders who have not been deemed to have
made an Advance on the Prime Rate Basis under the preceding paragraph, such
Lender (an "INCAPABLE LENDER") shall provide an additional notice to the
Agent and the Borrower of such fact and the following provisions shall
apply:
4.11.1 The Incapable Lender shall make US$ Advances on the Libor Basis,
and the parties will negotiate such amendments hereto as may be required
to give full effect to such intention, it being understood that the
Borrower alone will bear all foreign exchange risks; and
4.11.2 Sections 4.8 and 4.9 hereof shall apply without reference to
this Section 4.11 and, upon the expiration of the Designated Period of
any existing Libor Advance, the provisions of Section 5.8 hereof shall
apply to such Libor Advances.
5. INTEREST AND FEES
5.1 INTEREST ON THE PRIME RATE BASIS
The principal amount of the Loan which at any time and from time to time
remains outstanding and in respect of which the Borrower has chosen (subject
to the provisions of Section 4.1 with regard to Cdn. $ Libor Advances by
Foreign Lenders) or, in accordance with the provisions hereof, is obliged to
pay interest on the Prime Rate Basis, shall bear interest, calculated daily,
on the daily balance of such Loan, from the date of each Advance up to and
including the day preceding the date of repayment thereof in full at the
annual rate (calculated based on a 365 or 366 day year, as the case may be)
applicable to each of such days which corresponds to the Prime Rate at the
close of business on each of such days, plus the Margin.
5.2 PAYMENT OF INTEREST ON THE PRIME RATE BASIS
The interest payable in accordance with Section 5.1 and calculated in the
manner described therein shall be payable to the Agent monthly, in arrears,
on the last day of each month or on such other date (limited to once per
month) as the Agent may determine and advise the Borrower from time to time,
the first payment of which shall be exigible on the last day of the month in
which the first Prime Rate Advance was made.
5.3 INTEREST ON THE LIBOR BASIS
The principal amount of the Libor Advances which at any time and from time
to time remains outstanding shall bear interest, calculated daily, on the
daily balance of such Libor Advances, from each Rollover Date, at the annual
rate (calculated based on a 360-day year) applicable to each of such days
which corresponds to the LIBOR applicable to each Selected Amount, plus the
Margin, and shall be effective as and from each Rollover Date up to and
including the date prior to the next Rollover Date.
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5.4 PAYMENT OF INTEREST ON THE LIBOR BASIS
The interest payable in accordance with the provisions of Section 5.3
and calculated in the manner hereinabove set out on the amount outstanding
from time to time is payable to the Agent, in arrears,
5.4.1 on the last day of the Designated Period when the Designated
Period is 1 to 3 months,
5.4.2 when the Designated Period exceeds 3 months, on the last
Business Day of each period of 3 months during such Designated Period and
on the last day of the Designated Period.
5.5 LIMITS TO THE DETERMINATION OF LIBOR
Nothing herein contained shall be interpreted as authorizing the Borrower,
with respect to the determination of LIBOR, to choose a Selected Amount with
respect to each Designated Period of less than Cdn. $1,000,000 or a greater
amount other than in whole multiples of Cdn. $1,000,000.
5.6 FIXING OF LIBOR
LIBOR shall be transmitted to the Borrower at approximately 11:00 A.M., two
Banking Days prior to:
5.6.1 the date on which the Libor Advance is to be made; or
5.6.2 the relevant Rollover Date.
5.7 HEDGING
The Borrower shall enter into agreements with one or more Lenders providing
for, at all times during the Term, foreign exchange protection to the
Borrower with respect to 50% of the Debt under the HYD Offering (and any
Additional Offering if in US$), by way of Derivative Instruments acceptable
to the Agent, with an amortization schedule coincidental with the
amortization of the Debt under the HYD Offering and covering the full term
of the HYD Offering (and any Additional Offering if in US$).
The Borrower agrees that any amounts due to the Agent or the Lenders under
any Derivative Instruments of the nature described in this Section 5.7 shall
be deemed to form part of the Loan and shall be secured by the Security.
5.8 INTEREST ON THE LOAN
Where no specific provision with respect to interest on an outstanding
portion of the Loan is contained in this Agreement, including with respect
to Cdn. $ Libor Advances by Foreign Lenders which cannot be rolled over due
to the provisions of Sections 4.10 and 4.11, the interest on such portion of
the Loan shall be calculated and payable on the Prime Rate Basis.
5.9 ARREARS OF INTEREST
Any arrears of interest or principal shall bear interest at a rate that is
two percent (2%) per annum higher than the rate of interest payable in
respect of the relevant principal amount of the Loan and shall be calculated
and exigible on the same basis.
5.10 MAXIMUM INTEREST RATE
The amount of the interest or fees exigible in applying this agreement shall
not exceed the maximum rate permitted by Law. Where the amount of such
interest or such fees is greater than such maximum rate, the amount shall be
reduced to the highest rate which may be recovered in accordance with the
applicable provisions of Law.
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5.11 FEES
The Borrower shall pay the following fees (the "FEES") to the Agent:
5.11.1 for the Revolving Facility Lenders, a facility fee (the
"FACILITY FEE") calculated daily by multiplying the amount of the Credit
under the Revolving Facility (including the Credit under the Cash
Management Facilities) each day by the applicable rate set out in the
definition of "Margin", and dividing the result by 365 (or 366 in a leap
year), and then multiplying that result by the number of days in the
relevant quarter, payable quarterly in arrears two Business Days
following the last day of each calendar quarter, commencing in respect of
the quarter ending on December 31, 2003, or on such other date as the
Lenders may determine, acting reasonably; and
5.11.2 for the Agent, an annual agency fee in the amount and payable in
accordance with the provisions of a letter agreement dated as of
August 9, 2000, entered into between INTER ALIA, Quebecor Media Inc. and
the Agent, and consented to by the Borrower.
5.12 INTEREST ACT
5.12.1 For the purposes of the INTEREST ACT (Canada), any amount of
interest or fees calculated herein using 360, 365 or 366 days per year
and expressed as an annual rate is equal to the said rate of interest or
fees multiplied by the actual number of days comprised within the
calendar year, divided by 360, 365 or 366, as the case may be.
5.12.2 The parties agree that all interest in this Agreement will be
calculated using the nominal rate method and not the effective rate
method, and that the deemed re-investment principle shall not apply to
such calculations. In addition, the parties acknowledge that there is a
material distinction between the nominal and effective rates of interest
and that they are capable of making the calculations necessary to compare
such rates.
6. BANKERS' ACCEPTANCES
6.1 ADVANCES BY BANKERS' ACCEPTANCES AND CONVERSIONS INTO BANKERS'
ACCEPTANCES
6.1.1 Subject to the applicable provisions of this Agreement,
including those of the second paragraph of Section 4.1 with regard to
Notices of Borrowing for Libor Advances by Foreign Lenders, on any
Business Day during the Disbursement Period, by written Notice of
Borrowing to the Agent given at least two (2) Business Days prior to the
date of the Advance or the Rollover Date (for the purposes of this
Article 6 called the "ACCEPTANCE DATE") and before 10:00 A.M., the
Borrower may request that a BA Advance be made, that one or more Advances
(other than Cdn. $ Libor Advances by Foreign Lenders) not borrowed as
BA Advances be converted into one or more BA Advances or that a
BA Advance or any part thereof be extended, as the case may be (the "BA
REQUEST"). Bankers' Acceptances shall be issued on each Acceptance Date
or Rollover Date, in a minimum Selected Amount, with respect to each
Designated Period, of $5,000,000 or such greater amount which is an
integral multiple of $1,000,000, shall have a Designated Period of 10 to
180 days (or such other period as may be available and acceptable to the
Agent), subject to availability, and shall, in no event, mature on a date
after the expiry of the applicable Term.
6.1.2 Prior to making any BA Request, the Borrower shall deliver:
(a) to the Lenders, in the name of each Lender which is a bank that
accepts bankers' acceptances (a "BA LENDER"), drafts in form and
substance acceptable to the Agent and the Lenders; and
(b) to the Lenders in the name of each Lender which is not a bank or does
not accept bankers' acceptances (a "NON-BA LENDER"), Discount Notes;
completed and executed by its authorized signatories in sufficient quantity
for the Advance requested and in appropriate denominations to facilitate the
sale of the Bankers' Acceptances in the financial markets. No Lender shall
be responsible or liable for its failure to accept a Bankers' Acceptance
hereunder if such failure is due, in whole or in part, to the failure of the
Borrower to give appropriate instructions to the Agent on a
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timely basis, nor shall the Agent or any Lender be liable for any damage,
loss or other claim arising by reason of any loss or improper use of any
such instrument except a loss or improper use arising by reason of the gross
negligence or wilful misconduct of the Agent, such Lender, or their
respective employees. In order to facilitate issuances of Bankers'
Acceptances pursuant hereto, in accordance with the instructions given from
time to time by the Borrower, the Borrower hereby authorizes each Lender,
and for this purpose appoints each Lender its lawful attorney, to complete
and sign Bankers' Acceptances on behalf of the Borrower, in handwritten or
facsimile or mechanical signature or otherwise, and once so completed,
signed and endorsed, and following acceptance of them as Bankers'
Acceptances, to purchase, discount or negotiate such Bankers' Acceptances in
accordance with the provisions of this Article 6, and to provide the
Available Proceeds (as defined in subsection 6.2.4 (d)) to the Agent in
accordance with the provisions hereof. Drafts so completed, signed, endorsed
and negotiated on behalf of the Borrower by any Lender shall bind the
Borrower as fully and effectively as if so performed by an authorized
officer of the Borrower. Each Lender shall maintain a record with respect to
such instruments (i) received by it hereunder, (ii) voided by it for any
reason, (iii) accepted by it hereunder and (iv) cancelled at their
respective maturities. Each Lender agrees to provide such records to the
Borrower promptly upon request and, at the request of the Borrower, to
cancel such instruments which have been so completed and executed and which
are held by such Lender and have not yet been issued hereunder.
6.2 ACCEPTANCE PROCEDURE
With respect to any BA Advance:
6.2.1 The Agent shall promptly notify in writing each Lender of the
details of the proposed issue, specifying:
6.2.2 (a) For each BA Lender, (i) the principal amount of the Bankers'
Acceptances to be accepted by such Lender, and (ii) the Designated Period
of such Bankers' Acceptances; and
(b) For each Lender which is a Non-BA Lender, (i) the principal
amount of the Discount Notes to be issued to such Lender, and (ii) the
Designated Period of such Discount Notes.
6.2.3 The Agent shall establish the Bankers' Acceptance Discount Rate
at or about 10:00 a.m. on the Acceptance Date, and the Agent shall
promptly determine the amount of the BA Proceeds.
6.2.4 Forthwith, and in any event not later than 11:30 A.M. on the
Acceptance Date, the Agent shall indicate to each Lender, in the manner
set out in Section 18.5:
(a) the Bankers' Acceptance Discount Rate;
(b) the amount of the Stamping Fee applicable to those Bankers'
Acceptances to be accepted by such Lender on the Acceptance Date,
calculated by multiplying the appropriate percentage set out in the
definition of "Stamping Fee" by the face amount of each Bankers'
Acceptance (taking into account the number of days in the Designated
Period), any such Lender being authorized by the Borrower to collect the
Stamping Fee out of the BA Proceeds of those Bankers' Acceptances;
(c) the BA Proceeds of the Bankers' Acceptances to be purchased
by such Lender on such Acceptance Date; and
(d) the amount obtained (the "AVAILABLE PROCEEDS") by subtracting
the Stamping Fee mentioned in subsection 6.2.4(b) from the BA Proceeds
mentioned in subsection 6.2.4(c).
6.2.5 Not later than 1:00 P.M. on the Acceptance Date, each Lender
shall make available to the Agent its Available Proceeds.
6.2.6 Not later than 4:00 P.M. on the Acceptance Date, the Agent shall
transfer the Available Proceeds to the Borrower in accordance with
Section 8.9 and shall notify the Borrower on such day either by telex,
fax or telephone (if by telephone, to be confirmed subsequently in
writing) of the details of the issue.
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6.3 PURCHASE OF BANKERS' ACCEPTANCES AND DISCOUNT NOTES
Before giving value to the Borrower, the Lenders or the sub-participants
(other than Foreign Lenders who cannot make BA Advances) which:
6.3.1 are BA Lenders shall, on the Acceptance Date, accept the
Bankers' Acceptances by inserting the appropriate principal amount,
Acceptance Date and maturity date in accordance with the BA Request
relating thereto and affixing their acceptance stamps thereto, and shall
purchase or sell same; and
6.3.2 are Non-BA Lenders shall, on the Acceptance Date, complete the
Discount Notes by inserting the appropriate principal amount, Acceptance
Date and maturity date in accordance with the BA Request relating
thereto.
6.4 MATURITY DATE OF BANKERS' ACCEPTANCES
Subject to the applicable notice provisions, at or prior to the maturity
date of each Bankers' Acceptance, the Borrower shall:
6.4.1 give to the Agent a notice in the form of Schedule "B"
requesting that the Lenders convert all or any part of the BA Advance
then outstanding by way of Bankers' Acceptances which are maturing into a
Prime Rate Advance; or
6.4.2 give to the Agent a notice in the form of Schedule "B"
requesting that the Lenders extend all or any part of the BA Advance
outstanding by way of Bankers' Acceptances which are maturing into
another BA Advance by issuing new Bankers' Acceptances, subject to
compliance with the provisions of subsection 6.1.1 with respect to the
minimum Selected Amount and Designated Period; or
6.4.3 at latest at 10:00 A.M., two (2) Business Days prior to the
Rollover Date of each Bankers' Acceptance then outstanding and reaching
maturity, notify the Agent by way of a notice substantially in the form
of Schedule "B-1" (but omitting paragraph 3 thereof) that it intends to
deposit in its account for the account of the Lenders on the Rollover
Date an amount equal to the principal amount of each such Bankers'
Acceptance.
6.5 DEEMED CONVERSIONS ON THE MATURITY DATE
If the Borrower does not deliver to the Agent one or more of the notices
contemplated by subsections 6.4.1 or 6.4.2 or does not give the notice and
make the deposit contemplated by subsection 6.4.3, the Borrower shall be
deemed to have requested that the part of the BA Advance then outstanding
which is reaching maturity be converted into a Prime Rate Advance.
6.6 CONVERSION AND EXTENSION MECHANISM
If under the conditions
6.6.1 of subsection 6.4.1 and of Section 6.5, the Borrower requests or
is deemed to have requested, as the case may be, that the Agent convert
the portion of the BA Advance which is maturing into a Prime Rate
Advance, the Lenders shall pay the Bankers' Acceptances which are
outstanding and maturing. Such payments by the Lenders will constitute an
Advance within the meaning of this Agreement and the interest thereon
shall be calculated and payable as the Borrower may request or may be
deemed to have requested;
6.6.2 of subsection 6.4.3, the Borrower makes a deposit in its
account, without limiting in any way the generality of Section 17.5, the
Borrower hereby expressly and irrevocably authorizes the Agent to make
any debits necessary in its account in order to pay the Bankers'
Acceptances which are outstanding and maturing.
6.7 AMOUNTS GIVEN TO THE LENDERS DO NOT CONSTITUTE A PREPAYMENT
All amounts debited by the Agent from the Borrower's account in accordance
with the provisions of subsection 6.6.2 shall not constitute a prepayment in
accordance with the provisions of Section 8.3.
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6.8 PREPAYMENT OF BANKERS' ACCEPTANCES
Notwithstanding any provision hereof, the Borrower may not prepay any
Bankers' Acceptance other than on its maturity date; however, this provision
shall not prevent the Borrower from acquiring, in its discretion but subject
to the other provisions of this Agreement, any Bankers' Acceptance in
circulation from time to time.
6.9 APPORTIONMENT AMONGST THE LENDERS
The Agent is authorized by the Borrower and each Lender to allocate amongst
the Lenders (other than Foreign Lenders who cannot make BA Advances) the
Bankers' Acceptances to be issued and purchased in such manner and amounts
as the Agent may, in its sole discretion, but acting reasonably, consider
necessary, so as to ensure that no Lender is required to accept and purchase
a Bankers' Acceptance for a fraction of $100,000, and in such event, the
Lenders' respective Commitments in any such Bankers' Acceptances and
repayments thereof shall be altered accordingly. Further, the Agent is
authorized by the Borrower and each Lender to cause the proportionate share
of one or more Lender's Advances (calculated based on its Commitment) to be
exceeded by no more than $100,000 each as a result of such allocations
provided that the principal amount of outstanding Advances, including
Bankers' Acceptances, shall not thereby exceed the maximum amount of the
respective Commitment of each Lender. Any resulting amount by which the
requested face amount of any such Bankers' Acceptance shall have been so
reduced shall be advanced, converted or continued, as the case may be, as a
Prime Rate Advance, to be made contemporaneously with the BA Advance.
6.10 CASH DEPOSITS
Each Lender may, in its discretion, at any time, in the absence of any
demand by the Borrower to such effect, grant an Advance to the Borrower, the
amount of which shall be equivalent to the face value of all Bankers'
Acceptances then in circulation which have been accepted, which Advance
shall not bear interest. The amount of the Advance shall not be taken into
account in order to calculate the amount of the Credit used pursuant hereto.
The Agent shall retain the amount of the Advance in a non-interest bearing
cash collateral account as security, for the benefit of the Borrower, which
amount may be entirely set-off against the amount of the Advance and the
amount of the Bankers' Acceptances in circulation which such Lender has
accepted and may be imputed, in the Lender's discretion, to the payment of
the Bankers' Acceptances at their maturity. The Borrower shall sign and
remit as security with regard thereto all appropriate documents which the
Lenders might judge necessary or desirable, specifically including an
assignment of the credit balance of the deposit account held as security.
6.11 DAYS OF GRACE
The Borrower shall not claim from the Lenders any days of grace for the
payment at maturity of any Bankers' Acceptances presented and accepted by
the Lenders pursuant to the provisions of this Agreement. Further, the
Borrower waives any defence to payment which might otherwise exist if for
any reason a Bankers' Acceptance shall be held by any Lender in its own
right at the maturity thereof.
6.12 OBLIGATIONS ABSOLUTE
The obligations of the Borrower with respect to Bankers' Acceptances shall
be unconditional and irrevocable and shall be paid strictly in accordance
with the provisions of this Agreement under all circumstances, including the
following circumstances:
6.12.1 any lack of validity or enforceability of any draft accepted by
any Lender as a Bankers' Acceptance; or
6.12.2 the existence of any claim, set-off, defence or other right
which the Borrower may have at any time against the holder of a Bankers'
Acceptance, the Lenders, or any other person or entity, whether in
connection with this Agreement or otherwise.
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6.13 DEPOSITORY BILLS AND NOTES ACT
Bankers' Acceptances may be issued in the form of a depository xxxx and
deposited with a clearing house, both terms as defined in the DEPOSITORY
BILLS AND NOTES ACT. The Agent and the Borrower shall agree on the
procedures to be followed, acting reasonably. The Lenders are also
authorized to issue depository bills as replacements for previously issued
Bankers' Acceptances, on the same terms as those replaced, and deposit them
with a clearing house against cancellation of the previously issued Bankers'
Acceptances.
7. ILLEGALITY, INCREASED COSTS AND INDEMNIFICATION
7.1 ILLEGALITY, INCREASED COSTS
If a Lender, acting reasonably, determines (which determination shall be
attested to by a certificate submitted to the Borrower by the Lender with a
copy to the Agent and which shall be final and binding between the parties
hereto in the absence of manifest error) that (a) the adoption by a
governmental or international authority (including the Bank for
International Settlements (the "BIS")) of a law, directive, requirement or
guideline, whether or not having the force of law, (b) any modification to a
law, directive or guideline, whether or not having the force of law, or to
the interpretation or application of same by a tribunal or governmental or
international authority (including the BIS) or other body charged with such
interpretation or application, or (c) any quashing by a tribunal or other
governmental or international authority or body (including the BIS) of an
interpretation of any law, directive, requirement or guideline, whether or
not having the force of law:
7.1.1 has rendered or will render it illegal or contrary to any law,
directive or guideline for any of the Lenders to maintain or to give
effect to all or part of their obligations stipulated in this Agreement,
including the obligation to make or maintain all or any part of a BA
Advance or a Libor Advance pursuant to the terms hereof, then the
obligation of such Lender(s) to maintain or to give effect to such part
of its obligations will become null and, subject to the provisions of the
particular law, directive or guideline and of Section 7.2 with respect to
losses, costs and expenses, if the Loan affected is a BA Advance, the
Borrower may convert the principal amount thereof into a Prime Rate
Advance. If the Loan affected is a Libor Advance, the provisions of
Section 4.11 shall apply. In either case, the Borrower shall pay the
interest accrued thereon, or may reimburse the particular BA Advance or
Libor Advance, as the case may be, in whole with interest accrued
thereon.
7.1.2 Such conversion or reimbursement shall be made at the expiry of
the relevant Designated Period of any then outstanding Libor Advances or
BA Advances, as the case may be, or, if in the judgment of the Lender
expressed to the Agent in the certificate referred to above, an immediate
conversion or reimbursement is necessary, immediately upon demand by the
Agent, subject to the payment by the Borrower of breakage costs, if any;
or
7.1.3 (a) has imposed, modified or deemed applicable any loan ceiling
with respect to the Lenders, or imposed, modified or deemed applicable
any special tax, reserve, deposit, capital adequacy or similar
requirement with respect to the assets held by, deposited at or used for
the purchase of funds, or to the loans made by the Lenders, or
(b) changes the basis of taxation on payments made to the Lenders under
this Agreement (other than a change affecting the taxes based on net
profits of the Lenders), or (c) imposes upon the Lenders any other
monetary conditions or restrictions with respect to this Agreement, all
or any part of a Loan, as the case may be, or any other document, effect
or operation contemplated hereby, and if the result of any of the
foregoing is to increase the cost to such Lender of making or maintaining
its Commitment or any Advance, or to reduce any amount otherwise
receivable by such Lender hereunder with respect thereto, then, in any
such case, the Borrower shall promptly pay to such Lender, within 10
Business Days from demand, such additional amounts necessary to
compensate such Lender for such additional cost or reduced amount
receivable as is determined in good faith by such Lender. If a Lender
becomes entitled to claim any additional amounts pursuant to this
Section 7.1, it shall promptly notify the Borrower, through the Agent, of
the event by reason of which it has become so entitled and provide
reasonable particulars of the calculation of such amount. A certificate
of a Lender as to any such additional amounts payable to it shall be
conclusive and binding in the absence of manifest error.
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7.2 INDEMNITY
The Borrower shall indemnify each Lender against and hold each Lender, as
well as its directors, officers and employees, harmless from any loss or
expense, including without limitation any loss or expense arising from
interest or fees payable by such Lender to lenders of funds obtained by it
in order to make or maintain any Advance and any loss or expense incurred in
liquidating or re-employing deposits from which such funds were obtained,
which such Lender may sustain or incur as a consequence of any (a) default
by the Borrower in the payment when due of the amount of or interest on any
Loan or in the payment when due of any other amount hereunder, (b) default
by the Borrower in obtaining an Advance after the Borrower has given notice
hereunder that it desires to obtain such Advance, (c) default by the
Borrower in making any voluntary reduction of the outstanding amount of any
Loan after the Borrower has given notice hereunder that it desires to make
such reduction, and (d) the payment of any Bankers' Acceptance or Libor
Advance otherwise than on the maturity date thereof (including without
limitation any such payment required pursuant to Section 8.1 or upon
acceleration pursuant to Section 14.2). A certificate of the Agent providing
reasonable particulars of the calculation of any such loss or expense shall
be conclusive and binding in the absence of manifest error. If any Lender
becomes entitled to claim any amount pursuant to this Section 7.2, it shall
promptly notify the Borrower of the event by reason of which it has become
so entitled and reasonable particulars of the related loss or expense,
provided that the failure to do so promptly shall not prejudice the Lenders'
right to claim hereunder.
Without prejudice to the survival or termination of any other agreement of
the Borrower under this Agreement, the obligations of the Borrower under
this Section 7.2 shall survive the payment of principal and interest on all
Loans and the termination of the Credit.
8. PAYMENT, REPAYMENT AND PREPAYMENT
8.1 REPAYMENT OF THE LOAN
The Borrower hereby agrees to repay the amount of the Loan outstanding under
the Revolving Facility on the last day of the Term.
8.2 AMOUNT AND APPORTIONMENT OF MANDATORY REPAYMENTS
The Borrower hereby undertakes to make Mandatory Repayments equal to the sum
of:
8.2.1 100% of the Net Proceeds of all Asset Dispositions (excluding
the Net Proceeds of Asset Dispositions received by the Borrower up to an
amount of $50,000,000 in the aggregate) of the VL Group (excluding the
non-material assets referred to in Section 13.3), unless same are
reinvested within 12 months following any such Asset Disposition to
acquire capital assets used in the Core Business, payable within 5
Business Days following the expiry of such 12 month period; plus
8.2.2 Any amounts payable to the Agent for the Lenders in accordance
with the provisions of Section 12.6, provided that insurance proceeds
received by the Borrower, up to an amount of $50,000,000 in the
aggregate, will be exempt from the imputation rules set out in this
Section 8.2 and may be retained by the Borrower.
The Borrower shall advise the Agent of its intention to make any such
Mandatory Repayment by notice in writing substantially in the form of
Schedule "B-1", at least 5 and not more than 20 days before the Mandatory
Repayment is due, and shall pay the amount of such Mandatory Repayment to
the Agent when it is due. All proceeds of each Mandatory Repayment shall be
applied to repay and permanently reduce the Revolving Facility.
No such Mandatory Repayment may be made on a date that would require a Libor
Advance or BA Advance to be prepaid, except in accordance with the
provisions of Section 8.4.
8.3 VOLUNTARY REPAYMENT AND PREPAYMENT OF THE LOAN OR CANCELLATION OF
THE CREDIT
On any Business Day during the Term, after having given notice to the Agent
of one (1) Business Day with respect to the repayment of Prime Rate Advances
and two (2) Business Days with respect to BA Advances,
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substantially in the form of Schedule "B-1", the Borrower may repay in
minimum amounts of $1,000,000 or in whole multiples of such amount, all or
part of the principal amount of the Loan under the Revolving Facility,
provided that in respect of a BA Advance, no repayment shall be made on a
date other than a maturity date of the Bankers' Acceptances outstanding at
that time, with, in each case, all interest accrued and unpaid on the
amounts so prepaid. In respect of Cdn. $ Libor Advances by Foreign Lenders,
no repayment may be made on a day other than a Rollover Date, save as
provided in Sections 7.1, 7.2 and 8.4.
On any Business Day during the Term, after having given notice to the Agent
at least ten (10) days prior to the proposed prepayment, substantially in
the form of Schedule "B-1", the Borrower may repay or prepay in minimum
amounts of $10,000,000, or in whole multiples of such amounts, all or part
of the principal amount of the Loan, provided that in respect of the Libor
Advances, no repayment may be made on a day other than a Rollover Date, save
as provided in Sections 7.1, 7.2 and 8.4, and in respect of a BA Advance, no
prepayment shall be made on a date other than a maturity date of the
Bankers' Acceptances outstanding at that time, with, in each case, all
interest accrued and unpaid on the amounts so prepaid. Notwithstanding the
foregoing and in the case of voluntary repayments or prepayments under the
Revolving Facility other than Cdn. $ Libor Advances by Foreign Lenders,
accrued and unpaid interest on the amounts repaid or prepaid need not be
paid at the time of the repayment or prepayment, but shall be paid in
accordance with the provisions of Section 5.2 hereof.
In addition, the Borrower may, upon the same notice, cancel any portion of
the Credit that has not been drawn by the Borrower. No Facility Fee shall be
payable in respect of any portion of the Credit so cancelled as and from the
effective date of its cancellation. The Borrower shall not be permitted to
draw Advances in respect of any portion of the Credit so cancelled.
8.4 PAYMENT OF LOSSES RESULTING FROM A PREPAYMENT OR A MANDATORY
REPAYMENT
If a prepayment or Mandatory Repayment to be made would require the
repayment of outstanding Bankers' Acceptances prior to their maturity, or
the repayment of a Libor Advance on a day other than a Rollover Date, the
Borrower shall provide to the Agent cash collateral in an amount equal to
the face amount of such Bankers' Acceptances or the principal amount of such
Libor Advance, as the case may be, which cash collateral shall be held by
the Agent in an interest bearing account and used to repay same at maturity
or on the next Rollover Date, as the case may be. However, in the case where
the prepayment or Mandatory Repayment would require the prepayment of a
Libor Advance, the Borrower may elect to prepay same and pay to the Agent
for the Lenders the amount of the losses, costs and expenses suffered or
incurred by the Lenders with respect thereto which are referred to in
Section 7.2.
8.5 CURRENCY OF PAYMENTS
All payments, repayments, prepayments or Mandatory Repayments, as the case
may be:
8.5.1 of principal under the Loan, or any part thereof, shall be made
in the same currency as that in which they are outstanding;
8.5.2 of interest, shall be made in the same currency as the principal
amount outstanding to which they relate;
8.5.3 of Fees, shall be made in Canadian Dollars alone; and
8.5.4 of the amounts referred to in Section 7.2, shall be made in the
same currency as the losses, costs and expenses suffered or incurred by
the Lenders.
8.6 PAYMENTS BY THE BORROWER TO THE AGENT
All payments to be made by the Borrower in connection with this Agreement
shall be made in funds having same day value to the Agent, at the Agency
Branch, or at any other office or account in Toronto or Montreal designated
by the Agent. Any such payment shall be made on the date upon which such
payment is due, in accordance with the terms hereof, no later than
11:00 A.M.
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8.7 PAYMENT ON A BUSINESS DAY
Each time a payment, repayment, prepayment or Mandatory Repayment is due on
a day that is not a Business Day, it shall be made on the following Business
Day.
8.8 PAYMENTS BY THE LENDERS TO THE AGENT
Any amounts payable to the Agent by a Lender shall be paid in funds having
same day value to the Agent by the Lenders on a Business Day at the Agency
Branch.
8.9 PAYMENTS BY THE AGENT TO THE BORROWER
Any payment received by the Agent for the account of the Borrower shall be
paid in funds having same day value to the Borrower on the date of receipt,
or if such date is not a Business Day, on the next Business Day, at the
Branch.
8.10 NETTING
On the date of any Advance or on a Rollover Date (a "TRANSACTION DATE"), the
Agent shall be entitled to net amounts payable on such date by the Agent to
a Lender against amounts payable in the same currency on such date by such
Lender to the Agent, for the account of the Borrower. Similarly, on any
Transaction Date, the Borrower hereby authorizes each Lender to net amounts
payable in one currency on such date by such Lender to the Agent, for the
account of the Borrower, against amounts payable in the same currency on
such date by the Borrower to such Lender in accordance with the Agent's
calculations made in accordance with the provisions of this Agreement.
8.11 APPLICATION OF PAYMENTS
8.11.1 Except as otherwise indicated herein, all payments made to the
Agent by the Borrower for the account of the Lenders shall be
distributed the same day by the Agent, in accordance with its
normal practice, in funds having same day value, among the Lenders
to the accounts last designated in writing by each Lender to the
Agent, PRO RATA in accordance with their respective Commitments,
and notice thereof shall be given to the Borrower by the Agent
within a reasonable delay.
8.11.2 Except as otherwise indicated herein or as otherwise determined
by the Lenders, all payments made by the Borrower to the Agent on
behalf of the Lenders shall be applied by the Lenders as follows:
(a) to the fees, costs, expenses and accessories contemplated by
Article 7, Section 14.5 and Section 17.5 or by the Security
Documents;
(b) to all amounts due under Article 5 hereunder;
(c) to the repayment of the principal amount of the Loan subject,
in the case of Mandatory Repayments, to the imputation rules
set out in Section 8.2;
(d) to any other amounts due pursuant to this Agreement.
8.12 NO SET-OFF OR COUNTERCLAIM BY BORROWER
All payments by the Borrower shall be made free and clear of and without any
deduction for or on account of any set-off or counterclaim.
8.13 DEBIT AUTHORIZATION
The Agent is hereby authorized to debit the Borrower's and the Guarantors'
account or accounts maintained from time to time at the Branch or elsewhere,
and to set off and compensate against any and all accounts, credits and
balances maintained at any time by the Borrower or the Guarantors for the
amount of any interest
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or any other amounts due and owing hereunder from time to time payable by
the Borrower, in order to obtain payment thereof.
8.14 WITHHOLDING TAXES
8.14.1 All payments to be made hereunder by the Borrower shall be made
free and clear of, and without deduction or withholding for or on
account of, any present or future tax, levy, impost, duty, charge,
assessment or fee (including interest, penalties and additions
thereto) (herein "TAXES"), but excluding net income taxes and
franchise taxes (imposed in lieu of income taxes) imposed on any
Lender as a result of a present or former connection between such
Lender and the jurisdiction imposing such tax (other than any such
connection arising solely from such Lender having executed,
delivered or performed its obligations under, or received a
payment under, or enforced this Agreement or any Guarantee). If
any Taxes are required to be withheld from any payment hereunder,
the Borrower shall (a) increase the amount of such payment so that
the Lenders will receive a net amount (after deduction and
withholding of all Taxes) equal to the amount otherwise due
hereunder; (b) pay such Taxes to the appropriate taxing authority
for the account of the relevant Lenders and (c) as promptly as
possible thereafter, send the Agent and the Lenders an original
receipt showing payment thereof, together with such additional
documentary evidence as the Lenders may from time to time
reasonably require.
8.14.2 Each Lender other than a Foreign Lender agrees to use reasonable
measures to avoid or to minimize any amounts which might otherwise
be payable pursuant to this Section 8.14, but no Lender shall be
required to disclose any information about its taxes to the
Borrower that is not publicly available.
8.14.3 If the Borrower fails to perform its obligations under
subsection 8.14.1, the Borrower shall indemnify the Lenders for
any incremental Taxes, interest or penalties that may become
payable by the Lenders as a consequence of such failure. The
obligations of the Borrower under this Section 8.14 shall survive
the termination of this Agreement.
9. SECURITY
9.1 SECURITY FOR ADVANCES PRIOR TO THE PHASE II DATE
As general and continuing security for the performance by the Borrower of
its obligations to the Lenders prior to the Phase II Date hereunder
(including under the Cash Management Facilities) and under the Security
Documents, and of the Borrower's obligation to repay the Loan, including all
amounts owing by the Borrower to the Lenders in principal, interest and
accessories hereunder and under any agreement pertaining to Derivative
Obligations, including the Negative Value of Derivative Instruments entered
into with a Lender, as such agreements are, from time to time, amended,
restated, amended and restated, extended or renewed, the Borrower shall:
9.1.1 cause to be executed by Quebecor Media Inc. (the "QUEBECOR MEDIA
GUARANTEE") and by each of the other Guarantors an unconditional
solidary (joint and several) Guarantee, in favour of the Agent on
behalf of the Lenders, of the obligations of the Borrower under
this Agreement and the Security Documents, substantially in the
form annexed as Schedule "D"; provided that the Quebecor Media
Guarantee shall incorporate by reference the provisions of,
INTER ALIA, Sections 8.1 and 8.2 of the Quebecor Media Credit
Facility, providing for certain restrictions as to the ability of
Quebecor Media Inc. to incur Debt, sell assets and otherwise
perform certain acts, as such provisions appear at the Closing
Date and irrespective of any amendment subsequent thereto; and
9.1.2 cause to be executed by the owner of the shares of the Borrower
and each of the Initial VL Group Guarantors an agreement creating
a first-ranking (prior to the Phase II Date) pledge of the shares
of each of the Borrower and the Initial VL Group Guarantors (other
than Quebecor Media Inc. and GVL) to the Agent on behalf of the
Lenders, which agreement shall be substantially in form of
Schedule "E".
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9.2 SECURITY FOR ADVANCES FOLLOWING THE PHASE II DATE
As general and continuing security for the performance by the Borrower of
its obligations to the Lenders on and after the Phase II Date hereunder
(including under the Cash Management Facilities) and under the Security
Documents, and of the Borrower's obligation to repay the Loan, including all
amounts owing by the Borrower to the Lenders in principal, interest and
accessories hereunder and under any agreement pertaining to Derivative
Obligations, including the Negative Value of Derivative Instruments entered
into with a Lender, as such agreements are, from time to time, amended,
restated, amended and restated, extended or renewed, the Borrower shall:
9.2.1 cause to be executed by each of the Guarantors an unconditional
solidary (joint and several) Guarantee (or, in the case of the
Initial VL Group Guarantors, confirmations of their existing
Guarantees), in favour of the Agent on behalf of the Lenders, of
the obligations of the Borrower under this Agreement and the
Security Documents, substantially in the form annexed as
Schedule "D", provided that the Guarantees provided by CF Cable
TV Inc. and its Subsidiaries shall be limited to the extent
contemplated by the terms of the CF Cable Notes. The existing
Guarantee executed by GVL shall be amended to provide that the
Agent shall not have any recourse to any of the shares owned by
GVL which have not been pledged in accordance with the provisions
of subsection 9.1.2. The Guarantees provided by CF Cable TV Inc.
and its Subsidiaries shall provide that, to the extent permitted
by the provisions of the CF Cable Notes, such Guarantees
constitute "First Priority Debt", as such expression is defined in
the CF Cable Notes;
9.2.2 cause to be executed by Quebecor Media Inc. a limited-recourse
Guarantee agreement with the Agent for the Lenders, which will be
substantially in the form of Schedule "D" but will provide that
(A) the recourse of the Lenders under such Guarantee shall be
limited to the pledge, if any, of the shares referred to in
subsection 9.1.2, which pledge shall remain in effect but shall
rank second to the Permitted Charge referred to in
subsection 1.1.88.7 until the Quebecor Media Credit Facility has
been repaid in full and cancelled, and (B) the restrictions
contained in the Quebecor Media Credit Facility and incorporated
by reference in the Guarantee referred to in subsection 9.1.1
shall no longer be so incorporated;
9.2.3 execute and cause to be executed by the Guarantors other than
Quebecor Media Inc. and GVL, whose pledges of shares pursuant to
the provisions of subsection 9.1.2 shall remain in effect, an
agreement pledging the shares of each of their respective
Subsidiaries to the Agent on behalf of the Lenders, which
agreement shall be substantially in form of Schedule "E" (the
"SHARE PLEDGE"), provided that the Share Pledges by CF Cable
TV Inc. and its Subsidiaries shall be limited to the extent
contemplated by the provisions of the CF Cable Notes;
9.2.4 execute and cause to be executed by each of the Guarantors
(other than Quebecor Media Inc.) first-ranking security (subject
only to Permitted Charges) in favour of the Agent on behalf of the
Lenders, by way of a hypothec on the universality of all of its
movable and immovable property located in the Province of Quebec
(and/or, at the option of the Agent, by way of a hypothec securing
Debentures granted in favour of the Agent or a collateral agent
designated by the Agent as the power of attorney ("fonde de
pouvoir") of the Lenders within the meaning of Article 2692 of the
Civil Code of Quebec, as contemplated by Section 18.16), provided
that (a) any Security created by CF Cable TV Inc. and its
Subsidiaries shall be limited to the extent contemplated by the
provisions of the CF Cable Notes, and (b) the Security created by
GVL shall not extend to any shares owned by GVL which have not
been pledged in accordance with the provisions of
subsection 9.1.2;
9.2.5 execute first-ranking security (subject only to Permitted
Charges) in favour of each Lender that is a bank, within the
meaning of the Bank Act (Canada), under Sections 427
and following of the Bank Act (Canada);
9.2.6 execute and cause to be executed by each of the Guarantors
(other than Quebecor Media Inc. and GVL) in favour of the Agent on
behalf of the Lenders, a first-ranking (subject only to
30
Permitted Charges) General Security Agreement and mortgage
charging all of its property and assets, personal (movable) and
real (immovable), if any, located elsewhere in Canada or in the
USA (and/or, at the option of the Agent, by way of a debenture or
other instrument containing the same Charges), provided that any
Security created by CF Cable TV Inc. and its Subsidiaries shall be
limited to the extent contemplated by the provisions of the CF
Cable Notes;
9.2.7 execute and cause to be executed by each of the Guarantors
(other than Quebecor Media Inc. and GVL), a first-ranking
assignment, by way of collateral security, of the contracts
governing or evidencing intellectual property rights (subject to
Permitted Charges, and to the extent not prohibited by the terms
of the agreements governing such rights) in favour of the Agent on
behalf of the Lenders, provided that any Security created by CF
Cable TV Inc. and its Subsidiaries shall be limited to the extent
contemplated by the provisions of the CF Cable Notes;
9.2.8 cause the Agent on behalf of the Lenders to be named in all
insurance policies protecting the members of the VL Group and
their movable property, activities, business interruption and
third party liability against any form of loss as a named insured
as its interest may appear, and deliver to the Agent certificates
of insurance in form and substance satisfactory to the Agent;
9.2.9 execute concurrently with (in respect of movable property), and
within sixty days of (in respect of immovable property), the
integration of Videotron Telecom Ltd. ("VTL"), by way of
amalgamation or otherwise, with the Borrower (the "MERGER"), any
and all Security Documents or as the case may be, make any
additional filings or registrations, reasonably requested by the
Lenders, to ensure that the Lenders will hold valid and
enforceable Security in, to and under the assets of VTL acquired
by the Borrower as a result of the Merger.
9.3 LIMITATIONS ON GUARANTEES AND SECURITY FOR ADVANCES
The liability of each Guarantor governed by the COMPANIES ACT (Quebec) under
its Guarantee (other than each of the Initial VL Group Guarantors, the
liability of whom is unlimited) (each an "APPLICABLE GUARANTOR") shall be
limited as follows, but only to the extent that the provisions of
Section 123.66 of the COMPANIES ACT (Quebec) apply thereto:
9.3.1 on the Phase II Date, the liability of each Applicable Guarantor
shall be limited to the amount of the book value or the
realization value of its assets, whichever is greater, less the
sum of its liabilities and its issued and paid-up share capital
account on such date (the "INITIAL LIABILITY");
9.3.2 every day thereafter that its Guarantee remains in effect and
until the date of determination on which it is then able to
discharge its liabilities when due, each Applicable Guarantor
shall be deemed to have granted a new Guarantee in an amount equal
to the increase in the aggregate amount of the Guarantee that such
Applicable Guarantor can provide on such day (calculated in
accordance with the provisions of subsection 9.3.1);
9.3.3 the liability of each Applicable Guarantor may never be less
than its Initial Liability; and
9.3.4 if ever the restriction provided by Law with respect to each
Applicable Guarantor's ability to execute a Guarantee is repealed,
each of the Applicable Guarantors shall be deemed to have granted
an unlimited Guarantee on the date such repeal came into force.
The relevant amounts on the Phase II Date, as determined by the directors of
the Applicable Guarantor, will be set forth in a certificate in the form set
out in Schedule "K", to be delivered within 5 Business Days following the
Phase II Date. For the purposes hereof, the directors of each Applicable
Guarantor shall, not less frequently than quarterly, determine such amounts
as of the end of each financial quarter and the Borrower shall deliver or
cause to be delivered to the Agent, as part of its Compliance Certificate
with respect to such financial quarter, a summary of such increases, if any,
supported by a certificate of the chief financial officer of each Applicable
Guarantor setting forth such amounts and reasonable details of the
calculations thereof.
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9.4 FURTHER LIMITATIONS ON GUARANTEES AND SECURITY FOR ADVANCES
Notwithstanding any other provision hereof to the contrary, the liability of
CF Cable TV Inc. and each of its Subsidiaries (each a "RELEVANT GUARANTOR")
shall be limited as follows:
9.4.1 on the Phase II Date, the liability of each Relevant Guarantor
under its Guarantee and the Security Documents shall constitute
First Priority Debt within the meaning and to the extent permitted
by the trust indenture dated as of July 11, 1995 among the
Guarantors party thereto and The Chase Manhattan Bank, as Trustee,
providing for the issue of notes, including the aggregate of
US$100,000,000 of 12 year notes of CF Cable TV Inc. designated as
9 1/8% Senior Secured First Priority Notes due 2007 (the "TRUST
INDENTURE") and thereafter shall constitute Second Priority Debt
within the meaning and to the extent permitted by the Trust
Indenture (the "INITIAL LIABILITY");
9.4.2 every day thereafter that its Guarantee remains in effect and
until the provisions of subsection 9.4.4 apply, each Relevant
Guarantor shall be deemed to have granted a new Guarantee by
incurring additional First Priority Debt and additional Second
Priority Debt to the extent permitted by the Trust Indenture in
amounts equal to the increase in the aggregate amount of the
Guarantee that such Relevant Guarantor can provide on such day (by
way of First Priority Debt and Second Priority Debt under the
Trust Indenture);
9.4.3 the liability of each Relevant Guarantor may never be less than
its Initial Liability;
9.4.4 if ever the restriction provided by the Trust Indenture with
respect to each Relevant Guarantor's ability to execute a
Guarantee is no longer applicable, each of the Relevant Guarantors
shall be deemed to have granted an unlimited Guarantee on the date
such restriction ceased to be applicable; and
9.4.5 the Security Documents shall oblige each Relevant Guarantor to
provide additional security in the event that its liability is
increased in accordance with the foregoing.
The relevant amounts on the Phase II Date, as determined by the directors of
the Relevant Guarantor, will be set forth in a certificate in the form set
out in Schedule "K", to be delivered on such date. For the purposes hereof,
the directors of each Relevant Guarantor shall, not less frequently than
quarterly, determine such amounts as of the end of each financial quarter
and the Borrower shall deliver or cause to be delivered to the Agent, as
part of its Compliance Certificate with respect to such financial quarter, a
summary of such increases, if any, supported by a certificate of the chief
financial officer of each Relevant Guarantor setting forth such amounts and
reasonable details of the calculations thereof.
10. CONDITIONS PRECEDENT
10.1 INITIAL ADVANCE UNDER THE REVOLVING FACILITY AND TERM FACILITY A-1
The obligation of the Lenders to make an initial Advance under the Revolving
Facility and under Term Facility A-1 is conditional upon the fulfilment of
each of the conditions set out in this Section 10.1 and in Section 10.3
to the entire satisfaction of the Agent and the Lenders:
10.1.1 certified copies of all of the constating documents, borrowing
by-laws and resolutions of the Borrower, of Quebecor Media Inc.,
of GVL and of each member of the VL Group shall have been provided
to the Agent;
10.1.2 the Borrower shall have provided an irrevocable direction of
payment to the Agent pursuant to which the Borrower instructs the
Agent, contemporaneously with the first Advance hereunder and
using the proceeds thereof, to repay all amounts due under the
Existing Credit Agreement and the Existing Credit Agreement shall
have been cancelled;
10.1.3 all Charges on the property of each member of the VL Group,
other than Permitted Charges, shall have been discharged;
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10.1.4 each of this Agreement and the Security Documents contemplated
by Section 9.1 shall have been executed, delivered, issued or
assigned and registered or published, as the case may be, wherever
required;
10.1.5 the Agent shall have received copies of all existing title and
search reports prepared by lawyers or notaries with respect to any
immovable property owned by the VL Group and with respect to any
network pertaining to the Core Business, together with an
undertaking to update same prior to the Phase II Date;
10.1.6 evidence satisfactory to the Lenders shall have been provided to
the Agent that Quebecor Media Inc. owns all or substantially all
of the shares of every class of GVL (meaning for these purposes
not less than 94% of all such shares), and the Lenders shall be
satisfied that Quebecor Media Inc. is in a position to obtain 100%
of all such shares within a delay not exceeding 60 days (or such
additional period as may be approved by the Majority Lenders) from
the Closing Date by way of the compulsory acquisition of same in
accordance with the provisions of the Quebec Companies Act;
10.1.7 evidence satisfactory to the Lenders shall have been provided to
the Agent that GVL or another wholly-owned Subsidiary of Quebecor
Media Inc. owns (a) all of the shares of every class of each of
the Initial VL Group Guarantors, and (b) the percentages and
classes of shares of each Subsidiary of GVL as set out in the
diagram referred to in subsection 10.1.10 (c);
10.1.8 all of the issued and outstanding shares of the Borrower and
each of the Guarantors (other than Quebecor Media Inc. and GVL)
shall have been pledged in accordance with the pledge described in
subsection 9.1.2, and all of the pledged shares shall have been
remitted to the Agent or to one or more agents of the Agent;
10.1.9 all necessary Regulatory Approvals (other than the approval of
the CRTC) and all other required approvals shall have obtained,
and all Laws, including environmental Laws, shall have been
complied with;
10.1.10 the Borrower shall have delivered to the Agent a certificate in
the form of Schedule "F" signed by an officer stipulating and
certifying that:
(a) such officer has taken cognizance of all the terms and
conditions of this Agreement and of all contracts, agreements
and deeds pertaining hereto;
(b) no Default or Event of Default has occurred or exists
hereunder;
(c) the corporate structure of Quebecor Media Inc. and the VL
Group is as set out in the diagram attached to the
certificate; and
(d) subject to obtaining the approval of the CRTC to the
Transaction, each member of the VL Group holds the permits,
Licences, licences and authorizations required in order to
permit it to possess its property and its real estate and to
carry on its business in the manner in which it is being
carried on at present;
10.1.11 nothing shall have occurred which would constitute a Material
Adverse Change;
10.1.12 the Borrower shall have delivered to the Agent the favourable
legal opinion of counsel to the Borrower and to the Guarantors,
addressed to the Lenders, the Agent and its counsel, substantially
in the form set forth in Schedule "G" and covering as well such
other ancillary matters as pertain to the transactions
contemplated hereunder, as required by the Agent, acting
reasonably.
33
10.2 INITIAL ADVANCE UNDER THE REVOLVING FACILITY
The obligation of the Lenders to make the initial Advance under the
Revolving Facility is conditional upon the fulfilment of each of the
conditions set out in this Section 10.2 and in Section 10.3 to the entire
satisfaction of the Agent and the Lenders:
10.2.1 certified copies of all of the constating documents, borrowing
by-laws and resolutions of the Borrower and of each other member
of the VL Group not previously provided to the Agent shall have
been provided to the Agent;
10.2.2 each of the Security Documents contemplated by Section 9.2 shall
have been executed, delivered, issued or assigned and registered
or published, as the case may be, wherever required;
10.2.3 the terms of the Additional Offering intended to close on the
Seventh Amendment Closing Date shall be the same, in all material
respects, as those in respect of the HYD Offering, and such
Additional Offering shall have been completed and the proceeds
thereof used (a) to prepay Term Facility C in its entirety, which
Facility will have been cancelled as a result;
10.2.4 all of the issued and outstanding shares of the Subsidiaries
referred to in subsection 9.2.3 owned, directly or indirectly by
the Borrower and the Guarantors, shall have been pledged in
accordance with the Share Pledge executed by the Borrower and the
relevant Guarantors and all of the pledged shares shall have been
remitted to the Agent, except to the extent not permitted by the
terms of the CF Cable Notes;
10.2.5 Schedule "K" shall have been completed, and there shall have
been delivered to the Agent certificates of the chief financial
officers of the Borrower and each relevant Guarantor, in form and
substance satisfactory to the Lenders and their counsel,
confirming and supporting the figures in Schedule "K" as to the
maximum amount of each Guarantee as at the Seventh Amendment
Closing Date;
10.2.6 the Borrower shall have delivered to the Agent a certificate in
the form of Schedule "F" signed by an officer stipulating and
certifying that:
(a) such officer has taken cognizance of all the terms and
conditions of this Agreement and of all contracts, agreements
and deeds pertaining hereto;
(b) no Default or Event of Default has occurred or exists
hereunder;
(c) the corporate structure of the VL Group is as set out in the
diagram attached to the certificate;
(d) each member of the VL Group holds the permits, Licences,
licences and authorizations required in order to permit it to
possess its property and its real estate and to carry on its
business in the manner in which it is being carried on at
present, including all Regulatory Approvals; and
(e) all property to be charged by the Security Documents is
located in the jurisdictions described in a schedule thereto;
10.2.7 the Borrower shall have delivered to the Agent in a sufficient
number of copies for each of the Lenders its Annual Business Plan
in respect of its financial years ending December 31, 2005, 2006
and 2007, showing PRO FORMA compliance with all financial
covenants hereunder;
10.2.8 each of the Security Documents shall have been amended (to the
extent required), executed, delivered, issued or assigned and
registered or published, as the case may be, wherever required; in
particular, the Security Documents described in subsection 9.2.6
shall have been amended as required to ensure their continued
enforceability;
10.2.9 the Borrower shall have delivered to the Agent the favourable
legal opinion(s) of the counsel to the Borrower, addressed to the
Lenders, the Agent and its counsel, in form and substance
34
acceptable to the Agent and its counsel, acting reasonably,
including with regard to the continuing validity of all relevant
Guarantees and Security.
10.3 CONDITIONS PRECEDENT TO ANY ADVANCE
The obligation of the Lenders to make any Advance under the Credit is
conditional upon each of the following conditions having been satisfied:
10.3.1 the representations and warranties contained in this Agreement
shall continue to be true and correct (except where stated to be
made as at a particular date);
10.3.2 the Borrower shall have delivered to the Agent a completed
Notice of Borrowing;
10.3.3 nothing shall have occurred since the Sixth Amendment Closing
Date which would constitute a Material Adverse Change; and
10.3.4 no Default shall have occurred and be continuing and no Event of
Default shall have occurred.
10.4 WAIVER OF CONDITIONS PRECEDENT
The conditions set out in Sections 10.1, 10.2 and 10.3 are solely for the
benefit of the Lenders, and may be waived by the Agent with the unanimous
consent of the Lenders, without prejudice to the right of the Agent to
assert any such condition in connection with any subsequently requested
Advance.
10.5 RELEASE OF QUEBECOR MEDIA GUARANTEE
The parties agree that the Quebecor Media Guarantee has become a limited
recourse guarantee, such that the recourse of the Agent is limited to the
pledge of the shares executed by GVL pursuant to subsection 9.1.2 of this
Credit Agreement, which was thereafter assumed by Quebecor Media Inc.
11. REPRESENTATIONS AND WARRANTIES
For so long as the Loan remains outstanding and unpaid, or the Borrower is
entitled to borrow hereunder (whether or not the conditions precedent to such
borrowing have been or may be satisfied), the Borrower hereby represents and
warrants to the Lenders that:
11.1 INCORPORATION
Each member of the VL Group is a corporation duly incorporated and
organized, validly existing and in good standing under the Laws of its
jurisdiction of incorporation and of all jurisdictions in which it carries
on business or is otherwise required to be so qualified. Each member of the
VL Group has the capacity and power, whether corporate or otherwise, to hold
its assets and carry on the business presently carried on by it or which it
proposes to carry on hereafter in each jurisdiction where such business is
carried on.
11.2 AUTHORIZATION
The Borrower and each member of the VL Group which is a party to any
Security Document has the power and has taken all necessary steps under the
Laws in order to be authorized to borrow hereunder, to provide the Security,
as the case may be, and to execute and deliver and perform its obligations
under this Agreement and each of the Security Documents to which it is a
party, as the case may be, in accordance with the terms and conditions
thereof and to complete the transactions contemplated in the Security
Documents and herein, as the case may be. This Agreement has been duly
executed and delivered by duly authorized officers of the Borrower and is,
and each of the Security Documents to which the Borrower and each other
member of the VL Group is a party is, and when executed and delivered in
accordance with the terms hereof, shall be, a legal, valid and binding
obligation of the Borrower and each other member of the VL Group,
respectively, enforceable in accordance with its terms.
35
11.3 COMPLIANCE WITH LAWS AND CONTRACTS
The execution and delivery of and performance of the obligations under this
Agreement and each of the Security Documents by the Borrower and each other
member of the VL Group, as the case may be, in accordance with their
respective terms and the completion of the transactions contemplated therein
and herein by the Borrower and each other member of the VL Group, as the
case may be, do not require any consents or approvals, do not violate any
Laws, do not conflict with, violate or constitute a breach under the
documents of incorporation or by-laws of any member of the VL Group or under
any agreements, contracts or deeds to which any member of the VL Group is a
party or binding upon it or its assets and do not result in or require the
creation or imposition of any Charge whatsoever on the assets of any member
of the VL Group, whether presently owned or hereafter acquired, save for the
Permitted Charges.
11.4 CURRENT BUSINESS
The VL Group operates businesses in the cable and telecommunications
industry, including on-line internet services, telephony (not commercialized
at the Closing Date), and the sale and rental of videocassettes.
11.5 FINANCIAL STATEMENTS
The Consolidated financial statements provided from time to time hereunder
are prepared in accordance with GAAP applied on a consistent basis
throughout the periods specified (except as noted thereon) and are an
accurate representation of the financial position of the VL Group as of the
respective dates specified and the results of their operations and cash
flows for the respective periods specified.
11.6 CONTINGENT LIABILITIES AND INDEBTEDNESS
Neither the Borrower nor any other member of the VL Group has (a) any
material Contingent Obligations or contingent liabilities known to it which
are not disclosed or referred to in the most recent financial statements
delivered to the Agent in accordance with the provisions of Section 12.15
or otherwise disclosed to the Agent in writing, or (b) incurred any
Indebtedness which is not disclosed in or reflected in such financial
statements, or otherwise disclosed to the Agent in writing, other than
Contingent Obligations, contingent liabilities or Indebtedness incurred in
the ordinary course of business and Debt permitted hereunder.
11.7 TITLE TO ASSETS
Each member of the VL Group has good, valid and marketable title to all of
its properties and assets, free and clear of any Charges other than
Permitted Charges. All of the immovable property (including any cable
network) owned by the VL Group as of the Sixth Amendment Closing Date is
listed in Schedule "I". All premises occupied by any member of the VL Group
as of the Sixth Amendment Closing Date containing material assets belonging
to such members of the VL Group are also listed in Schedule "I". All of the
movable property of the VL Group as of the Sixth Amendment Closing Date is
located in the province of Quebec and in Ontario, New Brunswick and Xxxxxx
Xxxxxx Island. Each member of the VL Group has rights sufficient for it to
use all the Licences, licences, intellectual property and patents, patent
applications, trade marks, trade xxxx applications, tradenames, service
marks, copyrights, industrial designs, technology and other similar
intellectual property rights reasonably necessary for the conduct of its
business. To the knowledge of the Borrower, neither it nor any member of the
VL Group is infringing or is alleged to be infringing the intellectual
property rights of any other Person.
11.8 LITIGATION
There are no actions, suits or legal proceedings instituted or pending or,
to the knowledge of each member of the VL Group, threatened, against any of
them or their property before any court or arbitrator or any governmental
body or instituted by any governmental body which could reasonably be
expected to result in a Material Adverse Change.
36
11.9 TAXES
Each member of the VL Group has filed within the prescribed delays all
federal, provincial or other tax returns which it is required by Law to file
and all taxes, assessments and other duties levied by the various
governmental authorities with respect to each member of the VL Group have
been paid when due, except to the extent that (a) payment thereof is being
contested in good faith by such member of the VL Group in accordance with
the appropriate procedures, for which adequate reserves have been
established in the books of the relevant member of the VL Group, and
(b) the outcome of such contestation would not reasonably be expected to
result in a Material Adverse Change.
11.10 INSURANCE
Each member of the VL Group has contracted for the insurance coverage
described in Section 12.6.
11.11 NO ADVERSE CHANGE
No Material Adverse Change has occurred since August 31, 2000.
11.12 REGULATORY APPROVALS
No member of the VL Group is required to obtain any consent, approval,
authorization, permit, Licence or licence from, nor to effect any filing or
registration with, any federal, provincial or other regulatory authority in
connection with the execution, delivery or performance, in accordance with
their respective terms, of this Agreement or the Security Documents, any
borrowings hereunder and the granting of the Security, save with respect to
the due registration of any Security Documents that remain to be registered
after the Sixth Amendment Closing Date.
11.13 COMPLIANCE WITH LAWS AND LICENCES
Each member of the VL Group is in full compliance in all material respects
with all requirements of applicable Laws and with all of the conditions
attaching to its permits, authorizations, Licences, licences, certificates
and approvals, including without limitation its articles of incorporation
and by-laws.
11.14 PENSION AND EMPLOYMENT LIABILITIES
Except for a deficit not exceeding $2,000,000 in respect of the pension plan
for executives of the Borrower, no member of the VL Group has any unfunded
pension liabilities, whether valued on a going concern or a wind-up basis,
and all obligations (including wages, salaries, commissions and vacation
pay) to current employees and to former employees have been paid in full or
duly provided for.
11.15 PRIORITY
The Security and Charges created, evidenced or constituted by or under the
Security Documents bind each member of the VL Group which is a party
thereto, are valid and subject to no Charge, other than the Permitted
Charges, and are enforceable, as security for the performance of the
obligations secured thereunder, in accordance with their respective terms,
against the members of the VL Group which are parties thereto.
11.16 COMPLETE AND ACCURATE INFORMATION
All of the information, reports and other documents and all data (other than
forecasts), as well as the amendments thereto, provided to the Agent by or
on behalf of the VL Group were, at the time same were provided, and are at
the date hereof, complete, true and accurate in all material respects. All
forecasts provided to the Agent were prepared in good faith and all
assumptions used therein were reasonable.
11.17 SHARE CAPITAL
On the Sixth Amendment Closing Date, all of the shares of the Borrower and
each of the Guarantors (other than Quebecor Media Inc.) are owned, directly
or indirectly, by Quebecor Media Inc., free and clear of any
37
Charges, other than Permitted Charges; following the Sixth Amendment Closing
Date, no Change of Control has occurred and the shares of the Borrower and
each of the Guarantors (other than Quebecor Media Inc.) owned, directly or
indirectly, by Quebecor Media Inc. are owned free and clear of any Charges,
other than Permitted Charges.
11.18 ABSENCE OF DEFAULT
There exists no Default or Event of Default hereunder.
11.19 AGREEMENTS WITH THIRD PARTIES
Each member of the VL Group is in compliance in all material respects with
each and every one of its obligations under agreements with third parties to
which it is a party or by which it is bound, the breach of which could be
expected to result in a Material Adverse Change.
11.20 ENVIRONMENT
11.20.1 There are no existing claims, demands, suits, proceedings or
actions of any nature whatsoever, whether threatened or pending,
arising out of the presence on any property owned or controlled by
any member of the VL Group, either past or present, of any
hazardous substance or hazardous waste, or out of any past or
present activity conducted on any property now owned by any member
of the VL Group, whether or not conducted by any member of the VL
Group, involving hazardous substances or hazardous waste, which
would reasonably be expected to result in a Material Adverse
Change;
11.20.2 To the best of the knowledge of the Borrower, after due enquiry:
(a) there is no hazardous substance or hazardous waste existing on
or under any property of any member of the VL Group which
constitutes a material violation of any ordinance, statute or
law for which an owner, operator or person in control of a
property may be held liable;
(b) the business of each member of the VL Group is being carried
on so as to respect in all material ways the Laws applicable
to environmental and health and safety matters; and
(c) no contaminant, pollutant, toxic substance or material or
dangerous waste has been spilled or emitted into the
environment from any property owned, operated or controlled by
any member of the VL Group for which such member of the VL
Group could have any material liability.
11.21 SURVIVAL OF REPRESENTATIONS AND WARRANTIES
All of the representations and warranties made hereunder are true and
correct at the Closing Date, shall be true and correct at the date of any
Advance hereunder (except where qualified in this Article 11 as being made
as at a particular date), shall survive the execution and delivery of this
Agreement, any investigation by or on behalf of the Lenders or the making of
any Advance hereunder, and none of same are nor shall be waived, except in
writing.
12. COVENANTS
For so long as the Loan remains outstanding and unpaid, or the Borrower is
entitled to borrow hereunder (whether or not the conditions precedent to such
borrowing have been or may be satisfied) and unless the Agent shall otherwise
agree in writing, the Borrower, for itself and each member of the VL Group and
with respect to itself and each member of the VL Group, agrees as follows:
12.1 PRESERVATION OF JURIDICAL PERSONALITY
It shall do or cause to be done all things necessary to preserve and
maintain its corporate existence in full force and effect, except as
permitted under Sections 13.1 and 13.3.
38
12.2 PRESERVATION OF LICENCES
It shall maintain in effect and obtain, where necessary, all such
authorizations, approvals, Licences, licences or consents of such
governmental agencies, whether federal, provincial or local, which may be or
become necessary or required for each member of the VL Group to carry on its
businesses and to satisfy its obligations hereunder and under the Security
Documents.
12.3 COMPLIANCE WITH APPLICABLE LAWS
It shall conduct its business in a proper and efficient manner and shall
keep or cause to be kept appropriate books and records of account, in
compliance with the Law, and shall record or cause to be recorded faithfully
and accurately all transactions with respect to its business in accordance
with GAAP applied on a consistent basis, and shall comply with all
requirements of Law and with all the conditions attaching to its permits,
authorizations, Licences, licences, certificates and approvals in all
material respects.
12.4 MAINTENANCE OF ASSETS
It shall maintain or cause to be maintained in good operating condition all
of its assets used or useful in the conduct of its business, as would a
prudent owner of similar property, whether same are held under lease or
under any agreement providing for the retention of ownership, and shall from
time to time make or cause to be made thereto all necessary and appropriate
repairs, renewals, replacements, additions, improvements and other works
except as permitted under Section 13.3.
12.5 BUSINESS
It shall not substantially change the nature of its business activities from
its Core Business.
12.6 INSURANCE
It shall maintain insurance coverage with responsible insurers, in amounts
and against risks normally insured by owners of similar businesses or assets
in areas which are generally similar to those in which the members of the VL
Group are engaged. By no later than the Phase II Date, all such policies of
insurance will contain a standard "mortgage clause" acceptable to the Agent
providing that no such policy may be cancelled without the insurer providing
not less than 30 days' prior written notice to the Agent. The insurance
policies confirming the insurance required hereunder shall not contain any
co-insurance provisions except to the extent such co-insurance provisions
would normally appear in policies covering other Persons engaged in similar
businesses and owning similar properties as the VL Group, and consistent
with prudent business practices.
If any proceeds of such insurance become payable at any time, the member of
the VL Group entitled to receive same, subject to the rights of the Agent on
behalf of the Lenders, shall be entitled to receive such proceeds up to an
amount of $50,000,000 in the aggregate; any proceeds in excess of such
amount shall, if requested by the Borrower, be held by the Agent for
reinvestment by the Borrower or the relevant Guarantor in capital assets in
the Core Business within a period of 12 months from the date of receipt and
otherwise shall be paid to the Agent for the benefit of the Lenders as a
Mandatory Repayment in accordance with the provisions of Section 8.2.
12.7 PAYMENT OF TAXES AND DUTIES
It shall pay all taxes, assessments and other governmental duties which are
imposed on it or on its income or profits or its assets, when due and
payable, provided that no such tax, assessment or duty need be paid if
(a) it is being contested in good faith by appropriate proceedings promptly
initiated and diligently conducted, and (b) such reserves or other
appropriate provision, if any, as shall be required by GAAP shall have been
made therefor, and (c) the outcome of such contestation would not reasonably
be expected to result in a Material Adverse Change.
39
12.8 ACCESS AND INSPECTION
It shall allow the employees and representatives of the Agent, during normal
business hours, to have access to and inspect the assets of the members of
the VL Group, to inspect and take extracts from or copies of the books and
records of the members of the VL Group and to discuss the business, assets,
liabilities, financial position, operating results or business prospects of
the members of the VL Group with the principal officers of the members of
the VL Group and, after obtaining the approval of the Borrower which shall
not be unreasonably withheld, with the auditors of the Borrower.
12.9 MAINTENANCE OF ACCOUNT
It shall maintain operating accounts at the Branch or other branches of the
Agent at all times during the Term. In addition, the Lenders shall have the
right to provide all of the auxiliary non-credit banking services to the
Borrower, at fees acceptable to the relevant Lender and the Borrower, acting
reasonably.
12.10 PERFORMANCE OF OBLIGATIONS
It shall perform all obligations in the ordinary course of business, except
to the extent that the non-fulfilment of same would not reasonably be
expected to result in a Material Adverse Change, and except where the same
are being contested in good faith, if the outcome of such contestation would
not reasonably be expected to result in a Material Adverse Change.
Notwithstanding the foregoing contained in this Section 12.10, it shall
punctually pay all amounts due or to become due under this Agreement.
12.11 MAINTENANCE OF RATIOS
At the end of each quarter during the Term commencing February 28, 2001, on
a rolling four-quarter basis, the VL Group shall maintain the following
ratios, provided that (a) the first test as at February 28, 2001, shall be
calculated by extrapolating from the relevant results for that quarter;
(b) the second test effective May 31, 2001 shall be calculated by
extrapolating from the relevant results for that quarter and the preceding
quarter; (c) the third test effective August 31, 2001 shall be calculated by
extrapolating from the relevant results for that quarter and the 2 preceding
quarters and (d) the fourth and all subsequent tests shall be calculated in
respect of the preceding four quarters:
12.11.1 LEVERAGE RATIO. A Leverage Ratio not exceeding the following:
------------------------------------------------------------------
QUARTER ENDING MAXIMUM LEVERAGE RATIO
------------------------------------------------------------------
August 31, 2001 5.0:1
December 31, 2001
March 31, 2002
June 30, 2002
September 30, 2002
------------------------------------------------------------------
December 31, 2002 4.5:1
March 31, 2003
June 30, 2003
------------------------------------------------------------------
September 30, 2003 5.0:1
December 31, 2003
March 31, 2004
June 30, 2004
------------------------------------------------------------------
September 30, 2004 4.75:1
December 31, 2004
March 31, 2005
June 30, 2005
------------------------------------------------------------------
Thereafter 4.5:1
------------------------------------------------------------------
40
12.11.2 INTEREST COVERAGE RATIO. An Interest Coverage Ratio of at least:
--------------------------------------------------------------------------
QUARTER ENDING MINIMUM INTEREST COVERAGE RATIO
--------------------------------------------------------------------------
August 31, 2001 1.75:1
December 31, 2001
--------------------------------------------------------------------------
March 31, 2002 2.00:1
June 30, 2002
September 30, 2002
December 31, 2002
--------------------------------------------------------------------------
March 31, 2003 2.50:1
June 30, 2003
September 30, 2003
December 31, 2003
--------------------------------------------------------------------------
March 31, 2004 3.00:1
and thereafter
--------------------------------------------------------------------------
12.11.3 SENIOR SECURED DEBT COVERAGE RATIO. A Senior Secured Debt
Coverage Ratio of not more than 2.5:1.
For greater certainty and without limiting any provision of this
Agreement, the Borrower acknowledges that the failure to respect any of
the foregoing financial ratios at any time during the Term constitutes a
material breach of this Agreement.
12.12 MANDATORY REPAYMENTS
It shall pay to the Lenders any amounts required to be paid in accordance
with Section 8.2.
12.13 MAINTENANCE OF SECURITY
It shall take all necessary steps to preserve and maintain in effect the
rights of the Agent and the Lenders, as well as any collateral agent
designated by the Agent, pursuant to the Security Documents, together with
any renewals thereof or additional documents creating Charges that may be
required from time to time, and shall provide the Compliance Certificates
setting out the applicable amount, as at the end of each financial quarter,
of the Guarantees as contemplated by Section 9.3. In addition, if any new
Subsidiary of any member of the VL Group is created or Acquired, or if a
Person otherwise becomes a member of the VL Group, such Subsidiary will
provide Security of the nature described in Article 9.
12.14 PAYMENT OF LEGAL FEES AND OTHER EXPENSES
Whether the transactions contemplated by this Agreement are concluded or not
and whether or not any part of the Credit is actually advanced, in whole or
in part, the Borrower shall pay all reasonable costs relating to the Credit,
including in particular:
12.14.1 the reasonable legal fees and costs incurred by the Agent and
the Lenders for the negotiation, drafting, signing, registration,
publication and/or service of the commitment letter, this
Agreement and the Security Documents, as well as any amendments,
renunciations, consents or examinations pertaining to this
Agreement and the Security Documents; and
12.14.2 the reasonable costs of syndicating and advertising, as well as
all reasonable fees, including reasonable legal fees and costs,
incurred by the Agent, any collateral agent designated by the
Agent, and the Lenders to preserve, enforce or exercise their
respective rights hereunder or under the Security Documents
following an action, a Default or an omission of the Borrower or
of any other member of the VL Group.
41
All amounts due to the Agent and the Lenders pursuant hereto shall bear
interest on the Prime Rate Basis from the date of their disbursement by the
Lenders or from the date of their undertaking until the Borrower has repaid
same in full, with interest on unpaid interest, as in the case of the Prime
Rate Advances, taking into account such modifications as may be necessary.
The obligations of the Borrower under this Section 12.14 shall subsist
notwithstanding the full repayment of the Loan under the provisions hereof.
12.15 FINANCIAL REPORTING
For so long as the Loan remains outstanding and unpaid, or the Borrower is
entitled to borrow hereunder (whether or not the conditions precedent to
such borrowing have been or may be satisfied) and unless the Lenders shall
otherwise agree in writing, the Borrower agrees to provide or cause to be
provided to the Agent, with sufficient copies for the Agent and each Lender,
and so undertakes:
12.15.1 QUARTERLY STATEMENTS
Within 60 days after the end of each financial quarter of each
financial year of the Borrower (other than the last quarter):
(a) the unaudited Consolidated balance sheet of the VL Group as at
the end of such quarter and the related Consolidated statements of
earnings and cash flows, for the period then ended, in each case
with comparative figures for the same period for the immediately
preceding financial year and in respect of the preceding financial
year end; and
(b) the unaudited consolidated balance sheet of the Borrower as at
the end of such quarter and the related consolidated statements of
earnings and cash flows of the Borrower, determined in accordance
with GAAP, for the period then ended, in each case with
comparative figures for the same period for the immediately
preceding financial year and in respect of the preceding financial
year end; and
(c) a Compliance Certificate of the chief financial officer of the
Borrower in the form of Schedule "J" and setting forth the
information necessary to determine whether the Borrower has
complied with the covenants contained in Section 12.11, as well as
a reconciliation of the financial statements prepared in
accordance with GAAP to the information used in determining
compliance with the financial covenants using GAAP as at the Sixth
Amendment Closing Date, certifying that the Borrower is in
compliance with all of its covenants hereunder and that no Default
or Event of Default has come to the attention of the officer of
the Borrower signing the certificate, after due inquiry, or if a
Default or an Event of Default has occurred, setting out the
relevant particulars thereof, the period of existence thereof and
what action the Borrower has taken or proposes to take with
respect thereto (a "COMPLIANCE CERTIFICATE").
12.15.2 ANNUAL STATEMENTS
(a) Within 120 days following the end of each financial year of the
Borrower, the audited Consolidated balance sheet of the VL Group
as at the end of such year and the related Consolidated statements
of earnings and cash flows for such financial year, together with
comparative figures for the immediately preceding year, the whole
as certified without qualification by the current auditors of the
Borrower or otherwise by another reputable firm of independent
chartered accountants acceptable to the Agent, together with the
unaudited consolidated balance sheet of the Borrower as at the end
of such year and the related consolidated statements of earnings
and changes in financial position for such financial year,
determined in accordance with GAAP, together with comparative
figures for the immediately preceding year, and any audited
statements of any other member of the VL Group that may be
prepared; and
(b) Within 75 days following the end of each financial year of the
Borrower, a Compliance Certificate, based on unaudited financial
information, to be updated and replaced by a second Compliance
Certificate to be provided along with the audited financial
statements referred to in paragraph (a) above.
42
12.15.3 OTHER INFORMATION
(a) Within 75 days following the end of each financial year of the
Borrower commencing with the financial year ending August 31,
2001, the Annual Business Plan, which shall promptly be submitted
to the Agent for the Lenders; and
(b) Within 75 days following the end of each financial quarter of the
Borrower, a certificate of its Chief Financial Officer certifying
a detailed calculation of Excess Cash Flow (in such form and
providing such detail as the Agent may reasonably require) during
such quarter (the "EXCESS CASH FLOW CERTIFICATE"); and
(c) from time to time and forthwith upon demand by the Agent, such
data, reports, statements, documents or other additional
information pertaining to the business, assets, liabilities,
financial position, operating results or business prospects of the
VL Group as the Agent may request, acting reasonably.
12.16 NOTICE OF CERTAIN EVENTS
The Borrower shall advise the Agent forthwith upon the occurrence of any of
the following events:
12.16.1 The commencement of any proceeding or investigation by or before
any governmental body and any action or proceeding before any
court or arbitrator against any member of the VL Group, or any of
its property, assets or activities which could reasonably be
expected to result in a Material Adverse Change;
12.16.2 The occurrence of any Material Adverse Change which is known to
the Borrower or any other member of the VL Group, acting
reasonably;
12.16.3 Any Default or Event of Default, specifying in each case the
relevant details and the action contemplated in this respect.
12.17 CF CABLE INTER-CREDITOR AGREEMENT
The Borrower agrees to use its best efforts to obtain the consent, waiver or
amendment to the Inter-Creditor Agreement required by the Lenders on the
Sixth Amendment Closing Date from the holders of the CF Cable Notes.
12.18 ACCURACY OF REPORTS
All information, reports, statements and other documents and data provided
to the Agent or the Lenders, whether pursuant to this Article or any other
provisions of this Agreement shall, at the time same shall be provided, be
true, complete and accurate in all material respects to the extent necessary
to provide the Lenders with a true and accurate understanding of their
effect.
13. NEGATIVE COVENANTS
For so long as the Loan or any other amounts payable hereunder to the Lender
remain outstanding and unpaid, or the Borrower is entitled to borrow hereunder
(whether or not the conditions precedent to such borrowing have been or may be
satisfied), the Borrower, for itself and each member of the VL Group and with
respect to itself and each member of the VL Group agrees that it shall not do
any of the following:
13.1 LIQUIDATION AND AMALGAMATION
Liquidate or dissolve or take any steps to amalgamate, consolidate or effect
any restructuring or corporate or capital reorganization, or change its head
or registered office, except where (I) (a) the surviving entity of any such
amalgamation or merger assumes all of the obligations hereunder and (b) the
transaction in question is between a member of the VL Group and its
wholly-owned Subsidiaries or is among wholly-owned Subsidiaries
43
of the same member of the VL Group; or (II) in all other cases, the
transaction in question, in the sole opinion of the Lenders, acting
reasonably, does not have a detrimental effect on the financial condition of
the VL Group or on the position of the Lenders and their Security under the
Security Documents or otherwise. Notwithstanding the foregoing, no member of
the VL Group may become a Subsidiary of (i) CF Cable TV Inc. until the CF
Cable Notes have been repaid in full, or (ii) a Person who is a non-resident
of Canada within the meaning of the INCOME TAX ACT (Canada), without the
prior written consent of the Lenders. For greater certainty, the Lenders
hereby consent to the Merger pursuant to this Section 13.1 (ii), subject to
compliance with the conditions precedent set out in Sections 10.2 and 10.3,
and subject to the following:
13.1.1 All of the representations and warranties and covenants
contained herein shall apply to VTL as and from the date of the
Merger;
13.1.2 VTL shall become a member of the VL Group as and from the date
of the Merger;
13.1.3 each of the Security Documents with respect to movable
(personal) property referred to in subsection 9.2.9 shall have
been executed, delivered, issued or assigned and registered or
published, as the case may be, wherever required, and provided
that the Security Documents required with respect to immovable
property are executed, delivered and registered or published, as
the case may be, wherever required, within 60 days following the
Merger as set out in subsection 9.2.9; and
13.1.4 The Borrower shall have delivered to the Agent a certificate in
the form of Schedule "F" signed by an officer stipulating and
certifying that:
(a) such officer has taken cognizance of all the terms and conditions
of this Agreement and of all contracts, agreements and deeds
pertaining hereto;
(b) no Default or Event of Default has occurred or exists hereunder;
(c) the corporate structure of the VL Group is as set out in the
diagram attached to the certificate;
(d) Videotron Telecom Ltd. has no Debt as of the date of the Merger,
and has no material liabilities other than those that have been
disclosed to the Lenders in the financial statements provided to
the Lenders immediately prior to the Seventh Amendment Closing
Date and liabilities incurred in the ordinary course of business
since that date;
(e) each member of the VL Group holds the permits, Licences, licences
and authorizations required in order to permit it to possess its
property and its real estate and to carry on its business in the
manner in which it is being carried on at present, including all
Regulatory Approvals; and
(f) all property to be charged by the Security Documents is located
in the jurisdictions described in a schedule thereto;
13.2 CHARGES
Create, assume, enter into or permit to subsist, directly or indirectly, any
Charge on the property of any member of the VL Group, other than Permitted
Charges.
13.3 ASSET DISPOSITIONS
The VL Group shall not permit an Asset Disposition of all or any part of
their property or assets (whether presently held or subsequently acquired),
other than sales at fair market value, and, in such case, only if (a) at the
time of the proposed Asset Disposition, there is no Default or Event of
Default hereunder and the proposed Asset Disposition will not cause such a
Default or Event of Default, (b) the Net Proceeds of such Asset Disposition
are dealt with in accordance with the provisions of Section 8.2, and (c) the
amount of (A) EBITDA generated during the preceding 12 months by the assets
comprised in any such Asset Disposition, plus (B) the aggregate 12-month
trailing EBITDA generated by all other assets comprised in all previous
Asset Dispositions made during the Term (calculated as of the date of the
applicable Asset Disposition), does not exceed 15% of the VL Group's EBITDA
for the 12 months ending on the last day of
44
the month immediately preceding the date of the proposed Asset Disposition;
provided that the VL Group shall be permitted to make (i) dispositions of
inventory in the ordinary course of business, (ii) dispositions of
machinery, equipment, spare parts and materials, appliances or vehicles, if
same are no longer necessary or useful to the operation of the business or
have become obsolete, worn out, surplus, damaged or unusable, as well as the
non-material assets listed in Schedule "I" consisting of surplus real estate
of the VL Group, which are excluded from the Security and not subject to any
Charge thereunder, (iii) exchanges of assets between members of the VL Group
that have provided unlimited Guarantees and Security to the Agent for the
Lenders. In the event of any such permitted Asset Disposition to a Person
other than a member of the VL Group, the Security on the assets so disposed
of shall be discharged by the Agent without any requirement to obtain the
consent of the Lenders. In addition, any member of the VL Group (other than
VTL until it has provided Security on all of its assets) shall be permitted
to dispose of Back-to-Back Preferred Shares in order to repay Back-to-Back
Debt, and shall also be permitted to dispose of property as part of a Tax
Benefit Transaction, provided that (A) no Default or Event of Default exists
at the time and (B) disposing of such Back-to-Back Preferred Shares or
property as part of a Tax Benefit Transaction will not cause a Default or an
Event of Default.
13.4 PRESERVATION OF CAPITAL
Neither the Borrower nor any of the Guarantors (other than Quebecor
Media Inc.) shall: (a) return any capital to its shareholders or purchase,
redeem, repurchase or otherwise acquire, directly or indirectly, for
consideration, any shares of any class of its capital stock now or
subsequently issued, or any other equity security issued by it of any nature
(including warrants and options), (b) declare, pay or set aside for payment
any dividend or distribution whatsoever in respect of any share of the
capital stock of the Borrower or any of the Initial VL Group Guarantors
(provided that (x) a dividend or other distribution in an amount of
approximately $150,000,000 paid by the Borrower to GVL to permit GVL to
repay certain Debt to the Borrower (the "GVL DISTRIBUTION"),
(y) distributions arising under Back-to-Back Transactions and Tax Benefit
Transactions, and (z) distributions consisting of (1) a quarterly payment
equal to (aa) 100% of Excess Cash Flow if the Leverage Ratio, calculated on
a PRO FORMA basis after taking into account the payment proposed, is greater
than 3.5:1 but less than or equal to 4.0:1, or (bb) 50% of Excess Cash Flow
if the Leverage Ratio, calculated on a pro forma basis after taking into
account the payment proposed, is more than 4.0:1, and (2) a maximum of
$50,000,000 net during the Term (provided that no Advance for such purpose
shall be made if the amount of the Credit available under the Revolving
Facility, after the disbursement of such Advance, would be less than
$50,000,000), by way of loans, dividends, return of capital or share
repurchases, or (c) set aside any funds for any of the purposes proscribed
in paragraphs (a) or (b). However, transactions of the nature described in
paragraphs (a), (b) and (c) will be permitted (i) if all amounts so paid
under such provisions are paid to the Borrower or to a Guarantor that has
provided an unlimited Guarantee and the Security to the Agent on behalf of
the Lenders, or (ii) if the Leverage Ratio, calculated on a PRO FORMA basis
after taking into account the payment proposed, is less than or equal to
3.5:1; provided that, with respect to any of the transactions described in
paragraphs (a), (b) or (c), (A) no Default or Event of Default exists at the
time and (B) making the payment of such amount will not cause a Default or
Event of Default.
13.5 RESTRICTIONS ON SUBSIDIARIES
Without the consent of the Majority Lenders, no Subsidiary of the Borrower
or of any Guarantor shall assume, enter into or otherwise become bound by
any agreement or undertaking (including any undertaking in the HYD Offering
or any Additional Offering) that would reasonably be expected to prevent
such Person from declaring or paying dividends or inter-company payments or
distributions of any kind to the Borrower, except as contained (a) herein,
(b) in the CF Cable Notes, until repayment of same, or (c) in the Quebecor
Media Facility.
13.6 ISSUANCE AND TRANSFER OF SHARES
Issue any shares of its capital stock to which are attached voting rights or
allow any such shares to be transferred, assigned or otherwise alienated,
unless the proceeds thereof are used in accordance with
45
Section 8.2, or such shares are pledged in favour of the Agent on behalf of
the Lenders under the share pledge agreements contemplated by
subsection 9.1.2 or 9.2.3.
13.7 ACQUISITIONS
Make any Acquisition, in any manner whatsoever, directly or indirectly,
other than an Acquisition required for the purpose of carrying on its
business in the ordinary course, or permit any Subsidiary or Subsidiaries to
be constituted otherwise than in accordance with the provisions of
Section 13.11, except that (A) the members of the VL Group shall be
permitted to make Acquisitions in the Core Business and to create
Subsidiaries if: (a) no Default or Event of Default exists at the time,
(b) paying the purchase price in respect of such Acquisition will not cause
a Default or Event of Default, and (c) any Person which is Acquired or
created as a Subsidiary becomes a member of the VL Group and provides the
Security contemplated by Article 9, and (B) any member of the VL Group shall
be permitted to acquire Back-to-Back Securities in an amount not exceeding
the amount of the corresponding Back-to-Back Securities, and shall also be
permitted to acquire property as part of a Tax Benefit Transaction, provided
that (A) no Default or Event of Default exists at the time and
(B) acquiring such Back-to-Back Preferred Shares or property as part of a
Tax Benefit Transaction will not cause a Default or an Event of Default.
13.8 DEBT AND GUARANTEES
Incur or assume Debt, provide Guarantees or render itself liable in any
manner whatsoever, directly or indirectly, for any Indebtedness or
obligation whatsoever of another Person, except (a) hereunder for the
purposes set forth in Section 3.1; (b) under the CF Cable Notes, limited to
the amount outstanding thereunder at the Closing Date, or any Debt incurred
on the refinancing of the CF Cable Notes by a member of the VL Group, which
refinancing shall be only on an unsecured basis and for an amount not in
excess of US$100,000,000; (c) that a member of the VL Group may provide
financial assistance to another member of the VL Group that has provided an
unlimited Guarantee and the Security to the Agent on behalf of the Lenders;
(d) under the Cash Management Agreements; (e) in connection with the
Acquisition of Consortium Cable-Axion Digitel Inc., in respect of which not
more than $20,000,000 will be due; (f) in connection with the Borrower's
existing commercial paper program which will be terminated on or before
December 31, 2000; (g) in connection with Debt incurred or assumed that is
secured by Permitted Charges, and within the limits applicable thereto;
(h) in connection with Back-to-Back Transactions and Tax Benefit
Transactions; (i) in connection with the HYD Offering; (j) that the Borrower
may incur or assume Debt by way of Additional Offerings, and that the
members of the VL Group may provide unsecured Guarantees in respect of
obligations of the Borrower under any such Debt outstanding at any time, to
the extent that the Borrower complies with the applicable Leverage Ratio
calculated on a PRO FORMA basis; (k) the Borrower may borrow Subordinated
Debt from Quebecor Media Inc. in an initial principal amount of up to
$150,000,000, with interest at a rate not exceeding the three month bankers'
acceptance rate quoted on Xxxxxx'x Services, page CDOR, as at approximately
10:00 a.m. on such day plus 1.5% per annum (together with interest accrued
thereon or paid in kind, the "QMI SUBORDINATED DEBT"); (l) in connection
with an unsecured cash management credit facility limited to a maximum
amount of $10,000,000, provided that the aggregate amount of such cash
management facility and the Cash Management Facility shall never exceed
$15,000,000; (m) in connection with other Subordinated Debt; provided that,
with respect to any of the matters described in paragraphs (c) to (l) above
inclusive, (A) no Default or Event of Default exists at the time,
(B) incurring or assuming such Debt (including by way of providing such
Guarantee) will not cause a Default or Event of Default, and (C) on a
PRO FORMA basis, the incurrence or assumption of such Debt would not
reasonably be expected to cause the Borrower to breach any of its covenants
under Section 12.11 hereof.
13.9 FINANCIAL ASSISTANCE BY THE VL GROUP
Make any loan or advance to any party other than (a) as contemplated by
Sections 13.4 and 13.7, or (b) to another member of the VL Group that has
provided an unlimited Guarantee and the Security to the Agent on behalf of
the Lenders and has fully guaranteed the obligations of the Borrower
hereunder, or (c) by way of Back-to-Back Transactions or Tax Benefit
Transactions, or (d) under the Cash Management Facilities.
46
Notwithstanding the foregoing, the VL Group shall be entitled to provide
financial assistance to their customers in the ordinary course of the Core
Business by way of subsidizing consumer equipment purchases and leases and
similar transactions.
13.10 SUBORDINATED DEBT
Repay any Debt the repayment of which is subordinated to the rights of the
Lenders, or pay any interest due to the creditor of any such Debt, other
than (a) interest due in respect of Subordinated Debt (including the QMI
Subordinated Debt), provided (for greater certainty) that no Default has
occurred or will occur as a result of such payment, and (b) any amount due
under or in connection with the QMI Subordinated Debt, provided that the
amount so repaid, together with the amounts distributed by the Borrower in
accordance with Section 13.4, do not in the aggregate exceed the amounts
permitted to be distributed by the Borrower under Section 13.4, and (c) in
respect of Back-to-Back Securities or Back-to-Back Transactions. In
addition, the Borrower may agree to the conversion of the QMI Subordinated
Debt into equity, provided that any new shares resulting from such
conversion are pledged to the Agent on behalf of the Lenders.
13.11 MEMBERS OF THE VL GROUP, RELATED PARTY TRANSACTIONS
Prior to the Phase II Date, permit any member of the VL Group to cease being
wholly-owned, or create or acquire any Subsidiaries other than wholly-owned
Subsidiaries; provided that Tele-Cable Charlevoix Inc. and Societe d'Edition
et de Transcodage T.E. Ltee. need not be wholly-owned. On and after the
Phase II Date, permit any Change in Control of the Borrower and the Initial
VL Group Guarantors. In addition, no transaction shall be entered into by
any member of the VL Group with any Associate of any member of the VL Group
except on fair market terms and conditions as would be contracted by Persons
dealing at arms' length, provided that this last sentence shall not apply to
the transactions expressly permitted by paragraph (h) of Section 13.8;
provided, however, for greater certainty, that to the extent payments made
in connection with or in respect of the Back-to-Back Transactions are made
to any Affiliates of the Borrower that are not members of the VL Group, all
corresponding payments required to be paid by such Affiliates pursuant to
the related Back-to-Back Securities are received, immediately prior to,
concurrently with or immediately subsequent to any such payments, by all
applicable members of the VL Group, and each such payment by a member of the
VL Group shall be conditional upon receipt of an equal or greater amount
from such non-member of the VL Group that is an Affiliate. Finally, payment
of a management fee or other similar expense by the Borrower to its direct
or indirect parent company shall be permitted for bona fide services
(including reimbursement for expenses incurred in connection with, or
allocation of corporate expenses in relation to, providing such services)
provided to, and directly related to the operations of, the VL Group, in an
aggregate annual amount not to exceed 1.25% of consolidated revenues (being
gross revenues of the VL Group calculated in accordance with GAAP, less any
amounts derived from Subsidiaries that are not members of the VL Group, and
save that any portion of such gross revenues derived from a Person that is
not a Subsidiary of the Borrower accounted for by the equity method of
accounting shall be included in such calculation only to the extent of the
amount of dividends or distributions actually paid to a member of the
VL Group by such Person) in any twelve-month period.
13.12 DERIVATIVE INSTRUMENTS
Enter into any Derivative Instruments other than for the purposes of hedging
interest rate, commodity or foreign exchange exposure, and not for the
purpose of speculation.
47
14. EVENTS OF DEFAULT AND REALIZATION
14.1 EVENT OF DEFAULT
The occurrence of any of the following events shall constitute an Event of
Default unless remedied within the prescribed delays or renounced to in
writing:
14.1.1 If the Borrower fails to make any payment of interest or
principal with respect to the Loan when due; or
14.1.2 If the VL Group fails to respect any of the financial tests set
out in Section 12.11 hereof at any time;
14.1.3 If the Borrower or any Guarantor fails to respect any of its
other obligations and undertakings hereunder or under the Security
Documents or another undertaking of the Borrower or any other
Guarantor with respect to the Loan not otherwise contemplated by
this Section 14.1 and has not remedied the Default within fifteen
(15) days following the date on which the Agent has given written
notice to the Borrower; or
14.1.4 If (a) the Borrower or any Guarantor commits an act of
bankruptcy within the meaning of the Bankruptcy and Insolvency
Act, makes an assignment in favour of its creditors, consents to
the filing of a petition for a receiving order against it,
files a proposal within the meaning of the Bankruptcy and
Insolvency Act, or makes a motion to a tribunal to name, or
consents to, approves or accepts the appointment of a trustee,
receiver, liquidator or sequestrator with respect to itself or its
property, commences any other proceeding with respect to itself or
its property under the provisions of any law contemplating
reorganizations, proposals, rectifications, compromises or
liquidations in connection with insolvent Persons, in any
jurisdiction whatsoever; or (b) a trustee, receiver, liquidator or
sequestrator is named with respect to the Borrower, any Guarantor
or its property, or the Borrower or any Guarantor is judged
insolvent or bankrupt; or (c) a proceeding seeking to name a
trustee, receiver, liquidator or sequestrator, or to force the
Borrower or any Guarantor into bankruptcy, is commenced against
the Borrower or any Guarantor and is not settled or withdrawn
within a delay of 30 days; or
14.1.5 If the Borrower or any Guarantor is in default with respect to
any Indebtedness (other than amounts due to the Lenders hereunder)
which has resulted in Indebtedness in excess of an amount of
$10,000,000 ($25,000,000 in the case of Quebecor Media Inc.)
becoming payable prior to its stated maturity or scheduled
repayment date; or
14.1.6 If one or more judgments is rendered by a competent tribunal
against the Borrower or any Guarantor in an aggregate amount in
excess of $10,000,000 ($25,000,000 in the case of Quebecor
Media Inc.) (net of applicable insurance coverage pursuant to
which liability is acknowledged in writing by the insurer, with a
copy promptly provided to the Agent on behalf of the Lenders) and
remains undischarged or unsatisfied for a period ending on the
earlier of (a) 25 days from such judgment, or (b) the 5th day
prior to the date on which such judgment becomes executory; or
14.1.7 If property of any of the Borrower or any Guarantor having a
total value in excess of $10,000,000 ($25,000,000 in the case of
Quebecor Media Inc.) is the object of one or more seizures or
takings of possession or other legal proceedings by creditors, and
is not released within 15 days in respect of movable property or
45 days in respect of immovable property, and in any event, not
less than 10 days prior to the date fixed for any sale of such
property; or
14.1.8 If any statement, attestation, financial statement, report,
data, representation or warranty which was given by, for the
account of or in the name of the Borrower or any Guarantor to the
Lenders, with respect to this Agreement or any Security Documents,
is revealed at any time to be misleading or incorrect in any
material respect when it was made, and if any event or
circumstance which makes such statement, attestation, financial
statement, report, data, representation or warranty misleading in
any material respect is capable of being remedied, such action as
may be required to remedy same shall not have been completed
within 15 days of the
48
earlier of (a) the Agent notifying the Borrower or, as the case
may be, a Guarantor of such breach, or (b) the Borrower notifying
the Agent of the Default in accordance with subsection 12.16.3; or
14.1.9 If in the opinion of the Lenders, acting in good faith, there
occurs a Material Adverse Change and the situation has not been
remedied within 15 days following the earlier of the date on which
(a) the Agent gave notice thereof to the Borrower, or (b) the
Borrower gave notice to the Agent in accordance with
subsection 12.16.3; or
14.1.10 If a Change in Control occurs; or
14.1.11 If any Guarantee to be provided by any Guarantor hereunder is or
purports to be terminated by notice given under article 2362 of
the Quebec Civil Code.
14.2 REMEDIES
If an Event of Default occurs under subsection 14.1.4, the Loans shall
immediately become due and exigible, without presentation, demand, protest
or other notice of any nature, to which the Borrower hereby expressly
renounces. If any other Event of Default occurs, the Agent may, at its
option, and shall if required to do so by the Lenders, declare immediately
due and exigible, without presentation, demand, protest or other notice of
any nature, to which the Borrower hereby expressly renounces,
notwithstanding any provision to the contrary effect in this Agreement or in
the Security Documents:
14.2.1 the entire amount of the Loan, including the amount
corresponding to the principal amount of the BA Advances then
outstanding, in principal and interest, notwithstanding the fact
that one or more of the holders of the Bankers' Acceptances issued
pursuant to the provisions hereof have not demanded payment in
whole or in part or have demanded only partial payment from the
Lenders, and the amount of the Negative Value of Derivative
Instruments. The Borrower shall not have the right to invoke
against the Lenders any defence or right of action,
indemnification or compensation of any nature or kind whatsoever
that the Borrower may at any time have or have had with respect to
any holder of one or more of the Derivative Instruments or
Bankers' Acceptances issued in accordance with the provisions
hereof; and
14.2.2 an amount equal to the amount of losses, costs and expenses
assumed by the Lenders and referred to in Section 7.2; and
the Credit shall cease and as and from such time shall be cancelled, and the
Lenders may exercise all of their rights and recourses under the provisions
of this Agreement and of the Security Documents. For greater certainty, from
and after the occurrence of any Default or Event of Default, the Lenders
shall not be obliged to make any further Advances under the Credit.
14.3 BANKRUPTCY AND INSOLVENCY
If the Borrower files a notice of intention to file a proposal, or files a
proposal under the Bankruptcy and Insolvency Act, or if the Borrower obtains
the permission of the court to file a Plan of Arrangement under the
Companies' Creditors Arrangements Act, and if a stay of proceedings is
obtained or ordered under the provisions of either of those statutes,
without prejudice to the Lenders' rights to contest such stay of
proceedings, the Borrower covenants and agrees to continue to pay interest
on all amounts due to the Lenders in accordance with the provisions hereof.
In this regard, the Borrower acknowledges that permitting the Borrower to
continue to use the proceeds of the Loan constitutes valuable consideration
provided after the filing of any such proceeding in the same way that
permitting the Borrower to use leased premises constitutes such valuable
consideration.
14.4 NOTICE
Except where otherwise expressly provided herein, no notice or demand of any
nature is required to be given to the Borrower by the Agent in order to put
the Borrower in default, the latter being in default by the simple lapse of
time granted to execute an obligation or by the simple occurrence of a
Default.
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14.5 COSTS
If an Event of Default occurs, and within the limits contemplated by
Section 12.14, the Agent may impute to the account of the Lenders and pay to
other persons reasonable sums for services rendered with respect to the
realization, recovery, sale, transfer, delivery and obtention of payment
with respect to the Security and may deduct the amount of such costs and
payments from the proceeds which it receives therefrom. The balance of such
proceeds may be held by the Agent in the place of such Security and, when
the Agent decides it is opportune, may be applied to the account of the part
of the indebtedness of the Borrower to the Lenders which the Agent deems
preferable, without prejudice to the rights of the Lenders against the
Borrower for any loss of profit.
14.6 RELATIONS WITH THE BORROWER
The Agent may grant delays, take security or renounce thereto, accept
compromises, grant acquittances and releases and otherwise negotiate with
the Borrower as it deems advisable without in any way diminishing the
liability of the Borrower or prejudicing the rights of the Lenders with
respect to the Security.
14.7 APPLICATION OF PROCEEDS
Subject to the provisions hereof, the Agent may apply the proceeds of
realization of the property contemplated by the Security Documents and of
any credit or compensating balance in reduction of the part of the Loan
(principal, interest or accessories and/or the Negative Value of Derivative
Instruments originally entered into with a Lender) which the Agent judges
appropriate. If any Lender is owed money by the Borrower as a result of
Derivative Obligations, and, in particular, as a result of the Negative
Value of Derivative Instruments, the claim of such Lender shall rank
PARI PASSU with the other amounts comprising the Loan.
15. JUDGMENT CURRENCY
15.1 RULES OF CONVERSION
If for the purpose of obtaining judgment in any court or for any other
purpose hereunder, it is necessary to convert an amount due, advanced or to
be advanced hereunder from the currency in which it is due (the "FIRST
CURRENCY") into another currency (the "SECOND CURRENCY") the rate of
exchange used shall be that at which, in accordance with normal banking
procedures, the Agent could purchase, in the Canadian money market or the
Canadian exchange market, as the case may be, the First Currency with the
Second Currency on the date on which the judgment is rendered, the sum is
exigible or advanced or to be advanced, as the case may be. The Borrower
agrees that its obligations in respect of any First Currency due from it to
the Lenders in accordance with the provisions hereof shall, notwithstanding
any judgment rendered or payment made in the Second Currency, be discharged
by a payment made to the Agent on account thereof in the Second Currency
only to the extent that, on the Business Day following receipt of such
payment in the Second Currency, the Agent may, in accordance with normal
banking procedures, purchase on the Canadian money market or the Canadian
foreign exchange market, as the case may be, the First Currency with the
amount of the Second Currency so paid or which a judgment rendered exigible;
and if the amount of the First Currency which may be so purchased is less
than the amount originally due in the First Currency, the Borrower agrees as
a separate and independent obligation and notwithstanding any such payment
or judgment to indemnify the Lenders against such deficiency.
15.2 DETERMINATION OF AN EQUIVALENT CURRENCY
If, in their discretion, the Lenders or the Agent choose or, pursuant to the
terms of this Agreement, are obliged to choose the equivalent in Canadian
Dollars of any securities or amounts expressed in US Dollars or the
equivalent in US Dollars of any securities or amounts expressed in Canadian
Dollars, the Agent, in accordance with the conversion rules as stipulated in
Section 15.1
15.2.1 on the date indicated in the Notice of Borrowing as the date of
a request for an Advance; and
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15.2.2 at any other time which in the opinion of the Lenders is
desirable;
may, using the spot rate of the Agent on such date, determine the equivalent
in Canadian Dollars or in US Dollars, as the case may be, of any security or
amount expressed in the other currency pursuant to the terms hereof.
Immediately following such determination, the Agent shall inform the
Borrower of the conclusion which the Lenders have reached.
16. ASSIGNMENT
16.1 ASSIGNMENT BY THE BORROWER
The rights of the Borrower under the provisions hereof are purely personal
and may not be transferred or assigned, and the Borrower may not transfer or
assign any of its obligations, such assignment being null and of no effect
opposite the Lenders and rendering any balance outstanding of the amounts
referred to in Section 14.2 immediately due and exigible at the option of
the Lenders and further releasing the Lenders from any obligation to make
any further Advances under the provisions hereof.
16.2 ASSIGNMENTS AND TRANSFERS BY THE LENDERS
16.2.1 Each Lender may, at its own cost, assign or transfer to a Person
entitled to lend money in Canada or any other Person consented to
by the Borrower and the Agent or, to the extent permitted under
Section 17.15, to a Foreign Lender (the "ASSIGNEE") in accordance
with this Article 16 up to 100% of its rights, benefits and
obligations hereunder (provided that its aggregate retained
Commitment, if any, under the Revolving Facility is not less than
$5,000,000) with the prior consent of the Borrower, which shall
not be unreasonably withheld or delayed. The Borrower may not
refuse to consent to an assignment or transfer on the sole grounds
that the Assignee is a Foreign Lender, provided the provisions of
Section 17.15 are respected. After the occurrence of a Default,
any Lender may transfer all or any part of its rights, benefits
and obligations hereunder to any Person, without the consent of
the Borrower, but upon notice to the Agent and the Borrower.
16.2.2 Except for any assignments or transfers arranged by the
Arrangers for their Affiliates in order to fulfill their sell-down
requirements, for which no restrictions shall apply, any such
assignment or transfer under the Revolving Facility shall be for a
minimum amount of $5,000,000 in the aggregate and in multiples of
$1,000,000 thereafter.
16.2.3 Notwithstanding subsection 16.2.1, each Lender shall be entitled
to assign or transfer, at its own cost, in accordance with the
other provisions of this Section 16 (including 16.5), its rights,
benefits and obligations hereunder, in whole or in part, to a
parent or subsidiary corporation or an Affiliate of such Lender.
16.3 TRANSFER AGREEMENT
If a Lender wishes to assign or transfer all or any of its rights, benefits
and obligations hereunder in accordance with Section 16.2, then such
assignment or transfer shall be effected by the execution and delivery of a
duly completed and executed Transfer Agreement by such Lender to the Agent
together with a transfer fee of $3,500 (other than in connection with the
initial syndication of the Credit), at least 5 Business Days prior to the
effective date of such transfer, whereupon, to the extent that in such
Transfer Agreement such Lender seeks to assign or transfer its rights and
obligations hereunder:
16.3.1 such Lender shall be released from further obligations to the
Borrower with respect to the portion of the obligations of such
Lender assumed by the Assignee;
16.3.2 the Assignee shall assume the obligations of such Lender and
acquire the rights of such Lender in respect of the Borrower,
without novation of the Borrower's obligations;
16.3.3 the Agent, such Lender and the Assignee shall acquire the same
rights and assume the same obligations between themselves as they
would have acquired and assumed had the Assignee been an original
party hereto with the obligations assumed and the rights acquired
by it as a
51
result of such assignment or transfer; in furtherance of such
principle, the Assignee shall be deemed to have agreed to be bound
by the provisions of the Inter-Creditor Agreement, to the extent
it remains in force at the relevant time, as if it had been an
original party thereto; and
16.3.4 the Borrower, the Agent and such Lenders shall all execute such
documents and perform such acts as may be required to give effect
to the transfer or assignment.
16.4 NOTICE
The Agent shall promptly deliver an executed copy of any Transfer Agreement
to each party thereto.
16.5 SUB-PARTICIPATIONS
A Lender may, at its own cost, grant one or more sub-participations in its
rights, benefits and obligations hereunder, provided that, notwithstanding
any such sub-participation, such Lender shall remain, insofar as the
Borrower and the Agent is concerned, as the Lender responsible hereunder,
and the Borrower shall not be obliged to recognize any such sub-participant
as having the rights against it which it would have if it had been a party
hereto.
16.6 GENERAL
Notwithstanding anything contained in this Article:
16.6.1 the Agent shall act as agent for each Assignee and, in this
connection, with respect to all decisions, notices and other
matters relating to anything referred to in this Agreement, the
Borrower shall only be obliged to give notice to or request
consents from the Agent;
16.6.2 except as the result of an assignment and transfer permitted
under Section 17.15, the amounts payable by the Borrower under
this Agreement shall not increase, whether in respect of
withholding on account of taxes or otherwise, as a result of any
such assignment or transfer to an Assignee which is a non-resident
of Canada as defined in the Income Tax Act (Canada); and
16.6.3 any Lender (a "GRANTING LENDER") may grant to a special purpose
funding vehicle (an "SPV"), identified as such from time to time
by the Granting Lender to the Agent and the Borrower, the option
to provide to the Borrower all or any part of an Advance that such
Granting Lender would otherwise be required to make hereunder;
provided that (a) nothing herein shall constitute a commitment by
any SPV to make any Advance, and (b) if an SPV does not make such
Advance, the Granting Lender shall remain liable to do so. Any
Advance by an SPV shall be made using the Commitment of the
Granting Lender as if the Advance in question had been made by
such Granting Lender. Each party hereto agrees that no SPV shall
be liable for any indemnity or other payment hereunder, all of
which liability shall remain with the Granting Lender.
Accordingly, each party further agrees (which agreement will
survive the termination hereof) that it shall not institute any
insolvency or other proceeding against the SPV until a date that
is not less than one year and one day following the repayment of
all of such SPV's commercial paper and other senior Indebtedness.
In addition, any SPV may (a) assign all or any portion of its
interests in any Loans (i) with notice to, but without the consent
of the Borrower or the Agent, and without paying any fees
therefor, to the Granting Lender or (ii) to any financial
institution, with the consent of the Borrower and the Agent
providing liquidity and/or credit support to or for the account of
such SPV to support the funding and maintenance of Advances; and
(b) disclose on a confidential basis any non-public information
relating to the Loans to any rating agency, commercial paper
dealer or provider of any surety, guarantee or credit or liquidity
enhancement to such SPV.
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17. MISCELLANEOUS
17.1 NOTICES
Except where otherwise specified herein, all notices, requests, demands or
other communications between the parties hereto shall be in writing and
shall be deemed to have been duly given or made to the party to whom such
notice, request, demand or other communication is given or permitted to be
given or made hereunder, when delivered to the party (by certified mail,
postage prepaid, or by facsimile or by physical delivery) to the address of
such party and to the attention indicated under the signature of such party
or to any other address which the parties hereto may subsequently
communicate to each other in writing. Notwithstanding the foregoing, any
notice shall be deemed to have been received by the party to whom it is
addressed (a) upon receipt if sent by mail and (b) if telecopied before
3:00 p.m. on a Business Day, on that day and if telecopied after 3:00 p.m.
on a Business Day, on the Business Day next following the date of
transmission. If normal postal or telecopier service is interrupted by
strike, work slow-down, fortuitous event or other cause, the party sending
the notice shall use such services which have not been interrupted or shall
deliver such notice by messenger in order to ensure its prompt receipt by
the other party.
17.2 AMENDMENT AND WAIVER
The rights and recourses of the Lenders under this Agreement and the
Security Documents are cumulative and do not exclude any other rights and
recourses which the Lenders might have, and no omission or delay on the part
of the Lenders in the exercise of any right shall have the effect of
operating as a waiver of such right, and the partial or sole exercise of a
right or power will not prevent the Lenders from exercising thereafter any
other right or power. The provisions of this Agreement may only be amended
or waived by an instrument in writing (and not orally) in each case signed
by the Agent with the approval of the requisite majority of Lenders.
17.3 DETERMINATIONS FINAL
In the absence of any manifest error, any determinations to be made by the
Lenders in accordance with the provisions hereof, when made, are final and
irrevocable for all parties.
17.4 ENTIRE AGREEMENT
The entire agreement between the parties is expressed herein, and no
variation or modification of its terms shall be valid unless expressed in
writing and signed by the parties. All previous agreements, promises,
proposals, representations, understandings and negotiations between the
parties hereto which relate in any way to the subject matter of this
Agreement are hereby deemed to be null.
17.5 INDEMNIFICATION AND COMPENSATION
In addition to the other rights now or hereafter conferred by law and those
described in subsection 6.6.2 and Section 8.13, and without limiting such
rights, if a Default or Event of Default should occur, each Lender and the
Agent is hereby authorized by the Borrower, at any time and from time to
time, subject to the obligation to give notice to the Borrower subsequently
and within a reasonable delay, to indemnify, compensate, use and allocate
any deposit (general or special, term or demand, including, without
limitation, any debt evidenced by certificates of deposit, whether or not
matured) and any other debt at any time held or due by the Lenders to the
Borrower or to its credit or its account, with respect to and on account of
any obligation and indebtedness of the Borrower to the Lenders in accordance
with the provisions hereof or the Security Documents, including, without
limitation, the accounts of any nature or kind which flow from or relate to
this Agreement or the Security Documents, whether or not the Agent has made
demand under the terms hereof or has declared the amounts referred to in
Section 14.2 as exigible in accordance with the provisions of that Section
and even if such obligation and Debt or either of them is a future or
unmatured Debt.
53
17.6 BENEFIT OF AGREEMENT
This Agreement shall be binding upon and enure to the benefit of each party
hereto and its successors and permitted assigns.
17.7 COUNTERPARTS
This Agreement may be signed in any number of counterparts, each of which
shall be deemed to constitute an original, but all of the separate
counterparts shall constitute one single document.
17.8 APPLICABLE LAW
This Agreement, its interpretation and its application shall be governed by
the Laws of the Province of Quebec and the Laws of Canada applicable
therein.
17.9 SEVERABILITY
Each provision of this Agreement is separate and distinct from the others,
such that any decision of a court or tribunal to the effect that any
provision of this Agreement is null or unenforceable shall in no way affect
the validity of the other provisions of this Agreement or the enforceability
thereof. Any provision of this agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent
permitted by applicable Laws, the Borrower hereby waives any provision of
any Laws which renders any provision hereof prohibited or unenforceable in
any respect.
17.10 FURTHER ASSURANCES
The Borrower covenants and agrees on its own behalf and on behalf of each
member of the VL Group that, at the request of the Agent, the Borrower and
each other member of the VL Group will at any time and from time to time
execute and deliver such further and other documents and instruments and do
all acts and things as the Agent in its absolute discretion requires in
order to evidence the indebtedness of the Borrower under this Agreement or
otherwise, including under any Derivative Instruments, and to confirm and
perfect, and maintain perfection of, the Security.
17.11 GOOD FAITH AND FAIR CONSIDERATION
Each party hereto acknowledges and declares that it has entered into this
Agreement freely and of its own will. In particular, each party hereto
acknowledges that this Agreement was freely negotiated by the Borrower and
the Lenders in good faith, that this Agreement does not constitute a
contract of adhesion, that there was no exploitation of the Borrower by the
Lenders, and that there is no serious disproportion between the
consideration provided by the Lenders and that provided by the Borrower.
17.12 RESPONSIBILITY OF THE LENDERS
Each Lender shall be solely responsible for the performance of its own
obligations hereunder. Accordingly, no Lender is in any way jointly and
severally or solidarily responsible for the performance of the obligations
of any other Lender.
17.13 INDEMNITY
The Borrower agrees to indemnify and defend each of the Agent, each Lender,
and their respective directors, officers, agents and employees from, and
hold each of them harmless against, any and all losses, liabilities, claims,
damages or expenses of any kind which at any time or from time to time may
be asserted against or incurred or paid by any of them for or in connection
with, arising directly or indirectly from or relating to: (i) the
participation of the Agent or of any of the Lenders in the transactions
contemplated by this Agreement, (ii) the role of the Agent or the Lenders in
any investigation, litigation or other proceeding brought or threatened
relating to the Credit, (iii) the presence on or under or the release or
migration from any property
54
or into the environment of any hazardous material, and/or (iv) the
compliance with or enforcement of any of their rights or obligations
hereunder, including without limitation:
17.13.1 the fees and disbursements of counsel;
17.13.2 the costs of defending, counterclaiming or claiming over against
third parties in respect of any action or matter and any cost,
liability or damage arising out of any settlement; and
17.13.3 other than losses, liabilities, claims, damages or expenses
incurred by reason of the gross negligence or willful misconduct
of the indemnified party, as determined by a final judgment of a
court of competent jurisdiction.
17.14 LANGUAGE
The parties acknowledge that they have required that the present agreement,
as well as all documents, notices and legal proceedings entered into, given
or instituted pursuant hereto or relating directly or indirectly hereto be
drawn up in English. Les parties reconnaissent avoir exige la redaction en
anglais de la presente convention ainsi que de tous documents executes, xxxx
xxxxxx et procedures judiciaires intentees, directement ou indirectement,
relativement ou a la suite de la presente convention.
17.15 FOREIGN LENDERS
Notwithstanding the provisions of subsection 16.2.1 hereof, each of the
Borrower, the Agent and the Lenders agrees that:
17.15.1 the Arrangers (as hereinafter defined) may solicit and receive
Commitments from any Person who is a non-resident of Canada
(within the meaning of the INCOME TAX ACT (Canada)) and who is
authorized by law to lend money ("FOREIGN LENDERS") to the extent
of $11,000,000 of the Revolving Facility;
17.15.2 in such case, the Affiliates of the Arrangers may make the
required Assignments to such Foreign Lenders; and
17.15.3 upon compliance with the provisions of Article 16, such Foreign
Lenders may further assign and transfer their Commitments to any
other Foreign Lender.
Neither the Agent nor the Borrower shall accept or be bound by any
assignment or transfer where the effect of the purported assignment or
transfer would be to create Commitments of Foreign Lenders in excess of the
limits mentioned above. "ARRANGERS" shall mean RBC Dominion
Securities Inc., Bank of America, N.A., Canada Branch, BMO Xxxxxxx
Xxxxx Inc., The Toronto-Dominion Bank and their respective successors and
assignees.
Notwithstanding any other provision of this Agreement to the contrary, any
Foreign Lender governed by the applicable Laws of the United States of
America may at any time assign all or a portion of its rights under this
Agreement and all other documents ancillary thereto (including the Security
Documents) to a Federal Reserve Bank. No such assignment shall relieve the
assigning Foreign Lender from its obligations under this Agreement or such
other documents.
18. THE AGENT AND THE LENDERS
18.1 AUTHORIZATION OF AGENT
18.1.1 Each Lender hereby irrevocably appoints and authorizes the Agent
to act for all purposes as its agent hereunder and under the
Security Documents with such powers as are expressly delegated to
the Agent by the terms of this Agreement, together with such other
powers as are reasonably incidental thereto and undertakes not to
take any action on its own. Notwithstanding the provisions of the
Civil Code of Quebec relating to contracts generally and to
mandate, the Agent shall have no duties or responsibilities except
those expressly set forth in this Agreement. As to any matters not
expressly provided for by this Agreement, the Agent shall act
hereunder or in connection herewith in accordance with the
instructions of the Lenders in accordance with
55
the provisions of this Article 18, but, in the absence of any such
instructions, the Agent may (but shall not be obliged to) act as
it shall deem fit in the best interests of the Lenders, and any
such instructions and any action taken by the Agent in accordance
herewith shall be binding upon each Lender. The Agent shall not,
by reason of this Agreement, be deemed to be a trustee for the
benefit of any Lender, the Borrower or any other Person. Neither
the Agent nor any of its directors, officers, employees or agents
shall be responsible to the Lenders for any recitals, statements,
representations or warranties contained in this Agreement or in
any certificate or other document referred to, or provided for in,
or received by any of them under, this Agreement, for the value,
validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement, or any other document referred to
or provided for herein or any collateral provided for hereby or
for any failure by the Borrower to perform its obligations
hereunder. The Agent may employ agents and attorneys-in-fact and
shall not be responsible for the negligence or misconduct of any
such agents or attorneys-in-fact selected by it with reasonable
care. Neither the Agent nor any of its directors, officers,
employees or agents shall be responsible for any action taken or
omitted to be taken by it or them under or in connection herewith,
except for its or their own gross negligence or wilful misconduct.
18.1.2 For the purposes of creating a SOLIDARITE ACTIVE between each
Lender, taken individually, and the Agent in accordance with
Article 1541 of the CIVIL CODE OF QUEBEC, the Borrower and each
Lender (on its own behalf) acknowledge and agree with the Agent
that such Lender and the Agent are hereby conferred the legal
status of solidary creditors of the Borrower and the Guarantors in
respect of all amounts, liabilities and other obligations, present
and future, owed by the Borrower to the Agent and such Lender
hereunder and under Derivative Instruments (collectively, the
"LENDER SOLIDARY CLAIM"). Accordingly, but subject (for the
avoidance of doubt) to Article 1542 of the CIVIL CODE OF QUEBEC,
the Borrower and each of the Guarantors is irrevocably bound
towards the Agent and each Lender in respect of the entire Lender
Solidary Claim of the Agent and such Lender, such that the Agent
and each Lender shall at all times have a valid and effective
right of action for the entire Lender Solidary Claim of the Agent
and such Lender and the right to give a full acquittance for it.
Thus, without limiting the generality of the foregoing, the Agent,
as solidary creditor for itself and each Lender, shall at all
times have a valid and effective right of action in respect of all
amounts, liabilities and other obligations owed by the Borrower
and the Guarantors to the Agent and the Lenders or any of them
hereunder and under Derivative Instruments and the right to give
full acquittance for same. The parties further agree and
acknowledge that the Security Documents described in
subsections 9.1.1, 9.1.2, 9.2.1, 9.2.2, 9.2.3, 9.2.4, 9.2.7 and
9.2.9, as the case may be, shall be granted to the Agent, for its
own benefit and for the benefit of the Lenders, as solidary
creditor as hereinabove set forth.
18.2 AGENT'S RESPONSIBILITY
18.2.1 The Agent shall be entitled to rely upon any certificate, notice
or other document (including any cable, telegram, telex or
telecopy) believed by it to be genuine and correct and to have
been signed or sent by or on behalf of the proper person or
persons, and upon advice and statements of legal advisers,
independent accountants and other experts selected by the Agent.
The Agent may deem and treat each Lender as the holder of the
Commitment in the Loan made by such Lender for all purposes hereof
unless and until an Assignment has been completed in accordance
with Section 16.2.
18.2.2 The Agent shall not be deemed to have knowledge of the
occurrence of a Default or Event of Default unless the Agent has
received notice from a Lender or the Borrower describing such a
Default or Event of Default and stating that such notice is a
"Notice of Default". In the event that the Agent receives such a
notice of the occurrence of a Default or Event of Default or
otherwise becomes aware that a Default or Event of Default has
occurred, the Agent shall promptly give notice thereof to the
Lenders. The Agent shall take such action with respect to such
Default or Event of Default as shall be reasonably directed by the
Lenders in accordance
56
with the provisions of this Article 18 provided that, unless and
until the Agent shall have received such directions, the Agent may
(but shall not be obliged to) take such action, or refrain from
taking such action, with respect to such a Default or Event of
Default as it shall deem advisable in the best interest of the
Lenders.
18.2.3 The Agent shall have no responsibility, (a) to the Borrower on
account of the failure of any Lender to perform its obligations
hereunder, or (b) to any Lender on account of the failure of the
Borrower to perform its obligations hereunder.
18.2.4 Each Lender severally represents and warrants to the Agent that
it has made its own independent investigation of the financial
condition and affairs of the Borrower in connection with the
making and continuation of its Commitment in the Loan hereunder
and has not relied on any information provided to such Lender by
the Agent in connection herewith, and each Lender represents and
warrants to the Agent that it shall continue to make its own
independent appraisal of the creditworthiness of the Borrower
while the Loan is outstanding or the Lenders have any obligations
hereunder.
18.3 RIGHTS OF AGENT AS LENDER
With respect to its Commitment in the Loan, the Agent in its capacity as a
Lender shall have the same rights and powers hereunder as any other Lender
and may exercise the same as though it were not acting as the Agent and the
term "Lender" shall, unless the context otherwise indicates, include the
Agent in its capacity as a Lender. The Agent may (without having to account
therefor to any Lender) accept deposits from, lend money to and generally
engage in any kind of banking or other business with the Borrower as if it
were not acting as the Agent and may accept fees and other consideration
from the Borrower for customary services in connection with this Agreement
and the Loan and otherwise without having to account for the same to the
Lenders.
18.4 INDEMNITY
Each Lender agrees to indemnify the Agent, to the extent not otherwise
reimbursed by the Borrower, rateably in accordance with its respective
Commitments, for any and all liabilities, obligations, losses, damages,
penalties, actions, judgements, suits, costs, expenses or disbursements of
any kind and nature whatsoever which may be imposed on, incurred by or
asserted against, the Agent in any way relating to or arising out of this
Agreement, the Security Documents or any other documents contemplated by or
referred to herein or therein or the transactions contemplated hereby or
thereby (excluding, unless a Default or Event of Default is apprehended or
has occurred and is continuing, normal administrative costs and expenses
incidental to the performance of its agency duties hereunder) or the
enforcement of any of the terms hereof or of any such other documents,
provided that no Lender shall be liable for any of the foregoing to the
extent they arise from the Agent's gross negligence or wilful misconduct.
18.5 NOTICE BY AGENT TO LENDERS
As soon as practicable after its receipt thereof, the Agent will forward to
each Lender a copy of each report, notice or other document required by this
Agreement to be delivered to the Agent for such Lender.
18.6 PROTECTION OF AGENT
18.6.1 The Agent shall not be required to keep itself informed as to
the performance or observance by the Borrower of this Agreement or
any other document referred to or provided for herein or therein
or to inspect the properties or books of the Borrower. Except (in
the case of the Agent) for notices, reports and other documents
and information expressly required to be furnished to the Lenders
by the Agent hereunder, the Agent shall have no duty or
responsibility to provide any Lender with any credit or other
information concerning the affairs or financial condition of the
Borrower which may come to the attention of the Agent, except
where provided to the Agent for the Lenders, provided that such
information does not confer any advantage to the Agent as a Lender
over the other Lenders. Nothing in this Agreement shall oblige the
Agent to
57
disclose any information relating to the Borrower if such
disclosure would or might, in the opinion of the Agent, constitute
a breach of any Laws or duty of secrecy or confidence.
18.6.2 Unless the Agent shall have been notified in writing or by
telegraph, telex or telecopier by any Lender prior to the date of
an Advance requested hereunder that such Lender does not intend to
make available to the Agent such Lender's proportionate share of
such Advance, based on its Commitment, the Agent may assume that
such Lender has made such Lender's Commitment in such Advance
available to the Agent on the date of such Advance and the Agent
may, in reliance upon such assumption, make available to the
Borrower a corresponding amount. If such corresponding amount is
not in fact made available to the Agent by such Lender, the Agent
shall be entitled to recover such amount (together with interest
thereon at the rate determined by the Agent as being its cost of
funds in the circumstances) on demand from such Lender or, if such
Lender fails to reimburse the Agent for such amount on demand,
from the Borrower.
18.6.3 Unless the Agent shall have been notified in writing or by
telegraph, telex or telecopier by the Borrower prior to the date
on which any payment is due hereunder that the Borrower does not
intend to make such payment, the Agent may assume that the
Borrower has made such payment when due and the Agent may, in
reliance upon such assumption, make available to each Lender on
such payment date an amount equal to such Lender's PRO RATA share
of such assumed payment. If it is established that the Borrower
has not in fact made such payment to the Agent, each Lender shall
forthwith on demand repay to the Agent the amount made available
to such Lender (together with interest at the rate determined by
the Agent as being its cost of funds in the circumstances).
18.7 NOTICE BY LENDERS TO AGENT
Each Lender shall endeavour to use its best efforts to notify the Agent of
the occurrence of any Default or Event of Default forthwith upon becoming
aware of such event, but no Lender shall be liable if it fails to give such
notice to the Agent.
18.8 SHARING AMONG THE LENDERS
Each Lender agrees that as amongst themselves, except as otherwise provided
for by the provisions of this Agreement, all amounts received by the Agent,
in its capacity as agent of the Lenders pursuant to this Agreement or any
other document contemplated hereby (whether received by voluntary payment,
by the exercise of the right of set-off or compensation or by counterclaim,
cross-claim, separate action or as proceeds of realization of any security,
other than agency fees), and all amounts received by any Lender in relation
to this Agreement shall be shared by each Lender PRO RATA, in accordance
with their respective Commitment and each Lender undertakes to do all such
things as may be reasonably required to give full effect to this
Section 18.8. If any amount which is so shared is later recovered from the
Lender who originally received it, each other Lender shall restore its
proportionate share of such amount to such Lender, without interest.
As a necessary consequence of the foregoing, each Lender shall share, in a
percentage equal to its Commitment (and, for the purposes of this Section, a
Lender that holds a Derivative Instrument creating Deriviative Obligations
shall have a Commitment that is deemed to be in an amount equal to (a) its
Commitment otherwise calculated, plus (b) the Negative Value of Derivative
Instruments entered into by such Lender that created Derivative
Obligations), any losses incurred as a result of any Default or Event of
Default by the Borrower, and shall pay to the Agent, within two
(2) Business Days following a request by the Agent, any amount required to
ensure that such Lender bears its PRO RATA share of such losses, if any,
including any amounts required to be paid to any Lender in respect of any
Bankers' Acceptances and, for greater certainty, amounts forming part of the
Cash Management Facilities (which form part of the Revolving Facility). Such
obligation to share losses shall be absolute and unconditional and shall not
be affected by any circumstance, including, without limitation, (1) any
set-off, compensation, counterclaim, recoupment, defence or other right
which such Lender may have against the Agent, the Borrower or any other
Person for any reason whatsoever; (2) the occurrence or continuance of any
Default or Event of Default; (3) any adverse change in the condition
(financial or otherwise) of the Borrower or any other Person; (4) any breach
of this Agreement by the
58
Borrower or any other Person; or (5) any other circumstance, happening or
event whatsoever, whether or not similar to any of the foregoing. If any
Lender does not make available the amount required hereunder, the Agent
shall be entitled to recover such amount on demand from such Lender,
together with interest thereon at the Prime Rate from the date of
non-payment until such amount is paid in full.
18.9 DERIVATIVE OBLIGATIONS
18.9.1 The Derivative Obligations shall be secured by the Security
provided that the related Derivative Instruments:
(a) are governed by an ISDA Master Agreement; and
(b) provide that bankruptcy or insolvency constitutes an event of
default thereunder.
18.9.2 Each Lender shall confirm to the Agent and to the Borrower, upon
request, quarterly on or about the last day of each financial
quarter of each financial year of the Borrower, the Negative Value
of the Derivative Instruments issued by it or contracted through
it, calculated on a net as well as on a gross basis where several
Derivative Instruments are governed by the same Master Agreement,
as well as the Credit Facility in respect of which such Derivative
Instruments apply.
18.10 PROCEDURE WITH RESPECT TO ADVANCES
Subject to the provisions of this Agreement, upon receipt of a Notice of
Borrowing from the Borrower, the Agent shall, without delay, advise each
Lender of the receipt of such notice, of the date of such Advance, of its
proportionate share of the amount of each Advance and of the relevant
details of the Agent's account(s). Each Lender shall disburse its
proportionate share of each Advance, taking into account its Commitment, and
shall make it available to the Agent (no later than 10:00 A.M.) on the date
of the Advance fixed by the Borrower, by depositing its proportionate share
of the Advance in the Agent's account in Canadian Dollars or US Dollars, as
the case may be. Once the Borrower has fulfilled the conditions stipulated
in this Agreement, the Agent will make such amounts available to the
Borrower on the date of the Advance, at the Branch, and, in the absence of
other arrangements made in writing between the Agent and the Borrower, by
transferring or causing to be transferred an equivalent amount in the case
of a direct Advance, and the Available Proceeds (as defined in
subsection 6.2.4 (d)) in the case of Banker's Acceptances, in accordance
with the instructions of the Borrower which appear in the Notice of
Borrowing with respect to each Advance; however, the obligation of the Agent
with respect hereto is limited to taking the steps judged commercially
reasonable in order to follow such instructions, and once undertaken, such
steps shall constitute conclusive evidence that the amounts have been
disbursed in accordance with the applicable provisions. The Agent shall not
be liable for damages, claims or costs imputed to the Borrower and resulting
from the fact that the amount of an Advance did not arrive at its
agreed-upon destination.
18.11 ACCOUNTS KEPT BY EACH LENDER
Each Lender shall keep in its books, in respect of its Commitment, accounts
for the Libor Advances (if a Foreign Lender), Prime Rate Advances, Bankers'
Acceptances and other amounts payable by the Borrower under this Agreement.
Each Lender shall make appropriate entries showing, as debits, the amount of
the Debt of the Borrower to it in respect of the Libor Advances, Prime Rate
Advances and BA Advances, as the case may be, the amount of all accrued
interest and any other amount due to such Lender pursuant hereto and, as
credits, each payment or repayment of principal and interest made in respect
of such indebtedness as well as any other amount paid to such Lender
pursuant hereto. These accounts shall constitute (in the absence of manifest
error or of contradictory entries in the accounts of the Agent referred to
in Section 4.4) PRIMA FACIE evidence of their content against the Borrower.
The accounts which are maintained by the Agent shall constitute, except in
the case of manifest error, PRIMA FACIE proof of the amounts advanced and
the Bankers' Acceptances accepted by each Lender, the interest and other
amounts due to them and the payments of principal, interest or others made
to the Lenders.
59
18.12 BINDING DETERMINATIONS
The Agent shall proceed in good faith to make any determination which is
required in order to apply this Agreement and, once made, such determination
shall be final and binding upon all parties, except in the case of manifest
error.
18.13 AMENDMENT OF ARTICLE 18
The provisions of this Article 18 relating to the rights and obligations of
the Lenders and the Agent INTER SE may be amended or added to, from time to
time, by the execution by the Agent and the Lenders of an instrument in
writing and such instrument in writing shall validly and effectively amend
or add to any or all of the provisions of this Article affecting the Lenders
without requiring the execution of such instrument in writing by the
Borrower.
18.14 DECISIONS, AMENDMENTS AND WAIVERS OF THE LENDERS
When the Lenders may or must consent to an action or to anything or to
accomplish another act in applying this Agreement, the Agent shall request
that each Lender give its consent in this regard. Subject to the provisions
of Section 18.15, all decisions taken by the Lenders shall be taken as
follows: a) if there are two Lenders, by unanimous consent; b) if there are
three or more Lenders, by the Majority Lenders. The Agent shall confirm such
consent to each Lender and to the Borrower.
18.15 AUTHORIZED WAIVERS, VARIATIONS AND OMISSIONS
If so authorized in writing by the Lenders, the Agent, on behalf of the
Lenders, may grant waivers, consents, vary the terms of this Agreement and
the Security Documents and do or omit to do all acts and things in
connection herewith or therewith. Notwithstanding the foregoing, except with
the prior written agreement of each of the Lenders, nothing in
Section 18.14 or this Section 18.15 shall authorize (i) any extension of the
date for, or alteration in the amount, currency or mode of calculation or
computation of any payment of principal or interest or other amount,
(ii) any increase in the Commitment of a Lender, (iii) any extension of any
maturity date, (iv) any change in the terms of Article 18, (v) any change in
the manner of making decisions among the Lenders including the definition of
Majority Lenders, (vi) the release of the Borrower or any Guarantor, except
as provided herein with respect to permitted Asset Dispositions or as
contemplated in Section 13.1, (vii) the release, in whole or in part, of any
of the Security Documents or the Security constituted thereby, except as
provided herein with respect to permitted Asset Dispositions or as
contemplated in Section 13.1, (viii) any change in or any waiver of the
conditions precedent provided for in Article 10 or (ix) any amendment to
this Section 18.15.
18.16 PROVISIONS FOR THE BENEFIT OF LENDERS ONLY_--_POWER OF ATTORNEY FOR
QUEBEC PURPOSES
Without limiting the powers of the Agent hereunder or under the Security
Documents and to the extent applicable, each of the Lenders hereby
acknowledges that the Agent (or a collateral agent designated by the Agent)
shall, for the purposes of holding any security granted under the hypothecs
described in Section 9.2.3 or granted under Section 9.2.9 hereof to secure
payment of the Debentures, be the holder of an irrevocable power of attorney
(FONDE DE POUVOIR) (within the meaning of Article 2692 of the CIVIL CODE OF
QUEBEC) for all present and future Lenders and in particular for all present
and future holders of the Debentures. Each of the Lenders hereby
constitutes, to the extent necessary, the Agent (or such designated
collateral agent) as the holder of such irrevocable power of attorney in
order to hold security granted under such hypothecs to secure the
Debentures. Each Assignee shall be deemed to have confirmed and ratified the
constitution of the Agent as the holder of such irrevocable power of
attorney by execution of the relevant Transfer Agreement. Notwithstanding
the provisions of Section 32 of the AN ACT RESPECTING THE SPECIAL POWERS OF
LEGAL PERSONS (Quebec), the Borrower, the Guarantors and the Lenders
irrevocably agree that the Agent may acquire and be the holder of a
Debenture. By executing a Debenture, the issuer of the Debenture shall be
deemed to have acknowledged that the Debenture constitutes a title of
indebtedness, as such term is used in Article 2692 of the CIVIL CODE OF
QUEBEC.
60
18.17 PROVISIONS FOR THE BENEFIT OF LENDERS ONLY
The provisions of this Article 18 relating to the rights and obligations of
the Lenders and Agent INTER SE shall be operative as between the Lenders and
Agent only, and the Borrower shall not have any rights or obligations under
or be entitled to rely for any purposes upon such provisions. However, the
provisions of subsection 18.2.3 and 18.16 shall be applicable as between the
Borrower, the Guarantors (if applicable) and the Agent.
18.18 RESIGNATION OF AGENT
18.18.1 Notwithstanding the irrevocable appointment of the Agent, a
majority of Lenders holding not less than 66.67% of the
Commitments may (with the consent of the Borrower), upon giving
the Agent thirty (30) days prior written notice to such effect,
terminate the Agent's appointment hereunder provided that a
successor Agent has been appointed at or prior to the expiry of
such notice.
18.18.2 The Agent may resign its appointment hereunder at any time
without giving any reason therefor by giving written notice to
such effect to each of the other parties hereto. Such resignation
shall not be effective until a successor Agent has been appointed.
18.18.3 In the event of any such termination or resignation, the Lenders
shall appoint a successor Agent that is willing to accept such
role and is acceptable to the Borrower within thirty (30) days
therefrom, deliver copies of all accounts to such successor and
the retiring Agent shall be discharged from any further
obligations hereunder but shall remain entitled to the benefit of
the provisions of this Article 18 and the Agent's successor and
each of the other parties hereto shall have the same rights and
obligations among themselves as they would have had if such
successor originally had been a party hereto as Agent.
18.19 NO NOVATION
The parties hereto agree that the changes to the terms and conditions of the
Credit Agreement and the amendments and restatement set out herein and the
execution of these presents shall not constitute novation, and that all
Security shall continue to apply to this Credit Agreement, as amended and
restated by these presents, and all other obligations secured thereby.
19. FORMAL DATE
19.1 FORMAL DATE
For the purposes of convenience, this Agreement may be referred to as
bearing the Formal Date of November 28, 2000 notwithstanding its actual date
of signature.
61
IN WITNESS WHEREOF THE PARTIES HERETO HAVE SIGNED THIS AGREEMENT ON THE DATE
AND AT THE PLACE FIRST HEREINABOVE MENTIONED.
VIDEOTRON LTEE ROYAL BANK OF CANADA
Per: Per:
Per: Per:
Address: 000 Xxxxx Xx. Xxxx Address: 1 Place Ville Xxxxx
6th floor 4th floor
Montreal, Quebec Xxxxxxxx, Xxxxxx
X0X 0X0 H3B 4R8
Attention: Treasurer Attention: Managing Director Corporate Credit
Telephone: (000) 000-0000 Telephone: 000-0000
Fax: (000) 000-0000 Fax: (000) 000-0000
THE TORONTO-DOMINION BANK BANK OF MONTREAL
Per: Per:
Per: Per:
Address: Corporate and Investment Banking Address: Loan Products Group
000 Xx. Xxxxxxx, 0xx xxxxx Investment and Corporate Banking
Montreal, Quebec 1 First Canadian Place, 4th floor
H2Y 1S1 Xxxxxxx, Xxxxxxx X0X 0X0
Attention: Manager Attention: Vice-President
Tel: (000) 000-0000 Tel: (000) 000-0000
Fax: (000) 000-0000 Fax: (000) 000-0000
BANK OF AMERICA, N.A. CANADA BRANCH ROYAL BANK OF CANADA, AS AGENT
Per: Per:
Per:
Address: Global Corporate and Investment Address: 000 Xxx Xxxxxx, 00xx xxxxx
Xxxxxxx Xxxxx Xxxxx, Xxxxx Bank Plaza
000 Xxxxx Xx. Xxxx, Xxxxx 0000 Xxxxxxx, Xxxxxxx
Xxxxxxx, Xxxxxxx X0X 0X0
X0X 0X0
Attention: Vice-President Attention:
Tel: (000) 000-0000 Tel: (000) 000-0000
Fax: (000) 000-0000 Fax: (000) 000-0000
62
CANADIAN IMPERIAL BANK OF COMMERCE THE BANK OF NOVA SCOTIA
Per: Per:
Per: Per:
Address: 000 Xxx Xxxxxx, 0xx Xxxxx Address: X.X. Xxx 0000, Xxxxxxx X
XXX Xxxxx 00 Xxxx Xx. Xxxx, Xxxxxx Plaza
Toronto, Ontario 62nd floor
M5J 2S8 Xxxxxxx, Xxxxxxx, X0X 0X0
Attention: Director Attention: Director
Telephone: (000) 000-0000 Telephone: (000) 000-0000
Fax: (000) 000-0000 Fax: (000) 000-0000
CITIBANK N.A., CANADIAN BRANCH CREDIT SUISSE FIRST BOSTON, TORONTO BRANCH
Per: Per:
Per: Per:
Address: Citibank Place Address: One First Canadian Place
123 Front Street West, Suite 1900 Suite 3000, P.O. Box 301
Toronto, Ontario Xxxxxxx, Xxxxxxx
X0X 0X0 X0X 0X0
Attention: Manager Attention: Director
Tel: (000) 000-0000 Telephone: (000) 000-0000
Fax: (000) 000-0000 Fax: (000) 000-0000
CAISSE CENTRALE XXXXXXXXXX BANK OF TOKYO-MITSUBISHI (CANADA)
Per: Per:
Per: Per:
Address: 1 Complexe Xxxxxxxxxx Address: 000 xx xx Xxxxxxxxxxx Xxxx
Xxxxx 0000 Xxxxx 0000
Xxxxxxxx, Quebec Xxxxxxxx, Xxxxxx
X0X 0X0 X0X 0X0
Attention: Attention:
Telephone: (000) 000-0000 Telephone: (000) 000-0000
Fax: (000) 000-0000 Fax: (000) 000-0000
00
XXXXXXXXXX XXXX XX XXXXXX NATIONAL BANK OF CANADA
Per: Per:
Per: Per:
Address: 0000 XxXxxx Xxxxxxx Xxxxxx Address: 1155 Metcalfe
Suite 1980 5th floor
Montreal, Quebec Xxxxxxxx, Xxxxxx
X0X 0X0 H3B 4B9
Attention: Attention: Vice President
Telephone: (000) 000-0000, #4732 Telephone: (000) 000-0000
Fax: (000) 000-0000 Fax: (000) 000-0000
HSBC BANK CANADA
Per:
Per:
Address:
0000 XxXxxx Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxx, Xxxxxx, X0X 0X0
Attention: Global Relationship Manager,
Corporate & Institutional Banking
Telephone: (000) 000-0000
Fax: (000) 000-0000
64
SCHEDULE "A" -- LIST OF LENDERS AND COMMITMENTS
THE REVOLVING FACILITY
Cash Management Facilities -- The Toronto-Dominion Bank ("TD") -- $15,000,000.
Balance of Revolving Facility:
---------------------------------------------------------------------------------------------
LENDER % COMMITMENT ($) COMMITMENT (%)
---------------------------------------------------------------------------------------------
Royal Bank of Canada $ 48,000,000 10.66667%
---------------------------------------------------------------------------------------------
Bank of Montreal $ 44,000,000 9.77778%
---------------------------------------------------------------------------------------------
The Bank of Nova Scotia $ 44,000,000 9.77778%
---------------------------------------------------------------------------------------------
Bank of America N.A., Canada Branch $ 44,000,000 9.77778%
---------------------------------------------------------------------------------------------
Citibank N.A., Canadian Branch $ 44,000,000 9.77778%
---------------------------------------------------------------------------------------------
The Toronto-Dominion Bank $ 44,000,000 9.00000%
---------------------------------------------------------------------------------------------
Canadian Imperial Bank of Commerce $ 38,000,000 8.00000%
---------------------------------------------------------------------------------------------
Credit Suisse First Boston, Toronto Branch $ 29,000,000 6.44444%
---------------------------------------------------------------------------------------------
HSBC Bank Canada $ 20,000,000 4.44444%
---------------------------------------------------------------------------------------------
National Bank of Canada $ 33,000,000 7.33333%
---------------------------------------------------------------------------------------------
Caisse centrale Xxxxxxxxxx $ 30,000,000 6.66667%
---------------------------------------------------------------------------------------------
Bank of Tokyo-Mitsubishi (Canada) $ 20,000,000 4.44444%
---------------------------------------------------------------------------------------------
Laurentian Bank of Canada $ 12,000,000 2.66667%
---------------------------------------------------------------------------------------------
TOTAL $450,000,000 100%
---------------------------------------------------------------------------------------------
A-1
SCHEDULE "B" -- NOTICE OF BORROWING AND CERTIFICATE
TO: ROYAL BANK OF CANADA, AS AGENT
FROM: VIDEOTRON LTEE DATE:
1) This Notice of Borrowing and Certificate is delivered to you pursuant to the
credit agreement originally dated as of November 28, 2000, as amended and
restated as of November 19, 2004, and as same may have been further amended (the
"CREDIT AGREEMENT"). All defined terms set forth in this Notice of Borrowing and
Certificate shall have the respective meanings set forth in the Credit
Agreement.
2) We hereby request a Cdn. $ Advance under the Revolving Facility of the
Credit Agreement as follows:
(a) Date of Advance:
------------------------------------------------------------
(b) Amount of Advance:
------------------------------------------------------------
(c) Type of Advance:
------------------------------------------------------------
(d) Designated Period(s) (if any):
------------------------------------------------------------
(e) Maturity Date(s) (if applicable):
------------------------------------------------------------
(f) Payment Instruction (if any):
------------------------------------------------------------
3) We have understood the provisions of the Credit Agreement which are relevant
to the furnishing of this Notice of Borrowing and Certificate. To the extent
that this Notice of Borrowing and Certificate evidences, attests or confirms
compliance with any covenants or conditions precedent provided for in the Credit
Agreement, we have made such examination or investigation as was, in our
opinion, necessary to enable us to express an informed opinion as to whether
such covenants or conditions have been complied with.
4) WE HEREBY CERTIFY THAT, in our opinion, as of the date hereof:
(a) All of the representations and warranties of the Borrower contained in
Article 11 of the Credit Agreement (except where qualified in Article 11 as
being made as at a particular date) are true and correct on and as of the date
hereof as though made on and as of the date hereof.
(b) All of the covenants of the Borrower contained in Articles 12 and 13 of
the Credit Agreement together with all of the conditions precedent to an Advance
and all other terms and conditions contained in the Credit Agreement have been
fully complied with.
(c) No Event of Default has occurred and no Default has occurred and is
continuing.
Yours truly,
VIDEOTRON LTEE
Per:
-----------------------------------
Title:
-----------------------------------
B-1
SCHEDULE "B-1" -- NOTICE OF REPAYMENT
TO: ROYAL BANK OF CANADA, AS AGENT
FROM: VIDEOTRON LTEE DATE:
1) This notice of repayment is delivered to you pursuant to the Credit
Agreement originally dated as of November 28, 2000 entered into among VIDEOTRON
LTEE and, INTER ALIA, Royal Bank of Canada as Agent (as amended and restated and
in effect on the date hereof, the "CREDIT AGREEMENT"). All defined terms set
forth in this notice shall have the respective meanings set forth in the Credit
Agreement.
2) We hereby advise you that we will be repaying the sum of Cdn.$________ on
________ as follows [INDICATE AMOUNT PAYABLE IN RESPECT OF THE REVOLVING
FACILITY AS WELL AS THE TYPE OF ADVANCE TO BE REPAID].
3) As to an amount of Cdn. $________, the above-mentioned payment should be
treated as a [MANDATORY REPAYMENT / VOLUNTARY PREPAYMENT] under Section [8.2 /
8.3], which we understand will have the effect of reducing the amount of the
Revolving Facility by an equal amount (or by an equivalent amount, if in US$).
[IF THE PAYMENT IS A MANDATORY REPAYMENT, PROVIDED DETAILS OF THE CALCULATIONS
USED TO DETERMINE THE AMOUNT]
Yours truly,
VIDEOTRON LTEE
Per:
-----------------------------------
Title:
-----------------------------------
B-1-1
SCHEDULE "C" -- TRANSFER AGREEMENT
TO: ____________ (the "AGENT"); and
FROM: ____________ (the "BORROWER")
WHEREAS the Borrower entered into a Credit Agreement originally dated as of
November 28, 2000 (as amended and restated, the "CREDIT AGREEMENT") with the
Agent, as Agent and Lender, and with other Lenders, whereby the Lenders agreed
to provide the Borrower with certain credit facilities; and
WHEREAS pursuant to and in accordance with Article 16 of the Credit
Agreement a Lender may, with the prior consent of the Borrower and the Agent,
assign or transfer all or any of its rights, benefits and obligations under the
Credit Agreement by duly completing, executing and delivering to the Agent and
to the Borrower this Transfer Agreement; and
WHEREAS ________ (the "TRANSFEROR") wishes to assign or transfer to ________
(the "ASSIGNEE") the rights, benefits and obligations of the Transferor under
the Credit Agreement specified herein;
WHEREAS the Borrower and the Agent have consented in writing to such
assignment or transfer pursuant to the provisions of the Credit Agreement and
have reiterated their consent hereby;
NOW THEREFORE in consideration of the foregoing and of one dollar ($l.00)
and other good and valuable consideration, the receipt of which is hereby
acknowledged, the signatories hereto agree as follows:
1. All capitalized terms defined in the Credit Agreement and not otherwise
defined herein have the same meaning as in the Credit Agreement.
2. The Transferor assigns and transfers to the Assignee the following rights,
benefits and obligations, without warranty (the "TRANSFER"):
(description of the transferred rights, benefits and obligations, indicating
retained interest or fees, if applicable, extent of the Assignee's interest
and any applicable arrangements if any Libor Advances or BA Advances are
outstanding at the time of the Assignment)
(the "TRANSFERRED RIGHTS" and the "TRANSFERRED OBLIGATIONS", as applicable). The
Transfer shall be effective as of ________, ________.
3. If the Advances made by the Assignee are less than the proportionate share
of all Advances based on the Commitment of the Assignee in the Credit, the
Assignee shall, on demand, indemnify the Transferor in respect of the principal
amount of the corresponding Advances made by the Transferor in excess of the
Transferor's Commitment. The Advances in respect of which the Assignee is bound
to indemnify the Transferor are set out in Schedule "B" hereto. On the effective
date of the Transfer, the Transferor shall pay to the Assignee the indemnity
fees in respect of [BA ADVANCES, DISCOUNT NOTES AND LIBOR ADVANCES] in the
amounts specified in Schedule "B" during the period in which the Assignee is to
indemnify the Transferor.
4. The Assignee accepts the Transfer and assumes the Transferred Obligations
without novation and without warranty (the "Assumption"). The Assignee
acknowledges and accepts that the Assignee and the Agent are solidary creditors
of the Borrower and the Guarantors in respect of all amounts, liabilities and
other obligations, present and future, of the Borrower and the Guarantors to
each of them under the Credit Agreement and the Derivative Instruments as
contemplated by Section 18.1.2 of the Credit Agreement and in accordance with
Article 1541 of the Civil Code of Quebec.
5. The Transfer and the Assumption are governed by and subject to Article 16 of
the Credit Agreement.
6. The Transferor and the Assignee acknowledge that arrangements have been made
between them as to the portion, if any, of Fees and interest received or to be
received by the Transferor pursuant to the Credit Agreement and to be paid by
the Transferor to the Assignee.
7. The Assignee acknowledges and confirms that it has not relied upon and that
neither the Transferor nor the Agent has made any representation or warranty
whatsoever as to the due execution, legality, effectiveness, validity or
enforceability of the Credit Agreement or any other documentation or information
delivered by the Transferor or
C-1
the Agent to the Assignee in connection therewith or for the performance thereof
by any party thereto or for the performance of any obligation by any Subsidiary
or for the financial condition of the Borrower or of any Subsidiary. All
representations, warranties and conditions expressed or implied by law or
otherwise are hereby excluded.
8. The Assignee represents and warrants that it has itself been, and will
continue to be, solely responsible for making its own independent appraisal of
and investigation into the financial condition, creditworthiness, affairs,
status and nature of the Borrower and has not relied and will not hereafter rely
on the Transferor and/or the Agent to appraise or keep under review on its
behalf the financial condition, creditworthiness, affairs, status or nature of
the Borrower. The Assignee acknowledges and agrees that it has no right to
obtain any non-public information directly from the Borrower and that it will
request any information it requires solely from the Agent.
9. Each of the Transferor and the Assignee represents and warrants to the other
and to the Agent, the other Lenders and the Borrower, that it has the right,
capacity and power to enter into the Transfer and the Assumption in accordance
with the terms hereof and to perform its obligations arising therefrom, and all
action required to authorize the execution and delivery hereof and the
performance of such obligations has been duly taken.
10. This Transfer Agreement shall be governed by and construed in accordance
with the laws of the Province of Quebec, Canada.
11. The parties confirm having requested that this document be drafted in the
English language. Les parties confirment avoir requis que ce document soit
redige en langue anglaise.
12. Following the Transfer and Assumption, Schedule "A" to the Credit Agreement
will be replaced by Schedule "A" annexed hereto.
AND THE PARTIES HAVE SIGNED AS OF ________, 200__.
THE BANK ------------------------ , ------------------------ ,
as Transferor as Assignee
Per: Per:
----------------------------------------- -----------------------------------------
Per: Per:
----------------------------------------- -----------------------------------------
CONSENTED TO AND ACKNOWLEDGED:
THE BANK ------------------------ , ------------------------ ,
as Agent as Borrower
Per: Per:
----------------------------------------- -----------------------------------------
Per: Per:
----------------------------------------- -----------------------------------------
C-2
SCHEDULE "D" -- GUARANTEE
[PREVIOUSLY DELIVERED]
D-1
SCHEDULE "E" -- SHARE PLEDGE
[PREVIOUSLY DELIVERED]
E-1
SCHEDULE "F" -- OFFICER'S CERTIFICATE
I, the undersigned, ____________________________,
the ____________________________ , of Videotron Ltee (the "BORROWER"), do hereby
certify as follows:
(a) I have taken cognizance of all the terms and conditions of the Credit
Agreement (the "CREDIT AGREEMENT") originally dated as of November 28,
2000 and amended and restated on November 19, 2004, entered into,
INTER ALIA, among the Borrower, Royal Bank of Canada, as Agent and
Lender, and the Lenders party thereto, as well as of all contracts,
agreements and deeds pertaining thereto; and
(b) no Default or Event of Default has occurred nor exists thereunder; and
(c) the corporate structure of Quebecor Media Inc. and the VL Group is as
set out in the diagram attached to this certificate;
(d) each member of the VL Group holds the permits, Licences, licences and
authorizations required in order to permit it to possess its property and
its real estate and to carry on its business in the manner in which it is
being carried on at present; and
(e) all property to be charged by the Security Documents is located in the
jurisdictions described in a schedule hereto.
All expressions referred to herein have the meanings ascribed to them in the
Credit Agreement.
Executed at the City of Montreal, Province of Quebec this day of
- , 2004.
------------------------------------------------
Encl.
F-1
SCHEDULE "G" -- LEGAL OPINION (INITIAL CLOSING)
[PREVIOUSLY DELIVERED]
G-1
SCHEDULE "G-1" -- LEGAL OPINION (POST REGULATORY APPROVAL)
[PREVIOUSLY DELIVERED]
G-1-1
SCHEDULE "H" -- EXISTING SECURITY
[PREVIOUSLY DELIVERED]
H-1
SCHEDULE "I" -- PROPERTY OF THE VL GROUP
The following comprises a list of substantially all of the immovables owned
by members of the VL Group. A full description of all immovable property owned
by members of the VL Group (which is not already subject to the Security) will
be furnished to the Agent on or prior to the Seventh Amendment Closing Date,
save and except that all immovables owned by VTL will be provided to the Agent
and Charged within the time frame stipulated in subsection 9.2.9.
I-1
SCHEDULE "I" -- PROPERTY OF THE VL GROUP
1. LIST OF IMMOVABLE PROPERTIES OWNED BY THE VL GROUP:
I) VIDEOTRON LTEE
-- Rang 3 Nord-Est Lot 28A-3-1 Armagh
(IN PROCESS TO BE SOLD)
-- House Hill Road Xxxxx Plain
-- rue Xxxxxxxxx Black Lake
-- 365, rue St-Desire Black Lake
-- rue Briquade Blainville
-- 00, xxx Xxxxxxxxx Cabano
-- 144, rue St-Laurent Cap-De-La-Xxxxxxxxx*
(IN PROCESS TO BE SOLD)
-- 221, boul. Springer Chapais
-- 000, xxx Xxxxxx Xxxxxxxxxxx
-- 59, xxx Xxxxxxx ouest Chicoutimi
-- 000, xxx Xxxxxxxxx Xxxxx-xxx-Xxxxxxxx
-- 000, xxxxxx Xxxxxxxx Xxxxxxxxx
-- Xxx 00-0 xx xxxx 0 Xxxxxxxxx
-- 0000, xxx xxx Xxxxxxx Dolbeau
-- 000, xxx Xxxxx-Xxxx Xxxxxxxxx
-- 2785, chemin St-Xxxxxxx Xxxxxx-Xxxxxxxxx*
-- 611, rue Cowie (210 rue St-Urbain) Granby
-- 00, xxx Xxxxxx-Xxxxxx Xxxxxxxx
-- 88, avenue Xxxxxxxx La Pocatiere
-- 0000, Xxxxxx Xxxxx-Xxxxxxx Lachenaie
-- 0000, xxxx. Xxx-Xxxx (Xxxxxxx) Laval
-- 0, xxx xx xx Xxxxxxx Xxxxx (Xxxxxx)
-- 000, xxx Xxxxx-Xxxxxx Le Gardeur
-- 397, boul. St-Xxxx-Xxxxxxxx Xxxxxxx*
-- Xxxxxx xx Xxx 00X-00, xx xxxx 0 Metabetchouan
-- 000, xxx Xxxxxxxxxx Xxxx-Xxxxxxx
-- 14165, rue Xxxxxxxx Montreal
(IN PROCESS TO SELL)
-- 000, xxx Xxxxxxxx ouest Montreal
-- Terrain Notre-Dame-des-Laurentides
(IN PROCESS TO SELL)
-- 0000, xxx. Xxxxxxxxxx Xxxxxxxx de xx Xxxx
-- Xxx 00-00-0, Xxxx XX, Xxx 00-00-00, Xxxx 0 Pointe-Xxxxx
-- 000, xxx Xxxxxxxxxx Xxxxxxxxxxxx
-- 0000, xxx Xxxx-Xxxxxx Xxxxxx
-- Rang l, lot 31-18-21 Ragueneau
---------
* only the building is owned by Videotron Ltee
I-2
-- 000, xxxxxx Xxxxxxxxxxx Xxxxxxx-xx-Xxxx
-- 60, Dassylva Rang Ste Mathilde
-- Site d'antenne (Partie du lot 169) Riviere-Malbaie
-- Lot 661 RiviereMalbaie
(IN PROCESS TO SELL)
-- 000-0 xx xx xxxxxxxxxxxxxxx xxxxxxxx xx Xxxxx-Xxxxxxx xx Xxxxxxx
l'Islet
-- Rang 4 lot 12A-27 Saint-Xxxx-xx-Xxxxxxxxx
-- Xxx 00-0 Xxxx X Xxxxx-Xxxxxxxx
-- 000, xxx Xx-Xxxxx Xxxxx-Xxxxxx
-- 2830, rue Galt ouest Sherbrooke
-- 000, xxxxxx xxx Xxxxxxxxx Xxxxx
-- 35, route 277 St-Anselme
-- 000, xxxx. Xx-Xxxxxxx Xx-Xxxxxxx-Xxx-Xxxxxxxxxxx*
-- 000, xxx Xxxxx Xxxxxxxxx est St-Bruno
(IN PROCESS TO SELL)
-- Rang 1, Canton Ashford St-Damase de L'Islet
-- Xxx 000-00 xx Xxxx 0-X-0 Xx-Xxxxx
-- Cote-Sainte-Xxxx Ste-Xxxx-xx-Xxxxxxx
-- 1258, boul. Sacre-Coeur St-Felicien
-- 1193, rue Xxxxxxxx St-Felicien
-- Rang 9-A-6 rang 4 St-Xxxxxxx
-- Site -- Xxx 000-000 Xx-Xxxxxxxx
-- Xxx 00-X0 xxx Xxxxxx Xx-Xxxxxx
-- 223, Chemin des Iles Levis
-- Xxxx 0 & 0 Xx-Xxxxxx
-- 0000, xxxx. Xxxxx St-Xxxxxx
-- 3750, rue Richelieu St-Xxxxxx
-- 0000, xxxx. Xxxxxxxx Xx-Xxxxxxx
-- 000, xxx xx Xxxx Xx-Xxxxxx de Kamouraska
-- 4002, rue Xxxxx Xxxxxx
-- 000, xxx Xxxxx-Xxxx (Xxxxxxx) Xxxxxxxxxxxxx
-- 000, xxx Xxxxx-Xxxx (Stationnement) Victoriaville
-- Partie lot 00 xxxx xx Xxx-X-X'Xxxxx Village de Cap-A-L'Aigle
(IN PROCESS TO SELL)
-- The cable television networks and cable
lines and systems.
---------
* only the building is owned by Videotron Ltee
I-3
II) VIDEOTRON (LAURENTIEN) LTEE (NOW VIDEOTRON (REGIONAL) LTEE)
-- Lot C 5e Rang Chemin Xxxxxx Xxxx-Gardien (Buckingham)
-- Lot G Concession 9 Rockland
-- Partie 18B, 2(e) Rang Canton Xxxxxxxxx Gatineau
-- 000, xxx Xxxxxxxx Xxxx
-- 00, xxx Xxxxxx Xxxxxxxx
-- 000, xxx Xxxxxxxxx Xxxxxxxx
III) CF CABLE TV INC.
- The cable television networks and cable lines and systems including,
without limiting the foregoing, land file 65-B-1 and 64-B-1 opened at
the Register of Public Service Networks and Immovables situated in
territory without a cadastral survey of the Registration Division of
Montreal and Laval, respectively.
IV) VIDEOTRON (RDL) LTEE (NOW VIDEOTRON (REGIONAL) LTEE)
- The cable television networks and cable lines and systems including,
without limiting the foregoing,
(a) land file 015-B-001 and 015-B-003 opened at the Register of Public
Service Networks and Immovables situated in territory without a
cadastral survey of the Registration Division of Bellechasse,
(b) land file 10-B-1, 10-B-2 and 10-B-3 opened at the Register of Public
Service Networks and Immovables situated in territory without a
cadastral survey of the Registration Division of Kamouraska,
(c) land file 00-X-0, 00-X-0, 00-X-0, 00-X-0 and 13-B-5 opened at the
Register of Public Service Networks and Immovables situated in
territory without a cadastral survey of the Registration Division of
L'Islet,
(d) land file 14-B-1, 14-B-4, 14-B-7 and 14-B-8 opened at the Register of
Public Service Networks and Immovables situated in territory without
a cadastral survey of the Registration Division of Montmagny,
(e) land file 09-B-6, 09-B-7 and 09-B-8 opened at the Register of Public
Service Networks and Immovables situated in territory without a
cadastral survey of the Registration Division of Temiscouata,
(f) land file 017-B-12 and 017-B-21 opened at the Register of Public
Service Networks and Immovables situated in territory without a
cadastral survey of the Registration Division of Montmorency,
(g) land file 020-B-2 opened at the Register of Public Service Networks
and Immovables situated in territory without a cadastral survey of
the Registration Division of Quebec.
V) VIDEOTRON (RICHELIEU) LTEE (NOW VIDEOTRON (REGIONAL) LTEE)
- The cable television networks and cable lines and systems including,
without limiting the foregoing,
(a) land file 59-B-5 opened at the Register of Public Service Networks
and Immovables situated in territory without a cadastral survey of
the Registration Division of Coaticook,
(b) land file 25-B-9 opened at the Register of Public Service Networks
and Immovables situated in territory without a cadastral survey of
the Registration Division of Xxxxxxx,
(c) land file 50-B-02 opened at the Register of Public Service Networks
and Immovables situated in territory without a cadastral survey of
the Registration Division of Richelieu,
I-4
(d) land file 35-B-06 and 35-B-07 opened at the Register of Public
Service Networks and Immovables situated in territory without a
cadastral survey of the Registration Division of Richmond,
(e) land file 36-B-5 and 36-B-6 opened at the Register of Public Service
Networks and Immovables situated in territory without a cadastral
survey of the Registration Division of Sherbrooke.
VI) TELE-CABLE CHARLEVOIX (1977) INC.
- The cable television networks and cable lines and systems including,
without limiting the foregoing,
(a) land file 11-B-01, 11-B-03, 11-B-09 and 11-B-10 opened at the
Register of Public Service Networks and Immovables situated in
territory without a cadastral survey of the Registration Division of
Charlevoix No. 1,
(b) land file 28-B-1 opened at the Register of Public Service Networks
and Immovables situated in territory without a cadastral survey of
the Registration Division of Lotbiniere,
(c) land file 07-B-08 and 07-B-20 opened at the Register of Public
Service Networks and Immovables situated in territory without a
cadastral survey of the Registration Division of Rimouski,
(d) land file 97-B-17, 97-B-18 and 97-B-20 opened at the Register of
Public Service Networks and Immovables situated in territory without
a cadastral survey of the Registration Division of Saguenay,
2. LIST OF PREMISES OCCUPIED BY MEMBERS OF THE VL GROUP:
I) VIDEOTRON LTEE
-- Chemin Xxxxxxxx Xxxxx
-- 000, xxxxxx xx Xxx Xxxxxxxxxxxx
-- 000, rue Fusey Cap-De-La-Xxxxxxxxx
-- 21, rue Racine ouest Chicoutimi
-- 0, xxx Xxxx Xxxxx-Xxxxxx Chicoutimi
-- Rue Chemin St-Xxxxxxx Xxxxxx-Xxxxxxxxx
-- 000, 00xxxx xxxxxx Xxxxxx
-- 3665, boul. Ste-Rose (Terrain) Laval
-- 000, xxx Xxxxxx Xx Xxxxxxx
-- 00X, xxx xx xx Xxxxxxx Xxx Escoumins
-- 830, de l'Eglise St-Xxxxxxx
-- Partie des lots P-159 et P-160 Mont St-Gregoire
-- 8147, rue Sherbrooke est Montreal
-- 000, xxx Xxxxx xxx Xxxxxxxx
-- 0000, rue Coffee Montreal
-- 0000, xxx Xx-Xxxxx Xxxxxxxx
-- 0000, xxxx. Xxxx-Xxxxxxxx est Montreal
-- 26, route rurale 225 Noyan
-- 1700, chemin Oka Oka
-- 000, xxxx. Xxxx-Xxxxxxxx xxx #150 Quebec
-- Chemin Xxxxxx Xxxxx-Coeur
-- 3330, rue King ouest Sherbrooke
-- 000, xxx Xxxxxxxxx Sorel
I-5
-- 000X, xxxxxx Xxxxxxx-Xx-Xxxx Xx-Xxxxx
-- 00, xxx Xxx Xxxxxxx Xxx-Xxxx-Xxx-Xxxxxxx
-- 000, xxxx. Xxxxxxxxxx Xx-Xxxx-xxx-Xxxxxxxxx
-- 662, Montee du Village St-Xxxxxx-Du-Lac
-- 0000, xxx Xxxxxxx-Xxxxx Xx-Xxxxxxx-Xx-Xxxxxxx
-- Xxx 000 Xx-Xxxxxx xx Xxxxxxxxxx
-- 000, xxxx. Xx-Xxxxxxx St-Xxxxxxx
-- 90, rue Xxxxxxxxxxx Xxxxxxxxx-Xxxxxx
II) VIDEOTRON (LAURENTIEN) LTEE (NOW VIDEOTRON (REGIONAL) LTEE)
-- 000, xxx Xxxxxxxx Xxxx
III) LE SUPERCLUB VIDEOTRON LTEE ET GROUPE DE DIVERTISSEMENT SUPERCLUB INC.
(QUEBEC, NEW-BRUNSWICK)
-- Les Terrasses Xxxxxxxxx, Siege social, Province de Quebec
suite 500
-- 0000, xxx Xxxx-Xxxxx Xxx Xx-Xxxxxxx X0X 0X0
-- 0000, xxx Xxxxxx Xxxxxxxx X0X 0X0
-- 000, xxxx. Xxxxx, local 100 Repentigny J6A 5N4
-- 000, xxxx. x'Xxxxx Xxxxxxxxxxx X0X 4Y7
-- 0000, Xxxxxx Xxxxxxx Xxxxxxxxx X0X 0X0
-- 0000, xxxx. xxx Xxxxxxxxxxx Xxxxxx X0X 0X0
-- 0000, xxxx. Xxx Xxxxxxx Xxxxxxx-Xxx-Xxxxxxx X0X 0X0
-- 0000, xxxx. Xx-Xxxxxx Xxxxxxxxxxxxx X0X 0X0
-- 0000, xx. xx Xxxx-Xxxxx Xxx Xxxxxxxx X0X 0X0
-- 0, xxx Xxxxxxxx Xxxxxxxxxxx X0X 0X0
-- 000, xxxx. xxx Xxxxxxxxxxx Xx-Xxxxxxx X0X 0X0
-- 0000, xxx Xx-Xxxxxx Xxxxxxxxx X0X 0X0
-- 000X, Xxxx-Xxxxxxx Xxxxxxxxxx X0X 0X0
-- 0000, xxxx. xx xx Xxxx-Xxx, bureau 140 Levis G6V 4Z2
-- 0000, Xxxxxxx Xxxxxxxxx Xxxxxxx-xxx-Xxxxxxxx X0X 0X0
-- 0000, Xxxxx-Xxxxxxxx Xxxxxxxx-Xxxx X0X 0X0
-- 10410, Pie-IX Xxxxxxxx-Xxxx X0X 0X0
-- 8675 Xxxx Xx-Xxxxxxx X0X 0X0
-- 0000, Xxxxxxxxxx-Xxxxxx Xxxxxxxx X0X 0X0
-- 0000 Xxxxxxxxxx xxxxx Xxxxxxxx X0X 0X0
-- 00 Xxxxxxx Xxxxxxx Xxxx Xxxxxxxxxx X0X 0X0
-- 0000, Xxxxx Xxxxxxxx-Xxxx X0X 0X0
-- 000, x'Xxxxxxx Xxxxxxxx, Xxxxx X0X 0X0
-- 0000, xxx Xxxxxxxx Xxxxxxxx X0X 0X0
-- 2575, Xxxxxxx Lachine H8S 1R2
-- 0000, Xxx Xxxxx, xxx. 000 Xxxxxxxx X0X 0X0
I-6
-- 0000, Xxx-Xxxxxxxxx xxx Xxxxxxxx X0X 0X0
-- 00, xxx Xx-Xxxx Xxx Xxx-Xxxxxx-xxx-Xxxxx X0X 0X0
-- 000, Xxxxxxx Xxxxx Xxxx-Xxxxx X0X 0X0
-- 0000, xxxxxx xx Xxxx Xxxxxxxx X0X 0X0
-- 000 Xxxxxxxxxx xxxxx Xxxxxxxx X0X 0X0
-- 000, xxxx. xx Xxxxxxxxx Xx-Xxxx X0X 0X0
-- 0000, Xxxxx Xxxx Xxxxxxxx X0X 0X0
-- 0000, xxxx. Xxxxxxxxx Xx-Xxxxxx X0X 0X0
-- 00, xxx Xxxxxxxxxx Xxx Xxx-Xxxxxx-xxx-Xxxxx X0X 0X0
-- 0000 xxx Xxxxxxxxxx, xxxxx 000 Xxx-Xxxxx X0X 0X0
-- 000, 00x Xxxxxx Xx-Xxxxxxxx X0X 0X0
-- 000, xxxx. Xxxxxx-Xxxxx Xx-Xxxxxxxx X0X 0X0
-- 000, xxxx. Xxxxxx, xxxxx 00 Xxx-Xxxxxxxx X0X 0X0
-- 000 xxxxx 000, xxxxx 000 Xx-Xxxxxxxx X0X 0X0
-- 0000, xxxx. Xxxx-Xxxxxxxx, Xxxxxxx Xxxxxxxx Xxxxxxxx X0X 0X0
-- 5800, Cavendish, local X-0X Xxxx Xx-Xxx X0X 0X0
-- 000, xxx Xx-Xxxxxx Xxxx-Xxxxxxxxx X0X 0X0
-- 000, xxxxxx xx Xx-Xxxx Xx Xxxxxxx X0X 0X0
-- 0000, xxxx. Xxxxxx XxXxxxx X0X 0X0
-- 000, xxxx. Xxxx-Xxxxxxx Xxxxxxxx X0X 0X0
-- 0000, xxxx. Xx-Xxxx #000 Xxxxxxx-xxx-Xxxxxxx X0X 0X0
-- 00000, xxxx. Xxxxxxxxxxx Xxxxxxxxxxx X0X 0X0
-- 0000, xx X'Xxxxxx Xxxxx-Xxxxx X0X 0X0
-- 0000, Xxxxxxxxxx Verdun H4G 1X9
-- 0000, xxxx. Xxxxxxxxxx Xxxxxxxxxx Xxxx X0X 0X0
-- 0000, 0xxx Xxxxxx Xxxxxxxxxxxx X0X 0X0
-- 0000, xxxx. Xx-Xxxx Xxxxxxxx Montreal HlB 4A4
-- 0000, Xxxxxx Xxxxxxx Xxxxxxxxx X0X 0X0
-- 0000, xxx Xxxxxxx Xxxxxxxx X0X 0X0
-- 5645 Xxxxxx-Xxxxx Xxxxxxxx X0X 0X0
-- 0000, xxxx. Xxxxxxxxxx, local 1255 Brossard J4X 1C2
-- 0000, Xxxxxx Xxx Xxxxxxxx X0X 0X0
-- 000, xxxx. xxx Xxxxxxxxxxx Xxxx-Xxxx X0X 0X0
-- 0000, Xxxxxxxxxx Xxx Xxxxxxxx X0X 0X0
-- 0000, xxxx. Xxxxxx Xxxxxxxx X0X 0X0
-- 0000, xxx Xxxxxxxxx Lac Megantic G6B 1H3
-- 1116, Xxxxxx Nord Galeries de la Chaudiere Ste-Xxxxx de Beauce G6E 1N7
-- 0000, xxxx. xx xx Xxxx-Xxx Xxxxx X0X 0X0
-- 0000, xxxxxx Xxxxxxx XxXxxxx X0X 0X0
-- 0000, xxx Xx-Xxxxxxx Xxxxxxxx X0X 0X0
I-7
IV) CABLAGE QMI INC., VIDEOTRON TVN INC. AND SOCIETE D'EDITION ET DE
TRANSCODAGE T.E. LTEE
Ces entites sont tous des sous-locataires dans le 300, rue Xxxxx est.
V) VIDEOTRON (1998) LTEE
Aucune propriete n'appartient ou n'est occupee par cette entite.
I-8
SCHEDULE I (PART 2)
LIST OF NON-MATERIAL REAL ESTATE (SECTION 13.3)
---------------------------------------------------------------------------------------------------------------
NO ADRESSE DE L'IMMEUBLE VILLE CIRCONSCRIPTION FONCIERE VALEUR
---------------------------------------------------------------------------------------------------------------
000 000, xxx Xxxxx Xxxxxxxxx xxx Xxxxx-Xxxxx Xxxxxxx (XX PROCESS TO SELL) 2 220 $
---------------------------------------------------------------------------------------------------------------
055 14165, rue Xxxxxxxx Montreal Montreal (IN PROCESS TO SELL) 71 900 $
---------------------------------------------------------------------------------------------------------------
062 Lot 556-13, 556-14 Cap-de-la-Xxxxxxxxx (IN PROCESS TO SELL) 52 000 $
---------------------------------------------------------------------------------------------------------------
067 Xxx 000-0-0 Xxxxxx-Xxxx-xxx-Xxxxxxxxxxx Xxxxxxxxxxxx (IN PROCESS 36 000 $
TO SELL)
---------------------------------------------------------------------------------------------------------------
177 535, boul. Frontenac (route Black Lake Thetford (IN PROCESS TO SELL) 13 000 $
112)
---------------------------------------------------------------------------------------------------------------
348 Xxx 000-0 xxxxxx xx Xxxxxxxx Xxxxxxxxx Xxxxxxxx (XX PROCESS TO SELL) 14 700 $
---------------------------------------------------------------------------------------------------------------
362 St-Honore N/P (IN PROCESS TO SELL) 15 800 $
---------------------------------------------------------------------------------------------------------------
380 Lots 7 & 8 Saint-Honore Temiscouata (IN PROCESS TO 400 $
SELL)
---------------------------------------------------------------------------------------------------------------
383 Xxx-000-00 Xxxxx-Xxxxx Rimouski (OPERATION) 10 000 $
---------------------------------------------------------------------------------------------------------------
385 Partie lot 00 xxxx xx Xxxxxxx xx Xxx-x-x'Xxxxx Xxxxxxxxxx Xx. 0 (IN PROCESS TO 7 000 $
Cap-a-l'Aigle SELL)
---------------------------------------------------------------------------------------------------------------
000 xxx Xxxxx-Xxxxxxx Armagh Bellechasse (IN PROCESS TO 1 500 $
SELL)
---------------------------------------------------------------------------------------------------------------
I-9
SCHEDULE "J"_--_OFFICER'S COMPLIANCE CERTIFICATE
TO: ROYAL BANK OF CANADA, AS AGENT
We have reviewed the Credit Agreement originally dated as of November 28,
2000 entered into among VIDEOTRON LTEE, Royal Bank of Canada, as Agent and the
Lenders (as defined in the Credit Agreement, as amended and restated on
November 19, 2004, and as modified, supplemented, amended or amended and
restated from time to time, the "CREDIT AGREEMENT") and hereby certify that:
(i) with the exceptions listed below (if any), as of the date of this
certificate, the Borrower has complied with all the terms and
conditions of the Credit Agreement; and
(iii) no Default has occurred and is continuing and no Event of Default has
occurred or exists under the Credit Agreement [OR, IF A DEFAULT OR
EVENT OF DEFAULT EXISTS, SET OUT THE DETAILS AND PROPOSED SOLUTIONS].
We attach a Compliance Certificate demonstrating the Borrower's compliance
with the financial covenants listed in subsections 12.11.1, 12.11.2 and 12.11.3
of the Credit Agreement for the latest period required under subsection
{12.15.1 -- quarterly} {12.15.2 -- annual} {CHOOSE ONE}. In addition, we attach
a list of any increases in the maximum amount of any Guarantee provided by a
member of the VL Group that is limited by applicable Law.
------------------------------------------------
Name and Title
Date:
-------------------------------------------
List of Defaults or Events of Default (either list or state "none". If any
exist, set out particulars, period of existence and actions proposed)
------------------------------------------------
------------------------------------------------
------------------------------------------------
J-1
COMPLIANCE CERTIFICATE
MAINTENANCE OF RATIOS (SECTION 12.11)
QUARTER ENDING ________________
1. LEVERAGE RATIO (DEBT TO EBITDA)
(A) Debt of the VL Group $
(B) EBITDA $
*Ratio of Debt to EBITDA (A/B) =
2. INTEREST COVERAGE RATIO
(B) EBITDA $
(D) Interest Expense $
Ratio of EBITDA to Interest Expense (B/D) =
3. SENIOR SECURED DEBT COVERAGE RATIO
Senior Secured Debt under: (a) Credit Agreement $
(b) CF Cable Notes $
(c) Negative Value of Derivative Instruments $
(d) Other Debt supported by a Charge $
(B) EBITDA $
Ratio of Debt under the Credit Agreement to EBITDA = $
CALCULATION OF DEBT (A)
Borrowed money (excluding QMI Subordinated Debt) $
PLUS
Negative Value of Derivative Instruments $
PLUS
Deferred purchase price $
PLUS
Obligations secured by Charges $
PLUS
Capital and Synthetic Leases $
PLUS
Contingent Obligations $
PLUS
B/A's, letters of credit and Guarantees $
EQUALS
DEBT (A): $
J-2
CALCULATION OF EBITDA
(i) Net income or loss of VL Group $
PLUS
(ii) non-controlling interests $
PLUS
(iii) extraordinary items $
PLUS
(iv) Interest Expense $
PLUS
(v) Income tax expense
PLUS
(vi) Depreciation and amortization $
PLUS OR MINUS
(vi) Forex translation gains/losses $
PLUS
(vi) Non-cash financial charges $
EQUALS
EBITDA (B) $
LIST OF INCREASES IN ANY LIMITED GUARANTEES
NAME OF GUARANTOR AMOUNT OF EXISTING GUARANTEE INCREASE IN AMOUNT
----------------- ---------------------------- ------------------
[PLEASE SEE ATTACHED OFFICER'S CERTIFICATE FOR COMPUTATIONS AND DETAILS]
J-3
SCHEDULE "K" -- LIMITS TO CERTAIN GUARANTEES AS AT THE PHASE II DATE
[PREVIOUSLY DELIVERED]
K-1
SCHEDULE "K" (PART 2, SUBSECTION 10.2.5) -- LIMITS TO CERTAIN GUARANTEES AS
AT THE SEVENTH AMENDMENT CLOSING DATE
ABILITY TO
GUARANTOR PAY DEBTS REALIZABLE ISSUED AND
(QUEBEC WHEN DUE BOOK VALUE VALUE OF PAID-UP SHARE
-------------------------------------------------------------------------------------------------------------------------------
COMPANIES ONLY) (Y/N) OF ASSETS ASSETS LIABILITIES CAPITAL ACCOUNT RESULT
-------------------------------------------------------------------------------------------------------------------------------
Videotron TVN Inc. Y $ 77,919,000 $ 208,724,050 $ 22,944,000 $ 31,557,000 $ 154,223,050
-------------------------------------------------------------------------------------------------------------------------------
Le SuperClub Y $ 109,537,000 $ 211,748,201 $ 96,298,000 $ 1,000 $ 115,449,201
Videotron ltee
-------------------------------------------------------------------------------------------------------------------------------
Les Proprietes Y $ 1 $ 1 $ 0 $ 1 $ 0
SuperClub Inc.
-------------------------------------------------------------------------------------------------------------------------------
SuperClub Videotron Y $ 52,607,000 $ 52,605,001 $ 52,261,000 $ 100 $ 345,900
Canada Inc.
-------------------------------------------------------------------------------------------------------------------------------
Groupe de Y $ 133,001,000 $ 133,001,000 $ 0 $133,001,000 $ 0
divertissement
SuperClub Inc.
-------------------------------------------------------------------------------------------------------------------------------
Videotron (1998) ltee Y $1,420,036,000 $2,267,458,572 $1,244,049,000 $165,000,000 $ 858,409,572
-------------------------------------------------------------------------------------------------------------------------------
CF Cable TV Inc. Y $ 695,118,000 $ 759,049,154 $ 580,092,000 $165,000,000 $ 13,957,154
(federal)
-------------------------------------------------------------------------------------------------------------------------------
Videotron (Regional) Y $ 457,667,000 $ 495,722,046 $ 163,903,000 $213,631,000 $ 118,188,046
ltee (federal)
-------------------------------------------------------------------------------------------------------------------------------
0000-0000 Xxxxxx Inc. Y $ (49,579,000) $2,267,458,672 $ 558,493,000 $ 100 $1,708,965,572
-------------------------------------------------------------------------------------------------------------------------------
Note:
(1) Based on unaudited unconsolidated balance sheet as at October 31, 2004
K-2
SCHEDULE "L" -- GUARANTORS AS AT JUNE 29, 2001
[PREVIOUSLY DELIVERED]
L-1
SCHEDULE "M"
MEMBERS OF THE VL GROUP AS AT THE
SEVENTH AMENDMENT CLOSING DATE
VIDEOTRON LTEE
VIDEOTRON TVN INC.
LE SUPERCLUB VIDEOTRON LTEE
LES PROPRIETES SUPERCLUB INC./SUPERCLUB PROPERTIES INC.
SUPERCLUB VIDEOTRON CANADA INC.
GROUPE DE DIVERTISSEMENT SUPERCLUB INC.
VIDEOTRON (1998) LTEE
SOCIETE D'EDITION ET DE TRANSCODAGE T.E. LTEE
CF CABLE TV INC./CF CABLE TV INC.
VIDEOTRON (REGIONAL) LTEE/VIDEOTRON (REGIONAL) LTD.
0000-0000 XXXXXX INC.
GUARANTORS AS AT THE SEVENTH AMENDMENT CLOSING DATE
VIDEOTRON TVN INC.
LE SUPERCLUB VIDEOTRON LTEE
LES PROPRIETES SUPERCLUB INC./SUPERCLUB PROPERTIES INC.
SUPERCLUB VIDEOTRON CANADA INC.
GROUPE DE DIVERTISSEMENT SUPERCLUB INC.
VIDEOTRON (1998) LTEE
CF CABLE TV INC./CF CABLE TV INC.
VIDEOTRON (REGIONAL) LTEE/VIDEOTRON (REGIONAL) LTD.
0000-0000 XXXXXX INC.
QUEBECOR MEDIA INC., under a limited recourse guarantee (limited to a pledge of
the shares of the Borrower).
---------
Note: Videotron Telecom Limited is to become a Guarantor and a member of the
VL Group at the time of the Merger.
M-1
SCHEDULE "N" -- FORM OF SUBORDINATION AGREEMENT FOR BACK-TO-BACK SECURITIES
This SUBORDINATION AGREEMENT is dated as of - , 200 - (the "AGREEMENT").
To: Royal Bank of Canada, for itself and as Agent under the Credit Agreement
(defined below) for the Lenders (the "AGENT"), Videotron Ltee, a Quebec company
(the "OBLIGOR"), as obligor under the - dated as of - , and - in the
principal amount of $ - and $ - , respectively, made by the Obligor in
favour of - (the "SUBORDINATED NOTES"), and - , as holder (the "HOLDER")
of the Subordinated Notes, for ten dollars and other good and valuable
consideration received by each of the Obligor and the Holder from the Agent and
by each of the Obligor and the Holder from the other, agree as follows:
1. INTERPRETATION.
(a) "CASH, PROPERTY OR SECURITIES". "Cash, Property or Securities" shall
not be deemed to include securities of the Obligor or any other
Person provided for by a plan of reorganization or readjustment, the
payment of which is subordinated at least to the extent provided
herein with respect to the Subordinated Notes, to the payment of all
Senior Indebtedness which may at the time be outstanding; provided,
however, that (i) all Senior Indebtedness is assumed by the new
Person, if any, resulting from any such reorganization or
readjustment, and (ii) the rights of the holders of the Senior
Indebtedness are not, without the consent of such holders, altered by
such reorganization or readjustment.
(b) "PAYMENT IN FULL". "payment in full", with respect to Senior
Indebtedness, means the receipt on an irrevocable basis of cash in an
amount equal to the unpaid principal amount of the Senior
Indebtedness and premium, if any, and interest and any special
interest thereon to the date of such payment, together with all other
amounts owing with respect to such Senior Indebtedness.
(c) "SENIOR INDEBTEDNESS". "Senior Indebtedness" means, at any date all
indebtedness (including, without limitation, any and all amounts of
principal, interest, special interest, additional amounts (including
amounts owed under any Derivative Instrument entered into with a
Lender, as defined in the Credit Agreement), premium, fees,
penalties, indemnities and "post-petition interest" in bankruptcy and
any reimbursement of expenses) under (1) the Indenture described as
the "US$335,000,000 - % Indenture dated as of - , including,
without limitation, the "Notes", the "Subsidiary Guarantees", the
"Exchange Notes", the "Additional Notes" and any Guarantee of the
Exchange Notes or the Additional Notes (in each case, as defined in
the Indenture) and (2) the Amended and Restated Credit Agreement,
originally dated as of November 28, 2000, as amended and restated as
of October 8, 2003, among the Obligor, the Lenders as defined
therein, and Royal Bank of Canada, as administrative agent (the
"CREDIT AGREEMENT"; capitalized terms used herein without definition
having the meanings set forth therein).
2. AGREEMENT ENTERED INTO PURSUANT TO CREDIT AGREEMENT. The Obligor, the
Agent and the Lenders are entering into this Agreement pursuant to the
provisions of the Credit Agreement, pursuant to which Videotron Ltee has
borrowed Cdn. $368,130,000 and has additional borrowings available of
Cdn.$100,000,000 (the "CREDIT").
3. SUBORDINATION. The indebtedness represented by the Subordinated Notes
shall be subordinated as follows:
(a) AGREEMENT TO SUBORDINATE. The Obligor, for itself and its successors
and assigns, and the Holder agree that the indebtedness evidenced by
the Subordinated Notes (including, without limitation, principal,
interest, premium, fees, penalties, indemnities and "post-petition
interest" in bankruptcy (as same is interpreted under the US
Bankruptcy Code) and any reimbursement of expenses) is subordinate
and junior in right of payment, to the extent and in the manner
provided in this Section 3, to the prior payment in full of all
Senior Indebtedness. The provisions of this Section 3 are for the
benefit of the Agent acting on behalf of the holders from time to
time of Senior Indebtedness under the Credit Agreement, including the
Lenders as defined therein, and such holders
N-1
are hereby made obligees hereunder to the same extent as if their
names were written herein as such, and they (collectively or singly)
may proceed to enforce such provisions.
(b) LIQUIDATION, DISSOLUTION OR BANKRUPTCY.
(i) Upon any distribution of assets of the Obligor to creditors or
upon a liquidation or dissolution or winding-up of the Obligor
or in a bankruptcy, arrangement, liquidation, reorganization,
insolvency, receivership or similar case or proceeding relating
to the Obligor or its property or other marshalling of assets
of the Obligor:
(A) the holders of Senior Indebtedness shall be entitled to
receive payment in full of all Senior Indebtedness before the
Holder shall be entitled to receive any payment of principal
of or interest on, or any other amount owing in respect of,
the Subordinated Notes;
(B) until payment in full of all Senior Indebtedness, any
distribution of assets of the Obligor of any kind or character
to which the Holder would be entitled but for this Section 3
is hereby assigned to the holders of Senior Indebtedness
absolutely and shall be paid by the Obligor or by any
receiver, trustee in bankruptcy, liquidating trustee, agents
or other Persons making such payment or distribution to, the
Agent on behalf of the holders of Senior Indebtedness under
the Credit Agreement, as their interests may appear; and
(C) in the event that, notwithstanding the foregoing, any payment
or distribution of assets of the Obligor of any kind or
character, whether in Cash, Property or Securities, shall be
received by the Holder before all Senior Indebtedness is paid
in full, such payment or distribution shall be held in trust
for the benefit of and shall be paid over to the Agent on
behalf of the holders of Senior Indebtedness under the Credit
Agreement, as their interests may appear, for application to
the payment of all Senior Indebtedness under the Credit
Agreement until all such Senior Indebtedness shall have been
paid in full after giving effect to any concurrent payment or
distribution to the holders of Senior Indebtedness under the
Credit Agreement in respect of such Senior Indebtedness.
(ii) If (A) a bankruptcy, reorganization, insolvency, receivership
or similar proceeding relating to the Obligor or its property
(a "REORGANIZATION PROCEEDING") is commenced and is continuing
and (B) the Holder does not file proper claims or proofs of
claim in the form required in a Reorganization Proceeding prior
to 45 days before the expiration of the time to file such
claims, then (1) upon the request of the Agent, the Holder
shall file such claims and proofs of claim in respect of the
Subordinated Notes and execute and deliver such powers of
attorney, assignments and proofs of claim or proxies as may be
directed by the Agent to enable it to exercise in the sole
discretion of the Agent any and all voting rights attributable
to the Subordinated Notes which are capable of being voted
(whether by meeting, written resolution or otherwise) in a
Reorganization Proceeding and enforce any and all claims upon
or in respect of the Subordinated Notes and to collect and
receive any and all payments or distributions which may be
payable or deliverable at any time upon or in respect of the
Subordinated Notes, and (2) whether or not the Agent shall take
the action described in clause (1) above, the Agent shall
nevertheless be deemed to have such powers of attorney as may
be necessary to enable the Agent to exercise such voting
rights, file appropriate claims and proofs of claim and
otherwise exercise the powers described above for and on behalf
of the Holder.
(c) RELATIVE RIGHTS. This Section 3 defines the relative rights of the
Holder and the holders of Senior Indebtedness. Nothing in this
Section 3 shall:
(i) impair, as between the Obligor and the Holder, the obligation
of the Obligor, which is absolute and unconditional, to pay the
principal of and interest on the Subordinated Notes in
accordance with their terms; or
(ii) affect the relative rights of the Holder and creditors of the
Obligor other than the holders of Senior Indebtedness; or
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(iii) affect the relative rights of the holders of Senior
Indebtedness among themselves or opposite the Obligor under
the Credit Documents; or
(iv) prevent the Holder from exercising its available remedies upon
a default, subject to the rights of the holders of Senior
Indebtedness to receive cash, property or other assets
otherwise payable to the Holder.
(d) SUBORDINATION MAY NOT BE IMPAIRED.
(i) No right of any holder of Senior Indebtedness to enforce the
subordination of indebtedness evidenced by the Subordinated
Notes shall in any way be prejudiced or impaired by any act or
failure to act by the Obligor or by any such holder or the
Agent, or by any non-compliance by the Obligor with the terms,
provisions or covenants herein, regardless of any knowledge
thereof which any such holder or the Agent may have or be
otherwise charged with. Neither the subordination of the
Subordinated Notes as herein provided nor the rights of the
holders of Senior Indebtedness with respect hereto shall be
affected by any extension, renewal or modification of the
terms, or the granting of any security in respect of, any
Senior Indebtedness or any exercise or non-exercise of any
right, power or remedy with respect thereto.
(ii) The Holder agrees that all indebtedness evidenced by the
Subordinated Notes will be unsecured by any Charge (as defined
in the Credit Agreement) or by any Lien (as defined in the
Indenture) upon or with respect to any property of the Obligor.
(iii) The Holder agrees not to exercise any offset or counterclaim
or similar right in respect of the indebtedness evidenced by
the Subordinated Notes except to the extent payment of such
indebtedness is permitted and will not assign or otherwise
dispose of the Subordinated Notes or the indebtedness which it
evidences unless the assignee or acquiror, as the case may be,
agrees to be bound by the terms of this Agreement.
(g) HOLDER ENTITLED TO RELY.
Upon any payment or distribution pursuant to this Section 3, the
Holder shall be entitled to rely (i) upon any order or decree of a
court of competent jurisdiction in which any proceedings of the
nature referred to in Section 3(b) are pending, (ii) upon a
certificate if the liquidating trustee or agent or other person in
such proceedings making such payment or distribution to the Holder or
its representative, if any, or (iii) upon a certificate of the Agent
or any representative (if any) of the holders of Senior Indebtedness
for the purpose of ascertaining the persons entitled to participate
in such payment or distribution, the holders of the Senior
Indebtedness and other indebtedness of the Obligor, the amount
thereof or payable thereon, the amount or amounts paid or distributed
thereon and all other facts pertinent thereto or to this Section 3.
4. ENFORCEABILITY. Each of the Obligor and the Holder represents and
warrants that this Agreement has been duly authorized, executed and
delivered by each of the Obligor and the Holder and constitutes a valid
and legally binding obligation of each of the Obligor and the Holder,
enforceable in accordance with its terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar
laws of general applicability relating to or affecting creditors' rights
and to general equity principles; and on the date hereof, the Holder
shall deliver an opinion or opinions of counsel to such effect to the
Agent for the benefit of the Lenders.
5. MISCELLANEOUS.
(a) Until payment in full of all the Senior Indebtedness, the Obligor and
the Holder agree that no amendment shall be made to any of the
Subordinated Notes which would affect the rights of the holders of
the Senior Indebtedness.
(b) This Agreement may not be amended or modified in any respect, nor may
any of the terms or provisions hereof be waived, except by an
instrument signed by the Obligor, the Holder and the Agent.
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(c) This Agreement shall be binding upon each of the parties hereto and
their respective successors and assigns and shall inure to the
benefit of the Agent and each and every holder of Senior Indebtedness
and their respective successors and assigns.
(d) This Agreement shall be governed by and construed in accordance with
the laws of the State of New York.
(e) The Holder and the Obligor each hereby irrevocably agrees that any
suits, actions or proceedings arising out of or in connection with
this Agreement may be brought in any state or federal court sitting
in The City of New York or any court in the Province of Quebec and
submits and attorns to the non-exclusive jurisdiction of each such
court.
(f) The Holder and the Obligor will whenever and as often as reasonably
requested to do so by the Agent, do, execute, acknowledge and deliver
any and all such other and further acts, assignments, transfers and
any instruments of further assurance, approvals and consents as are
necessary or proper in order to give complete effect to this
Agreement.
(g) Each of the Holder and the Obligor irrevocably appoints CT
Corporation System, as its authorized agent in the State of New York
upon which process may be served in any such suit or proceedings, and
agrees that service of process upon such agent, and written notice of
said service to CT Corporation System, by the person serving the same
to the addresses listed below, shall be deemed in every respect
effective service of process upon the Holder or the Obligor, as
applicable, in any such suit or proceeding.
If to the Obligor:
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If to the Holder:
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Each of the Holder and the Obligor further agrees to take any and all action
as may be necessary to maintain such designation and appointment of such agent
in full force and effect for a period of ten years from the date of this
Agreement.
IN WITNESS WHEREOF, the Obligor and the Holder each have caused this
Agreement to be duly executed.
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by
Name: -
Title: -
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by
Name: -
Title: -
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