Groupe De Divertissement Superclub F4/A Registration of securities (foreign) (amended)

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As filed with the Securities and Exchange Commission on January 14, 2005

Registration No. 333-121032

SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549

AMENDMENT NO. 1
TO
Form F-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

VIDÉOTRON LTÉE
AND THE GUARANTORS LISTED ON THE TABLE OF ADDITIONAL REGISTRANTS^*
(Exact name of Registrant as specified in its charter)

Province of Quebec (State or other jurisdiction of incorporation or organization)		4841 (Primary Standard Industrial Classification Code Number)		Not applicable (I.R.S. Employer Identification No.)
Vidéotron Ltée 300 Viger Avenue East Montreal, Quebec H2X 3W4 Canada (514) 281-1232 (Address, including zip code, and telephone number, including area code, of registrant's principal executive offices)

CT Corporation System
111 Eighth Avenue
New York, New York 10011
(212) 894-8600
(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copies to:
John A. Willett, Esq. Christine D. Rogers, Esq. Arnold & Porter LLP 399 Park Avenue New York, New York 10022-4690 (212) 715-1000		Marc Lacourcière, Esq. Ogilvy Renault 1981 McGill College Avenue, Suite 1100 Montreal, Québec H3A 3C1 Canada (514) 847-4747

*: The companies listed on the next page in the "Table of Additional Registrants" are included in this Registration Statement on Form F-4 as co-registrants.

Approximate date of commencement of proposed sale of the securities to the public: As soon as practicable following the effectiveness of this registration statement.

If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.o

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.o

CALCULATION OF REGISTRATION FEE

Title of each class of securities to be registered	Amount to be registered	Proposed maximum offering price per unit(1)	Proposed maximum aggregate offering price(1)	Amount of registration fee(1)


6⁷/8% Senior Notes due January 15, 2014	$315,000,000	100%	$315,000,000	$39,910.50(3)
Guarantees of 6⁷/8% Senior Notes due January 15, 2014(2)	—	—	—	—

(1): The registration fee has been calculated in accordance with Rules 457(a), 457(f)(2) and 457(n) under the Securities Act.
(2): In accordance with Rule 457(n), no separate fee for the registration of the guarantees of the 6⁷/8% Senior Notes due January 15, 2014 of Vidéotron Ltée, which are being registered concurrently, is payable.
(3): Previously paid.

The co-registrants hereby amend this registration statement on such date or dates as may be necessary to delay its effective date until the co-registrants shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until this registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

TABLE OF ADDITIONAL REGISTRANTS

The following subsidiaries of Vidéotron Ltée have fully and unconditionally guaranteed the 6⁷/8% Senior Notes due January 15, 2014 of Vidéotron Ltée and are additional registrants under this Registration Statement.

Exact Name of Additional Registrant as Specified in its Charter^*	State or Other Jurisdiction of Incorporation or Organization	Primary Standard Industrial Classification Code Number	I.R.S. Employer Identification Number
Vidéotron TVN inc.	Province of Québec	4841	N/A
Le SuperClub Vidéotron ltée	Province of Québec	7841	N/A
Vidéotron (1998) ltée	Province of Québec	4841	N/A
Groupe de Divertissement SuperClub Inc.	Province of Québec	7841	N/A
SuperClub Vidéotron Canada inc.	Province of Québec	7841	N/A
Les Propriétés SuperClub inc.	Province of Québec	7841	N/A

*: The address and telephone number of the principal executive offices of each additional registrant are the same address and telephone number of the principal executive offices of Vidéotron Ltée.

The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

Subject to completion, dated January 14, 2005

PROSPECTUS

US$315,000,000

Vidéotron Ltée

Offer to Exchange All Outstanding US$315,000,000 Principal Amount of
6⁷/8% Senior Notes due January 15, 2014
Issued on November 19, 2004
for US$315,000,000 Principal Amount of
6⁷/8% Senior Notes due January 15, 2014
That Have Been Registered Under the Securities Act of 1933

The Exchange Offer:

•: We will exchange all old notes that are validly tendered and not validly withdrawn for an equal principal amount of new notes that have been registered.
•: You may withdraw tenders of old notes at any time prior to the expiration of the exchange offer.
•: The exchange offer expires at 5:00 PM, New York City time, on February , 2005, unless we extend the exchange offer.

The New Notes:

•

The terms of the new notes to be issued in the exchange offer are substantially identical to the terms of the old notes, except that the new notes will be freely tradeable by persons who are not affiliated with us.

•

The terms of the new notes to be issued in the exchange offer are identical to the terms of the US$335.0 million principal amount of our existing 6⁷/8% Senior Notes due January 15, 2014, which were issued on October 8, 2003 and have been registered under the Securities Act.

•

No active public market currently exists for the existing notes or the old notes. We do not intend to list the new notes on any securities exchange and, therefore, no active public market is anticipated.

•

The new notes, like the old notes and the existing notes, will be unsecured, will be guaranteed by our current subsidiaries, and will rank:

—: equally with all of our and our subsidiary guarantors' existing and future unsecured debt that does not expressly provide that it is subordinated to the new notes or the subsidiary guarantees;
—: senior to all of our and our subsidiary guarantors' existing and future debt that expressly provides that it is subordinated to the new notes or the subsidiary guarantees;
—: effectively junior to all of our and our subsidiary guarantors' existing and future secured debt; and
—: effectively junior to all debt and other obligations of any of our subsidiaries that do not guarantee the new notes.

This investment involves risks. See "Risk Factors" beginning on page 15.

Neither the Securities and Exchange Commission nor any state securities commission has
approved or disapproved of these securities or determined if this prospectus is truthful or complete.
Any representation to the contrary is a criminal offense.

The date of this prospectus is January , 2005

You should rely only on the information contained in this prospectus. We have not authorized anyone to provide you with different information. We are not making an offer of these securities in any state or other jurisdiction where the offer is not permitted. You should not assume that the information contained in this prospectus is accurate as of any date other than the date on the front of this prospectus.

TABLE OF CONTENTS

		Page
Industry and Market Data		ii
Enforceability of Civil Liabilities		ii
Forward-Looking Statements		ii
Presentation of Financial Information		iii
Exchange Rates		iii
Summary		1
Risk Factors		15
Use of Proceeds		25
Capitalization		26
Selected Consolidated Financial and Operating Data		27
Management's Discussion and Analysis of Financial Condition and Results of Operations		33
Business		50
Management		72
Our Shareholder		78
Certain Relationships and Related Transactions		78
Description of Certain Indebtedness		82
The Exchange Offer		85
Description of the Notes		95
Certain Tax Considerations		140
Notice to Canadian Investors		144
Plan of Distribution		146
Legal Matters		146
Independent Auditors		146
Where You Can Find More Information		147
Index to Financial Statements		F-1

This prospectus incorporates by reference documents that contain important business and financial information about Vidéotron that is not included in or delivered with this prospectus. These documents are available without charge to security holders upon written or oral request to: Vidéotron Ltée, 300 Viger Avenue East, Montreal, Québec, Canada H2X 3W4, Attention: Corporate Secretary, telephone number (514) 281-1232. To obtain timely delivery, holders of the old notes must request these documents no later than five business days before the expiration date. Unless extended, the expiration date is February , 2005.

INDUSTRY AND MARKET DATA

Market data and certain industry statistics used throughout this prospectus were obtained from internal surveys, market research, publicly available information and industry publications. Industry publications generally state that the information contained therein has been obtained from sources believed to be reliable, but that the accuracy and completeness of such information is not guaranteed. Similarly, internal surveys and industry and market data, while believed to be reliable, have not been independently verified, and we make no representation as to the accuracy or completeness of such information.

ENFORCEABILITY OF CIVIL LIABILITIES

We are incorporated under the laws of the Province of Québec. Substantially all our directors, controlling persons and officers, as well as certain of the experts named in this prospectus, are residents of Canada, and all or a substantial portion of their assets and all of our assets are located outside the United States. We have agreed, in accordance with the terms of the indenture under which the new notes will be issued, to accept service of process in any suit, action or proceeding with respect to the indenture or the new notes brought in any federal or state court located in New York City by an agent designated for such purpose, and to submit to the jurisdiction of such courts in connection with such suits, actions or proceedings. However, it may be difficult for holders of the new notes to effect service within the United States upon directors, officers and experts who are not residents of the United States or to realize in the United States upon judgments of courts of the United States predicated upon civil liability under U.S. federal or state securities laws. We have been advised by Ogilvy Renault, our Canadian counsel, that there is doubt as to the enforceability in Canada against us or against our directors, officers and experts who are not residents of the United States, in original actions or in actions for enforcement of judgments of courts of the United States, of liabilities predicated solely upon U.S. federal or state securities laws.

FORWARD-LOOKING STATEMENTS

This prospectus includes "forward-looking statements" within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. All statements other than statements of historical facts included in this prospectus, including, without limitation, statements under the captions "Summary," "Risk Factors," "Use of Proceeds," "Capitalization," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Business" as well as statements located elsewhere in this prospectus regarding the prospects of our industry and our prospects, plans, financial position and business strategy, may constitute forward-looking statements. In addition, forward-looking statements generally can be identified by the use of forward-looking terminology such as "may," "will," "expect," "intend," "estimate," "anticipate," "plan," "foresee," "believe" or "continue" or the negatives of these terms or variations of them or similar terminology. Although we believe that the expectations reflected in these forward-looking statements are reasonable, we can give no assurance that these expectations will prove to have been correct. While the below list of cautionary statements is not exhaustive, some important factors that could affect future operating results, financial position and cash flows and could cause actual results to differ materially from those expressed in these forward-looking statements are:

•: the intensity of competitive activity in the industries in which we operate;
•: unanticipated higher capital spending required to address continued development of competitive alternative technologies;
•: changes in our ability to obtain services and other items critical to our operations; and
•: changes in laws and regulations, or in their interpretations, which could result in, among other things, the loss (or reduction in value) of our licenses or markets or in an increase in competition, compliance costs or capital expenditures.

These and other factors could cause actual results to differ materially from our expectations expressed in the forward-looking statements included in this prospectus, and further details and descriptions of these and other factors are disclosed in this prospectus, including under the section "Risk Factors." Each of these forward-looking statements speak only as of the date of this prospectus. We will not update these statements unless the securities laws require us to do so.

PRESENTATION OF FINANCIAL INFORMATION

Our consolidated financial statements, the financial statements of Videotron Telecom Ltd. and our unaudited pro forma combined financial information included in this prospectus have been prepared in accordance with accounting principles generally accepted in Canada, or Canadian GAAP. For a discussion of the principal differences between Canadian GAAP and accounting principles generally accepted in the United States, or U.S. GAAP, see note 22 to our audited consolidated financial statements for the years ended December 31, 2001, 2002 and 2003, note 8 to our unaudited interim consolidated financial statements for the nine months ended September 30, 2003 and 2004, note 19 to the audited financial statements of Videotron Telecom Ltd. for the years ended December 31, 2002 and 2003, note 7 to the unaudited interim financial statements of Videotron Telecom Ltd. for the nine months ended September 30, 2003 and 2004 and note (b) to our unaudited pro forma combined financial information, all of which are included in this prospectus.

Both we and Videotron Telecom Ltd. state our financial statements in Canadian dollars. In this prospectus, references to Canadian dollars, Cdn$ or $ are to the currency of Canada and references to U.S. dollars or US$ are to the currency of the United States.

We use in this prospectus certain financial measures that are not calculated in accordance with Canadian or U.S. GAAP to assess our financial performance and Videotron Telecom's financial performance. For example, we use EBITDA (and related ratios), cash interest expense and long-term debt, excluding QMI subordinated loans, in this prospectus. We provide the calculation of these non-GAAP financial measures and a reconciliation to the most directly comparable GAAP financial measures in notes 6, 7 and 9 under "Selected Consolidated Financial and Operating Data."

EXCHANGE RATES

The following table sets forth, for the periods indicated, the average, high, low and end of period noon buying rates in the City of New York for cable transfers in foreign currencies as certified for customs purposes by the Federal Reserve Bank of New York, or the noon buying rate. Such rates are set forth as US dollars per Cdn$1.00 and are the inverse of rates quoted by the Federal Reserve Bank of New York for Canadian dollars per US$1.00. On January 13, 2005, the inverse of the noon buying rate was Cdn$1.00 equals US$0.8330.

Year Ended	Average(1)	High	Low	Period End
December 31, 2004	0.7719	0.8493	0.7158	0.8310
December 31, 2003	0.7136	0.7738	0.6349	0.7738
December 31, 2002	0.6370	0.6619	0.6200	0.6329
December 31, 2001	0.6446	0.6697	0.6241	0.6279
December 31, 2000	0.6727	0.6969	0.6410	0.6669
December 31, 1999	0.6746	0.6925	0.6535	0.6925

Nine Months Ended		Average(1)		High		Low		Period End
September 30, 2004		0.7525		0.7906		0.7243		0.7906
September 30, 2003		0.7000		0.7492		0.6349		0.7404

Month Ended	Average(2)	High	Low	Period End
December 31, 2004	0.8204	0.8435	0.8064	0.8310
November 30, 2004	0.8357	0.8493	0.8155	0.8402
October 31, 2004	0.8020	0.8201	0.7850	0.8191
September 30, 2004	0.7763	0.7906	0.7651	0.7906
August 30, 2004	0.7618	0.7714	0.7506	0.7595
July 31, 2004	0.7561	0.7644	0.7489	0.7521

(1): The average of the exchange rates on the last day of each month during the applicable year or nine-month period.
(2): The average of the exchange rates for all days during the applicable month.

iii

Canada has no system of exchange controls. There are no Canadian restrictions on the repatriation of capital or earnings of a Canadian company to non-resident investors. There are no laws of Canada or exchange restrictions affecting the remittance of dividends, interest, royalties or similar payments to non-resident holders of our securities, except as described under "Certain Tax Considerations — Canadian Material Federal Income Tax Considerations for Non-Residents of Canada."

SUMMARY

The following summary highlights selected information included in this prospectus to help you understand Vidéotron Ltée, the exchange offer and the new notes. For a more complete understanding of Vidéotron Ltée, the exchange offer and the new notes, we encourage you to read this entire prospectus carefully. Unless the context indicates or otherwise requires, the terms "Vidéotron," "our company," "we," "us" and "our" as used in this prospectus refer to Vidéotron Ltée and its consolidated subsidiaries.

Our Business

We are the largest distributor of pay-television services in the Province of Québec and the third largest cable operator in Canada based on the number of cable customers. We hold cable licenses that cover approximately 80% of Québec's 3.0 million homes passed by cable, which includes residential and commercial premises. Our cable licenses include licenses for the greater Montréal area, the second largest urban area in Canada. The greater Montréal area represents one of the largest contiguous clusters in Canada and is among the largest in North America as measured by the number of cable customers. This concentration provides us with improved operating efficiencies and is a key element in the development and launch of our bundled service offerings. In 2001, we substantially completed our network modernization program, which has provided us with one of the largest bi-directional hybrid fiber coaxial (HFC) networks in North America, with approximately 97% of our systems upgraded to two-way capability and 74% of our customers served by systems upgraded to 750 MHz.

In July 2004, we announced our intention to launch a telephony service using Voice over IP technology in Québec. This project is being conducted with another wholly owned subsidiary of Quebecor Media, Videotron Telecom Ltd., or Videotron Telecom, which holds a license as a competitive local exchange carrier and will initially provide the circuit switches and local network interconnection services. We are currently conducting technical field tests for this telephony service, and we anticipate launching this service progressively among our residential and commercial customers in the first half of 2005. Our new telephony service will include local and long-distance calling and permit our customers to access a host of other telephony services, such as enhanced 911 Emergency service, name and number caller ID and automatic call forwarding.

Through SuperClub Vidéotron, we also own the largest chain of video and game rental stores in Québec and among the largest of such chains in Canada, with a total of 288 retail locations (of which 241 are franchised) and more than 1.65 million video club rental members. With approximately 145 retail locations located in our markets, SuperClub Vidéotron is both a showcase and a valuable and cost-effective distribution network for our growing array of advanced products and services, such as high-speed Internet access and digital television.

Our Shareholder

We are a wholly owned subsidiary of Quebecor Media. Quebecor Media is a leading Canadian-based media company with interests in newspaper publishing operations, television broadcasting, business telecommunications, book and magazine publishing and new media services, as well as our cable operations. Through these interests, Quebecor Media holds leading positions in the creation, promotion and distribution of news, entertainment and Internet-related services that are designed to appeal to audiences in every demographic category.

Quebecor Media is 54.7% owned by Quebecor Inc., a communications holding company, and 45.3% owned by CDP Capital-Communications. Quebecor Inc.'s primary assets are its interests in Quebecor Media and Quebecor World Inc., one of the world's largest commercial printers. CDP Capital-Communications is a wholly owned subsidiary of Caisse de dépôt et placement du Québec, Canada's largest pension fund with over $140 billion in assets under management.

Quebecor Media is neither an obligor nor a guarantor of our obligations under the notes.

Our Corporate Structure

Our current corporate structure is (certain immaterial subsidiaries have been omitted):

*: Not a guarantor of the notes.
**: Vidéotron TVN inc. was liquidated into Vidéotron on December 31, 2004, and Vidéotron (1998) ltée was liquidated into Vidéotron on January 1, 2005. We expect that Vidéotron TVN inc. and Vidétron (1998) ltée will be dissolved in 2005.

All of the subsidiaries in the above corporate chart are wholly owned and, with the exception of CF Cable TV Inc., or CF Cable, and Videotron (Regional) Ltd., or Videotron Regional, will guarantee the new notes. CF Cable and Videotron Regional have undertaken to become guarantors of the notes at such time when CF Cable's 9.125% Senior Secured First Priority Notes due 2007, or the CF Cable notes, are no longer outstanding.

Reorganization

We currently expect that the operations of Videotron Telecom, which is a wholly owned subsidiary of Quebecor Media, will be integrated within our own operations in 2005, subject to the approval of the CRTC and our lenders, as well as the satisfactory completion of discussions with our labor unions. Combining Videotron Telecom's telecommunication network and expertise with our commercial customer base will, we believe, enable us to offer additional bundled services to those customers, which we expect will result in new business opportunities. In addition, this reorganization is a continuation of the collaboration between Videotron Telecom and our company in the Voice over IP project and fiber network development.

Videotron Telecom is a provider of a full range of business telecommunications services, including local service, long distance, high speed data transmission, Internet connectivity and Internet hosting, to customers that include businesses and governmental end users and other telecommunications service providers in Canada. Videotron Telecom's regional network has over 9,000 km of fiber optic cable in Québec and 2,000 km in Ontario and reaches more than 80% of business located in the metropolitan areas of Québec and most of the businesses located in the major metropolitan areas of Ontario. Videotron Telecom's extensive network supports direct connectivity with networks in Ontario, eastern Québec, the Maritimes and the United States. In addition, approximately 33% of Videotron Telecom's revenue in 2003 came from services provided to Quebecor Inc. and Quebecor Media and its subsidiaries.

For the year ended December 31, 2003, Videotron Telecom generated revenues of $75.6 million (including $19.9 million of revenues from Vidéotron and its subsidiaries) and EBITDA of $14.8 million. For the nine-month period ended September 30, 2004, Videotron Telecom's revenues were $56.1 million (including $9.3 million of revenues from Vidéotron and its subsidiaries) and EBITDA was $9.7 million. See the reconciliation of Videotron Telecom's EBITDA to its net loss in note 7 under "Selected Consolidated Financial and Operating Data."

Amendments to Our Credit Facilities

Concurrently with the completion of the private placement offering of the old notes on November 19, 2004, we used the net proceeds from the offering of the old notes to, among other things, repay in full the current outstanding indebtedness under the $318.1 million Term C loan under our credit facilities and amended the terms of our credit agreement to, among other things, increase our revolving credit facility from $100.0 million to $450.0 million and extend its maturity to November 2009.

These amendments create additional financial flexibility to allow us to redeem the CF Cable notes, which are callable at par in July 2005, and to finance future distributions to Quebecor Media, our parent company.

See "Description of Certain Indebtedness — Credit Facilities — General."

Our Principal Executive Office

Our principal executive office is located at 300 Viger Avenue East, Montréal, Province of Québec, Canada H2X 3W4. Our telephone number is (514) 281-1232.

The Exchange Offer

On November 19, 2004, we sold our 6⁷/8% Senior Notes due January 15, 2014 in a private placement exempt from the registration requirements of the Securities Act, and the initial purchasers of these old notes then resold them in reliance on other exemptions from the registration requirements of the Securities Act. We and the subsidiary guarantors of the old notes entered into a registration rights agreement with the initial purchasers. Under the registration rights agreement, we agreed, among other things, to deliver to you this prospectus and to keep the exchange offer open for not less than 30 days after the date notice of the exchange offer is mailed to the holders of the old notes. In addition, we agreed that if the exchange offer is not completed by May 18, 2005, we will file, and use our best efforts to cause to become effective, a shelf registration statement covering the resale of the old notes. You are entitled to exchange in the exchange offer your old notes for new notes, which are identical in all material respects to the old notes except that:

•: the new notes have been registered under the Securities Act and will be freely tradeable by persons who are not affiliated with us;
•: the new notes are not entitled to the rights which are applicable to the old notes under the registration rights agreement; and
•: our obligation to pay special interest on the old notes if (a) the exchange offer registration statement that includes this prospectus is not declared effective by March 21, 2005 or (b) if the exchange offer is not consummated by April 20, 2005, in each case, at incremental rates ranging from 0.25% per annum to 1.0% per annum depending on how long we fail to comply with these deadlines, does not apply to the new notes.

The terms of the new notes to be issued in the exchange offer will be identical to the terms of the US$335.0 million principal amount of our existing 6⁷/8% Senior Notes due January 15, 2014, which were issued on October 8, 2003 and have been registered under the Securities Act.


The Exchange Offer		We are offering to exchange up to US$315.0 million aggregate principal amount of our new 6⁷/8% Senior Notes due January 15, 2014, which have been registered under the Securities Act, for up to US$315.0 million aggregate principal amount of our old 6⁷/8% Senior Notes due January 15, 2014, which were issued on November 19, 2004 pursuant to a private placement offering. Old notes may be exchanged only in integral multiples of US$1,000.
Resale of the New Notes		Based on interpretations by the staff of the SEC set forth in no-action letters issued to third parties, we believe that the new notes issued in the exchange offer may be offered for resale, resold and otherwise transferred by you (unless you are our "affiliate" within the meaning of Rule 405 under the Securities Act) without compliance with the registration and prospectus delivery requirements of the Securities Act,provided that you are:
		• acquiring the new notes in the ordinary course of business;
		• not participating, do not intend to participate, and have no arrangement or understanding with any person to participate in the distribution of the new notes; and
		• not a broker-dealer who purchased your old notes directly from us for resale pursuant to Rule 144A or any other available exemption under the Securities Act.
		We do not intend to seek our own no-action letter, and there is no assurance that the SEC staff would make a similar determination with respect to the new notes. If this interpretation is inapplicable and you transfer any new notes issued to you in the exchange offer without delivering a prospectus or without an exemption under the Securities Act, you may incur liability under the Securities Act. We do not assume or indemnify you against this liability.

		Each broker-dealer that receives new notes for its own account in exchange for the old notes that were acquired by this broker-dealer as a result of market-making activities or other trading activities must acknowledge that it will deliver a prospectus in connection with any resale of those new notes. See "Plan of Distribution."
		Any holder of old notes who:
		• is our "affiliate" as defined in Rule 405 under the Securities Act;
		• does not acquire the new notes in the ordinary course of its business;
		• tenders in the exchange offer with the intention to participate, or for the purpose of participating, in a distribution of the new notes; or
		• is a broker-dealer that purchased old notes from us to resell them pursuant to Rule 144A or any other available exemption under the Securities Act,
		cannot rely on the position of the SEC staff expressed in the no-action letters described above and, in the absence of an exemption, must comply with the registration and prospectus delivery requirements of the Securities Act in connection with the resale of the new notes.
Expiration of Exchange Offer		The exchange offer will expire at 5:00 p.m., New York City time, on February , 2005, unless we decide to extend the expiration date.
Withdrawal Rights		You may withdraw the tender of your old notes at any time prior to 5:00 p.m., New York City time, on the expiration date.
Accrued Interest on the New Notes and the Old Notes		The old note and the new notes will bear interest from July 15, 2004.
Conditions to the Exchange Offer		The exchange offer is subject to customary conditions, some of which we may waive. See "The Exchange Offer — Conditions to the Exchange Offer."
Procedures for Tendering Old Notes		If you wish to exchange your old notes for new notes pursuant to the exchange offer, you must complete, sign and date the letter of transmittal according to the instructions contained in this prospectus and the letter of transmittal. You must also mail or otherwise deliver the letter of transmittal, together with your old notes and any other required documents, to the exchange agent at the address set forth on the cover of the letter of transmittal. If you hold old notes through the Depository Trust Company, or DTC, and wish to participate in the exchange offer, you must comply with the Automated Tender Offer Program procedures of DTC, by which you will agree to be bound by the letter of transmittal.
		By signing or agreeing to be bound by the letter of transmittal, you will represent to us that, among other things:
		• you are acquiring the new notes in the ordinary course of business;

		• you have no arrangement or understanding with any person to participate in the distribution of the new notes;
		• if you are a broker-dealer that will receive new notes for your own account in exchange for old notes that were acquired as a result of market-making or other trading activities, you will deliver a prospectus, as required by law, in connection with any resale of the new notes; and
		• you are not our "affiliate" as defined in Rule 405 under the Securities Act.
		See "The Exchange Offer — Procedures for Tendering Old Notes."
Special Procedures for Beneficial Owners		If you own a beneficial interest in old notes that are registered in the name of a broker, dealer, commercial bank, trust company or other nominee or custodian, and you wish to tender your old notes in the exchange offer, you should contact the registered holder as soon as possible and instruct the registered holder to tender on your behalf.
Guaranteed Delivery Procedures		If you wish to tender your old notes and your old notes are not immediately available or you cannot deliver your old notes, the letter of transmittal or any other documents required by the letter of transmittal to the exchange agent or comply with the applicable procedures under DTC's Automated Tender Offer Program by the expiration date, you must tender your old notes pursuant to the guaranteed delivery procedures described in this prospectus under the heading "The Exchange Offer — Procedures for Tendering Old Notes — Guaranteed Delivery Procedures."
Consequences of Failure to Exchange the Old Notes for the New Notes		All unexchanged old notes will continue to be subject to transfer restrictions. In general, the old notes may not be offered or sold unless registered under the Securities Act or pursuant to an exemption from registration under the Securities Act and applicable state securities laws. Therefore, the market for secondary resales of any unexchanged old notes is likely to be minimal. Other than in connection with the exchange offer, we do not currently anticipate that we will register the old notes under the Securities Act.
Federal Income Tax Consequences		The exchange of the old notes for the new notes will generally not be a taxable event for U.S. federal income tax purposes. See "Certain Tax Considerations — Certain U.S. Federal Income Tax Considerations."
Use of Proceeds		We will not receive any cash proceeds from the issuance of the new notes in the exchange offer. We will pay all expenses incident to the exchange offer. See "Use of Proceeds" and "The Exchange Offer — Fees and Expenses."
Exchange Agent for Notes		Wells Fargo Bank, National Association is the exchange agent for the exchange offer.

The New Notes

The summary below describes the principal terms of the new notes. Some of the terms and conditions described below are subject to important limitations and exceptions. The "Description of the Notes" section of this prospectus contains a more detailed description of the terms and conditions of the notes.

Issuer	Vidéotron Ltée.
Securities	US$315,000,000 in principal amount of senior unsecured notes due January 15, 2014. The new notes will be issued under an indenture dated as of October 8, 2003, as supplemented, pursuant to which we previously issued US$335,000,000 aggregate principal amount of our existing 6⁷/8% Senior Notes due January 15, 2014 that had been registered under the Securities Act. The new notes will rank equally and form part of a single series with these existing notes and will have the same terms as these existing notes.
Maturity	January 15, 2014.
Interest	Annual rate: 6⁷/8%.
	Payment frequency: every six months on January 15 and July 15.
	First payment: January 15, 2005.
Ranking	The existing notes and the old notes are, and the new notes will be, senior unsecured obligations of Vidéotron Ltée. Accordingly, the existing notes and the old notes rank, and the new notes will rank:
	•	equally with all of our existing and future unsecured unsubordinated indebtedness;
	•	senior to all of our existing and future subordinated indebtedness;
	•	effectively subordinated to all of our existing and future secured indebtedness, to the extent of the assets securing such indebtedness; and
	•	structurally subordinated to all of the existing and future liabilities, including trade payables, of our subsidiaries that are not guarantors.
	After giving effect to the completion of the offering of the old notes and the application of the net proceeds as described under "Use of Proceeds," as of September 30, 2004, we would have had $2,184.7 million of indebtedness, or $934.7 million of indebtedness excluding the QMI subordinated loans, of which $97.1 million would have been senior secured debt of subsidiaries that are not guarantors. These non-guarantor subsidiaries would have had no additional indebtedness to third parties and an additional $83.2 million of total liabilities (excluding inter-company liabilities). See "Capitalization."
Guarantees	The existing notes and the old notes are, and the new notes will be, guaranteed by certain of our existing and future subsidiaries on a senior unsecured basis.
	The guarantees will be general unsecured senior obligations of the guarantors. Accordingly, they will rank equally with all unsecured unsubordinated indebtedness of the guarantors, effectively subordinated to all secured indebtedness of the guarantors, to the extent of the assets securing such indebtedness, and senior to all future subordinated indebtedness of the guarantors.

Optional Redemption	We may redeem the notes, in whole or in part, at any time on or after January 15, 2009 at the redemption prices described in the section "Description of the Notes — Optional Redemption" plus accrued and unpaid interest.
	In addition, on or before January 15, 2007, we may redeem up to 35% of the principal amount of the notes with the net cash proceeds from certain equity offerings at the redemption price listed in the section "Description of the Notes — Optional Redemption."
Tax Redemption	We may also redeem the notes, in whole but not in part, at any time at 100% of the principal amount of the notes plus accrued and unpaid interest, if any, to the date of redemption in the event of changes affecting Canadian withholding taxes that would require us to pay "additional amounts" to holders of the notes. See "Description of the Notes — Redemption for Changes in Withholding Taxes" and "— Payment of Additional Amounts."
Change of Control	If we experience a change in control, we must offer to purchase the notes at 101% of the principal amount plus accrued and unpaid interest, if any, to the date of purchase.
Certain Covenants	The indenture governing the notes limits our ability and the ability of our restricted subsidiaries to:
	•	borrow money or sell preferred stock;
	•	create liens;
	•	pay dividends on or redeem or repurchase our stock;
	•	make certain types of investments;
	•	sell stock in our restricted subsidiaries;
	•	restrict dividends or other payments from restricted subsidiaries;
	•	enter into transactions with affiliates;
	•	issue guarantees of debt; and
	•	sell assets or merge with other companies.
	These covenants contain important exceptions, limitations and qualifications. See "Description of the Notes."
Additional Amounts	Any payments made by us with respect to the notes will be made without withholding or deduction for Canadian taxes unless required by law. If we are required by law to withhold or deduct for Canadian taxes with respect to a payment to the holders of notes, we will pay the additional amount necessary so that the net amount received by the holders of notes after the withholding is not less than the amount that they would have received in the absence of the withholding. See "Description of the Notes — Payment of Additional Amounts."
Tax Consequences	For a discussion of the possible U.S. and Canadian federal income tax consequences of an investment in the new notes, see "Certain Tax Considerations." You should consult your own tax advisor to determine the federal, state, provincial, local and other tax consequences of an investment in the new notes.

Use of Proceeds		We will not receive any cash proceeds from the issuance of the new notes in the exchange offer. See "Use of Proceeds."
Absence of an Active Public Market for the New Notes		The old notes are presently eligible for trading in the PORTAL market. We do not intend to apply for the new notes to be listed on any securities exchange or to arrange for any quotation system to quote them. The initial purchasers have advised us that they intend to make a market for the new notes, but they are not obligated to do so. The initial purchasers may discontinue any market making in the new notes at any time in their sole discretion. Accordingly, we cannot assure you that a liquid market for the new notes will develop or be maintained.

You should refer to "Risk Factors" for an explanation of certain risks of investing in the new notes.

Summary Consolidated Financial and Operating Data and
Pro Forma Combined Financial Information

The following tables present financial information derived from our consolidated financial statements. Our consolidated financial statements included in this prospectus are comprised of balance sheets as at December 31, 2002 and 2003 and the statements of operations, shareholder's equity and cash flows for each of the years in the three-year period ended December 31, 2003 and have been audited by KPMG LLP, independent chartered accountants. KPMG LLP's report on these audited consolidated financial statements is included in this prospectus. The consolidated balance sheet data as at December 31, 2001 have been derived from the audited consolidated balance sheet not included in this prospectus. The financial information for the nine months ended September 30, 2003 and 2004 are derived from our unaudited interim consolidated financial statements for such periods included in this prospectus. In the opinion of management, our unaudited interim consolidated financial statements for the nine months ended September 30, 2003 and 2004 include all adjustments (consisting solely of normal recurring adjustments) necessary to present fairly the financial results for such periods. Interim results are not necessarily indicative of the results, which may be expected for any other interim period or for a full year. Our unaudited pro forma combined financial data presented below are derived from our unaudited pro forma combined financial statements included elsewhere in this prospectus. Our unaudited pro forma combined statements of operations included in this prospectus give effect to the reorganization described under "Summary — Reorganization" as if it had occurred on January 1, 2001, and our unaudited pro forma combined balance sheet included in this prospectus gives effect to this reorganization as if it had occurred on September 30, 2004. Our unaudited pro forma combined financial statements are based on our historical consolidated financial statements included in this prospectus and the historical financial statements of Videotron Telecom; Videotron Telecom's audited financial statements for the years ended December 31, 2002 and 2003 and unaudited interim financial statements as at and for the nine months ended September 30, 2003 and 2004 are included in this prospectus. Our unaudited pro forma combined financial statements purport neither to represent what our results of operations or financial position would have been had this reorganization in fact occurred on January 1, 2001 or September 30, 2004 nor to project our results of operations or financial position for any future period or date. The pro forma adjustments eliminate significant transactions and balances between us and Videotron Telecom. The information presented below the caption "Operating Data" is not derived from our consolidated financial statements. The information presented below the captions "Other Financial Data and Ratios" and "Other Financial Data and Ratio" is unaudited except for cash flows and capital expenditures for the years ended December 31, 2001, 2002 and 2003. All information contained in the following tables should be read in conjunction with, and is qualified in its entirety by reference to, all our consolidated financial statements and the related notes included in this prospectus and the section entitled "Management's Discussion and Analysis of Financial Condition and Results of Operations." Our financial statements and our unaudited pro forma combined financial information have been prepared in accordance with Canadian GAAP. For a discussion of the principal differences between Canadian GAAP and U.S. GAAP, see note 22 to our audited consolidated financial statements for the years ended December 31, 2001, 2002 and 2003, note 8 to our unaudited consolidated financial statements for the nine months ended September 30, 2003 and 2004 and note (b) to our unaudited pro forma combined financial information included in this prospectus.

												Pro Forma Combined(17)									Pro Forma Combined(17)
															Nine Months Ended September 30,
			Year Ended December 31,
			Year Ended December 31,									Year Ended December 31, 2003									Nine Months Ended September 30, 2004
			2001			2002			2003			Year Ended December 31, 2003			2003			2004			Nine Months Ended September 30, 2004
			(restated)(1)			(restated)(1)									(restated)(1)
												(unaudited)			(unaudited)						(unaudited)
			(dollars in thousands, except for ARPU)
Statement of Operations Data:
Operating revenues:
	Cable television		$	607,942		$	579,200		$	558,887		$	558,887		$	418,383		$	428,542		$	428,542
	Internet access			99,629			135,514			183,268			183,268			133,033			162,603			162,603
	Telecommunications			—			—			—			55,663			—			—			46,765
	Video stores			35,155			35,344			38,450			38,450			28,267			32,590			32,590
	Other(1)			22,728			30,982			24,396			24,396			16,123			16,652			16,652

		Total operating revenues		765,454			781,040			805,001			860,664			595,806			640,387			687,152

Direct cost(1)				227,322			259,686			245,967			244,715			182,847			182,651			185,569
Operating, general and administrative expenses(1)				274,202			285,816			283,784			323,378			212,679			204,235			236,674
Depreciation and amortization(1)				116,692			120,016			122,958			158,824			87,326			94,797			119,981
Financial expenses				101,307			76,188			64,602			63,179			34,361			133,339			133,299
Dividend income from parent company				—			—			—						—			(85,626	)		(85,626	)
Other items(2)				95,570			25,000			(2,500	)		(8	)		(2,500	)		—			1,700
Income taxes(1)				(10,076	)		2,663			26,830			21,388			24,156			10,211			5,735
Non-controlling interest in a subsidiary				145			188			49			49			46			79			79
Amortization of goodwill(3)				13,331			—			—			—			—			—			—

Net income (loss)(1)(3)			$	(53,039	)	$	11,483		$	63,311		$	49,139		$	56,891		$	100,701		$	89,741

Balance Sheet Data (at period end):
Cash and cash equivalents			$	80,935		$	16,041		$	28,329					$	816		$	25,747		$	25,913
Total assets(1)(5)				1,728,715			1,570,463			1,525,605						1,490,167			2,608,272			2,881,779
Long-term debt, excluding QMI subordinated loans(4)(5)				1,310,179			1,119,625			886,677						884,108			834,368			934,700	(10)
QMI subordinated loans(5)				—			—			150,000						150,000			1,250,000			1,250,000
Common shares(4)				1			1			173,326						31,311			173,236			333,593
Shareholder's equity(4)				(328,673	)		(345,189	)		70,817						44,182			89,767			332,361
Other Financial Data and Ratios:
EBITDA(1)(6)			$	168,215		$	210,350		$	277,701		$	292,530		$	202,734		$	339,048		$	348,756
EBITDA margin(1)(6)				22.0	%		26.9	%		34.5	%		34.0	%		34.0	%		52.9	%		50.8	%
Cash flows from operating activities			$	208,005		$	195,934		$	194,078					$	64,858		$	189,565
Cash flows used in investing activities				(135,305	)		(91,878	)		(110,802	)					(53,922	)		(1,179,785	)
Cash flows from (used in) financing activities				5,327			(159,372	)		(72,094	)					(31,870	)		977,620
Capital expenditures(7)				133,319			93,041			90,284						55,398			96,434
Cash interest expense(8)				85,529			76,416			65,098						49,137			44,061
Ratio of long-term debt, excluding QMI subordinated loans, to EBITDA(1)(4)(5)(6)(9)				7.8x			5.3x			3.2x						3.3x			1.8x			2.0x	(10)
Ratio of EBITDA to cash interest expense(1)(6)(8)				2.0x			2.8x			4.3x						4.1x			7.7x
Ratio of earnings to fixed charges(11)				0.3x			1.2x			2.0x						2.4x			3.4x
Operating Data (unaudited):
Homes passed(12)				2,330,648			2,329,023			2,351,344						2,344,149			2,374,668
Basic customers(13)				1,519,172			1,440,184			1,433,260						1,422,965			1,450,547
Basic penetration(14)				65.2	%		61.8	%		61.0	%					60.7	%		61.1	%
Digital customers				114,634			171,625			240,863						214,372			308,954
Digital penetration(15)				7.5	%		11.9	%		16.8	%					15.1	%		21.3	%
High-speed Internet customers				228,328			305,054			406,277						378,525			476,182
High-speed Internet penetration(14)				9.8	%		13.1	%		17.3	%					16.1	%		20.1	%
ARPU(16)			$	38.33		$	40.45		$	43.40					$	43.01		$	45.73

			Year Ended December 31,						Nine Months Ended September 30,
			2002			2003			2003			2004
			(restated)(1)						(restated)(1)
									(unaudited)
			(dollars in thousands)
AMOUNTS UNDER U.S. GAAP
Statement of Operations Data:
Operating revenues:
	Cable television		$	579,200		$	558,887		$	418,383		$	434,650
	Internet access			135,514			183,268			133,033			163,950
	Video stores			35,344			38,450			28,267			32,590
	Other(1)			30,982			24,396			16,123			16,652

		Total operating revenues		781,040			805,001			595,806			647,842

Direct cost(1)				259,044			245,967			182,847			182,651
Operating, general and administrative expenses(1)				285,952			280,804			210,435			211,849
Depreciation and amortization(1)				137,687			133,003			95,231			104,013
Financial expenses				72,850			62,424			24,947			121,965
Dividend income from parent company				—			—			—			(85,626	)
Other items(2)				606			—			—			—
Income taxes(1)				5,166			24,079			21,862			6,717
Non-controlling interest in a subsidiary				188			49			46			79
Impairment of goodwill(3)				2,004,000			—			—			—

Net income (loss)(1)(3)			$	(1,984,453	)	$	58,675		$	60,438		$	106,194

Balance Sheet Data (at period end):
Cash and cash equivalents			$	16,041		$	28,329		$	816		$	25,747
Total assets(1)				3,956,549			3,899,915			3,883,831			4,965,952
Long-term debt, excluding QMI subordinated loans(4)(5)				1,119,625			888,017			884,108			830,253
QMI subordinated loans(5)				—			150,000			150,000			1,250,000
Common shares(4)				1			173,236			31,311			173,236
Shareholder's equity(4)				1,963,438			2,373,352			2,356,355			2,395,255
Other Financial Data and Ratio:
EBITDA(1)(6)			$	235,250		$	278,181		$	202,478		$	338,889
EBITDA margin(1)(6)				30.1	%		34.6	%		34.0	%		52.3	%
Cash flows from operating activities			$	189,617		$	193,878		$	64,716		$	189,406
Cash flows used in investing activities				(85,561	)		(110,602	)		(53,780	)		(1,179,626	)
Cash flows from (used in) financing activities				(159,372	)		(72,094	)		(31,870	)		977,620
Capital expenditures(7)				92,414			90,284			55,398			96,434
Ratio of earnings to fixed charges(11)				—			1.9x			2.8x			4.2x

(1): During the fourth quarter ended December 31, 2003, we revised our accounting policies in accordance with Canadian Institute of Chartered Accountants Handbook Section 1100,Generally Accepted Accounting Principles. This new accounting policy requires, among other things, that we expense, as they are incurred, the costs related to equipment subsidies granted to our customers, as well as customer reconnection costs. This change in our accounting policies has been applied retroactively, and the amounts presented for the prior periods have been restated for this change. Because this new accounting policy with respect to equipment subsidies and customer reconnection costs is consistent with the applicable existing accounting policy under U.S. GAAP, the retroactive application of this change will not affect the amounts presented for prior periods under U.S. GAAP.
(2): Following the acquisition of us by Quebecor Media in 2000, our former employees exercised in-the-money options and we introduced a restructuring program in 2001. In 2001, our residential Internet protocol telephony project was suspended, and other items for the year ended December 31, 2001 consisted primarily of the write-off of fixed assets and deferred charges related to that project. In 2002, in connection with the renegotiation of two of our collective bargaining agreements, we put in place a second restructuring initiative resulting in a reduction of 300 employees, and other items consisted primarily of severance costs relating to this restructuring. Because the final severance costs relating to this restructuring were lower than estimated, the difference between the final severance costs and the estimated severance costs was reversed in 2003 and increased our net income in 2003 by approximately $2.5 million.
(3): Effective January 1, 2002, we implemented Canadian Institute of Chartered Accountants Handbook Section 3062,Goodwill and Other Intangible Assets and its US equivalent,FAS 142. The new standards require that goodwill and intangible assets with indefinite lives no longer be amortized, but instead be tested for impairment at least annually. At January 1, 2002, we had unamortized goodwill in the amount of $432.3 million under Canadian GAAP and $4,666.9 million under U.S. GAAP, which is no longer being amortized. This change in accounting policy is not applied retroactively and the amounts presented for the prior periods have not been restated for this change. If

this change in accounting policy were applied to the reported combined statements of operations for the prior periods, the impact of the change, in respect of goodwill and intangible assets with indefinite useful lives not being amortized, would be as follows:

	Year Ended December 31,
	2001
	(restated)
	(dollars in thousands)
Net loss	$	(53,039	)
Goodwill amortization		13,331

Net loss before goodwill amortization	$	(39,708	)

(4): Long-term debt, excluding QMI subordinated loans, for us means long-term debt and a promissory note payable to a company under common control less the QMI subordinated loans, and it does not include the retractable preferred shares held by Quebecor Media. The retraction price of the retractable preferred shares was $300.0 million as of December 31, 2001 and $332.5 million as of December 31, 2002. During the year ended December 31, 2003, $332.5 million of the retractable preferred shares were converted into our common shares. The excess of the retraction price of the preferred shares over the stated capital converted into common shares was credited to our contributed surplus account in an amount of $301.2 million. The outstanding amount of retractable preferred shares as of December 31, 2003 was $2.0 million. See the reconciliation of long-term debt, excluding QMI subordinated loans, to long-term debt in note 6 under "Selected Consolidated Financial and Operating Data."
(5): The term "QMI subordinated loans" refers to the $150.0 million subordinated loan due 2015 we entered into in favor of Quebecor Media and the $1.1 billion subordinated loan due 2019 our subsidiary Vidéotron (1998) ltée, which is a guarantor of the notes, entered into on January 16, 2004 in favor of Quebecor Media. Interest on the $150.0 million subordinated loan throughout its term is payable in cash at our option. The QMI subordinated loans have been excluded from long-term debt because, under the terms of the notes, all payments on the $150.0 million subordinated loan are restricted payments treated in the same manner as dividends on our common shares, and the proceeds of our $1.1 billion subordinated loan were invested in retractable preferred shares of Quebecor Media as part of a back-to-back transaction to reduce our income tax obligations. On December 16, 2004, Quebecor Media redeemed its $1.1 billion of retractable preferred shares, and we used the proceeds to repay our $1.1 billion subordinated loan. The QMI subordinated loans are reflected as long-term debt on our consolidated balance sheet. As at September 30, 2004, our total long-term debt was $2,084.4 million. See "Description of Certain Indebtedness — Indebtedness to Quebecor Media" and "Management's Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — Purchase of Shares of Quebecor Media and Service of Subsidiary Subordinated Loan."
(6): EBITDA for us means net income (loss) before depreciation and amortization, financial expenses, income taxes and goodwill amortization. EBITDA as defined above is not a measure of results that is consistent with Canadian or U.S. GAAP. It is not intended to be regarded as an alternative to other financial operating performance measures or to the statement of cash flows as a measure of liquidity. It is not intended to represent funds available for debt service, dividends, reinvestment or other discretionary uses, and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with generally accepted accounting principles. EBITDA is included in this prospectus because we believe it is a meaningful measure of our performance. EBITDA is commonly used by the investment community to analyze and compare the performance of companies in the industries in which we are engaged. Our definition of EBITDA may not be identical to similarly titled measures reported by other companies. EBITDA margin is EBITDA as a percentage of operating revenues. See the reconciliation of EBITDA to net income (loss) in note 7 under "Selected Consolidated Financial and Operating Data."
(7): Capital expenditures is comprised of acquisition of fixed assets.
(8): Cash interest expense for us means financial expenses less interest income, loss on foreign denominated debt, amortization of debt premium, write-off and amortization of deferred financing costs and interest on the QMI subordinated loans plus interest capitalized to fixed assets. We use cash interest expense in this prospectus because we believe it is a meaningful measure of the amount of our cash obligations from indebtedness from the perspective of a holder of the notes. We exclude interest on the $150.0 million QMI subordinated loan from this measure because cash payments of this loan will be deferred until the maturity of this loan, and we exclude interest on the $1.1 billion QMI subordinated loan from this measure because this loan is part of a back-to-back transaction to reduce our income tax obligations. See "Management's Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — Purchase of Shares of Quebecor Media and Service of Subsidiary Subordinated Loan." Cash interest expense is not intended to be a measure that should be regarded as an alternative to other financial reporting measures, and it should not be considered in isolation as a substitute for measures prepared in accordance with Canadian GAAP or U.S. GAAP. See the reconciliation of cash interest expense to financial expenses in note 9 under "Selected Consolidated Financial and Operating Data."
(9): The ratios of long-term debt, excluding QMI subordinated loans, to EBITDA for the nine months ended September 30, 2003 and 2004 are based on annualized EBITDA for the nine months ended September 30, 2003 and 2004, respectively.
(10): The pro forma combined long-term debt, excluding QMI subordinated loans, and the pro forma combined ratio of long-term debt, excluding QMI subordinated loans, to EBITDA for the nine months ended September 30, 2004 are based on the long-term debt, excluding QMI subordinated loans, after giving effect to this offering and the application of the net proceeds from the offering of the old notes as described under "Use of Proceeds" as if they had occurred on September 30, 2004 and the annualized EBITDA for the nine months ended September 30, 2004 after giving effect to the integration of the operations of Videotron Telecom with our operations as described under "Summary — Reorganization" as if it had occurred on January 1, 2004. See "Capitalization."
(11): For the purpose of calculating the ratio of earnings to fixed charges, (i) earnings consist of net income (loss) plus non-controlling interest in subsidiary, income taxes, fixed charges, amortized capitalized interest, less interest capitalized and (ii) fixed charges consist of interest

expensed and capitalized, plus amortized premiums, discounts and capitalized expenses relating to indebtedness and an estimate of the interest within rental expense. For the years ended December 31, 2000 and 2001, earnings as calculated under Canadian GAAP, were inadequate to cover our fixed charges, and the coverage deficiency was $66.8 million and $63.0 million, respectively. For the year ended December 31, 2002, earnings, as calculated under U.S. GAAP, were inadequate to cover our fixed charges, and the coverage deficiency was $1,978.5 million. For the ratios of earnings to fixed charges for the year ended August 31, 1999, the four months ended December 31, 1999 and the year ended December 31, 2000, see "Selected Consolidated Financial and Operating Data."

(12): "Homes passed" means the number of residential premises, such as single dwelling units or multiple dwelling units, and commercial premises passed by the cable television distribution network in a given cable system service area in which the programming services are offered.
(13): Basic customers are customers who receive basic cable television service in either the analog or digital mode.
(14): Represents customers as a percentage of total homes passed.
(15): Represents customers as a percentage of basic customers.
(16): Average monthly revenue per user, or ARPU, is an industry term that we use to measure our average cable and Internet revenue per month per basic cable customer. ARPU is not a measurement under Canadian GAAP or U.S. GAAP, and our definition and calculation of ARPU may not be the same as identically titled measures reported by other companies. We calculate ARPU by dividing our combined cable television and Internet-access revenues for the applicable nine-month or twelve-month period by the average number of our basic cable customers during the applicable period, and then dividing the resulting amount by the number of months in the applicable period.
(17): The pro forma combined statement of operations data give effect to the reorganization described under "Summary — Reorganization" as if it had occurred on January 1, 2001, and the pro forma combined balance sheet data give effect to this reorganization as if it had occurred on September 30, 2004.

RISK FACTORS

An investment in the new notes involves risks. You should consider carefully the risks described below as well as the other information appearing elsewhere in this prospectus before you decide to invest in the new notes.

Risks Relating to the Notes

If you do not properly tender your old notes, you will not receive new notes in the exchange offer, and you may not be able to sell your old notes.

We registered the new notes, but not the old notes, under the Securities Act. We will only issue new notes in exchange for old notes that are timely received by the exchange agent, together with all required documents, including a properly completed and duly signed letter of transmittal. Therefore, you should allow sufficient time to ensure timely delivery of the old notes, and you should carefully follow the instructions on how to tender your old notes.

Neither we nor the exchange agent is required to tell you of any defects or irregularities with respect to your tender of the old notes. If you do not tender your old notes or if we do not accept your old notes because you did not tender your old notes properly, then, after we consummate the exchange offer, you will continue to hold old notes that are subject to the existing transfer restrictions. In general, you may not offer or sell the old notes unless they are registered under the Securities Act or offered or sold in a transaction exempt from, or not subject to, the registration requirements of the Securities Act and applicable state securities laws.

Although we may in the future seek to acquire unexchanged old notes in open market or privately negotiated transactions, through subsequent exchange offers or otherwise, we have no present plans to acquire any unexchanged old notes or to file with the SEC a shelf registration statement to permit resales of any unexchanged old notes. In addition, holders who do not tender their old notes, except for initial purchasers or holders of old notes who are prohibited by applicable law or SEC policy from participating in the exchange offer or may not resell the new notes acquired in the exchange offer without delivering a prospectus and this prospectus is not appropriate or available for such resales by such holders, will not have any further registration rights and will not have the right to receive special interest on their old notes.

The market for the old notes may be significantly more limited after the exchange offer.

Because we anticipate that most holders of old notes will elect to exchange their old notes, we expect that the liquidity of the market for any old notes remaining after the completion of the exchange offer may be substantially limited. Any old notes tendered and exchanged in the exchange offer will reduce the aggregate principal amount of the old notes outstanding. Accordingly, the liquidity of the market for any old notes could be adversely affected and you may be unable to sell them. The extent of the market for the old notes and the availability of price quotations would depend on a number of factors, including the number of holders of old notes remaining outstanding and the interest of securities firms in maintaining a market in the old notes. An issue of securities with a smaller number of units available for trading may command a lower, and more volatile, price than would a comparable issue of securities with a larger number of units available for trading. Therefore, the market price for the old notes that are not exchanged may be lower and more volatile as a result of the reduction in the aggregate principal amount of the old notes outstanding.

Our substantial indebtedness and significant interest payment requirements could adversely affect our financial condition and prevent us from fulfilling our obligations under the notes.

We have a substantial amount of indebtedness, which could have significant consequences, including the following:

•: make it more difficult for us to satisfy our obligations with respect to the notes;
•: increase our vulnerability to general adverse economic and industry conditions;

•: require us to dedicate a substantial portion of our cash flow from operations to make interest and principal payments on our indebtedness, reducing the availability of our cash flow to fund capital expenditures, working capital and other general corporate purposes;
•: limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate;
•: place us at a competitive disadvantage compared to our competitors that have less debt; and
•: limit our ability to borrow additional funds on commercially reasonable terms, if at all.

We will need a significant amount of cash to service our debt. Our ability to generate cash depends on many factors beyond our control.

Our ability to meet our debt service requirements, including those with respect to the notes, will depend on our ability to generate cash in the future. Our ability to generate cash depends on many factors beyond our control, such as competition and general economic conditions. In addition, our ability to borrow funds in the future to make payments on our debt will depend on our satisfaction of the covenants in our credit facilities and our other debt agreements, including the indenture governing the notes, and other agreements that we may enter into in the future. We cannot assure you that we will generate sufficient cash flow from operations or that future distributions will be available to us in amounts sufficient to pay our indebtedness, including the notes, or to fund our other liquidity needs. If we are unable to generate sufficient cash flow to meet our debt service requirements, we may have to renegotiate the terms of our debt or obtain additional financing. We cannot assure you that we will be able to refinance any of our debt, including our credit facilities or the notes, or obtain additional financing on commercially reasonable terms, if at all.

Restrictive covenants in our outstanding debt instruments may reduce our operating and financial flexibility, which may prevent us from capitalizing on business opportunities.

The terms of our credit facilities and the indenture governing the notes contain a number of operating and financial covenants restricting our ability to, among other things:

•: incur additional debt, including guarantees by our restricted subsidiaries;
•: pay dividends and make restricted payments;
•: create liens;
•: use the proceeds from sales of assets and subsidiary stock;
•: create or permit restrictions on the ability of our restricted subsidiaries to pay dividends or make other distributions to us;
•: enter into transactions with affiliates;
•: enter into sale and leaseback transactions; and
•: consolidate or merge or sell all or substantially all of our assets.

In addition, our ability to comply with covenants contained in the indenture, our credit facilities and the agreements governing other debt to which we are or may become a party may be affected by events beyond our control, including prevailing economic, financial and industry conditions. Our failure to comply with these covenants could result in an event of default which, if not cured or waived, could result in an acceleration of our debt and cross-defaults under our other debt. This could require us to repay or repurchase debt prior to the date it would otherwise be due, which could adversely affect our financial condition. Acceleration of any debt outstanding under our credit facilities or any of our other debt could prevent us from making interest and principal payments on the notes. Even if we are able to comply with all applicable covenants, the restrictions on our ability to manage our business in our sole discretion could adversely affect our business by, among other things, limiting our ability to take advantage of financings, mergers, acquisitions and other corporate opportunities that we believe would be beneficial to us.

Although these notes are referred to as "senior notes," they will be effectively subordinated to our and the guarantors' secured indebtedness.

Like the existing notes and the old notes, and each guarantee of the existing notes and the old notes, the new notes, and each guarantee of the new notes, will be unsecured and therefore are effectively subordinated to any secured indebtedness that we, or the relevant guarantor, may incur to the extent of the assets securing such indebtedness. In the event of a bankruptcy or similar proceeding involving us or a guarantor, the assets that serve as collateral for any secured indebtedness will be available to satisfy the obligations under the secured indebtedness before any payments are made on the notes. After giving effect to the completion of the offering of the old notes and the application of the net proceeds from this offering as described under "Use of Proceeds," as of September 30, 2004, we would have had $2,184.7 million of debt outstanding, $97.1 million of which would have been senior secured debt. The existing notes and the old notes are, and the new notes will be, effectively subordinated to any borrowings under our credit facilities. See "Description of Certain Indebtedness."

Not all of our subsidiaries guarantee our obligations under the notes, and the assets of our subsidiaries that do not guarantee the notes may not be available to make payments on the notes.

The guarantors of the notes do not include all of our subsidiaries. Payments on the notes are only required to be made by us and the guarantors. As a result, no payments are required to be made from assets of subsidiaries that do not guarantee the notes, unless those assets are transferred by dividend or otherwise to us or a guarantor. Initially, neither our wholly owned subsidiary CF Cable, nor its wholly owned subsidiary, Videotron Regional, will guarantee the notes until the termination of the indenture governing the CF Cable notes. Until CF Cable and Videotron Regional guarantee the notes, the notes will rank effectively behind the liabilities of CF Cable and Videotron Regional, including the CF Cable notes. This means that CF Cable and its subsidiaries must pay their creditors, including the holders of the CF Cable notes, in full before their assets are available to us to pay you. As of September 30, 2004, the aggregate amount of liabilities (including the CF Cable notes and trade payables but excluding inter-company liabilities) of CF Cable and its subsidiaries was $179.9 million.

In the event of a bankruptcy, liquidation or reorganization of any of the subsidiaries that do not guarantee the notes, holders of their liabilities, including their trade creditors, will be entitled to payment of their claims from the assets of those subsidiaries before any assets of these subsidiaries are made available for distribution on us. As a result, the existing notes and the old notes are, and the new notes will be, effectively subordinated to all debt and other liabilities of the subsidiaries that do not guarantee the notes. As of September 30, 2004, the total liabilities of those of our subsidiaries that do not guarantee the notes, excluding inter-company liabilities, were $180.3 million.

We may still be able to incur substantially more debt, which could increase the risks described above.

The terms of our credit facilities and the indenture governing the notes do not fully prohibit us or our subsidiaries from incurring additional debt. After giving effect to the completion of the offering of the old notes and the amendment of our credit facilities and the application of the net proceeds from this offering as described under "Use of Proceeds," as of September 30, 2004, we would have had $450 million available for additional borrowings under our credit facilities. We may be able to incur substantial additional debt in the future. If we do so, the risks described above could be greater.

We depend, to a certain extent, on our subsidiaries for cash needed to service our obligations under our indebtedness, including the notes.

For the year ended December 31, 2003, our subsidiaries generated approximately 49% of our revenues (before inter-company eliminations) and held approximately 48% of our consolidated total assets. We need the cash generated by our subsidiaries from their operations and their borrowings to service our obligations, including the notes. Our subsidiaries are not obligated to make funds available to us.

Our subsidiaries' ability to make payments to us will depend upon their operating results and will also be subject to applicable laws and contractual restrictions. For example, the terms of the indenture governing the CF Cable notes contain a number of operating and financial covenants that restrict CF Cable's ability to, among other things, pay dividends and make restricted payments to us. In addition, some of our subsidiaries may, in the future, become subject to loan agreements and indentures that restrict sales of assets and prohibit or significantly restrict

the payment of dividends or the making of distributions, loans or advances to shareholders and partners. The indenture governing the notes permits our subsidiaries to incur debt with similar prohibitions and restrictions.

We may not be able to finance a change of control offer required by the indenture because we may not have sufficient funds at the time of the change of control or our credit facilities may not allow the repurchases.

If we were to experience a change of control (as defined under the indenture governing our notes), we would be required to make an offer to purchase all of the notes then outstanding at 101.0% of the principal mount plus accrued and unpaid interest, if any, to the date of purchase. However, we may not have sufficient funds at the time of the change of control to make the required repurchase of the notes.

In addition, under our credit facilities, a change of control would be an event of default. Any future credit agreement or other agreements relating to our senior indebtedness to which we become a party may contain similar provisions. Our failure to purchase the notes upon a change of control under the indenture would constitute an event of default under the indenture. This default would in turn constitute an event of default under our credit facilities and may constitute an event of default under future senior indebtedness, any of which may cause the related debt to be accelerated after the expiry of any applicable notice or grace periods. If debt were to be accelerated, we may not have sufficient funds to repurchase the notes and repay the debt.

Canadian bankruptcy and insolvency laws may impair the trustee's ability to enforce remedies under the notes.

The rights of the trustee who represents the holders of the notes to enforce remedies could be delayed by the restructuring provisions of applicable Canadian federal bankruptcy, insolvency and other restructuring legislation if the benefit of such legislation is sought with respect to us. For example, both theBankruptcy and Insolvency Act (Canada) and theCompanies' Creditors Arrangement Act (Canada) contain provisions enabling an insolvent person to obtain a stay of proceedings against its creditors and to file a proposal to be voted on by the various classes of its affected creditors. A restructuring proposal, if accepted by the requisite majorities of each affected class of creditors, and if approved by the relevant Canadian court, would be binding on all creditors within each affected class, including those creditors that did not vote to accept the proposal. Moreover, this legislation, in certain instances, permits the insolvent debtor to retain possession and administration of its property, subject to court oversight, even though it may be in default under the applicable debt instrument, during the period that the stay against proceedings remains in place.

The powers of the court under theBankruptcy and Insolvency Act (Canada) and particularly under theCompanies' Creditors Arrangement Act (Canada) have been interpreted and exercised broadly so as to protect a restructuring entity from actions taken by creditors and other parties. Accordingly, we cannot predict whether payments under the notes would be made during any proceedings in bankruptcy, insolvency or other restructuring, whether or when the trustee could exercise its rights under the indenture governing the notes or whether and to what extent holders of the notes would be compensated for any delays in payment, if any, of principal, interest and costs, including the fees and disbursements of the trustee.

An active trading market for the new notes may not develop or be maintained.

The existing notes are not listed on a national securities exchange, and we do not intend to have the existing notes and the new notes listed on a national securities exchange. We have been informed by the initial purchasers that they currently intend to make a market in the new notes. However, they are under no obligation to do so, and, if they do make a market in the new notes, they may cease their market-making at any time without notice. Accordingly, we cannot assure you of the liquidity of the market for the new notes or the prices at which you may be able to sell the new notes.

In addition, the market for non-investment grade debt has historically been subject to disruptions that caused volatility in prices. It is possible that the market for the new notes will be subject to disruptions. Any such disruptions may have a negative effect on your ability to sell the new notes regardless of our prospects and financial performance.

Non-U.S. holders of the notes are subject to restrictions on the resale of notes.

We sold the old notes in reliance on exemptions from applicable Canadian provincial securities laws and the laws of other jurisdictions where the old notes were offered and sold, and therefore the old notes may be transferred and resold only in compliance with the laws of those jurisdictions to the extent applicable to the transaction, the transferor and/or the transferee. Although we registered the new notes under the Securities Act, we did not, and we do not intend to, qualify the new notes by prospectus in Canada, and, accordingly, the new notes will remain subject to restrictions on resale in Canada. In addition, non-U.S. holders will remain subject to restrictions imposed by the jurisdiction in which the holder is resident. See "The Exchange Offer — Resale of the New Notes" and "Notice to Canadian Investors."

Applicable statutes allow courts, under specific circumstances, to void the guarantees of the notes provided by certain of our subsidiaries.

Our creditors or the creditors of one or more guarantors of the notes could challenge the guarantees as fraudulent transfers, conveyances or preferences or on other grounds under applicable U.S. federal or state law or applicable Canadian federal or provincial law. While the relevant laws vary from one jurisdiction to another, the entering into of the guarantees by certain of our subsidiaries could be found to be a fraudulent transfer, conveyance or preference or otherwise void if a court were to determine that:

•: a guarantor delivered its guarantee with the intent to defeat, hinder, delay or defraud its existing or future creditors;
•: the guarantor did not receive fair consideration for the delivery of the guarantee; or
•: the guarantor was insolvent at the time it delivered the guarantee.

To the extent a court voids a guarantee as a fraudulent transfer, preference or conveyance or holds it unenforceable for any other reason, holders of notes would cease to have any direct claim against the guarantor that delivered a guarantee. If a court were to take this action, the guarantor's assets would be applied first to satisfy the guarantor's liabilities, including trade payables and preferred stock claims, if any, before any portion of its assets could be distributed to us to be applied to the payment of the notes. We cannot assure you that a guarantor's remaining assets would be sufficient to satisfy the claims of the holders of notes relating to any voided portions of the guarantees.

In addition, the corporate statutes governing the guarantors of the notes may also have provisions that serve to protect each guarantor's creditors from impairment of its capital from financial assistance given to its corporate insiders where there are reasonable grounds to believe that, as a consequence of this financial assistance, the guarantor would be insolvent or the book value, or in some cases the realizable value, of its assets would be less than the sum of its liabilities and its issued and paid-up share capital. While the applicable corporate laws may not prohibit financial assistance transactions and a corporation is generally permitted flexibility in its financial dealings, the applicable corporate laws may place restrictions on each guarantor's ability to give financial assistance in certain circumstances.

U.S. investors in the notes may have difficulties enforcing civil liabilities.

We are governed by the laws of the Province of Québec. Moreover, substantially all of our directors, controlling persons and officers are residents of Canada or other jurisdictions outside of the United States and a substantial portion of our assets and their assets are located outside of the United States. As a result, it may be difficult for holders of notes to effect service of process upon us or such persons within the United States or to enforce against us or them in the United States, judgments of courts of the United States predicated upon the civil liability provisions of the U.S. federal or state securities laws or other laws of the United States. In addition, there is doubt as to the enforceability in Canada of liabilities predicated solely upon U.S. federal or state securities law against us and our directors, controlling persons and officers who are not residents of the United States, in original actions or in actions for enforcement of judgments of U.S. courts.

Risks Relating to Our Business

We may not successfully implement our business and operating strategies.

Our business and operating strategies include maximizing customer satisfaction, launching and deploying additional value-added products and services, maintaining our advanced broadband network, reducing costs and improving operating efficiency, and further integrating our operations within the Quebecor Media group of companies. We may not be able to fully implement these strategies or realize their anticipated results. Implementation of these strategies could also be affected by a number of factors, some of which are beyond our control, such as operating difficulties, increased operating costs or capital expenditures, regulatory developments, general or local economic conditions or increased competition. Any material failure to implement our strategies could have a material adverse effect on our business, financial condition and operating results and on our ability to meet our obligations, including our ability to service our indebtedness.

We operate in highly competitive industries.

In our cable operations, we compete against direct broadcast satellite, or DBS, providers, multi-channel multipoint distribution systems, or MDS, satellite master antenna television systems and over-air television broadcasters. In addition, we will soon compete against incumbent local exchange carriers, which are in the process of securing licenses to launch video distribution services using video digital subscriber line, or VDSL, technology. We also face competition from illegal providers of cable television services and illegal access to foreign DBS and pirate systems that enable customers to access programming services from U.S. and Canadian DBS without paying any fee. In our Internet access business, we compete against other Internet service providers offering residential and commercial Internet access services. Recent decisions of the CRTC also require us to offer access to our high speed Internet system to competitive Internet service providers. Competitors in the video rental industry include other video stores, video-on-demand services, television and other alternative entertainment media. In addition, depending on the final regulatory framework set by the CRTC, our planned telephony service will have numerous competitors, including incumbent local exchange carriers, competitive local exchange carriers, wireless telephone service operators and other providers of Voice over IP telephony services, and possibly including competitors that are not facilities-based and therefore have a much lower infrastructure cost. We cannot assure you that our existing and future competitors will not pursue or be capable of achieving business strategies similar to or competitive with ours. Some of our competitors have greater financial and other resources than we do. We may not be able to compete successfully in the future against existing or potential competitors, and increased competition could have a material adverse effect on our business, financial condition or results of operations.

We compete, and will continue to compete, with alternative technologies, and we may be required to invest a significant amount of capital to address continued technological development.

The cable and Internet access industries are experiencing rapid and significant technological changes, which may result in alternative means of transmission and which could have a material adverse effect on our business, financial condition or results of operations. Further, industry regulators have authorized direct-to-home satellite (DTH), microwave services and video digital subscriber line (VDSL) services, and may authorize other alternative methods of transmitting television and other content with improved speed and quality. We may not be able to successfully compete with existing or newly developed alternative technologies or may be required to acquire, develop or integrate new technologies ourselves. The cost of the acquisition, development or implementation of new technologies could be significant and our ability to fund such implementation may be limited and could have a material adverse effect on our ability to successfully compete in the future.

We may not be able to obtain additional capital to continue the development of our business.

Our business has required substantial capital for the upgrade, expansion and maintenance of our network and the launch and expansion of new or additional services. If the demand for capacity increases, or if we decide to introduce new services, such as high definition television, or HDTV, or our new telephony service, which we intend to launch in Québec in the first half of 2005 and depending on the evolution of our product and service offerings, we may need to make unplanned additional capital expenditures. We may not be able to obtain the funds necessary to finance our capital improvement program or any additional capital requirements through internally generated

funds, additional borrowings or other sources. If we are unable to obtain these funds, we would not be able to implement our business strategy and our results of operations would be adversely affected.

Our financial performance will be materially adversely affected if we cannot continue to distribute a wide range of television programming on reasonable terms.

The financial performance of our cable service business depends in large part on our ability to distribute a wide range of appealing, conveniently-scheduled television programming at reasonable rates. We obtain television programming from suppliers pursuant to programming contracts. We cannot assure you that we will be able to maintain key programming contracts or continue to pay reasonable rates for television programming. Loss of programming contracts may have a material adverse effect on our results of operations because the quality and amount of television programming offered by us affect the attractiveness of our services to customers and, accordingly, the prices we can charge. Programming costs represent our single largest expense item, and the cost of television programming may increase in the future. If we cannot pass on such increases, if any, to our customers, then these increased costs may have a material adverse effect on our results of operations.

We depend on third-party suppliers and providers for services and other items critical to our operations.

We depend on third-party suppliers and providers for services and other items that are critical to our operations, including set-top converter boxes, servers and routers, fiber-optic cable, telephone circuits, inter-city links, support structures, software, the "backbone" telecommunications network for our Internet access service and construction services for expansion and upgrades of our network. These services and items are available from a limited number of suppliers. If no supplier can provide us with set-top converter boxes that comply with evolving Internet and telecommunications standards or that are compatible with our other equipment and software, our business, financial condition and results of operations could be materially adversely affected. In addition, if we are unable to obtain critical equipment, software, services or other items on a timely basis and at an acceptable cost, our ability to offer our products and services and roll out our advanced services may be delayed, and our business, financial condition and results of operations could be materially adversely affected.

We are subject to extensive government regulation. Changes in government regulation could adversely affect our business, financial condition or results of operations.

Broadcasting operations are generally subject to extensive government regulation. Regulations govern the issuance, amendment, renewal, transfer, suspension, revocation and ownership of broadcasting programming and distribution licenses. With respect to distribution undertakings, regulations govern, among other matters, the distribution of Canadian and non-Canadian programming services and the maximum fees to be charged to the public in certain circumstances. In Canada, there are significant restrictions on the ability of foreign entities to own or control broadcasting undertakings. See "Business — Regulation — Ownership and Control of Canadian Broadcasting Undertakings."

Our broadcasting distribution and telecommunications (including Internet access service) operations are regulated respectively by theBroadcasting Act (Canada) and theTelecommunications Act (Canada) and regulations thereunder. The Canadian Radio-television and Telecommunications Commission, or the CRTC, which administers theBroadcasting Act (Canada) and theTelecommunications Act (Canada), has the power to grant, amend, suspend, revoke and renew broadcasting distribution licenses, approve certain changes in corporate ownership and control, and make regulations and policies in accordance with theBroadcasting Act (Canada), subject to certain directions from the Federal Cabinet. We are also subject to technical requirements and performance standards for cable television systems under theRadiocommunication Act (Canada) administered by Industry Canada.

Changes to the regulations and policies governing broadcast television, specialty or pay-television services and broadcasting distribution through cable or alternate means, the introduction of new regulations or policies or terms of license, could have a material adverse effect on our business, financial condition or operating results. For example, the Supreme Court of Canada decided in April 2002 that theRadiocommunication Act (Canada) covers and prohibits both the "black market" reception of satellite television signals (i.e., the unauthorized decoding of Canadian and foreign encrypted satellite signals) and the "grey market" reception of satellite television signals (i.e., the reception of foreign signals through subscriptions in Canada to foreign satellite television providers), but

expressly did not rule on the question of the constitutionality of the legislative prohibition against grey market reception. On October 28, 2004, a Québec court of first instance held that the provisions of theRadiocommunication Act (Canada), which prohibited grey market reception of satellite signals, violated the principle of freedom of expression guaranteed by the Canadian Charter of Rights and Freedoms and were therefore invalid. The Québec court suspended its declaration of invalidity for a one-year period starting on the date of the judgment. On November 24, 2004, the Government of Canada filed an inscription of appeal with respect to this decision, which appeal will be argued before and decided by the Superior Court of Québec. For a more complete description of the regulatory environment affecting our business, see "Business — Regulation."

At the present time, through an exemption order, the CRTC does not regulate the content of the Internet or interactive television and does not regulate broadcast distribution via the Internet. However, the CRTC has a policy of reviewing its exemption orders every five to seven years.

While the CRTC has an established framework for regulating facilities-based local telephony competition, a recently concluded proceeding on regulatory issues related to the provision of Voice over IP telephony may bring significant changes to that framework. Depending on the decisions rendered by the CRTC, our local telephony service plans could be substantially altered or even withdrawn.

The CRTC may not renew our existing broadcasting distribution licenses or grant us new licenses, either on acceptable terms or at all.

Our CRTC broadcasting distribution licenses must be renewed from time to time, typically every seven years, and cannot be transferred without regulatory approval. Our inability to renew any of our licenses or acquire new interests or licenses on acceptable terms, or at all, could have a material adverse effect on our business, financial condition or operating results.

We are required to provide third-party Internet service providers with access to our cable systems, which may result in increased competition.

The four largest cable operators in Canada, including Vidéotron, have been required by the CRTC to provide third-party Internet service providers with access to their cable systems at mandated wholesale rates. The CRTC has approved cost-based rates for our third-party Internet access service and has resolved most, if not all, of the technical issues that had been delaying third party interconnection. The CRTC has also required us to file new costs study in order to review the rates that will be charged to third-party Internet service providers and to establish the level of mark-up on costs that is appropriate for third party access services and facilities provided by us. As a result, we expect that interconnection by third party Internet service providers to our cable network will commence in the near future.

Until access through interconnection is provided to third-party Internet service providers to the underlying telecommunications facilities used to provide Internet service, the CRTC requires us and other incumbent cable carriers to allow third-party retail Internet service providers to purchase for the purpose of resale our retail high-speed Internet services at a discount of 25% off the lowest retail Internet service rate charged by such cable carriers to their cable customers during a one-month period.

As a result of these requirements, we may experience increased competition for retail high-speed Internet customers. In addition, because our resale rates are regulated by the CRTC, we could be limited in our ability to recover our costs associated with providing this access.

We may have to support increasing costs in securing access to support structures needed for our network.

We require access to the support structures of hydro-electric and telephone utilities and to municipal rights of way to deploy our cable network. Where access cannot be secured, we may apply to the CRTC to obtain a right of access under theTelecommunications Act (Canada). However, the CRTC's jurisdiction to establish the terms and conditions of access to the support structure of hydro-electric utilities has been challenged in the courts. In a recent decision of the Supreme Court of Canada, it was held that the CRTC does not have the jurisdiction to establish the terms and conditions of access to the support structure of hydro-electric utilities. As a result, our costs of obtaining access to support structures of hydro-electric companies could be substantially increased. Although we are a party

to an agreement for access to the support structures of hydro-electricity utilities in Québec, this agreement expires in December 2005.

We serve our customers through a single clustered network, which may be more vulnerable to widespread disruption.

We provide our cable products and services through a primary headend and eight regional headends in our single clustered network. This characteristic means that a failure in our primary headend could prevent us from delivering some of our products and services throughout our network until we have resolved the failure, which may result in significant customer dissatisfaction.

We are controlled by Quebecor Media.

All of our issued and outstanding common shares are held by Quebecor Media. As a result, Quebecor Media controls our policies and operations. The interests of Quebecor Media, as our sole equity holder, may conflict with the interests of the holders of the notes.

In addition, Quebecor Media has entered into certain transactions, and in the future may enter into other transactions, with us to consolidate tax losses within the Quebecor Media group. As a result of these transactions, we have recognized significant income tax benefits. Quebecor Media may unwind these transactions at any time in its discretion, which unwinding may impact our ability to reduce our income tax obligations. See "Management's Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — Purchase of Shares of Quebecor Media and Service of Subsidiary Subordinated Loan."

Also, Quebecor Media is a holding company with no significant assets other than its equity interests in its subsidiaries. Its principal source of cash needed to pay its own obligations is the cash that its subsidiaries generate from their operations and borrowings. We expect to pay quarterly dividends to Quebecor Media in the future subject to the terms of our indebtedness and applicable law. In addition, actions taken by Quebecor Media and its financial condition, matters over which we have no control, may affect us and the market for the notes. See "Management's Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — Payment of Dividends."

We depend on key personnel.

Our success depends to a large extent upon the continued services of our senior management and our ability to retain skilled employees. There is intense competition for qualified management and skilled employees, and our failure to recruit, retain and train such employees could have a material adverse effect on our business, financial condition or operating results.

We may be adversely affected by strikes and other labor protests.

As of September 30, 2004, approximately 81% of our employees are unionized. We are currently a party to four collective bargaining agreements. As of the date of this prospectus, none of our collective bargaining agreements has expired or is the subject of renewal negotiations. Our collective bargaining agreements (representing approximately 2,018 employees) will expire between December 31, 2006 and August 31, 2008.

We have had significant labor disputes in the past, which have disrupted our operations, resulted in damages to our network and impaired our operating results. In April 2003, we settled an eleven-month labor dispute with 1,700 of our unionized employees. We cannot predict the outcome of any future negotiations relating to the renewal of our collective bargaining agreements, nor can we assure you that we will not experience work stoppages, strikes or other forms of labor protests pending the outcome of any future negotiations. Any strikes or other forms of labor protests in the future could disrupt our operations and have a material impact on our business, financial condition or operating results.

We may be adversely affected by fluctuations of the exchange rate.

Virtually all of our revenue and the majority of our expenses, other than interest payments on U.S. dollar-denominated debt and purchases of set-top converter boxes and cable modems, is received or denominated in

Canadian dollars. As of September 30, 2004, the existing notes issued on October 8, 2003 and the CF Cable notes, and interest, principal and premium, if any, thereon, was denominated in U.S. dollars. As a result, we are exposed to foreign currency exchange risk. We entered into transactions to hedge the exchange rate risk with respect to these existing notes and a portion of the CF Cable notes. However, such hedging transactions may not be successful, such that exchange rate fluctuations may impair our ability to make payments in respect of the existing notes. See "Management's Discussion and Analysis of Financial Condition and Results of Operations — Quantitative and Qualitative Disclosure about Market Risk."

For the purposes of financial reporting, any change in the value of the Canadian dollar against the U.S. dollar during a given financial reporting period would result in a foreign exchange gain or loss on the translation of the CF Cable notes into Canadian dollars. Consequently, our reported earnings and debt could fluctuate materially as a result of foreign exchange gains or losses.

We are subject to environmental regulations.

We are subject to federal, provincial and municipal laws relating to protection of the environment. Our properties, and the areas surrounding our properties, may have had historic uses, or may have current uses, affecting our properties, which require further study or remedial measures. We cannot assure you that all our environmental liabilities have been determined. See "Business — Environment."

USE OF PROCEEDS

We will not receive any cash proceeds from the exchange offer. Because we are exchanging the new notes for the old notes, which have substantially identical terms, the issuance of the new notes will not result in any increase in our indebtedness. The exchange offer is intended to satisfy our obligations under the registration rights agreement. The proceeds from the offering of the old notes, net of commissions and expenses, and excluding accrued interest, were US$325.2 million, or Cdn$387.9 million. The old notes were issued on November 19, 2004 at 105% of their principal amount, and the gross proceeds from the offering of the old notes were US$330.8 million. We applied the net proceeds from the offering of the old notes to repay in full the outstanding indebtedness under the $318.1 million Term C loan of our credit facilities, to terminate our interest rate swaps relating to our Term C loan (which had been fully repaid) and to pay a $54.6 million dividend to Quebecor Media. We will use the remainder of these net proceeds for general corporate purposes. In addition, concurrently with the offering of the old notes, we increased our total borrowing capacity under our revolving credit facility by $350.0 million to $450.0 million and extended its maturity to November 2009. See "Description of Certain Indebtedness — Credit Facilities — General."

Borrowings under our credit facilities bear interest at the Canadian prime rate, the bankers' acceptance rate or the London Interbank Offered Rate (LIBOR) plus, in each instance, an applicable margin that is tied to financial ratios. Without giving effect to each interest rate swap agreement to which we were a party, the weighted average interest rate of our Term C loan under our credit facilities at September 30, 2004 was 3.92%. The interest rate swap agreements had the effect of converting the weighted average interest rate of our Term C loan under our credit facilities at September 30, 2004 to 5.41%. See "Management's Discussion and Analysis of Financial Condition and Results of Operations — Quantitative and Qualitative Disclosure About Market Risk."

CAPITALIZATION

The following table presents our capitalization as of September 30, 2004 (i) on an actual basis, and (ii) as adjusted to give effect to the offering of the old notes and the application of the net proceeds from the offering of the old notes as described under "Use of Proceeds." This table is presented and should be read with our consolidated financial statements and the related notes included in this prospectus. See "Summary — Summary Consolidated Financial and Operating Data and Pro Forma Combined Financial Information," "Selected Consolidated Financial and Operating Data," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Description of Certain Indebtedness."

		As at September 30, 2004
		Actual		As Adjusted
		(dollars in millions, unaudited)
Long-term debt, including current portion:
	Revolving credit facility	$	—	$	—
	Term C loan due 2008		318.1		—
	9.125% CF Cable notes due 2007(1)		97.1		97.1
	6⁷/8% Senior Notes due January 15, 2014(2)(3)		419.2		837.6
	QMI Subordinated loan due 2015(4)		150.0		150.0
	QMI Subordinated loan due 2019(5)		1,100.0		1,100.0

Total long term-debt, including current portion			2,084.4		2,184.7
Total shareholder's equity			89.8		89.8	(6)

	Total capitalization	$	2,174.2	$	2,274.5

(1): U.S. dollar-denominated notes issued and secured by the assets of our subsidiary, CF Cable, which will not be a guarantor of the notes offered hereby. CF Cable has undertaken to become a guarantor of the notes at such time when the CF Cable notes are no longer outstanding.
(2): Converted from U.S. dollars to Canadian dollars based on the noon-buying rate on September 30, 2004 of $1.2649 to US$1.00, or $1.00 to US$0.7906.
(3): For purposes of this "Capitalization" table, indebtedness from the old notes is stated at the gross proceeds received, including the premium, from the offering of the old notes which is consistent with the way in which this indebtedness will be reflected in our balance sheet under Canadian GAAP.
(4): Subordinated loan due 2015 from Quebecor Media. Interest throughout the term of this subordinated loan is payable in cash at our option. Under the terms of the indenture governing the notes, all payments on this subordinated loan are restricted payments treated in the same manner as dividends on our common shares. See "Description of Certain Indebtedness — Indebtedness to Quebecor Media — $150.0 Million Subordinated Loan."
(5): Subordinated loan due 2019 from Quebecor Media to our subsidiary Vidéotron (1998) ltée, which is a guarantor of the notes. The proceeds from this subordinated loan were invested in retractable preferred shares of Quebecor Media as part of a back-to-back transaction to reduce our income tax obligations. On December 16, 2004, this subordinated loan was repaid in full with the proceeds from the redemption of the retractable preferred shares of Quebecor Media. See "Description of Certain Indebtedness — Indebtedness to Quebecor Media — $1.1 Billion Subordinated Loan" and "Management's Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — Purchase of Shares of Quebecor Media and Service of Subsidiary Subordinated Loan."
(6): Total shareholder's equity at September 30, 2004, as adjusted, does not give effect to the write-off of deferred financing costs and losses related to the termination of interest rate swaps in connection with the offering of the old notes.

SELECTED CONSOLIDATED FINANCIAL AND OPERATING DATA

Our financial statements have been prepared in accordance with Canadian GAAP. For a discussion of the principal differences between Canadian GAAP and U.S. GAAP, see note 22 to our audited consolidated financial statements for the years ended December 31, 2001, 2002 and 2003 and note 8 to our unaudited consolidated financial statements for the nine months ended September 30, 2003 and 2004 included in this prospectus.

			Year Ended August 31,			Four Months Ended December 31,			Year Ended December 31,											Nine Months Ended September 30,
			1999			1999			2000			2001			2002		2003			2003			2004
			(restated) (1) (unaudited)			(restated) (1) (unaudited)			(restated) (1) (unaudited)			(restated) (1)			(restated) (1)					(restated) (1)
																				(unaudited)
			(dollars in thousands)
Statement of Operations Data:
Operating revenues:
	Cable television		$	580,146		$	199,750		$	596,223		$	607,942		$	579,200	$	558,887		$	418,383		$	428,542
	Internet access			24,538			13,182			60,112			99,629			135,514		183,268			133,033			162,603
	Video stores			21,073			9,879			32,053			35,155			35,344		38,450			28,267			32,590
	Other(1)			11,894			4,543			10,118			22,728			30,982		24,396			16,123			16,652

		Total operating revenues		637,651			227,354			698,506			765,454			781,040		805,001			595,806			640,387

Direct cost(1)				172,268			63,414			201,938			227,322			259,686		245,967			182,847			182,651
Operating, general and administrative expenses(1)				251,717			88,962			271,504			274,202			285,816		283,784			212,679			204,235
Depreciation and amortization(1)				100,146			37,981			122,187			116,692			120,016		122,958			87,326			94,797
Financial expenses				26,572			6,093			54,842			101,307			76,188		64,602			34,361			133,339
Dividend income from parent company				—			—			—			—			—		—			—			(85,626	)
Other items(2)				17,040			(8,595	)		99,205			95,570			25,000		(2,500	)		(2,500	)		—
Income taxes(1)				23,140			11,537			(27,407	)		(10,076	)		2,663		26,830			24,156			10,211
Share in the results of a company subject to significant influence				(489	)		(136	)		—			—			—		—			—			—
Non-controlling interest in a subsidiary				100			57			253			145			188		49			46			79
Amortization of goodwill(3)				13,486			108			13,397			13,331			—		—			—			—

Net income (loss)(1)(3)			$	33,671		$	27,933		$	(37,413	)	$	(53,039	)	$	11,483	$	63,311		$	56,891		$	100,701

	Year Ended August 31,			Four Months Ended December 31,			Year Ended December 31,												Nine Months Ended September 30,
	1999			1999			2000			2001			2002			2003			2003			2004
	(restated) (1) (unaudited)			(restated) (1) (unaudited)			(restated) (1) (unaudited)			(restated) (1)			(restated) (1)						(restated) (1)
																			(unaudited)
	(dollars in thousands, except for ARPU)
Balance Sheet Data (at period end):
Cash and cash equivalents	$	1,012		$	1,498		$	195		$	80,935		$	16,041		$	28,329		$	816		$	25,747
Total assets(1)(5)		1,624,591			1,623,552			1,690,234			1,728,715			1,570,463			1,525,605			1,490,167			2,608,272
Long-term debt, excluding QMI subordinated loans(4)(5)(6)		840,610			801,521			950,843			1,310,179			1,119,625			886,677			884,108			834,368
QMI subordinated loans(5)		—			—			—			—			—			150,000			150,000			1,250,000
Common shares(4)		57,658			57,658			1			1			1			173,326			31,311			173,236
Shareholder's equity(4)		393,664			394,768			297,537			(328,673	)		(345,189	)		70,817			44,182			89,767
Other Financial Data and Ratio:
EBITDA(1)(7)	$	197,015		$	83,652		$	125,606		$	168,215		$	210,350		$	277,701		$	202,734		$	339,048
EBITDA margin(1)(7)		30.9	%		36.8	%		18.0	%		22.0	%		26.9	%		34.5	%		34.0	%		52.9	%
Cash flows from operating activities	$	233,012		$	72,403		$	89,272		$	208,005		$	195,934		$	194,078		$	64,858		$	189,565
Cash flows used in investing activities		(281,548	)		(29,577	)		(103,137	)		(135,305	)		(91,878	)		(110,802	)		(53,922	)		(1,179,785	)
Cash flows from (used in) financing activities		53,084			(41,553	)		9,800			5,327			(159,372	)		(72,094	)		(31,870	)		977,620
Capital expenditures(8)		238,628			82,058			304,527			133,319			93,041			90,284			55,398			96,434
Cash interest expense(9)		55,840			22,764			66,906			85,529			76,416			65,098			49,137			44,061
Ratio of earnings to fixed charges(10)		1.9	x		2.8	x		0.1	x		0.3	x		1.2	x		2.0	x		2.4	x		3.4	x
Operating Data (unaudited):
Homes passed(11)		2,304,460			2,309,850			2,324,940			2,330,648			2,329,023			2,351,344			2,344,149			2,374,668
Basic customers(12)		1,542,364			1,565,321			1,559,446			1,519,172			1,440,184			1,433,260			1,422,965			1,450,547
Basic penetration(13)		66.9	%		67.8	%		67.1	%		65.2	%		61.8	%		61.0	%		60.7	%		61.1	%
Digital customers		14,378			31,727			80,898			114,634			171,625			240,863			214,372			308,954
Digital penetration(14)		0.9	%		2.0	%		5.2	%		7.5	%		11.9	%		16.8	%		15.1	%		21.3	%
High-speed Internet customers		32,924			52,996			140,302			228,328			305,054			406,277			378,525			476,182
High-speed Internet penetration(13)		1.4	%		2.3	%		6.0	%		9.8	%		13.1	%		17.3	%		16.1	%		20.1	%
ARPU(15)	$	33.55		$	34.18		$	35.14		$	38.33		$	40.45		$	43.40		$	43.01		$	45.73

			Year Ended December 31,						Nine Months Ended September 30,
			2002			2003			2003			2004
			(restated) (1)						(restated) (1)
									(unaudited)
			(dollars in thousands)
AMOUNTS UNDER U.S. GAAP
Statement of Operations Data:
Operating revenues:
	Cable television		$	579,200		$	558,887		$	418,383		$	434,650
	Internet access			135,514			183,268			133,033			163,950
	Video stores			35,344			38,450			28,267			32,590
	Other(1)			30,982			24,396			16,123			16,652

		Total operating revenues		781,040			805,001			595,806			647,842

Direct cost(1)				259,044			245,967			182,847			182,651
Operating, general and administrative expenses(1)				285,952			280,804			210,435			211,849
Depreciation and amortization(1)				137,687			133,003			95,231			104,013
Financial expenses				72,850			62,424			24,947			121,965
Dividend income from parent company				—			—			—			(85,626	)
Other items(2)				606			—			—			—
Income taxes(1)				5,166			24,079			21,862			6,717
Non-controlling interest in a subsidiary				188			49			46			79
Impairment of goodwill(3)				2,004,000			—			—			—

Net income (loss)(1)(3)			$	(1,984,453	)	$	58,675		$	60,438		$	106,194

Balance Sheet Data (at period end):
Cash and cash equivalents			$	16,041		$	28,329		$	816		$	25,747
Total assets (1)				3,956,549			3,899,915			3,883,831			4,965,952
Long-term debt, excluding QMI subordinated loans(4)(5)(6)				1,119,625			888,017			884,108			830,253
QMI subordinated loans(5)				—			150,000			150,000			1,250,000
Common shares(4)				1			173,236			31,311			173,236
Shareholder's equity(4)				1,963,438			2,373,352			2,356,355			2,395,255
Other Financial Data and Ratio:
EBITDA(1)(7)			$	235,250		$	278,181		$	202,478		$	338,889
EBITDA margin(1)(7)				30.1	%		34.6	%		34.0	%		52.3	%
Cash flows from operating activities			$	189,617		$	193,878		$	64,716		$	189,406
Cash flows used in investing activities				(85,561	)		(110,602	)		(53,780	)		(1,179,626	)
Cash flows from (used in) financing activities				(159,372	)		(72,094	)		(31,870	)		977,620
Capital expenditures(8)				92,414			90,284			55,398			96,434
Ratio of earnings to fixed charges(10)				—			1.9	x		2.8	x		4.2	x

(1): During the fourth quarter ended December 31, 2003, we revised our accounting policies in accordance with Canadian Institute of Chartered Accountants Handbook Section 1100,Generally Accepted Accounting Principles. This new accounting policy requires, among other things, that we expense, as they are incurred, the costs related to equipment subsidies granted to our customers, as well as customer reconnection costs. This change in our accounting policies has been applied retroactively, and the amounts presented for the prior periods have been restated for this change. Because this new accounting policy with respect to equipment subsidies and customer reconnection costs is consistent with the applicable existing accounting policy under U.S. GAAP, the retroactive application of this change will not affect the amounts presented for prior periods under U.S. GAAP.
(2): Following the acquisition of us by Quebecor Media in 2000, our former employees exercised in-the-money options and we introduced a restructuring program in 2001. Other items for the year ended December 31, 2000 consisted primarily of payments made to our employees under our employee stock option plan and a restructuring provision. In 2001, our residential Internet protocol telephony project was suspended, and other items for the year ended December 31, 2001 consisted primarily of the write-off of fixed assets and deferred charges related to that project. In 2002, in connection with the renegotiation of two of our collective bargaining agreements, we put in place a second restructuring initiative resulting in a reduction of 300 employees, and other items consisted primarily of severance costs relating to this restructuring. Because the final severance costs relating to this restructuring were lower than estimated, the difference between the final severance costs and the estimated severance costs was reversed in 2003 and increased our net income in 2003 by approximately $2.5 million.
(3): Effective January 1, 2002, we implemented Canadian Institute of Chartered Accountants Handbook Section 3062,Goodwill and Other Intangible Assets and its US equivalent,FAS 142. The new standards require that goodwill and intangible assets with indefinite lives no longer be amortized, but instead be tested for impairment at least annually. At January 1, 2002, we had unamortized goodwill in the amount of $432.3 million under Canadian GAAP and $4,666.9 million under U.S. GAAP, which is no longer being amortized. This change

in accounting policy is not applied retroactively and the amounts presented for the prior periods have not been restated for this change. If this change in accounting policy were applied to the reported combined statements of operations for the prior periods, the impact of the change, in respect of goodwill and intangible assets with indefinite useful lives not being amortized, would be as follows:

	Year Ended December 31,
	2000			2001
	(restated) (unaudited)			(restated)
	(dollars in thousands)
Net loss	$	(29,651	)	$	(53,039	)
Goodwill amortization		13,397			13,331

Net loss before goodwill amortization	$	(16,254	)	$	(39,708	)

(4): Long-term debt, excluding QMI subordinated loans, means long-term debt and a promissory note payable to a company under common control less the QMI subordinated loans, and it does not include the retractable preferred shares held by Quebecor Media. The retraction price of the retractable preferred shares was $300.0 million as of December 31, 2001 and $332.5 million as of December 31, 2002. During the year ended December 31, 2003, $332.5 million of the retractable preferred shares were converted into our common shares. The excess of the retraction price of the preferred shares over the stated capital converted into common shares was credited to our contributed surplus account in an amount of $301.2 million. The outstanding amount of retractable preferred shares as of December 31, 2003 was $2.0 million.
(5): The term "QMI subordinated loans" refers to the $150.0 million subordinated loan due 2015 we entered into in favor of Quebecor Media and the $1.1 billion subordinated loan due 2019 our subsidiary Vidéotron (1998) ltée, which is a guarantor of the notes, entered into on January 16, 2004 in favor of Quebecor Media. Interest on the $150.0 million subordinated loan throughout its term is payable in cash at our option. The QMI subordinated loans have been excluded from long-term debt because under the terms of the notes, all payments on the $150.0 million subordinated loan are restricted payments treated in the same manner as dividends on our common shares, and the proceeds of our $1.1 billion subordinated loan has been invested in retractable preferred shares of Quebecor Media as part of a back-to-back transaction to reduce our income tax obligations. On December 16, 2004, Quebecor Media redeemed its $1.1 billion of retractable preferred shares, and we used the proceeds to repay our $1.1 billion subordinated loan. The QMI subordinated loans are reflected as long-term debt on our consolidated balance sheet. As at September 30, 2004, our total long-term debt was $2,084.4 million. See "Description of Certain Indebtedness — Indebtedness to Quebecor Media" and "Management's Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — Purchase of Shares of Quebecor Media and Service of Subsidiary Subordinated Loan."
(6): We believe that long-term debt, excluding QMI subordinated loans, is a meaningful measure of the amount of our indebtedness we have from the perspective of a holder of the notes because the QMI subordinated loans are subordinated in right of payment to the prior payment in full of senior indebtedness, including the notes; all payments on the $150.0 million subordinated loan are restricted payments, under the terms of the notes, treated in the same manner as dividends on our common shares; and the proceeds of our $1.1 billion subordinated loan were invested in retractable preferred shares of Quebecor Media as part of a back-to-back transaction to reduce our income tax obligations. This back-to-back transaction was unwound on December 16, 2004. Consequently, we use long-term debt, excluding QMI subordinated loans, in this prospectus. Long-term debt, excluding QMI subordinated loans, is not intended to be a measure that should be regarded as an alternative to other financial reporting measures, and it should not be considered in isolation as a substitute for measures of liabilities prepared in accordance with U.S. GAAP or Canadian GAAP. Long-term debt, excluding QMI subordinated loans, is calculated from and reconciled to long-term debt as follows:

	As at August 31,		Four Months Ended December 31,		Year Ended December 31,									Nine Months Ended September 30,
	1999		1999		2000		2001		2002		2003			2003			2004
	(restated) (unaudited)		(restated) (unaudited)		(restated) (unaudited)		(restated)		(restated)					(restated)
														(unaudited)
							(dollars in millions)
Long-term debt	$	840.6	$	801.5	$	950.8	$	1,287.7	$	1,119.6	$	1,036.7		$	1,034.1		$	2,084.4
Promissory note to a company under common control		—		—		—		22.5		—		—			—			—
QMI subordinated loans		—		—		—		—		—		(150.0	)		(150.0	)		(1,250.0	)

Long-term debt, excluding QMI subordinated loans, as defined	$	840.6	$	801.5	$	950.8	$	1,310.2	$	1,119.6	$	886.7		$	884.1		$	834.4

AMOUNTS UNDER U.S. GAAP
Long-term debt									$	1,119.6	$	1,038.0		$	1,034.1		$	2,084.4
Promissory note to a company under common control										—		—			—			—
QMI subordinated loans										—		(150.0	)		(150.0	)		(1,250.0	)

Long-term debt, excluding QMI subordinated loans, as defined									$	1,119.6	$	888.0		$	884.1		$	834.4

(7): EBITDA for us means net income (loss) before depreciation and amortization, financial expenses, income taxes and goodwill amortization. EBITDA for Videotron Telecom means net loss before depreciation and amortization, financial expenses and income taxes. EBITDA, in each case as defined above, is not a measure of results that is consistent with Canadian or U.S. GAAP. They are not intended to be regarded as alternatives to other financial operating performance measures or to the statement of cash flows as a measure of liquidity. They are not intended to represent funds available for debt service, dividends, reinvestment or other discretionary uses, and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with generally accepted accounting principles. EBITDA is included in this prospectus because we believe it is a meaningful measure of our performance and Videotron Telecom's management believes it is a meaningful measure of its performance. EBITDA is commonly used by the investment community to analyze and compare the performance of companies in the industries in which we and Videotron Telecom are engaged. Our definition of EBITDA is not identical to the definition of EBITDA used by Videotron Telecom, and the definitions of EBITDA used by us and Videotron Telecom may not be identical to similarly titled measures reported by other companies. EBITDA margin is EBITDA as a percentage of operating revenues. Our EBITDA is calculated from and reconciled to our net income (loss) as follows:

																					Pro Forma Combined
															Pro Forma Combined
																	Nine Months Ended September 30,
			Four Months Ended December 31, 1999		Year Ended December 31,																Nine Months Ended September 30, 2004
	Year Ended August 31, 1999				Year Ended December 31,										Year Ended December 31, 2003
	Year Ended August 31, 1999				2000			2001			2002		2003		Year Ended December 31, 2003		2003		2004
	(restated)		(restated)		(restated)			(restated)			(restated)						(restated)
	(unaudited)		(unaudited)														(unaudited)				(unaudited)
	(dollars in millions)
Net income (loss)(1)(3)	$	33.7	$	27.9	$	(37.4	)	$	(53.0	)	$	11.5	$	63.3	$	49.1	$	56.9	$	100.7	$	89.7
Depreciation and amortization(1)		100.1		38.0		122.2			116.7			120.0		123.0		158.8		87.3		94.8		120.0
Financial expenses		26.6		6.1		54.8			101.3			76.2		64.6		63.2		34.4		133.3		133.3
Income taxes(1)		23.1		11.5		(27.4	)		(10.1	)		2.7		26.8		21.4		24.2		10.2		5.7
Goodwill amortization(3)		13.5		0.1		13.4			13.3			—		—		—		—		—		—

EBITDA as defined	$	197.0	$	83.6	$	125.6		$	168.2		$	210.4	$	277.7	$	292.5	$	202.8	$	339.0	$	348.7

	Year Ended December 31,					Nine Months Ended September 30,
	2002			2003		2003		2004
	(restated)					(unaudited)
	(dollars in millions)
AMOUNTS UNDER U.S. GAAP
Net income (loss)(1)(3)	$	(1,984.5	)	$	58.7	$	60.4	$	106.2
Depreciation and amortization(1)		137.7			133.0		95.2		104.0
Financial expenses		72.9			62.4		24.9		122.0
Income taxes(1)		5.2			24.1		21.9		6.7
Impairment of goodwill(3)		2,004.0			—		—		—

EBITDA as defined	$	235.3		$	278.2	$	202.4	$	338.9

Videotron: Telecom's EBITDA is calculated from and reconciled to its net loss as follows:

	Year Ended December 31, 2003			Nine Months Ended September 30, 2004
				(unaudited)
	(dollars in millions)
Net loss	$	(14.2	)	$	(11.0	)
Depreciation and amortization		35.9			25.2
Financial expenses		(1.4	)		—
Income taxes		(5.5	)		(4.5	)

EBITDA as defined	$	14.8		$	9.7

(8): Capital expenditures is comprised of acquisition of fixed assets.

(9): Cash interest expense for us means financial expenses less interest income, loss on foreign denominated debt, amortization of debt premium, write-off and amortization of deferred financing costs and interest on the QMI subordinated loans plus interest capitalized to fixed assets. We use cash interest expense in this prospectus because we believe it is a meaningful measure of the amount of our cash obligations from indebtedness from the perspective of a holder of the notes. We exclude interest on the $150.0 million QMI subordinated loan from this measure because cash payments of this loan will be deferred until the maturity of this loan, and we exclude interest on the $1.1 billion QMI subordinated loan from this measure because this loan is part of a back-to-back transaction to reduce our income tax obligations. This back-to-back transaction was unwound on December 16, 2004. See "Management's Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — Purchase of Shares of Quebecor Media and Service of Subsidiary Subordinated Loan." Cash interest expense is not intended to be a measure that should be regarded as an alternative to other financial reporting measures, and it should not be considered in isolation as a substitute for measures prepared in accordance with Canadian GAAP or U.S. GAAP. Cash interest expense is calculated from and reconciled to financial expense as follows:

																		Nine Months Ended September 30,
				Four Months Ended December 31, 1999		Year Ended December 31,
	Year Ended August 31, 1999					Year Ended December 31,
	Year Ended August 31, 1999					2000			2001			2002			2003			2003			2004
	(unaudited)			(unaudited)		(restated)			(restated)			(restated)						(restated)
																		(unaudited)
	(dollars in millions)
Financial expenses	$	28.6		$	5.0	$	54.8		$	101.3		$	76.2		$	64.6		$	34.4		$	133.3
Interest income		1.3			0.7		0.3			1.4			2.2			0.7			0.1			0.7
Interest capitalized to fixed assets		2.5			0.6		2.9			0.7			—			—			—			—
Loss on foreign-denominated short-term monetary items		(0.9	)		1.3		(0.9	)		(2.1	)		(0.3	)		1.8			3.2			0.4
Gain (loss) on foreign denominated debt		20.2			10.5		(1.1	)		(12.1	)		2.2			23.6			17.8			(2.3	)
Amortization of debt premium		—			—		1.4			2.1			1.0			1.1			0.9			0.6
Write-off and amortization of deferred financing costs		(4.5	)		1.0		(1.8	)		(2.5	)		(4.6	)		(4.1	)		(3.8	)		(1.0	)
Net premium, write-off of financing costs and termination of swap agreement		—			—		—			(2.5	)		—			(17.1	)		—			—
Interest income (expense) from (to) affiliated companies		8.6			3.7		11.3			(0.8	)		(0.3	)		(5.5	)		(3.5	)		(87.6	)

Cash interest expense as defined	$	55.8		$	22.8	$	66.9		$	85.5		$	76.4		$	65.1		$	49.1		$	44.1

(10): For the purpose of calculating the ratio of earnings to fixed charges, (i) earnings consist of net income (loss) plus non-controlling interest in subsidiary, income taxes, fixed charges, amortized capitalized interest, less interest capitalized and (ii) fixed charges consist of interest expensed and capitalized, plus amortized premiums, discounts and capitalized expenses relating to indebtedness and an estimate of the interest within rental expense. For the years ended December 31, 2000 and 2001, earnings, as calculated under Canadian GAAP, were inadequate to cover our fixed charges, and the coverage deficiency was $66.8 million and $63.0 million, respectively. For the year ended December 31, 2002, earnings, as calculated under U.S. GAAP, were inadequate to cover our fixed charges, and the coverage deficiency was $1,978.5 million.
(11): "Homes passed" means the number of residential premises, such as single dwelling units or multiple dwelling units, and commercial premises passed by the cable television distribution network in a given cable system service area in which the programming services are offered.
(12): Basic customers are customers who receive basic cable television service in either the analog or digital mode.
(13): Represents customers as a percentage of total homes passed.
(14): Represents customers as a percentage of basic customers.
(15): Average monthly revenue per user, or ARPU, is an industry term that we use to measure our average cable and Internet revenue per month per basic cable customer. ARPU is not a measurement under Canadian GAAP or U.S. GAAP, and our definition and calculation of ARPU may not be the same as identically titled measures reported by other companies. We calculate ARPU by dividing our combined cable television and Internet-access revenues for the applicable four-month, nine-month or twelve-month period by the average number of our basic cable customers during the applicable period, and then dividing the resulting amount by the number of months in the applicable period.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

The following discussion and analysis provides information concerning our operating results and financial condition. This discussion should be read in conjunction with our consolidated financial statements and accompanying notes included elsewhere in this prospectus. It also contains forward-looking statements, which are subject to a variety of factors that could cause actual results to differ materially from those contemplated by these statements. See "Forward-Looking Statements."

General

Our consolidated financial statements have been prepared in accordance with Canadian GAAP, which differ from U.S. GAAP in certain respects. Note 22 to our audited consolidated financial statements for the years ended December 31, 2001, 2002 and 2003 and note 8 to our unaudited consolidated financial statements for the nine months ended September 30, 2003 and 2004 contain discussions of the principal differences between Canadian GAAP and U.S. GAAP and the extent to which these differences affect our consolidated financial statements.

On July 5, 2001, we acquired from our sole shareholder Quebecor Media its wholly owned subsidiary Vidéotron (1998) ltée in exchange for one Series E preferred share and a promissory note. On October 7, 2003, our sole shareholder Quebecor Media transferred its wholly owned subsidiaries SuperClub Vidéotron and Vidéotron TVN to us in exchange for additional shares of our capital stock. These transactions were between entities under common control and were accounted for by the continuity-of-interests method. The transfers were recorded at the carrying value of the subsidiaries' net assets at the moment of the applicable transfer, and the corresponding figures in our consolidated financial statements for periods before the transfers include those of Vidéotron (1998) ltée, SuperClub Vidéotron and Vidéotron TVN.

Our primary sources of revenue are subscriptions from our customers for cable television and Internet access services and the rental and sale of video cassettes and digital video discs, or DVDs. Our business is mostly subscription-based, which has historically provided stable revenues and low sensitivity to general economic conditions. We provide a wide variety of packages at a range of prices. Internet revenues include amounts from both our high-speed Internet access and dial-up customers. As of September 30, 2004, we had 476,182 high-speed Internet access customers and 24,887 dial-up customers.

Because our cable television and Internet access services use the same network, we have only one significant business segment. Our other revenues consist primarily of revenues from sales of equipment and revenues from our subsidiary Société d'édition et de transcodage ltée, which provides certain broadcasting services, including television standards conversion and duplication, background music on cable channels, signal delivery, recording and distribution and caption subtitling for the hearing impaired.

Our direct cost consists of television programming costs, Internet bandwidth and transportation costs, set-top box and modem costs and purchasing costs for video cassettes and DVDs. These costs vary with the number of customers and prices negotiated with our suppliers.

Major components of operating expenses include salaries and benefits, subcontracting costs, advertising and regulatory contributions.

We experienced a decline in the number of our basic cable customers in the years ended December 31, 2000, 2001 and 2002 and in the first half of 2003 due to increased competition from direct broadcast satellite and the impact of an eleven-month labor conflict. In April 2003, this labor conflict was resolved and we entered into collective bargaining agreements with 1,700 unionized employees. These agreements terminate in December 2006 and we believe these new agreements have resulted in operating expenses that are approximately $20 million lower, on an annualized basis, than what we would have incurred under our previous labor agreements. Despite this labor conflict, we experienced growth in the numbers of our digital and high-speed Internet access customers. Since July 2003, we recorded an increase in the number of our basic cable customers. We believe that this increase is due to our effort to improve customer service, the deployment of our products in retail stores and the return of our employees after the eleven-month labor conflict. See "Business — Employees."

During the nine months ended September 30, 2004, we recorded a net increase of 17,287 basic cable customers. During the same period, we also recorded net growth of 69,905 customers of our high-speed Internet

access service and 68,091 customers of our digital television service, the latter of which includes customers who have upgraded from our analog cable service.

EBITDA for us means net income (loss) before depreciation and amortization, financial expenses, income taxes and goodwill amortization. EBITDA is not a measure of results that is consistent with Canadian or U.S. GAAP. It is not intended to be regarded as an alternative to other financial operating performance measures or to the statement of cash flows as a measure of liquidity. It is not intended to represent funds available for debt service, dividends, reinvestment or other discretionary uses, and should not be considered in isolation as a substitute for measures of performance prepared in accordance with generally accepted accounting principles. We use EBITDA because we believe it is a meaningful measure of performance. EBITDA is commonly used in the sectors in which we are engaged and by the investment community to analyze and compare companies. It also facilitates year-over-year comparison of results, since EBITDA excludes, among other things, unusual items that are not readily comparable from year to year. Our definition of EBITDA may not be identical to similarly titled measures reported by other companies. EBITDA margin is EBITDA as a percentage of operating revenues. See the reconciliation of EBITDA to net income (loss) in note 7 under "Selected Consolidated Financial and Operating Data."

Average monthly revenue per user, or ARPU, is an industry term that we use to measure our average cable and Internet revenue per month per basic cable customer. ARPU is not a measurement under Canadian GAAP or U.S. GAAP, and our definition and calculation of ARPU may not be the same as identically titled measures reported by other companies. We calculate ARPU by dividing our combined cable television and Internet-access revenues for the applicable nine-month or twelve-month period by the average number of our basic cable customers during the applicable period, and then dividing the resulting amount by the number of months in the applicable period.

Nine Months Ended September 30, 2004 Compared to Nine Months Ended September 30, 2003

Revenues

Consolidated operating revenues for the nine months ended September 30, 2004 were $640.4 million, compared to $595.8 million for the same period in 2003, an increase of $44.6 million, or 7.5%. This increase would have been $52.3 million, or 8.8%, if we exclude the impact of the change in accounting policy. See note 1(b) to our unaudited consolidated financial statements for the nine months ended September 30, 2003 and 2004 and "— Recent Canadian GAAP Accounting Pronouncements."

Cable television revenues for the nine months ended September 30, 2004 increased by $10.1 million, or 2.4%, as compared to the same period in 2003. The increase would have been $16.5 million or 3.9% if we exclude the impact of the change in accounting policy. We realized a net addition of 17,287 basic cable customers for the nine months ended September 2004, compared to a decrease of 17,219 customers during the same period in 2003. We increased the number of digital customers by 68,091, or 28.3%, for the nine months ended September 30, 2004 compared to 42,747, or 24.9% for the same period in 2003.

Internet revenues for the nine months ended September 30, 2004 increased by $29.6 million, or 22.3%, as compared to the same period in 2003. The increase would have been $30.9 million or 23.2% if we exclude the impact of the change in accounting policy. We increased the number of our high-speed Internet customers by 69,905, or 17.2%, for the nine months ended September 30, 2004 compared to 73,471, or 24.1%, for the same period in 2003.

We introduced price increases for our cable and Internet access products in March 2004.

ARPU increased to $45.73 for the nine months ended September 30, 2004, from $43.01 for the same period in 2003, representing a 6.3% increase. ARPU would have been $46.33, or a 7.7% increase if we exclude the impact of the change in accounting policy.

Revenues from video stores for the nine months ended September 30, 2004 increased by $4.3 million, or 15.2%, as compared to the same period in 2003.

Other revenues, which consisted mainly of the sale of customers equipment, were $16.7 million for the nine months ended September 30, 2004 compared to $16.1 million in the same period in 2003, an increase of $0.6 million.

Direct Cost and Operating, General and Administrative Expenses

Direct cost decreased by $0.1 million, or 0.5%, to $182.7 million for the nine months ended September 30, 2004 from $182.8 million for the same period in 2003. This decrease is mainly attributable to a significant reduction in bandwidth and transportation costs for the Internet access services and rate reduction with programming services, partially offset by higher programming costs due to an increase in the number of our digital customers. This addition of new customers also had a direct impact on the costs of sales of set-top boxes even with the reduction in the acquisition cost of this equipment.

Operating, general and administrative expenses decreased by $8.5 million, or 4.0%, to $204.2 million for the nine months ended September 30, 2004 from $212.7 million for the same period in 2003 due to the deferral of $7.5 million of connection incremental and direct cost due to new accounting policy.

EBITDA

EBITDA for the nine months ended September 30, 2004 was $339.0 million, compared to $202.7 million for the same period in 2003, representing an increase of $136.3 million, or 67.2%. Our EBITDA margin decreased to 50.8% for the nine months ended in 2004 from 52.9% for the same period in 2003. Subsidies on customer equipments amounted to $25.8 million in the nine months ended September 30, 2004, or 4.0% of sales, compared to $23.7 million, or 4.0% of sales in the same period in 2003. See the reconciliation of EBITDA to net income (loss) in note 7 under "Selected Consolidated Financial and Operating Data."

Depreciation and Amortization

Depreciation and amortization expenses for the nine months ended September 30, 2004 were $94.8 million, an increase of $7.5 million, or 8.6%, from $87.3 million for the same period in 2003. This increase was attributable to ongoing capital expenditures required to support an increased number of Internet access customers, network extensions and maintenance capital. We also revised the useful life of digital cable set-top boxes from 10 years to 7 years.

Financial Expenses, Dividend Income and Other Items

Financial expenses for the nine months ended September 30, 2004 were $133.3 million, as compared to $34.4 million for the same period in 2003, an increase of $98.9 million. The increase was attributable to a foreign exchange loss of $2.3 million on US dollar-denominated long-term debt as compared to a gain of $17.8 million in 2003. We also paid $83.7 million of interest expense on the new $1.1 billion subordinated loan from Quebecor Media, which was compensated by a $85.6 million dividend income related to the $1.1 billion investment in Quebecor Media, our parent company. See "— Liquidity and Capital Resources — Purchase of Shares of Quebecor Media and Service of Subsidiary Subordinated Loan."

Other items for 2003 consisted of the reversal of $2.5 million of the revised restructuring provision that had been taken in the fourth quarter of 2002.

Net Income

Our net income was $100.7 million for the nine months ended September 30, 2004, as compared to $56.9 million for the corresponding period of 2003, an increase of $43.8 million, or 77.0%. This increase was mainly due to improvement in revenues and from a lower effective tax rate due to the tax consolidation transactions with our parent company. See "— Liquidity and Capital Resources — Purchase of Shares of Quebecor Media and Service of Subsidiary Subordinated Loan."

Income Taxes

Income taxes for the nine months ended September 30, 2004 were $10.2 million, compared to $24.2 million for the same period in 2003, representing an effective tax rate of 9.2% compared to 29.8% in 2003, a decrease of 20.6% based on income before income taxes and non-controlling interest. This decline is mainly due to tax consolidation transactions, partly offset by losses on foreign currency denominated debt compared to a gain in 2003.

Year Ended December 31, 2003 Compared to Year Ended December 31, 2002

Revenues

Consolidated operating revenues for the year ended December 31, 2003 were $805.0 million, compared to $781.0 million for the year ended December 31, 2002, an increase of $24.0 million or 3.1%. ARPU increased to $43.40 in the year ended December 31, 2003 from $40.45 in 2002, representing a 7.3% increase.

Cable television revenues for the year ended December 31, 2003 decreased $20.3 million, or 3.5%, as compared to 2002. This decrease was primarily a result of the decline in the number of our basic cable customers, partially offset by price increases we implemented in February 2003. We recorded a decrease of 6,924 basic cable customers for the year ended December 31, 2003, as compared to a reduction of 78,988 basic cable customers in 2002. However, during the last two quarters of 2003, we recorded net additions to our basic cable customers of 21,150, as compared to a loss of 23,637 during the same period in 2002. This increase was due to our effort to improve customer service, the deployment of our products in retail stores and the return of our employees after an eleven-month labor conflict that was settled in April 2003. The number of our digital customers increased by 69,238, or 40.3%, from December 31, 2002 to December 31, 2003, for a total of 240,863 digital customers as of December 31, 2003. Digital penetration of our customer base increased from 11.9% as at December 31, 2002 to 16.8% at December 31, 2003.

Internet revenues for the year ended December 31, 2003 increased $47.8 million, or 35.2%, as compared to 2002. This growth was due to the net addition of 101,223 high-speed Internet access customers in 2002 and price increases that we gradually implemented beginning in the second half of 2002. High-speed Internet penetration of our total homes passed increased from 13.1% at December 31, 2002 to 17.3% at December 31, 2003.

Revenues from video stores for the year ended December 31, 2003 increased $3.1 million, or 8.8%, as compared to 2002. This growth was due to higher revenues generated by our franchised video stores and by a higher volume of rentals of video cassettes, DVDs and video games in our corporate video stores.

Other revenues for year ended December 31, 2003 were $6.7 million lower than during the year ended December 31, 2002. This decrease was due to the lower selling prices for cable modems in 2003, which was partially offset by a higher volume of digital terminals sold to our customers.

Direct Cost and Operating, General and Administrative Expenses

Direct cost declined $13.7 million, or 5.3%, to $246.0 million for the year ended December 31, 2003 from $259.7 million for 2002. As a percentage of total revenues, direct cost declined to 30.6% for the year ended December 31, 2003 from 33.3% for 2002. Direct cost for cable television services for the year ended December 31, 2003 was lower than for the year ended December 31, 2002. This was primarily the result of the decline in our programming costs due to a decrease in the number of our basic cable customers and the resolution of a dispute with service providers. Direct cost for Internet access for the year ended December 31, 2003 was also lower than for the previous year. This decrease was due to a significant reduction in bandwidth and transportation costs, which was partially offset by the higher volume resulting from an increased number of Internet access customers. Direct cost for customers' equipment for the year ended December 31, 2003 was the same as for 2002. Although the volume of units sold to our customers in 2003 were greater than in 2002, this was offset by a reduction in the purchase price for the equipment.

Operating, general and administrative expenses declined $2.0 million, or 0.7%, to $283.8 million for the year ended December 31, 2003 from $285.8 million for 2002. As a percentage of total revenues, operating, general and administrative expenses declined to 35.3% in the year ended December 31, 2003 from 36.6% for 2002. Ongoing efforts to reduce costs partially served to reduce operating, general and administrative expenses in the year ended

December 31, 2003, but these efforts were partially offset by the recording as indirect costs of $8.0 million in expenses that had been capitalized in prior years. In addition, higher non-recurring items in the year ended December 31, 2002, as compared to 2003, also contributed to the decline in operating, general and administrative expenses in 2003 for an amount of $7.7 million.

EBITDA

EBITDA for the year ended December 31, 2003 was $277.7 million, as compared to $210.3 million for the same period in 2002, representing an increase of $67.4 million or 32.0%. This growth in EBITDA was a result of the increase in revenues, combined with cost reductions and the absence of non-recurring costs. EBITDA margin increased to 34.5% for the year ended December 31, 2003 from 26.9% for 2002. See the reconciliation of EBITDA to net income (loss) in note 7 under "Selected Consolidated Financial and Operating Data."

Depreciation and Amortization

Depreciation and amortization expenses for the year ended December 31, 2003 were $123.0 million, an increase of $3.0 million, or 2.5%, as compared to $120.0 million for 2002. This growth was attributable to ongoing capital expenditures required to support an increased number of Internet access customers, network extensions and maintenance capital, which were partially offset by lower amortization of deferred charges.

Financial Expenses and Other Items

Financial expenses for the year ended December 31, 2003 were $64.6 million, as compared to $76.2 million for 2002, a reduction of $11.6 million, or 15.2%. This reduction in financial expenses was due to lower interest expense on long-term debt, and a $23.6 million foreign exchange gain on U.S. dollar-denominated long-term debt, as compared to a foreign exchange gain on U.S. dollar-denominated debt of $2.2 million in 2002. The write-off of financing costs and the termination costs of a swap agreement, which amounted to $17.1 million in 2003, partially offset the reduction in financial expenses.

Other items for the year ended December 31, 2003 consisted of a $2.5 million reversal of the restructuring provision that had been taken in the fourth quarter of 2002.

Net Income

Our net income was $63.3 million in the year ended December 31, 2003, as compared to $11.5 million in 2002, an increase of $51.8 million, or 450.4%.

Year Ended December 31, 2002 Compared to Year Ended December 31, 2001

Revenues

Consolidated revenues for the year ended December 31, 2002 were $781.0 million, as compared to $765.5 million for the year ended December 31, 2001, an increase of $15.5 million or 2.0%. ARPU increased to $40.45 in the year ended December 31, 2002 from $38.33 in 2001, representing a 5.5% increase.

Cable television revenues for the year ended December 31, 2002 decreased $28.7 million, or 4.7%, as compared to 2001.

This decrease was primarily a result of the decline in the number of our basic cable customers, which was partially offset by price increases. We recorded a decline of 5.2% in the number of our basic cable customers from 1,519,172 at December 31, 2001 to 1,440,184 at December 31, 2002. This decline was partially due to the negative impact of a labor dispute from May 2002 until April 2003. The number of our digital customers increased by 56,991, or 49.7%, from December 31, 2001 to December 31, 2002. Digital penetration of our customer base increased from 7.5% at December 31, 2001 to 11.9% at December 31, 2002.

Internet revenues for the year ended December 31, 2002 increased $35.9 million, or 36.0%, as compared to 2001. This growth was due to an increase of 76,726 high-speed Internet access customers and price increases that we gradually implemented beginning in the second half of 2002. High-speed Internet penetration of our total homes passed increased from 9.8% at December 31, 2001 to 13.1% at December 31, 2002.

Revenues from video stores for the year ended December 31, 2002 were $35.3 million, as compared to $35.2 million for 2001. This growth was due to higher revenues from our franchised video stores and higher sales of video cassettes and DVDs, which was partially offset by a decrease in rental revenues and the closing of two of our corporate video stores in 2001.

Other revenues for the year ended December 31, 2002 were $8.3 million higher than during the year ended December 31, 2001. This variation was due to an increase in the buying rate of digital set-top boxes and modem subsidies.

Direct Cost and Operating, General and Administrative Expenses

Direct cost increased $32.4 million, or 14.2%, to $259.7 million for the year ended December 31, 2002 from $227.3 million for 2001. As a percentage of total revenues, direct cost increased to 33.2% for the year ended December 31, 2002 from 29.7% for 2001. Direct cost for cable television services for the year ended December 31, 2002 was higher than for the year ended December 31, 2001. This increase was due to higher fees paid for programming services and the introduction of new services. Direct cost for Internet access for the year ended December 31, 2002 was also higher than for the previous year. This increase was due to a higher number of high-speed Internet access customers, which was offset partially by a decline in bandwidth costs.

Operating, general and administrative expenses increased $11.6 million, or 4.2%, to $285.8 million for the year ended December 31, 2002 from $274.2 million for 2001. As a percentage of total revenues, operating, general and administrative expenses increased to 36.6% in the year ended December 31, 2002 from 35.8% for 2001. A net amount of $10.1 million of this increase was attributable to non-recurring items during the year ended December 31, 2002 due to the labor dispute that was resolved in April 2003, which were partially offset by an $8.3 million recovery of network taxes. In addition, because our network modernization program was substantially completed in 2001, operating, general and administrative expenses increased by $15.7 million for the year ended December 31, 2002, as such indirect costs were capitalized in 2001. Other operating, general and administrative expenses were $5.9 million lower than for the same period in 2001 due to a review of all cost components and the implementation of cost reduction initiatives.

EBITDA

EBITDA for the year ended December 31, 2002 was $210.3 million, as compared to $168.2 million for 2001, representing an increase of $42.1 million or 25.0%. This increase in EBITDA was a result of a reduction of the other expenses, as described in note 2 under "Selected Consolidated Financial and Operating Data." Excluding the other items, EBITDA would have declined as a result of the increase in direct cost and non-recurring items, which was greater than the increase in combined revenues. See the reconciliation of EBITDA to net income (loss) in note 7 under "Selected Consolidated Financial and Operating Data."

Depreciation and Amortization

Depreciation and amortization expenses for the year ended December 31, 2002 were $120.0 million, an increase of $3.3 million, or 2.8%, as compared to 2001. This growth was attributable to ongoing capital expenditures required to maintain our network and deploy value-added products.

Financial Expenses and Other Items

Financial expenses for the year ended December 31, 2002 were $76.2 million, as compared to $101.3 million in 2001, a decline of $25.1 million or 24.8%. This decline in financial expenses was mainly due to foreign exchange gains on our U.S. dollar-denominated long-term debt, which amounted to $2.2 million for the year ended December 31, 2002, as compared to a foreign exchange loss of $12.1 million in 2001. Interest expenses on long-term debt were $8.4 million, or 10.1%, lower in the year ended December 31, 2002, as compared to the year ended December 31, 2001. This decrease was due to lower interest rates and partial repayment of long-term debt.

Other items for the year ended December 31, 2002 consisted of a $25.0 million restructuring provision to cover a workforce reduction program. For the year ended December 31, 2001, other items totaled $95.6 million and consisted primarily of the write-off of fixed assets and deferred charges relating to our residential Internet protocol telephony project, which was suspended in 2001 due to market and technological uncertainties.

Net Income

We reported net income of $11.5 million in the year ended December 31, 2002, as compared to a net loss of $53.0 million in 2001, an increase of $64.5 million. This increase resulted from the write-off of fixed assets and deferred charges relating to our residential Internet protocol telephony project in 2001 and the fact that we had no such corresponding write-off in 2002.

Effective January 1, 2002, we implemented the Canadian Institute of Chartered Accountants Handbook Section 3062, Goodwill and Other Intangible Assets. In accordance with this standard, we will not amortize goodwill and intangible assets with indefinite useful lives. Prior to January 1, 2002, we amortized goodwill using the straight-line method over a period of up to 40 years.

Liquidity and Capital Resources

Our principal liquidity and capital resource requirements consist of:

•: capital expenditures to maintain and upgrade our network in order to support the growth of our customer base;
•: the cost of migrating our customers from analog to digital cable television service; and
•: the service and repayment of our debt.

Capital Expenditures

During the nine months ended September 30, 2004, we invested $96.4 million in capital expenditures, as compared to $55.4 million during the same period in 2003. This growth is mainly to increase the capacity of our Internet network in order to maintain and improve the quality of service offered to our Internet access customers as the numbers of our Internet access customers has grown, the speed of our Internet access service was increased at the beginning of the second quarter and there has been a higher volume of network extensions. We continue to focus on success-driven capital spending and maintaining our network so that it remains in very good condition.

During the year ended December 31, 2003, we invested $90.3 million in capital expenditures, as compared to $93.0 million in capital expenditures in 2002, representing a decline of $2.7 million, or 2.9%. We spent $7.1 million to implement our new video-on-demand service. We also invested $8.0 million to support the growth of our Internet access service.

Capital expenditures for the year ended December 31, 2002 were $93.0 million, as compared to $133.3 million for the year ended December 31, 2001, representing a decline of $40.3 million, or 30.2%. This reduction resulted from the expensing of $15.7 million of indirect costs in 2002 that were capitalized in 2001 and the suspension of our Internet protocol telephony project, in which we invested $25.7 million before this suspension in 2001.

In addition to maintenance capital expenditures, we decided in December 2003 to invest in additional capital expenditures to upgrade our two-way capability network in Quebec City to increase the bandwidth from 480 MHz to 750 MHz or greater, and we are currently contemplating additional capital expenditures to similarly upgrade our network in Central Québec. We estimate that $29.1 million of capital expenditures over two years will be required to upgrade our network in Quebec City, and we believe that our cash flow from operating activities will be sufficient to meet these anticipated capital expenditures. If we were to proceed with the upgrade of our network in Central Québec, we estimate that these capital expenditures could amount to approximately $15 million over two years.

Servicing and Repayment of Our Debt

During the nine months ended September 30, 2004, we made mandatory repayments of $37.5 million on our long-term debt. During the year ended December 31, 2003, we made cash interest payments of $65.1 million, as compared to $77.0 million for the year ended December 31, 2002. During the year ended December 31, 2003, we borrowed $150.0 million in the form of a subordinated loan from our parent company, Quebecor Media, and used the proceeds of this loan to repay an equivalent amount under our credit facilities. The mandatory principal repayments on our credit facilities were $70.7 million during the year ended December 31, 2003. On October 8, 2003, we refinanced our debt. We issued US$335.0 million aggregate principal amount of our 6⁷/8% Senior Notes

due January 15, 2014, repaid in full and terminated the Term A and Term B loans under our original credit facilities, borrowed $368.1 million under a new Term C loan and reduced the aggregate amount we may borrow under our revolving credit facility from $150.0 million to $100.0 million. As part of this transaction, we also terminated our foreign currency swap relating to the fully repaid and terminated Term B loan. As a result of this transaction, the mandatory repayments of our credit facilities were reduced to $50.0 million per year, with the remainder due in 2008. Financing costs of $9.1 million were incurred for this transaction and will be amortized over the life of the financing.

For the year ended December 31, 2002, we repaid $159.3 million of our long-term debt. During the year ended December 31, 2001, we acquired the shares of Vidéotron (1998) ltée from our parent company, Quebecor Media, and issued to it a $300.0 million promissory note and a $300.0 million Series E preferred share, as described in note 2 to our audited consolidated financial statements. This promissory note was repaid on the same date with the funds we received from additions to our credit facilities.

Payment of Dividends

During the nine months ended September 30, 2004, we paid $80.0 million in dividends to our sole shareholder, Quebecor Media, and during the quarter ended December 31, 2003, we paid a dividend of $20.0 million to Quebecor Media. No dividends were paid during the years ended December 31, 2001 and 2002. We expect to pay quarterly dividends to Quebecor Media in the future, subject to the terms of our indebtedness and applicable law.

Purchase of Shares of Quebecor Media and Service of Subsidiary Subordinated Loan

Unlike corporations in the United States, corporations in Canada are not permitted to file consolidated tax returns. As a result, we entered into certain transactions that have the effect of consolidating tax losses within the Quebecor Media group.

In the first quarter of 2004, our wholly owned subsidiary, Vidéotron (1998) ltée, entered into a $1.1 billion subordinated loan with Quebecor Media and used the proceeds to invest in $1.1 billion of Quebecor Media preferred shares. On December 16, 2004, this subordinated loan was repaid in full with the proceeds from the redemption of the preferred shares of Quebecor Media, and this back-to-back transaction was unwound. The subordinated loan would have matured on January 16, 2019 and bore interest at an annual rate of 10.75% payable semi-annually. The Quebecor Media preferred shares were redeemable at the option of Quebecor Media and retractable at our option at the paid-up value and carried a 11.0% annual fixed cumulative preferential dividend payable semi-annually. During the nine months ended September 30, 2004, we made cash interest payments of $50.5 million with respect to the subordinated loan and received $51.7 million in dividends with respect to our ownership of the Quebecor Media preferred shares.

This subordinated loan and our investment in Quebecor Media preferred shares for the same principal amounts had the effect of significantly reducing our income tax obligation. This is because the interest expense on the subordinated loan was deductible for income tax purposes, while the dividend income on the Quebecor Media preferred shares was not taxable. See "Description of Certain Indebtedness — Indebtedness to Quebecor Media — $1.1 Billion Subordinated Loan."

Retractable Preferred Shares

In 2001 and 2002, we issued retractable Series E preferred shares to Quebecor Media, which were presented as a liability in our consolidated financial statements at the retraction price of these shares. During the year ended December 31, 2003, these preferred shares were exchanged for our common shares. The excess of the retraction price over the stated capital of these preferred shares was credited to our contributed surplus account in an amount of $301.2 million.

During the year ended December 31, 2003, we issued one retractable Series F preferred share to Quebecor Media, which is presented as a liability in our consolidated financial statements at a retraction price of $2.0 million.

Investing Activities

The total cash flows used by investing activities for the nine months ended September 30, 2004 were $1,179.8 million, as compared to $53.9 million for the same period in 2003, an increase of $1,125.9 million, due to the acquisition for $1.1 billion of preferred shares, Series D, of our sole shareholder Quebecor Media and the acquisition of substantially all the assets of Jumbo Entertainment Inc. for a cash consideration of approximately $7.1 million. On December 16, 2004, Quebecor Media redeemed the preferred shares, Series D, held by Vidéotron (1998) ltée at the paid-up value, plus accrued dividends. See "— Purchase of Shares of Quebecor Media and Service of Subsidiary Subordinated Loan."

Contractual Obligations and Other Commercial Commitments

Contractual Obligations. Our material obligations under firm contractual arrangements, including commitments for future payments under our credit facilities, notes, the CF Cable notes and operating lease arrangements, as of December 31, 2003, are summarized below and are disclosed in notes 13, 16 and 17 to our audited consolidated financial statements.

				Payments Due By Period
		Total		< 1 year		1-3 years		4-5 years		>5 years
		(dollars in millions)
Contractual obligations:
	Credit facilities	$	355.6	$	50.0	$	100.0	$	205.6		��
	Notes		430.4		—		—		—		430.4
	CF Cable notes		100.6		—		—		100.6		—
	Operating leases and other debt		23.0		6.5		9.2		4.7		2.6

	Total contractual cash obligations	$	909.6	$	56.5	$	109.2	$	310.9	$	433.0

As of December 31, 2003, the outstanding balance on our credit facilities was $355.6 million. We made mandatory principal repayments on these facilities of $70.7 million during the year ended December 31, 2003 and repaid $150.0 million from the proceeds of the subordinated loan we entered into with Quebecor Media. On October 8, 2003, concurrently with the issuance of our notes, we repaid in full and terminated the Term A and Term B loans under our original credit facilities, borrowed $368.1 million under a new Term C loan and reduced the aggregate amount we may borrow under our revolving credit facility from $150.0 million to $100.0 million. As a result of this transaction, repayment under our remaining credit facilities are reduced to $50.0 million per year, with the remainder in 2008. Our subordinated loan from Quebecor Media is repayable in 2015 and requires no debt amortization. The CF Cable notes are due in 2007 and are redeemable at our option on or after July 15, 2005 at 100.0% of their principal amount.

We rent equipment and premises under various operating leases. As of December 31, 2003, we estimated that the minimum aggregate payments under these leases over the next five years will be approximately $23 million. During the year ended December 31, 2003, we renewed or extended several leases and entered into new operating leases. As of September 30, 2004, we believe that the minimum payments under these leases over the next five years will not be materially different than they were as of December 31, 2003.

Effective January 1, 2002, we entered into a five-year management services agreement with Quebecor Media for services it provides to us, including internal audit, legal and corporate, financial planning and treasury, tax, real estate, human resources, risk management, public relations and other services. This agreement provides for an annual management fee payable to Quebecor Media of $6.0 million for the year ended December 31, 2003 and amounts to be agreed upon for the years 2004, 2005 and 2006. Management fees payable to Quebecor Media will amount to $7.3 million for the year ended December 31, 2004. See "Certain Relationships and Related Transactions — Management Services and Others."

Other Commercial Commitments. We have contractual arrangements with Videotron Telecom for bandwidth and transportation of Internet services that will expire on August 31, 2004. We have numerous agreements with

Videotron Telecom for broadband services maturing up to 15 years. These commitments are in accordance with current market prices. See "Certain Relationships and Related Transactions — Telecommunications Services."

As of December 31, 2003, there were no material commitments for capital expenditures.

Sources of Liquidity and Capital Resources

Our primary sources of liquidity and capital resources are:

•: funds from operations;
•: financing from related party transactions;
•: capital market debt financings; and
•: our credit facilities.

Funds from Operations. Cash provided by operating activities during the nine months ended September 30, 2004 was $189.6 million, as compared to $64.9 million for the same period in 2003, an increase of $124.7 million. Cash flows from operations before changes in non-cash operating items amounted to $223.7 million for the nine months ended September 30, 2004, compared to $164.6 million for the same period in 2003. This $59.1 million increase is mainly due to improved revenues and a reduction in interest expense on long-term debt (excluding the subordinated debt for tax consolidation with Quebecor Media). Changes in non-cash operating items used $34.2 million in the nine months ended September 30, 2004, as compared to $99.7 million for the same period in 2003, a decrease of $65.5 million. The variation in non-cash operating items is mainly due to the timing in the payments made to programming services, suppliers and to affiliated companies.

Cash provided by operating activities during the year ended December 31, 2003 was $194.1 million, as compared to $195.9 million for the year ended December 31, 2002, a decline of $1.8 million. Cash flow from operations before changes in non-cash operating items, amounted to $220.4 million for the year ended December 31, 2003, as compared to $143.8 million for 2002, an increase of $76.6 million or 53.3%. This increase was due to the improvement in operating results. Non-cash operating items used $26.3 million during the year ended December 31, 2003, as compared to $52.1 million provided in 2002, a decrease of $78.4 million. The payment of accrued restructuring charges, payments to programming suppliers and to affiliated companies caused the variation.

For the year ended December 31, 2002, cash provided by operating activities was $195.9 million, as compared to $208.0 million in 2001.

Financing from Related Party Transactions. In the year ended December 31, 2003, we borrowed $150.0 million under a subordinated loan from our parent company, Quebecor Media. The loan, maturing in 2015 and bearing interest at bankers' acceptance rate plus 1.5%, is subordinated in right of payment to the prior payment in full of the entirety of our existing and future indebtedness under our credit facilities and to the notes. On October 8, 2003, the terms of this subordinated loan were amended such that interest throughout the term of the loan is payable in cash at our option. See "Description of Certain Indebtedness — Indebtedness to Quebecor Media — $150.0 Million Subordinated Loan."

Cash flows generated from financing activities were $977.6 million in the nine months ended September 30, 2004 as compared to $31.9 million used for the same period in 2003, an increase of $1,009.5 million. On January 16, 2004, we borrowed $1.1 billion in the form of a subordinated loan from our sole shareholder, Quebecor Media. See "Description of Certain Indebtedness — Indebtedness to Quebecor Media — $1.1 Billion Subordinated Loan." We used all the proceeds from this loan to purchase 1,100,000 preferred shares, Series D of Quebecor Media. On December 16, 2004, Quebecor Media redeemed these preferred shares, and we used the proceeds from this redemption to repay in full the outstanding amounts under the $1.1 billion subordinated loan. See "— Purchase of Shares of Quebecor Media and Service of Subsidiary Subordinated Loan."

Interest Rate and Foreign Exchange Management. We use certain financial instruments, such as interest rate swaps, currency swap agreements and cross-currency interest rate swap agreements, to manage our interest rate and foreign exchange exposure on debt instruments. These instruments are not used for trading or speculative purposes. See "— Quantitative and Qualitative Disclosure about Market Risk."

We expect that our cash requirements relating to our existing operations over the next twelve months will be to fund operating activities and working capital, capital expenditures and debt service payments. We plan to fund these requirements from the sources of cash described above.

We believe that, based on our current levels of operations and anticipated growth, our cash from operations, together with our other available sources of liquidity, will be sufficient for the foreseeable future to fund anticipated capital expenditures and to make required payments of principal and interest on our debt, including payments due on the notes and under our credit facilities, as amended. We also expect, to the extent permitted by the terms of our indebtedness and applicable law, to pay quarterly dividends to Quebecor Media in the future.

Summary of Critical Accounting Policies

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Consequently, actual results could differ from these estimates. We believe that the following are some of the more critical areas requiring the use of management estimates.

Long-Lived Assets

We review our property and equipment for impairment whenever events or circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of property and equipment is measured by comparing the carrying amount of the assets to the projected cash flows the assets are expected to generate. If these assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds its fair market value.

We also evaluate goodwill for impairment on at least an annual basis and whenever events or circumstances indicate that the carrying amount may not be recoverable from its estimated future cash flows. Impairment of goodwill is measured at the reporting unit level by comparing the reporting unit's carrying amount, including goodwill, to the fair value of the reporting unit, which are established based on projected discounted future cash flows of the unit using a discount rate reflecting our average cost of funds. If the carrying amount of the reporting unit exceeds its fair value, goodwill is considered impaired, and a second test is performed to measure the amount of impairment loss.

In our determination of the recoverability of property, equipment and goodwill, we based our estimates used in preparing the discounted cash flows on historical and various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions.

Employee Future Benefits

Pensions. Pension costs of our defined benefit pension plan are determined using actuarial methods and could be impacted significantly by our assumptions regarding future events, including expected return on plan assets and rate of compensation increases. The fluctuation of the discount rate at each measurement date also has an impact.

Other Post-Retirement Benefits. We accrue the cost of post-retirement benefits, other than pensions, which are impacted significantly by a number of management assumptions, such as the discount rate, the rate of compensation increase, and an annual rate of increase in the per capita cost of covered benefits. These benefits, which are funded by us as they become due, include mainly life insurance programs and cable service.

Employee future benefits accounting policy is explained at note 1(j) to our audited consolidated financial statements, and assumptions on expected return on plan assets, rate of compensation increases and discount rates are disclosed in note 3 to our audited consolidated financial statements.

Subsidies on Equipment Sold to Customers

During the fourth quarter ended December 31, 2003, we revised our accounting policies for the sale of equipment to our customers. Up to the end of the third quarter ended September 30, 2003, the costs of subsidies

granted to our customers on the equipment sold were capitalized and amortized over a three-year period on a straight-line basis. We changed our accounting policies to expense, as they are incurred, the costs related to our customers' subsidies. These changes have been applied retroactively.

Off-Balance Sheet Arrangements

Operating Leases

We have guaranteed a portion of the residual values of certain assets under our operating leases with expiry dates between 2004 and 2008, to the benefit of the lessor. If the fair value of the assets, at the end of their respective lease terms, is less than the residual value guaranteed, then we must, under certain conditions, compensate the lessor for a portion of the shortfall. The maximum exposure in respect of these guarantees is $6.4 million. As at December 31, 2003, we have not recorded a liability associated with these guarantees because we do not expect to make any payments pertaining to the guarantees of these leases.

Guarantees under Lease Agreements

One of our subsidiaries has provided guarantees to the lessor of certain of the franchisees for operating leases, with expiry dates through 2008. If a franchisee defaults under the agreement, the subsidiary must, under certain conditions, compensate the lessor for the default. The maximum exposure in respect of these guarantees is $5.9 million. As at December 31, 2003, this subsidiary has not recorded a liability associated with these guarantees because it is its present estimation that no franchisee will default under the applicable agreement. Recourse against the sub-lessee is also available up to the total amount due.

Guarantees Related to the Existing Notes

Under the terms of the indenture governing the existing notes issued on October 8, 2003, we are committed to pay any amount of withholding taxes that could eventually be levied by any Canadian Taxing Authority (as defined in this indenture) on payments made to the lenders so that the amounts the lenders would receive are not less than amounts receivable if no taxes are levied. The amount of such guarantee is not limited and it is not possible for us to establish a maximum exposure amount of the guarantee because our exposure depends exclusively on the future actions, if any, by the Canadian Taxing Authorities. Although no recourse exists for such liability, we have the right to redeem the existing notes at their face value if such taxes were levied by any Canadian Taxing Authority, thereby terminating the guarantee.

Risks and Uncertainties

In the normal course of business, we are exposed to fluctuations in interest rates and exchange rates. We manage this exposure through staggered maturities and an optimal balance of fixed and variable rate obligations. As at December 31, 2003, we were using derivative financial instruments to reduce our exchange rate and interest rate exposure.

While these agreements expose us to the risk of non-performance by a third party, we believe that the possibility of incurring such loss is remote due to the creditworthiness of the parties with whom we deal. We do not hold or issue any derivative financial instruments for trading purposes. A description of the financial derivatives used by us as at December 31, 2003 is provided in note 1(h) to our audited consolidated financial statements included in this prospectus and in "— Quantitative and Qualitative Disclosure about Market Risk."

Concentration of credit risk with respect to trade receivables is limited due to our large customer base and low receivable amounts from individual customers. As of December 31, 2003, we had no significant concentration of credit risk.

Quantitative and Qualitative Disclosure About Market Risk

In the normal course of business, we are exposed to market risks. In addition to market risks associated with changes in interest rates and the exchange rate of the U.S. dollar to the Canadian dollar, we are also exposed to credit risk. We use certain financial instruments, such as interest rate swaps, currency swap agreements and cross-

currency interest rate swap agreements, to manage our interest rate and foreign exchange exposure. These instruments are not used for trading or speculative purposes.

The table below provides information on the derivative financial instruments and other financial instruments that are sensitive to changes in interest rates and foreign currencies as of the date shown.

	December 31, 2003
					Fair Value
	Years of Maturity	Year-end Effective Interest Rate	Carrying Amount(1)		Primary Debt Instrument		Currency & Interest Instruments		Total Financial Instruments
Debt:
Credit facilities(2)	2008	3.86%-5.00%	(355.6	)	(355.6	)	—		(355.6	)
CF Cable notes(3)	2007	7.59%	(100.6	)	(103.4	)	—		(103.4	)
Notes(3)	2014	7.00%	(445.7	)	(448.4	)	(24.6	)	(473.0	)
QMI subordinated loan	2015	4.80%	(150.0	)	(150.0	)	—		(150.0	)

			(1,051.9	)	(1,057.4	)	(24.6	)	(1,082.0	)
Interest rate contracts:
Interest rate swap agreements(4)(5)	2004-2006		—		—		(9.5	)	(9.5	)

(1): Including the carrying amount of primary debt instrument and the carrying amount of the currency and interest instrument.
(2): The fair value of our credit facilities is estimated to approximate carrying value as rates are tied to short-term indexes.
(3): The fair values of the existing notes issued on October 8, 2003 and the CF Cable notes are estimated based on their quoted market prices, the estimated value of the foreign exchange and interest rate swap agreements, and the year-end foreign exchange rate.
(4): The fair value of the interest rate swap agreements is estimated based upon discounted cash flows using applicable market rates as of December 31, 2003.
(5): The interest rate swap agreements cover $315.0 million of the term credit facilities.

	December 31, 2002
					Fair Value
	Years of Maturity	Year-end Effective Interest Rate	Carrying Amount(1)		Primary Debt Instrument		Currency & Interest Instruments		Total Financial Instruments
Debt:
Credit facilities(2)	2003-2009	4.28%-5.00%	(986.9	)	(995.8	)	8.3		(987.5	)
CF Cable notes(3)	2007	7.59%	(123.8	)	(125.9	)	—		(125.9	)

			(1,110.7	)	(1,121.7	)	8.3		(1,113.4	)
Interest rate contracts:
Interest rate swap agreements(4)(5)	2003-2006		—		—		(13.4	)	(13.4	)

(1): Including the carrying amount of primary debt instrument and the carrying amount of the currency and interest instrument.
(2): The fair value of our credit facilities is estimated to approximate carrying value as rates are tied to short-term indexes, except for US$231.4 million that have been converted into a Canadian dollar-denominated loan through the use of cross-currency interest rate swap agreements..
(3): The fair values of the CF Cable notes are estimated based on quoted market prices, the estimated value of the foreign exchange and interest rate swap agreements, and the year-end foreign exchange rate.

(4): The fair value of the interest rate swap agreements is estimated based upon discounted cash flows using applicable market rates as of December 31, 2002.
(5): The interest rate swap agreements cover $315.0 million of the term credit facilities.

Fair value estimates are made at a specific point in time and are based on relevant market information about the financial instruments. These estimates are subjective in nature and involve uncertainties and matters of professional judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect these estimates.

As of December 31, 2003, the aggregate amount of minimum principal payments required in each of the next five years and thereafter based on borrowing levels as at that date are as follows:

Year ending December 31,	(in thousands)
2004	$	50,000
2005		50,000
2006		50,000
2007		150,615
2008		155,600
Thereafter		580,462

We manage our exposure to interest rate risk by having a combination of fixed and variable rate obligations and by periodically using financial instruments such as interest rate swap agreements. We entered into interest rate swaps to manage our interest rate exposure on our credit facilities. We are committed to exchange, at specific intervals, the difference between the fixed and floating interest rate calculated by reference to the notional amounts. As at December 31, 2003, we will pay fixed interest rates ranging from 4.01% to 5.49% on a notional amount of $315.0 million and will receive a floating interest rate based on the bankers' acceptance rate having a three-month maturity. These swaps expire from 2004 to 2006.

We are also exposed to changes in the exchange rate of the U.S. dollar to the Canadian dollar since our revenues are received in Canadian dollars while the interest and principal on our existing notes issued on October 8, 2003 and the CF Cable notes are denominated in U.S. dollars. During the year ended December 31, 2003, we have concluded cross-currency interest swaps to hedge the foreign exchange fluctuations relating to our existing notes by fixing the U.S. dollar/Canadian dollar exchange rate at 1.3425 on a notional amount of US$335.0 million and by fixing interest rate at 7.657% on a notional amount of $181.2 million and by opting for a floating interest rate based on the bankers' acceptance rate plus 2.73% on a notional amount of $268.5 million.

Foreign currency fluctuations have created gains or losses in our results on the non-hedged U.S. dollar-denominated long-term debt. For the year ended December 31, 2003, we had unrealized foreign exchange gains of $23.6 million, as compared to $2.2 million for the same period in 2002 and foreign exchange losses of $12.1 million for the year ended December 31, 2001.

We are exposed to credit risk in the event of non-performance by the counterparties to our foreign currency contracts and interest rate swap agreements. We do not obtain collateral or other security to secure performance of obligations under financial instruments subject to credit risk, but we mitigate this risk by generally dealing only with major Canadian and U.S. financial institutions with a Standard & Poor's rating (or the equivalent) of at least A. Accordingly, we do not anticipate incurring any losses as a result of non-performance by the counterparties to our foreign currency contracts and interest rate swap agreements.

We are exposed to credit risk towards our customers. Concentrations of credit risk with respect to trade receivables are limited due to our very large customer base and low receivable amounts from individual customers.

Regulation

We are subject to extensive government regulation mainly through theBroadcasting Act (Canada) and theTelecommunications Act (Canada), both of which are administered by the Canadian Radio-television and Telecommunications Commission. Changes to the regulations and policies governing broadcast television, specialty

channels and program distribution through cable and direct broadcast satellite services, Internet service providers, Voice over IP services, the introduction of new regulations or policies or terms of license or treatment of the tax deductibility of advertising expenditures could have a material effect on our business, financial condition or results of operations. See "Business — Regulation."

Canadian and United States Accounting Policy Differences

We prepare our financial statements in accordance with Canadian GAAP, which differ in certain respects from U.S. GAAP. The areas of material differences and their impact on our financial statements are described in note 22 to our audited annual consolidated financial statements. Significant differences include the accounting for derivative financial instruments and the accounting for development and pre-operating costs.

Under Canadian GAAP, derivative financial instruments are accounted for on an accrual basis, with gains and losses being deferred and recognized in income in the same period and in the same financial category as the income or expenses arising from the corresponding hedged position. Under U.S. GAAP, derivative financial instruments are recorded at fair value.

Under Canadian GAAP, certain development and pre-operating costs, which satisfy specified criteria for recoverability, are deferred and amortized. Under U.S. GAAP, these costs are expensed as incurred.

Under U.S. GAAP, we would apply push-down accounting to reflect the new basis of the assets and liabilities after the acquisition of us by Quebecor Media. Under the push-down basis of accounting, the following adjustments were accounted from the acquisition date:

		As of October 23, 2000
		(dollars in thousands)
Fixed assets		$	114,608
Deferred charges			(22,585	)
Goodwill			4,360,512

	Change in assets		4,452,535

Accrued charges			40,445
Future income taxes			24,930

	Change in liabilities		65,375

Change in contributed surplus		$	4,387,160

Recent Canadian GAAP Accounting Pronouncements

In November 2001, the Canadian Institute of Chartered Accountants, or the CICA, issued Accounting Guideline 13,Hedging Relationship, and in November 2002 the CICA amended the effective date of this guideline. This accounting guideline establishes new criteria for hedge accounting and will apply to all hedging relationships in effect on or after January 1, 2004. On January 1, 2004 we re-assessed all hedging relationships to determine whether the criteria established by the CICA's new accounting guideline were met or not and we began applying the new guideline on a prospective basis. To qualify for hedge accounting, the hedging relationship must be appropriately documented at the inception of the hedge and there must be reasonable assurance, both at the inception and throughout the term of the hedge, that the hedging relationship will be effective. Effectiveness requires a high correlation of changes in fair values or cash flow between the hedged item and the hedging item. Since the new Canadian criteria for hedge accounting are consistent with existing U.S. criteria for qualifying for hedge accounting, with which we comply, we do not anticipate any material impact from adopting this accounting guideline.

The CICA has also issued section 1100 of the CICA Handbook,Generally Accepted Accounting Principles. Section 1100 establishes standards for financial reporting in accordance with generally accepted accounting principles, and it describes both what constitutes, as well as the sources of, Canadian GAAP. This section also provides guidance on which sources to consult when selecting accounting policies and determining appropriate disclosures when a matter is not dealt with explicitly in the primary sources of generally accepted accounting

principles. Section 1100 of the CICA Handbook came into force on January 1, 2004. In accordance with common industry practices, equipment subsidies were deferred and amortized over a period of three years, and customer reconnection costs were capitalized and depreciated over a three-year or a four-year period on a straight-line basis. Industry practices no longer qualify as being acceptable under Canadian GAAP.

Under the new accounting principles, equipment subsidies are to be accounted for as revenues for the product of sales and cost of sales for the cost of equipment and recognized in earnings at the time of the sale and customer reconnection costs will be accounted for as operating expenses when incurred.

During the fourth quarter ended December 31, 2003, we revised our accounting policies on equipment subsidies and customer reconnection costs to be in accordance with the new accounting principles. These changes have been applied retroactively and had the following effects for the three fiscal years ended December 31, 2001, 2002 and 2003:

•: our operating revenues increased by $16.3 million, $25.4 million and $19.4 million;
•: our direct and operating costs increased by $33.3 million, $63.1 million and $61.6 million;
•: our depreciation expense decreased by $16.2 million, $21.2 million and $27.4 million;
•: our income tax expense decreased by nil, $5.2 million and $4.0 million; and
•: our net loss increased by $0.8 million, and our net income decreased by $11.3 million and $10.8 million.

As at December 31, 2002, deferred charges decreased by $35.2 million, our fixed assets decreased by $10.7 million, our future income tax assets increased by $16.1 million and our deficit as at January 1, 2001 increased by $17.7 million. Although the retroactive application of these changes affected amounts presented for prior periods under Canadian GAAP, it will not affect the amounts presented for prior periods under U.S. GAAP because the new accounting policies with respect to equipment subsidies and customer reconnection costs are consistent with the applicable existing accounting policies under U.S. GAAP.

We chose to implement this change in our accounting policies in the fourth quarter ended December 31, 2003 in accordance with the provisions of Section 1506,Accounting Changes, of the CICA Handbook. Section 1506 of the CICA Handbook requires that changes in accounting policies be applied retroactively, except where certain conditions apply.

Had we not made this accounting change in 2003, we would have been required to do so on January 1, 2004, the date on which Section 1100 of the CICA Handbook came into effect. Under the provisions of Section 1100 of the CICA Handbook, the change would have been applied on a prospective basis and would have resulted in a lack of comparability of operating results for the periods in which different accounting principles were used.

In March 2003, the CICA issued Section 3110 of the CICA Handbook,Asset Retirement Obligations. This section establishes standards for the recognition, measurement and disclosure of liabilities for asset retirement obligations and the associated asset retirement costs. The standards require an entity to record the fair value of a liability for an asset retirement obligation in the period in which it is incurred and when a reasonable estimate of fair value can be made. The standards define the fair value as the amount at which that liability could be settled in a current transaction between willing parties, other than in a forced or liquidation transaction. An entity is subsequently required to allocate that asset retirement cost to amortize it over its useful life. The standards in Section 3110 are applicable to financial periods starting on or after January 1, 2004. We implemented these new standards in the first quarter of 2004. The adoption of these standards did not have a material impact on our consolidated financial statements for the first quarter ended March 31, 2004.

In June 2003, the CICA amended the standards on the presentation and disclosure of financial instruments included in Section 3860 of the CICA Handbook,Financial Instruments — Disclosure and Presentation. The new standards require obligations that may be settled at the issuer's option by a variable number of the issuer's own equity instruments to be presented as liabilities. Thus, securities issued by an enterprise that give the issuer unrestricted rights to settle the principal amount in cash or in the equivalent value of its own equity instruments will no longer be presented as equity. These revised standards are applicable to financial periods starting on or after November 1, 2004. We did not apply these new standards prior to that date.

In December 2002, the CICA issued Section 3063 of the CICA Handbook,Impairment or Disposal of Long-lived Assets. Section 3063 amends existing guidance on long-lived asset impairment measurement and establishes standards for the recognition, measurement and disclosure of the impairment of long-lived assets held for use by us. It requires that an impairment loss be recognized when the carrying amount of a long-lived asset to be held and used exceeds the sum of the undiscounted cash flows expected from its use and eventual disposal; an impairment should be measured as the amount by which the carrying amount of a long-lived asset exceeds its fair value. This guideline is harmonized with the corresponding guideline under U.S. GAAP. The new standards in Section 3063 are applicable for financial periods beginning on or after April 1, 2003. We implemented the new standards in the first quarter of 2004. The adoption of these standards did not have a material impact on our consolidated financial statements for the first quarter ended March 31, 2004.

Recent U.S. GAAP Accounting Pronouncements

In May 2003, FASB issued Statement No. 150,Accounting for Certain Financial Instruments with Characteristics of Both Liabilities and Equity (FAS 150), which requires companies to evaluate certain financial instruments within the scope of the standard to determine their appropriate classification as liabilities measured at their fair value. FAS 150 is effective immediately for all financial instruments of public companies entered into or modified after May 31, 2003, and it is otherwise effective for the first interim period beginning on or after June 15, 2003. This Statement has no impact on our financial statements.

In April 2003, FASB issued Statement No. 149,Amendment of Statement 133 on Derivative Instruments and Hedging Activities. This statement amends the financial accounting and reporting for derivative instruments to clarify the definition of a derivative, expand the nature of exemptions from the statement, clarify the application of hedge accounting when using certain instruments, clarify when an embedded derivative with an underlying that is an interest rate or interest rate index is not considered clearly and closely related to the host contract, and modify the cash flow presentation of derivative instruments that contain financing elements. This statement is effective for derivative transactions and hedging relationships entered into or modified after June 30, 2003. We do not expect that this statement will have a material impact on our consolidated financial statements.

BUSINESS

Overview

As of September 30, 2004, we had approximately 1.45 million basic cable customers, representing a basic penetration rate of 61.1%. Through our extensive broadband coverage, we also offer digital television and high-speed Internet access services to approximately 97% of our total homes passed. We have rapidly grown our digital customer base in recent years, and at September 30, 2004, we had 308,954 digital customers, representing 21.3% of our basic customers and 13.0% of our total homes passed. We have also rapidly grown our high-speed Internet access customer base, and at September 30, 2004, we had 476,182 high-speed Internet access customers, representing 32.8% of our basic customers and 20.1% of our total homes passed. We believe that the continued increase in the penetration of our digital television and high-speed Internet access services will result in increased average revenue per customer and higher EBITDA margins.

We offer our advanced products and services, which include video-on-demand and selected interactive television services, as a bundled package that is unique among the competitors in our market. We differentiate our services by offering a higher speed Internet access product and the widest range of French- language programming in Canada. We believe that our bundled packages of products and services, together with our focus on customer service and the breadth of our French-language offerings, have resulted in improved customer satisfaction, increased use of our services and higher customer retention.

In July 2004, we announced our intention to launch a telephony service using Voice over IP technology in Québec. This project is being conducted with another wholly owned subsidiary of Quebecor Media, Videotron Telecom Ltd., which holds a license as a competitive local exchange carrier and will initially provide the circuit switches and local network interconnection services. We are currently conducting technical field tests for this telephony service, and we anticipate launching this service progressively among our residential and commercial customers in the first half of 2005. Our new telephony service will include local and long-distance calling and permit our customers to access a host of other telephony services, such as enhanced 911 Emergency service, name and number caller ID and automatic call forwarding.

Competitive Strengths

Leading Market Positions. We are the largest distributor of pay-television services in Québec and the third largest cable operator in Canada. We believe that our strong market position has enabled us to more effectively launch and deploy new products and services. For example, since the introduction of our high-speed Internet access service, we estimate that we have become the largest provider of such service in the areas we serve. In addition, we operate the largest chain of video stores in Québec through our SuperClub Vidéotron subsidiary. We believe that

our retail distribution network of over 560 stores, including the SuperClub Vidéotron video stores, assist us in marketing and distributing our advanced services, such as high-speed Internet access and digital television, on a large scale basis.

Advanced Broadband Network. We have one of the most advanced bi-directional networks in North America. Currently, 97% of our cable network is two-way enabled with 74% of our customers served by bandwidth of 750 MHz. We substantially completed our network modernization program in 2001 and expect the majority of our future capital spending to be driven by the launch and deployment of new services. Following the substantial completion of this program, we have generated positive cash flow before financing activities in 2001, 2002 and 2003. We are committed to maintaining and upgrading our network capacity and, to that end, we currently anticipate that future capital expenditures over the next five years will be required for us to maintain and upgrade our network in order to accommodate the evolution of our products and services, to meet the demand for increased capacity and to introduce our new telephony service.

Single, Highly Contiguous Cluster. We serve our customer base through a single clustered network that covers approximately 80% of Québec's total addressable market (as per 2002 CRTC data) and five of the province's top six urban areas. This network represents one of the largest contiguous clusters in Canada and among the largest in North America as measured by the number of cable customers. We serve all of our cable customers through one primary headend and eight regional headends. We believe that our single cluster and network architecture provide us with the following benefits:

•: a higher quality and more reliable network;
•: reduced capital required to launch and deploy new products and services;
•: a lower cost structure through reduced maintenance and technical support costs; and
•: more rapid and effective introduction of new products and services, enhancing our ability to increase both customers and revenues.

Differentiated, Bundled Service Offerings. Through our technologically advanced network, we offer a variety of products and services to our customers, including digital television, high-speed Internet access, video-on-demand and other interactive television services. In addition, we intend to launch our telephony service progressively among our residential and commercial customers using Voice over IP in Québec in the first half of 2005, which, if successful, will enable us to become an integrated provider of video, data and voice services. We believe the competitors in our market are currently unable to offer a comparable suite of products and services in an integrated bundle. Specifically, our direct broadcast satellite competitors cannot currently offer full interactivity or video-on-demand. We believe many of our product and service offerings are superior to those of our competitors. For example, our standard high-speed Internet access service enables our customers to download data at a higher speed than that currently offered by standard digital subscriber line, or DSL, technology. In addition, we offer the widest range of French-language programming in Canada. As approximately 80% of the Province of Québec is French speaking, we believe our ability to deliver unique French-language content provides us with a competitive advantage in our communities. We believe that offering bundled products and services has contributed to improved customer satisfaction, increased use of our services, higher average revenue per customer and higher customer retention.

Strong, Market-Focused Management Team. Our focused and results-oriented senior management team has extensive experience and expertise in a range of areas, including marketing, finance, telecommunications and technology. Under the leadership of our senior management team, we have successfully increased sales of our digital television products and improved penetration of our high-speed Internet access product.

Our Strategy

Our objective is to maximize revenues and operating cash flow by leveraging our strong market position and advanced broadband network. To achieve this objective, we are pursuing the following strategy:

•: Maximize Customer Satisfaction. We are focused on providing reliable, high-quality products and services and superior customer service. We will continue to provide high-quality offerings by tailoring our product

and service packages to satisfy the specific needs of the different customer segments we serve based on various factors, including demographics, competition and price sensitivity. To further enhance customer satisfaction, we are currently implementing a number of initiatives. For example, all of our customer service representatives and technical support staff are now trained to assist our customers with respect to all products and services offered by us, which in turn allows our customers to be served more efficiently and seamlessly. Through increased customer satisfaction, we believe we will further strengthen the Vidéotron brand name and increase acceptance of our products and services.

•: Launch Additional Value-Added Products and Services while Maintaining Leadership in Existing Services. We currently offer an array of advanced products and services to our customers, including high-speed Internet access, digital television, video-on-demand, high-definition television, personal video recorders and selected interactive services, such as television-based Internet access. In general, we have experienced significant growth in these advanced products and services. We plan to further increase our penetration and expand our leadership position in these offerings. Through our advanced broadband network, we also intend to continue to rapidly launch additional advanced products and services, including interactive programming and advertising and local and long distance telephony using Voice over IP technology. We believe that the introduction of new products and services will increase the value of our bundled packages and will result in higher average revenue per customer and improved customer retention.
•: Maintain Our Advanced Broadband Network. We believe that the demand for advanced, bandwidth-intensive services will increase significantly in coming years. We also believe that our network design provides high capacity and superior signal quality that will enable us to provide to our current and future customers new advanced products and services in addition to those currently offered by us. Our capital expenditure programs are designed to accommodate the evolution of our products and services, meet the demand for increased capacity and support new products and services, such as our new telephony service.
•: Reduce Costs and Improve Operating Efficiency. To date, we have gained efficiencies by rationalizing our work force, negotiating new collective bargaining agreements with our employees, obtaining more favorable programming agreements and increasing productivity. We believe that we have significant opportunities to further improve operating efficiency and reduce costs through more efficient allocation of resources, more targeted product and service offerings, a more focused capital expenditure program and increased synergies with Quebecor Media's integrated media platform.
•: Further Integrate Our Operations within the Quebecor Media Group of Companies. We will continue to integrate our distribution capabilities with the content and reach of Quebecor Media's other media assets. For example, we believe that cross-selling and cross-promotion opportunities exist with TVA Group Inc., the largest French-language television broadcaster in North America, and Sun Media Corporation, the largest newspaper publisher in Québec and the second largest in Canada. We also intend to combine the strong retail presence of Archambault Group Inc., the largest music and book retailer in Québec, with our SuperClub Vidéotron video stores to promote and distribute our advanced products and services.

Broadcast Distribution Industry Overview

Cable Television Industry Overview

Cable television has been available in Canada for almost 50 years and is a well developed market. Competition in the cable industry was first introduced in Canada in 1997. As of August 31, 2003, there were approximately 6.9 million cable television customers in Canada, representing a basic cable penetration rate of 65.2% of homes passed. The Canadian cable television market is fairly concentrated with the four largest cable service providers serving 6.7 million customers, or approximately 96% of total basic cable customers. For the twelve months ended August 31, 2003, total industry revenue was estimated to be over $4.2 billion and is expected to grow significantly in the future because Canadian cable operators have aggressively upgraded their networks and have begun launching

and deploying new products and services, such as high-speed Internet access and digital television services. The following table summarizes recent annual key statistics for the Canadian and U.S. cable television industries.

	Twelve Months Ended August 31,
	1999		2000		2001		2002		2003		CAGR(1)
	(Homes passed and basic cable customers in millions, dollars in billions)
Canada
Industry Revenue	$3.0		$3.3		$3.6		$3.9		$4.2		8.8	%
Homes Passed	9.7		9.9		10.0		10.2		10.5		2.0	%
Basic Cable Customers	7.3		7.3		7.2		7.0		6.9		(1.4	%)
Basic Penetration	74.8	%	73.5	%	71.5	%	68.6	%	65.2	%

	Twelve Months Ended November 30,
	1999		2000		2001		2002		2003		CAGR(1)
	(Homes passed and basic cable customers in millions, dollars in billions)
U.S.
Industry Revenue	US$36.9		US$40.9		US$43.5		US$49.4		US$51.3		8.6	%
Homes Passed	97.6		99.1		100.6		102.7		102.9		1.3	%
Basic Cable Customers	68.5		69.3		73.0		73.5		73.4		1.7	%
Basic Penetration	70.2	%	70.0	%	72.6	%	71.6	%	71.3	%

Source of Canadian data: CRTC. Source of U.S. data: NCTA, Nielsen Media Research, Kagan Research and Broadband Cable Financial Databook 2003.

(1): Compounded annual growth rate from 1999 until 2003.

The traditional cable business, which is the delivery of video via hybrid fiber coaxial network, is fundamentally similar in the U.S. and Canada. Different economic and regulatory conditions, however, have given rise to important differences between the two markets. Canadian operators have more limited revenue sources than U.S. operators due to Canadian regulations which prevent cable operators from generating revenue from local advertising. However, the lack of local advertising revenues allows Canadian cable operators to benefit from lower programming costs as compared to U.S. cable operators.

A significant portion of Canada's cable television customers are based in Québec. As of August 31, 2003, Québec was home to approximately 24% of Canada's population and approximately 21.7% of its basic cable customers. Basic cable penetration in Québec, which was approximately 55.2% as of August 31, 2003, has traditionally been lower than in other populated provinces in Canada, principally due to the higher concentration of French-speaking Canadians in Québec. It is estimated that over 80% of Québec's population is French-speaking. Contrary to the English-speaking provinces of Canada, where programming in English comes from all over North America, programming in French is available "off-air" in most of Québec's French-speaking communities. The arrival of a variety of French-language specialty programming not available "off air" contributed to a slight cable penetration increase in the 1990s.

See "— Regulation" for more information on the regulatory framework governing Canada's cable industry.

Expansion of Digital Distribution and Programming

In order to compete with the direct broadcast satellite offerings, the cable industry began deploying digital technology, which allows for a large number of programming channels and advanced services to be offered.

In addition, in the last four years, the choice and range of television programming has expanded substantially in Canada. In November 2000, the CRTC released its decisions on the applications for new digital pay and specialty television channels. In total, the CRTC approved 21 Category One licenses (16 English-language and five

French-language) and 262 Category Two licenses, as well as two pay-per-view and four video-on-demand licenses. Cable service providers using digital technology are required to carry all of the approved Category One services appropriate to their markets while Category Two licensees who do not have guaranteed distribution rights must negotiate with cable service providers for access. Since then, the CRTC has licensed dozens of Category Two additional programming licenses. The increase in programming content as a result of the launch of approximately 50 of these programming services is believed to be a key factor in driving increases in digital cable penetration in Canada.

In September 2001, Canadian cable service providers, including Vidéotron, significantly expanded their digital programming offering through the launch of many of the new digital channels licensed by the CRTC. From September 2001 to December 2003, we have launched over 30 new English-language and four new French-language digital channels, significantly increasing the programming offered to our digital customers. In 2004, we have launched 39 new channels, including four new French-language digital channels, six high definition channels, one ethnic channel and ten time shifting channels. We expect to launch 15 new audio channels in 2004. We have launched a French-language subscription video-on-demand service and intend to launch a similar English-language service before the end of 2004. We believe the launch of these digital channels will help to improve the penetration of our digital television service among our customers.

Products and Services

We currently offer our customers analog cable television services and programming as well as new and advanced high-bandwidth products and services such as high-speed Internet access, digital television, premium programming and selected interactive television services. We continue to focus on our high-speed Internet access and digital television services, both of which are increasingly desired by customers. With our advanced broadband network, we will be able to successfully increase penetration of value-added services such as video-on-demand, high-definition television, personal video recorders, as well as interactive programming and advertising.

In July 2004, we announced that we intend to launch a new telephony service in Québec in the first half of 2005 together with our affiliate Videotron Telecom by joining our customer base with Videotron Telecom's telecommunication network and expertise. We expect that we will integrate Videotron Telecom's operations within our own operations in 2005, subject to the approval of the CRTC and our lenders, as well as the satisfactory completion of discussions with our labor unions. See our unaudited pro forma combined financial information included in this prospectus, "Summary — Reorganization" and "Summary — Summary Consolidated Financial and Operating Data and Pro Forma Combined Financial Information."

Traditional Cable Television Services

Customers subscribing to our traditional analog "basic" and analog "extended basic" services generally receive a line-up of between 49 and 59 channels of television programming, depending on the bandwidth capacity of their local cable system. Customers who pay additional amounts can also subscribe to additional channels, either individually or in packages. For any additional programming, customers must rent or buy a set-top box. We tailor our channels to satisfy the specific needs of the different customer segments we serve.

Our cable television service offerings include the following:

•: Basic Service. All of our customers receive a package of basic programming, consisting of local broadcast television stations, the four U.S. commercial networks and PBS, selected Canadian specialty programming services, and local and regional community programming. Our basic service customers generally receive 32 channels on basic cable.
•: Extended Basic Service. This expanded programming level of services includes a package of French- and English-language specialty television programming and U.S. cable channels in addition to the basic service channel line-up described above. Branded as "Telemax," this service was introduced in almost all of our markets largely to satisfy customer demand for greater flexibility and choice.
•: Premium Cable and Pay-Television Services. We offer commercial-free movies, U.S. superstations and other special entertainment programming.

•: Pay-Per-View Service. These channels allow customers to pay on a per-event basis to view a single showing of a recently released movie, a special sporting event or a music concert on a commercial-free basis. We offer both French-language and English-language pay-per-view services.

Advanced Products and Services

Cable's high bandwidth is a key factor in the successful delivery of advanced products and services. Several emerging technologies and increasing Internet usage by our customer base have presented us with significant opportunities to expand our sources of revenue. In most of our systems, we currently offer a variety of advanced products and services including high-speed Internet access, digital television and selected interactive services. We intend to continue to develop and deploy additional services to further broaden our service offering.

•: High-Speed Internet Access. Leveraging our advanced cable infrastructure, we offer high-speed Internet access to our residential customers primarily via cable modems attached to personal computers. We provide this service at speeds more than 50 times the speed of a conventional telephone modem. As of September 30, 2004, we had over 476,182 high-speed Internet access customers, representing 32.8% of our basic customers and 20.1% of our total homes passed. In addition, as of September 30, 2004, we had 24,887 dial-up Internet access customers. Based on internal estimates, we are the largest provider of high-speed Internet access services in the areas we serve with an estimated market share of 48.4% as of September 30, 2004.
•: Digital Television. As part of our network modernization program, we have installed headend equipment capable of delivering digitally encoded transmissions to a two-way digital-capable set-top box in the customer's home. This digital connection provides significant advantages. In particular, it increases channel capacity, which allows us to increase both programming and service offerings while providing increased flexibility in packaging our services. We launched our digital television service in March 1999 with the introduction of digital video compression terminals in the greater Montréal area. Since introducing our digital television service in the greater Montréal area, we have also introduced the service in other major markets. In September 2001, we launched a new digital service offering under the iLLICO brand. In addition to providing high quality sound and image quality, iLLICO offers our customers significant programming flexibility. Our basic digital package includes 24 television channels, 30 audio services providing CD quality music, 14 AM/FM radio channels, an interactive programming guide as well as television-based e-mail capability. Our extended digital basic television service, branded as i Self-Service, offers customers the ability to select more than 100 additional channels of their choice, allowing them to customize their choices among many specialty channels. This service also offers customers significant programming flexibility including the option of French-language only, English-language only or a combination of French- and English-language programming. We also offer pre-packaged themed service tiers in the areas of news, sports and discovery. Customers who purchase basic service and one customized package can also purchase channels on an à la carte basis at a specified cost per channel per month. As part of our digital service offering, customers can also purchase near-video-on-demand services on a per-event basis. Our customers currently have the option to purchase or lease the digital set-top boxes required for digital service. As of September 30, 2004, we had over 308,954 customers for our digital television service. Notwithstanding our digital television service, we intend to continue to offer analog cable service to our customers.
•: Interactive Services. In September 2001, we also launched digital interactive services under the iLLICO Interactive brand. These services, which combine our digital television and Internet access services, will enable customers equipped with wireless keyboards to access the Internet and send and receive e-mail. In the near future, we intend to provide additional functionality including e-commerce. We believe interactive services will be increasingly desired by customers, and we intend to continue to develop and deploy advanced products and services to add greater functionality to our interactive services offering.
•: Video-On-Demand. Video-on-demand service enables digital cable customers to rent from a library of movies, documentaries and other programming through their digital set-top box. Our digital cable customers are able to rent their video-on-demand selections for a period of 24 hours, which they are then able to watch at their convenience with full stop, rewind, fast forward, pause and replay functionality during that

period. Our video-on-demand service is available to 96% of the homes passed by us. We also offer pay television channels on a subscription basis that permit our customers to access and watch any of their video-on-demand selections at any time at their convenience.

•: Voice over IP. In July 2004, we announced our intention to launch a telephony service using Voice over IP technology in Québec. We are currently conducting technical field tests for our planned telephony service, and we anticipate launching this service progressively among our residential and commercial customers in the first half of 2005. Our new telephony service will include local and long-distance calling and permit our customers to access a host of other telephony services, such as enhanced 911 Emergency service, name and number caller ID and automatic call forwarding.
��: Other New Business Initiatives. To maintain and enhance our market position, we are focused on increasing penetration of high-definition television and personal video recorders, as well as other high-value products and services.

The following table summarizes our customer statistics for our analog and digital cable and advanced products and services:

	As of December 31,										As of September 30,
	1999		2000		2001		2002		2003		2004
Video services
*Basic analog cable*
Homes passed(1)	2,309,850		2,324,940		2,330,648		2,329,023		2,351,344		2,374,668
Basic customers(2)	1,565,321		1,559,446		1,519,172		1,440,184		1,433,260		1,450,547
Penetration(3)	67.8	%	67.1	%	65.2	%	61.8	%	61.0	%	61.1	%
*Digital cable*
Digital customers	31,727		80,898		114,634		171,625		214,372		308,954
Penetration(4)	2.0	%	5.2	%	7.5	%	11.9	%	15.1	%	21.3	%
Number of digital terminals	33,888		85,756		121,210		182,010		257,350		332,530
Data services
*Dial-up Internet access*
Dial-up customers	72,720		62,673		55,427		43,627		28,821		24,887
*High-speed Internet access*
Cable modem customers	52,996		140,302		228,328		305,054		406,277		476,182
Penetration(3)	2.3	%	6.0	%	9.8	%	13.1	%	17.3	%	20.1	%

(1): "Homes passed" means the number of residential premises, such as single dwelling units or multiple dwelling units, passed by the cable television distribution network in a given cable system service area in which the programming services are offered.
(2): Basic customers are customers who receive basic cable service in either the analog or digital mode.
(3): Represents customers as a percentage of total homes passed.
(4): Represents customers for the digital service as a percentage of basic customers.

In the nine months ended September 30, 2004, we recorded a net increase of 17,287 basic cable customers. During the same period, we also recorded net growth of 69,905 customers of our high-speed Internet access service and 68,091 customers of our digital television service, the latter of which includes customers who have upgraded from our analog cable service.

Our New Telephony Service

In July 2004, we announced our intention to launch our new telephony service using Voice over IP technology progressively among our residential and commercial customers in Québec in the first half of 2005, which we expect will include both local and long-distance calling, and, upon commercial launch, will permit all of our telephony

customers, both residential and commercial, to access all service features mandated by CRTC Decision 97-8 and other regulatory decisions and orders, including: enhanced 911 Emergency service; number portability from and to any local exchange carrier; a message relay service allowing subscribers to communicate with the hearing impaired; and a variety of personal privacy features including universal call tracing.

We also intend to offer free basic listings in local telephone directories, as well as full operator assistance, including: operator-assisted calls; collect and third-party calls; local, national and international directory assistance; person-to-person calls; and busy-line verification.

Finally, we intend to offer as part of our new telephony service a host of convenient, optional features, including: name and number caller ID; call waiting with long-distance distinctive ring and audible indicator tone; name and number caller ID on call waiting; visual indicator of a full voice mail box and audible message waiting indicators; automatic call forwarding; three-way conference calling; automatic recalling; and last incoming call identification and recall.

In keeping with our competitive strength of providing differentiated, bundled service offerings, we intend to offer free installation of our new telephony service to existing cable television and/or Internet customers and to new bundled customers. We also intend to offer discounts to our bundled customers, when compared to the sum of the prices of the individual services provided to these customers. In addition, we plan to offer discounts for a second telephone line subscription.

Video Stores

Pricing of Our Products and Services

Our revenues are derived principally from the monthly fees our customers pay for cable services. The rates we charge vary based on the market served and the level of service selected. Rates are usually adjusted annually. We also offer discounts to our bundled customers, when compared to the sum of the prices of the individual services provided to these customers. As of September 30, 2004, the average monthly fees for basic and extended basic service were $21.89 and $35.46, respectively, and the average monthly fees for basic and extended basic digital service were $12.66 and $38.71, respectively. A one-time installation fee, which may be waived in part during certain promotional periods, is charged to new customers. Monthly fees for rented equipment such as set-top boxes and cable modems, and administrative fees for delinquent payments for service, are also charged. Except in respect of our Internet access services, customers are typically free to discontinue service at any time without additional charge, but they may be charged a reconnection fee to resume service.

The CRTC only regulates rates for basic cable service. The fees for services offered in discretionary packages, including Canadian and U.S. specialty television services, are based upon rates negotiated between us and the providers of programming services. In addition, fees for extended cable service (over and above basic cable service rates), pay-television and pay-per-view services, and rentals for set-top boxes are priced by us on a discretionary basis and are not regulated by the CRTC.

Although our service offerings vary by market, because of differences in the bandwidth capacity of the cable systems in each of our markets and competitive and other factors, our services are typically offered at monthly price ranges, which reflect discounts for bundled service offerings, as follows:

Service		Price Range
Basic analog cable		$15.07 – $26.85
Extended basic analog cable		$25.57 – $39.19
Basic digital cable		$ 9.99 – $14.98
Extended basic digital cable		$25.57 – $67.98
Pay-television		$ 6.00 – $19.95
Pay-per-view (per movie or event)		$ 3.99 – $79.95
Video-on-demand (per movie or event)		$ 0.99 – $ 9.99
Dial-up Internet access		$ 9.95 – $22.95
High-speed Internet access		$24.95 – $69.95

Our Network Technology

As of September 30, 2004, our cable systems consisted of approximately 7,500 km of fiber optic cable and 25,000 km of coaxial cable, passing approximately 2.4 million homes and serving approximately 1.45 million customers. Our network is the largest broadband network in Québec covering over 80% of cable homes passed, and one of the most advanced broadband networks in North America, with over 97% two-way capability at present.

The following table summarizes the current technological state of our systems, based on the percentage of our customers who have access to the bandwidths listed below and two-way capability:

	Under 450 MHz	480 to 625 MHz	750 MHz	Two-Way Capability
December 31, 2000	7%	21%	72%	92%
December 31, 2001	3%	25%	72%	97%
December 31, 2002	3%	23%	74%	97%
December 31, 2003	3%	23%	74%	97%
September 30, 2004	3%	23%	74%	97%

Our cable television networks are comprised of four distinct parts including signal acquisition networks, main headends, distribution networks and subscriber drops. The signal acquisition network picks up a wide variety of television, radio and multimedia signals. These signals and services originate from either a local source or content provider or are picked up from distant sites chosen for satellite or "off-air" reception quality and transmitted to the main headends by way of "off-air" links, coaxial links or fiber optic relay systems. Each main headend processes, modulates, scrambles and combines the signals in order to distribute them throughout the network. Each main headend is connected to the primary headend in order to receive the digital MPEG2 signals and the IP Backbone for the Internet services. This connection is provided by Videotron Telecom through its inter-city fiber network. The first stage of this distribution consists of either a fiber optic link or a very high capacity microwave link which distributes the signals to distribution or secondary headends. After that, the signal uses the hybrid fiber coaxial cable network made of wide-band amplifiers and coaxial cables capable of serving up to 30 km in radius from the distribution or secondary headends to the subscriber drops. The subscriber drop brings the signal into the customer's television set directly or, depending on the area or the services selected, through various types of customer equipment including set top boxes.

Since 1995, we have invested over $301.8 million in a modernization program to upgrade our network to enable us to develop and deploy new advanced products and services. This modernization program was substantially completed as of December 31, 2001. As a result, we are now able to deliver simultaneously up to 75 analog channels and over 200 digital channels in the greater Montréal area and in western Québec, and up to 49 analog channels and over 70 digital channels in other urban areas in Québec, and provide two-way capability throughout most of our network. In December 2003, we decided to upgrade our two-way capability network in

Quebec City to increase the bandwidth from 480 MHz to 750 MHz or greater, and we estimate that $29.1 million of capital expenditures over the next two years will be required. We are also currently contemplating similarly upgrading our two-way capability network in central Québec. If we were to proceed with such upgrade, we estimate that approximately $15 million of capital expenditures over two years would be required. After completion of these upgrades, we expect that approximately 95% of our network will have a bandwidth of 750 MHz or greater. Further increase in bandwidth, up to 860 Mhz, in the Montréal region may be required as demand for higher speed in Internet access services grows and new high definition television channels are introduced.

We have adopted the hybrid fiber coaxial network architecture as the standard for our ongoing system upgrades. Hybrid fiber coaxial network architecture combines the use of fiber optic cable with coaxial cable. Fiber optic cable has excellent broadband frequency characteristics, noise immunity and physical durability and can carry hundreds of video and data channels over extended distances. Coaxial cable is less expensive and requires greater signal amplification in order to obtain the desired transmission levels for delivering channels. In most systems, we deliver our signals via fiber optic cable from the headend to a group of nodes to the homes passed served by that node. Our system design provides for cells of approximately 1,000 homes each to be served by fiber optic cable. To allow for this configuration, secondary headends were put into operation in the greater Montréal area and in the greater Quebec City area. Remote secondary headends must also be connected with fiber optic links. The loop structure of the two-way networks brings reliability through redundancy, the cell size improves flexibility and capacity, while the reduced number of amplifiers separating the home from the headend improves signal quality and reliability. Our network design provides us with significant flexibility to offer customized programming to individual cells of 1,000 homes, which is critical to our ability to deploy certain advanced services in the future, including video-on-demand and the continued expansion of our interactive services. Our network design also allows for further segmentation to 500 or 250 homes where cable and Internet service penetration requires higher network capacity.

We also believe that our network design provides high capacity and superior signal quality that will enable us to provide to our current and future customers new advanced products and services in addition to those currently offered by us.

Marketing and Customer Care

Our long term marketing objective is to increase our cash flow through deeper market penetration of our services and continued growth in revenue per customer. We believe that customers will come to view their cable connection as the best distribution channel to the home for a multitude of services. To achieve this objective, we are pursuing the following strategies:

•: continue to rapidly deploy advanced products and services such as high-speed Internet access and digital television;
•: introduce new advanced products and services desired by customers;
•: design product offerings that provide greater opportunity for customer entertainment and information choices;
•: leverage the retail presence and other products offered within the Quebecor Media group, including the retail presence of Archambault Group Inc., and within non-exclusive commercial retailers to cross-promote and distribute our cable and data services to our existing and future customers;
•: target marketing opportunities based on demographic data and past purchasing behavior;
•: develop targeted marketing programs to attract former customers, households that have never subscribed to our services and customers of alternative or competitive services; and
•: leverage the relationship between customer service representatives and our customers by training and motivating customer service representatives to promote advanced products and services.

We plan to invest increasing amounts of time, effort and financial resources in marketing new and existing services. To increase both customer penetration and the number of services used by our customers, we will use

coordinated marketing techniques, including door-to-door solicitation, telemarketing, media advertising, e-marketing and direct mail solicitation.

Maximizing customer satisfaction is a key element of our business strategy. In support of our commitment to customer satisfaction, we operate a 24-hour customer service hotline seven days a week for nearly all of our systems. We currently have five operational call centers and we are implementing various initiatives to improve customer service and satisfaction. For example, all of our customer service representatives and technical support staff are now trained to assist our customers with respect to all products and services offered by us, which in turn allows our customers to be served more efficiently and seamlessly. Our customer care representatives continue to receive extensive training to develop customer contact skills and product knowledge, which are key contributors to high rates of customer retention as well as to selling additional products and services and higher levels of service to our customers. We have also implemented Web-based customer service capabilities. To assist us in our marketing efforts, we utilize surveys, focus groups and other research tools as part of our efforts to determine and proactively respond to customer needs.

Programming

We believe that offering a wide variety of conveniently scheduled programming is an important factor in influencing a customer's decision to subscribe to and retain our cable services. We devote significant resources to obtaining access to a wide range of programming that we believe will appeal to both existing and potential customers. We rely on extensive market research, customer demographics and local programming preferences to determine our channel and package offerings. The CRTC currently regulates the distribution of foreign content in Canada and, as a result, we are limited in our ability to provide such programming to our customers. We obtain basic and premium programming from a number of suppliers, including TVA Group.

Since September 2001, we have significantly expanded the programming available to our customers through the launch of over 55 English-language and eight French-language digital channels in digital format and 12 high definition digital channels. Furthermore, we believe the launch of these digital channels will help to increase the penetration of our digital television service among our customers.

Our programming contracts generally provide for a fixed term of up to seven years, and are subject to negotiated renewal. Programming tends to be made available to us for a flat fee per customer. Our overall programming costs have increased in recent years and may continue to increase due to factors including, but not limited to, additional programming being provided to customers as a result of system rebuilds that increase channel capacity, increased costs to produce or purchase specialty programming and inflationary or negotiated annual increases.

Competition

We face competition in the areas of price, service offerings and service reliability. We compete with other providers of television signals and other sources of home entertainment. In addition, as we expand into additional services such as interactive services, we may face additional competition. We operate in a competitive business environment which can adversely affect our business and operations. Our principal competitors include off-air television and providers of other entertainment, direct broadcast satellite, digital subscriber line, private cable, other cable distribution and wireless distribution. We also face competition from illegal providers of cable television services and illegal access to foreign DBS and pirate systems that enable customers to access programming services from U.S. and Canadian direct broadcast satellite services without paying any fee.

Off-Air Television and Providers of Other Entertainment. Cable television has long competed with broadcast television, which consists of television signals that the viewer is able to receive without charge using an "off-air" antenna. The extent of such competition is dependent upon the quality and quantity of broadcast signals available through "off-air" reception compared to the services provided by the local cable system. Cable systems also face competition from alternative methods of distributing and receiving television signals and from other sources of entertainment such as live sporting events, movie theaters and home video products, including videotape recorders and DVD players. The extent to which a cable television service is competitive depends in significant part upon the cable system's ability to provide a greater variety of programming, superior technical performance and superior customer service than are available over the air or through competitive alternative delivery sources.

•: Direct Broadcast Satellite. Direct broadcast satellite, or DBS, is a significant competitor to cable systems. DBS delivers programming via signals sent directly to receiving dishes from medium- and high-powered satellites, as opposed to broadcast, cable delivery or lower-powered transmissions. This form of distribution generally provides more channels than some of our television systems and is fully digital. DBS service can be received virtually anywhere in Canada through the installation of a small rooftop or side-mounted antenna. DBS systems use video compression technology to increase channel capacity and digital technology to improve the quality of the signals transmitted to their customers.
•: DSL. The deployment of digital subscriber line technology, known as DSL, provides customers with Internet access at data transmission speeds greater than that which is available over conventional telephone lines. DSL service is comparable to high-speed Internet access over cable systems. We also face competition from other providers of DSL service.
•: VDSL. The CRTC and Industry Canada have authorized video digital subscriber line, or VDSL, services. VDSL technology increases the capacity of DSL lines available, which permits the distribution of digital video. We expect that we will soon face competition from incumbent local exchange carriers, which are in the process of securing licenses to launch video distribution services using this technology.
•: Private Cable. Additional competition is posed by satellite master antenna television systems known as "SMATV systems" serving multi-dwelling units, such as condominiums, apartment complexes, and private residential communities.
•: Other Cable Distribution. Currently, a second cable operator offering analog television distribution and providing high-speed Internet access service is serving multi-unit dwellings in the greater Montréal area.
•: Wireless Distribution. Cable television systems also compete with wireless program distribution services such as multi-channel multipoint distribution systems. This technology uses microwave links to transmit signals from multiple transmission sites to line-of-sight antennas located within the customer's premises.
•: Grey and Black Market DBS Providers. Cable and other distributors of television signals continue to face competition from the use of access codes and equipment that enable the unauthorized decoding of Canadian and foreign encrypted satellite signals (black market) and from the reception of foreign signals through subscriptions to foreign satellite television providers that are not lawful distributors in Canada (grey market). See "Risk Factors — Risks Relating to Our Business — We are subject to extensive government regulation. Changes in government regulation could adversely affect our business, financial condition or results of operations."

Our new telephony service that we intend to launch progressively among our residential and commercial customers in Québec in the first half of 2005 will compete against other telephone companies, including both the incumbent telephone service provider in Québec, which controls a significant portion of the telephony market in Québec, as well as other Voice over IP telephony service providers.

Regulation

Ownership and Control of Canadian Broadcast Undertakings

Subject to any directions issued by the Governor in Council (effectively the Federal Cabinet), the Canadian Radio-television and Telecommunications Commission, referred to as the CRTC, regulates and supervises all aspects of the Canadian broadcasting system.

The Governor in Council, through an Order-in-Council referred to as the Direction to the CRTC (Ineligibility of Non-Canadians), has directed the CRTC not to issue, amend or renew a broadcasting license to an applicant that is a non-Canadian. Canadian, a defined term in the Direction, means, among other things, a citizen or a permanent resident of Canada, a qualified corporation, a Canadian government, a non-share capital corporation of which a majority of the directors are appointed or designated by statute, regulation or specified governmental authorities, or a qualified mutual insurance company, qualified pension fund society or qualified cooperative of which not less than 80% of the directors or members are Canadian. A qualified corporation is one incorporated or continued in Canada, of which the chief executive officer (or if there is no chief executive officer, the person performing functions similar to those performed by a chief executive officer) and not less than 80% of the directors are

Canadian, and not less than 80% of the issued and outstanding voting shares and not less than 80% of the votes are beneficially owned and controlled, directly or indirectly, by Canadians. In addition to the above requirements, Canadians must beneficially own and control, directly or indirectly, not less than 66.6% of the issued and outstanding voting shares and not less than 66.6% of the votes of the parent company that controls the subsidiary, and neither the parent company nor its directors may exercise control or influence over any programming decisions of the subsidiary if Canadians beneficially own and control less than 80% of the issued and outstanding shares and votes of the parent corporation, if the chief executive officer of the parent corporation is a non-Canadian or if less than 80% of the parent corporation's directors are Canadian. There are no specific restrictions on the number of non-voting shares which may be owned by non-Canadians. Finally, an applicant seeking to acquire, amend or renew a broadcasting license must not otherwise be controlled in fact by non-Canadians, a question of fact which may be determined by the CRTC in its discretion. Control is defined broadly in the Direction to mean control in any manner that results in control in fact, whether directly through the ownership of securities or indirectly through a trust, agreement or arrangement, the ownership of a corporation or otherwise. Vidéotron is a qualified Canadian corporation.

Regulations made under theBroadcasting Act (Canada) require the prior approval of the CRTC of any transaction that directly or indirectly results in (i) a change in effective control of the broadcasting distribution undertaking of a licensee, (ii) a person or a person and its associates acquiring control of 30% or more of the voting interests of a licensee or of a person who has, directly or indirectly, effective control of a licensee, or (iii) a person or a person and its associates acquiring 50% or more of the issued common shares of the licensee or of a person who has direct or indirect effective control of a licensee. In addition, if any act, agreement or transaction results in a person or a person and its associates acquiring control of at least 20% but less than 30% of the voting interests of a licensee, or of a person who has, directly or indirectly, effective control of the licensee, the CRTC must be notified of the transaction. Similarly, if any act, agreement or transaction results in a person or a person and its associates acquiring control of 40% or more but less than 50% of the voting interests of a licensee, or a person who has directly or indirectly effective control of the licensee, the CRTC must be notified.

In November 2002, the federal Minister of Industry initiated a review of the existing foreign ownership restrictions applicable to telecommunications carriers. In April 2003, the House of Commons Standing Committee on Industry, Science and Technology released a report of its study of the issue of foreign direct investment restrictions applicable to telecommunications common carriers. The House of Commons Standing Committee on Industry, Science and Technology, recommended, among other things, that the Government of Canada remove the existing foreign ownership restrictions in the telecommunications industry and ensure that any changes made to the Canadian ownership and control requirements applicable to telecommunications common carriers be applied equally to broadcasting distribution undertakings. In June 2003, the House of Commons Standing Committee on Canadian Heritage released a report of its review of theBroadcasting Act (Canada) and, among other things, recommended that the current restrictions on foreign ownership relating to broadcasting, cable and telecommunications remain. In September 2003, the Canadian government announced it intended to launch an expedited analysis of these reports and this issue, but to date the results of that analysis have not been publicly announced and no changes have been made or proposed. We cannot predict, what, if any, changes will result from these reports.

Jurisdiction Over Canadian Broadcasting Undertakings

Our cable distribution undertakings are subject to theBroadcasting Act (Canada) and regulations made under theBroadcasting Act (Canada) that empower the CRTC, subject to directions from the Governor in Council, to regulate and supervise all aspects of the Canadian broadcasting system in order to implement the policy set out in that Act. Certain of our undertakings are also subject to theRadiocommunication Act (Canada), which empowers Industry Canada to establish and administer the technical standards that networks and transmission must respect, namely, maintaining the technical quality of signals.

The CRTC has, among other things, the power under theBroadcasting Act (Canada) and regulations to issue, subject to appropriate conditions, amend, renew, suspend and revoke broadcasting licenses, approve certain changes in corporate ownership and control, and establish and oversee compliance with regulations and policies concerning broadcasting, including various programming and distribution requirements, subject to certain directions from the Federal Cabinet.

Licensing of Canadian Broadcasting Distribution Undertakings

The CRTC has responsibility for the issuance, amendment, renewal, suspension and revocation of Canadian broadcasting licenses, including licenses to operate a cable distribution undertaking. A cable distribution undertaking distributes broadcasting services to customers predominantly over closed transmission paths. A license to operate a cable distribution undertaking gives the cable television operator the right to distribute television programming services in its licensed service area. Broadcasting licenses may be issued for periods not exceeding seven years and are usually renewed, except in cases of a serious breach of the conditions attached to the license or the regulations of the CRTC. The CRTC is required to hold a public hearing in connection with the issuance, suspension or revocation of a license.

Cable systems with 2,000 customers or less and operating their own local headend are exempted from the obligation to hold a license pursuant to an exemption order issued by the CRTC in 2001 and amended in 2002. These cable systems will continue to have to comply with a number of programming carriage requirements set out in the exemption order and comply with the Canadian ownership and control requirements in the Direction. We operate 16 of these small cable systems.

Similarly, cable systems with between 2,000 and 6,000 customers (generally Class 2 cable systems or Class 3 cable systems not exempt under the CRTC's exemption for small cable undertakings) are also exempted from holding a license pursuant to a CRTC public notice issued in 2003. Cable distribution undertakings that are fully interconnected with other broadcasting distribution undertakings will be ineligible for this exemption unless the aggregate number of customers served by the interconnected broadcast distribution undertakings is less than 6,000. The CRTC has issued a proposed exemption order in June of 2004, and we have filed for revocation of license for three networks that will benefit from the exemption by having reduced administrative costs and regulatory burdens.

In September 2003, the CRTC adopted amendments to the Broadcasting Distribution Regulations that permit the CRTC to implement its regional licensing model for cable distribution undertakings (Broadcasting Public Notice CRTC 2003-48). The CRTC believes that the regional licensing approach will result in greater efficiencies for the licensees of cable distribution undertakings as well as for itself and reflects the current trend toward consolidation in the cable industry and growing interconnection between systems.

In November 2003, the CRTC finalized the regulatory framework that will govern the distribution of digital signals by over-the-air television stations (Broadcasting Public Notice CRTC 2003-61). The CRTC requires broadcasting distribution undertakings to distribute the primary digital signal of a licensed over-the-air television service in accordance with the priorities that currently apply to the distribution of the analog version of the services. The CRTC expects all broadcasting distribution undertakings to implement the necessary upgrades. Analog carriage should be phased out once 85% of a particular broadcasting distribution undertaking's customers have digital receivers or set-top boxes that can convert digital signals to analog. Exempt undertakings will not be required to duplicate mandatory services in digital format. A further proceeding to establish a licensing framework governing the transition of pay and specialty services to high definition, or HD, signals was initiated in August 2004. It will also establish a framework to govern the distribution of such services by broadcasting distribution undertakings. It is expected that this policy will be made public after the first quarter of 2005. According to the CRTC, the time period during which broadcasters and distributors will have to provide services in both analog and digital formats will depend on the speed with which customers convert from analog to digital. A shorter transition period will reduce the overall costs of the transition for both broadcasters and distributors.

In order to conduct our business, we must maintain our broadcasting distribution undertaking licenses in good standing. Failure to meet the terms of our licenses may result in their short-term renewal, suspension, revocation or non-renewal. We still hold a separate license for each of our 34 cable systems with greater than 2,000 customers and have never failed to obtain a license renewal for those cable systems.

Application of Canadian Telecommunications Regulation

In a series of decisions, the CRTC has determined that the carriage of "non-programming" services by cable companies results in the company being regulated as a carrier under theTelecommunications Act (Canada). This applies to a company serving its own customers, or allowing a third party to use its distribution network to provide non-programming services to customers, such as providing access to high-speed Internet services.

In addition, the CRTC regulates the provision of telephony services in Canada. On May 1, 1997, the CRTC established the regulatory framework for the provision of competitive local telephony services in Canada. Among the key elements of this framework are: a technical form of interconnection based on a co-carrier (i.e., peer-to-peer) relationship between the incumbent local exchange carrier and competitive local exchange carriers, or CLECs; mutual compensation for traffic termination (including Bill & Keep compensation at low levels of traffic imbalance); effective deregulation of CLEC retail service offerings with the exception of certain social obligations such as the provision of enhanced 911 service; and the imposition of a series of regulatory safeguards on the incumbent local exchange carriers to protect against anti-competitive conduct on their part, including retail tariffing requirements, service bundling restrictions and winback restrictions.

We expect that Videotron Telecom, which has been operating as a competitive local exchange carrier under the framework described above for several years, will provide the underlying local network interconnection services for our planned residential local telephony offering. In this capacity, we will be acting as a reseller of Videotron Telecom's competitive local exchange carrier services. In a series of rulings dating back to 1997, the CRTC has established that virtually all of the significant regulatory obligations imposed upon competitive local exchange carriers flow through to their resellers, and our planned residential local telephony offering has been designed on this basis.

In early 2004, the CRTC launched a regulatory proceeding to consider the advent of local telephony services using Voice over IP technology, and more specifically whether the existing framework for local telephony competition needed to be modified to accommodate these services. A public hearing was conducted in September 2004, and a decision is pending. Because we plan to offer services that satisfy the current requirements that are applied to the provision of conventional switched local telephone service, we do not believe that any new regulation imposed by the CRTC will prevent us from offering our planned Voice over IP telephony service. If, however, the CRTC forebears from the regulation of Voice over IP telephony service entirely, or substantially lessens the competitive safeguards applicable to the incumbent local exchange carriers, or creates unduly favorable conditions for non-facilities-based Voice over IP service providers, then our plans for our own Voice over IP offering may have to be substantially altered.

Right to Access to Telecommunications and Hydro-Electric Support Structures

The CRTC has concluded that some provisions of theTelecommunications Act (Canada) may be characterized as encouraging joint use of existing support structures of telephone utilities to facilitate efficient deployment of cable distribution undertakings by Canadian carriers. We access these support structures in exchange for a tariff that is regulated by the CRTC. If it were not possible to agree on the use or conditions of access with a support structure owner, we could apply to the CRTC for a right of access to a supporting structure of a telephone utility. The Supreme Court of Canada, however, has held on May 16, 2003 that the CRTC does not have jurisdiction under theTelecommunications Act (Canada) to establish the terms and conditions of access to the support structure of hydro-electricity utilities. Terms of access to the support structures of hydro-electricity utilities must therefore be negotiated with those utilities.

We have entered into an agreement for access to the support structures of hydro-electricity utilities in Québec running through December 2005. The Canadian Cable Telecommunications Association, or the CCTA, has filed an application before the Ontario Energy Board, or the OEB, to establish uniform terms and conditions of access to electricity distribution power pools in Ontario for the purpose of transmitting cable services, including a specific pole rental charge, retroactive to January 1, 1997. Hearings are presently ongoing before the OEB with respect to CCTA's application and no date has been fixed for a decision. While we have limited facilities located in Ontario that will be directly affected by the OEB's decision, the setting of rates and terms and conditions for support structure access in Ontario will very likely influence future negotiations with Québec electricity utilities for the period commencing in 2006.

Canadian Broadcast Distribution (Cable Television)

Distribution of Canadian Content

The Broadcasting Distribution Regulations made by the CRTC pursuant to theBroadcasting Act (Canada) mandate the types of Canadian and non-Canadian programming services respectively that can be distributed by

broadcasting distribution undertakings, including cable television systems. In summary, each cable television system is required to distribute all of the Canadian programming services that the CRTC has determined are appropriate for the market it serves, which includes local and regional television stations, certain specialty channels and pay television channels, and a pay-per-view service, but does not include Category 2 digital services and video-on-demand services.

As revised from time to time, the CRTC has issued a list of non-Canadian programming services eligible for distribution in Canada on a discretionary user-pay basis to be linked along with Canadian pay-television services or with Canadian specialty services. The CRTC currently permits the linkage of up to one non-Canadian service for one Canadian specialty service and up to five non-Canadian services for every one Canadian pay-television service. In addition, the number of Canadian services received by a cable television customer must exceed the total number of non-Canadian services received. The CRTC decided that it would not be in the interest of the Canadian broadcasting system to permit the distribution of certain non-Canadian pay-television movie channels and specialty programming services that could be considered competitive with licensed Canadian pay-television and specialty services. Therefore, pay-television movie channels and certain specialty programming services available in the United States and other countries are not approved for distribution in Canada.

Also important to broadcasting operations in Canada are the specialty (or thematic) programming service access rules, which require cable systems with more than 6,000 customers (Class 1 cable systems) operating in a French-language market to offer each analog French-language Canadian specialty service licensed, other than certain religious programming services, to the extent of availability of channels. Moreover, all Canadian specialty channels, other than Category 2 digital specialty channels, must be carried by broadcast distributors with more than 2,000 customers (Class 1 and Class 2 cable systems) when digital distribution is offered. These rules seek to ensure wider carriage for certain Canadian specialty channels than might otherwise be secured through negotiation. However, Category 2 digital specialty channels do not benefit from any regulatory assistance to guarantee distribution on cable or DTH satellite distribution undertakings apart from the requirement that a distributor offer at least five non-related Category 2 digital specialty channels for every Category 2 digital specialty channel it distributes in which it owns, directly or indirectly, more than 10% of the equity.

1998 Broadcasting Distribution Regulations

The Broadcasting Distribution Regulations enacted in 1998, also called the 1998 Regulations, apply to distributors of broadcasting services or broadcasting distribution undertakings in Canada. The 1998 Regulations promote competition between broadcasting distribution undertakings and the development of new technologies for the distribution of such services while ensuring that quality Canadian programs are exhibited. The 1998 Regulations introduced important new rules, including the following:

•: Competition, Carriage Rules and Signal Substitution. The 1998 Regulations provide equitable opportunities for all distributors of broadcasting services. Similar to the signal carriage and substitution requirements that are imposed on existing cable television systems, under the 1998 Regulations, new broadcasting distribution undertakings are also subject to carriage and substitution requirements. The 1998 Regulations prohibit a distributor from giving an undue preference to any person, including itself, or subjecting any person to an undue disadvantage. This gives the CRTC the ability to address complaints of anti-competitive behavior on the part of certain distributors.

A significant aspect of television broadcasting in Canada is simultaneous program substitution, or simulcasting, a regulatory requirement under which Canadian distribution undertakings, such as cable television systems with over 6,000 customers, are required to substitute the foreign programming service with local Canadian signal, including Canadian commercials, for broadcasts of identical programs by a U.S. station when both programs are exhibited at the same time. These requirements are designed to protect the program rights that Canadian broadcasters acquire for their respective local markets. The CRTC, however, has suspended the application of these requirements to DTH satellite operators for a period of time, so long as they undertake certain alternative measures, including monetary compensation to a fund designed to help finance regional television productions.

•: Canadian Programming and Community Expression Financing Rules. All distributors, except systems with less than 2,000 customers, are required to contribute at least 5% of their gross annual broadcast revenues to

the creation and presentation of Canadian programming including community programming. However, the allocation of these contributions between broadcast and community programming can vary depending on the type and size of the distribution system involved.

•: Inside Wiring Rules. The CRTC determined that the inside wiring portion of cable networks creates a bottleneck facility that could affect competition if open access is not provided to other distributors. Incumbent cable companies may retain the ownership of the inside wiring but must allow usage by competitive undertakings to which the cable company may charge a just and reasonable fee for the use of the inside wire. Because the CRTC did not establish a fee for the use of the inside wire until September 2003, we negotiated a fee for the use of inside wire owned by Câblage QMI in February 2002. On September 3, 2002, the CRTC established a fee of $0.52 per customer per month for the use of cable inside wire in MDUs. As a result, the CRTC, on October 9, 2002, ordered Câblage QMI and us to comply with the inside wiring access rules.

Broadcasting License Fees

Broadcasting licensees are subject to annual license fees payable to the CRTC. The license fees consist of two fees. One fee allocates the CRTC's regulatory costs for the year to licensees based on a licensee's proportion of the gross revenue derived during the year from the licensed activities of all licensees whose gross revenues exceed specific exemption levels. The other fee, also called the Part II license fee, for a broadcasting distribution undertaking, is 1.365% of the amount by which its gross revenue derived during the year from its licensed activity exceeds $175,000. Our broadcasting distribution activities are subject to both fees. In January 2004, we filed a claim before the Federal Court on the basis that the Part II license fee is similar to a tax levy and that the CRTC has no jurisdiction to impose a tax. This claim has been merged with a similar claim from the Canadian Association of Broadcasters.

Rates

Our revenue related to cable television is derived mainly from (a) monthly subscription fees for basic cable service; (b) fees for premium services such as specialty services, pay-television and pay-per-view television and video-on-demand; and (c) installation and additional outlets charges.

The CRTC does not regulate the fees charged by non-cable broadcast distribution undertakings and does not regulate the fees charged by cable providers for non-basic services. The basic service fees charged by Class 1 (6,000 customers or more) cable providers are regulated by the CRTC until true competition exists in a particular service area, which occurs when:

(1): 30% or more of the households in the licensed service area have access to the services of another broadcasting distribution undertaking. The CRTC has advised that as of August 31, 1997, the 30% availability criterion was satisfied for all licensed cable areas; and
(2): the number of customers for basic cable service has decreased by at least 5% since the date on which a competitor started offering its basic cable service in the particular area.

For all but two of our service areas, the basic service fees for our customers have been deregulated.

The CRTC further restricts installation fees to an amount that does not exceed the average actual cost incurred to install and connect the outlet to a household situated in a residential area.

Subject to certain notice and other procedural requirements, for Class 1 cable systems still regulated, we may increase our basic service rates so as to pass through to customers increases in CRTC authorized fees to be paid to specialty programming services distributed on our basic service. However, the CRTC has the authority to suspend or disallow such an increase.

In the event that distribution services may be compromised as a result of economic difficulties encountered by a Class 1 cable distributor, a request for a rate increase may be submitted to the CRTC. The CRTC may approve an increase if the distributor satisfies the criteria then in effect for establishing economic need.

Winback Restrictions

In a letter decision dated April 1, 1999, the CRTC established rules, referred to as the winback rules, that prohibit the targeted marketing by incumbent cable companies of customers who have cancelled basic cable service. These rules require us and other incumbent cable companies to refrain for a period of 90 days from: (a) directly contacting customers who, through an agent, have notified their cable company of their intention to cancel basic cable service; and (b) offering discounts or other inducements not generally offered to the public, in instances when customers personally initiate contact with the cable company for the purpose of canceling basic cable service. The CRTC considers it appropriate at this time to eliminate the winback rules as they pertain to customers in single unit dwellings. In August of 2004 (Public Notice CRTC 2004-62), the CRTC has decided that it will no longer require incumbent cable companies to adhere to winback rules with respect to customers who reside in single unit dwellings. However, the CRTC has also determined that the winback rules should continue to apply to incumbent cable companies with respect to their dealings with individual customers who reside in multiple unit dwellings. The CRTC has further determined that incumbent cable companies are prohibited from initiating communication with residents of a multiple unit dwelling for a period of 90 days from the date on which a new entrant enters into an access agreement to provide service in the multiple unit dwelling. Moreover, the CRTC now requires incumbent cable companies to refrain from the targeted marketing of all residents of a multiple unit dwelling, or from offering them discounts or other inducements not generally available to the public, for a period of 90 days following the date on which a new entrant enters into an access agreement to offer services in the multiple unit dwelling.

In February 2001, the CRTC also announced similar "winback" restrictions on certain cable television operators, including us, in the Internet service market. These restrictions limit cable operators' ability to "win back" Internet service customers who have chosen to switch to another Internet service provider within 90 days of the customer's switch.

Copyright Board Proceedings

Certain copyrights in television and pay audio programming are administered collectively and tariff rates are established by the Copyright Board of Canada. Tariffs set by the Copyright Board are generally applicable until a public process is held and a decision of the Copyright Board is rendered for a renewed tariff. Renewed tariffs are often applicable retroactively.

Royalties for the Retransmission of Distant Signals

Following the implementation in 1989 of the Canada-U.S. Free Trade Agreement, theCopyright Act (Canada) was amended to require retransmitters, including Canadian cable television operators, to pay royalties in respect of the retransmission of distant television and radio signals.

Since this legislative amendment, theCopyright Act (Canada) empowers the Copyright Board of Canada to quantify the amount of royalties payable to retransmit these signals and to allocate them among collective societies representing the holders of copyright in the works thus retransmitted. Regulated cable television operators cannot automatically recover such paid retransmission royalties from their customers, although such charges might be a component of an application for a basic cable service rate increase based on economic need.

Distant television signal retransmission royalties vary from $100 per year for Class 3 cable systems and from $0.30 to $0.65 per customer per month for Class 2 cable systems serving areas with fewer than 1,500 customers and to $0.70 per customer per month for more than 6,000 customers (Class 1 cable systems), except in French-language markets. In French-language markets, there is a 50% rebate for Class 1 and Class 2 cable systems, where the maximum rate is $0.35 per customer per month. The same pricing structure, with lower rates, applies for distant radio signal transmission. All of our undertakings operate in French-language markets. Recently, the collective societies representing copyright holders filed with the Copyright Board of Canada a tariff request to increase to $1.00 per customer per month the distant signal retransmission royalty applicable to systems of more than 6,000 customers for the years 2000 to 2008. In December 2003, the 2003 tariff was extended indefinitely on an interim basis until the Copyright Board rules on the proposed tariff, and a hearing in respect of the proposed tariff has been scheduled for October 2005.

Royalties for the Transmission of Pay and Specialty Services

In 1989, theCopyright Act (Canada) was amended, in particular, to define copyright as including the exclusive right to "communicate protected works to the public by telecommunication." Prior to the amendment, it was generally believed that copyright holders did not have an exclusive right to authorize the transmission of works carried on radio and television station signals when these signals were not broadcast but rather transmitted originally by cable television operators to their customers. In 1996, at the request of the Society of Composers, Authors and Music Publishers of Canada (SOCAN), the Copyright Board approved Tariff 17A, which required the payment of royalties by broadcasting distribution undertakings, including cable television operators, that transmit musical works to their customers in the course of transmitting television services on a subscription basis. Through a series of industry agreements, this liability was shared with the pay and specialty programming services.

In February 2001, the Copyright Board rendered a decision that set the royalty rates payable pursuant to Tariff 17A for 1996 to 2000. The royalty payable by small transmission systems was $10 per year. The monthly royalty payable by transmission systems (other than small transmission systems) for the signals of Canadian and American pay services was 2.1% of the transmitter's affiliation payments to these services in 1996 and 1.8% for the remainder of the tariff period. For all other signals transmitted, the monthly royalty payable by a transmitter is based on the total number of premises served in the system's licensed area and varies from $0.028 to $0.095 for 1996 to $0.044 to $0.155 for 2000. Royalties payable by a system located in a French-language market are calculated at a rate equal to 85% of the rate otherwise payable. Starting in 2001, SOCAN requested substantial increases to the Tariff 17 royalty rates, while several objectors requested changes to the tariff structure and royalty calculations. Starting in 2001, the royalty rates that had been approved for 2000 were continued on an interim basis pending a decision of the Copyright Board on SOCAN's proposed Tariff 17A.

In March 2004, the Copyright Board rendered its decision setting Tariff 17A royalty rates for 2001 through 2004. The Board changed the structure of Tariff 17A to calculate the royalties based on the revenues of the pay and specialty programming services (affiliation payments only in the case of foreign and pay services, and all revenues in the case of Canadian specialty services) and set a basic royalty rate of 1.9%, which is subject to reductions in certain cases, although there is no French-language discount. Since interim royalty payments had been made at a lower rate based on the 2000 tariff, there is a retroactive royalty obligation owed by us for the period starting in 2001. Along with all of the other broadcasting distribution undertakings and programming services, we are in the process of settling and paying this retroactive obligation to SOCAN. SOCAN has agreed that the 2005 tariff will continue on the same basis as in 2004.

Royalties for Pay Audio Services

The Copyright Board of Canada rendered a decision on March 16, 2002 regarding two new tariffs for the years 1997-1998 to 2002, which provide for the payment of royalties from programming and distribution undertakings broadcasting pay audio services. The tariffs fix the royalties payable to SOCAN and to the Neighbouring Rights Collective of Canada, or NRCC, respectively, at 11.115% and 5.265% of the affiliation payments payable during a month by a distribution undertaking for the transmission for private or domestic use of a pay audio signal. The royalties payable to SOCAN and NRCC by a small cable transmission system, an unscrambled low or very low power television station or by equivalent small transmission systems are fixed by the Board at 5.56% and 2.63%, respectively, of the affiliation payments payable during a year by the distribution undertaking for the transmission for private or domestic use of a pay audio signal. Royalties payable by a system located in a French-language market are calculated at a rate equal to 85% of the rate otherwise payable.

Tariff in Respect of Internet Service Provider Activities

In 1996, SOCAN proposed a tariff (Tariff 22) to be applied against Internet service providers, in respect of composers'/publishers' rights in musical works communicated over the Internet to Internet service providers' customers. SOCAN's proposed tariff was challenged by a number of industry groups and companies. In 1999, the Copyright Board decided that Internet service providers should not be liable for the communication of musical works by their customers, although they might be liable if they themselves operated a musical website. In June 2004, the Supreme Court of Canada upheld this portion of the decision of the Copyright Board and determined that Internet service providers do not incur liability for copyright content when they engage in normal

intermediary activities, including web hosting and caching. SOCAN's tariff proposal will, therefore, be subject to further consideration by the Copyright Board to determine what royalties should be paid by content providers in respect of music communicated over the Internet.

Access by Third Parties to Cable Networks

In Canada, access to the Internet is a telecommunications service. While Internet access services are not regulated on a retail (price and terms of service) bases, Internet access for third-party Internet service providers is mandated and tariffed according to conditions approved by the CRTC for cable operators.

On July 6, 1999, the CRTC required certain of the largest cable television operators, including Vidéotron, to submit tariffs for high-speed Internet access services, known as open access or third-party access, in order to allow competing retail Internet service providers to offer such services over a cable infrastructure. Some of our tariff elements, most notably the per end-user rate we may charge to third-party Internet service providers, were approved by the CRTC on an interim basis in August 2002. A revised cost study for our per end-user rate was filed with the CRTC in August 2004 and is under consideration. Other tariff elements, most notably those related to our interconnection architecture and service charges, were approved by the CRTC on an interim basis in November 2004. Other technical, operational and business policies to implement access services have been addressed by the CRTC Interconnection Steering Committee, or CISC, and technical tests have been concluded.

Final tariff rates for our per end-user charge to Internet service providers and our other third-party interconnection service charges will be established pursuant to CRTC follow-up proceedings currently under way. We expect that interconnection by third-party Internet service providers to our cable network will commence in the near future.

Until third-party access to our cable network is provided, the CRTC requires certain of the largest cable television operators, including Vidéotron, to allow third-party retail Internet service providers to purchase for the purpose of resale our retail high-speed Internet services at a discount of 25% off the lowest retail Internet service rate charged by us to our cable customers during a one-month period. This resale obligation will cease to be mandated once facilities-based access is available to Internet service providers.

History

Our name is Vidéotron Ltée. We were founded on September 1, 1989 as part of the amalgamation of our two predecessor companies, namely Vidéotron Ltée and Télé-Câble St-Damien inc., under Part IA of theCompanies Act (Québec). In October 2000, our parent company, Le Groupe Vidéotron Ltée, was acquired by Quebecor Media for $5.3 billion. At the time of this acquisition, the assets of Le Groupe Vidéotron ltée included all of our shares. On October 7, 2003, Quebecor Media, our sole shareholder, transferred its wholly owned subsidiaries SuperClub Vidéotron and Vidéotron TVN to us in exchange for additional shares of our capital stock. Vidéotron TVN inc. was liquidated into Vidéotron on December 31, 2004, and Vidéotron (1998) ltée was liquidated into Vidéotron on January 1, 2005. We expect that Vidéotron TVN inc. and Vidéotron (1998) ltée will be dissolved in 2005. We also currently expect that the operations of Videotron Telecom, which is a wholly owned subsidiary of Quebecor Media, will be integrated within our own operations in 2005, subject to the approval of the CRTC and our lenders, as well as the satisfactory completion of discussions with our labor unions.

Our registered office is located at 300 Viger Avenue East, Montréal, Québec, Canada H2X 3W4, and our telephone number is (514) 281-1232. Our corporate website can be accessed throughwww.videotron.com. The information found on our corporate website is, however, not part of this prospectus. Our agent for service of process in the United States is CT Corporation System, 111 Eighth Avenue, New York, New York 10011.

Property, Plants and Equipment

Our corporate offices are located in leased space at 300 Viger Avenue East, Montréal, Québec, Canada H2X 3W4. We own several buildings in Montréal, the largest of which is located at 150 Beaubien Street (approximately 27,850 square feet) and houses our primary headend. We also own a building of approximately 40,000 square feet in Quebec City where our regional headend for the Quebec City region is located. We also own

or lease a significant number of smaller locations for signal reception sites and customer service and business offices. We generally lease space for the business offices and retail locations for the operation of our video stores.

Our credit facilities are generally secured by charges over all of our assets and those of our subsidiaries. The CF Cable notes are generally secured by charges over all of its assets and those of its subsidiaries. See the description of our debt instruments under "Description of Certain Indebtedness."

Employees

As of September 30, 2004, we had 2,494 full-time and part-time employees. Substantially all of our employees are based and work in the Province of Québec. Approximately 2,018 of our employees are unionized, and the terms of their employment are governed by one of our four regional collective bargaining agreements. Our two most important collective bargaining agreements, covering our unionized employees in the Montréal and Quebec City regions, will expire on December 31, 2006. We also have two other collective bargaining agreements that cover our unionized employees in the Chicoutimi and Hull regions, which will expire on December 31, 2006 and August 31, 2008, respectively.

We have had significant labor disputes in the past. The renewal in April 2003 of our collective bargaining agreements for the Montréal and Quebec City regions ended a labor dispute, which began in May 2002, that disrupted our operations, resulted in damages to our network and impaired our operating results. The terms of the new collective bargaining agreements, however, enable us to reduce our operating costs and enhance productivity and provide us with greater flexibility in the management of our operations. We believe these new agreements have resulted in operating expenses that are approximately $20 million lower, on an annualized basis, than what we would have incurred under our previous labor agreements.

Intellectual Property

We use a number of trademarks for our products and services. Many of these trademarks are registered by us in the appropriate jurisdictions. In addition, we have legal rights in the unregistered marks arising from their use. We have taken affirmative legal steps to protect our trademarks, and we believe our trademarks are adequately protected.

Environment

Our operations are subject to federal, provincial and municipal laws and regulations relating to the protection of the environment, including those governing the discharge of pollutants into the air and water, the management and disposal of hazardous materials, the recycling of wastes and the cleanup of contaminated sites. Laws and regulations relating to workplace safety and worker health, which among other things, regulate employee exposure to hazardous substances in the workplace, also govern our operations. Compliance with these laws has not had, and management does not expect it to have, a material effect upon our capital expenditures, net income or competitive position. Environmental laws and regulations and the interpretation of such laws and regulations, however, have changed rapidly in recent years and may continue to do so in the future. The property on which our primary headend is located has contamination problems to various degrees related to historical use by previous owners as a landfill site and is listed by the authorities on their contaminated sites registry. We believe that such contamination poses no risk to public health, and we are currently updating our environmental studies to determine whether further intervention is required. Our properties, and the areas surrounding all our properties, may have had historic uses or may have current uses which could have had or have an adverse environmental impact, and which may require further study or remedial measures. No material studies or remedial measures are currently anticipated or planned by us or required by regulatory authorities with respect to our properties. However, we cannot provide assurance that all environmental liabilities have been determined, that any prior owner of our properties did not create a material environmental condition not known to us, that a material environmental condition does not otherwise exist as to any such property, or that expenditure will not be required to deal with known or unknown contamination.

Legal Proceedings

On March 13, 2002, an action was filed in the Superior Court of Québec by Investissement Novacap inc., Telus Québec Inc. and Paul Girard against Vidéotron, in which the plaintiffs allege that we wrongfully terminated our obligations under a share purchase agreement entered into in August 2000 and are seeking damages of approximately $26 million.

In November 2001, Voca-tel Communications Inc. instituted legal proceedings against us for wrongful breach of contract in the amount of $4.7 million.

In 1999, Regional Cablesystems Inc. (now Persona Communications Inc.) initiated an arbitration in which it sought an amount of $8.6 million as a reduction of the purchase price of the shares of Northern Cable Holding sold to Regional Cablesystems Inc. by CF Cable in October 1998. A settlement in principle has been reached subject to finalization of settlement documentation.

We believe that the legal actions and arbitration proceedings described above are unfounded, and we intend to vigorously defend our position in each of these matters.

We are also involved from time to time in various claims and lawsuits incidental to the conduct of our business in the ordinary course. We carry insurance coverage in such amounts that we believe to be reasonable under the circumstances. We believe that an adverse outcome of such legal proceedings will not have a material adverse impact on our operating results or our financial condition.

MANAGEMENT

Directors and Executive Officers

The following table presents certain information concerning our directors and executive officers as of the date of this prospectus:

Name and Municipality of Residence	Age	Position
FRANÇOIS LAURIN(1) Pointe Claire, Québec	44	Director
ROBERT DÉPATIE Rosemère, Québec	46	Director and President and Chief Executive Officer
SERGE GOUIN Montréal, Québec	61	Director and Chairman of the Board
JEAN LA COUTURE, FCA(1) Montréal, Québec	58	Director
JACQUES MALLETTE Longueuil, Québec	47	Director and Executive Vice President and Chief Financial Officer
JEAN-LOUIS MONGRAIN(1) Brossard, Québec	61	Director
PIERRE KARL PÉLADEAU Montréal, Québec	43	Director
YVAN GINGRAS Montréal, Québec	47	Executive Vice President, Finance and Operations
BERNARD BRICAULT Quebec City, Québec	51	Vice President, Technical Quality
SYLVAIN BROSSEAU Varennes, Québec	41	Vice President, Customer Service
MARK D'SOUZA Montréal, Québec	44	Vice President and Treasurer
ANDRÉ GASCON Longueuil, Québec	43	Vice President, Information Technologies
DANIEL PROULX Montréal, Québec	47	Vice President, Engineering
J. SERGE SASSEVILLE Westmount, Québec	46	Vice President, Legal Affairs and Secretary
ÉDOUARD G. TRÉPANIER Boucherville, Québec	53	Vice President, Regulatory Affairs
LOUISE SAUVÉ Montréal, Québec	44	Vice President, Control
MANON BROUILLETTE Montréal, Québec	36	Vice President, Marketing
JEAN NOVAK Beaconsfield, Québec	41	Vice President, Sales
CLAUDINE TREMBLAY Montréal, Québec	50	Assistant Secretary

(1): Member of our Audit Committee.

François Laurin, Director. Mr. Laurin has served as a director of our company since July 2004. Mr. Laurin, a chartered accountant and chartered financial analyst, is Vice-President, Investments, Communications of CDP Capital-Communications, a wholly owned subsidiary of Caisse de dépôt et placement du Québec, Canada's largest pension fund with over $140 billion in assets under management. From 2001 to 2003, Mr. Laurin was Vice-President and Controller at Bombardier Transport in Berlin, and from 2000 to 2001, he served as Vice-President, Finance and Administration of Microcell i5 Inc. Mr. Laurin was the Vice-President, Finance, and Controller of Teleglobe for eight years from 1992 to 2000 and Vice-President, Administrative Services, of Télévision Quatre-Saisons for four years from 1988 to 1992. Prior to 1988, Mr. Laurin served in various positions at Price Waterhouse, CP Rail and CFCF 12. He is a member of the Ordre des comptables agréés du Québec, the Canadian Institute of Chartered Accountants and the Association for Investment Management and Research. In addition, Mr. Laurin serves as a Governor, a member of the board of directors and Chairman of the Finance Committee of Les Amis de la Montagne, an organization dedicated to the preservation and enhancement of Montréal's Mount Royal Park.

Robert Dépatie, Director and President and Chief Executive Officer. Mr. Dépatie has been a director of our company and our President and Chief Executive Officer since June 2003. He joined us in December 2001 as Senior Vice President, Sales, Marketing and Customer Service. Before joining us, Mr. Dépatie held numerous senior positions in the food distribution industry, such as President of Distributions Alimentaires Le Marquis/Planters from 1999 to 2001 and General Manager of Les Aliments Small-Fry (Humpty Dumpty) from 1998 to 1999. From 1988 to 1998, he held various senior positions with H.J. Heinz Canada Ltd., such as Executive Vice-President from 1993 to 1998. He has also been a director of Joncas Postexperts Inc., an indirect subsidiary of Quebecor World Inc., since April 2002.

Serge Gouin, Director and Chairman of the Board. Mr. Gouin has served as a director of our company and our Chairman of the Board since July 2001. In addition, Mr. Gouin was appointed to the position of President and Chief Executive Officer of Quebecor Media in March 2004. Mr. Gouin has also been a director of Quebecor Media since the fall of 2000 and served as Chairman of the Board of Directors of Quebecor Media from January 2003 to March 2004. He is also a member of the executive committee of the Board of Directors of Quebecor Media and chairs its compensation and human resources committee. Mr. Gouin was an Advisory Director of Citigroup Global Markets Canada Inc. From 1991 to 1996, Mr. Gouin served as President and Chief Operating Officer of Le Groupe Vidéotron Ltée. From 1987 to 1991, Mr. Gouin was President and Chief Executive Officer of Télé-Métropole Inc. Mr. Gouin is also a member of the board of directors of Cott Corporation, Onex Corporation and Cossette Communication Group Inc.

Jean La Couture, FCA, Director. Mr. La Couture has served as a director of our company since October 2003, and he has also been a director of Quebecor Media and the Chairman of its audit committee since May 5, 2003. Mr. La Couture, a Fellow Chartered Accountant, is President of Private Hearing Ltd., a mediation and negotiation firm, and President of Top Management Services Inc., a management firm. He also acts as President for the "Regroupement des assureurs de personnes à charte du Québec (RACQ)." From 1972 to 1994, he was President and Chief Executive Officer of three organizations, including La Garantie, Compagnie d'assurance de l'Amérique du Nord, a Canadian specialty line insurance company from 1990 to 1994. Mr. La Couture also serves as Director on the Board of Directors of several corporations, including Quebecor Inc., Quebecor Media, Sun Media Corporation, Groupe Pomerleau (a Québec-based construction company) and Innergex Power Income Fund.

Jacques Mallette, Director and Executive Vice President and Chief Financial Officer. Mr. Mallette has served as a director of our company and our Executive Vice President and Chief Financial Officer since April 2003. Mr. Mallette has also served as Executive Vice President and Chief Financial Officer of Quebecor Inc., Quebecor Media and Sun Media Corporation since March 2003. Prior to joining the Quebecor group of companies, Mr. Mallette was President and Chief Executive Officer of Cascades Boxboard Group Inc., where he started as Vice President and Chief Financial Officer in 1994. He also serves as director of a number of subsidiaries of Quebecor Media. Mr. Mallette has been a member of the Canadian Institute of Chartered Accountants since 1982.

Jean-Louis Mongrain, Director. Mr. Mongrain has served as a director of our company since October 2003. Mr. Mongrain has also been a director of Quebecor Media since December 13, 2002. Mr. Mongrain is an experienced banker, who successively worked for the Royal Bank of Canada and the Laurentian Bank.

Mr. Mongrain graduated from Sherbrooke University where he obtained a master's degree in commerce. He worked for more than 10 years for the Royal Bank of Canada where he occupied various functions in the commercial and corporate banking sectors. After that, he worked for the Laurentian Bank from 1989 to 2000 where he served as head of the credit functions of the bank as well as President of the credit committee. He was responsible for the updating of the bank's credit policies and was also involved in several due diligence investigations in connection with various acquisitions. Mr. Mongrain also serves as a member of the boards of directors of Sun Media Corporation and Groupe Deschênes inc.

Pierre Karl Péladeau, Director. Mr. Péladeau has served as a director of our company since June 2001. In addition, Mr. Péladeau is President and Chief Executive Officer of Quebecor Inc. and was appointed to the position of President and Chief Executive Officer of Quebecor World in March 2004. Mr. Péladeau served as President and Chief Executive Officer of Quebecor Media from August 2000 to March 2004. Mr. Péladeau joined Quebecor's communications division in 1985 as Assistant to the President. From 1989 until 1991, Mr. Péladeau was Vice-President, Operations of Quebecor Group Inc., and he was appointed President in 1991. In 1994, Mr. Péladeau helped establish Quebecor Printing Europe and, as its President, oversaw its growth through a series of acquisitions in France, the United Kingdom, Spain and Germany to become one of Europe's largest printers by 1997. In 1997, Mr. Péladeau became Executive Vice President and Chief Operating Officer of Quebecor Printing Inc. (which has since become Quebecor World Inc.). In 1999, Mr. Péladeau became President and Chief Executive Officer of Quebecor Inc. Mr. Péladeau was also our President and Chief Executive Officer from July 2001 until June 2003. Mr. Péladeau sits on the boards of directors of numerous companies in the Quebecor group and is active in many charitable and cultural organizations.

Yvan Gingras, Executive Vice President, Finance and Operations. Mr. Gingras joined us in 2001 as Senior Vice President, Finance and Administration and was appointed our Executive Vice President, Finance and Operations in July 2003. Prior to joining us, Mr. Gingras was Vice President and Controller of Abitibi-Consolidated Inc. from 2000 to 2001. He also held several positions, including senior management functions, with Donohue Inc. from 1981 to 2000. Mr. Gingras has been a member of the Canadian Institute of Chartered Accountants since 1980.

Bernard Bricault, Vice President, Technical Quality. Mr. Bricault has served as our Vice President, Technical Quality since September 1997. Mr. Bricault has been with us for more than 20 years and has held various senior management positions since 1987.

Sylvain Brosseau, Vice President, Customer Service. Mr. Brosseau has served as our Vice President, Customer Service since July 2003. From 1996 to July 2003, Mr. Brosseau held various management positions with us, including Executive Director, Customer Service and Executive Director, Technical Support.

Mark D'Souza, Vice President and Treasurer. Mr. D'Souza has served as our Vice President and Treasurer since April 2002. Mr. D'Souza also serves as Vice President and Treasurer of Quebecor Media and Quebecor Inc. He was Chief Financial Officer of Quebecor World Europe from June 2000 to April 2002. He was Vice President and Treasurer of Quebecor World Inc. from September 1997 to June 2000. Prior to joining the Quebecor group of companies, he served as Director, Finance of Société Générale de Financement du Québec from March 1995 to September 1997 and served in corporate finance positions at the Royal Bank of Canada and Union Bank of Switzerland from July 1989 to March 1995.

André Gascon, Vice President, Information Technologies. Mr. Gascon joined us in October 2003. Prior to his appointment as Vice President, Information Technologies, Mr. Gascon served for more than two years as Team Manager of Service Conseil Mona inc., an information technology consulting firm based in Montréal. From 1998 to 2001, he was Director, Information Technology of Microcell Telecommunications Inc. Between 1986 and 1998, Mr. Gascon has held various management positions relating to information technology with Larochelle Gratton Inc. and Société de Transport de Laval. Mr. Gascon holds a master degree in business administration from Sherbrooke University.

Daniel Proulx, Vice President, Engineering. Prior to his appointment as Vice President, Engineering in July 2003, Mr. Proulx served as our Vice President, Information Technology. Mr. Proulx has held various management positions since joining us in 1995.

J. Serge Sasseville, Vice President, Legal Affairs and Secretary. Mr. Sasseville was appointed our Vice President, Legal Affairs and Secretary in November 2001. He is also Vice President, Strategy, Legal and Corporate Affairs and Corporate Secretary, Cable TV and Internet Portals of Quebecor Media and Vice-President, Legal Affairs and Secretary of Netgraphe Inc. Mr. Sasseville has held various senior management positions in the Quebecor group of companies since 1987. Mr. Sasseville is and has been a member of the boards of numerous organizations promoting Canadian cultural and entertainment industries. He has been a member of the Québec Bar since 1981.

Edouard G. Trépanier, Vice President, Regulatory Affairs. Mr. Trépanier has served as our Vice President, Regulatory Affairs since March 2002. Mr. Trépanier also serves as Vice President, Regulatory Affairs of Quebecor Media. Mr. Trépanier was our Director, Regulatory Affairs from 1994 to 2001. Prior to joining us in 1994, he held several positions at the CRTC, including Interim General Director of Operations, Pay-television and Speciality Services. Prior to joining the CRTC, Mr. Trépanier worked as a television producer for TVA Group Inc., Rogers Communications Inc. and the Canadian Broadcasting Corporation in Ottawa. Mr. Trépanier is and has been a member of the boards of numerous cable industry organizations.

Louise Sauvé, Vice President, Control. Ms. Sauvé joined us in June 2004 as Vice President, Control. Prior to joining us, she was Vice President, Finance and Operations of Québec Blue Cross from 1999 to 2004. She has held various management positions at Québec Blue Cross from 1987 to 1998. Ms. Sauvé has been a member of the Canadian Institute of Chartered Accountants since 1982.

Manon Brouillette, Vice President, Marketing. Ms. Brouillette has been our Vice President, Marketing since July 2004. Before joining our company, Ms. Brouillette was Vice President, Marketing and Communications of the San Francisco Group from April 2003 to February 2004. She was also responsible for the national and regional accounts of the Blitz division of Groupe Cossette Communication Marketing from April 2002 to April 2003. From September 1998 to April 2002, she worked at Publicité Martin inc. Ms. Brouillette holds a major in communications and a minor in marketing from Laval University.

Jean Novak, Vice President, Sales. Mr. Novak joined us in May 2004. Prior to his appointment as Vice President, Sales, between 1988 and 2004, Mr. Novak held various management positions in sales and distribution for Molson Breweries, Canada's largest brewing company including General Manager for all on premise accounts and the Montreal sales region as well as Manager, Customer Service and Telesales in Quebec. Mr. Novak holds a bachelor's degree in marketing from the HEC Montréal.

Claudine Tremblay, Assistant Secretary. Ms. Tremblay has served as our Assistant Secretary since November 2001. In addition, Ms. Tremblay is currently Senior Director, Corporate Secretariat of Quebecor Inc. and has been Assistant Secretary of Quebecor Media since its inception. Since August 1988, Ms. Tremblay has been Assistant Secretary of Quebecor Inc. She also serves as either Secretary or Assistant Secretary of various subsidiaries of Quebecor Inc. Ms. Tremblay was Assistant Secretary and Administrative Assistant at the National Bank of Canada from 1979 to 1988. She has also been a member of the Chambre des Notaires du Québec since 1977.

Board of Directors

Our board of directors has seven directors. Each director is selected by Quebecor Media, our sole shareholder, to serve until a successor director is elected or appointed. On October 9, 2003, we formed a three-person audit committee. Our audit committee is composed of Messrs. François Laurin, Jean La Couture and Jean-Louis Mongrain.

Compensation of Directors and Executive Officers

Except for our President and Chief Executive Officer, Mr. Robert Dépatie, and our Executive Vice President and Chief Financial Officer, Mr. Jacques Mallette, all of our directors are also directors of Quebecor Media, and, as such, do not receive any remuneration in their capacity as directors of Vidéotron, except for the members of our audit committee who receive attendance fees of $1,500 per meeting and Mr. La Couture who receives an annual fee of $3,500 to act as Chairman of the audit committee. Mr. Mallette does not receive any remuneration as a director

of Vidéotron. Mr. Dépatie, who is an employee of Vidéotron, is not entitled to receive any additional compensation for serving as our director. Our directors are reimbursed for their reasonable out-of-pocket expenses incurred in connection with meetings of our board of directors and our audit committee. We paid $8,075 aggregate amount of cash compensation to the members of our audit committee as a group in annual fees and attendance fees for the period from the formation of our audit committee in October 2003 to December 31, 2003.

The aggregate amount of compensation we paid for the year ended December 31, 2003 to our executive officers as a group, excluding those who are also executive officers of, and compensated by, Quebecor Media, was $1.9 million, including salaries, bonuses and profit-sharing payments.

Quebecor Media's Stock Option Plan

On January 29, 2002, Quebecor Media established a stock option plan to attract, retain and provide incentives to directors, executive officers and key contributors to the success of Quebecor Media and its subsidiaries. The compensation committee of Quebecor Media is responsible for the administration of this stock option plan and, as such, designates the participants under this stock option plan and determines the number of options granted, the vesting schedule, the expiry date and any other conditions applicable to such options.

All of the options granted under this stock option plan entitle the holder thereof to acquire common shares of Quebecor Media. Each option may be exercised within a maximum period of ten years following the date of grant at an exercise price not lower than the fair market value of the common shares as determined by the compensation committee (if the common shares of Quebecor Media are not listed at the time of the grant) or the market price (as defined in this stock option plan) of the common shares on the stock exchanges where such shares are listed at the time of the grant, as the case may be. Unless authorized by the compensation committee for a change in control transaction, no option may be exercised by an optionee if the shares of Quebecor Media have not been listed on a recognized stock exchange.

Except under specific circumstances and unless the compensation committee decides otherwise, options vest over a five-year period in accordance with one of the following vesting schedules as determined by the compensation committee at the time of the grant: (1) equally over five years with the first 20.0% vesting on the first anniversary of the date of the grant; (2) equally over four years with the first 25.0% vesting on the second anniversary of the date of the grant; and (3) equally over three years with the first 33.3% vesting on the third anniversary of the date of the grant.

On December 31, 2007, if the shares of Quebecor Media have not been so listed, optionees will have until January 31, 2008 to exercise their vested options, which period we refer to as the private company window. An additional private company window (from January 1st, 2010 to January 31, 2010) was recently approved by the board of directors of Quebecor Media. At the time an optionee exercises his or her options, such optionee may request to receive in lieu of the underlying common shares a cash amount, or a cash exercise, representing the difference between the exercise price of the option and the fair market value or the trading price, as the case may be, of the underlying common shares at the time of exercise. For any cash exercises, and in particular for the anticipated multiple cash exercises if the private company window is in effect, Quebecor Media may elect to pay all amounts owing in several installments if it is determined by Quebecor Media that it would be prudent to do so based on its financial condition. Options not exercised prior to their expiration will be forfeited and may be re-issued pursuant to this stock option plan.

Following the reverse stock split in December 2003, the maximum number of common shares of Quebecor Media that may be issued under this stock option plan is 6,185,714 common shares, and no optionee may hold options covering more than 5.0% of the issued and outstanding shares of Quebecor Media.

During the year ended December 31, 2003, 14 of our executive officers were granted options to purchase 339,271 common shares of Quebecor Media at a price determined by the compensation committee of Quebecor Media in accordance with the terms and conditions of this stock option plan.

Pension Benefits

Both Quebecor Media and we maintain pension plans for our non-unionized employees.

Quebecor Media's pension plan provides higher pension benefits to eligible executive officers than those provided to other employees. The higher pension benefits under this plan equal 2.0% of average salary over the best five consecutive years of salary (including bonuses), multiplied by the number of years of membership in the plan as an executive officer. The pension benefits so calculated are payable at the normal retirement age of 65 years, or sooner at the election of the executive officer, and from the age of 61 years without early retirement reduction. In addition, the pension benefits may be deferred, but not beyond the age limit under the relevant provisions of theIncome Tax Act (Canada), in which case the pension benefits are adjusted to take into account the delay in their payment in relation to the normal retirement age. The maximum pension benefits payable under Quebecor Media's pension plan are as prescribed by theIncome Tax Act (Canada). An executive officer contributes to this plan an amount equal to 5.0% of his or her salary up to a maximum of $4,583 in 2004.

Our pension plan provides pension benefits to our executive officers equal to 2.0% of salary (excluding bonuses) for each year of membership in the plan. The pension benefits so calculated are payable at the normal retirement age of 65 years, or sooner at the election of the executive officer, subject to an early retirement reduction. In addition, the pension benefits may be deferred, but not beyond the age limit under the relevant provisions of theIncome Tax Act (Canada), in which case the pension benefits are adjusted to take into account the delay in their payment in relation to the normal retirement age. The maximum pension benefits payable under our pension plan are as prescribed under theIncome Tax Act (Canada). An executive officer contributes to this plan an amount equal to 5.0% of his or her salary up to a maximum of $3,500 per year.

The table below indicates the annual pension benefits that would be payable at the normal retirement age of 65 years under both Quebecor Media's and our pension plans:

	Years of Membership
Compensation	Years of Membership
Compensation	10		15		20		25		30
$91,667 or more	$	18,333	$	27,500	$	36,667	$	45,833	$	55,000

Supplemental Retirement Benefit Plan for Designated Executives

In addition to Quebecor Media's and our pension plans, both Quebecor Inc., or Quebecor, and we provide supplemental retirement benefits to certain designated executives. As of December 31, 2003, three of our senior executive officers were participants under Quebecor's supplemental retirement benefit plan, and two of our senior executive officers were participants under our supplemental retirement benefit plan.

The benefits payable to the senior executive officers who participate in Quebecor's supplemental retirement benefit plan are calculated on the basis of their respective average salaries (including bonuses) for the best five consecutive years. The pension is payable for life without reduction from the age of 61. In case of death after retirement and from the date of death, Quebecor's supplemental retirement benefit plan provides for the payment of a joint and survivor pension to the eligible surviving spouse, representing 50.0% of the retiree's pension for a period of up to ten years.

As of December 31, 2003, our senior executive officers participating in Quebecor's supplemental retirement benefit plan each had credited service of less than three years.

The benefits payable to our two senior executive officers who participate in our supplemental retirement benefit plan are calculated on the basis of their respective average salaries (excluding bonuses) for the best five consecutive years. The benefits so calculated are payable at the normal retirement age of 65 years, or sooner at the election of the senior executive officer, subject to an early retirement reduction. In case of death after retirement and from the date of death, our supplemental retirement benefit plan provides for the payment of a joint and survivor pension to the eligible surviving spouse representing 60.0% of the retiree's pension.

As of December 31, 2003, one of our senior executive officers had a credited service of 2.3644 years under our supplemental retirement benefit plan, while a second senior executive officer began to accrue service on February 4, 2003 under such plan.

The table below indicates the annual supplemental pension that would be payable at the normal retirement age of 65 years:

	Years of Credited Service
Compensation	Years of Credited Service
Compensation	10		15		20		25		30
$ 300,000	$	41,667	$	62,500	$	83,333	$	104,167	$	125,000
400,000		61,667		92,500		123,333		154,167		185,000
500,000		81,667		122,500		163,333		204,167		245,000
600,000		101,667		152,500		203,333		254,167		305,000
800,000		141,667		212,500		283,333		354,167		425,000
1,000,000		181,667		272,500		363,333		454,167		545,000
1,200,000		221,667		332,500		443,333		554,167		665,000
1,400,000		261,667		392,500		523,333		654,167		785,000

Liability Insurance

Quebecor Inc. carries liability insurance for the benefit of its directors and officers, as well as for the directors and officers of its direct and indirect subsidiaries, including us and some of our associated companies, against certain liabilities incurred by them in such capacity.

OUR SHAREHOLDER

Quebecor Media is neither an obligor nor a guarantor of our obligations under the notes being offered hereby.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The following describes some transactions in which we and our directors, executive officers and affiliates are involved, as well as a transaction between Quebecor World Inc. and Videotron Telecom, which is described under "— Quebecor World Outsourcing of Information Technology," to which we will become a party only upon effectiveness of the integration of the operations of Videotron Telecom within our own operations, which we currently expect to occur in 2005, subject to the approval of the CRTC and our lenders, as well as the satisfactory completion of discussions with our labor unions. We believe that each of the transactions described below was on terms no less favorable to us than could have been obtained from independent third parties.

Video-On-Demand Services

Groupe Archambault Inc., or Archambault, which is a subsidiary of Quebecor Media, was granted a video-on-demand service license by the CRTC in July 2002. Effective March 1, 2003, we entered into an affiliation

agreement with Archambault granting us the non-exclusive right to offer Archambault's video-on-demand services to our customers. This agreement provides that we pay to Archambault 62% of all revenues generated from the fees paid by our customers to use Archambault's video-on-demand services. This agreement expires on August 31, 2008, which is also the expiration date of Archambault's CRTC license, but if Archambault obtains a renewed video-on-demand license from the CRTC, this agreement will be automatically renewed for a period equal to the length of this renewed license.

In connection with this affiliation agreement, we also entered into a video-on-demand services agreement with Archambault. Pursuant to this services agreement, we have agreed to provide various technical services to Archambault to enable it to provide to our customers its video-on-demand services over our network. In consideration of these technical services, Archambault will pay us a fee of 8% of all revenues generated from fees paid by our customers to use Archambault's video-on-demand services. The term of this agreement is the same as that of the affiliation agreement.

For the year ended December 31, 2003, we paid a fee of $0.6 million to Archambault under the affiliation agreement, and we received a fee of $0.2 million from Archambault under the services agreement. For the nine-month period ended September 30, 2004, we paid a fee of $2.7 million to Archambault under the affiliation agreement and received a fee of $0.1 million from Archambault under the services agreement.

Telecommunications Services

We have entered into several contracts with Videotron Telecom, a business telecommunications company wholly owned by Quebecor Media, for the provision or exchange of telecommunications services.

Telecommunications Services Agreements

In September 1999, we entered into a fifteen-year agreement pursuant to which Videotron Telecom provides us with inter-city connections for the transmission of both one-way and two-way video and telephony signals. Under the agreement, Videotron Telecom also leases to us fiber-optic and other equipment and provides maintenance and management services for our inter-city transmission circuits. We have an option to renew the contract for an additional fifteen year-term upon its expiration in 2014. In addition, in December 2000, we entered into a five-year contract, automatically renewable for one-year periods thereafter, pursuant to which Videotron Telecom provides us with intra-city transmission and other telecommunications services.

Fiber Optic Maintenance Agreement

In September 1999, we entered into a long-term mutual maintenance agreement pursuant to which Videotron Telecom provides maintenance services on our fiber optic strands that are located within Videotron Telecom's fiber optic cables, and we provide the same services on Videotron Telecom's fiber optic strands that are located within our fiber optic cables. Each party is billed monthly for the costs attributable to the maintenance of such party's fiber optic strands.

Internet Services Agreements

We provide dial-up and high-speed Internet access to our customers. In September 1999, Vidéotron (1998) ltée entered into two agreements with a wholly owned subsidiary of Videotron Telecom, Vidéotron Télécom (1998) ltée, relating to the provision of Internet access services to their respective customers. Both agreements had an initial term of three years with automatic renewal provisions for twelve-month periods thereafter. We have indicated to Videotron Telecom our intent not to renew these agreements on their current terms.

For the year ended December 31, 2003, we paid to Videotron Telecom a total of $12.2 million under these service agreements. For the nine-month period ended September 30, 2004, we paid to Videotron Telecom a total of $4.5 million under these services agreements.

Call Center and Customer Support Agreement

On May 3, 2002, we entered into a service agreement with Joncas Télexperts, a division of Joncas Postexperts Inc., or Joncas, an indirect subsidiary of Quebecor World Inc., itself an indirect subsidiary of Quebecor Inc. Under this service agreement, Joncas has agreed to provide us with certain administrative services, including the planning, set-up, operation and management of a new call center located in Montréal, and to provide operational and management services related to a second call center located in Montréal. These call centers offer us sales and after-sales customer support for our cable television and Internet access customers. The agreement terminates on December 31, 2004 and will be automatically renewed thereafter for successive one year periods, unless notice to the contrary is provided by either us or Joncas. The total amount we paid to Joncas under this agreement in 2003 was approximately $9.1 million. For the nine-month period ended September 30, 2004, we paid $3.8 million to Joncas under this agreement.

Management Services and Others

We have earned revenue from TVA Group for providing it with access to a specialty advertising channel carried on our network and incurred expenses for purchases and services obtained from related companies at prices and conditions prevailing on the market, as summarized below. The majority of our related party purchases were related to the telecommunications and Internet services agreements described above and for programming purchases, advertising purchases, outsourcing of call center operations and information technology services.

The following table presents the amounts of our revenues, accounts receivable, purchases, accounts payable and fixed assets from transactions with related parties during the periods indicated:

	Year Ended December 31,						Nine Months Ended September 30,
	2001		2002		2003		2004
							(unaudited)
	(dollars in millions)
Revenues	$	1.8	$	1.7	$	2.5	$	1.4
Accounts receivable		2.1		11.1		0.1		0.0
Purchases		69.0		78.4		60.6		41.5
Accounts payable		19.4		65.4		18.4		16.7
Fixed assets		5.6		3.3		1.6		0.0

We entered into a five-year management services agreement with Quebecor Media for services it provides to us, including internal audit, legal and corporate, financial planning and treasury, tax, real estate, human resources, risk management, public relations and other services. Under this agreement, management fees paid to Quebecor Media were $2.5 million for the year ended December 31, 2002 and $6.0 million for the year ended December 31, 2003. Management fees payable to Quebecor Media amounted to $5.5 million for the nine-month period ended September 30, 2004 and will be agreed upon for the years 2005 and 2006.

Indebtedness to Quebecor Media

We entered into a subordinated loan agreement with Quebecor Media on March 24, 2003. In addition, on January 16, 2004, our subsidiary Vidéotron (1998) ltée borrowed $1.1 billion from Quebecor Media in the form of a subordinated loan, which was repaid in full on December 16, 2004 with the proceeds from the redemption by Quebecor Media of retractable preferred shares held by Vidéotron (1998) ltée. See "Description of Certain Indebtedness — Indebtedness to Quebecor Media" and "Management's Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — Purchase of Shares of Quebecor Media and Service of Subsidiary Subordinated Loan."

Quebecor World Outsourcing of Information Technology

Although neither we nor any of our directors, executive officers or affiliates is currently a party to the transaction between Quebecor World Inc. and Videotron Telecom described below, we will become a party to this transaction upon the effectiveness of the integration of the operations of Videotron Telecom within our own operations, which we currently expect to occur in 2005, subject to the approval of the CRTC and our lenders, as well as the satisfactory completion of discussions with our labor unions.

Quebecor World Inc. has retained Videotron Telecom to outsource all of Quebecor World Inc.'s corporate information technology services. This transaction is effective as of July 2004 and contemplates:

•: the purchase by Videotron Telecom of the information technology infrastructure equipment of Quebecor World;
•: the provision of consulting services by certain Quebecor World Inc. personnel to Videotron Telecom for corporate information technology services; and
•: the provision of information technology managed services by Videotron Telecom to Quebecor World Inc. in North America.

Under the seven-year information technology managed services agreement, Videotron Telecom will provide infrastructure services in support of hosting server-based applications in the Videotron Telecom data centers and services related to computer operations, production control, technical support, network support, regional support, desktop support for certain sites, help-desk and corporate assistance, firewall and security support, business continuity and disaster recovery and voice and video support. The monthly revenues for such services are $1,512,205, for an annual total of $18,146,471. The agreement will expire on June 30, 2011.

DESCRIPTION OF CERTAIN INDEBTEDNESS

Credit Facilities

General

Prior to the amendment of our credit agreement on November 19, 2004, our credit agreement provided for a:

•: $100.0 million revolving credit facility that matured in October 2008; and
•: $318.1 million Term C loan that matured in October 2008.

The proceeds of the revolving credit facility are to be used exclusively for our working capital purposes and capital expenditures, and those of some of the guarantors (named in our credit agreement) and their subsidiaries, and may not be used to refinance indebtedness.

On October 28, 2003, we applied $368.1 million of borrowings under our Term C loan to fully repay outstanding borrowings under our other term loans and our revolving credit facility and terminated these other term loans under our credit facilities. See "Management's Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — Servicing and Repayment of Our Debt." From October 28, 2003 to November 18, 2004, we made quarterly payments aggregating $50.0 million on our Term C loan pursuant to the terms of our credit agreement, and on November 19, 2004, we used a portion of the net proceeds from the offering of the old notes to fully repay the current outstanding balances under, and terminate, the Term C loan of our credit facilities.

In addition, concurrently with the closing of the offering of the old notes on November 19, 2004, we amended our credit agreement to increase our revolving credit facility from $100.0 million to $450.0 million. Therefore, following these amendments and repayments, our credit facilities were comprised of a $450.0 million revolving credit facility that will mature in November 2009.

We also amended our credit agreement to, among other things:

•: decrease the pricing margins applicable to advances under our revolving credit facility in direct correlation with our Leverage Ratio (as defined in our credit agreement);
•: exempt net proceeds of offerings of equity securities or debt and excess cash flow from the mandatory repayment provisions of our credit agreement;
•: exempt the first $50.0 million received in respect of (i) asset dispositions or (ii) insurance proceeds from the mandatory repayment provisions of our credit agreement;
•: modify our Leverage Ratio from 4.0x to 4.5x as of September 30, 2006 and eliminate the Debt Service Coverage Ratio (as defined in our credit agreement);
•: permit us to repurchase shares, declare or pay dividends or set aside funds for those purposes in all circumstances if our Leverage Ratio is equal to or less than 3.5x on a pro forma basis;
•: permit us to issue or incur senior and unsecured debt and permit members of the Vidéotron Group (as defined in our credit agreement) to provide unsecured guarantees in respect of such senior and unsecured debt if we meet our financial tests on a pro forma basis;
•: permit the repayment of our subordinated loan with Quebecor Media in the same circumstances as those in which we are permitted to repurchase shares and declare or pay dividends as described above; and
•: obtain the required consent to allow us to eventually amalgamate with Videotron Telecom.

The following is a summary of the general terms and conditions of our credit facilities, as amended, and is qualified in its entirety by reference to the documentation entered into in connection with our credit facilities, as amended. A copy of each of the credit agreement, as amended, and the other documents into which we entered has been filed as an exhibit to the registration statement that includes this prospectus.

Interest Rate, Fees and Payments

Advances under our revolving credit facility will bear interest at the Canadian prime rate, the bankers' acceptance rate or the London Interbank Offered Rate (LIBOR) plus, in each instance, an applicable margin determined by Leverage Ratio (as defined in our credit agreement) of the Vidéotron Group (as defined in our credit agreement).

The applicable margin for Canadian prime rate advances ranges from 0% when this ratio is less than 3.0x but greater than or equal to 2.0x, to 0.50% when this ratio is greater than or equal to 4.0x. The applicable margin for LIBOR advances and bankers' acceptance advances ranges from 0.875% when this ratio is less than 3.0x but greater than or equal to 2.0x, to 1.50% when this ratio is greater than 4.0x. We have agreed to pay a facility fee based on the aggregate amount available to borrow under our revolving credit facility ranging from 0.375% when the Leverage Ratio is less than 3.0x but greater than or equal to 2.0x, to 0.50% when this ratio is greater than or equal to 4.0x.

Principal Repayments and Prepayment

Our revolving credit facility will be repayable in full in November 2009. Subject to certain exceptions and the exemption of the first $50.0 million received, we are required to apply 100% of the net cash proceeds of asset sales or transfers to repay borrowings under our revolving credit facility, unless we reinvest these proceeds within specified periods and for specific purposes. Subject to the exemption of the first $50.0 million received, we are also required to apply proceeds from insurance settlements received in excess of $5.0 million to repay borrowings under our revolving credit facility.

Security and Guarantees

Borrowings under our credit facilities and under eligible derivative instruments are secured by a first-ranking hypothec or security interest (subject to certain permitted encumbrances) on all our current and future assets, as well as those of the guarantors under the credit facilities, guarantees by members of the Vidéotron Group, pledges of shares by us and certain of the guarantors under the credit facilities, security given by us under section 427 of theBank Act (Canada) and other security.

Covenants

The credit facilities contain customary covenants that restrict and limit our ability and the ability of each member of the Vidéotron Group to, among other things, enter into merger or amalgamation transactions or liquidate or dissolve, grant encumbrances, sell assets, pay dividends or make other distributions, issue shares of capital stock, incur indebtedness, enter into related party transactions and acquire other entities. In addition, the credit facilities require us and the Vidéotron Group to comply with various financial covenants.

Events of Default

Our credit facilities contain customary events of default including the non-payment of principal or interest, the breach of any financial covenant, the failure to perform or observe any other covenant, the bankruptcy of us or any guarantor of our credit agreement, a default by us or any guarantor of our credit agreement in respect of any indebtedness in excess of $10.0 million, the making of any materially incorrect or incomplete representation or warranty, the occurrence of a material adverse change and the occurrence of any change of control.

CF Cable Notes

On July 11, 1995, CF Cable issued the CF Cable notes guaranteed by its subsidiaries. Chemical Bank, now JPMorgan Chase Bank, serves as the trustee for the CF Cable notes. The notes have a par value of US$94.7 million, bear interest at the rate of 9.125%, have a principal outstanding amount of US$75.6 million and mature in 2007. They are redeemable at the option of CF Cable on or after July 15, 2005 at 100% of their principal amount. They are secured by first-ranking hypothecs on substantially all of the assets of CF Cable and its subsidiaries. The indenture governing the CF Cable notes contains customary restrictive covenants and events of default, including limitations on the incurrence of debt and first priority debt.

Indebtedness to Quebecor Media

$150.0 Million Subordinated Loan

On March 24, 2003, we entered into a subordinated loan agreement with Quebecor Media pursuant to which Quebecor Media agreed to provide us with a subordinated loan in the principal amount of $150.0 million bearing interest at the three-month bankers' acceptance rate plus a 1.5% margin. The proceeds of this subordinated loan were used to reduce outstanding indebtedness under our credit facilities. Interest on this subordinated loan throughout its term is payable in cash at our option. Under the terms of the indenture governing the notes, all cash payments on this loan are restricted payments treated in the same manner as dividends on our common shares.

Our obligations under this loan are subordinated in right of payment to the prior payment in full of all our existing and future indebtedness under our credit facilities. In addition, the holders of all our other senior indebtedness, including the notes, will be entitled to receive payment in full of all amounts due on or in respect of all our other existing and future senior indebtedness before Quebecor Media is entitled to receive or retain payment of principal under this loan.

The subordinated loan agreement also provides that, for so long as indebtedness, obligations and liabilities are due and owing to the creditors under our credit facilities, Quebecor Media shall not be entitled to enforce its rights under this subordinated loan agreement without the prior consent of the administrative agent under the credit facilities.

$1.1 Billion Subordinated Loan

On January 16, 2004, Vidéotron (1998) ltée, our wholly owned subsidiary, entered into a subordinated loan agreement with Quebecor Media pursuant to which Quebecor Media agreed to provide it with a subordinated loan in the principal amount of $1.1 billion. The proceeds of this subordinated loan were used to invest in $1.1 billion of Quebecor Media preferred shares. On December 16, 2004, Quebecor Media redeemed these preferred shares, and we used the proceeds from this redemption to repay in full this subordinated loan. This subordinated loan would have matured on January 16, 2019 and bore interest at 10.75% payable semi-annually. The Quebecor Media preferred shares were redeemable at the option of Quebecor Media and retractable at our option at the paid-up value and carried a 11.0% annual fixed cumulative preferential dividend payable semi-annually.

Our obligations under this loan were subordinated in right of payment to the prior payment in full of all our existing and future indebtedness under our credit facilities. In addition, the holders of all our other senior indebtedness, including the notes, were entitled to receive payment in full of all amounts due on or in respect of all our other existing and future senior indebtedness before Quebecor Media would have been entitled to receive or retain payment of principal under this loan.

Unlike corporations in the United States, corporations in Canada are not permitted to file consolidated tax returns. Therefore, this subordinated loan and our investment in the Quebecor Media preferred shares for the same principal amount significantly reduce our income tax obligation. This is because the interest expense on the subordinated loan is deductible for income tax purposes, while the dividend income on the Quebecor Media preferred shares is not taxable. See "Management's Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — Purchase of Shares of Quebecor Media and Service of Subsidiary Subordinated Loan."

THE EXCHANGE OFFER

Purpose and Effect of the Exchange Offer

On November 19, 2004, we sold the old notes in a private placement exempt from the registration requirements of the Securities Act to Banc of America Securities LLC, Citigroup Global Markets Inc., RBC Capital Markets Corporation, Harris Nesbitt Corp., Scotia Capital (USA) Inc., TD Securities (USA) LLC, CIBC World Markets Corp., Credit Suisse First Boston LLC, NBF Securities (USA) Corp. and HSBC Securities (USA) Inc., as initial purchasers. The initial purchasers then resold the old notes pursuant to an prospectus, dated November 15, 2004, in reliance upon Rule 144A and Regulation S under the Securities Act. On November 19, 2004, we and the subsidiary guarantors entered into a registration rights agreement with the initial purchasers. A copy of the registration rights agreement has been filed as an exhibit to the registration statement that includes this prospectus, and the summary of some of the provisions of the registration rights agreement under "The Exchange Offer" does not purport to be complete and is subject to, and is qualified in its entirety by reference to, all the provisions of the registration rights agreement.

Under the registration rights agreement, we agreed, among other things, to:

•: file an exchange offer registration statement with the SEC with respect to a registered offer to exchange without novation the old notes for the new notes no later than January 3, 2005;
•: use our best efforts to cause the exchange offer registration statement to be declared effective under the Securities Act no later than March 21, 2005; and
•: keep the registered exchange offer open for not less than 30 days after the date notice of the registered exchange offer is mailed to the holders of the old notes.

Under the registration rights agreement, we also agreed that in the event that:

•: applicable interpretations of law by the staff of the SEC do not permit us to effect the exchange offer;
•: the exchange offer is not consummated by May 18, 2005;
•: we receive a request prior to the 20th day following the consummation of the registered exchange offer from any initial purchaser that is a broker-dealer with respect to old notes acquired directly from us or one of our affiliates; or
•: we receive a request prior to the 20th day following the consummation of the registered exchange offer from any holder of old note who is prohibited by applicable law or SEC policy from participating in the exchange offer or who may not resell the new notes acquired in the exchange offer without delivering a prospectus and this prospectus is not appropriate or available for such resales by this holder,

we will, at our cost, as promptly as practicable, file a shelf registration statement covering resales of the old notes or the new notes, use our best efforts to cause the shelf registration statement to be declared effective and use our best efforts to keep the shelf registration statement effective until the earlier of November 19, 2006 and the date when all of the old notes or the new notes covered by the shelf registration statement have been sold pursuant to the shelf registration statement. In the event a shelf registration statement is filed, we will, among other things, provide to each holder for whom the shelf registration statement was filed copies of the prospectus that is a part of the shelf registration statement, notify each of these holders when the shelf registration statement has become effective and take certain other actions as are required to permit unrestricted resales of the old notes or the new notes.

A holder selling old notes or new notes pursuant to a shelf registration statement would be required to be named as a selling security holder in the related prospectus and to deliver a prospectus to purchasers, will be subject to certain of the civil liability provisions under the Securities Act in connection with these sales and will be bound by the applicable provisions of the registration rights agreement (including certain indemnification obligations).

Pursuant to the registration rights agreement, we will be required to pay special interest if a registration default exists. A registration default will exist if:

•

on or prior to January 3, 2005, the exchange offer registration statement has not been filed with the SEC;

•

on or prior to March 21, 2005, the exchange offer registration statement has not been declared effective;

•

on or prior to April 20, 2005, the registered exchange offer has been consummated;

•

we are required to file the shelf registration statement pursuant to the registration rights agreement and:

•: the shelf registration statement has not been filed with the SEC on or prior to 45 days (or if the 45th day is not a business day, on the next business day) after the date on which the obligation to file the shelf registration statement arose under the registration rights agreement; or
•: the shelf registration statement has not been declared effective on or prior to 120 days (or if the 120th day is not a business day, on the next business day) after the date on which the obligation to file the shelf registration statement arose under the registration rights agreement; or

•

after either the exchange offer registration statement or the shelf registration statement has been declared effective, the exchange offer registration statement or the shelf registration statement ceases to be effective or usable (subject to certain exceptions) in connection with the resales of the old notes or the new notes in accordance with and during the periods specified in the registration rights agreement.

Special interest will accrue on the principal amount of the old notes and the new notes (in addition to the stated interest on the old notes and the new notes) from and including the date on which any of the registration defaults described above shall have occurred to but excluding the date on which all registration defaults have been cured. Special interest will accrue at a rate of 0.25% per annum during the 90-day period immediately following the occurrence of a registration default and shall increase by 0.25% per annum at the end of each subsequent 90-day period, but in no event shall this rate exceed 1.0% per annum.

We are conducting the exchange offer to satisfy our obligations under the registration rights agreement. If you participate in the exchange offer, you will, with limited exceptions, receive new notes that are freely tradeable and not subject to restrictions on transfer. You should read the discussion under "— Resales of New Notes" for more information regarding your ability to transfer the new notes.

The exchange offer is not being made to, nor will we accept tenders for exchange from, holders of old notes in any jurisdiction in which the exchange offer or the acceptance of the exchange offer would not be in compliance with the securities laws or blue sky laws of such jurisdiction.

Terms of the Exchange Offer

We are offering, upon the terms and subject to the conditions set forth in this prospectus and the accompanying letter of transmittal, to exchange up to US$315,000,000 aggregate principal amount of the new notes for a like aggregate principal amount of outstanding old notes. We will accept for exchange any and all old notes that are properly tendered on or prior to 5:00 p.m., New York City time, on February, 2005, or such later time and date to which we extend the exchange offer. We will issue US$1,000 principal amount of the new notes in exchange for each US$1,000 principal amount of outstanding old notes accepted in the exchange offer. You may tender some or all of your old notes pursuant to the exchange offer; however, old notes may only be tendered in integral multiples of US$1,000 in principal amount.

As of the date of this prospectus, US$315,000,000 in aggregate principal amount of the old notes were outstanding. This prospectus, together with the letter of transmittal, is being sent to all holders of the old notes known to us. Our obligation to accept old notes for exchange pursuant to the exchange offer is subject to certain conditions as set forth below under "— Conditions to the Exchange Offer."

The exchange agent will act as agent for the tendering holders for the purpose of receiving the new notes from us. If any tendered old notes are not accepted for exchange because of an invalid tender or otherwise, certificates for the unaccepted old notes will be returned, without expense, to the tendering holder as promptly as practicable after the expiration date.

Holders of the old notes do not have appraisal or dissenters' rights under the laws of the State of New York or the indenture. We intend to conduct the exchange offer in accordance with the applicable requirements of the Securities Act, the Exchange Act and the rules and regulations under the Securities Act and the Exchange Act.

The new notes will evidence the same indebtedness as that evidenced by the old notes and the exchange will occur without novation.

None of us, our board of directors and our management recommends that you tender or not tender your old notes in the exchange offer. In addition, no one has been authorized to make any such recommendation. You must make your own decisions whether to participate in the exchange offer and, if you choose to participate, as to the aggregate principal amount of your old notes to tender, after reading carefully this prospectus and the letter of transmittal. We urge you to consult your financial and tax advisors in making your decision on what action to take.

Conditions to the Exchange Offer

You must tender your old notes in accordance with the requirements of this prospectus and the letter of transmittal to participate in the exchange offer.

Notwithstanding any other provision of the exchange offer, or any extension of the exchange offer, we are not required to accept for exchange any old notes, and we may terminate or amend the exchange offer, if we determine at any time prior to the expiration date that the exchange offer violates applicable law or any applicable interpretation of applicable law by the staff of the SEC.

In addition, we will not be obligated to accept for exchange the old notes of any holder that has not made to us:

•: the representations described under "— Procedures for Tendering Old Notes — Representations Made by Tendering Holders of Old Notes" and "Plan of Distribution;" and
•: any other representations reasonably necessary under applicable SEC rules, regulations or interpretations to make available to us an appropriate form for registration of the new notes under the Securities Act.

The foregoing conditions are for our sole benefit, and we may assert them regardless of the circumstances giving rise to any such condition, or we may waive the conditions, completely or partially, whenever or as many times as we may choose, in our sole discretion. Our failure at any time to exercise any of the above rights will not be a waiver of those rights, and each right will be deemed an ongoing right that may be asserted at any time. Any determination by us concerning the events described above will be final and binding upon all parties. If we determine that a waiver of conditions materially changes the exchange offer, this prospectus will be amended or supplemented, and the exchange offer extended, if appropriate, as described under "— Expiration Date; Extensions; Amendments."

In addition, at any time when any stop order is threatened or in effect with respect to the registration statement that includes this prospectus or with respect to the qualification of the indenture under the Trust Indenture Act of 1939, we will not accept for exchange any old notes tendered, and no new notes will be issued in exchange for any such old notes.

Expiration Date; Extensions; Amendments

The expiration date of the exchange offer will be 5:00 p.m., New York City time, on February, 2005, unless we, in our sole discretion, extend the expiration date of the exchange offer. If we extend the expiration date of the exchange offer, the expiration date of the exchange offer will be the latest time and date to which the exchange offer is extended. We will notify the exchange agent by oral or written notice of any extension of the expiration date and make a public announcement of this extension no later than 9:00 a.m., New York City time, on the next business day after the previously scheduled expiration date.

In addition, we expressly reserve the right, at any time or from time to time, at our sole discretion:

•: to delay the acceptance of the old notes;

•: to extend the exchange offer;
•: if we determine any condition to the exchange offer has not occurred or has not been satisfied, to terminate the exchange offer; and
•: to waive any condition or amend the terms of the exchange offer in any manner.

If the exchange offer is amended in a manner we deem to constitute a material change, we will as promptly as practicable distribute to the registered holders of the old notes a prospectus supplement that discloses the material change. If we take any of the actions described in the previous paragraph, we will as promptly as practicable give oral or written notice of this action to the exchange agent and will make a public announcement of this action.

During any extension of the exchange offer, all old notes previously tendered will remain subject to the exchange offer and may be accepted for exchange by us. Any old notes not accepted for exchange for any reason will be returned without expense to the tendering holder as promptly as practicable after the expiration or termination of the exchange offer.

Procedures for Tendering Old Notes

Valid Tender

The tender of a holder's old notes and our acceptance of those old notes will constitute a binding agreement between the tendering holder and us upon the terms and subject to the conditions set forth in this prospectus and in the letter of transmittal. Except as set forth below, if you wish to tender old notes pursuant to the exchange offer, you must, on or prior to the expiration date:

•: transmit a properly completed and duly executed letter of transmittal, together with all other documents required by the letter of transmittal, to the exchange agent at one of the addresses set forth below under "— Exchange Agent;"
•: arrange with DTC to cause an agent's message to be transmitted with the required information (including a book-entry confirmation), to the exchange agent at one of the addresses set forth below under "— Exchange Agent;" or
•: comply with the guaranteed delivery procedures described below.

In addition, on or prior to the expiration date:

•: the exchange agent must receive the certificates for the old notes, together with the properly completed and duly executed letter of transmittal;
•: the exchange agent must receive a timely confirmation of a book-entry transfer of the old notes being tendered into the exchange agent's account at DTC, together with the properly completed and duly executed letter of transmittal or an agent's message; or
•: the holder must comply with the guaranteed delivery procedures described below.

The letter of transmittal or agent's message may be delivered by mail, facsimile, hand delivery or overnight carrier to the exchange agent.

The term "agent's message" means a message transmitted to the exchange agent by DTC which states that DTC has received an express acknowledgment from a tendering holder that it agrees to be bound by the letter of transmittal and that we may enforce the letter of transmittal against this tendering holder. The agent's message forms a part of book-entry transfer.

If you beneficially own old notes and those notes are registered in the name of a broker, dealer, commercial bank, trust company or other nominee or custodian, and you wish to tender your old notes in the exchange offer, you should contact the registered holder as soon as possible and instruct it to tender the old notes on your behalf and comply with the instructions set forth in this prospectus and the letter of transmittal.

If you tender fewer than all of your old notes, you should fill in the amount of the old notes tendered in the appropriate box in the letter of transmittal. If you do not indicate the amount tendered in the appropriate box, we will assume you are tendering all old notes that you hold.

The method of delivery of the certificates for the old notes, the letter of transmittal and all other documents is at your sole election and risk. Instead of delivery by mail, it is recommended that you use an overnight or hand delivery service. If delivery is by mail, it is recommended that you use registered mail, properly insured, with return receipt requested. In all cases, sufficient time should be allowed to assure timely delivery. No letters of transmittal or old notes should be sent directly to us. Delivery is complete when the exchange agent actually receives the items to be delivered. Delivery of documents to DTC in accordance with DTC's procedures does not constitute delivery to the exchange agent.

Signature Guarantees

Signatures on a letter of transmittal or a notice of withdrawal must be guaranteed unless the old notes surrendered for exchange are tendered:

•: by a registered holder of the old notes who has not completed the box entitled "Special Issuance Instructions" or "Special Delivery Instructions" on the letter of transmittal; or
•: for the account of an eligible institution.

An eligible institution is a firm or other entity firm that is a member of a registered national securities exchange or of the National Association of Securities Dealers, Inc., a commercial bank or trust company having an office or correspondent in the United States or any other "eligible guarantor institution" as this term is defined in Rule 17Ad-15 under the Exchange Act.

If a signature on a letter of transmittal or a notice of withdrawal is required to be guaranteed, this guarantee must be by an eligible institution.

If the letter of transmittal is signed by a person other than the registered holder of the old notes, the old notes surrendered for exchange must be endorsed by, or be accompanied by a written instrument of transfer or exchange, in form satisfactory to us in our sole discretion, duly executed by, the registered holder, with the signature guaranteed by an eligible institution.

If the letter of transmittal is signed by trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, this person should sign in that capacity when signing. In addition, this person must submit to us, together with the letter of transmittal, evidence satisfactory to us in our sole discretion of his or her authority to act in this capacity unless we waive this requirement.

Book-Entry Transfer

For tenders by book-entry transfer of old notes cleared through DTC, the exchange agent will make a request to establish an account at DTC with respect to the old notes for purposes of the exchange offer. Any financial institution that is a DTC participant may make book-entry delivery of old notes by causing DTC to transfer the old notes into the exchange agent's account at DTC in accordance with DTC's procedures for transfer. The exchange agent and DTC have confirmed that any financial institution that is a participant in DTC may use the Automated Tender Offer Program procedures to tender old notes pursuant to the exchange offer. Accordingly, any DTC participant may make book-entry delivery of the old notes by causing DTC to transfer those old notes into the exchange agent's account in accordance with DTC's Automated Tender Offer Program procedures for transfer.

Although delivery of the old notes pursuant to the exchange offer may be effected through book-entry transfer at DTC, you will not have validly tendered your old notes pursuant to the exchange offer until on or prior to the expiration date either:

•: the properly completed and duly executed letter of transmittal, or an agent's message, together with any required signature guarantees and any other required documents, has been transmitted to and received by the exchange agent at one of the addresses set forth below under "— Exchange Agent;" or

•: the guaranteed delivery procedures described below have been complied with.

Guaranteed Delivery Procedures

If you wish to tender your old notes and:

•: your old notes are not immediately available;
•: time will not permit your old notes or other required documents to reach the exchange agent before the expiration date; or
•: you cannot complete the procedure for book-entry transfer on a timely basis,

you may tender your old notes according to the guaranteed delivery procedures described in the letter of transmittal. Those procedures require that:

•

tender be made by and through an eligible institution;

•

on or prior to the expiration date, the exchange agent receive from this eligible institution a properly completed and duly executed letter of transmittal, or an agent's message, with any required signature guarantees, and a properly completed and duly executed notice of guaranteed delivery, substantially in the form provided:

•: setting forth the name and address of the holder of the old notes being tendered;
•: stating that the tender is being made; and
•: guaranteeing that within three New York Stock Exchange trading days after the date of execution of the notice of guaranteed delivery, the certificates for all physically tendered old notes, in proper form for transfer, or a book-entry confirmation, and any other documents required by the letter of transmittal, will be deposited by the eligible institution with the exchange agent; and

•

the exchange agent receives the certificates for the old notes, in proper form for transfer, or a book-entry confirmation, and all other documents required by the letter of transmittal, are received by the Exchange Agent within three New York Stock Exchange trading days after the date of execution of the notice of guaranteed delivery.

If you wish to tender your old notes pursuant to the guaranteed delivery procedures, you must ensure that the exchange agent receive a properly completed and duly executed letter of transmittal, or agent's message, and notice of guaranteed delivery before the expiration date.

Determination of Validity of Tender

We will resolve in our sole discretion all questions as to the validity, form, eligibility (including time of receipt) and acceptance of any old notes tendered for exchange. Our determination of these questions and our interpretation of the terms and conditions of the exchange offer, including without limitation the letter of transmittal and its instructions, shall be final and binding on all parties. A tender of old notes is invalid until all defects and irregularities have been cured or waived. Each holder must cure any and all defects or irregularities in connection with his, her or its tender of old notes within the reasonable period of time determined by us, unless we waive these defects or irregularities. None of us, our affiliates and assigns, the exchange agent and any other person is under any duty or obligation to give notice of any defect or irregularity with respect to any tender of the old notes, and none of them shall incur any liability for failure to give any such notice.

We reserve the absolute right in our sole and absolute discretion to:

•: reject any and all tenders of old notes determined to be in improper form or unlawful;
•: waive any condition of the exchange offer; and
•: waive any condition, defect or irregularity in the tender of old notes by any holder, whether or not we waive similar conditions, defects or irregularities in the case of other holders.

Representations Made by Tendering Holders of Old Notes

By tendering, you will represent to us that, among other things:

•: you are acquiring the new notes in the ordinary course of business;
•: you do not have any arrangement or understanding with any person or entity to participate in the distribution of the new notes;
•: if you are not a broker-dealer, you are not engaged in and do not intend to engage in a distribution of the new notes;
•: if you are a broker-dealer that will receive new notes for your own account in exchange for old notes that were acquired by you as a result of market-making activities or other trading activities, you will deliver a prospectus, as required by law, in connection with any resale of the new notes (see "Plan of Distribution"); and
•: you are not our "affiliate" as defined in Rule 405 of the Securities Act.

If you are our "affiliate," as defined under Rule 405 of the Securities Act, or are engaged in or intend to engage in or have an arrangement or understanding with any person to participate in a distribution of the new notes, you will represent and warrant that you (i) may not rely on the applicable interpretations of the staff of the SEC and (ii) must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale transaction. The letter of transmittal states that by so acknowledging and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act.

In addition, in tendering old notes, you must warrant in the letter of transmittal or in an agent's message that:

•: you have full power and authority to tender, exchange, sell, assign and transfer old notes;
•: we will acquire good, marketable and unencumbered title to the tendered old notes, free and clear of all liens, restrictions, charges and other encumbrances; and
•: the old notes tendered for exchange are not subject to any adverse claims or proxies.

You must also warrant and agree that you will, upon request, execute and deliver any additional documents requested by us or the exchange agent to complete the exchange, sale, assignment and transfer of the old notes.

Acceptance of Old Notes; Delivery of New Notes

Upon satisfaction or waiver of all of the conditions to the exchange offer, we will accept all old notes validly tendered, and not withdrawn, on or prior to the expiration date. We will issue the new notes to the exchange agent as promptly as practicable after acceptance of the old notes. See "— Terms of the Exchange Offer."

For purposes of the exchange offer, we shall be deemed to have accepted validly tendered old notes for exchange when, as and if we have given oral or written notice of our acceptance to the exchange agent, with written confirmation of any oral notice to be given promptly thereafter.

Withdrawal Rights

You may withdraw tenders of your old notes at any time prior to the expiration date.

For a withdrawal to be effective, the exchange agent must receive a written notice of withdrawal from you. A notice of withdrawal must:

•: specify the name of the person tendering the old notes to be withdrawn;
•: identify the old notes to be withdrawn, including the total principal amount of these old notes; and
•: where certificates for the old notes have been transmitted, specify the name of the registered holder of the old notes, if different from the name of the person withdrawing the tender of these old notes.

If you delivered or otherwise identified certificates representing old notes to the exchange agent, then, you must also submit the serial numbers of the particular certificates to be withdrawn and, unless you are an eligible institution, the signature on the notice of withdrawal must be guaranteed by an eligible institution. If you tendered old notes as a book-entry transfer, your notice of withdrawal must specify the name and number of the account at DTC to be credited with the withdrawn old notes and otherwise comply with the procedures of DTC. You may not withdraw or rescind any notice of withdrawal; however, old notes properly withdrawn may again be tendered at any time on or prior to the expiration date.

We will determine, in our sole discretion, all questions as to the validity, form and eligibility (including time of receipt) of any and all notices of withdrawal, and our determination of these questions shall be final and binding on all parties. Any old notes properly withdrawn will be deemed not to have been validly tendered for exchange for purposes of the exchange offer and will be returned to the holder without cost as soon as practicable after their withdrawal.

Exchange Agent

Wells Fargo Bank, National Association is the exchange agent for the exchange offer. You should direct all tendered old notes, executed letters of transmittal and other related documents to the exchange agent. You should direct all questions and requests for assistance, requests for additional copies of this prospectus or of the letter of transmittal and requests for notices of guaranteed delivery to the exchange agent at the following addresses and telephone numbers:

By Registered and Certified Mail:	By Overnight Courier or Regular Mail:	By Hand Delivery:
Wells Fargo Bank, National Association Corporate Trust Operations MAC N9303-121 P.O. Box 1517 Minneapolis, MN 55480 Attention: Reorg.	Wells Fargo Bank, National Association Corporate Trust Operations MAC N9303-121 6th & Marquette Avenue Minneapolis, MN 55479 Attention: Reorg.	Wells Fargo Bank, National Association Corporate Trust Operations 608 2nd Avenue South Northstar East Building - 12th Floor Minneapolis, MN 55402 Attention: Reorg.
or
Facsimile: (612) 667-4927 Telephone: (612) 667-9764

If you deliver executed letters of transmittal and any other required documents to an address or facsimile number other than those set forth above, your tender is invalid.

Fees and Expenses

We will bear the expenses of soliciting old notes for exchange. The principal solicitation is being made by mail by the exchange agent. Additional solicitation may be made by facsimile, telephone or in person by officers and regular employee of our company and our affiliates.

We have not retained any dealer-manager in connection with the exchange offer and will not make any payments to any broker, dealer, nominee or other person, other than the exchange agent, for soliciting tenders of the old notes pursuant to the exchange offer. We will pay the exchange agent reasonable and customary fees for its services.

We will pay the cash expenses to be incurred in connection with the exchange offer. They include:

•: registration and filing fees;
•: fees and expenses of the exchange agent and trustee;
•: accounting and legal fees and printing costs; and

•: related fees and expenses.

Transfer Taxes

We will pay all transfer taxes, if any, applicable to the exchange of the old notes under the exchange offer. A tendering holder, however, will be required to pay any applicable transfer taxes if:

•: this tendering holder instructs us to register new notes in the name of, or deliver new notes to, a person other than the registered tendering holder of the old notes;
•: the tendered old notes are registered in the name of a person other than the person signing the applicable letter of transmittal; or
•: a transfer tax is imposed for any reason other than the exchange of old notes under the exchange offer.

If satisfactory evidence of payment of any transfer taxes payable by a tendering holder is not submitted with the letter of transmittal, the amount of the transfer taxes will be billed directly to that tendering holder.

Accounting Treatment

The new notes will be recorded at the same carrying value, in U.S. dollars, as the old notes, and will be translated into Canadian dollars in accordance with Canadian GAAP, as reflected in our accounting records on the date of the exchange. Accordingly, we will recognize no gain or loss for accounting purposes upon the closing of the exchange offer. We will amortize the expenses of the exchange offer over the term of the new notes under Canadian GAAP.

Consequences of Failure to Exchange Old Notes

Following the consummation of the exchange offer, we will have fulfilled most of our obligations under the registration rights agreement. Unless you are an initial purchaser or a holder of old notes who is prohibited by applicable law or SEC policy from participating in the exchange offer or who may not resell the new notes acquired in the exchange offer without delivering a prospectus and this prospectus is not appropriate or available for such resales by you, if you do not tender your old notes in the exchange offer or if we do not accept your old notes because you did not tender them properly, you will not have any further registration rights with respect to your old notes, and you will not have the right to receive any special interest on your old notes. In addition, your old notes will continue to be subject to restrictions on their transfer. In general, any old note that is not exchanged for a new note may not be offered or sold, unless registered under the Securities Act, except pursuant to an exemption from, or in a transaction not subject to, the Securities Act and applicable state securities laws.

We may in the future seek to acquire unexchanged old notes in open market or privately negotiated transactions, through subsequent exchange offers or otherwise. We have no present plans, however, to acquire any unexchanged old notes or to file with the SEC a shelf registration statement to permit resales of any unexchanged old notes.

Resale of the New Notes

Based on interpretations by the SEC staff set forth in no-action letters issued to third parties in similar transactions, such as Exxon Capital Holding Corporation and Morgan Stanley & Co. Incorporated, we believe that a holder of the new notes may offer the new notes for resale or resell or otherwise transfer the new notes without compliance with the registration and prospectus delivery requirements of the Securities Act, unless this holder:

•: is our "affiliate" within the meaning of Rule 405 under the Securities Act;
•: is a broker-dealer who purchased old notes directly from us for resale under Rule 144A or any other available exemption under the Securities Act;
•: acquired the new notes other than in the ordinary course of this holder's business; or
•: is participating, intends to participate or has an arrangement or understanding with any person to participate in the distribution of the new notes.

Accordingly, holders wishing to participate in the exchange offer must make the applicable representations described in "— Procedures for Tendering Old Notes — Representations Made by Tendering Holders of Old Notes" above.

Although we are making the exchange offer in reliance on the interpretations by the SEC staff set forth in these no-action letters, we do not intend to seek our own no-action letter from the SEC. Consequently, we cannot assure you that the SEC staff would make a similar determination with respect to the exchange offer as it did in its no-action letters to third parties. If this interpretation is inapplicable and you resell or otherwise transfer any new notes without complying with the registration and prospectus delivery requirements of the Securities Act, you may incur liability under the Securities Act. We do not assume or indemnify you against this liability.

You may not rely on the interpretations of the SEC staff in the above-described no-action letters if you are a holder of old notes who:

•: is our "affiliate" as defined in Rule 405 under the Securities Act;
•: does not acquire the new notes in the ordinary course of business;
•: tenders in the exchange offer with the intention to participate, or for the purpose of participating, in a distribution of the new notes; or
•: is a broker-dealer that purchased old notes from us to resell them pursuant to Rule 144A under the Securities Act or any other available exemption under the Securities Act, and

in the absence of an exemption, you must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale or other transfer of the new notes.

In addition, each broker-dealer that receives new notes for its own account in exchange for old notes that were acquired by it as a result of market-making activities or other trading activities must acknowledge that it will deliver a prospectus in connection with any resale of those new notes. See "Plan of Distribution." Under the registration rights agreement, we will be required to use our best efforts to keep the registration statement that includes this prospectus effective to allow these participating broker-dealers and other persons, if any, with similar prospectus deliver requirements to use this prospectus in connection with the resale of the new notes for the period that shall end on the sooner of 180 days after the effectiveness date of the registration statement that includes this prospectus and the date on which a participating broker-dealer is no longer required to deliver a prospectus in connection with market-making or other trading activities.

In order to comply with state securities laws, the new notes may not be offered or sold in any state unless they have been registered or qualified for sale in such state or an exemption from registration or qualification is available and is complied with.

The new notes are not being offered for sale and may not be offered or sold, directly or indirectly, in Canada, or to any resident thereof, except in accordance with the securities laws of the provinces and territories of Canada. We are not required, and do not intend, to qualify by prospectus in Canada the new notes, and accordingly, the new notes will remain subject to restrictions on resale in Canada. See "Notice to Canadian Investors."

DESCRIPTION OF THE NOTES

You can find the definitions of certain terms used in this description under the subheading "— Definitions." In this description, the words "Vidéotron" and "we" refer only to Vidéotron Ltée and not to any of its subsidiaries.

We issued the old notes, and will issue the new notes under an indenture dated as of October 8, 2003, as supplemented, among Vidéotron, the Subsidiary Guarantors and Wells Fargo Bank, National Association (formerly named Wells Fargo Bank Minnesota, N.A.), as trustee, governing US$335.0 million principal amount of our existing notes, which were issued on October 8, 2003 and had been registered under the Securities Act. The indenture is governed by the Trust Indenture Act of 1939. The terms of the new notes include those stated in the indenture and those made part of the indenture by reference to the Trust Indenture Act. The new notes, the old notes and the existing notes will be treated as a single series of notes under the indenture, including for purposes of determining whether the required percentage of holders have given their approval or consent to an amendment or waiver or joined in directing the trustee to take certain actions on behalf of all holders. For purposes of this description, unless the context indicates otherwise, references in this prospectus to the "notes" include the new notes, the existing notes and the old notes. After the consummation of the exchange offer, the new notes and the old notes will represent approximately 48.5% of all notes issued under the indenture.

The following description is a summary of the material provisions of the indenture. It does not restate the indenture in its entirety. We urge you to read the indenture because it, and not this description, defines your rights as a holder of the new notes. A copy of the indenture is available upon request to Vidéotron at the address indicated under "Where You Can Find More Information." In addition, a copy of the indenture has been filed as an exhibit to the registration statement that includes this prospectus.

The registered holder of a note will be treated as the owner of the note for all purposes. Only registered holders will have rights under the indenture. In this description, the term "holder" refers only to registered holders of the notes.

Principal, Maturity and Interest

We issued US$335.0 million aggregate principal amount of the existing notes on October 8, 2003 and US$315.00 million aggregate principal amount of the old notes on November 19, 2004. We will issue up to US$315.0 million aggregate principal amount of the new notes in the exchange offer. In addition, subject to compliance with the limitations described under "— Covenants — Incurrence of Indebtedness and Issuance of Preferred Shares," we may issue an unlimited principal amount of additional notes at later dates under the same indenture ("Additional Notes"). Any Additional Notes that we issue in the future will be identical in all respects to the existing notes issued on October 8, 2003, the old notes issued on November 19, 2004 and the new notes that we expect to issue in the exchange offer, except that notes issued in the future will have different issuance prices and issuance dates. The existing notes, the old notes, the new notes and any Additional Notes subsequently issued under the indenture would be treated as a single class for all purposes under the indenture, including, without limitation, waivers, amendments, redemptions and offers to purchase. We issued the existing notes and the old notes, and will issue new notes and Additional Notes, only in fully registered form without coupons, in denominations of US$1,000 and integral multiples of US$1,000. The notes will mature on January 15, 2014.

Interest on the old notes and the new notes will accrue at the rate of 6⁷/8% per annum and will be payable semi-annually in arrears on January 15 and July 15, commencing on January 15, 2005. Vidéotron will make each interest payment to the holders of record on the immediately preceding January 1 and July 1.

Interest on the old notes and the new notes will accrue from July 15, 2004. Interest will be computed on the basis of a 360-day year comprised of twelve 30-day months. The interest rate on the old and new notes will increase if a registration default occurs. We refer to any interest payable as a result of this increase in interest rate as "special interest." You should refer to the description under the caption "The Exchange Offer" for a more detailed description of the circumstances under which the interest rate will increase.

Ranking

The existing notes and the old notes are, and the new notes will be:

•: senior unsecured obligations of Vidéotron;
•: effectively junior in right of payment to all of our and the Subsidiary Guarantors' existing and future secured indebtedness, including any borrowings under our Credit Agreement, to the extent of the value of the assets securing that indebtedness;
•: effectively junior in right of payment to all indebtedness and other obligations (including trade payables) of any of our subsidiaries that do not guarantee the notes;
•: equal in right of payment to all of our and the Subsidiary Guarantors' existing and future unsubordinated, unsecured indebtedness that does not expressly provide that it is subordinated to the notes or Subsidiary Guarantees, as applicable; and
•: senior in right of payment to all of our and the Subsidiary Guarantors' existing and future indebtedness that expressly provides that it is subordinated to the notes or Subsidiary Guarantees, as applicable.

The notes are obligations exclusively of Vidéotron. A portion of the operations of Vidéotron is conducted through subsidiaries. Therefore, Vidéotron's ability to service its debt, including the notes, will partially depend on the earnings of its subsidiaries and, to the extent they are not Subsidiary Guarantors, their ability to distribute those earnings as dividends, loans or other payments to Vidéotron. If their ability to make these distributions were restricted, by law or otherwise, then Vidéotron would not be able to use the cash flow of its subsidiaries to make payments on the notes. Furthermore, under certain circumstances, bankruptcy, "fraudulent conveyance" or "fraudulent preference" laws or other similar laws could invalidate the Subsidiary Guarantees. If this were to occur, Vidéotron would also be unable to use the assets of the Subsidiary Guarantors to the extent they were restricted from distributing funds to Vidéotron. Any of the situations described above could make it more difficult for Vidéotron to service its indebtedness.

Vidéotron principally relies on its shareholder's claim on the assets of its subsidiaries. This shareholder's claim is junior to the claims that creditors (including trade creditors) of Vidéotron's subsidiaries have against those subsidiaries. Holders of the notes will be creditors only of Vidéotron and those of its subsidiaries that are Subsidiary Guarantors. In the case of subsidiaries that are not Subsidiary Guarantors, all the existing and future liabilities of such subsidiaries, including any claims of trade creditors and preferred shareholders, will be effectively senior to the notes. The liabilities, including contingent liabilities, of Vidéotron's subsidiaries that are not Subsidiary Guarantors may be significant.

Although the indenture contains limitations on the amount of additional indebtedness that Vidéotron and the Restricted Subsidiaries may incur, the amounts of such additional indebtedness could nevertheless be substantial and may be incurred either by Vidéotron, the Subsidiary Guarantors or by any other subsidiaries of Vidéotron. See "— Covenants — Incurrence of Indebtedness and Issuance of Preferred Shares." The notes are unsecured obligations of Vidéotron, and the Subsidiary Guarantees are unsecured obligations of the Subsidiary Guarantors. Secured indebtedness of Vidéotron and the Subsidiary Guarantors, including under the Credit Agreement and any guarantees of the Credit Agreement, effectively will be senior to the notes to the extent of the value of the assets securing such indebtedness.

After giving effect to the completion of the offering of the old notes and the application of the net proceeds from the offering of the old notes as described under "Use of Proceeds," as of September 30, 2004, Vidéotron and its subsidiaries, on a consolidated basis, would have had $2,184.7 million of debt outstanding, $97.1 million of which would have been senior secured debt. As of September 30, 2004, the total liabilities of Vidéotron's subsidiaries that do not guarantee the notes, excluding inter-company liabilities, were $180.3 million.

As of the Issue Date, all of our subsidiaries were be "Restricted Subsidiaries." However, under the circumstances described below under the subheading "— Covenants — Designation of Restricted and Unrestricted Subsidiaries," we will be permitted to designate certain of our subsidiaries as "Unrestricted Subsidiaries." Any Unrestricted Subsidiaries will not be subject to any of the restrictive covenants in the indenture.

Subsidiary Guarantees

The obligations of Vidéotron under the notes and the indenture, including the repurchase obligation resulting from a Change of Control, will be fully and unconditionally guaranteed, jointly and severally, on a senior, unsecured basis, by each Subsidiary Guarantor, which will include each existing and future Wholly Owned Restricted Subsidiary of Vidéotron and any other Restricted Subsidiary of Vidéotron that guarantees any other Indebtedness (including any Back-to-Back Debt) of Vidéotron or any of its Restricted Subsidiaries, except that CF Cable TV Inc. and its Subsidiaries will only become Subsidiary Guarantors when CF Cable TV Inc.'s Senior Secured First Priority Notes due 2007 are no longer outstanding. Initially, all of Vidéotron's Subsidiaries will be Subsidiary Guarantors, except for Société D'Édition Et De Transcodage T.E. Ltée and CF Cable TV Inc. and their respective Subsidiaries.

If Vidéotron or a Subsidiary Guarantor sells or otherwise disposes of its entire ownership interest in a Subsidiary Guarantor (including by way of consolidation, merger or amalgamation) to a Person that is not (either before or after giving effect to such transaction) an Affiliate of Vidéotron, then in any such case, the Subsidiary Guarantor being sold will be released from all of its obligations under its Subsidiary Guarantee, subject to compliance with all applicable covenants of the indenture, including the covenant described under "— Repurchase at the Option of Holders — Asset Sales." In addition, if Vidéotron designates a Subsidiary Guarantor as an Unrestricted Subsidiary, which Vidéotron can do under certain circumstances, the designated Subsidiary Guarantor will be released from all of its obligations under its Subsidiary Guarantee. See "— Covenants — Designation of Restricted and Unrestricted Subsidiaries" and "— Merger, Consolidation or Sale of Assets." Upon being released from all other guarantee obligations, Subsidiary Guarantors may be released from their obligations under the Subsidiary Guarantees.

Methods of Receiving Payments on the Notes

If a holder has given wire transfer instructions to Vidéotron, Vidéotron will pay all principal, interest and premium and special interest, if any, on that holder's notes in accordance with those instructions. All other payments on the notes will be made at the office or agency of the paying agent and registrar for the notes within the City and State of New York unless Vidéotron elects to make interest payments by check mailed to the holders at their addresses set forth in the register of holders.

Paying Agent and Registrar for the Notes

The trustee will initially act as paying agent and registrar under the indenture. Vidéotron may change the paying agent or registrar without prior notice to any holder, and Vidéotron or any of its Subsidiaries may act as paying agent or registrar.

Transfer and Exchange

A holder may transfer or exchange its notes in accordance with the indenture. In connection with any transfer or exchange of the notes, the registrar and the trustee may require a holder, among other things, to furnish appropriate endorsements and transfer documents, and Vidéotron may require a holder to pay any taxes and fees required by law or permitted by the indenture. Vidéotron is not required to register the transfer of or to exchange any note selected for redemption. Also, Vidéotron is not required to transfer or exchange any note for a period of 15 days before a selection of notes to be redeemed.

Optional Redemption

At any time prior to January 15, 2007, Vidéotron may on any one or more occasions redeem up to 35% of the aggregate principal amount of the notes issued under the indenture at a redemption price of 106.875% of the principal amount of the notes redeemed, plus accrued and unpaid interest thereon and special interest, if any, to the redemption date (subject to the right of holders of record on the relevant record date to receive interest due on the

relevant interest payment date), with the net cash proceeds of one or more Equity Offerings;provided,however, that:

(1): at least 65% of the aggregate principal amount of notes issued under the indenture remain outstanding immediately after the occurrence of such redemption, excluding notes held by Vidéotron and its Subsidiaries; and
(2): the redemption occurs within 90 days of the date of the closing of any such Equity Offering.

Except as set forth above or under "— Redemption for Changes in Withholding Taxes," the notes will not be redeemable at Vidéotron's option prior to January 15, 2009. Starting on that date, Vidéotron may redeem all or a part of the notes, at once or over time, upon not less than 30 nor more than 60 days' notice, at the redemption prices, expressed as percentages of principal amount, set forth below, plus accrued and unpaid interest and special interest, if any, thereon, to the applicable redemption date (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date), if redeemed during the twelve-month period beginning on January 15 of the years indicated below:

Year		Percentage
2009		103.438%
2010		102.292%
2011		101.146%
2012 and thereafter		100.000%

Redemption for Changes in Withholding Taxes

If Vidéotron becomes obligated to pay any Additional Amounts because of a change in the laws or regulations of Canada or any Canadian Taxing Authority, or a change in any official position regarding the application or interpretation thereof, in either case that is publicly announced or becomes effective on or after the Issue Date, Vidéotron may, at any time, upon not less than 30 nor more than 60 days' notice, redeem all, but not part, of the notes at a price equal to 100% of the principal amount thereof, plus accrued and unpaid interest and special interest, if any, to the redemption date,provided that at any time that the aggregate principal amount of the notes outstanding is greater than US$20.0 million, any holder of the notes may, to the extent that it does not adversely affect Vidéotron's after-tax position, at its option, waive Vidéotron's compliance with the covenant described under the caption "— Payment of Additional Amounts" with respect to such holder's notes,provided,further, that if any holder waives this compliance, Vidéotron may not redeem that holder's notes pursuant to this paragraph.

Prior to any redemption of the notes pursuant to the preceding paragraph, Vidéotron shall deliver to the trustee an officers' certificate stating that Vidéotron is entitled to effect such redemption and setting forth a statement of facts showing that the conditions precedent to the right of redemption have occurred. Vidéotron will be bound to redeem the notes on the date fixed for redemption.

Payment of Additional Amounts

All payments made by or on behalf of Vidéotron or the Subsidiary Guarantors on or with respect to the notes will be made without withholding or deduction for any Taxes imposed by any Canadian Taxing Authority, unless required by law or the interpretation or administration thereof by the relevant Canadian Taxing Authority. If Vidéotron or any Subsidiary Guarantor (or any other payor) is required to withhold or deduct any amount on account of Taxes from any payment made under or with respect to any notes that are outstanding on the date of the required payment, it will:

(1): make this withholding or deduction;
(2): remit the full amount deducted or withheld to the relevant government authority in accordance with applicable law;
(3): pay the additional amounts, which we refer to as "Additional Amounts," as may be necessary so that the net amount received by each holder (including Additional Amounts) after this withholding or deduction

will not be less than the amount the holder would have received if these Taxes had not been withheld or deducted;

(4): furnish to the holders, within 30 days after the date the payment of any Taxes is due, certified copies of tax receipts evidencing this payment by Vidéotron or such Subsidiary Guarantor;
(5): indemnify and hold harmless each holder (other than an Excluded Holder, as defined below) for the amount of (a) any Taxes paid by each such holder as a result of payments made on or with respect to the notes, (b) any liability (including penalties, interest and expenses) arising from or with respect to these payments and (c) any Taxes imposed with respect to any reimbursement under (a) or (b), but excluding any of these Taxes that are in the nature of Taxes on net income, taxes on capital, franchise taxes, net worth taxes and similar taxes; and
(6): at least 30 days prior to each date on which any payment under or with respect to the notes is due and payable, if Vidéotron or any Subsidiary Guarantor becomes obligated to pay Additional Amounts with respect to such payment, deliver to the trustee an officers' certificate stating the amounts so payable and such other information necessary to enable the trustee to pay these Additional Amounts to holders on the payment date.

Notwithstanding the foregoing, no Additional Amounts will be payable to a holder in respect of beneficial ownership of a note (an "Excluded Holder"):

(1): with which Vidéotron or such Subsidiary Guarantor does not deal at arm's-length, within the meaning of theIncome Tax Act (Canada), at the time of making such payment;
(2): which is subject to such Taxes by reason of its being connected with Canada or any province or territory thereof otherwise than by the mere acquisition, holding or disposition of notes or the receipt of payments thereunder; or
(3): if such holder waives its right to receive Additional Amounts.

Whenever in the indenture there is mentioned, in any context, the payment of principal, premium, if any, redemption price, Change of Control Payment, offer price and interest, special interest or any other amount payable under or with respect to any note, this mention shall be deemed to include mention of the payment of Additional Amounts to the extent that, in such context, Additional Amounts are, were or would be payable. The obligations described under this heading will survive any termination, defeasance or discharge of the indenture and will apply mutatis mutandis to any jurisdiction in which any successor Person to Vidéotron or any Subsidiary Guarantor, as applicable, is organized or any political subdivision or taxing authority or agency thereof or therein.

Mandatory Redemption

Except as described below under the caption "— Repurchase at the Option of Holders," Vidéotron is not required to make mandatory redemption or sinking fund payments with respect to the notes.

Repurchase at the Option of Holders

Change of Control

Within 30 days following any Change of Control, Vidéotron will mail a notice to the trustee and each holder describing the transaction or transactions that constitute the Change of Control and offering to repurchase notes on the Change of Control Payment Date specified in the notice, pursuant to the procedures required by the indenture and described in the notice. If a Change of Control occurs, each holder of notes will have the right to require Vidéotron to repurchase all or any part, equal to US$1,000 or an integral multiple of US$1,000, of that holder's notes pursuant to a Change of Control Offer on the terms set forth in the indenture. In the Change of Control Offer, Vidéotron will offer a Change of Control Payment in cash equal to 101% of the aggregate principal amount of notes repurchased plus accrued and unpaid interest and special interest, if any, on the notes repurchased, to the date of purchase. The Change of Control Payment Date shall be no earlier than 30 days and no later than 60 days from the date the notice is mailed. Vidéotron will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent those laws and regulations are applicable

in connection with the repurchase of the notes as a result of a Change of Control. To the extent that the provisions of any securities laws or regulations conflict with the Change of Control provisions of the indenture, Vidéotron will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under the Change of Control provisions of the indenture by virtue of this conflict.

On the Change of Control Payment Date, Vidéotron will, to the extent lawful:

(1): accept for payment all notes or portions of notes properly tendered pursuant to the Change of Control Offer;
(2): deposit with the paying agent an amount equal to the Change of Control Payment in respect of all notes or portions of notes properly tendered; and
(3): deliver or cause to be delivered to the trustee the notes so accepted together with an officers' certificate stating the aggregate principal amount of notes or portions of notes being purchased by Vidéotron.

The paying agent will promptly mail or wire transfer to each holder of notes properly tendered the Change of Control Payment for these notes, and Vidéotron will execute and issue, and the trustee will promptly authenticate and mail, or cause to be transferred by book-entry, to each holder another note equal in principal amount to any unpurchased portion of the notes surrendered, if any;provided,however, that each such newly issued note will be in a principal amount of US$1,000 or an integral multiple of US$1,000.

Vidéotron will publicly announce the results of the Change of Control Offer on or as soon as practicable after the Change of Control Payment Date.

The provisions described above that require Vidéotron to make a Change of Control Offer following a Change of Control will be applicable regardless of whether any other provisions of the indenture are applicable. Except as described above with respect to a Change of Control, the indenture does not contain provisions that permit the holders of the notes to require that Vidéotron repurchase or redeem the notes in the event of a takeover, recapitalization or similar transaction.

Vidéotron will not be required to make a Change of Control Offer upon a Change of Control if a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in the indenture applicable to a Change of Control Offer made by Vidéotron and purchases all notes or portions of notes properly tendered and not withdrawn under such Change of Control Offer.

The definition of Change of Control includes a phrase relating to the direct or indirect sale, lease, transfer, conveyance or other disposition of "all or substantially all" of the properties or assets of Vidéotron and its Restricted Subsidiaries taken as a whole. Although there is a limited body of case law interpreting the phrase "substantially all," there is no precise established definition of the phrase under applicable law. Accordingly, the obligation of Vidéotron to make a Change of Control Offer and the ability of a holder of notes to require Vidéotron to repurchase such notes pursuant to such an offer as a result of a sale, lease, transfer, conveyance or other disposition of less than all of the assets of Vidéotron and its Restricted Subsidiaries taken as a whole to another Person or group may be uncertain.

In addition to the obligations of Vidéotron under the indenture with respect to the notes in the event of a Change of Control, the Credit Agreement provides that certain change of control events with respect to Vidéotron would constitute a default under such agreement. In addition, any future credit facilities or other agreements relating to Indebtedness to which Vidéotron becomes a party may prohibit or otherwise limit Vidéotron from purchasing any notes prior to their maturity, and may also provide that certain change of control events with respect to Vidéotron would constitute a default thereunder. In the event a Change of Control occurs at a time when Vidéotron is prohibited from purchasing notes, Vidéotron could seek the consent of its lenders to the purchase of notes or could attempt to refinance the borrowings that contain such restrictions. If Vidéotron does not obtain such a consent or repay such borrowings, Vidéotron will remain prohibited or otherwise restricted from purchasing notes. In addition, there can be no assurance that Vidéotron will have sufficient financial resources available to purchase the notes at the time of a Change of Control. In such case, Vidéotron's failure to purchase tendered notes would constitute an Event of Default under the indenture. See "Risk Factors — Risks Relating to the Notes — We may not be able to finance a change of control offer as required by the indenture because we may not have sufficient funds at the time of the change of control or our credit facilities may not allow the repurchases."

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Asset Sales

Vidéotron will not, and will not permit any of its Restricted Subsidiaries to, consummate an Asset Sale unless:

(1)

Vidéotron, or the Restricted Subsidiary, as the case may be, receives consideration at the time of the Asset Sale at least equal to the fair market value of the assets or Equity Interests issued or sold or otherwise disposed of;

(2)

such fair market value is determined by Vidéotron's Board of Directors and evidenced by a resolution of the Board of Directors set forth in an officers' certificate delivered to the trustee; and

(3)

at least 75% of the consideration received in the Asset Sale by Vidéotron or such Restricted Subsidiary is in the form of cash or Cash Equivalents. For purposes of this provision, each of the following shall be deemed to be cash:

(a): any Indebtedness or other liabilities, as shown on Vidéotron's or such Restricted Subsidiary's most recent balance sheet, of Vidéotron or any Restricted Subsidiary (other than contingent liabilities and Indebtedness that are by their terms pari passu with or subordinated to the notes or any Subsidiary Guarantee and liabilities to the extent owed to Vidéotron or any Affiliate of Vidéotron) that are assumed by the transferee of any such assets pursuant to a written agreement that releases Vidéotron or such Restricted Subsidiary from further liability with respect to such Indebtedness or liabilities; and
(b): any securities, notes or other obligations received by Vidéotron or any such Restricted Subsidiary from such transferee that are converted within 60 days of the applicable Asset Sale by Vidéotron or such Restricted Subsidiary into cash, to the extent of the cash received in that conversion.

Notwithstanding the foregoing paragraph, Vidéotron and its Restricted Subsidiaries may engage in Asset Swaps if (i) immediately after giving effect to any such Asset Swap, Vidéotron would be permitted to incur at east US$1.00 of additional Indebtedness pursuant to the Debt to Cash Flow Ratio test set forth in the first paragraph of the covenant described under the caption "— Covenants — Incurrence of Indebtedness and Issuance of Preferred Shares" and (ii) Vidéotron or such Restricted Subsidiary receives consideration at the time of such Asset Swap at least equal to the fair market value of the assets disposed of, which fair market value is determined by the Board of Directors of Vidéotron or the Restricted Subsidiary, as the case may be, and evidenced by a resolution of such Board of Directors set forth in an officers' certificate delivered to the trustee;provided,however, that the Board of Directors' determination must be based upon an opinion or appraisal issued by an accounting, appraisal or investment banking firm of national standing in the United States or Canada if the fair market value exceeds US$25.0 million.

Within 360 days after the receipt of any Net Proceeds from an Asset Sale, Vidéotron may apply those Net Proceeds at its option:

(1): to permanently repay or reduce Indebtedness, other than Subordinated Indebtedness, of Vidéotron or a Subsidiary Guarantor secured by such assets, Indebtedness of Vidéotron or a Subsidiary Guarantor under Credit Facilities or Indebtedness of a Restricted Subsidiary that is not a Subsidiary Guarantor, and, if the Indebtedness repaid is revolving credit Indebtedness, to correspondingly reduce commitments with respect thereto;
(2): to acquire, or enter into a binding agreement to acquire, all or substantially all of the assets (other than cash, Cash Equivalents and securities) of any Person engaged in a Permitted Business;provided,however, that any such commitment shall be subject only to customary conditions (other than financing), and such acquisition shall be consummated no later than 180 days after the end of this 360-day period;
(3): to acquire, or enter into a binding agreement to acquire, Voting Stock of a Person engaged in a Permitted Business from a Person that is not an Affiliate of Vidéotron;provided,however, that such commitment shall be subject only to customary conditions (other than financing) and such acquisition shall be consummated no later than 180 days after the end of such 360-day period; andprovided,further,however, that (a) after giving effect thereto, the Person so acquired becomes a Restricted Subsidiary of Vidéotron and (b) such acquisition is otherwise made in accordance with the indenture, including, without limitation, the covenant described under the caption "— Covenants — Restricted Payments;" or

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

Pending the final application of any Net Proceeds, Vidéotron may temporarily reduce revolving credit borrowings or otherwise invest the Net Proceeds in any manner that is not prohibited by the indenture.

Any Net Proceeds from Asset Sales that are not applied, invested or segregated from the general funds of Vidéotron for investment in identified assets pursuant to a binding agreement, in each case as provided in the preceding paragraph will constitute Excess Proceeds;provided,however, that the amount of any Net Proceeds that ceases to be so segregated as contemplated above shall also constitute "Excess Proceeds" at the time any such Net Proceeds cease to be so segregated;provided further,however, that the amount of any Net Proceeds that continues to be segregated for investment and that is not actually reinvested within twenty-four months from the date of the receipt of such Net Proceeds shall also constitute "Excess Proceeds."

When the aggregate amount of Excess Proceeds exceeds US$35.0 million, Vidéotron will make an Asset Sale Offer to all holders of notes and all holders of other Indebtedness that is pari passu in right of payment with the notes or any Subsidiary Guarantee containing provisions similar to those set forth in the indenture relating to the notes with respect to offers to purchase or redeem with the proceeds of sales of assets, to purchase the maximum principal amount of notes and such other pari passu Indebtedness that may be purchased out of the Excess Proceeds. The offer price in any Asset Sale Offer will be equal to 100% of the principal amount of the notes and such other pari passu Indebtedness, plus accrued and unpaid interest and special interest, if any, to the date of purchase, and will be payable in cash. If any Excess Proceeds remain after consummation of an Asset Sale Offer and all holders of notes have been given the opportunity to tender their notes for purchase in accordance with the Asset Sale Offer and the indenture, Vidéotron may use these Excess Proceeds for any purpose not otherwise prohibited by the indenture. If the aggregate principal amount of notes and such other pari passu Indebtedness tendered into such Asset Sale Offer exceeds the amount of Excess Proceeds, the notes and such other pari passu Indebtedness shall be purchased on a pro rata basis based on the principal amount of notes and such other pari passu Indebtedness tendered. Upon completion of each Asset Sale Offer, the amount of Excess Proceeds will be reset at zero.

Vidéotron will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws and regulations are applicable in connection with each repurchase of notes pursuant to an Asset Sale Offer. To the extent that the provisions of any securities laws or regulations conflict with the Asset Sales provisions of the indenture, Vidéotron will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under the Asset Sale provisions of the indenture by virtue of such conflict.

Selection and Notice

If less than all of the notes are to be redeemed at any time, the trustee will select notes for redemption as follows:

(1): if the notes are listed on any national securities exchange, in compliance with the requirements of the principal national securities exchange on which the notes are listed; or
(2): if the notes are not listed on any national securities exchange, on a pro rata basis, by lot or by such method as the trustee shall deem fair and appropriate.

No notes of less than US$1,000 will be redeemed in part. Notices of redemption will be mailed by first class mail at least 30 but not more than 60 days before the date of redemption to each holder of notes to be redeemed at its registered address. Notices of redemption may not be conditional.

If any note is to be redeemed in part only, the notice of redemption that relates to that note will state the portion of the principal amount of that note that is to be redeemed. Another note in principal amount equal to the unredeemed portion of the original note will be issued in the name of the holder thereof upon cancellation of the original note at Vidéotron's expense. Notes called for redemption become irrevocably due and payable on the date

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fixed for redemption. On and after the redemption date, interest will cease to accrue on notes or portions of them called for redemption,provided that the redemption price has been paid or set aside as provided in the indenture.

Covenants

Restricted Payments

Vidéotron will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly:

(1): declare or pay any dividend or make any other payment or distribution on account of Vidéotron's or any of its Restricted Subsidiaries' Equity Interests, including, without limitation, any payment in connection with any merger or consolidation involving Vidéotron or any of its Restricted Subsidiaries, or to the direct or indirect holders of Vidéotron's or any of its Restricted Subsidiaries' Equity Interests in their capacity as such, other than dividends, payments or distributions payable in Equity Interests (other than Disqualified Stock or Back-to-Back Securities) of Vidéotron or to Vidéotron or a Restricted Subsidiary (and, if such Restricted Subsidiary is not a Wholly Owned Restricted Subsidiary, to the other shareholders of such Restricted Subsidiary on a pro rata basis or on a basis that results in the receipt by Vidéotron or a Restricted Subsidiary of dividends or distributions of greater value than it would receive on a pro rata basis);
(2): purchase, redeem or otherwise acquire or retire for value, including, without limitation, in connection with any merger or consolidation involving Vidéotron, any Equity Interests of Vidéotron, other than such Equity Interests of Vidéotron held by Vidéotron or any of its Restricted Subsidiaries;
(3): make any payment on or with respect to, or purchase, redeem, defease or otherwise acquire or retire for value any Back-to-Back Securities or Indebtedness that is subordinated to the notes or the Subsidiary Guarantees, except, in the case of Indebtedness that is subordinated to the notes or the Subsidiary Guarantees (other than Back-to-Back Securities and the 2003 QMI Subordinated Loan), a payment of interest at the Stated Maturity of such interest or principal at or within one year of the Stated Maturity of principal of such Indebtedness;provided that any accretion or payment-in-kind of interest on the 2003 QMI Subordinated Loan, to the extent such accretion or payment is not made in cash, will not be a Restricted Payment;
(4): make any Restricted Investment; or
(5): pay any amount of Management Fees (including Deferred Management Fees) to a Person other than Vidéotron or a Restricted Subsidiary

(all such payments and other actions set forth in clauses (1) through (5) above being collectively referred to as "Restricted Payments"), unless, at the time of and after giving effect to such Restricted Payment:

(1)

no Default or Event of Default has occurred and is continuing or would occur as a consequence of such Restricted Payment; and

(2)

Vidéotron would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable fiscal quarter, have been permitted to incur at least US$1.00 of additional Indebtedness, other than Permitted Debt, pursuant to the Debt to Cash Flow Ratio test set forth in the first paragraph of the covenant described under the caption "— Incurrence of Indebtedness and Issuance of Preferred Shares;" and

(3)

such Restricted Payment, together with the aggregate amount of all other Restricted Payments declared or made by Vidéotron and its Restricted Subsidiaries after the Issue Date, excluding Restricted Payments made pursuant to clauses (2), (3), (4), (6), (7), (8), (9) and (10) of the next succeeding paragraph, shall not exceed, at the date of determination, the sum, without duplication, of:

(a): an amount equal to Vidéotron's Consolidated Cash Flow from the first date of the fiscal quarter in which the Issue Date occurs to the end of Vidéotron's most recently ended full fiscal quarter for which internal financial statements are available, taken as a single accounting period, less 1.5 times Vidéotron's Consolidated Interest Expense from the first date of the fiscal quarter in which the Issue Date occurs to the end of Vidéotron's most recently ended full fiscal quarter for which internal

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financial statements are available, taken as a single accounting period (or, if such amount for such period is a deficit, minus 100% of such deficit); plus

(b)

an amount equal to 100% of Capital Stock Sale Proceeds, less any such Capital Stock Sale Proceeds used in connection with:

(i): an Investment made pursuant to clause (6) of the definition of "Permitted Investments;" or
(ii): an incurrence of Indebtedness pursuant to clause (8) of the covenant described under the caption "— Incurrence of Indebtedness and Issuance of Preferred Shares;" plus

(c)

to the extent that any Restricted Investment that was made after the Issue Date is sold for cash or otherwise liquidated or repaid for cash (except to the extent any such payment or proceeds are included in the calculation of Consolidated Cash Flow), the lesser of (i) the cash return of capital with respect to such Restricted Investment, less the cost of disposition, if any, and (ii) the initial amount of such Restricted Investment; plus

(d)

to the extent that the Board of Directors of Vidéotron designates any Unrestricted Subsidiary that was designated as such after the Issue Date as a Restricted Subsidiary, the lesser of (i) the aggregate fair market value of all Investments owned by Vidéotron and its Restricted Subsidiaries in such Subsidiary at the time such Subsidiary was designated as an Unrestricted Subsidiary and (ii) the then aggregate fair market value of all Investments owned by Vidéotron and its Restricted Subsidiaries in such Unrestricted Subsidiary.

The preceding provisions will not prohibit:

(1): so long as no Default has occurred and is continuing or would be caused thereby, the payment of any dividend within 60 days after the date the dividend is declared, if at that date of declaration such payment would have complied with the provisions of the indenture;provided,however, that such dividend shall be included in the calculation of the amount of Restricted Payments;
(2): so long as no Default has occurred and is continuing or would be caused thereby, the redemption, repurchase, retirement, defeasance or other acquisition of any Subordinated Indebtedness of Vidéotron or any Subsidiary Guarantor or of any Equity Interests of Vidéotron in exchange for, or out of the net cash proceeds of the substantially concurrent sale, other than to a Subsidiary of Vidéotron or an employee stock ownership plan or to a trust established by Vidéotron or any Subsidiary of Vidéotron for the benefit of its employees, of, Equity Interests of Vidéotron (other than Disqualified Stock or Back-to-Back Securities);provided that the amount of any such net cash proceeds that are utilized for any such redemption, repurchase, retirement, defeasance or other acquisition shall be excluded from clause (3)(b) of the preceding paragraph;
(3): so long as no Default has occurred and is continuing or would be caused thereby, the defeasance, redemption, repurchase or other acquisition of Subordinated Indebtedness of Vidéotron or any Subsidiary Guarantor with the net cash proceeds from an incurrence of Permitted Refinancing Indebtedness;
(4): any payment by Vidéotron or a Restricted Subsidiary of Vidéotron to any one of the other of them;
(5): so long as no Default has occurred and is continuing or would be caused thereby, the repurchase, redemption or other acquisition or retirement for value by Vidéotron of any Equity Interests of Vidéotron held by any member of Vidéotron's, or any of its Subsidiaries', management pursuant to any management equity subscription agreement or stock option agreement in effect as of the Issue Date;provided,however, that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests shall not exceed US$2.0 million in any twelve-month period;
(6): payments of any kind made in connection with or in respect of Back-to-Back Securities;provided,however, that to the extent such payments are made to Affiliates of Vidéotron (other than its Subsidiaries), all corresponding payments required to be paid by such Affiliates pursuant to the related Back-to-Back Securities shall be received, immediately prior to or concurrently with any such payments, by all applicable Vidéotron Entities;
(7): so long as no Default has occurred and is continuing or would be caused thereby, any Tax Benefit Transaction;

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(8): so long as no Default has occurred and is continuing or would be caused thereby, the payment of any Management Fees or other similar expenses by Vidéotron to its direct or indirect parent company 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, Vidéotron and its Restricted Subsidiaries, in an aggregate amount not to exceed 1.5% of Consolidated Revenues in any twelve-month period;
(9): so long as no Default has occurred and is continuing or would be caused thereby, other Restricted Payments in an aggregate amount not to exceed US$30.0 million; and
(10): so long as no Default has occurred and is continuing or would be caused thereby and the Debt to Cash Flow Ratio is no greater than 5.0 to 1 (calculated on a pro forma basis as if such payment, including any related financing transaction, had occurred at the beginning of the applicable fiscal quarter), the payment of dividends or distributions to Quebecor Media Inc. or the repayment of the 2003 QMI Subordinated Loan, in an aggregate amount not to exceed Cdn$200.0 million.

The amount of any Restricted Payment, other than those effected in cash, shall be the fair market value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued to or by Vidéotron or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair market value of any assets or securities that are required to be valued by this covenant will be determined by the Board of Directors of Vidéotron whose resolution with respect thereto shall be delivered to the trustee. Vidéotron's Board of Directors' determination must be based upon an opinion or appraisal issued by an accounting, appraisal or investment banking firm of national standing in the United States or Canada if the fair market value exceeds US$25.0 million;provided, that the Board of Directors of Vidéotron shall not be required to obtain such an opinion or appraisal in connection with any payments with respect to Back-to-Back Securities to the extent such Back-to-Back Transactions were approved in accordance with the provisions of the covenant described under the caption "— Transactions with Affiliates." Not later than the date of making any Restricted Payment, Vidéotron will deliver to the trustee an officers' certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required by this covenant were computed, together with a copy of any fairness opinion or appraisal required by the indenture.

For purposes of this "Restricted Payments" covenant, if (i) any Vidéotron Entity ceases to be the obligor under or issuer of any Back-to-Back Securities and a Person other than a Vidéotron Entity becomes the obligor thereunder (or the issuer of any Back-to-Back Preferred Shares) or (ii) any Restricted Subsidiary that is an obligor under or issuer of any Back-to-Back Securities ceases to be a Restricted Subsidiary other than by consolidation or merger with Vidéotron or another Restricted Subsidiary, then Vidéotron or such Restricted Subsidiary shall be deemed to have made a Restricted Payment in an amount equal to the accreted value of such Back-to-Back Debt (or the subscription price of any Back-to-Back Preferred Shares) at the time of the assumption thereof by such other Person or at the time such Restricted Subsidiary ceases to be a Restricted Subsidiary.

Incurrence of Indebtedness and Issuance of Preferred Shares

Vidéotron will not, and will not permit any of its Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, "incur") any Indebtedness, including Acquired Debt, and Vidéotron will not issue any Disqualified Stock and will not permit any of its Subsidiaries to issue any Preferred Shares;provided,however, that Vidéotron may incur Indebtedness, including Acquired Debt, or issue Disqualified Stock, and the Subsidiary Guarantors may incur Indebtedness, including Acquired Debt, or issue Preferred Shares, if Vidéotron's Debt to Cash Flow Ratio at the time of incurrence of such Indebtedness or the issuance of such Disqualified Stock or Preferred Shares, after giving pro forma effect to such incurrence or issuance as of such date and to the use of proceeds therefrom, taking into account any substantially concurrent transactions related to such incurrence, as if the same had occurred at the beginning of the most recently ended full fiscal quarter of Vidéotron for which internal financial statements are available, would have been no greater than 5.5 to 1.0.

The first paragraph of this covenant will not prohibit the incurrence of any of the following items of Indebtedness or issuances of Preferred Shares, which we refer to collectively as "Permitted Debt:"

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(1)

the incurrence by Vidéotron or a Subsidiary Guarantor of Indebtedness and letters of credit under Credit Facilities (and the guarantee by CF Cable TV Inc. and its Subsidiaries) in an aggregate principal amount at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of Vidéotron and the Restricted Subsidiaries thereunder) not to exceed an aggregate of Cdn$469.0 million, less the aggregate amount of all Net Proceeds of Asset Sales applied by Vidéotron or any Restricted Subsidiaries subsequent to the Issue Date to permanently repay Indebtedness under a Credit Facility (and, in the case of any revolving credit Indebtedness, to effect a corresponding commitment reduction thereunder) pursuant to the covenant described under the caption "— Repurchase at the Option of Holders — Asset Sales;"

(2)

the incurrence by Vidéotron and its Restricted Subsidiaries of the Existing Indebtedness;

(3)

the incurrence by (a) Vidéotron of Indebtedness represented by the existing notes issued on the Issue Date and the Exchange Notes to be issued in exchange for such existing notes and in exchange for any Additional Notes, and (b) the Subsidiary Guarantors of Indebtedness represented by the Subsidiary Guarantees relating to the existing notes issued on the Issue Date and the Exchange Guarantees issued in exchange for such Subsidiary Guarantees and in exchange for the Subsidiary Guarantees relating to any Additional Notes;

(4)

the incurrence by Vidéotron or a Subsidiary Guarantor of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of construction or improvement of property, plant or equipment used in the business of Vidéotron or such Subsidiary Guarantor, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (4), not to exceed US$40.0 million at any time outstanding;

(5)

the incurrence by Vidéotron or any Subsidiary Guarantor of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to refund, refinance or replace Indebtedness, other than intercompany Indebtedness, that was permitted by the indenture to be incurred under the first paragraph of this covenant or clauses (2), (3) and (4) of this paragraph;

(6)

the incurrence by Vidéotron or any Subsidiary Guarantor of intercompany Indebtedness between or among Vidéotron and any of its Restricted Subsidiaries;provided,however, that:

(a): if Vidéotron or any Subsidiary Guarantor is the obligor on such Indebtedness, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all Obligations with respect to the notes, in the case of Vidéotron, or the Subsidiary Guarantee, in the case of a Subsidiary Guarantor, and
(b): (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than Vidéotron or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either Vidéotron or a Restricted Subsidiary of Vidéotron will be deemed, in each case, to constitute an incurrence of such Indebtedness by Vidéotron or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);

(7)

the issuance by Vidéotron or any of its Restricted Subsidiaries of Preferred Shares solely to or among Vidéotron and any of its Restricted Subsidiaries;provided,however, that (i) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Shares being held by a Person other than Vidéotron or a Restricted Subsidiary and (ii) any sale or other transfer of any such Preferred Shares to a Person that is not either Vidéotron or a Restricted Subsidiary will be deemed, in each case, to constitute an issuance of such Preferred Shares by Vidéotron or any of its Restricted Subsidiaries, as the case may be, that was not permitted by this clause (7);

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(8)

the incurrence by Vidéotron or any Restricted Subsidiary of Hedging Obligations that are incurred in the ordinary course of business of Vidéotron or such Restricted Subsidiary and not for speculative purposes;provided,however, that, in the case of:

(a): any Interest Rate Agreement, the notional principal amount of such Hedging Obligation does not exceed the principal amount of the Indebtedness to which such Hedging Obligation relates; and
(b): any Currency Exchange Protection Agreement, such Hedging Obligation does not increase the principal amount of Indebtedness of Vidéotron or such Restricted Subsidiary outstanding other than as a result of fluctuations in foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunder;

(9)

the guarantee by Vidéotron or a Subsidiary Guarantor of Indebtedness of Vidéotron or a Subsidiary Guarantor that was permitted to be incurred by another provision of this covenant;

(10)

the incurrence by Vidéotron or any Subsidiary Guarantors of Indebtedness in an aggregate principal amount at any time outstanding, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (10), not to exceed US$25.0 million;

(11)

the incurrence by Vidéotron or any of its Restricted Subsidiaries of Indebtedness in an aggregate principal amount at any time outstanding, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (11), not to exceed US$25.0 million, less the aggregate amount of all Net Proceeds of Asset Sales applied by Vidéotron or any Restricted Subsidiaries subsequent to the Issue Date to permanently repay such Indebtedness (and, in the case of any revolving credit Indebtedness, to effect a corresponding commitment reduction thereunder) pursuant to the covenant described under the caption "— Repurchase at the Option of Holders — Asset Sales;"

(12)

the issuance of Preferred Shares by Vidéotron's Unrestricted Subsidiaries or the incurrence by Vidéotron's Unrestricted Subsidiaries of Non-Recourse Debt;provided,however, that if any such Indebtedness ceases to be Non-Recourse Debt of an Unrestricted Subsidiary, that event will be deemed to constitute an incurrence of Indebtedness by a Restricted Subsidiary of Vidéotron that was not permitted by this clause (12); and

(13)

the issuance of Indebtedness or Preferred Shares in connection with a Tax Benefit Transaction.

The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the payment of dividends on Disqualified Stock in the form of additional shares of the same class of Disqualified Stock (to the extent provided for when the Indebtedness or Disqualified Stock on which such interest or dividend is paid was originally issued) will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock for purposes of this covenant;provided that in each case the amount thereof is for all other purposes included in the Consolidated Interest Expense and Indebtedness of Vidéotron or its Restricted Subsidiary as accrued.

Neither Vidéotron nor any Subsidiary Guarantor will incur any Indebtedness, including Permitted Debt, that is contractually subordinated in right of payment to any other Indebtedness of Vidéotron or such Subsidiary Guarantor, as applicable, unless such Indebtedness is also contractually subordinated in right of payment to the notes or the Subsidiary Guarantee, as applicable, on substantially identical terms;provided,however, that no Indebtedness of Vidéotron or a Subsidiary Guarantor shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of Vidéotron or such Subsidiary Guarantor, as applicable, solely by virtue of collateral or the lack thereof.

Notwithstanding any other provision of this "Incurrence of Indebtedness and Issuance of Preferred Shares" covenant, the maximum amount of Indebtedness that may be incurred pursuant to this covenant will not be deemed to be exceeded, with respect to any outstanding Indebtedness due solely to the result of fluctuations in the exchange rates of currencies.

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For purposes of determining compliance with this "Incurrence of Indebtedness and Issuance of Preferred Shares" covenant, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (13) above, or is entitled to be incurred pursuant to the first paragraph of this covenant, Vidéotron will be permitted to classify such item of Indebtedness on the date of its incurrence or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this covenant. Indebtedness under Credit Facilities outstanding on the date on which notes are first issued and authenticated under the indenture shall be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the second paragraph of this covenant.

Sale and Leaseback Transactions

Vidéotron will not, and will not permit any of its Restricted Subsidiaries to, enter into any sale and leaseback transaction;provided,however, that Vidéotron or any Restricted Subsidiary may enter into a sale and leaseback transaction if:

(1): Vidéotron or that Restricted Subsidiary, as applicable, could have (a) incurred Indebtedness in an amount equal to the Attributable Debt relating to such sale and leaseback transaction under the Debt to Cash Flow Ratio test in the first paragraph of the covenant described under the caption "— Incurrence of Indebtedness and Issuance of Preferred Shares" and (b) created a Lien on such property securing Attributable Debt pursuant to the covenant described below under the caption "— Liens;"
(2): the net cash proceeds of that sale and leaseback transaction are at least equal to the fair market value, as determined in good faith by the Board of Directors of Vidéotron and set forth in an officers' certificate delivered to the trustee, of the property that is the subject of that sale and leaseback transaction; and
(3): the transfer of assets in that sale and leaseback transaction is permitted by, and Vidéotron or that Restricted Subsidiary applies the proceeds of such transaction in compliance with, the covenant described under the caption "— Repurchase at the Option of Holders — Asset Sales."

Liens

Vidéotron will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, assume or suffer to exist or become effective any Lien of any kind on any asset owned at the Issue Date or thereafter acquired, except Permitted Liens, unless Vidéotron or such Restricted Subsidiary has made or will make effective provision to secure the notes and any applicable Subsidiary Guarantees equally and ratably with the obligations of Vidéotron or such Restricted Subsidiary secured by such Lien for so long as such obligations are secured by such Lien.

Dividend and Other Payment Restrictions Affecting Subsidiaries

Vidéotron will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create or permit to exist or become effective any consensual encumbrance or restriction on the ability of any Restricted Subsidiary to:

(1): pay dividends or make any other distributions on its Equity Interests to Vidéotron or any other Restricted Subsidiary, or with respect to any other interest or participation in, or measured by, its profits, or pay any liabilities owed to Vidéotron or any other Restricted Subsidiary;
(2): make loans or advances, or guarantee any such loans or advances, to Vidéotron or any other Restricted Subsidiary; or
(3): transfer any of its properties or assets to Vidéotron or any other Restricted Subsidiary.

However, the preceding restrictions will not apply to encumbrances or restrictions existing under or by reason of:

(1): agreements governing Existing Indebtedness and Credit Facilities as in effect on the Issue Date and any amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings thereof;provided,however, that such amendments, modifications, restatements, renewals,

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increases, supplements, refundings, replacement or refinancings are no more restrictive, taken as a whole, with respect to such dividend and other payment restrictions than those contained in such Existing Indebtedness and Credit Facilities, as in effect on the Issue Date;

(2): the indenture and the notes;
(3): applicable law or any applicable rule, regulation or order;
(4): any instrument governing Indebtedness or Capital Stock of a Person acquired by Vidéotron or any of its Restricted Subsidiaries as in effect at the time of such acquisition (except to the extent such Indebtedness or Capital Stock was incurred or issued in connection with or in contemplation of such acquisition), which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person, or the property or assets of the Person, so acquired;provided,however, that, in the case of Indebtedness, such Indebtedness was permitted by the terms of the indenture to be incurred at the time of such acquisition;
(5): customary non-assignment provisions in leases entered into in the ordinary course of business and consistent with past practices;
(6): purchase money obligations for property acquired in the ordinary course of business that impose restrictions on the property so acquired of the nature described in clause (3) of the preceding paragraph;
(7): any agreement for the sale or other disposition of a Restricted Subsidiary that restricts distributions by that Restricted Subsidiary pending its sale or other disposition;
(8): Permitted Refinancing Indebtedness;provided,however, that the restrictions contained in the agreements governing such Permitted Refinancing Indebtedness are no more restrictive, taken as a whole, than those contained in the agreements governing the Indebtedness being refinanced;
(9): Liens securing Indebtedness that is permitted to be secured without also securing the notes or the applicable Subsidiary Guarantee pursuant to the covenant described under the caption "— Liens" that limit the right of the debtor to dispose of the assets subject to any such Lien;
(10): provisions with respect to the disposition or distribution of assets or property in joint venture agreements, asset sale agreements, stock sale agreements and other similar agreements entered into in the ordinary course of business;
(11): restrictions on cash or other deposits or net worth imposed by customers under contracts entered into in the ordinary course of business; and
(12): any Indebtedness or any agreement pursuant to which such Indebtedness was issued if the encumbrance or restriction applies only upon a payment or financial covenant default or event of default contained in such Indebtedness or agreement and (A) the encumbrance or restriction is not materially more disadvantageous to the holders of the notes than is customary in comparable financings (as determined in good faith by the Board of Directors of Vidéotron) and (B) management of Vidéotron delivers to the trustee an officers' certificate evidencing its determination at the time such agreement is entered into, that such encumbrance or restriction will not materially impair Vidéotron's ability to make payments on the notes.

Merger, Consolidation or Sale of Assets

Vidéotron may not directly or indirectly, (i) consolidate, merge or amalgamate with or into another Person, whether or not Vidéotron is the surviving corporation, or (ii) sell, assign, transfer, convey or otherwise dispose of all or substantially all of the properties or assets of Vidéotron and its Restricted Subsidiaries taken as a whole, in one or more related transactions, to another Person, unless, in either case,

(1): either (a) Vidéotron is the surviving corporation, or (b) the Person formed by or surviving any such consolidation, merger or amalgamation (if other than Vidéotron) or to which such sale, assignment, transfer, conveyance or other disposition shall have been made is a corporation organized or existing

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under the laws of the United States, any state of the United States, the District of Columbia, Canada or any province or territory of Canada;

(2): the Person formed by or surviving any such consolidation, merger or amalgamation (if other than Vidéotron) or the Person to which such sale, assignment, transfer, conveyance or other disposition shall have been made expressly assumes all the obligations of Vidéotron under the notes, the indenture and, if applicable, the registration rights agreement, pursuant to agreements reasonably satisfactory to the trustee;
(3): immediately after giving effect to such transaction no Default or Event of Default exists; and
(4): Vidéotron or the Person formed by or surviving any such consolidation, merger or amalgamation, if other than Vidéotron, or to which such sale, assignment, transfer, conveyance or other disposition has been made will, on the date of such transaction after giving pro forma effect thereto and any related financing transactions as if the same had occurred at the beginning of the applicable fiscal quarter, be permitted to incur at least US$1.00 of additional Indebtedness pursuant to the Debt to Cash Flow Ratio test set forth in the first paragraph of the covenant described under the caption "— Incurrence of Indebtedness and Issuance of Preferred Shares."

Unless in connection with a disposition by Vidéotron or a Subsidiary Guarantor of its entire ownership interest in a Subsidiary Guarantor or all or substantially all the assets of a Subsidiary Guarantor permitted by, and in accordance with the applicable provisions of, the indenture (including without limitation the covenant described above under "— Repurchase at the Option of Holders — Asset Sales"), Vidéotron will cause each Subsidiary Guarantor not to directly or indirectly, (i) consolidate, merge or amalgamate with or into another Person, whether or not such Subsidiary Guarantor is the surviving corporation, or (ii) sell, assign, transfer, convey or otherwise dispose of all or substantially all of the properties or assets of such Subsidiary Guarantor, in one or more related transactions, to another Person, unless, in either case,

(1): either (a) such Subsidiary Guarantor is the surviving corporation, or (b) the Person formed by or surviving any such consolidation, merger or amalgamation (if other than such Subsidiary Guarantor) or to which such sale, assignment, transfer, conveyance or other disposition shall have been made is a corporation, limited liability company or limited partnership organized or existing under the laws of the United States, any state of the United States, the District of Columbia, Canada or any province or territory of Canada;
(2): the Person formed by or surviving any such consolidation, merger or amalgamation, if other than such Subsidiary Guarantor, or the Person to which such sale, assignment, transfer, conveyance or other disposition shall have been made expressly assumes all the obligations of such Subsidiary Guarantor under its Subsidiary Guarantee, the indenture and, if applicable, the registration rights agreement, pursuant to agreements reasonably satisfactory to the trustee;
(3): immediately after giving effect to such transaction no Default or Event of Default exists; and
(4): such Subsidiary Guarantor or the Person formed by or surviving any such consolidation, merger or amalgamation, if other than such Subsidiary Guarantor, or to which such sale, assignment, transfer, conveyance or other disposition has been made will, on the date of such transaction after giving pro forma effect thereto and any related financing transactions as if the same had occurred at the beginning of the applicable fiscal quarter, be permitted to incur at least US$1.00 of additional Indebtedness pursuant to the Debt to Cash Flow Ratio test set forth in the first paragraph of the covenant described above under the caption "— Incurrence of Indebtedness and Issuance of Preferred Shares."

In addition, Vidéotron will not, and will cause each Subsidiary Guarantor not to, directly or indirectly, lease all or substantially all of its properties or assets, in one or more related transactions, to any other Person. Clause (4) of each of the two preceding paragraphs above of this "Merger, Consolidation or Sale of Assets" covenant will not apply to a merger, consolidation or amalgamation, or a sale, assignment, transfer, conveyance or other disposition of assets, between or among Vidéotron and any of its Restricted Subsidiaries.

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Issuances and Sales of Equity Interests in Certain Subsidiaries

Vidéotron will not, and will not permit any of its Restricted Subsidiaries to, transfer, convey, sell, lease or otherwise dispose of (including, without limitation, by way of merger, amalgamation or otherwise) any Equity Interests in any direct or indirect Restricted Subsidiary that constitutes a Significant Subsidiary of Vidéotron or any group of Restricted Subsidiaries which, when taken as a whole, would constitute a Significant Subsidiary of Vidéotron to any Person (other than Vidéotron or a Wholly Owned Restricted Subsidiary of Vidéotron or, in connection with a Tax Benefit Transaction, to Quebecor Inc. or to any direct or indirect Subsidiary of Quebecor Inc.), unless:

(1): such transfer, conveyance, sale, lease or other disposition (whether by way of merger, amalgamation or otherwise) is of all the Equity Interests of such Restricted Subsidiary; and
(2): the Net Proceeds from such transfer, conveyance, sale, lease or other disposition (whether by way of merger, amalgamation or otherwise) are applied in accordance with the covenant described above under the caption "— Repurchase at the Option of Holders — Asset Sales."

In addition, Vidéotron will not permit any direct or indirect Restricted Subsidiary that constitutes a Significant Subsidiary or any group of Restricted Subsidiaries which, when taken as a whole, would constitute a Significant Subsidiary of Vidéotron to issue any Equity Interests to any Person, other than, (a) if necessary, shares of Capital Stock constituting directors' qualifying shares, (b) Back-to-Back Securities or (c) to Vidéotron or a Wholly Owned Restricted Subsidiary of Vidéotron.

Transactions with Affiliates

Vidéotron will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, make any payment to, or sell, lease, transfer, exchange or otherwise dispose of any of its properties or assets to, or purchase any property or assets from, or enter into or make or amend any transaction or series of transactions, contract, agreement, understanding, loan, advance or guarantee with, or for the benefit of, any Affiliate, officer or director of Vidéotron, each, an Affiliate Transaction, unless:

(1)

such Affiliate Transaction is on terms that are no less favorable to Vidéotron or the relevant Restricted Subsidiary than those that would have been obtained in a comparable arm's length transaction by Vidéotron or such Restricted Subsidiary with an unrelated Person; and

(2)

Vidéotron delivers to the trustee:

(a): with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of US$10.0 million, a resolution of the Board of Directors of Vidéotron set forth in an officers' certificate certifying that such Affiliate Transaction or series of related Affiliate Transactions complies with this covenant and that such Affiliate Transaction or series of related Affiliate Transactions has been approved by a majority of the disinterested members of the Board of Directors of Vidéotron; and
(b): with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of US$40.0 million, an opinion as to the fairness to Vidéotron or such Restricted Subsidiary of such Affiliate Transaction or series of related Affiliate Transactions from a financial point of view issued by an independent accounting, appraisal or investment banking firm of national standing in the United States or Canada.

The following items shall not be deemed to be Affiliate Transactions and, therefore, will not be subject to the provisions of the prior paragraph:

(1): any employment agreement entered into by Vidéotron or any of its Restricted Subsidiaries in the ordinary course of business and consistent with the past practice of Vidéotron or such Restricted Subsidiary;
(2): transactions between or among Vidéotron and/or its Restricted Subsidiaries;
(3): transactions with a Person that is an Affiliate of Vidéotron solely because Vidéotron owns an Equity Interest in such Person,provided such transactions are on terms that are no less favorable to Vidéotron or

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the relevant Restricted Subsidiary than those that would have been obtained in a comparable arm's length transaction by Vidéotron or such Restricted Subsidiary with an unrelated Person;

(4): payment of reasonable directors fees to Persons who are not otherwise Affiliates of Vidéotron;
(5): sales of Equity Interests of Vidéotron, other than Disqualified Stock or Back-to-Back Securities, to Affiliates of Vidéotron;
(6): any agreement or arrangement as in effect on the Issue Date or any amendment thereto or any transaction contemplated thereby, including pursuant to any amendment thereto, in any replacement agreement or arrangement thereto so long as any such amendment or replacement agreement or arrangement is not more disadvantageous to Vidéotron or its Restricted Subsidiaries, as the case may be, in any material respect than the original agreement as in effect on the Issue Date;
(7): Restricted Payments that are permitted by the provisions of the indenture described under the caption "— Restricted Payments;"
(8): Permitted Investments; and
(9): any Tax Benefit Transaction.

Future Guarantors

Vidéotron will cause each Person that becomes a Wholly Owned Restricted Subsidiary of Vidéotron following the Issue Date to become a Subsidiary Guarantor and to execute a supplemental indenture and deliver an opinion of counsel to the trustee. In addition, Vidéotron will not permit any of its Restricted Subsidiaries, directly or indirectly, to guarantee any other Indebtedness (including any Back-to-Back Debt) of Vidéotron or any of its Restricted Subsidiaries (other than CF Cable TV Inc.'s and its Subsidiaries' guarantee of Indebtedness under the Credit Agreement), unless such Restricted Subsidiary is a Subsidiary Guarantor or simultaneously executes and delivers a supplemental indenture providing for a Subsidiary Guarantee of the payment of the notes by such Restricted Subsidiary, which Subsidiary Guarantee shall be senior to or pari passu with such Subsidiary's guarantee of such other Indebtedness. Vidéotron will cause CF Cable TV Inc. and each of its Subsidiaries to become a Subsidiary Guarantor and to execute a supplemental indenture providing for a Subsidiary Guarantee of the notes when CF Cable TV Inc.'s Senior Secured First Priority Notes due 2007 are no longer outstanding. The form of the Subsidiary Guarantee will be attached as an exhibit to the indenture.

Designation of Restricted and Unrestricted Subsidiaries

The Board of Directors of Vidéotron may designate any Subsidiary to be an Unrestricted Subsidiary if such Subsidiary:

(1): has no Indebtedness other than Non-Recourse Debt;
(2): does not own any Equity Interests of any Restricted Subsidiary of Vidéotron, or hold any Liens on any property of Vidéotron or any of its Restricted Subsidiaries;
(3): is not party to any agreement, contract, arrangement or understanding with Vidéotron or any of its Restricted Subsidiaries unless the terms of any such agreement, contract, arrangement or understanding are no less favorable to Vidéotron or such Restricted Subsidiary than those that might be obtained at the time from Persons who are not Affiliates of Vidéotron;
(4): is a Person with respect to which neither Vidéotron nor any of its Restricted Subsidiaries has any direct or indirect obligation (a) to subscribe for additional Equity Interests or (b) to maintain or preserve such Person's financial condition or to cause such Person to achieve any specified levels of operating results;
(5): except in the case of a Subsidiary Guarantor that is designated as an Unrestricted Subsidiary in accordance with the indenture, has not guaranteed or otherwise directly or indirectly provided credit support for any Indebtedness of Vidéotron or any of its Restricted Subsidiaries;

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(6): has at least one director on its Board of Directors that is not a director or executive officer of Vidéotron or any of its Restricted Subsidiaries and has at least one executive officer that is not a director or executive officer of Vidéotron or any of its Restricted Subsidiaries; and
(7): that designation would not cause a Default or Event of Default.

Any designation of a Subsidiary of Vidéotron as an Unrestricted Subsidiary shall be evidenced to the trustee by filing with the trustee a certified copy of the resolution of the Board of Directors giving effect to such designation and an officers' certificate certifying that such designation complied with the preceding conditions and was permitted by the covenant described under the caption "— Restricted Payments." If, at any time, any Unrestricted Subsidiary would fail to meet the preceding requirements as an Unrestricted Subsidiary, it shall thereafter cease to be an Unrestricted Subsidiary for purposes of the indenture and any Preferred Shares of such Subsidiary shall be deemed to be issued and any Indebtedness of such Subsidiary shall be deemed to be incurred by a Restricted Subsidiary of Vidéotron as of such date, and, if such Preferred Shares are not permitted to be issued or such Indebtedness is not permitted to be incurred as of such date under the covenant described under the caption "— Incurrence of Indebtedness and Issuance of Preferred Shares," Vidéotron will be in default of such covenant.

If a Restricted Subsidiary is designated as an Unrestricted Subsidiary, the aggregate fair market value of all outstanding Investments owned by Vidéotron and its Restricted Subsidiaries in the Subsidiary so designated will be deemed to be an Investment made as of the time of such designation and will either reduce the amount available for Restricted Payments under the first paragraph of the covenant described above under the caption "— Restricted Payments" or reduce the amount available for future Investments under one or more clauses of the definition of Permitted Investments, as Vidéotron shall determine. That designation will be permitted only if such Investment would be permitted at that time and if such Restricted Subsidiary otherwise meets the definition of an Unrestricted Subsidiary. Upon designation of a Restricted Subsidiary as an Unrestricted Subsidiary in compliance with this covenant, such Subsidiary shall be released from any Subsidiary Guarantee previously made by such Subsidiary.

The Board of Directors of Vidéotron may at any time designate any Unrestricted Subsidiary to be a Restricted Subsidiary;provided,however, that (i) such designation shall be deemed to be an incurrence of Indebtedness by a Restricted Subsidiary of Vidéotron of any outstanding Indebtedness of such Unrestricted Subsidiary and such designation shall only be permitted if such Indebtedness is permitted under the covenant described under the caption "— Incurrence of Indebtedness and Issuance of Preferred Shares," calculated on a pro forma basis as if such designation had occurred at the beginning of the most recently ended full fiscal quarter for which internal financial statements are available; (ii) all outstanding Investments owned by such Unrestricted Subsidiary will be deemed to be made as of the time of such designation and such Investments shall only be permitted if such Investments would be permitted under the covenant described above under the caption "— Restricted Payments;" (iii) all Liens upon property or assets of such Unrestricted Subsidiary existing at the time of such designation would be permitted under the caption "— Liens;" and (iv) no Default or Event of Default would be in existence following such designation.

Business Activities

Vidéotron will not, and will not permit any Restricted Subsidiary to, engage in any business other than the Permitted Businesses, except to such extent as would not be material to Vidéotron and its Restricted Subsidiaries taken as a whole.

Reports

For so long as any notes remain outstanding, Vidéotron will furnish to the holders of the notes the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act. Whether or not Vidéotron is subject to Section 13(a) or 15(d) of the Exchange Act, so long as any notes are outstanding, Vidéotron shall file with the SEC and furnish to the holders of the notes and the trustee:

(1): within 120 days after the end of each fiscal year, annual reports on Form 20-F or 40-F, as applicable, or any successor form; and

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(2): (a) within 45 days after the end of each of the first three fiscal quarters of each fiscal year, reports on Form 10-Q, or any successor form, or (b) within 60 days after the end of each of the first three fiscal quarters of each fiscal year, reports on Form 6-K, or any successor form, which in each case, regardless of applicable requirements, shall, at a minimum, contain a "Management's Discussion and Analysis of Financial Condition and Results of Operations," and, with respect to any such reports, a reconciliation to U.S. GAAP as permitted by the SEC for foreign private issuers.

If Vidéotron has designated any of its Subsidiaries as Unrestricted Subsidiaries, then the quarterly and annual financial information required by the preceding paragraph shall include a reasonably detailed presentation, either on the face of the financial statements or in the footnotes thereto, and in "Management's Discussion and Analysis of Financial Condition and Results of Operations," of the financial condition and results of operations of Vidéotron and its Restricted Subsidiaries separate from the financial condition and results of operations of the Unrestricted Subsidiaries of Vidéotron.

Payments for Consent

Vidéotron will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, pay or cause to be paid any consideration to or for the benefit of any holder of notes for or as an inducement to any consent, waiver or amendment of any of the terms or provisions of the indenture or the notes unless such consideration is offered to be paid and is paid to all holders of the notes that consent, waive or agree to amend in the time frame set forth in the solicitation documents relating to such consent, waiver or agreement.

Events of Default and Remedies

Each of the following is an Event of Default:

(1)

default for 30 days in the payment when due of interest on, including Additional Amounts or special interest, if any, or with respect to, the notes;

(2)

default in payment, when due at Stated Maturity, upon acceleration, redemption, required repurchase or otherwise, of the principal of, or premium, if any, on the notes;

(3)

failure by Vidéotron or any of its Restricted Subsidiaries to comply with the provisions described under the captions "— Repurchase at the Option of Holders," "— Covenants — Incurrence of Indebtedness and Issuance of Preferred Shares," "— Covenants — Restricted Payments" or "— Covenants — Merger, Consolidation or Sale of Assets;"

(4)

failure by Vidéotron or any Restricted Subsidiary for 30 days after written notice thereof has been given to Vidéotron by the trustee or to Vidéotron and the trustee by the holders of at least 25% of the aggregate principal amount of the notes outstanding to comply with any of its other covenants or agreements in the indenture;

(5)

default under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any Indebtedness by Vidéotron or any of its Restricted Subsidiaries, or the payment of which is guaranteed by Vidéotron or any of its Restricted Subsidiaries, whether such Indebtedness or guarantee now exists, or is created after the Issue Date, if that default:

(a): is caused by a failure to pay principal of, or interest or premium, if any, on, such Indebtedness when due at the final maturity of such Indebtedness, which is referred to as a Payment Default; or
(b): results in the acceleration of such Indebtedness prior to its Stated Maturity, and, in each case, the principal amount of any such Indebtedness, together with the principal amount of any other such Indebtedness under which there has been a Payment Default or the maturity of which has been so accelerated, aggregates US$25.0 million or more;

(6)

failure by Vidéotron or any of its Restricted Subsidiaries to pay final, non-appealable judgments aggregating in excess of US$25.0 million, which judgments are not paid, discharged or stayed for a period of 60 days;

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(7): any Subsidiary Guarantee of a Significant Subsidiary ceases, or the Subsidiary Guarantees of any group of Subsidiaries that, when taken together, would constitute a Significant Subsidiary cease, to be in full force and effect (other than in accordance with the terms of any such Subsidiary Guarantee) or any Subsidiary Guarantor that is a Significant Subsidiary denies or disaffirms its obligations under its Subsidiary Guarantee, or a group of Subsidiary Guarantors that, when taken together, would constitute a Significant Subsidiary deny or disaffirm their obligations under their respective Subsidiary Guarantees; and
(8): certain events of bankruptcy or insolvency described in the indenture with respect to Vidéotron or any of its Significant Subsidiaries or any group of Subsidiaries that, taken together, would constitute a Significant Subsidiary.

In the case of an Event of Default arising from certain events of bankruptcy or insolvency, with respect to Vidéotron, any Subsidiary that is a Significant Subsidiary or any group of Subsidiaries that, taken together, would constitute a Significant Subsidiary, all outstanding notes will become due and payable immediately without further action or notice. If any other Event of Default occurs and is continuing, the trustee or the holders of at least 25% in principal amount of the then outstanding notes may declare all the notes to be due and payable immediately.

Holders of the notes may not enforce the indenture or the notes except as provided in the indenture. Subject to certain limitations, holders of a majority in principal amount of the then outstanding notes may direct the trustee in its exercise of any trust or power. The trustee may withhold from holders of the notes notice of any continuing Default or Event of Default if and so long as it determines in good faith that withholding notice is in their interest, except a Default or Event of Default relating to the payment of principal, interest or special interest, if any.

The holders of at least a majority in aggregate principal amount of the notes then outstanding by notice to the trustee may on behalf of the holders of all of the notes waive any existing Default or Event of Default and its consequences under the indenture except a continuing Default or Event of Default (i) in the payment of interest or special interest on, or the principal of, the notes and (ii) in respect of a covenant or provision which under the indenture cannot be modified or amended without the consent of the holder of each note affected by such modification or amendment. The holders of a majority in principal amount of the then outstanding notes will have the right to direct the time, method and place of conducting any proceeding for exercising any remedy available to the trustee. However, the trustee may refuse to follow any direction that conflicts with law or the indenture, that may involve the trustee in personal liability, or that the trustee determines in good faith may be unduly prejudicial to the rights of holders of notes not joining in the giving of such direction and may take any other action it deems proper that is not inconsistent with any such direction received from holders of notes. A holder may not pursue any remedy with respect to the indenture or the notes unless:

(1): the holder gives the trustee written notice of a continuing Event of Default;
(2): the holders of at least 25% in aggregate principal amount of outstanding notes make a written request to the trustee to pursue the remedy;
(3): such holder or holders offer the trustee indemnity satisfactory to the trustee against any costs, liability or expense;
(4): the trustee does not comply with the request within 60 days after receipt of the request and the offer of indemnity; and
(5): during such 60-day period, the holders of a majority in aggregate principal amount of the outstanding notes do not give the trustee a direction that is inconsistent with the request.

In the case of any Event of Default with respect to the notes occurring by reason of any willful action or inaction taken or not taken by or on behalf of Vidéotron with the intention of avoiding payment of the premium that Vidéotron would have had to pay if Vidéotron then had elected to redeem the notes pursuant to the optional redemption provisions of the indenture, an equivalent premium will also become and be immediately due and payable to the extent permitted by law upon the acceleration of the notes. If an Event of Default occurs prior to January 15, 2009, by reason of any willful action (or inaction) taken (or not taken) by or on behalf of Vidéotron with the intention of avoiding the prohibition on redemption of the notes prior to January 15, 2009, then the premium specified in the first paragraph under "— Optional Redemption" will also become immediately due and payable to the extent permitted by law upon the acceleration of the notes.

Vidéotron is required to deliver to the trustee within 120 days after the end of each fiscal year a statement regarding compliance with the indenture. Upon becoming aware of any Default or Event of Default, Vidéotron is required to deliver to the trustee a statement specifying such Default or Event of Default.

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No Personal Liability of Directors, Officers, Employees and Shareholders

No past, present or future director, officer, employee, incorporator or shareholder of Vidéotron or any Subsidiary Guarantor, as such, shall have any liability for any obligations of Vidéotron or the Subsidiary Guarantors under the notes or the indenture or the Subsidiary Guarantees or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each holder of notes by accepting a note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the notes. The waiver may not be effective to waive liabilities under United States federal securities laws.

Legal Defeasance and Covenant Defeasance

Vidéotron may, at its option and at any time, elect to have all of its obligations discharged with respect to the outstanding notes, and release each Subsidiary Guarantor from all of its obligations under its Subsidiary Guarantee, which we refer to as Legal Defeasance, except for:

(1): the rights of holders of outstanding notes to receive payments in respect of the principal of, or interest or premium and Additional Amounts and special interest, if any, on such notes when such payments are due solely from the trust referred to below;
(2): Vidéotron's obligation with respect to the notes concerning issuing temporary notes, registration of notes, mutilated, destroyed, lost or stolen notes and the maintenance of an office or agency for payment and money for security payments held in trust;
(3): the rights, powers, trusts, duties and immunities of the trustee, and Vidéotron's and the Subsidiary Guarantor's obligations in connection therewith; and
(4): the Legal Defeasance provisions of the indenture.

In addition, Vidéotron may, at its option and at any time, elect to have the obligations of Vidéotron released with respect to certain covenants that are described in the indenture, and release each Subsidiary Guarantor from all of its obligations under its Subsidiary Guarantee with respect to these covenants, which we refer to as Covenant Defeasance, and thereafter any omission to comply with those covenants shall not constitute a Default or Event of Default with respect to the notes. In the event Covenant Defeasance occurs, certain events, not including non-payment, bankruptcy, receivership, rehabilitation and insolvency events with respect to Vidéotron, described under the caption "— Events of Default and Remedies" will no longer constitute an Event of Default with respect to the notes.

In order to exercise either Legal Defeasance or Covenant Defeasance:

(1): Vidéotron must irrevocably deposit with the trustee, in trust, for the benefit of the holders of the notes cash in U.S. dollars, non-callable Government Securities, or a combination thereof, in such amounts as will be sufficient, in the opinion of a nationally recognized firm of independent public accountants, to pay the principal of, or interest and premium and Additional Amounts and special interest, if any, on the outstanding notes on the Stated Maturity or on the applicable date of redemption, as the case may be, and Vidéotron must specify whether the notes are being defeased to maturity or to a particular date of redemption;
(2): in the case of Legal Defeasance, Vidéotron shall have delivered to the trustee an opinion of counsel reasonably acceptable to the trustee confirming that (a) Vidéotron has received from, or there has been published by, the Internal Revenue Service a ruling or (b) since the Issue Date, there has been a change in the applicable federal income tax law, in either case to the effect that, and based thereon such opinion of counsel shall confirm that, the holders of the outstanding notes will not recognize income, gain or loss for federal income tax purposes as a result of such Legal Defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Legal Defeasance had not occurred and Vidéotron shall have delivered to the trustee an opinion of counsel in Canada reasonably acceptable to the trustee confirming that the holders of the outstanding notes will not recognize income, gain or loss for Canadian federal, provincial or territorial income tax purposes as a result of such Legal Defeasance and will be subject to Canadian federal, provincial or

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territorial income tax (including withholding tax) on the same amounts, in the same manner and at the same times as would have been the case if such Legal Defeasance had not occurred;

(3): in the case of Covenant Defeasance, Vidéotron shall have delivered to the trustee an opinion of counsel reasonably acceptable to the trustee confirming that the holders of the outstanding notes will not recognize income, gain or loss for federal income tax purposes as a result of such Covenant Defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Covenant Defeasance had not occurred and Vidéotron shall have delivered to the trustee an opinion of counsel in Canada reasonably acceptable to the trustee confirming that the holders of the outstanding notes will not recognize income, gain or loss for Canadian federal, provincial or territorial income tax purposes as a result of such Covenant Defeasance and will be subject to Canadian federal, provincial or territorial income tax (including withholding tax) on the same amounts, in the same manner and at the same times as would have been the case if such Covenant Defeasance had not occurred;
(4): no Default or Event of Default shall have occurred and be continuing either (a) on the date of such deposit or (b) insofar as Events of Default from bankruptcy or insolvency events are concerned, at any time in the period ending on the 91st day after the date of deposit, other than, in each case, a Default or Event of Default resulting from the borrowing of funds to be applied to such deposit;
(5): such Legal Defeasance or Covenant Defeasance will not result in a breach or violation of, or constitute a default under any material agreement or instrument to which Vidéotron or any of its Subsidiaries is a party or by which Vidéotron or any of its Subsidiaries is bound;
(6): Vidéotron must have delivered to the trustee an opinion of counsel to the effect that, (a) assuming no intervening bankruptcy of Vidéotron or any Subsidiary Guarantor between the date of deposit and the 91st day following the deposit and assuming that no holder is an "insider" of Vidéotron under applicable bankruptcy law, after the 91st day following the deposit, the trust funds will not be subject to the effect of any applicable bankruptcy, insolvency, reorganization or similar laws affecting creditors' rights generally, and (b) the creation of the defeasance trust does not violate the Investment Company Act of 1940;
(7): Vidéotron must deliver to the trustee an officers' certificate stating that the deposit was not made by Vidéotron with the intent of preferring the holders of notes over the other creditors of Vidéotron with the intent of defeating, hindering, delaying or defrauding creditors of Vidéotron or others;
(8): if the notes are to be redeemed prior to their Stated Maturity, Vidéotron must deliver to the trustee irrevocable instructions to redeem all of the notes on the specified redemption date; and
(9): Vidéotron must deliver to the trustee an officers' certificate and an opinion of counsel, each stating that all conditions precedent relating to the Legal Defeasance or the Covenant Defeasance have been complied with.

Amendment, Supplement and Waiver

Except as provided in the next two succeeding paragraphs, Vidéotron and the trustee may amend or supplement the indenture or the notes with the consent of the holders of at least a majority in principal amount of the notes then outstanding (including, without limitation, consents obtained in connection with a purchase of, or tender offer or exchange offer for, the notes), and any existing Default or Event of Default (except a continuing Default or Event of Default (i) in the payment of interest or special interest on, or the principal of, the notes and (ii) in respect of a covenant or provision under which the indenture cannot be modified or amended without the consent of the holder of each note affected by such modification or amendment) or compliance with any provision of the indenture or the notes may be waived with the consent of the holders of at least a majority in principal amount of the then outstanding notes (including, without limitation, consents obtained in connection with a purchase of, or tender offer or exchange offer for, the notes).

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Without the consent of each holder, an amendment or waiver may not (with respect to any notes held by a non-consenting holder):

(1): reduce the principal amount of notes whose holders must consent to an amendment, supplement or waiver;
(2): reduce the principal of or change the Stated Maturity of any note or alter the provisions with respect to the redemption of the notes;
(3): reduce the rate of or change the time for payment of interest, including special interest, if any, on any note;
(4): waive a Default or Event of Default in the payment of principal of, or interest or premium, or special interest, if any, on the notes, except a rescission of acceleration of the notes by the holders of at least a majority in aggregate principal amount of the notes and a waiver of the payment default that resulted from such acceleration;
(5): make any note payable in money other than that stated in the notes;
(6): make any change in the provisions of the indenture relating to waivers of past Defaults or the rights of holders of notes to receive payments of principal of, or interest or premium or special interest, if any, on the notes, or to institute suit for the enforcement of any payment on or with respect to such holders' notes or any Subsidiary Guarantee;
(7): amend, change or modify the obligation of Vidéotron to make and consummate an Asset Sale Offer with respect to any Asset Sale in accordance with the "— Repurchase at the Option of Holders — Asset Sales" covenant after the obligation to make such Asset Sale Offer has arisen or the obligation of Vidéotron to make and consummate a Change of Control Offer in the event of a Change of Control in accordance with the "— Repurchase at the Option of Holders — Change of Control" covenant after such Change of Control has occurred, including, in each case, amending, changing or modifying any definition relating thereto;
(8): except as otherwise permitted under the "— Covenants — Merger, Consolidation and Sale of Assets" covenant, consent to the assignment or transfer by Vidéotron or any Subsidiary Guarantor of any of their rights or obligations under the indenture;
(9): subordinate the notes or any Subsidiary Guarantee to any other obligation of Vidéotron or the applicable Subsidiary Guarantor;
(10): amend or modify the provisions described under the caption "— Payment of Additional Amounts";
(11): amend or modify any Subsidiary Guarantee in a manner that would adversely affect the holders of the notes or release any Subsidiary Guarantor from any of its obligations under its Subsidiary Guarantee or the indenture (except in accordance with the terms of the indenture); or
(12): make any change in the preceding amendment and waiver provisions.

Notwithstanding the preceding, without the consent of any holder of notes, Vidéotron and the trustee may amend or supplement the indenture or the notes:

(1)

to cure any ambiguity, defect or inconsistency;

(2)

to provide for uncertificated notes in addition to or in place of certificated notes;

(3)

to provide for the assumption of the obligations of Vidéotron or any Subsidiary Guarantor to holders of notes in the case of a merger, consolidation, or amalgamation or sale of all or substantially all of the assets of Vidéotron or such Subsidiary Guarantor, as the case may be;provided,however, that Vidéotron delivers to the trustee:

(a): an opinion of counsel to the effect that holders of the notes will not recognize income, gain or loss for U.S. federal income tax purposes as a result of such assumption by a successor corporation and

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will be subject to U.S. federal income tax on the same amount and in the same manner and at the same times as would have been the case if such assumption had not occurred, and

(b): an opinion of counsel in Canada to the effect that holders of the notes will not recognize income, gain or loss for Canadian federal, provincial or territorial tax purposes as a result of such assumption by a successor corporation and will be subject to Canadian federal, provincial or territorial taxes (including withholding taxes) on the same amounts, in the same manner and at the same times as would have been the case if such assumption had not occurred;

(4): to make any change that would provide any additional rights or benefits to the holders of the notes or that does not adversely affect the legal rights under the indenture of any such holder;
(5): to add additional guarantees with respect to the notes or release Subsidiary Guarantors from Subsidiary Guarantees as provided or permitted by the terms of the indenture;
(6): provide for the issuance of Additional Notes in accordance with the indenture; or
(7): to comply with requirements of the SEC in order to effect or maintain the qualification of the indenture under the Trust Indenture Act.

Satisfaction and Discharge

The indenture will be discharged and will cease to be of further effect as to all notes issued thereunder, when:

(1)

either:

(a): all notes that have been authenticated, except lost, stolen or destroyed notes that have been replaced or paid and notes for whose payment money has theretofore been deposited in trust and thereafter repaid to Vidéotron, have been delivered to the trustee for cancellation; or
(b): all notes that have not been delivered to the trustee for cancellation have become due and payable by reason of the making of a notice of redemption or otherwise or will become due and payable within one year and Vidéotron or any Subsidiary Guarantor has irrevocably deposited or caused to be deposited with the trustee as trust funds in trust solely for the benefit of the holders of the notes, cash in U.S. dollars, non-callable Government Securities, or a combination thereof, in such amounts as will be sufficient without consideration of any reinvestment of interest, to pay and discharge the entire indebtedness on the notes not delivered to the trustee for cancellation for principal, premium and Additional Amounts and special interest, if any, and accrued interest to the date of maturity or redemption;

(2)

no Default or Event of Default shall have occurred and be continuing on the date of such deposit or shall occur as a result of such deposit and such deposit will not result in a breach or violation of, or constitute a default under, any other instrument to which Vidéotron or any Subsidiary Guarantor is a party or by which Vidéotron or any Subsidiary Guarantor is bound;

(3)

Vidéotron or any Subsidiary Guarantor has paid or caused to be paid all sums payable by it under the indenture; and

(4)

Vidéotron has delivered irrevocable instructions to the trustee under the indenture to apply the deposited money toward the payment of the notes at maturity or the date of redemption, as the case may be.

In addition, in each case, Vidéotron must deliver an officers' certificate and an opinion of counsel to the trustee stating that all conditions precedent to satisfaction and discharge have been satisfied.

Concerning the Trustee

If the trustee becomes a creditor of Vidéotron or any Subsidiary Guarantor, the indenture limits its right to obtain payment of claims in certain cases, or to realize on certain property received in respect of any such claim as security or otherwise. The trustee will be permitted to engage in other transactions; however, if it acquires any conflicting interest it must eliminate such conflict within 90 days, apply to the SEC for permission to continue or resign.

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The holders of a majority in principal amount of the then outstanding notes will have the right to direct the time, method and place of conducting any proceeding for exercising any remedy available to the trustee, subject to certain exceptions. The indenture will provide that in case an Event of Default shall occur and be continuing, the trustee will be required, in the exercise of its power, to use the degree of care of a prudent person in the conduct of his or her own affairs. Subject to such provisions, the trustee will not be under an obligation to exercise any of its rights or powers under the indenture at the request of any holder of notes, unless such holder shall have offered to the trustee security and indemnity satisfactory to it against any loss, liability or expense that might be incurred by it in compliance with this request.

Additional Information

Anyone who receives this prospectus may obtain a copy of the indenture and registration rights agreement without charge by writing to Vidéotron Ltée, 300 Viger Avenue East, Montréal, Québec, Canada H2X 3W4.

Governing Law

The indenture and the notes will be governed by and construed in accordance with the laws of the State of New York.

Enforceability of Judgments

Since substantially all of the assets of Vidéotron are outside the United States, any judgments obtained in the United States against Vidéotron, including judgments with respect to the payment of principal, premium, interest, special interest, Additional Amounts, Change of Control Payment, offer price, redemption price or other amounts payable under the notes, may not be collectible within the United States.

Vidéotron's head office is in Québec and its assets are located principally in Québec. Vidéotron has been informed by its Canadian counsel, Ogilvy Renault, that the laws of Québec permit an action to be brought in a court of competent jurisdiction in Québec (a "Québec Court") on any final and enforceable judgment in personam for a sum certain of any federal or state court located in the Borough of Manhattan in The City of New York (a "New York Court") that is not subject to ordinary remedy under the internal laws of the State of New York if (i) the court rendering such judgment had jurisdiction over the judgment debtor, as recognized by the Québec Court (submission by Vidéotron in the indenture to the jurisdiction of the New York Court being sufficient for such purpose); (ii) such judgment was not obtained by fraud or in a manner contrary to natural justice or in contravention of the fundamental principles of procedure; (iii) the decision and enforcement thereof would not be inconsistent with public order as understood in international relations in Québec; (iv) the enforcement of such judgment does not constitute, directly or indirectly, the enforcement of foreign revenue laws (including taxation laws) or other laws of a public nature, such as expropriatory or penal laws; (v) a dispute between the same parties, based on the same facts and having the same object, has not given rise to a decision rendered in Québec, whether or not a final judgment, is not pending before a Québec Court in the first instance, or has not been decided in a third country and the decision has met the necessary conditions for recognition in Québec; (vi) the decision has not been rendered by default unless the plaintiff has proven due service on the defaulting party in accordance with the laws of the jurisdiction in which the decision was rendered; and (vii) the action to enforce such judgment is commenced within the applicable limitation period. Ogilvy Renault is not aware of any reasons under the present laws of Québec for avoiding enforcement of judgments of a New York Court with respect to the indenture or the notes on the basis of public order, as that term is understood in international relations and under the laws of Québec.

In addition, under theCurrency Act (Canada), a Canadian Court may only render judgment for a sum of money in Canadian currency, and in enforcing a foreign judgment for a sum of money in a foreign currency, a Canadian Court will render its decision in the Canadian currency equivalent of such foreign currency, converted at the rate of exchange prevailing on the day that the judgment of the New York Court became enforceable under New York law.

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Book-Entry, Delivery and Form

We refer to the notes that are being offered and sold to qualified institutional buyers in reliance on Rule 144A under the Securities Act as Rule 144A notes. Notes also may be offered and sold in offshore transactions in reliance on Regulation S, which we refer to as Regulation S notes. Except as set forth below, notes will be issued in registered, global form in minimum denominations of US$1,000 and integral multiples of US$1,000 in excess thereof. Notes will be issued at the closing of the offering only against payment in immediately available funds.

Rule 144A notes initially will be represented by one or more notes in registered, global form without interest coupons, collectively, the Rule 144A global notes. The Rule 144A global notes will be deposited upon issuance with the trustee as custodian for The Depository Trust Company, or DTC, in New York, New York, and registered in the name of DTC or its nominee, for credit to an account of a direct or indirect participant in DTC as described below. Regulation S notes initially will be represented by one or more notes in registered, global form without interest coupons, collectively, the Regulation S global notes and, together with the Rule 144A global notes, the global notes. The Regulation S global notes will be deposited on the date of first issuance with the trustee as custodian for DTC and registered in the name of DTC or its nominee, for credit to the accounts of purchasers at Euroclear System, which we refer to as Euroclear, or Clearstream Banking, S.A., which we refer to as Clearstream (as indirect participants in DTC). Beneficial interests in the Rule 144A global notes may not be exchanged for beneficial interests in the Regulation S global notes at any time except in the limited circumstances described below. See "— Exchanges Between Regulation S notes and Rule 144A notes."

Except as set forth below, the global notes may be transferred, in whole and not in part, only by DTC to another nominee of DTC, by a nominee of DTC to DTC or another nominee, or by DTC or this nominee to a successor of DTC or a nominee of this successor. Beneficial interests in the global notes may not be exchanged for notes in certificated form except in the limited circumstances described below. See "— Exchange of Global Notes for Certificated Notes." Except in the limited circumstances described below, owners of beneficial interests in the global notes will not be entitled to receive physical delivery of notes in certificated form.

Rule 144A notes, including beneficial interests in the Rule 144A global notes, will be subject to certain restrictions on transfer and will bear a restrictive legend as described under "Notice to Investors." Regulation S notes will also bear the legend as described under "Notice to Investors." In addition, transfers of beneficial interests in the global notes will be subject to the applicable rules and procedures of DTC and its direct or indirect participants, including, if applicable, those of Euroclear and Clearstream, which may change from time to time.

Depositary Procedures

The following description of the operations and procedures of DTC, Euroclear and Clearstream are provided solely as a matter of convenience. These operations and procedures are solely within the control of the respective settlement systems and are subject to changes by them. Vidéotron takes no responsibility for these operations and procedures and urges investors to contact the system or their participants directly to discuss these matters.

DTC has advised Vidéotron that DTC is a limited-purpose trust company created to hold securities for its participants and to facilitate the clearance and settlement of transactions in those securities between these participants through electronic book-entry changes in accounts of its participants. The participants include securities brokers and dealers (including the initial purchasers), banks, trust companies, clearing corporations and certain other organizations. Access to DTC's system is also available to indirect participants, which include other entities such as banks, brokers, dealers and trust companies, that clear through or maintain a custodial relationship with a participant, either directly or indirectly. Persons who are not participants may beneficially own securities held by or on behalf of DTC only through the participants or the indirect participants. The ownership interests in, and transfers of ownership interests in, each security held by or on behalf of DTC are recorded on the records of the participants and indirect participants.

DTC has also advised Vidéotron that, pursuant to procedures established by it:

(1): upon deposit of the global notes, DTC will credit the accounts of participants designated by the initial purchasers with portions of the principal amount of the global notes; and

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(2): ownership of these interests in the global notes will be shown on, and the transfer of ownership thereof will be effected only through, records maintained by DTC (with respect to the participants) or by the participants and the indirect participants (with respect to other owners of beneficial interest in the global notes).

Investors in the global notes who are participants in DTC's system may hold their interests in the global notes directly through DTC. Investors in the global notes who are not participants may hold their interests therein indirectly through organizations (including Euroclear and Clearstream) which are participants in such system. Euroclear and Clearstream will hold interests in the Regulation S global notes on behalf of their participants through customers' securities accounts in their respective names on the books of their respective depositories, which are Morgan Guaranty Trust Company of New York, Brussels office, as operator of Euroclear, and Citibank, N.A., as operator of Clearstream. All interests in a global note, including those held through Euroclear or Clearstream, may be subject to the procedures and requirements of DTC. Those interests held through Euroclear or Clearstream may also be subject to the procedures and requirements of such systems. The laws of some states require that certain Persons take physical delivery in definitive form of securities that they own. Consequently, the ability to transfer beneficial interests in a global note to such Persons will be limited to that extent. Because DTC can act only on behalf of participants, which in turn act on behalf of indirect participants, the ability of a Person having beneficial interests in a global note to pledge such interests to Persons that do not participate in the DTC system, or otherwise take actions in respect of such interests, may be affected by the lack of a physical certificate evidencing such interests.

Except as described below, owners of interest in the global notes will not have notes registered in their names, will not receive physical delivery of notes in certificated form and will not be considered the registered owners or "holders" thereof under the indenture for any purpose.

Payments in respect of the principal of, and interest and premium and special interest, if any, on a global note registered in the name of DTC or its nominee will be payable to DTC in its capacity as the registered holder under the indenture. Under the terms of the indenture, Vidéotron and the trustee will treat the Persons in whose names the notes, including the global notes, are registered as the owners for the purpose of receiving payments and for all other purposes. Consequently, none of Vidéotron, the trustee or any agent of Vidéotron or the trustee has or will have any responsibility or liability for:

(1): any aspect of DTC's records or any participant's or indirect participant's records relating to or payments made on account of beneficial ownership interests in the global notes or for maintaining, supervising or reviewing any of DTC's records or any participant's or indirect participant's records relating to the beneficial ownership interests in the global notes; or
(2): any other matter relating to the actions and practices of DTC or any of its participants or indirect participants.

DTC has advised Vidéotron that its current practice, upon receipt of any payment in respect of securities such as the notes (including principal and interest), is to credit the accounts of the relevant participants with the payment on the payment date unless DTC has reason to believe it will not receive payment on such payment date. Each relevant participant is credited with an amount proportionate to its beneficial ownership of an interest in the principal amount of the relevant security as shown on the records of DTC. Payments by the participants and the indirect participants to the beneficial owners of notes will be governed by standing instructions and customary practices and will be the responsibility of the participants or the indirect participants and will not be the responsibility of DTC, the trustee or Vidéotron. Neither Vidéotron nor the trustee will be liable for any delay by DTC or any of its participants in identifying the beneficial owners of the notes, and Vidéotron and the trustee may conclusively rely on and will be protected in relying on instructions from DTC or its nominee for all purposes.

Subject to the transfer restrictions set forth under "Notice to Investors," transfers between participants in DTC will be effected in accordance with DTC's procedures, and will be settled in same-day funds, and transfers between participants in Euroclear and Clearstream will be effected in accordance with their respective rules and operating procedures.

Subject to compliance with the transfer restrictions applicable to the notes described herein, cross-market transfers between the participants in DTC, on the one hand, and Euroclear or Clearstream participants, on the other

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hand, will be effected through DTC in accordance with DTC's rules on behalf of each of Euroclear or Clearstream, as the case may be, by its respective depositary; however, such cross-market transactions will require delivery of instructions to Euroclear or Clearstream as the case may be, by the counterparty in such system in accordance with the rules and procedures and within the established deadlines (Brussels time) of such system. Euroclear or Clearstream, as the case may be, will, if the transaction meets its settlement requirements, deliver instructions to its respective depositary to take action to effect final settlement on its behalf by delivering or receiving interests in the relevant global note in DTC, and making or receiving payment in accordance with normal procedures for same-day funds settlement applicable to DTC. Euroclear participants and Clearstream participants may not deliver instructions directly to the depositaries for Euroclear or Clearstream.

DTC has advised Vidéotron that it will take any action permitted to be taken by a holder of notes only at the direction of one or more participants to whose account DTC has credited the interests in the global notes and only in respect of such portion of the aggregate principal amount of the notes as to which such participant or participants has or have given such direction. However, if there is an Event of Default under the notes, DTC reserves the right to exchange the global notes for legended notes in certificated form, and to distribute such notes to its participants.

Although DTC, Euroclear and Clearstream have agreed to the foregoing procedures to facilitate transfers of interests in the Rule 144A global notes and the Regulation S global notes among participants in DTC, Euroclear and Clearstream, they are under no obligation to perform or to continue to perform such procedures, and may discontinue such procedures at any time. None of Vidéotron or the trustee or any of their respective agents will have any responsibility for the performance by DTC, Euroclear or Clearstream or their respective participants or indirect participants of their respective obligations under the rules and procedures governing their operations.

Exchange of Global Notes for Certificated Notes

A global note is exchangeable for definitive notes in registered certificated form, which we refer to as certificated notes, if:

(1): DTC notifies Vidéotron that it (a) is unwilling or unable to continue as depositary for the global notes or (b) has ceased to be a clearing agency registered under the Exchange Act and, in either case, Vidéotron fails to appoint a successor depositary within 120 days after the date of such notice;
(2): Vidéotron, at its option, notifies the trustee in writing that it elects to cause the issuance of the certificated notes, subject to the rules of DTC, which require the consent of each participant; or
(3): there shall have occurred and be continuing a Default or Event of Default with respect to the notes.

In addition, beneficial interests in a global note may be exchanged for certificated notes upon prior written notice given to the trustee by or on behalf of DTC in accordance with the indenture. In all cases, certificated notes delivered in exchange for any global note or beneficial interests in global notes will be registered in the names, and issued in any approved denominations, requested by or on behalf of the depositary (in accordance with its customary procedures) and will bear the applicable restrictive legend referred to in "Notice to Investors," unless that legend is not required by applicable law.

Exchange of Certificated Notes for Global Notes

Certificated notes may not be exchanged for beneficial interests in any global note unless the transferor first delivers to the trustee a written certificate, in the form provided in the indenture, to the effect that such transfer will comply with the appropriate transfer restrictions applicable to such notes. See "Notice to Investors."

Exchanges Between Regulation S Notes and Rule 144A Notes

Prior to the expiration of the Restricted Period, beneficial interests in the Regulation S global note may be exchanged for beneficial interests in the Rule 144A global note only if the transferor first delivers to the trustee a written certificate, in the form provided in the indenture, to the effect that:

(1): such exchange occurs in connection with a transfer of the notes pursuant to Rule 144A under the Securities Act; and

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(2)

the notes are being transferred to a Person:

(a): who the transferor reasonably believes to be a qualified institutional buyer within the meaning of Rule 144A under the Securities Act;
(b): purchasing for its own account or the account of a qualified institutional buyer in a transaction meeting the requirements of Rule 144A under the Securities Act; and
(c): in accordance with all applicable securities laws of the states of the United States and other jurisdictions.

Beneficial interests in a Rule 144A global note may be transferred to a Person who takes delivery in the form of an interest in the Regulation S global note, whether before or after the expiration of the Restricted Period, only if the transferor first delivers to the trustee a written certificate (in the form provided in the indenture) to the effect that such transfer is being made in accordance with Rule 903 or 904 of Regulation S or Rule 144 (if available) under the Securities Act.

Transfers involving exchanges of beneficial interests between the Regulation S global notes and the Rule 144A global notes will be effected in DTC by means of an instruction originated by the trustee through the DTC Deposit/Withdraw at Custodian system. Accordingly, in connection with any such transfer, appropriate adjustments will be made to reflect a decrease in the principal amount of the Regulation S global note and a corresponding increase in the principal amount of the Rule 144A global note or vice versa, as applicable. Any beneficial interest in one of the global notes that is transferred to a Person who takes delivery in the form of an interest in the other global note will, upon transfer, cease to be an interest in such global note and will become an interest in the other global note and, accordingly, will thereafter be subject to all transfer restrictions and other procedures applicable to beneficial interests in such other global note for so long as it remains such an interest.

Same Day Settlement and Payment

Vidéotron will make payments in respect of the notes represented by the global notes (including principal, premium, if any, interest and special interest, if any) by wire transfer of immediately available funds to the accounts specified by the global note holder. Vidéotron will make all payments of principal, interest and premium and special interest, if any, with respect to certificated notes by wire transfer of immediately available funds to the accounts specified by the holders thereof or, if no such account is specified, by mailing a check to each such holder's registered address. The notes represented by the global notes are expected to be eligible to trade in the PORTAL Market and to trade in DTC's Same-Day Funds Settlement System, and any permitted secondary market trading activity in such notes will, therefore, be required by DTC to be settled in immediately available funds. Vidéotron expects that secondary trading in any certificated notes will also be settled in immediately available funds.

Because of time zone differences, the securities account of a Euroclear or Clearstream participant purchasing an interest in a global note from a participant in DTC will be credited, and any such crediting will be reported to the relevant Euroclear or Clearstream participant, during the securities settlement processing day (which must be a business day for Euroclear and Clearstream) immediately following the settlement date of DTC. DTC has advised Vidéotron that cash received in Euroclear or Clearstream as a result of sales of interests in a global note by or through a Euroclear or Clearstream participant to a participant in DTC will be received with value on the settlement date of DTC but will be available in the relevant Euroclear or Clearstream cash account only as of the business day for Euroclear or Clearstream following DTC's settlement date.

Consent to Jurisdiction and Service

The indenture provides that Vidéotron irrevocably appoints CT Corporation System as its agent for service of process in any suit, action, or proceeding with respect to the indenture or the notes and for actions brought under federal or state securities laws in any federal or state court located in the Borough of Manhattan in The City of New York and submits to such non-exclusive jurisdiction.

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Definitions

Set forth below are defined terms used in the indenture. Reference is made to the indenture for a full disclosure of all such terms, as well as any other capitalized terms used herein for which no definition is provided.

"2003 QMI Subordinated Loan" means the Indebtedness owed by Vidéotron to Quebecor Media Inc. pursuant to the Subordinated Loan Agreement dated March 24, 2003 between Vidéotron and Quebecor Media Inc., as amended.

"Acquired Debt" means, with respect to any specified Person:

(1): Indebtedness of any other Person existing at the time such other Person is merged with or into or becomes a Subsidiary of such specified Person, whether or not such Indebtedness is incurred in connection with, or in contemplation of, such other Person merging with or into, or becoming a Subsidiary of such specified Person; and
(2): Indebtedness secured by a Lien encumbering any asset acquired by such specified Person.

"Affiliate" of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For purposes of this definition, "control," as used with respect to any Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise;provided,however, that beneficial ownership of more than 10% of the Voting Stock of a Person shall be deemed to be control. For purposes of this definition, the terms "controlling," "controlled by" and "under common control with" shall have correlative meanings.

"Asset Acquisition" means (a) an Investment by Vidéotron or any Restricted Subsidiary in any other Person pursuant to which such Person shall become a Restricted Subsidiary or shall be consolidated or merged with or into Vidéotron or any Restricted Subsidiary or (b) any acquisition by Vidéotron or any Restricted Subsidiary of the assets of any Person that constitute substantially all of an operating unit, a division or line of business of such Person or that is otherwise outside of the ordinary course of business.

"Asset Sale" means:

(1): the sale, lease, conveyance or other disposition of any assets or rights, other than sales of inventory in the ordinary course of business;provided,however, that the sale, conveyance or other disposition of all or substantially all of the assets of Vidéotron and its Restricted Subsidiaries, taken as a whole, will be governed by the provisions of the indenture described under the caption "— Repurchase at the Option of Holders — Change of Control" and/or the provisions described under the caption "— Covenants — Merger, Consolidation or Sale of Assets" and not by the provisions of the indenture described under "— Repurchase at the Option of Holders — Asset Sales;" and
(2): the issuance of Equity Interests of any of Vidéotron's Restricted Subsidiaries or the sale by Vidéotron's or any of its Restricted Subsidiaries of Equity Interests in any of its Restricted Subsidiaries.

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

(1): any single transaction or series of related transactions that involves assets having a fair market value (as determined by the Board of Directors of Vidéotron and evidenced by a resolution of the Board of Directors of Vidéotron) of less than US$1.0 million;
(2): a sale, lease, conveyance or other disposition of assets between or among Vidéotron and its Restricted Subsidiaries;
(3): an issuance of Equity Interests by a Restricted Subsidiary to Vidéotron or to another Restricted Subsidiary;
(4): the sale, lease, conveyance or other disposition of equipment, inventory, accounts receivable or other assets in the ordinary course of business;
(5): the sale or other disposition of cash or Cash Equivalents;

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(6): any Tax Benefit Transaction; and
(7): a Restricted Payment or Permitted Investment that is permitted by the covenant described above under the caption "— Covenants — Restricted Payments."

"Asset Swap" means an exchange of assets by Vidéotron or a Restricted Subsidiary of Vidéotron for:

(1): one or more Permitted Businesses;
(2): a controlling equity interest in any Person whose assets consist primarily of one or more Permitted Businesses;provided such Person becomes a Restricted Subsidiary of Vidéotron; and/or
(3): long-term assets that are used in a Permitted Business in a like-kind exchange or transfer pursuant to Section 1031 of the Internal Revenue Code or any similar or successor provision of the Internal Revenue Code or Sections 51, 85, 85.1, 86, 87 or 88(1) of theIncome Tax Act (Canada) or any similar or successor provisions of theIncome Tax Act (Canada).

"Attributable Debt" in respect of a sale and leaseback transaction means, at the time of determination, the present value of the obligation of the lessee for net rental payments during the remaining term of the lease included in such sale and leaseback transaction, including any period for which such lease has been extended or may, at the option of the lessor, be extended. Such present value shall be calculated using a discount rate equal to the rate of interest implicit in such transaction, determined in accordance with GAAP.

"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 Vidéotron Entity, executes a subordination agreement in favor of the holders of the notes in substantially the form attached as an exhibit to the indenture.

"Back-to-Back Preferred Shares" means Preferred Shares issued:

(a)

to a Vidéotron Entity by an Affiliate of Vidéotron in circumstances where, immediately prior to or after, as the case may be, the issuance of such Preferred Shares, an Affiliate of such Vidéotron Entity has loaned on an unsecured basis to such Vidéotron Entity, or an Affiliate of such Vidéotron Entity has subscribed for Preferred Shares of such Vidéotron Entity, in an amount equal to, the requisite subscription price for such Preferred Shares;

(b)

by a Vidéotron Entity to one of its Affiliates in circumstances where, immediately prior to or after, as the case may be, the issuance of such Preferred Shares, such Vidéotron Entity has loaned an amount equal to the proceeds of such issuance to an Affiliate on an unsecured basis; or

(c)

by a Vidéotron Entity to one of its Affiliates in circumstances where, immediately prior to or after, as the case may be, the issuance of such Preferred Shares, such Vidéotron Entity has used 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 Vidéotron Entity 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;
(B): in the case of (b) above, to the principal amount of the loan made to such Affiliate; or
(C): in the case of (c) above, to the aggregate redemption amount of the Preferred Shares issued by such Affiliate;

(ii)

the dividend payment date applicable to the Preferred Shares issued to or by such Vidéotron Entity will:

(A): in the case of (a) above, be immediately prior to, or on the same date as, the interest payment date relevant to the loan made or the dividend payment date on the Preferred Shares subscribed for by such Affiliate;
(B): in the case of (b) above, be immediately after, or on the same date as, the interest payment date relevant to the loan made to such Affiliate; or

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(C): in the case of (c) above, be immediately after, or on the same date as, the dividend payment date on the Preferred Shares issued by such Affiliate;

(iii)

the amount of dividends provided for on any payment date in the share conditions attaching to the Preferred Shares issued:

(A): to a Vidéotron Entity 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;
(B): by a Vidéotron Entity in the case of (b) above, will be less than or equal to the amount of interest payable in respect of the loan made to such Affiliate; or
(C): by a Vidéotron Entity in the case of (c) above, will be equal to the amount of dividends in respect of the Preferred Shares issued by such Affiliate; andprovided that, in the case of Preferred Shares issued by a Restricted Subsidiary of Vidéotron that is not a Subsidiary Guarantor, each holder of such Preferred Shares under such Back-to-Back Transaction, other than such Restricted Subsidiary, executes a subordination agreement in favor of the holders of the notes in substantially the form attached as an exhibit to the indenture.

"Back-to-Back Securities" means the Back-to-Back Preferred Shares or the Back-to-Back Debt or both, as the context requires,provided that a Back-to-Back Security issued by any Restricted Subsidiary of Vidéotron that is not a Subsidiary Guarantor (A) shall provide that (i) such Restricted Subsidiary shall suspend any payment on such Back-to-Back Security until such Restricted Subsidiary receives payment on the corresponding Back-to-Back Security in an amount equal to or exceeding the amount to be paid on the Back-to-Back Security issued by such Restricted Subsidiary and (ii) if the holder of such Back-to-Back Security is paid any amount on or with respect to such Back-to-Back Security by such Restricted Subsidiary, then to the extent such amounts are paid out of proceeds in excess of the corresponding payment received by such Restricted Subsidiary on the corresponding Back-to-Back Security held by it, the holder of such Back-to-Back Security will hold such excess payment in trust for the benefit of such Restricted Subsidiary and will forthwith repay such payment to such Restricted Subsidiary and (B) may provide that, notwithstanding clause (A), such Restricted Subsidiary may make payment on such Back-to-Back Security if at the time of payment such Restricted Subsidiary would be permitted to make such payment under the provision of the indenture described under the caption "— Covenants — Restricted Payments;"provided that any payment made pursuant to this clause (B) which is otherwise prohibited under clause (A) would constitute a Restricted Payment.

"Back-to-Back Transactions" means any of the transactions described under the definition of Back-to-Back Preferred Shares.

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

"Board of Directors" means:

(1): with respect to a corporation, the board of directors of the corporation;
(2): with respect to a partnership, the board of directors of the general partner of the partnership; and
(3): with respect to any other Person, the board or committee of such Person serving a similar function.

"Canadian Taxing Authority" means any federal, provincial, territorial or other Canadian government or any authority or agency therein having the power to tax.

"Capital Lease Obligation" means, at the time any determination thereof is to be made, the amount of the liability in respect of a capital lease that would at that time be required to be capitalized on a balance sheet in accordance with GAAP.

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"Capital Stock" means:

(1): in the case of a corporation, corporate stock;
(2): in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock;
(3): in the case of a partnership or limited liability company, partnership or membership interests (whether general or limited); and
(4): any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person.

"Capital Stock Sale Proceeds" means the aggregate net cash proceeds received by Vidéotron after the Issue Date:

(1): as a contribution to the common equity capital or from the issue or sale of Equity Interests of Vidéotron (other than Disqualified Stock or Back-to-Back Securities); or
(2): from the issue or sale of convertible or exchangeable Disqualified Stock or convertible or exchangeable debt securities of Vidéotron that have been converted into or exchanged for such Equity Interests, other than, in either (1) or (2), Equity Interests (or convertible or exchangeable Disqualified Stock or convertible or exchangeable debt securities) sold to a Subsidiary of Vidéotron.

"Cash Equivalents" means:

(1): United States dollars or Canadian dollars;
(2): investments in securities with maturities of one year or less from the date of acquisition issued or fully guaranteed by any state, commonwealth, territory or province of the United States of America or Canada, or by any political subdivision or taxing authority thereof, and rated in the "R-1" category by the Dominion Bond Rating Service Limited;
(3): certificates of deposit and eurodollar time deposits with maturities of one year or less from the date of acquisition, bankers' acceptances with maturities not exceeding one year and overnight bank deposits, in each case, with any domestic commercial bank having capital and surplus in excess of US$500.0 million;
(4): repurchase obligations with a term of not more than seven days for underlying securities of the types described in clauses (2) and (3) above entered into with any financial institution meeting the qualifications specified in clause (3) above;
(5): commercial paper having the highest rating obtainable from Moody's Investors Service, Inc. or Standard & Poor's Rating Services and in each case maturing within one year after the date of acquisition or with respect to commercial paper in Canada, a rating in the "R-1" category by the Dominion Bond Rating Service Limited; and
(6): money market funds at least 90% of the assets of which constitute Cash Equivalents of the kinds described in clauses (1) through (5) of this definition.

"Change of Control" means the occurrence of any of the following:

(1): the direct or indirect sale, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the properties or assets of Vidéotron and its Restricted Subsidiaries, taken as a whole, to any "person" (as that term is used in Section 13(d)(3) of the Exchange Act) other than a Permitted Holder or a Related Party of a Permitted Holder;
(2): the adoption of a plan relating to the liquidation or dissolution of Vidéotron;
(3): the consummation of any transaction (including, without limitation, any merger or consolidation) the result of which is that any Person, other than a Permitted Holder or a Related Party of a Permitted Holder, becomes the Beneficial Owner, directly or indirectly, of more than 50% of the Voting Stock of Vidéotron, measured by voting power rather than number of shares; or

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(4): during any consecutive two-year period, the first day on which individuals who constituted the Board of Directors of Vidéotron as of the beginning of such two-year period (together with any new directors who were nominated for election or elected to such Board of Directors with the approval of a majority of the individuals who were members of such Board of Directors, or whose nomination or election was previously so approved at the beginning of such two-year period) cease to constitute a majority of the Board of Directors of Vidéotron.

"Consolidated Cash Flow" means, with respect to any specified Person for any period, the Consolidated Net Income of such Person for such period plus:

(1): provision for taxes based on income or profits of such Person and its Restricted Subsidiaries for such period, to the extent that such provision for taxes was deducted in computing such Consolidated Net Income; plus
(2): Consolidated Interest Expense of such Person and its Restricted Subsidiaries for such period, including for purposes of this clause (2) any interest expense on the 2003 QMI Subordinated Loan that was otherwise excluded from the definition of Consolidated Interest Expense, in each case to the extent that any such expense was deducted in computing such Consolidated Net Income; plus
(3): depreciation, amortization (including amortization of goodwill and other intangibles but excluding amortization of prepaid cash expenses that were paid in a prior period to the extent such expense is amortized) and other non-cash expenses (excluding any such non-cash expense to the extent that it represents (i) an accrual of or reserve for cash expenses in any future period or (ii) amortization of a prepaid cash expense that was paid in a prior period to the extent such expense is amortized) of such Person and its Restricted Subsidiaries for such period, to the extent that such depreciation, amortization and other non-cash expenses were deducted in computing such Consolidated Net Income; minus
(4): any interest and other payments made to Persons other than any Vidéotron Entity in respect of Back-to-Back Securities to the extent such interest and other payments were not deducted in computing such Consolidated Net Income; minus
(5): non-cash items increasing such Consolidated Net Income for such period, other than the accrual of revenue in the ordinary course of business, in each case, on a consolidated basis and determined in accordance with GAAP.

Notwithstanding the preceding, the provision for taxes based on the income or profits of, the Consolidated Interest Expense of and the depreciation and amortization and other non-cash expenses of a Restricted Subsidiary of Vidéotron shall be added to Consolidated Net Income to compute Consolidated Cash Flow of Vidéotron only to the extent that a corresponding amount would be permitted at the date of determination to be dividended or distributed to Vidéotron by such Restricted Subsidiary without prior governmental approval (unless such approval has been obtained), and without direct or indirect restriction pursuant to the terms of its charter and all agreements, instruments, judgments, decrees, orders, statutes, rules and governmental regulations applicable to that Restricted Subsidiary or its shareholders.

"Consolidated Indebtedness" means, with respect to any Person as of any date of determination, without duplication, the total amount of Indebtedness of such Person and its Restricted Subsidiaries, including (i) the total amount of Indebtedness of any other Person, to the extent that such Indebtedness has been guaranteed by the referent Person or one or more of its Restricted Subsidiaries, and (ii) the aggregate liquidation value of all Disqualified Stock of such Person and all Preferred Shares of Restricted Subsidiaries of such Person, in each case, determined on a consolidated basis in accordance with GAAP.

"Consolidated Interest Expense" means, with respect to any Person, for any period, without duplication, the sum of (i) the consolidated interest expense of such Person and its Restricted Subsidiaries for such period, whether paid or accrued (including, without limitation, amortization of original issue discount, non-cash interest payments, the interest component of any deferred payment obligations, the interest component of all payments associated with Capital Lease Obligations, imputed interest with respect to Attributable Debt, commissions, discounts, and other fees, and charges incurred in respect of letter of credit or bankers' acceptance financings), all calculated after taking into account the effect of all Hedging Obligations, (ii) the consolidated interest expense of such Person and

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its Restricted Subsidiaries that was capitalized during such period, (iii) any interest expense on Indebtedness of another Person that is guaranteed by such Person or any of its Restricted Subsidiaries or secured by a Lien on assets of such Person or any of its Restricted Subsidiaries (whether or not such guarantee or Lien is called upon), (iv) the product of (a) all dividend payments on any series of Preferred Shares of such Person or any of its Restricted Subsidiaries, times (b) a fraction, the numerator of which is one and the denominator of which is one minus the then current combined federal, state, provincial, territorial and local statutory tax rate of such Person, expressed as a decimal, in each case, on a consolidated basis and in accordance with GAAP, and (v) to the extent not included in clause (iv) above for purposes of GAAP, the product of (a) all dividend payments on any series of Disqualified Stock of such Person or any of its Restricted Subsidiaries, times (b) a fraction, the numerator of which is one and the denominator of which is one minus the then current combined federal, state, provincial, territorial and local statutory tax rate of such Person, expressed as a decimal, in each case, on a consolidated basis and in accordance with GAAP. Interest and other payments on Back-to-Back Securities, and any accrual, or payment-in-kind, of interest on the 2003 QMI Subordinated Loan to the extent such interest is not paid in cash, will not be included as Consolidated Interest Expense.

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

(1): the Net Income (but not loss) of any Person that is not a Restricted Subsidiary (other than an Unrestricted Subsidiary) or that is accounted for by the equity method of accounting shall be included;provided, that the Net Income shall be included only to the extent of the amount of dividends or distributions paid in cash to the specified Person or a Restricted Subsidiary thereof;
(2): the Net Income of any Restricted Subsidiary shall be excluded to the extent that the declaration or payment of dividends or similar distributions by that Restricted Subsidiary of that Net Income is not at the date of determination permitted without any prior governmental approval (unless such approval has been obtained) or, directly or indirectly, by operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to that Subsidiary or its equityholders;
(3): the Net Income of any Person acquired during the specified period for any period prior to the date of such acquisition shall be excluded;
(4): the cumulative effect of a change in accounting principles shall be excluded;
(5): the Net Income (but not loss) of any Unrestricted Subsidiary shall be excluded, whether or not distributed to the specified Person or one of its Subsidiaries;provided,however, that for purposes of the covenant described under the caption "— Covenants — Restricted Payments," the Net Income of any Unrestricted Subsidiary will be included to the extent it would otherwise be included under clause (1) of this definition; and
(6): any non-cash compensation expense realized for grants of performance shares, stock options or other rights to officers, directors and employees of Vidéotron or any Restricted Subsidiary shall be excluded,provided that such shares, options or other rights can be redeemed at the option of the holders thereof for Capital Stock of Vidéotron or Quebecor Media Inc. (other than in each case Disqualified Stock of Vidéotron).

"Consolidated Revenues" means the gross revenues of Vidéotron and its Restricted Subsidiaries determined on a consolidated basis in accordance with GAAP;provided that (1) any portion of gross revenues derived directly or indirectly from Unrestricted Subsidiaries, including dividends or distributions from Unrestricted Subsidiaries, shall be excluded from such calculation, and (2) any portion of gross revenues derived directly or indirectly from a Person (other than a Subsidiary of Vidéotron or one of its Restricted Subsidiaries) 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 Vidéotron or a Restricted Subsidiary by such Person.

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"Credit Agreement" means the amended credit facility between Vidéotron, the guarantor subsidiaries named therein, Royal Bank of Canada, as administrative agent, RBC Dominion Securities, Inc., as lead arranger, and the lenders thereto to be entered into on or prior to the Issue Date.

"Credit Facilities" means, one or more debt facilities (including, without limitation, the Credit Agreement) or commercial paper facilities, in each case with banks or other institutional lenders providing for revolving credit loans, term loans, receivables financing (including through the sale of receivables to such lenders or to special purpose entities formed to borrow from such lenders against such receivables) or letters of credit, in each case, as amended, restated, modified, renewed, refunded, replaced or refinanced in whole or in part from time to time.

"Currency Exchange Protection Agreement" means, in respect of a Person, any foreign exchange contract, currency swap agreement, currency option or other similar agreement or arrangement designed to protect such Person against fluctuations in currency exchange rates entered into with any commercial bank or other financial institutions having capital and surplus in excess of US$500.0 million.

"Debt to Cash Flow Ratio" means, as of any date of determination (the "Determination Date"), the ratio of (a) the Consolidated Indebtedness of Vidéotron (excluding the 2003 QMI Subordinated Loan) as of such Determination Date to (b) the Consolidated Cash Flow of Vidéotron for the most recently ended fiscal quarter ending immediately prior to such Determination Date for which internal financial statements are available (the "Measurement Period") multiplied by four, determined on a pro forma basis after giving effect to all acquisitions or dispositions of assets made by Vidéotron and its Restricted Subsidiaries from the beginning of such quarter through and including such Determination Date (including any related financing transactions) as if such acquisitions and dispositions had occurred at the beginning of such quarter. For purposes of calculating Consolidated Cash Flow for each Measurement Period immediately prior to the relevant Determination Date, (i) any Person that is a Restricted Subsidiary on the Determination Date (or would become a Restricted Subsidiary on such Determination Date in connection with the transaction that requires the determination of such Consolidated Cash Flow) will be deemed to have been a Restricted Subsidiary at all times during the applicable Measurement Period; (ii) any Person that is not a Restricted Subsidiary on such Determination Date (or would cease to be a Restricted Subsidiary on such Determination Date in connection with the transaction that requires the determination of such Consolidated Cash Flow) will be deemed not to have been a Restricted Subsidiary at any time during the applicable Measurement Period; (iii) if Vidéotron or any of its Restricted Subsidiaries shall have in any manner (x) acquired through an Asset Acquisition or (y) disposed of (including by way of an Asset Sale or the termination or discontinuance of activities constituting such operating business) any operating business during the applicable Measurement Period or after the end of such period and on or prior to such Determination Date, such calculation will be made on a pro forma basis in accordance with GAAP, as if, in the case of an Asset Acquisition, all such transactions (including any related financing transactions) had been consummated on the first day of the applicable Measurement Period, and, in the case of an Asset Sale or termination or discontinuance of activities constituting such operating business, all such transactions (including any related financing transactions) had been consummated prior to the first day of the applicable Measurement Period; (iv) if (A) since the beginning of the applicable Measurement Period, Vidéotron or any Restricted Subsidiary has incurred any Indebtedness that remains outstanding or has repaid any Indebtedness, or (B) the transaction giving rise to the need to calculate the Debt to Cash Flow Ratio is an incurrence or repayment of Indebtedness, Consolidated Interest Expense for such Measurement Period shall be calculated after giving effect on a pro forma basis to such incurrence or repayment as if such Indebtedness was incurred or repaid on the first day of such period,provided that, in the event of any such repayment of Indebtedness, Consolidated Cash Flow for such period shall be calculated as if Vidéotron or such Restricted Subsidiary had not earned any interest income actually earned during such period in respect of the funds used to repay such Indebtedness; and (v) if any Indebtedness bears a floating rate of interest and is being given pro forma effect, the interest expense on such Indebtedness shall be calculated as if the base interest rate in effect for such floating rate of interest on the Determination Date had been the applicable base interest rate for the entire Measurement Period (taking into account any Interest Rate Agreement applicable to such Indebtedness if such Interest Rate Agreement has a remaining term in excess of twelve months). For purposes of this definition, any pro forma calculation shall be made in good faith by a responsible financial or accounting officer of Vidéotron consistent with Article 11 of Regulation S-X of the Securities Act, as such Regulation may be amended.

"Default" means any event that is, or with the passage of time or the giving of notice or both would be, an Event of Default.

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"Deferred Management Fees" means, for any period, any Management Fees that were payable during any prior period, the payment of which was not effected when due.

"Disqualified Stock" means any Capital Stock that, by its terms (or by the terms of any security into which it is convertible, or for which it is exchangeable, in each case at the option of the holder thereof), or upon the happening of any event, matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at the option of the holder thereof, in whole or in part, on or prior to the date that is 91 days after the date on which the notes mature. Notwithstanding the preceding sentence, (i) Back-to-Back Preferred Shares will not constitute Disqualified Stock and (ii) any Capital Stock that would constitute Disqualified Stock solely because the holders thereof have the right to require Vidéotron to repurchase such Capital Stock upon the occurrence of a change of control or an asset sale will not constitute Disqualified Stock if the terms of such Capital Stock provide that Vidéotron may not repurchase or redeem any such Capital Stock pursuant to such provisions unless such repurchase or redemption complies with the covenant described under the caption "— Covenants — Restricted Payments." The term "Disqualified Stock" shall also include any options, warrants or other rights that are convertible into Disqualified Stock or that are redeemable at the option of the holder, or required to be redeemed, prior to the date that is 91 days after the date on which the notes mature.

"Equity Interests" means Capital Stock and all warrants, options or other rights to acquire Capital Stock (but excluding any debt security that is convertible into, or exchangeable for, Capital Stock).

"Equity Offering" means an offering by Vidéotron of Equity Interests (other than Disqualified Stock or Back-to-Back Securities) of Vidéotron however designated and whether voting or non-voting or an equity contribution by a direct or indirect parent company to the common equity of Vidéotron.

"Exchange Offer Registration Statement" has the meaning set forth in the registration rights agreement.

"Exchange Notes" has the meaning set forth in the registration rights agreement.

"Existing Indebtedness" means Indebtedness of Vidéotron and its Restricted Subsidiaries (other than Indebtedness under the Credit Agreement, but including CF Cable TV Inc.'s Senior Secured First Priority Notes due 2007) in existence on the Issue Date, until such amounts are repaid.

"GAAP" means generally accepted accounting principles, consistently applied, as in effect in Canada from time to time.

"Government Securities" means direct obligations of, or obligations guaranteed by, the United States of America (including any agency or instrumentality thereof) and the payment for which the United States of America pledges its full faith and credit, and which are not callable or redeemable at the issuer's option.

"guarantee" means, as to any Person, a guarantee other than by endorsement of negotiable instruments for collection in the ordinary course of business, direct or indirect, in any manner including, without limitation, by way of a pledge of assets or through letters of credit or reimbursement agreements in respect thereof, of all or any part of any Indebtedness of another Person.

"Hedging Obligations" means, with respect to any specified Person, the obligations of such Person pursuant to any Interest Rate Agreement or Currency Exchange Protection Agreement.

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

(1): representing principal of and premium, if any, in respect of borrowed money;
(2): representing principal of and premium, if any, evidenced by bonds, notes, debentures or similar instruments or letters of credit (or reimbursement agreements in respect thereof);
(3): in respect of banker's acceptances;
(4): representing Capital Lease Obligations of such Person and all Attributable Debt in respect of sale and leaseback transactions entered into by such Person;
(5): representing the balance deferred and unpaid of the purchase price of any property, except any such balance that constitutes an accrued expense or trade payable;

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(6): representing the amount of all obligations of such Person with respect to the repayment of any Disqualified Stock or, with respect to any Subsidiary of such Person, any Preferred Stock (in each case, valued at the greater of its voluntary or involuntary maximum fixed repurchase price plus accrued dividends); or
(7): representing any Hedging Obligations,

if and to the extent any of the preceding items (other than letters of credit, Hedging Obligations, Attributable Debt, Disqualified Stock and Preferred Stock) would appear as a liability upon a balance sheet of the specified Person prepared in accordance with GAAP. In addition, the term "Indebtedness" includes all Indebtedness of others secured by a Lien on any asset of the specified Person (whether or not such Indebtedness is assumed by the specified Person) and, to the extent not otherwise included, the guarantee by the specified Person of any Indebtedness of any other Person. For purposes hereof, the "maximum fixed repurchase price" of any Disqualified Stock or Preferred Stock which does not have a fixed repurchase price shall be calculated in accordance with the terms of such Disqualified Stock or Preferred Stock as if such Disqualified Stock or Preferred Stock were purchased on any date on which Indebtedness shall be required to be determined pursuant to the indenture, and if such price is based upon, or measured by, the fair market value of such Disqualified Stock or Preferred Stock, such fair market value shall be determined in good faith by the Board of Directors of the issuer of such Disqualified Stock or Preferred Stock. The term "Indebtedness" will not include Back-to-Back Securities.

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

(1): the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount, and
(2): the principal amount thereof, together with any interest thereon that is more than 30 days past due, in the case of any other Indebtedness;provided,however, that if any Indebtedness denominated in a currency other than Canadian dollars is hedged or swapped through the maturity of such Indebtedness under a Currency Exchange Protection Agreement, the amount of such Indebtedness will be adjusted to the extent of any positive or negative value (to the extent the obligation under such Currency Exchange Protection Agreement is not otherwise included as Indebtedness of such Person) of such Currency Exchange Protection Agreement.

"Interest Rate Agreement" means, for any Person, any interest rate swap agreement, interest rate cap agreement, interest rate collar agreement or other similar agreement or arrangement designed to protect against fluctuations in interest rates entered into with any commercial bank or other financial institution having capital and surplus in excess of US$500.0 million.

"Investments" means, with respect to any Person, all direct or indirect investments by such Person in other Persons (including Affiliates) in the forms of loans or other extensions of credit (including guarantees, but excluding advances to customers or suppliers in the ordinary course of business that are, in conformity with GAAP, recorded as accounts receivable, prepaid expenses or deposits on the balance sheet of Vidéotron or its Restricted Subsidiaries and endorsements for collection or deposit arising in the ordinary course of business), advances (excluding commission, travel and similar advances to officers and employees made consistent with past practices), capital contributions (by means of any transfer of cash or other property to others or any payment for property or services for the account or use of others), purchases or other acquisitions for consideration of Indebtedness, Equity Interests or other securities, together with all items that are or would be classified as investments on a balance sheet prepared in accordance with GAAP and include the designation of a Restricted Subsidiary as an Unrestricted Subsidiary. If Vidéotron or any of its Restricted Subsidiaries sells or otherwise disposes of any Equity Interests of any direct or indirect Restricted Subsidiary of Vidéotron such that, after giving effect to any such sale or disposition, such Person is no longer a Restricted Subsidiary of Vidéotron, Vidéotron shall be deemed to have made an Investment on the date of any such sale or disposition equal to the fair market value of the Investment in such Restricted Subsidiary not sold or disposed of in an amount determined as provided in the third paragraph of the covenant described under the caption "— Covenants — Restricted Payments." The acquisition by Vidéotron or any

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Restricted Subsidiary of Vidéotron of a Person that holds an Investment in a third Person will be deemed to be an Investment by Vidéotron or such Restricted Subsidiary in such third Person in an amount equal to the fair market value of the Investment held by the acquired Person in such third Person in an amount determined as provided in the third paragraph of the covenant described under the caption "— Covenants — Restricted Payments."

"Issue Date" means October 8, 2003.

"Lien" means, with respect to any asset, any mortgage, lien, pledge, charge, security interest, hypothecation, assignment for security or encumbrance of any kind in respect of such asset, whether or not filed, recorded or otherwise perfected under applicable law, including any conditional sale or capital lease or other title retention agreement, any lease in the nature thereof, any option or other agreement to sell or give a security interest in and any filing of or agreement to give any financing statement under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction.

"Management Fees" means any amounts payable by Vidéotron or any Restricted Subsidiary in respect of management or similar services.

"Net Income" means, with respect to any specified Person, the net income (loss) of such Person, determined in accordance with GAAP and before any reduction in respect of Preferred Shares dividends, excluding, however:

(1): any gain (or loss), together with any related provision for taxes on such gain (or loss), realized in connection with: (a) any Asset Sale (without regard to the $1.0 million limitation set forth in the definition thereof) or (b) the disposition of any securities by such Person or any of its Restricted Subsidiaries or the extinguishment of any Indebtedness of such Person or any of its Restricted Subsidiaries; and
(2): any extraordinary gain (or loss), together with any related provision for taxes on such extraordinary gain (or loss).

"Net Proceeds" means the aggregate cash proceeds received by Vidéotron or any of its Restricted Subsidiaries in respect of any Asset Sale (including, without limitation, any cash received upon the sale or other disposition of any non-cash consideration received in any Asset Sale), net of (a) the direct costs relating to such Asset Sale, including, without limitation, legal, accounting and investment banking fees, and sales commissions, (b) any relocation expenses incurred as a result of the Asset Sale, (c) taxes paid or payable as a result of the Asset Sale, in each case, after taking into account any available tax credits or deductions and any tax sharing arrangements, (d) amounts required to be applied to the repayment of Indebtedness or other liabilities, secured by a Lien on the asset or assets that were the subject of such Asset Sale, or required to be paid as a result of such sale, (e) any reserve for adjustment in respect of the sale price of such asset or assets established in accordance with GAAP, and (f) all distributions and other payments required to be made to minority interest holders in Subsidiaries or joint ventures of Vidéotron or such Restricted Subsidiary as a result of such Asset Sale.

"Non-Recourse Debt" means Indebtedness:

(1): as to which neither Vidéotron nor any of its Restricted Subsidiaries (a) provides credit support of any kind (including any undertaking, agreement or instrument that would constitute Indebtedness), (b) is directly or indirectly liable as a guarantor or otherwise or (c) constitutes the lender;
(2): no default with respect to which (including any rights that the holders thereof may have to take enforcement action against an Unrestricted Subsidiary) would permit, upon notice, lapse of time or both, any holder of any other Indebtedness (other than the notes) of Vidéotron or any of its Restricted Subsidiaries to declare a default on such other Indebtedness or cause the payment thereof to be accelerated or payable prior to its Stated Maturity; and
(3): as to which the lenders have been notified in writing that they will not have any recourse to the stock or assets of Vidéotron or any of its Restricted Subsidiaries.

"Obligations" means any principal, interest, penalties, fees, indemnifications, reimbursements, damages and other liabilities payable under the documentation governing any Indebtedness.

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�� "Permitted Business" means the businesses conducted by Vidéotron and its Restricted Subsidiaries in the cable and telecommunications industry, including on-line Internet services, telephony and the sale and rental of videocassettes, or anything related or ancillary thereto.

"Permitted Holders" means one or more of the following persons or entities:

(1): Quebecor Inc.;
(2): Quebecor Media Inc.;
(3): any issue of the late Pierre Péladeau;
(4): any trust having as its sole beneficiaries one or more of the persons listed in clause (3) above;
(5): any corporation, partnership or other entity controlled by one or more of the persons or trusts referred to in clause (3) or (4) above or in this clause (5); and
(6): Capital Communications CDPQ Inc.

"Permitted Investments" means:

(1)

any Investment in Vidéotron or in a Restricted Subsidiary of Vidéotron;

(2)

any Investment in cash or Cash Equivalents;

(3)

any Investment by Vidéotron or any of its Restricted Subsidiaries in a Person, if as a result of such Investment:

(a): such Person becomes a Restricted Subsidiary of Vidéotron; or
(b): such Person is merged, consolidated or amalgamated with or into, or transfers or conveys substantially all of its assets to, or is liquidated into, Vidéotron or any of its Restricted Subsidiaries,provided that, in each case, such Person's primary business is a Permitted Business;

(4)

any Investment made as a result of the receipt of non-cash consideration from an Asset Sale that was made pursuant to and in compliance with the covenant described under the caption "— Repurchase at the Option of Holders — Asset Sales;"

(5)

any acquisition of assets solely in exchange for the issuance of Equity Interests (other than Disqualified Stock or Back-to-Back Securities) of Vidéotron;

(6)

Hedging Obligations entered into in the ordinary course of business of Vidéotron or any of its Restricted Subsidiaries and not for speculative purposes, and that do not increase the Indebtedness of the obligor outstanding at any time other than as a result of fluctuations in interest rates or foreign currency exchange rates or by reason of fees, indemnifies and compensation payable thereunder;

(7)

payroll, travel and similar advances to officers, directors and employees of Vidéotron and its Restricted Subsidiaries for business-related travel expenses, moving expenses and other similar expenses that are expected at the time of such advances ultimately to be treated as expenses in accordance with GAAP;

(8)

any Investment in connection with Back-to-Back Transactions;

(9)

any Investment existing on the Issue Date; and

(10)

other Investments in any Person that is not an Affiliate of Vidéotron (other than a Restricted Subsidiary) having an aggregate fair market value (measured on the date each such Investment was made and without giving effect to subsequent changes in value), when taken together with all other Investments made pursuant to this clause (10) since the Issue Date not to exceed US$50.0 million.

"Permitted Liens" means:

(1): Liens on the assets of Vidéotron and any Restricted Subsidiaries of Vidéotron securing Indebtedness and other Obligations of Vidéotron and Restricted Subsidiaries of Vidéotron under Credit Facilities, which Indebtedness was permitted by the terms of the indenture to be incurred,provided,however, that the

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aggregate principal amount of such Indebtedness secured by such Liens shall not exceed an aggregate of Cdn$650 million at any one time outstanding;

(2): Liens in favor of Vidéotron or a Restricted Subsidiary;
(3): Liens on property of a Person existing at the time such Person is merged with or into or consolidated or amalgamated with Vidéotron or any Restricted Subsidiary of Vidéotron,provided that such Liens were in existence prior to the contemplation of such merger, consolidation or amalgamation and do not extend to any assets other than those of the Person merged into or consolidated or amalgamated with Vidéotron or the Restricted Subsidiary;
(4): Liens on property existing at the time of acquisition thereof by Vidéotron or any of its Restricted Subsidiaries,provided that such Liens were in existence prior to the contemplation of such acquisition and do not extend to any assets other than such property;
(5): Liens to secure the performance of statutory obligations, surety or appeal bonds, performance bonds or other obligations of a like nature incurred in the ordinary course of business;
(6): Liens to secure Indebtedness (including Capital Lease Obligations) permitted by clause (4) of the second paragraph of the covenant described under the caption "— Covenants — Incurrence of Indebtedness and Issuance of Preferred Shares" covering only the assets acquired with such Indebtedness;
(7): Liens existing on the Issue Date;
(8): Liens for taxes, assessments or governmental charges or claims that are not yet delinquent or that are being contested in good faith by appropriate proceedings promptly instituted and diligently concluded,provided that any reserve or other appropriate provision as shall be required in conformity with GAAP shall have been made therefor;
(9): Liens securing Permitted Refinancing Indebtedness,provided that any such Lien does not extend to or cover any property, Capital Stock or Indebtedness other than the property, shares or debt securing the Indebtedness so refunded, refinanced or extended;
(10): attachment or judgment Liens not giving rise to a Default or an Event of Default;
(11): Liens incurred or deposits made in the ordinary course of business in connection with workers' compensation, unemployment insurance and other types of social security;
(12): Liens incurred or deposits made to secure the performance of tenders, bids, leases, statutory or regulatory obligations, bankers' acceptance, surety and appeal bonds, government contracts, performance and return-of-money bonds and other obligations of a similar nature incurred in the ordinary course of business, exclusive of Obligations for the payment of borrowed money;
(13): licenses, permits, reservations, servitudes, easements, rights-of-way and rights in the nature of easements (including, without limiting the generality of the foregoing, licenses, easements, rights-of-way and rights in the nature of easements for railways, sidewalks, public ways, sewers, drains, gas or oil pipelines, steam, gas and water mains or electric light and power, or telephone and telegraph or cable television conduits, poles, wires and cables, reservations, limitations, provisos and conditions expressed in any original grant from any governmental entity or other grant of real or immovable property, or any interest therein) and zoning land use and building restrictions, by-laws, regulations and ordinances of federal, provincial, regional, state, municipal and other governmental authorities in respect of real property not interfering, individually or in the aggregate, in any material respect with the use of the affected real property for the ordinary conduct of the business of Vidéotron or any of its Restricted Subsidiaries at such real property;
(14): Liens of franchisors or other regulatory bodies arising in the ordinary course of business;
(15): Liens securing reimbursement obligations with respect to letters of credit that encumber documents and other property relating to such letters of credit and the products and proceeds thereof;
(16): Liens encumbering customary initial deposits and margin deposits, and other Liens that are within the general parameters customary in the industry and incurred in the ordinary course of business, in each

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case, securing Indebtedness under Hedging Obligations and forward contracts, options, future contracts, future options or similar agreements or arrangements, including mark-to-market transactions designed solely to protect Vidéotron or any of its Restricted Subsidiaries from fluctuations in interest rates, currencies or the price of commodities;

(17): Liens consisting of any interest or title of licensor in the property subject to a license;
(18): Liens arising from sales or other transfers of accounts receivable which are past due or otherwise doubtful of collection in the ordinary course of business;
(19): Any extensions, substitutions, replacements or renewals of the foregoing clauses (2) through (18); and
(20): Liens incurred in the ordinary course of business of Vidéotron or any Restricted Subsidiary of Vidéotron with respect to Obligations that do not exceed US$25.0 million at any one time outstanding.

"Permitted Refinancing Indebtedness" means any Indebtedness of Vidéotron or any of its Restricted Subsidiaries issued in exchange for, or the net proceeds of which are used to extend, refinance, renew, replace, defease or refund other Indebtedness of Vidéotron or any Subsidiary Guarantor (other than intercompany Indebtedness);provided,however, that:

(1): the principal amount (or accreted value, if applicable) of such Permitted Refinancing Indebtedness does not exceed the principal amount (or accreted value, if applicable) of the Indebtedness so extended, refinanced, renewed, replaced, defeased or refunded (plus all accrued interest thereon and the amount of any reasonably determined premium necessary to accomplish such refinancing and such reasonable expenses incurred in connection therewith);
(2): such Permitted Refinancing Indebtedness has a final maturity date later than the final maturity date of, and has a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of, the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded;
(3): if the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded is subordinated in right of payment to the notes or the Subsidiary Guarantees, such Permitted Refinancing Indebtedness is subordinated in right of payment to, the notes on terms at least as favorable to the holders of notes as those contained in the documentation governing the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded;
(4): if the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded is pari passu in right of payment with the notes or any Subsidiary Guarantees, such Permitted Refinancing Indebtedness is pari passu with, or subordinated in right of payment to, the notes or such Subsidiary Guarantees; and
(5): such Indebtedness is incurred either by Vidéotron, a Subsidiary Guarantor or by the Restricted Subsidiary who is the obligor on the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded.

"Person" means any individual, corporation, partnership, joint venture, association, joint-stock company, trust, unincorporated organization, limited liability company or government or other entity.

"Preferred Shares" means any Capital Stock of a Person, however designated, which entitles the holder thereof to a preference with respect to the payment of dividends, or as to the distribution of assets upon any voluntary or involuntary liquidation or dissolution of such Person, over shares of any other class of Capital Stock issued by such Person.

"Related Party" means:

(1): any controlling shareholder, 80% (or more) owned Subsidiary, or immediate family member (in the case of an individual) of any Permitted Holder, or
(2): any trust, corporation, partnership or other entity, the beneficiaries, shareholders, partners, owners or Persons beneficially holding an 80% or more controlling interest of which consist of any one or more Permitted Holder and/or such other Persons referred to in the immediately preceding clause (1).

"Restricted Investment" means an Investment other than a Permitted Investment.

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"Restricted Subsidiary" of a Person means any Subsidiary of the referent Person that is not an Unrestricted Subsidiary.

"sale and leaseback transaction" means, with respect to any Person, any transaction involving any of the assets or properties of such Person whether now owned or hereafter acquired, whereby such Person sells or transfers such assets or properties and then or thereafter leases such assets or properties or any part thereof or any other assets or properties which such Person intends to use for substantially the same purpose or purposes as the assets or properties sold or transferred.

"Significant Subsidiary" means any Subsidiary that would be a "significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated pursuant to the Securities Act, as such Regulation is in effect on the date hereof, as such Regulation is in effect on the Issue Date.

"Stated Maturity" means, with respect to any installment of interest or principal on any series of Indebtedness, the date on which such payment of interest or principal was scheduled to be paid in the original documentation governing such Indebtedness, and shall not include any contingent obligations to repay, redeem or repurchase any such interest or principal prior to the date originally scheduled for the payment thereof.

"Subordinated Indebtedness" means any Indebtedness of Vidéotron or any Subsidiary Guarantor (whether outstanding on the Issue Date or thereafter incurred) that is subordinate or junior in right of payment to the notes or any Subsidiary Guarantee pursuant to a written agreement to that effect.

"Subsidiary" means, with respect to any specified Person:

(1): any corporation, association or other business entity of which more than 50% of the total voting power of shares of Capital Stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person (or a combination thereof); and
(2): any partnership (a) the sole general partner or the managing general partner of which is such Person or a Subsidiary of such Person or (b) the only general partners of which are such Person or one or more Subsidiaries of such Person (or any combination thereof).

"Subsidiary Guarantee" means a guarantee on the terms set forth in the indenture by a Subsidiary Guarantor of Vidéotron's obligations with respect to the notes.

"Subsidiary Guarantor" means (1) each Restricted Subsidiary of Vidéotron on the Issue Date other than Société D'Édition Et De Transcodage T.E. Ltée, CF Cable TV Inc. and their respective Subsidiaries and (2) any other Person that becomes a Subsidiary Guarantor pursuant to the covenant described under "— Covenants — Future Guarantors" or who otherwise executes and delivers a supplemental indenture to the trustee providing for a Subsidiary Guarantee, and in each case their respective successors and assigns until released from their obligations under their Subsidiary Guarantees and the indenture in accordance with the terms of the indenture.

"Tax" means any tax, duty, levy, impost, assessment or other governmental charge (including penalties, interest and any other liabilities related thereto).

"Tax Benefit Transaction" means, for so long as Vidéotron is a direct or indirect Subsidiary of Quebecor Inc., any transaction between a Vidéotron Entity and Quebecor Inc. or any of its Affiliates, the primary purpose of which is to create tax benefits for any Vidéotron Entity or for Quebecor Inc. or any of its Affiliates;provided,however, that (1) the Vidéotron Entity 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 Vidéotron Entity; (2) Vidéotron delivers to the trustee (a) a resolution of the Board of Directors of Vidéotron to the effect the transaction will not prejudice the noteholders 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 Vidéotron Entity 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,provided that such an opinion shall not be required for Tax Benefit Transactions in amounts not exceeding Cdn$1 million (and not exceeding in the aggregate Cdn$10 million for the preceding 12-month period); (3) such transaction is set forth in writing; and (4) the Consolidated Cash Flow of

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Vidéotron 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 full fiscal quarter 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 the indenture and shall be deemed to have been effected as of such date and, if the transaction is not otherwise permitted by the indenture as of such date, Vidéotron will be in default under the indenture if such transaction does not comply with the preceding requirements or is not otherwise unwound within 30 days of that date.

"Unrestricted Subsidiary" means:

(a): any Subsidiary of Vidéotron that is designated after the Issue Date as an Unrestricted Subsidiary as permitted or required pursuant to the covenant described under the caption "— Covenants — Designation of Restricted and Unrestricted Subsidiaries" and is not thereafter redesignated as a Restricted Subsidiary as permitted pursuant thereto; and
(b): any Subsidiary of an Unrestricted Subsidiary.

"Vidéotron Entity" means any of Vidéotron or any of its Restricted Subsidiaries.

"Voting Stock" of any Person as of any date means the Capital Stock of such Person that is at the time entitled to vote in the election of the Board of Directors of such Person.

"Weighted Average Life to Maturity" means, when applied to any Indebtedness at any date, the number of years obtained by dividing:

(1): the sum of the products obtained by multiplying (a) the amount of each then remaining installment, sinking fund, serial maturity or other required payments of principal, including payment at final maturity, in respect thereof, by (b) the number of years (calculated to the nearest one-twelfth) that will elapse between such date and the making of such payment; by
(2): the then outstanding principal amount of such Indebtedness.

"Wholly Owned Restricted Subsidiary" of any specified Person means a Restricted Subsidiary of such Person all of the outstanding Capital Stock or other ownership interests of which (other than directors' qualifying shares) will at the time be owned by such Person or by one or more Wholly Owned Restricted Subsidiaries of such Person.

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CERTAIN TAX CONSIDERATIONS

Certain U.S. Federal Income Tax Considerations

Based on the advice of Arnold & Porter LLP, the following is a summary of certain U.S. federal income tax consequences applicable to an investment in new notes by a "U.S. Holder" who acquires new notes pursuant to the exchange offer. This summary is based on the Internal Revenue Code of 1986, as amended, which we refer to as the Code, Treasury Regulations, rulings by the Internal Revenue Service, which we refer to as the IRS, and judicial decisions now in effect. All of these are subject to change, possibly with retroactive effect, or different interpretations. For purposes of this summary, "U.S. Holder" means the beneficial holder of a new note who or that for U.S. federal income tax purposes is:

•: an individual citizen or resident alien of the United States;
•: a corporation or other entity treated as such formed in or under the laws of the United States or any political subdivision of the United States;
•: an estate, the income of which is subject to U.S. federal income taxation regardless of its source;
•: a trust, if a court within the United States is able to exercise primary supervision over the administration of such trust and one or more "U.S. persons" (within the meaning of the Code) have the authority to control all substantial decisions of the trust, or if a valid election is in effect to be treated as a U.S. person; or
•: a partnership or other entity treated as such, but only with respect to partners that are U.S. Holders under any of the foregoing clauses.

This summary does not cover all aspects of U.S. federal income taxation that may be relevant to particular U.S. Holders in light of their specific circumstances (for example, U.S. Holders subject to the alternative minimum tax provisions of the Code) or to investors that may be subject to special treatment under U.S. federal income tax law, including:

•: dealers in stocks, securities or currencies;
•: securities traders that use a mark-to-market accounting method;
•: banks;
•: insurance companies;
•: tax-exempt organizations;
•: persons holding new notes as part of a hedging or conversion transaction or a straddle;
•: persons deemed to sell new notes under the constructive sale provisions of the Code;
•: persons who or that are, or may become, subject to the expatriation provisions of the Code;
•: persons whose functional currency is not the U.S. dollar; and
•: direct, indirect or constructive owners of 10% or more of our outstanding voting shares.

The summary also does not discuss any aspect of state, local or foreign law, or U.S. federal estate and gift tax law as applicable to U.S. Holders. In addition, it is limited to U.S. Holders who purchase and hold the new notes as "capital assets" within the meaning of the Code, generally, property held for investment.

Except as used in "— Exchange of Old Notes into New Notes" below, when "note" and "notes" are used in this summary, they refer equally to "old note," "new note," "old notes" and "new notes," respectively.

You should consult your own tax advisor regarding the federal, state, local and foreign tax consequences of the purchase, ownership and disposition of the notes.

Exchange of Old Notes Into New Notes

The exchange of an old note for a new note by a holder pursuant to the exchange offer will not constitute a taxable exchange for U.S. federal income tax purposes. A U.S. Holder will not recognize any gain or loss upon the

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receipt of a new note pursuant to the exchange offer and a U.S. Holder will be required to continue to include interest on the new note in gross income, and to account for any bond premium, in the manner and to the extent described below. A U.S. Holder's holding period for a new note will include the holding period for the old note exchanged pursuant to the exchange offer, and such U.S. Holder's basis in the new note immediately after the exchange will be the same as such U.S. Holder's basis in such old note immediately before the exchange.

Interest on the Notes

Stated interest on the notes will be taxable to a U.S. Holder as ordinary income at the time it is received or accrued, in accordance with the U.S. Holder's method of accounting for U.S. federal income tax purposes. Interest on the notes will constitute income from sources outside the United States and under the foreign tax credit rules, interest paid in taxable years beginning before January 1, 2007, with certain exceptions, will be "passive" or "financial services" income, while interest paid in taxable years beginning after December 31, 2006 will, depending on your circumstances, be "passive" or "general" income which, in either case, is treated separately from other types of income for purposes of computing the foreign tax credit allowable to you under the United States federal income tax laws.

Redemption

In the event of a change of control of us, or a Change of Control, the U.S. Holders will have the right to require us to purchase their notes. Under the Treasury Regulations, the right of U.S. Holders to require redemption of the notes upon the occurrence of a Change of Control will not give rise to original issue discount on the notes if the likelihood of the occurrence, as of the date the notes are issued, is remote. We believe that the likelihood of a Change of Control is remote under this rule, and therefore we will treat this possibility as if it will not give rise to original issue discount on the notes.

We may redeem the notes at any time on or after a certain date, and, in certain circumstances, we may redeem or repurchase a portion of the notes at any time prior to a certain date. Under the Treasury Regulations, we will be deemed to exercise any option to redeem the notes if the exercise of such option would lower the yield of the notes. We believe, and will take the position for all U.S. federal income tax purposes, that we will not be treated as having exercised the option to redeem the notes under these rules.

Sale, Exchange or Retirement of a Note

A U.S. Holder generally will recognize gain or loss upon the sale, exchange, redemption, retirement or other disposition of a note, measured by the difference, if any, between:

•: the amount of cash and the fair market value of any property received, except to the extent that the cash or other property is attributable to the payment of accrued interest not previously included in income, which amount will be taxable as ordinary income; and
•: the holder's tax basis in the notes.

Any such gain or loss will generally be capital gain or loss and will generally be long-term capital gain or loss if the note has been held or deemed held for more than one year at the time of the disposition. Net capital gains of noncorporate U.S. Holders, including individuals, may be taxed at lower rates than items of ordinary income. The ability of a U.S. Holder to offset capital losses against ordinary income is limited. Any gain or loss recognized by a U.S. Holder on the sale or other disposition of a note generally will be treated as income from sources within the United States or loss allocable to income from sources within the United States. Any loss attributable to accrued but unpaid interest will be allocated against income of the same category and source as the interest on the notes. A U.S. Holder's tax basis in a note will generally equal its cost to the U.S. Holder.

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Information Reporting and Backup Withholding

A U.S. Holder of the notes may be subject to "backup withholding" with respect to certain "reportable payments," including interest payments and, under certain circumstances, principal payments on the notes. These backup withholding rules apply if the U.S. Holder, among other things:

•: fails to furnish a social security number or other taxpayer identification number, or TIN, certified under penalty of perjury within a reasonable time after the request for the TIN;
•: furnishes an incorrect TIN;
•: fails to report properly interest or dividends; or
•: under certain circumstances, fails to provide a certified statement, signed under penalties of perjury, that the TIN furnished is the correct number and that such holder is not subject to backup withholding.

A U.S. Holder that does not provide us with its correct TIN also may be subject to penalties imposed by the IRS. Any amount withheld from a payment to a U.S. Holder under the backup withholding rules is creditable against the U.S. Holder's federal income tax liability,provided that the required information is furnished to the IRS. Backup withholding will not apply, however, with respect to payments made to certain U.S. Holders, including corporations and tax-exempt organizations,provided their exemptions from backup withholding are properly established.

We will report to the U.S. Holders of notes and to the IRS the amount of any "reportable payments" for each calendar year and the amount of tax withheld, if any, with respect to these payments.

Canadian Material Federal Income Tax Considerations for Non-Residents of Canada

In the opinion of Ogilvy Renault, our Canadian counsel, the following summary fairly describes the main Canadian federal income tax consequences applicable to you if you exchange old notes for new notes pursuant to the exchange offer or if you invest, as initial purchaser, in the notes and, for purposes of theIncome Tax Act (Canada), which we refer to as the Act, you hold such new notes as capital property. Generally, a note will be considered to be capital property to a holderprovided the holder does not hold the note in the course of carrying on a business and has not acquired the note in one or more transactions considered to be an adventure or concerns in the nature of trade. This summary is based on the Canada-United States Income Tax Convention (1980), as amended, or the Convention, the relevant provisions of the Act and the Regulations thereunder, or the Regulations, as in force on the date hereof, and counsel's understanding of the administrative practices of the Canada Revenue Agency. It assumes that the specific proposals to amend the Act and the Regulations publicly announced by the Minister of Finance of Canada prior to the date of this prospectus are enacted in their present form, but the Act or the Regulations may not be amended as proposed or at all. This summary does not address provincial, territorial or foreign income tax considerations. Changes in the law or administrative practices or future court decisions may affect your tax treatment.

The following commentary is generally applicable to a holder who, at all times for purposes of the Act, deals at arm's length with us and who, for the purposes of the Convention and the Act, is not and is not deemed to be a resident of Canada during any taxation year in which it owns the notes and does not use or hold, and is not deemed to use or hold the notes in the course of carrying on a business in Canada and to an insurer or an authorized foreign bank who carries on an insurance business or a bank business in Canada, who we refer to as a Non-Resident Holder.

Interest Payments

A Non-Resident Holder will not be subject to tax (including withholding tax) under the Act on interest, principal or premium on the new notes.

Dispositions

Gains realized on the disposition or deemed disposition of new note by a Non-Resident Holder will not be subject to tax under the Act.

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Exchange of Old Notes for New Notes

The exchange of an old note for a new note by a Non-Resident Holder pursuant to the exchange offer will not constitute a taxable transaction for the purposes of the Act.

The preceding discussions of federal income tax consequences is for general information only and is not legal or tax advice. Accordingly, you should consult your own tax advisor as to particular tax consequences of purchasing, holding, and disposing of the notes, including the applicability and effect of any state, local or foreign tax laws, and of any proposed changes in applicable laws.

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NOTICE TO CANADIAN INVESTORS

Distribution and Resale Restrictions

The distribution of the new notes in Ontario is being made on an exempt distribution basis and, as such, is exempt from the requirement that we prepare and file a prospectus with the Ontario Securities Commission. Any resale of our new notes must be made in accordance with applicable securities laws, which may require resale to be made in accordance with exemptions from registration and prospectus requirements. Recipients of the new notes in Ontario are advised that, notwithstanding anything contained in this prospectus, the new notes may continue to be subject to resale restrictions in Canada notwithstanding the fact that we filed with the United States Securities and Exchange Commission an exchange offer registration statement with respect to our offer to exchange the old notes for the new notes. Vidéotron is not a "reporting issuer" in any province or territory of Canada. Accordingly, purchasers of the new notes are advised to seek legal advice prior to any resale of the new notes.

Representations and Agreement by Purchasers

Each purchaser of new notes in Ontario will be deemed to have acknowledged, represented to and agreed with us and the dealer from whom comfirmation of purchase of the new notes is received that such purchaser:

(a): (i) is entitled under applicable provincial securities laws to purchase the new notes without the benefit of a prospectus qualified under such securities laws; (ii) is basing its investment decision solely on this prospectus and not on any other information concerning us or this prospectus; (iii) such purchaser is purchasing as principal for its own account and not as agent; (iv) such purchaser or any ultimate purchaser for which such purchaser is acting as agent (where permitted by law) is entitled under Ontario securities laws to purchase the new notes without the benefit of a prospectus qualified under such securities laws; (v) such purchaser is purchasing for investment only and not with a view to resale or distribution; (vi) without limiting the generality of the foregoing, such purchaser is purchasing the new notes (x) through a dealer that is registered as an international dealer in Ontario and such purchaser is a "designated institution," including a fund or person, other than an individual, that is an "accredited investor" as defined in section 1.1 of Ontario Securities Commission Rule 45-501 Exempt Distributions, or OSC Rule 45-501, and to which an international dealer in Ontario may sell our notes, or (y) through a dealer that is a fully registered dealer in Ontario and such fund or person (including an individual) is an "accredited investor" in Ontario under OSC Rule 45-501;
(b): acknowledges that the distribution of the new notes in Canada is being made on an exempt distribution basis and that any resale of the notes in Canada must be made through an appropriately registered dealer or in accordance with an exemption from the registration requirements of applicable securities laws and in accordance with, or pursuant to an exemption from, the prospectus requirements of such laws, which vary depending on the Province. Canadian purchasers are advised to seek legal advice prior to any resale of the new notes; and
(c): confirms that it is such purchaser's express wish that all documents evidencing or relating in any way to the sale of new notes be drafted in the English language only.Chaque acheteur des billets au Canada recevant un avis de confirmation à l'égard de son acquisition reconnaît que c'est sa volonté expresse que tous les documents faisant foi ou se rapportant de quelque manière à la vente des billets soient rédigés uniquement en anglais.

Rights of Action for Damages or Rescission

Securities legislation in Ontario provides that every purchaser of securities in Ontario pursuant to this prospectus shall have, in addition to any other rights it may have at law, a right of action for rescission or damages against us if this prospectus, together with any amendments hereto, contains a misrepresentation. Where used herein the term "misrepresentation" means an untrue statement of a material fact or an omission to state a material fact that is required to be stated or that is necessary to make any statement not misleading or false in light of the circumstances in which it was made, and the expression "material fact" means a fact that significantly affects or would reasonably be expected to have a significant effect on the market price or value of the new notes.

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In the event that this prospectus, together with any amendments hereto, delivered to a purchaser resident in Ontario contains a misrepresentation and it was a misrepresentation at the time of purchase, the purchaser will be deemed to have relied upon the misrepresentation and will, as provided below, have a right of action against us for damages, or for rescission, in which case, if the purchaser elects to exercise the right of rescission, the purchaser will have no right of action for damages against usprovided that, among other limitations:

(a): in the case of an action for rescission, no action shall be commenced more than 180 days from the day of the transaction that gave rise to the cause of action;
(b): in the case of any action, other than an action for rescission, no action shall be commenced more than the earlier of (i) 180 days after the purchaser first had knowledge of the facts giving rise to the cause of action, or (ii) three years after the date of the transaction that gave rise to the cause of action;
(c): we will not be liable if we prove that the purchaser purchased the notes with knowledge of the misrepresentation;
(d): in the case of an action for damages, we will not be liable for all or any portion of the damages that we prove do not represent the depreciation in value of the notes as a result of the misrepresentation relied upon; and
(e): in no case will the amount recoverable in any action exceed the price at which the notes were sold to purchasers.

The statutory and contractual rights discussed above are in addition to and without derogation from any other rights or remedies available at law to the purchaser. The right of action must be exercised within prescribed time limits. Purchasers should refer to the applicable provisions of Ontario securities legislation for the particulars of these rights or consult with a legal advisor.

The foregoing summaries are subject to the express provisions of theSecurities Act (Ontario) and the regulations and rules thereunder and reference is made thereto for the complete text of such provisions. Such provisions may contain limitations and statutory defences on which we may rely.

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PLAN OF DISTRIBUTION

Each broker-dealer that receives new notes for its own account pursuant to the exchange offer must acknowledge that it will deliver a prospectus in connection with any resale of these new notes. This prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of new notes received in exchange for old notes where those old notes were acquired as a result of market-making activities or other trading activities. Under the registration rights agreement, we and the subsidiary guarantors have agreed that, starting on the expiration date and ending on the sooner of 180 days after the effectiveness date of the registration statement that includes this prospectus and the date on which a participating broker-dealer is no longer required to deliver a prospectus in connection with market-making or other trading activities, we will make this prospectus, as amended or supplemented, available to any broker-dealer for use in connection with any of these resales. In addition, until February , 2005, all dealers effecting transactions in the new notes may be required to deliver a prospectus.

We will not receive any proceeds from any sale of new notes by broker-dealers. New notes received by broker-dealers for their own account pursuant to the exchange offer may be sold from time to time in one or more transactions in the over-the-counter market, in negotiated transactions, through the writing of options on the new notes or a combination of these methods of resale, at market prices prevailing at the time of resale, at prices related to these prevailing market prices or negotiated prices. Any of these resales may be made directly to purchasers or to or through brokers or dealers who may receive compensation in the form of commissions or concessions from any of these broker-dealers and/or the purchasers of any of these new notes. Any broker-dealer that resells new notes that were received by it for its own account pursuant to the exchange offer and any broker or dealer that participates in a distribution of these new notes may be deemed to be an "underwriter" within the meaning of the Securities Act and any profit of any of these resales of new notes and any commissions or concessions received by any of these persons may be deemed to be underwriting compensation under the Securities Act. The letter of transmittal states that by acknowledging that it will deliver and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act.

Until the 180th day after the effectiveness date of the registration statement that includes this prospectus or the date on which a participating broker-dealer is no longer required to deliver a prospectus in connection with market-making or other trading activities, whichever occurs first, we and the subsidiary guarantors will promptly send additional copies of this prospectus and any amendment or supplement to this prospectus to any broker-dealer that requests those documents in the letter of transmittal. We have agreed to pay all expenses incident to the exchange offer (including the expenses of one counsel for the holders of the old notes) other than commissions or concessions of any brokers or dealers and will indemnify the holders of the old notes (including any broker-dealers) against certain liabilities, including liabilities under the Securities Act.

LEGAL MATTERS

Ogilvy Renault, Montréal, Canada, will pass upon the validity of the new notes offered by this prospectus. Arnold & Porter LLP, New York, New York, will provide an opinion as to the enforceability of the new notes under New York law.

INDEPENDENT AUDITORS

Our consolidated balance sheets as at December 31, 2002 and 2003 and our consolidated statements of operations, shareholder's equity and cash flows for the three years ended December 31, 2003 are included this prospectus and have been audited by KPMG LLP, independent accountants, as indicated in their report appearing in this prospectus. In addition, the balance sheets as at December 31, 2002 and 2003 of Videotron Telecom and the statements of operations, deficit and cash flows for the years ended December 31, 2002 and 2003 of Videotron Telecom are included in this prospectus and have been audited by KPMG LLP, independent accountants, as indicated in their report appearing in this prospectus.

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WHERE YOU CAN FIND MORE INFORMATION

We have filed with the SEC a registration statement on Form F-4 under the Securities Act with respect to the new notes offered in this prospectus. As permitted by SEC rules, this prospectus does not contain all of the information included in the registration statement (including its exhibits and schedules). You should read the registration statement (including its exhibits and schedules) for more information about us, the exchange offer and the new notes. This prospectus summarizes material provisions of contracts and other documents to which we refer you. Because this prospectus may not contain all the information that you find important, you should review the full text of these documents. We have filed these documents as exhibits to the registration statement.

We are also subject to the reporting requirements of the Exchange Act. We file reports and other information with the SEC. The public may read and copy the registration statement (including its exhibits and schedules) and the reports and other information filed by us at the SEC's Public Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549. You may obtain information on the operation of the SEC's Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. The address of this Internet site is http://www.sec.gov.

In addition, you may obtain a copy of the documents to which we refer you in this prospectus without charge upon written or oral request to: Vidéotron Ltée, 300 Viger Avenue East, Montreal, Québec, Canada H2X 3W4, Attention: Corporate Secretary, telephone number (514) 281-1232. To obtain timely delivery, you must request these documents no later than five business days before the expiration date of the exchange offer. Unless extended, the expiration date is February , 2005.

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INDEX TO FINANCIAL STATEMENTS

		Page
Vidéotron Ltée
*Annual Financial Information as at and for the years ended December 31, 2001, 2002 and 2003*
Report of Independent Registered Public Accounting Firm		F-2
Consolidated Statements of Operations for the years ended December 31, 2001, 2002 and 2003		F-3
Consolidated Statements of Shareholder's Equity for the years ended December 31, 2001, 2002 and 2003		F-4
Consolidated Balance Sheets as at December 31, 2002 and 2003		F-5
Consolidated Statements of Cash Flows for the years ended December 31, 2001, 2002 and 2003		F-6
Notes to Consolidated Financial Statements for the years ended December 31, 2001, 2002 and 2003		F-8
*Interim Financial Information as at September 30, 2004 and for the nine months ended September 30, 2003 and 2004*
Consolidated Statements of Operations for the nine months ended September 30, 2003 and 2004 (unaudited)		F-39
Consolidated Statements of Shareholder's Equity for the nine months ended September 30, 2003 and 2004 (unaudited)		F-40
Consolidated Balance Sheets as at December 31, 2003 and September 30, 2004 (unaudited)		F-41
Consolidated Statements of Cash Flows for the nine months ended September 30, 2003 and 2004 (unaudited)		F-42
Notes to Consolidated Financial Statements for the nine months ended September 30, 2003 and 2004 (unaudited)		F-43
Videotron Telecom Ltd.
*Annual Financial Information as at and for the years ended December 31, 2002 and 2003*
Report of Independent Registered Public Accounting Firm		F-57
Statements of Operations and Deficit for the years ended December 31, 2002 and 2003		F-58
Balance Sheets as at December 31, 2002 and 2003		F-59
Statements of Cash Flows for the years ended December 31, 2002 and 2003		F-60
Notes to Financial Statements for the years ended December 31, 2002 and 2003		F-61
*Interim Financial Information as at September 30, 2004 and for the nine months ended September 30, 2003 and 2004*
Statements of Operations for the nine months ended September 30, 2003 and 2004 (unaudited)		F-69
Balance Sheets as at December 31, 2003 and September 30, 2004 (unaudited)		F-70
Statements of Cash Flows for the nine months ended September 30, 2003 and 2004 (unaudited)		F-71
Notes to Financial Statements for the nine months ended September 30, 2003 and 2004 (unaudited)		F-72
Pro Forma Combined Financial Information
Pro forma combined financial information for the years ended December 31, 2001, 2002 and 2003 and as at and for the nine months ended September 30, 2004 (unaudited)		F-76

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

TO THE DIRECTORS OF VIDÉOTRON LTÉE

We have audited the consolidated balance sheets of Vidéotron Ltée and its subsidiaries as at December 31, 2002 and 2003 and the consolidated statements of operations, shareholder's equity and cash flows for each of the years in the three-year period ended December 31, 2003. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, these consolidated financial statements present fairly, in all material respects, the financial position of Vidéotron Ltée and its subsidiaries as at December 31, 2002 and 2003 and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 2003 in accordance with Canadian generally accepted accounting principles.

Canadian generally accepted accounting principles vary in certain significant respects from accounting principles generally accepted in the United States of America. Information relating to the nature and effect of such differences is presented in Note 22 to the consolidated financial statements.

Montréal, Canada
January 28, 2004, except as to note 23 which is
dated as of November 15, 2004

/s/ KPMG LLP
Chartered Accountants

F-2

VIDÉOTRON LTÉE

CONSOLIDATED STATEMENTS OF OPERATIONS

Years ended December 31, 2001, 2002 and 2003
(in thousands of Canadian dollars)

		2001			2002			2003
		(Restated — note 1 (b))			(Restated — note 1 (b))
Operating revenues
	Cable television	$	607,942		$	579,200		$	558,887
	Internet		99,629			135,514			183,268
	Video stores		35,155			35,344			38,450
	Other		22,728			30,982			24,396

			765,454			781,040			805,001
Operating expenses
	Direct cost		227,322			259,686			245,967
	Operating, general and administrative expenses		274,202			285,816			283,784

			501,524			545,502			529,751

Operating income before the undernoted			263,930			235,538			275,250
Depreciation and amortization (note 4)			116,692			120,016			122,958
Financial expenses (note 5)			101,307			76,188			64,602
Other items (note 6)			95,570			25,000			(2,500	)

Income (loss) before income taxes, non-controlling interest and amortization of goodwill			(49,639	)		14,334			90,190
Income taxes (note 7):
	Current		3,172			5,074			14,063
	Future		(13,248	)		(2,411	)		12,767

			(10,076	)		2,663			26,830

			(39,563	)		11,671			63,360
Non-controlling interest in a subsidiary			145			188			49

Income (loss) before amortization of goodwill			(39,708	)		11,483			63,311
Amortization of goodwill (note 1 (b) (i))			13,331			—			—

Net income (loss)		$	(53,039	)	$	11,483		$	63,311

See accompanying notes to consolidated financial statements.

F-3

VIDÉOTRON LTÉE

CONSOLIDATED STATEMENTS OF SHAREHOLDER'S EQUITY

Years ended December 31, 2001, 2002 and 2003
(in thousands of Canadian dollars)

		Capital stock		Contributed surplus			Retained earnings (deficit)			Total shareholder's equity
Balance as at December 31, 2000:
	As previously reported	$	1	$	84,357		$	230,852		$	315,210
	Changes in accounting principles (note 1 (b))		—		—			(17,673	)		(17,673	)

	As restated		1		84,357			213,179			297,537
Excess of purchase price paid over the carrying value of a business acquired from the parent company (note 2 (a))			—		—			(300,000	)		(300,000	)
Excess of the preferred share retractable value over the stated capital (note 2 (a))			—		—			(273,171	)		(273,171	)
Net loss for the year			—		—			(53,039	)		(53,039	)

Balance as at December 31, 2001			1		84,357			(413,031	)		(328,673	)
Excess of the preferred share retractable value over the stated capital (note 14)			—		—			(27,999	)		(27,999	)
Net income for the year			—		—			11,483			11,483

Balance as at December 31, 2002			1		84,357			(429,547	)		(345,189	)
Conversion of 2 Series E preferred shares into 820,000 common shares (note 14)			31,310		—			—			31,310
Excess of the preferred share retractable value over the stated capital converted into Class A shares (note 14)			—		301,170			—			301,170
Excess of purchase price over the carrying value of assets transferred by the parent company			—		—			(2,000	)		(2,000	)
Issuance of shares (note 14)			141,925		—			—			141,925
Excess of consideration issued to the parent company over the net book value of business acquired (note 14)			—		(26,699	)		(76,437	)		(103,136	)
Transfer of tax deductions from a company controlled by the ultimate parent company (note 7)			—		3,382			—			3,382
Net income for the year			—		—			63,311			63,311
Dividend			—		—			(19,956	)		(19,956	)

Balance as at December 31, 2003		$	173,236	$	362,210		$	(464,629	)	$	70,817

See accompanying notes to consolidated financial statements.

F-4

VIDÉOTRON LTÉE

CONSOLIDATED BALANCE SHEETS

As at December 31
(in thousands of Canadian dollars)

		2002			2003
		(Restated — note 1 (b))
Assets
Current assets:
	Cash and cash equivalents	$	16,041		$	28,329
	Marketable securities		—			23,130
	Accounts receivable (note 8)		71,704			69,088
	Amounts receivable from affiliated companies (note 19)		11,062			105
	Income taxes receivable		621			6,535
	Inventories (note 9)		19,130			23,198
	Prepaid expenses		4,024			6,938
	Future income taxes (note 7)		12,525			10,762

			135,107			168,085
Fixed assets (note 10)			959,583			901,561
Goodwill			432,315			433,215
Deferred charges (note 11)			28,558			17,302
Future income taxes (note 7)			14,834			5,376
Investments			66			66

		$	1,570,463		$	1,525,605

Liabilities and Shareholder's Equity (Deficit)
Current liabilities:
	Issued and outstanding cheques	$	1,945		$	3,051
	Accounts payable and accrued liabilities (note 12)		197,484			163,074
	Amounts payable to affiliated companies (note 19)		65,429			18,355
	Deferred revenue		79,931			89,315
	Income taxes payable		937			8,139
	Current portion of long-term debt (note 13)		86,145			50,000

			431,871			331,934
Forward exchange contract			—			15,272
Future tax liabilities (note 7)			117,179			118,202
Retractable preferred shares (note 14)			332,480			2,000
Long-term debt (note 13)			1,033,480			986,677
Non-controlling interest in subsidiaries			642			703

			1,915,652			1,454,788
Shareholder's equity:
	Common shares (note 14)		1			173,236
	Contributed surplus		84,357			362,210
	Deficit		(429,547	)		(464,629	)

			(345,189	)		70,817

		$	1,570,463		$	1,525,605

Commitments (note 17)
Contingencies (note 20)
Subsequent event (note 21)

See accompanying notes to consolidated financial statements.

F-5

VIDÉOTRON LTÉE

CONSOLIDATED STATEMENTS OF CASH FLOWS

Years ended December 31, 2001, 2002 and 2003
(in thousands of Canadian dollars)

			2001			2002			2003
			(Restated — note 1 (b))			(Restated — note 1 (b))
Cash flows from operating activities:
	Net income (loss)		$	(53,039	)	$	11,483		$	63,311
	Adjustments for the following items:
		Depreciation and amortization (notes 1 (b) (i), 4 and 5)		139,427			129,985			132,866
		Future income taxes		(13,248	)		(2,411	)		12,767
		Loss on disposal of fixed assets		8,686			7,566			18,447
		Non-controlling interest in a subsidiary		145			188			49
		Net premium, write-off of financing costs and other charges upon early redemption of long-term debt (note 5)		2,476			—			17,094
		Write-off of fixed assets and deferred charges (note 6)		91,706			—			—
		(Gain) loss on foreign currency denominated debt (note 5)		12,145			(2,211	)		(23,623	)
		Other		1,756			(768	)		(517	)

	Cash flows from operations			190,054			143,832			220,394
	Net change in non-cash operating items:
		Accounts receivable		7,281			10,201			2,629
		Current income taxes		4,232			126			10,928
		Amounts receivable and payable from/to affiliated companies		(9,932	)		(9,007	)		(1,953	)
		Inventories		(16,621	)		10,604			(4,068	)
		Prepaid expenses		611			1,857			(2,720	)
		Accounts payable and accrued liabilities		12,110			70,184			(40,516	)
		Promissory notes payable to a company under common control		22,543			(22,543	)		—
		Deferred revenue		(2,273	)		(9,320	)		9,384

				17,951			52,102			(26,316	)

	Cash flows from operating activities			208,005			195,934			194,078
Cash flows from investing activities:
	Acquisition of fixed assets			(133,319	)		(93,041	)		(90,284	)
	Disbursements for deferred charges			(6,988	)		(1,050	)		(313	)
	Proceeds on disposal of fixed assets and investments			5,602			4,103			3,825
	Acquisition of short-term investments			—			—			(23,130	)
	Acquisition of Internet subscribers (note 2 (c))			—			—			(900	)
	Acquisition of non-controlling interest (note 2 (b))			(600	)		(1,890	)		—

	Cash flows used in investing activities			(135,305	)		(91,878	)		(110,802	)

F-6

VIDÉOTRON LTÉE

CONSOLIDATED STATEMENTS OF CASH FLOWS, Continued

Years ended December 31, 2001, 2002 and 2003
(in thousands of Canadian dollars)

		2001			2002			2003
		(Restated — note 1 (b))			(Restated — note 1 (b))
Cash flows from financing activities:
	Repayment of long-term debt	$	(137,623	)	$	(159,277	)	$	(1,033,345	)
	Issuance in long-term debt		447,000			—			1,038,732
	Repayment of a promissory note to the parent company (note 2 (a))		(300,000	)		—			—
	Financing cost on long-term debt		(4,037	)		—			(9,086	)
	Recouponing fees and termination of swaps		—			—			(48,375	)
	Dividend to parent company		—			—			(19,956	)
	Other		(13	)		(95	)		(64	)

	Cash flows from (used in) financing activities		5,327			(159,372	)		(72,094	)

Net change in cash and cash equivalents			78,027			(55,316	)		11,182
Cash and cash equivalents at beginning of year			(8,615	)		69,412			14,096

Cash and cash equivalents at end of year		$	69,412		$	14,096		$	25,278

Cash and cash equivalents are comprised of:
	Cash and cash equivalents	$	80,935		$	16,041		$	28,329
	Issued and outstanding cheques		(11,523	)		(1,945	)		(3,051	)

		$	69,412		$	14,096		$	25,278

See accompanying notes to consolidated financial statements.

F-7

VIDÉOTRON LTÉE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years ended December 31, 2001, 2002 and 2003

1. SIGNIFICANT ACCOUNTING POLICIES:

(a): Consolidated financial statements:

The Company is a distributor of pay-television services in the Province of Québec by delivering cable television and Internet access services. It also operates the largest chain of video stores in Québec.

These consolidated financial statements, expressed in Canadian dollars, have been prepared in accordance with Canadian generally accepted accounting principles and include the consolidated financial statements of Vidéotron Ltée and its subsidiaries, CF Cable TV Inc., Vidéotron (1998) Ltée, Vidéotron TVN Inc., Le SuperClub Vidéotron Ltée and Société d'édition et de transcodage T.E. Ltée.

(b)

Changes in accounting principles:

(i): Goodwill and other intangible assets:

Goodwill represents the excess of purchase price over the fair value of net assets of acquired businesses. Until December 31, 2001, goodwill was amortized using the straight-line method over periods of up to 40 years. Prior to January 1, 2002, the Company periodically reviewed the net recoverable amount of its goodwill to determine its long-term recovery, using the undiscounted future cash flow method. Any impairment of the carrying value of goodwill was charged to income.

Effective January 1, 2002, the Canadian Institute of Chartered Accountants ("CICA") introduced new Handbook Section 3062, Goodwill and Other Intangible Assets. Under these new recommendations, goodwill is not amortized but tested annually for impairment. In accordance with the requirements of Section 3062, this change in accounting policy is applied prospectively and the amounts presented for prior periods have not been restated for this change.

As at December 31, 2001, the Company had unamortized goodwill of $432.3 million. For the years ended December 31, 2002 and 2003, this change in accounting policy resulted in a reduction of $13.3 million in amortization expense related to goodwill.

The following summarizes the effect of the accounting change if it had been applied retroactively:

	2001			2002		2003
	(in thousands of Canadian dollars)
Net income (loss), as reported	$	(53,039	)	$	11,483	$	63,311
Goodwill amortization		13,331			—		—

Adjusted net income (loss)	$	(39,708	)	$	11,483	$	63,311

Under Section 3062, goodwill is tested for impairment annually, or more frequently if events or changes in circumstances indicate that the asset might be impaired. The impairment test is carried out in two steps. In the first step, the carrying amount of the reporting unit is compared with its fair value. When the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is considered not to be impaired and the second step of the impairment test is not required. The second step is carried out when the carrying amount of a reporting unit exceeds its fair value, in which case the implied fair value of the reporting unit's goodwill is compared with its carrying amount to measure the amount of the impairment loss, if any. When the carrying amount of the reporting unit's goodwill exceeds the implied fair value of the goodwill, an impairment loss is recognized in an amount equal to the excess and is presented as a separate line item in the income statement before extraordinary items and discontinued operations.

The Company carried out the test in 2002 and 2003 and concluded it was not required to record an impairment to the carrying value of goodwill.

(ii): Foreign currency translation:

In November 2001, the CICA modified Handbook Section 1650, Foreign Currency Translation which eliminates the deferral and amortization of foreign currency translation gains and losses on long-lived monetary items and requires that such changes be recognized in the statement of operations currently. In the first quarter of 2002, the Company adopted the new recommendations retroactively and the comparative figures have been restated. Net loss for the year ended December 31, 2001 increased by $12.1 million. As at December 31, 2001, the deferred charges decreased by $9.3 million and the carrying value of the financial hedge included in the accrued liabilities increased by $2.9 million.

F-8

(iii): Stock-based compensation:

Effective January 1, 2002, the Company adopted the new recommendations of Section 3870 of the CICA Handbook, Stock-based Compensation and Other Stock-based Payments, with respect to the accounting for stock-based compensation. The new recommendations are applied to all stock-based payments for employee awards that are direct awards of stock or call for settlement in cash or other assets, at the option of the employee, including stock appreciation rights, granted on or after January 1, 2002. The new recommendations are applied retroactively, without restatement. This modification had no impact on deficit as at January 1, 2002 since there was no such option outstanding at that date.

In conformity with the new recommendations, the Company accounts for all stock-based awards granted by the parent company to certain of its employees that are direct awards of stock or call for settlement in cash or other assets, including stock appreciation rights, by the fair value method. Under the fair-value based method, compensation cost attributable to awards to employees that call for settlement in cash or other assets is recognized over the vesting period in each period in operating expenses. Changes in fair value between the grant date and the measurement date result in a change in the measure of the compensation cost.

(iv): Disclosure of guarantees:

In February 2003, the CICA issued Accounting Guideline ("AcG-14"),Disclosure of Guarantees, which requires certain disclosures to be made by a guarantor about its obligations under guarantees in its interim and annual consolidated financial statements for interim periods beginning on or after January 1, 2003.

A guarantee is a contract or an indemnification agreement that contingently requires the Company to make payments to the other party to the contract or agreement, based on changes in an underlying obligation that is related to an asset, a liability or an equity security of the other party, or based on a third party failure to perform under an obligating agreement. It could also be an indirect guarantee of the indebtedness of another party, even though the payment to the other party may not be based on changes in an underlying obligation that is related to an asset, a liability or an equity security of the other party.

In the normal course of business, the Company enters into numerous agreements containing features that meet the AcG-14 criteria for a guarantee including the following:

Operating leases:

The Company has guaranteed a portion of the residual values of certain assets under operating leases for the benefit of the lessor. If the fair value of the assets, at the end of their respective lease terms, is less than the residual value guaranteed, the Company must, under certain conditions, compensate the lessor for a portion of the shortfall. As at December 31, 2003, the maximum exposure in respect of these guarantees is $6.4 million and no amount has been recorded in the financial statements.

Guarantees under lease agreements:

A subsidiary of the Company has provided guarantees to the lessor of certain of the franchisees for operating leases, with expiry dates through 2008. If the franchisee defaults under the agreement, the subsidiary must, under certain conditions, compensate the lessor for the default. The maximum exposure in respect of these guarantees is $5.9 million. As at December 31, 2003, the subsidiary has not provided for any liability associated with these guarantees, since it is its present estimation that no franchisee will default under the agreement. Recourse against the sub-lessee is also available, up to the total amount due.

Guarantees related to the Senior Notes:

Under the terms of the indenture governing the Senior Notes, the Company is committed to pay any amount of withholding taxes that could eventually be levied by any Canadian Taxing Authority on payments made to the lenders so that the amounts the lenders would receive are not less than amounts receivable if no taxes are levied. The amount of such guarantee is not limited and it is not possible for the Company to establish a maximum amount of the guarantee as it is dependent exclusively on future actions, if any, by the Taxation Authorities. Although no recourse exists for such liability, the Company has the right to redeem such long-term debt at their face value if such taxes were levied by the Canadian Taxing Authorities, thereby terminating the guarantee.

(v): Equipment subsidies and reconnection costs:

During the fourth quarter of 2003, the Company revised its accounting for the sale of equipment to subscribers and the accounting of the reconnecting costs. Up to the end of the third quarter of 2003, the costs of subsidies granted to the subscribers on the equipment sold were capitalized and amortized over a three-year period on a straight-line basis and the costs of reconnecting subscribers, which included material, direct labor, and certain overhead charges were capitalized to the fixed assets and depreciated over a three-year or a four-year period on a straight-line basis.

F-9

The Company changed its accounting principles to expense as they are incurred, the costs related to subscribers' subsidies as well as the costs of reconnecting subscribers. These changes have been applied retroactively and had the following effects for the three-year period ended December 31, 2001, 2002 and 2003:

•: The operating revenues increased by $16.3 million, $25.4 million and $19.4 million;
•: The direct and operating costs increased by $33.3 million, $63.1 million and $61.6 million;
•: The depreciation expense decreased by $16.2 million, $21.2 million and $27.4 million;
•: The income tax expense decreased by nil, $5.2 million and by $4.0 million; and
•: The net loss increased by $0.8 million and the net income decreased by $11.3 million and $10.8 million.

As at December 31, 2002, deferred charges decreased by $35.2 million, fixed assets decreased by $10.7 million, future income tax assets increased by $16.1 million and the deficit as at January 1, 2001 increased by $17.7 million.

The following table reconciles the retained earnings (deficit) for the two-year period ended December 31, 2002:

		2001			2002
		(in thousands of Canadian dollars)
Balance at beginning of year:
	As previously reported	$	230,852		$	(394,532	)
	Changes in accounting principles		(17,673	)		(18,499	)

	As restated		213,179			(413,031	)
Excess of purchase price paid over the carrying value of business acquired from the parent company (note 2 (a))			(300,000	)		—
Excess of the preferred share retractable value over the stated capital (notes 2 (a) and 14)			(273,171	)		(27,999	)
Net income (loss) for the year			(53,039	)		11,483

Balance at end of year		$	(413,031	)	$	(429,547	)

(c): Marketable securities:

Marketable securities consist primarily of commercial paper maturing at short-term, and are recorded at the lower of cost and market value.

(d): Fixed assets and video rental inventory:

Fixed assets are recorded at cost, net of related grants and income tax credits. Cost includes material, direct labour, certain overhead charges and interest expenses relating to the projects to construct and connect receiving and distribution networks. Expenditures for additions, improvements and replacements are capitalized, whereas expenses for maintenance and repairs are charged to operating and administrative expenses as incurred.

At the beginning of 2001, the Company revised the useful life of certain of its fixed assets related to its distribution network. The useful life of these assets was changed from twelve years to fifteen years. This change in accounting estimate, applied prospectively, decreased the depreciation expense by $18.5 million in 2001.

The Company reviews the recoverability of fixed assets annually or more frequently if events or circumstances indicate that the carrying amount may not be recoverable. Recoverability and measurement of the decline in value are estimated by comparing the carrying amounts of a group of assets to undiscounted net cash flows expected to be generated by that group of assets.

F-10

Depreciation is calculated using the following depreciation basis and periods or rates:

Asset	Basis	Period/rate
Receiving and distribution networks	Straight-line	3 years to 20 years
Furniture and equipment	Declining balance	20% to 33.3%
	and straight-line	3 years to 7 years
Terminals and operating system	Straight-line	5 years and 10 years
Buildings	Declining balance	5%
Video rental inventory	Straight-line	3 years
Coding and transmission material	Declining balance	20%

Depreciation of video rental inventory is charged to direct costs.

(e): Deferred charges:

Deferred charges are recorded at cost and include long-term financing costs that are amortized over the term of the debt using the interest method. Development costs related to new specialty services and pre-operating expenditures are amortized when commercial operations begin using the straight-line method over a three-year period.

(f): Inventories:

Inventories are recorded at the lower of cost, using the average cost method, or replacement value.

(g): Revenue recognition:

Initial hook-up revenue is recognized as revenue to the extent of direct selling costs incurred. The remainder, if any, is deferred and amortized to income over the estimated average period that subscribers are expected to remain connected to the network. Direct selling costs include commissions, the portion of sales person's compensation for obtaining new subscribers, local advertising targeted for acquisition of new subscribers and cost of processing documents related to new subscribers acquired.

Operating revenues from cable television and other services, such as Internet access, are recognized when services are provided. When subscribers are invoiced, the portion of unearned revenues is recorded under "Deferred revenue". Revenues from video rentals are recorded as services are provided.

(h): Derivative financial instruments:

The Company uses various derivative financial instruments to manage its exposure to fluctuations in foreign currency exchange rates and interest rates. The Company does not hold or issue derivative instruments for speculative purposes.

The Company entered into cross-currency interest rate swap agreements to hedge foreign currency denominated debt and manage exchange rate exposures relating to certain debt instruments denominated in foreign currency. These swaps are designated as hedges of firm commitments to pay interest, and change the basis from Libor to Bankers' Acceptance rates, on the foreign currency denominated debt and the principal at maturity, which would otherwise expose the Company to foreign currency risk.

Translation gains and losses on the related foreign currency denominated debt are offset by corresponding translation losses or gains on the swap agreements.

The Company also enters into interest rate swaps in order to manage the impact of fluctuating interest rates on its long-term debt. These swap agreements require the periodic exchange of payments without the exchange of the notional principal amount on which the payments are based. The Company designates its interest rate swap agreements as hedges of the underlying contractual interest payments on the debt. Interest expense on the debt is adjusted to include the payments made or received under the interest rate swaps, which are accounted for on the accrual basis.

(i): Cash and cash equivalents:

Cash and cash equivalents are comprised of cash and short-term liquid investments maturing within three months from the date of acquisition, net of issued and outstanding cheques.

(j): Income taxes:

The Company follows the asset and liability method of accounting for income taxes. Under the asset and liability method, future income tax assets and liabilities are recognised for the estimated future tax consequences attributable to differences between the

F-11

financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Future income tax assets and liabilities are measured using enacted or substantively enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. The effect on future income tax assets and liabilities of a change in tax rates is recognised in income in the period that includes the enactment or substantively enactment date. Future income tax assets are recognised and, if realization is not considered "more likely than not", a valuation allowance is provided.

(k): Employee future benefits:

The Company and an affiliated company maintain a defined benefit career salary pension plan and a last five years average salary pension plan for certain employees. The plans provide for the payment of benefits based on the number of years of service and career average earnings of the employees covered by the plans. The Company also maintains defined contribution pension plans for other employees.

Pension plan costs are determined using actuarial methods and are funded through contributions determined in accordance with the projected benefit method. Pension plan expense is charged to operations and includes:

•: The cost of pension plan benefits provided in exchange for employees' services rendered during the year;
•: The amortization of the initial net transition asset on a straight-line basis over the expected average remaining service life of the employee group covered by the plans;
•: The amortization of prior service costs over the expected average remaining service life of the employee group covered by the plans; and
•: The interest cost of pension plan obligations, the return on pension funds assets, and the amortization of cumulative unrecognized net actuarial gains and losses in excess of 10 % of the greater of the benefit obligation or fair value of plan assets over the expected average remaining service life of the employee group covered by the plans.

The Company provides post-retirement benefits to eligible employees. The costs of these benefits, which are principally life insurance, are accounted for during the employees' working active period.

(l): Advertising:

Advertising cost is expensed as incurred. The advertising expenses for 2001, 2002 and 2003 are $21.9 million, $18.6 million and $17.8 million, respectively.

(m): Use of estimates:

The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses. Significant areas requiring the use of management estimates relate to the determination of pension and other employee benefits, the useful life of assets for depreciation, amortization and evaluation of net recoverable amount of fixed assets, goodwill, and development and pre-operating costs and provisions for income taxes. Accordingly, actual results could differ from those estimates.

2. BUSINESS COMBINATIONS AND REORGANIZATION:

(a): On July 5, 2001, Vidéotron Ltée acquired from its parent all the outstanding shares of Vidéotron (1998) Ltée for an agreed value of $600 million. As consideration, Vidéotron Ltée issued one Preferred Share, Series E, with a stated capital of $300 million and a Promissory Note of $300 million. Since this transaction was between companies under common control, the net assets acquired were recorded at the carrying amount in the books of Vidéotron (1998) Ltée of $26.8 million and as the value of the Preferred Shares issued. The excess consideration paid out at the redemption of the Promissory Note of $300 million and the excess of the preferred share retraction value of $273.2 million were charged to retained earnings.

This business combination was accounted for using the continuity of interest method, and the results of operations of the acquired company have been included in the consolidated financial statements of Vidéotron Ltée as if the two companies had always been pooled together.

(b): In 2002, Télé-Câble Charlevoix (1977) Inc., a subsidiary of CF Cable TV Inc., a subsidiary of Vidéotron Ltée, redeemed from its non-controlling shareholder 189,000 Class "D" preferred shares for a total consideration of $2.0 million including cumulative unpaid dividends of $0.1 million.

F-12

(c): On June 30, 2003, a subsidiary of the Company acquired for a cash consideration of $0.9 million, at the carrying value of the investment held by the parent company, a small group of Internet (dial-up) customers from its parent company. Assets acquired, amounting to $0.9 million, have been recorded as goodwill.
(d): On October 7, 2003, the Company acquired from its parent company all the issued and outstanding shares of Vidéotron TVN Inc. and of Le SuperClub Vidéotron Ltée in consideration of the issuance of 354,813 common shares for a total stated capital of $141.9 million. The excess of the consideration issued over the net book value of the business acquired, amounting to $103.1 million, has been charged to deficit and contributed surplus. This business combination was accounted for using the continuity of interest method, and the results of operations of the acquired companies have been included in these consolidated financial statements as if this group of companies had always been subsidiaries of the Company.
(e): On February 8, 2002, the Company sold its internal wire business to an affiliated company, Câblage QMI Inc., and received as consideration $19.5 million in preferred shares. On December 23, 2003, Câblage QMI Inc. sold back its business to the Company and received in exchange notes amounting to $16.1 million. On the same date, the parent company of Câblage QMI Inc. sold its investment in Câblage QMI Inc. to the Company and received in exchange 1 Series F preferred share of the Company's capital stock retractable at an amount of $2.0 million. On December 27, 2003, Câblage QMI Inc. was wound up into the Company. Since all these transactions are between companies under common control, they have been accounted for at book value.

3. EMPLOYEE FUTURE BENEFITS:

According to the most recent actuarial valuation of the defined benefit pension plans, the projected actuarial value of accrued pension benefits, for accounting purposes, amounted to $44.0 million and the adjusted market value of assets amounted to $51.2 million. The market value of assets for the defined contribution pension plans totalled $200.9 million. The funds assets also include listed stocks of the parent company and of a company under common control at a market value of $1.0 million ($0.3 million in 2002).

The total net benefit costs amounted to $6.4 million in 2001, $3.0 million in 2002 and $2.8 million in 2003. The total employer's contribution paid to pension plans amounted to $7.2 million in 2001, $4.5 million in 2002 and $5.1 million in 2003.

The latest actuarial valuations of the defined benefits plans were performed as at December 31, 2002 and May 1, 2003. The following tables provide a reconciliation of the changes in the plans' benefit obligations and fair value of plan assets for the years ended December 31, 2002 and 2003, and a statement of funded status as at these dates:

		2002									2003
		Pension benefits			Post-retirement benefits			Total			Pension benefits			Post-retirement benefits			Total
		(in thousands of Canadian dollars)
Change in benefit obligations:
	Benefit obligations, beginning of year	$	40,095		$	2,334		$	42,429		$	36,542		$	3,635		$	40,177
	Curtailment loss (gain)		115			—			115			—			(1,265	)		(1,265	)
	Service costs		2,067			164			2,231			1,999			175			2,174
	Plan participants' contribution		2,119			—			2,119			2,373			—			2,373
	Interest costs		2,559			231			2,790			2,554			256			2,810
	Change in assumptions		—			953			953			3,705			292			3,997
	Actuarial loss (gain)		(1,620	)		—			(1,620	)		1,914			—			1,914
	Benefits and settlements paid		(8,793	)		(47	)		(8,840	)		(5,075	)		(47	)		(5,122	)

Benefit obligations, end of year		$	36,542		$	3,635		$	40,177		$	44,012		$	3,046		$	47,058

F-13

		2002									2003
		Pension benefits			Post-retirement benefits			Total			Pension benefits			Post-retirement benefits			Total
		(in thousands of Canadian dollars)
Change in plan assets:
	Fair value of plan assets at beginning of year	$	45,041		$	—		$	45,041		$	43,604		$	—		$	43,604
	Plan participants' contribution		2,119			—			2,119			2,373			—			2,373
	Actual return on plan assets		2,181			—			2,181			3,325			—			3,325
	Employer contributions		1,935			47			1,982			2,149			47			2,196
	Actuarial gain		1,121			—			1,121			4,798			—			4,798
	Benefits and settlements paid		(8,793	)		(47	)		(8,840	)		(5,075	)		(47	)		(5,122	)

Fair value of plan assets, end of year		$	43,604		$	—		$	43,604		$	51,174		$	—		$	51,174

Reconciliation of funded status:
	Excess of fair value of plan assets over benefit obligations, end of year	$	7,062		$	(3,635	)	$	3,427		$	7,162		$	(3,046	)	$	4,116
	Unrecognized actuarial (gain) loss		(3,284	)		519			(2,765	)		(2,422	)		(466	)		(2,888	)

Net amount recognized in balance sheet		$	3,778		$	(3,116	)	$	662		$	4,740		$	(3,512	)	$	1,228

Components of the net benefit costs are as follows:

		2001
		Pension benefits			Post-retirement benefits			Total
		(in thousands of Canadian dollars)
Service costs		$	2,886		$	151		$	3,037
Interest costs			2,900			218			3,118
Expected return on plan assets			(3,373	)		—			(3,373	)
Curtailment loss			578			—			578
Amortization of actuarial gain			—			(3	)		(3	)

			2,991			366			3,357
Defined contribution pension plan:
	Employer's contribution during the period		5,152			—			5,152

			8,143			366			8,509
Portion related to affiliated companies			(2,077	)		(42	)		(2,119	)

Net benefit costs		$	6,066		$	324		$	6,390

		2002
		Pension benefits			Post-retirement benefits			Total
		(in thousands of Canadian dollars)
Service costs		$	2,067		$	164		$	2,231
Interest costs			2,559			231			2,790
Expected return on plan assets			(3,417	)		—			(3,417	)
Curtailment loss			37			—			37
Amortization of actuarial gain			—			14			14

			1,246			409			1,655
Defined contribution pension plan:
	Employer's contribution during the period		2,542			—			2,542

			3,788			409			4,197
Portion related to affiliated companies			(1,139	)		(31	)		(1,170	)

Net benefit costs		$	2,649		$	378		$	3,027

F-14

		2003
		Pension benefits			Post-retirement benefits		Total
		(in thousands of Canadian dollars)
Service costs		$	1,999		$	175	$	2,174
Interest costs			2,554			256		2,810
Expected return on plan assets			(3,325	)		—		(3,325	)
Curtailment loss			—			—		—
Amortization of actuarial gain			(109	)		11		(98	)

			1,119			442		1,561
Defined contribution pension plan:
	Employer's contribution during the period		2,954			—		2,954

			4,073			442		4,515
Portion related to affiliated companies			(1,048	)		—		(1,048	)

Net benefit costs		$	3,025		$	442	$	3,467

The amount recognized in the consolidated balance sheets is as follows:

	2002									2003
	Pension benefits			Post-retirement benefits			Total			Pension benefits			Post-retirement benefits			Total
	(in thousands of Canadian dollars)
Employee future benefit costs	$	4,562		$	—		$	4,562		$	5,523		$	—		$	5,523
Accrued benefit liability		(784	)		(3,116	)		(3,900	)		(783	)		(3,512	)		(4,295	)

Net amount recognized	$	3,778		$	(3,116	)	$	662		$	4,740		$	(3,512	)	$	1,228

The assumptions used in the measurement of the Company's benefit obligations are as follows for the years ended December 31, 2002 and 2003:

	2002	2003
Discount rate	6.75%	6.25%
Expected return on plan assets	7.75	7.75
Rate of compensation increase	3.25	3.25

4. DEPRECIATION AND AMORTIZATION:

	2001		2002		2003
	(in thousands of Canadian dollars)
Fixed assets	$	111,802	$	114,305	$	121,928
Deferred charges		4,890		5,711		1,030

	$	116,692	$	120,016	$	122,958

Direct costs include $6.9 million in 2001, $5.4 million in 2002 and $5.8 million in 2003 of depreciation on video rental inventory.

F-15

5. FINANCIAL EXPENSES:

		2001			2002			2003
		(in thousands of Canadian dollars)
Third parties:
	Interest on long-term debt	$	82,939		$	74,522		$	63,588
	Write-off and amortization of deferred financing costs		2,528			4,607			4,128
	Amortization of debt premium and discount		(2,083	)		(973	)		(1,066	)
	Net premium, write-off of financing costs and termination costs of swap agreement		2,476			—			17,094
	(Gain) loss on foreign currency long-term debt		12,145			(2,211	)		(23,623	)
	(Gain) loss on foreign currency short-term monetary items		2,057			348			(1,848	)
	Bank fees		1,510			1,504			1,339
	Other interests and penalty charges		1,080			390			171

			102,652			78,187			59,783
Interest capitalized to fixed assets			(709	)		—			—
Interest income			(1,469	)		(2,289	)		(676	)

			100,474			75,898			59,107
Parent company:
	Interest (income) expense		79			(178	)		5,495
Companies under common control:
	Interest expense		754			468			—

		$	101,307		$	76,188		$	64,602

Interest paid to and interest received from third parties in 2001 amounted to $78.3 million and $1.6 million, respectively, $72.3 million and $2.1 million in 2002, and $61.0 million and $0.7 million in 2003.

Interest paid to and interest received from affiliated companies in 2001 amounted to $0.3 million and nil, $1.1 million and $0.2 million in 2002, and $0.1 million and nil in 2003.

6. OTHER ITEMS:

	2001		2002		2003
	(in thousands of Canadian dollars)
Write-off of fixed assets and deferred charges⁽¹⁾	$	91,706	$	—	$	—
Restructuring costs⁽²⁾		3,836		25,000		(2,500	)
Other		28		—		—

	$	95,570	$	25,000	$	(2,500	)

(1): In 2001, as a result of market and technological uncertainties, the Company decided to suspend its residential Internet Protocol (IP) telephony project and wrote off certain assets in the amount of $76.0 million. The Company also abandoned other projects totaling $15.7 million including software under development.
(2): The Company conducted cost reduction programs which included labour reductions and consequently employees and other related charges. As of December 31, 2002, a $25.0 million restructuring provision has been recorded in connection with a work force reduction program. The final costs were lower than estimated and the excess amount was reversed in 2003.

F-16

7. INCOME TAXES:

The following schedule reconciles income taxes computed on income before income taxes, share in the results of a company subject to significant influence, non-controlling interest in a subsidiary and amortization of goodwill based on the consolidated basic income tax rate and the effective income tax rate:

		2001			2002			2003
		(in thousands of Canadian dollars)
Income taxes based on the combined Federal and Provincial (Quebec) basic income tax rate of 37.16% in 2001; 35.12% in 2002 and 33.12% in 2003		$	(18,446	)	$	5,034		$	29,871
Change due to the following items:
	Federal large corporations tax		2,737			2,315			2,405
	Non-deductible charges and/or loss deductible at a lower rate or for which the tax benefit was not recorded		6,125			204			(4,432	)
	Reduction of enacted tax rate		286			(1,422	)		(1,097	)
	Other		(778	)		(3,468	)		83

Income taxes based on the effective income tax rate		$	(10,076	)	$	2,663		$	26,830

Income taxes paid in 2001 amounted to $5.3 million, $5.1 million in 2002 and $3.1 million in 2003.

The tax effects of significant items comprising the Company's net future tax liability are as follows:

			2002			2003
			(in thousands of Canadian dollars)
Future income tax assets:
	Operating loss carryforwards		$	54,648		$	56,565
	Restructuring provisions			8,250			—
	Other provisions			4,275			10,762
	Differences between book and tax bases of fixed assets and other assets			4,578			11,278

				71,751			78,605
Future income tax liabilities:
	Differences between book and tax bases of fixed assets			(161,571	)		(176,726	)
	Differences between book and tax bases of other assets			—			(3,943	)

				(161,571	)		(180,669	)

Net future income tax liability			$	(89,820	)	$	(102,064	)

Presented as follows:
	Future income tax assets:
		Short-term	$	12,525		$	10,762
		Long-term		14,834			5,376

				27,359			16,138
Future income tax long-term liability				(117,179	)		(118,202	)

Net future income tax liability			$	(89,820	)	$	(102,064	)

During the year, the Company obtained from a company under common control of the ultimate parent company, income tax deductions of $9.7 million, of which $9.6 million is recorded as income taxes receivable and $0.1 million as future income tax assets. The consideration payable to this company under common control amounts to $6.3 million. This transaction allows the Company to realize a gain of $3.4 million which has been credited to contributed surplus.

As at December 31, 2003, the Company had net operating loss carryforwards for income tax purposes available to reduce future taxable income of approximately $192.9 million, expiring from 2004 to 2010, for which a future income tax asset of $56.6 million has been recognized at that date.

F-17

8. ACCOUNTS RECEIVABLE:

	2002			2003
	(in thousands of Canadian dollars)
Trade	$	82,919		$	76,308
Allowance for doubtful accounts		(11,215	)		(7,220	)

	$	71,704		$	69,088

Allowance for doubtful accounts is provided for systematically based on the aging of the receivable.

9. INVENTORIES:

	2002		2003
	(in thousands of Canadian dollars)
Subscribers' equipment	$	9,263	$	11,828
Video store materials		2,571		2,948
Other supplies and spare parts		7,296		8,422

	$	19,130	$	23,198

10. FIXED ASSETS:

	2002
	Cost		Accumulated depreciation		Net book value
	(in thousands of Canadian dollars)
Receiving and distribution networks	$	1,391,783	$	603,308	$	788,475
Furniture and equipment		183,471		129,952		53,519
Terminals and operating system		197,433		103,018		94,415
Buildings		21,645		7,564		14,081
Video rental inventory		10,503		6,465		4,038
Coding and transmission material		8,303		5,098		3,205
Land		1,850		—		1,850

	$	1,814,988	$	855,405	$	959,583

	2003
	Cost		Accumulated depreciation		Net book value
	(in thousands of Canadian dollars)
Receiving and distribution networks	$	1,446,970	$	685,404	$	761,566
Furniture and equipment		211,320		149,742		61,578
Terminals and operating system		140,467		82,384		58,083
Buildings		21,656		8,533		13,123
Video rental inventory		10,521		7,962		2,559
Coding and transmission material		7,481		4,651		2,830
Land		1,822		—		1,822

	$	1,840,237	$	938,676	$	901,561

F-18

11. DEFERRED CHARGES:

	2002		2003
	(in thousands of Canadian dollars)
Long-term financing fees	$	13,179	$	10,934
Employee future benefit costs (note 3)		4,562		5,523
Forward exchange contract		8,948		—
Development and pre-operating costs		1,367		438
Leasehold inducement		502		407

	$	28,558	$	17,302

12. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES:

	2002		2003
	(in thousands of Canadian dollars)
Trade accounts payable and accruals	$	49,988	$	47,971
Subscribers' equipment suppliers		6,037		13,643
Royalties and service providers dues		75,112		56,858
Restructuring accrual⁽¹⁾		25,000		—
Employees' salaries and dues		17,984		18,058
Pension plan accrued liability		3,900		4,295
Provincial and federal sales tax		9,769		9,262
Interest due		9,694		12,987

	$	197,484	$	163,074

(1): Restructuring accrual:

			(in thousands of Canadian dollars)
Balance as at December 31, 2001			$	1,236
	Additional reserve (note 6)			25,000
	Utilized in 2002:
		Payments		(1,236	)

Balance as at December 31, 2002				25,000
	Utilized in 2003:
		Payments		(22,500	)
	Reversal of over provision (note 6)			(2,500	)

Balance as at December 31, 2003			$	—

F-19

13. LONG-TERM DEBT:

		2002		2003
		(in thousands of Canadian dollars)
Bank facility (a):
	Term-loan A	$	630,802	$	—
	Term-loan B		365,044		—
	Term-loan C		—		355,630
Senior Secured First Priority Notes (b)			123,755		100,615
Senior Notes (c)			—		430,432
Subordinated loan — Quebecor Media Inc.			—		150,000
Other			24		—

			1,119,625		1,036,677
Short-term portion of the long-term debt			86,145		50,000

Long-term portion of the long-term debt		$	1,033,480	$	986,677

(a): Bank facility:

On October 8, 2003, concurrently with the issuance of the Senior Notes, the Company repaid entirely and terminated its former bank facility term-loans A and B, borrowed an amount of $368.1 million under a term-loan C and reduced the authorized amount under the revolving credit facility from $150.0 million to $100.0 million.

Bank credit facility, bearing interest at Bankers' Acceptances and Canadian LIBOR rates, plus, in each case, a margin depending upon Vidéotron Ltée leverage ratio, are secured by a first ranking hypothec on the universality of all tangible and intangible assets, current and future, of Vidéotron Ltée and its subsidiaries, with some restrictions regarding CF Cable TV Inc. and its subsidiaries' assets. The credit facilities are composed as follows:

(i): Revolving Credit Facility of a maximum amount of $100.0 million, maturing on October 8, 2008;
(ii): Term-loan C of an original amount of $368.1 million, payable in quarterly instalments of $12.5 million beginning on December 1, 2003, and maturing on October 8, 2008 with a bullet payment of $118.1 million. The Company has reduced the interest fluctuation risk associated with the facility by using interest rate swaps under which the Company has fixed the payment of the interest.

As at December 31, 2003, the outstanding balances include Bankers' Acceptance based advances of $355.2 million, and Prime Rate based advances of $0.4 million and the effective rates range from 3.86% to 5.0% at that date.

The credit facilities contain usual covenants such as maintaining certain financial ratios and certain restrictions as to the payment of dividends and to asset acquisitions and dispositions. The unused amount under the Revolving Facility at year-end is $100 million.

(b): Senior Secured First Priority Notes:

Senior Secured First Priority Notes having a par value of US$75.6 million in 2002 and 2003 bear interest at the rate of 9.125% and mature in 2007. The Notes are redeemable at the option of the Company on or after July 15, 2005 at 100% of the principal amount. These Notes are secured by first-ranking hypothecs on substantially all of the assets of CF Cable TV Inc. and certain of its subsidiaries. In addition, CF Cable TV Inc. and its subsidiaries have provided, to the extent permitted under the Notes Trust Indenture, guarantees in favour of the lenders under its parent credit agreement. In the case of realization on the assets of CF Cable TV Inc. and its subsidiaries, the proceeds thereof would be first used to repay, on a pro rata basis, and as described in an inter-creditor agreement entered into on June 29, 2001, between, among others, the agent under the parent's credit agreement and the trustee under the Notes Trust Indenture, the Senior Secured First Priority Notes and the first priority guarantees provided to the lenders under the parent's credit agreement. In May 2002, the Company repurchased US$2.2 million of these Notes.

(c): Senior Notes:

On October 8, 2003, the Company issued US$335.0 million of aggregate principal amount of Senior Notes at a discount rate of 99.0806% for net proceeds of US$331.9 million, before issuance fees of US$5.7 million. These Notes bear interest at a rate of 6.875% payable every six months on January 15 and July 15, and mature on January 15, 2014. The first interest payment is due on July 15, 2004. The Notes contain certain restrictions for Vidéotron Ltée, including limitations on its ability to incur additional indebtedness, and are unsecured. Vidéotron Ltée entered into cross-currency interest swaps to hedge foreign exchange fluctuations related to the interest and capital repayment of these Notes denominated in foreign currency. In accordance with the Registered Exchange Offer,

F-20

Vidéotron Ltée will complete during the first quarter of 2004 the exchange of those Senior Notes for new Notes having substantially identical terms to the Senior Notes. These new Notes have been registered under the United States Securities Act of 1933. The Notes will be redeemable, in whole or in part, at any time on or after January 15, 2009, with a premium decreasing from 3.438% on January 15, 2009 to nil on January 15, 2012.

(d): Subordinated loan — Quebecor Media Inc.:

On March 24, 2003, the Company contracted a subordinated loan of $150.0 million from its parent company. The $150 million subordinated loan, maturing in March 2015, bears interest at the rate of 90-day Bankers' Acceptance rates plus 1.5%, payable in arrears on the last day of each quarter starting June 30, 2003. The obligations of the Company are subordinated in right of payment to the prior payment in full of all existing and future indebtedness of the Company under or in connection with the Credit Agreement. The holders of all other senior indebtedness of the Company will be entitled to receive payments in full of all amounts due on or in respect of all other existing and future senior indebtedness of the Company before the Lender is entitled to receive or retain payment of principal.

In June 2003, the Company notified the Lender according to the subordinated loan agreement that it will stop the payment of all interests on the loan until April 2004. The amount of interests owed to Quebecor Media Inc. as at December 31, 2003 totalled $5.4 million.

Minimum principal payments on long-term debt in each of the next five years and thereafter are as follows:

	(in thousands of Canadian dollars)
2004	$	50,000
2005		50,000
2006		50,000
2007		150,615
2008		155,600
2009 and thereafter		580,462

F-21

14. SHARE CAPITAL:

Authorized:

A limited number of preferred shares, without par value, ranking prior to the common shares with regard to payment of dividends and repayment of capital, without voting rights, issuable in Series. The following Series were designated:

1,000 Preferred Shares, Series A, carrying the rights and restrictions attached to the class as well as a fixed annual non-cumulative preferred dividend of 10% and redeemable at the holder's option

1,000 Preferred Shares, Series B, carrying the rights and restrictions attached to the class as well as a fixed annual non-cumulative preferred dividend of 9% and redeemable at the holder's option

100 Preferred Shares, Series C, carrying the rights and restrictions attached to the class as well as a fixed monthly non-cumulative preferred dividend at a rate equal to the prime rate of the Company's lead banker less 0.75% and redeemable at the holder's option

100 Preferred Shares, Series D, carrying the rights and restrictions attached to the class as well as a fixed monthly non-cumulative preferred dividend of 1%, computed on the redemption price of the preferred shares

10 Preferred Shares, Series E, carrying the rights and restrictions attached to the class as well as a fixed annual non-cumulative preferred cash dividend of 4%, retractable at the holder's option

10 Preferred Shares, Series F, carrying the rights and restrictions attached to the class as well as a fixed annual non-cumulative preferred cash dividend of 4%, retractable at the holder's option

An unlimited number of common shares, without par value, voting and participating

	2002				2003
	Common Shares		Retractable preferred shares (b)		Common Shares		Retractable preferred shares (b)
	(in thousands of Canadian dollars)
Issued and paid:
11,174,813 common shares (10,000,000 in 2002)	$	1	$	—	$	173,236	$	—
Nil (2 Preferred shares, Series E in 2002) — book value of $31,310 (1 in 2002 — book value of $26,829)		—		332,480		—		—
1 Preferred share, Series F		—		—		—		2,000

	$	1	$	332,480	$	173,236	$	2,000

Vidéotron Ltée modified its articles of amalgamation as follows:

On June 29, 2001, Vidéotron Ltée modified its authorized common shares to permit the issuance of an unlimited number.

On July 5, 2001, Vidéotron Ltée issued, as part of the consideration for the acquisition of Vidéotron (1998) Ltée, one Series E Preferred Share at a stated capital of $300 million and a Promissory Note of $300 million. Since this transaction is between companies under common control, the net assets of Vidéotron (1998) Ltée were recognized at their carrying value of $26.8 million (see note 2 (a)). Because the Preferred Share issued is redeemable, it is presented at its redemption value of $300 million. The difference of $271.2 million was charged to retained earnings. The entire retraction value of the promissory note was also charged to retained earnings.

On December 5, 2002, Vidéotron Ltée acquired from its parent company certain trademarks and the related future tax asset of $4.5 million. In consideration for this asset acquisition, the Company has issued one Series E Preferred Share retractable at the option of the holder at $32.5 million. Since this transaction is between companies under common control, the stated capital of this share, amounting to the carrying value of the net assets acquired, being $4.5 million, has been recorded in share capital and the $28.0 million excess has been charged to retained earnings.

F-22

On March 28, 2003, the parent company converted one of its Series E Preferred Shares into 750,000 common shares at a stated capital of $26.8 million. Furthermore, on May 14, 2003, the parent company converted its last Series E Preferred Shares into 70,000 common shares at a stated capital of $4.5 million. The excess of the preferred share retractable value over the stated capital converted into common shares, amounting to $301.2 million, has been credited to the contributed surplus.

On October 7, 2003, the Company acquired from its parent company all the issued and outstanding shares of Vidéotron TVN Inc. and of Le SuperClub Vidéotron Ltée in consideration of the issuance of 354,813 common shares for a total stated capital of $141.9 million. The excess of the consideration issued over the net book value of the business acquired, amounted to $103.1 million, of which $26.7 million has been charged to the contributed surplus and $76.4 million to the deficit. This business combination was accounted for using the continuity of interest method, and the results of operations of the acquired companies have been included in these consolidated financial statements as if this group of companies had always been subsidiaries of the Company.

On December 23, 2003, the Company acquired from its parent company all the issued and outstanding shares of Câblage QMI Inc. in consideration of the issuance of 1 Series F preferred share, retractable at an amount of $2.0 million.

15. STOCK OPTION PLAN:

Under a stock option plan established by the parent company, 6,185,714 Common Shares of the parent company were set aside for officers, senior employees and other key employees of the parent company and its subsidiaries. Each option may be exercised within a maximum period of ten years following the date of grant at an exercise price not lower than, as the case may be, the fair market value, at the date of grant, of the Common Shares of the parent company, as determined by the parent company's Board of Directors (if the Common Shares are not listed on a stock exchange at the time of the grant) or the trading price of the Common Shares of the parent company on the stock exchanges where such shares are listed at time of the grant. Unless authorized by the parent company's Compensation Committee for a change in control transaction, no options may be exercised by an optionee if the shares of the parent company have not been listed on a recognized stock exchange. At December 31, 2007, if the shares of the parent company have not been so listed, optionees will have until January 31, 2008 to exercise their right to receive the difference between the fair market value and the exercise price of the options in cash. At December 31, 2009, if the shares of the parent company have not been so listed, optionees will have until January 31, 2010 to exercise their right to receive the difference between the fair market value and the exercise price of the options in cash. Except under specific circumstances and unless the Compensation Committee decides otherwise, options vest over a five-year period in accordance with one of the following vesting schedules as determined by the Compensation Committee at the time of grant: (i) equally over five years with the first 20% vesting on the first anniversary of the date of the grant, (ii) equally over four years with the first 25% vesting on the second anniversary of the date of the grant, and (iii) equally over three years with the first 33% vesting on the third anniversary of the date of the grant.

F-23

The following table gives summary information on outstanding options granted by the parent company to the employees of the Company as at December 31, 2003 and 2002:

	2003				2002
	Options		Weighted average exercise price		Options		Weighted average exercise price
Balance at beginning of year	268,532		$	17.69	—		$	—
Granted	339,271			18.69	276,880			17.64
Transferred and cancelled	(62,164	)		18.18	(8,348	)		16.17

Balance at end of year	545,639		$	18.49	268,532		$	17.69

Vested options at end of year	7,730		$	16.17	—		$	—

The following table gives summary information on outstanding options as at December 31, 2003:

	Outstanding options		Vested options
Exercise price	Number	Weighted average years to maturity	Number	Weighted average exercise price
$15.19	50,032	9.41 years	—	$	—
16.17	183,978	8.27 years	7,730		16.17
19.46	240,749	9.60 years	—		—
21.42	8,869	9.93 years	—		—
21.77	62,011	8.23 years			—

$15.19 to 21.77	545,639	9.01 years	7,730	$	16.17

For the year ended December 31, 2003, a charge of $0.9 million related to the plan was included in net income (none for the year ended December 31, 2002), since the exercise price of the options was lower than the fair market value of the parent company's Common Shares, as determined by the parent company's Board of Directors.

16. FINANCIAL INSTRUMENTS:

(a): Fair values:

The carrying amount of cash and cash equivalents, accounts receivable, issued and outstanding cheques, accounts receivable from/payable to affiliated companies, and accounts payable and accrued liabilities approximates their fair value as these items will be realized or paid within one year.

As at December 31, the estimated fair values of long-term debt and derivative financial instruments are as follows:

			2002					2003
			Book value		Fair value			Book value			Fair value
			(in thousands of Canadian dollars)
Liabilities:
	Financial liabilities:
		Long-term debt	$	1,119,625	$	1,121,697		$	1,036,676		$	1,057,479
	Derivative financial instruments:
		Interest rate swaps		—		(13,438	)		—			(9,460	)
Assets (liabilities):
	Cross currency interest rate swaps			8,948		8,336			(15,272	)		(24,588	)

The fair value estimates are based on market quotes, when available, or on rates that the Company could obtain for instruments having the same characteristics. These estimates are subjective in nature and involve uncertainties and matters of professional judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect these estimates.

F-24

(b): Management of interest rate risk and foreign exchange risk:

The Company has entered into interest rate swaps to manage its interest rate exposure on its bank facility. The Company is committed to exchange, at specific intervals, the difference between the fixed and floating interest rate calculated by reference to the notional amounts. As at December 31, 2003, the Company will pay fixed interest rates ranging from 4.01% to 5.49% on a notional amount of $315.0 million and will receive a floating interest rate based on Bankers' Acceptance having a three-month maturity. These swaps expire from 2004 to 2006.

During the year ended December 31, 2003, the Company has concluded cross currency interest swaps to hedge the foreign exchange fluctuations related to its US Senior Notes by fixing the US/Canadian dollar exchange rate at 1.3425 on a notional amount of US$335.0 million and by fixing the interest rate at 7.66% on a notional amount of $181.2 million and by opting for a floating interest rate based on bankers' acceptance rate plus 2.73% on a notional amount of $268.5 million.

(c)

Other disclosures:

(i): The credit risk of the financial instruments arises from the possibility that the counterparties to the agreements or contracts may default on their obligations under the agreements. In order to minimize this risk, the Company's general policy is to deal only with counterparties with a Standard & Poor's rating (or the equivalent) of at least A.
(ii): The Company is exposed to a credit risk towards its customers. However, credit risk concentration is minimized because of the large number of customers.

17. COMMITMENTS:

Under the terms of operating leases, the Company is committed to make the following minimum annual lease payments over the next years:

(in thousands of Canadian dollars)
2004	$	6,531
2005		5,319
2006		3,894
2007		2,821
2008		1,908
2009 and thereafter		2,636

18. SUPPLEMENTAL CASH FLOW INFORMATION:

		2001			2002		2003
		(in thousands of Canadian dollars)
Non-cash financing and investing activities:
	(i) Purchase of fixed assets financed by accounts payable and accrued liabilities	$	24,279		$	—	$	958
	(ii) Issuance of share capital in consideration of the acquisition of a subsidiary		26,829			—		2,000
	(iii) Issuance of share capital in consideration of the future tax asset related to the trademark acquired from the parent company		—			6,080		—
	(iv) Spending in deferred charges financed by accounts payable and accrued liabilities and by affiliated companies		(2,497	)		946		1,195

F-25

19. RELATED PARTY TRANSACTIONS:

In addition to the transactions disclosed elsewhere in these financial statements, the Company entered into the following transactions with affiliated companies. These transactions have been recorded at the exchange value, which is the amount established and agreed to by the related parties:

		2001			2002			2003
		(in thousands of Canadian dollars)
Parent company:
	Operating and administrative expenses	$	21,918		$	16,060		$	8,492
	Operating and administrative expenses recovered		—			(456	)		(216	)
	Acquisition of fixed and intangible assets		5,552			3,895			1,613
	Proceeds on disposal of fixed assets		—			(586	)		—
	Reorganization costs		742			—			—
Companies under common control:
	Operating revenue		1,755			1,693			2,450
	Direct costs		25,208			26,939			18,271
	Operating and administrative expenses		21,107			35,877			34,087
	Acquisition of fixed assets		160			—			—
	Proceeds on disposal of fixed assets		(75	)		—			—

The Company and a company under common control entered into a signal transmission services agreement until 2014, renewable for an additional 15-year period. In 2001, service charges arising from this agreement amounted to $8.4 million in 2001, $8.4 million in 2002 and $7.0 million in 2003.

The Company and a company under common control entered into a network and technical equipment agreement until 2003, renewable for a 12-month period. Service charges arising from this agreement amounted to $19.3 million in 2001, $21.2 million in 2002 and $12.2 million in 2003.

20. CONTINGENCIES:

In 1999, the purchaser of a business sold by the Company initiated an arbitration by which he claimed an amount of $8.6 million as a reduction of the purchase price of the business. It is not possible at this stage to determine the outcome of this claim.

In November 2001, the Company terminated a sale service agreement with a supplier and is being sued for breach of contract for an amount of $4.7 million. It is not possible to determine the outcome of the claims.

On March 13, 2002, a legal action was initiated by the shareholders of a cable company against Vidéotron Ltée. They contend that Vidéotron Ltée did not honor its commitment related to a stock purchase agreement signed in August 2000. The plaintiffs are requesting compensations totalling $26.0 million. Vidéotron Ltée's management believes that this action is not justified and intends to vigorously defend its case in Court.

In the normal course of business, the Company is a party to various claims and lawsuits. Even though the outcome of these various pending cases as at December 31, 2003 cannot be determined with certainty, the Company believes that their outcome will not have a material adverse impact on its operating results or financial position.

21. SUBSEQUENT EVENT:

On January 16, 2004, Vidéotron (1998) Ltée, a subsidiary of the Company, borrowed $1.1 billion from Quebecor Média Inc. This subordinated loan bears interest at 10.75% and matures on January 16, 2019. On the same day, Vidéotron (1998) Ltée invested the whole proceeds from this loan into preferred shares, Series D of Quebecor Média Inc.

F-26

22. SIGNIFICANT DIFFERENCES BETWEEN GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP) IN CANADA AND THE UNITED STATES:

The consolidated financial statements have been prepared in accordance with generally accepted accounting principles ("GAAP") in Canada which are different in some respects from those in the United States ("US"), as described below. The following tables set forth the impact of significant differences between Canadian GAAP and US GAAP on the Company's consolidated financial statements, including disclosures, that are required under US GAAP.

Consolidated statements of operations

		2001			2002			2003
		(restated — note 1 (b))
		(in thousands of Canadian dollars)
Net income (loss) for the year based on Canadian GAAP		$	(53,039	)	$	11,483		$	63,311
Adjustments:
	Push-down basis of accounting (i)		(63,626	)		2,838			(7,954	)
	Goodwill impairment (i) and (ii)		—			(2,004,000	)		—
	Development and pre-operating costs (iii)		(2,931	)		2,744			2,485
	Accounting for derivative instruments and hedging activities (iv)		(17,454	)		3,338			1,607
	Interest on debt contracted by the parent company for financing of its subsidiary		(14,319	)		—			—
	Income taxes (v)		17,209			(856	)		(774	)

Net income (loss) for the year based on US GAAP			(134,160	)		(1,984,453	)		58,675
Other comprehensive loss (vi):
	Pension and postretirement benefits (vii)		(314	)		—			(613	)
	Accounting for derivative instruments and hedging activities (iv)		—			—			(843	)

Comprehensive income (loss) based on US GAAP		$	(134,474	)	$	(1,984,453	)	$	57,219

Accumulated other comprehensive loss at beginning of year		$	—		$	(314	)	$	(314	)
Changes in the year			(314	)		—			(1,456	)

Accumulated other comprehensive loss at end of year		$	(314	)	$	(314	)	$	(1,770	)

As at December 31, 2001, the Company had unamortized goodwill of $4,666.9 million. The coming into effect on January 1, 2002 of a new accounting policy, pursuant to which goodwill is no longer amortized, resulted in a reduction of $120 million in amortization expense related to goodwill. The following summarizes the effect of the accounting change if it had been applied retroactively:

	2001			2002			2003
	(in thousands of Canadian dollars)
Net income (loss), as reported	$	(134,160	)	$	(1,984,453	)	$	58,675
Goodwill amortization		119,142			—			—

Adjusted net income (loss)	$	(15,018	)	$	(1,984,453	)	$	58,675

Consolidated Shareholder's Equity

		2002			2003
		(restated — note 1 (b))
		(in thousands of Canadian dollars)
Shareholder's equity (deficit) based on Canadian GAAP		$	(345,189	)	$	70,817
Cumulative adjustments:
	Push-down basis of accounting (i)		4,329,075			4,321,121
	Goodwill impairment (ii)		(2,004,000	)		(2,004,000	)
	Development and pre-operating costs (iii)		(2,931	)		(446	)
	Accounting for derivative instruments and hedging activities (iv)		(14,116	)		(13,352	)
	Income taxes (v)		913			139
	Pension and postretirement benefits (vii)		(314	)		(927	)

Shareholder's equity based on US GAAP		$	1,963,438		$	2,373,352

F-27

(i): Push-down basis of accounting:

The basis of accounting used in the preparation of these financial statements under US GAAP reflects the push-down resulting from the acquisition on October 23, 2000 by Quebecor Media Inc. of the Company and its subsidiaries. Under Canadian GAAP, each entity has retained the historical carrying value basis of its assets and liabilities. The excess of the purchase price over the value assigned to the net assets of the Company at the date of acquisition has been allocated to goodwill and has been amortized, up to December 31, 2001, on the straight-line basis over 40 years.

The principal adjustments, taking into account the final allocation of the purchase price finalized in the fourth quarter of 2001, to the historical consolidated financial statements of the Company to reflect Parent's cost basis were:

(a): The carrying values of fixed assets were increased by $114.6 million;
(b): The deferred charges related to financing fees and exchange losses on long-term debt have been written off to reflect the fair value of the assumed long-term debt, and further reduction in deferred charges was recorded for a total amount of $22.6 million;
(c): Accrued charges increased by $40.3 million;
(d): Future income tax liability increased by $24.9 million; and
(e): The $4,360.5 million excess of parent's cost over the value assigned to the net assets of the Company at the date of acquisition has been recorded as goodwill and $4,387.3 million was credited as contributed surplus.

(ii): Goodwill impairment:

The accounting requirements for goodwill under Canadian GAAP and US GAAP are similar in all material respects. However, in accordance with the transitional provisions contained in Section 3062 of the CICA Handbook, an impairment loss recognized during the financial year, in which the new recommendations are initially applied, is recognized as the effect of a change in accounting policy and charged to opening retained earnings, without restatement of prior periods. Under US GAAP, an impairment loss recognized as a result of transitional goodwill impairment test is recognized as the effect of a change in accounting principles in the statement of operations above the caption "net income".

(iii): Development and pre-operating costs:

Under Canadian GAAP, certain development and pre-operating costs, which satisfy specified criteria for recoverability, are deferred and amortized. Under US GAAP, these costs are expensed as incurred.

(iv): Accounting for derivative instruments and hedging activities:

The Company adopted, at the beginning of 2001, Statement of Financial Accounting Standards No. 133 "Accounting for Derivative Instruments and Hedging Activities" as amended (SFAS 133), which establishes accounting and reporting standards for derivative instruments and hedging activities and requires that all derivatives be recorded as either assets or liabilities in the balance sheet at fair value with changes in fair value recorded in the statement of operations unless the instrument is effective and qualifies for hedge accounting. As of the adoption date, the Company did not hold any of these instruments. Under Canadian GAAP, derivative financial instruments are accounted for on an accrual basis. Realized and unrealized gains and losses are deferred and recognized in income in the same period and in the same financial statement category as the income or expense arising from the corresponding hedged position. Furthermore, under Canadian GAAP, the change in foreign exchange rate on long-term foreign currency denominated instrument is recorded either as an asset or liability when hedge accounting is used. Under US GAAP, these changes are recorded in the statement of operations or other comprehenive income based on whether a hedging relationship has been established which qualifies as a hedging relationship under US GAAP.

(v): Income taxes:

This adjustment represents the tax impact of the US GAAP adjustments. Furthermore, under Canadian GAAP, income taxes are measured using substantially enacted tax rates, while under US GAAP measurement is based on enacted tax rates.

F-28

(vi): Comprehensive income (loss):

Comprehensive income is presented in accordance with FAS No. 130, "Reporting Comprehensive Income". This standard defines comprehensive income as all changes in equity other than those resulting from investments by owners and distributions to owners. Other comprehensive income consists of adjustments to shareholder's equity related to the accrued pension benefit liability, representing the excess of the accumulated pension benefit obligation as compared to the fair value of plan assets and to changes in the derivative fair values of contracts that are designated effective and qualify as cash flow hedges.

(vii): Pension and postretirement benefits:

The accounting requirements for pension and postretirement benefits under Canadian GAAP and US GAAP are similar in all material respects. However, under US GAAP, if the accumulated benefit obligation exceeds the fair value of a pension plan's assets, the Company is required to recognize a minimum accrued liability equal to the unfunded accumulated benefit obligation, which is recorded as a separate component of shareholder's equity under the caption "other comprehensive income".

(viii): Operating income before the undernoted:

US GAAP requires that depreciation and amortization and other items be included in the determination of operating income and does not permit the disclosure of subtotals of the amounts of operating income before these items. Canadian GAAP permits the subtotals of the amounts of operating income before these items.

(ix): Consolidated statements of cash flows:

The disclosure of a subtotal of the amount of funds provided by operations before changes in non-cash operating working capital items in the consolidated statement of cash flows is allowed by Canadian GAAP while it is not allowed by US GAAP.

(x)

Recent accounting pronouncements:

(a): EIC 141, Revenue Recognition, incorporates the principles and summarizes the guidance in the SEC's SAB 101, Revenue Recognition in financial statements. The EIC is of the opinion that this abstract provides appropriate interpretative guidance on the application of existing standards on revenue. The guidance may be applied prospectively, and should be applied to sales transactions recognized in the first interim or annual period beginning after December 17, 2003.
(b): EIC 142, Revenue Arrangements with Multiple Deliverables, is based on EITF 00-21 and addresses certain aspects of the accounting by a vendor for arrangements under which it will perform multiple revenue generating activities. The guidance may be applied prospectively, and should be applied to revenue arrangements with multiple deliverables entered into in the first interim period or annual fiscal period beginning after December 17, 2003.

(xi)

Guaranteed debt:

The combined information below has been presented in accordance with the requirements of the Securities and Exchange Commission for guarantor financial statements.

The Company's Senior Notes due 2013 described in note 13 are guaranteed by specific subsidiaries of the Company (the "Subsidiary Guarantors"). The accompanying condensed consolidated financial information as at December 31, 2002 and 2003 and for the years 2001, 2002 and 2003 has been prepared in accordance with US GAAP. The information under the column headed "Combined Guarantors" is for all the Subsidiary Guarantors. Investments in the Subsidiary Guarantors are accounted for by the equity method in the separate column headed "Vidéotron Ltée". Each Subsidiary Guarantor is wholly-owned by the Company. All guarantees are full and unconditional, and joint and several (to the extent permitted by applicable law).

The main subsidiaries included under the column "Subsidiary Guarantors" are Vidéotron TVN Inc., Vidéotron (1998) Ltée and Le SuperClub Vidéotron Ltée, and its subsidiary Groupe de Divertissement SuperClub Inc.

The "Non-Subsidiary Guarantors" are CF Cable TV Inc., Vidéotron (Régional) Ltée, Télé-Câble Charlevoix (1977) Inc. and Société d'Édition et de Transcodage T.E. Ltée.

F-29

CONSOLIDATED STATEMENT OF OPERATIONS
In accordance with United States GAAP
For the year ended December 31, 2001

	Vidéotron Ltée			Subsidiary guarantors			Subsidiary non-guarantors			Adjustments and eliminations			Consolidated
	(in thousands of Canadian dollars)
Revenues	$	443,171		$	178,445		$	172,637		$	(28,799	)	$	765,454
Direct cost		125,679			55,941			47,111			(931	)		227,800
Operating and administrative expenses		179,075			69,325			60,974			(27,541	)		281,833
Depreciation and amortization		169,265			54,109			37,245			(267	)		260,352
Financial expenses		79,799			15,977			32,728			—			128,504
Other items		(5,826	)		7,219			2,414			—			3,807

Loss before the undernoted		(104,821	)		(24,126	)		(7,835	)		(60	)		(136,842	)
Income taxes		(7,502	)		(524	)		5,199			—			(2,827	)

		(97,319	)		(23,602	)		(13,034	)		(60	)		(134,015	)
Share in the results of a company subject to significant influence		(556	)		—			(212	)		768			—
Non-controlling interest		—			—			13			132			145

Net loss	$	(96,763	)	$	(23,602	)	$	(12,835	)	$	(960	)	$	(134,160	)

F-30

CONSOLIDATED STATEMENT OF CASH FLOWS
In accordance with United States GAAP
For the year ended December 31, 2001

			Vidéotron Ltée			Subsidiary guarantors			Subsidiary non-guarantors			Adjustments and eliminations			Consolidated
			(in thousands of Canadian dollars)
Cash flows from operating activities:
	Net loss		$	(96,763	)	$	(23,602	)	$	(12,835	)	$	(960	)	$	(134,160	)
	Items not involving cash:
		Depreciation and amortization		171,517			60,986			37,520			(267	)		269,756
		Future income taxes		(8,918	)		(1,129	)		3,764			—			(6,283	)
		Write-off of fixed assets and deferred charges		32,464			(34,043	)		(90	)		—			(1,669	)
		Loss on foreign currency denominated debt		5,343			—			6,802			—			12,145
		Other		(12,292	)		34,816			3,310			(710	)		25,124
		Shares in the results of a company subject to significant influence		(556	)		—			(212	)		768			—
	Changes in non-cash operating working capital			70,760			(32,884	)		494			(227	)		38,143

				161,555			4,144			38,753			(1,396	)		203,056
Cash flows from investing activities:
	Acquisition of fixed assets			(63,329	)		(31,786	)		(20,462	)		—			(115,577	)
	Net change in deferred charges			(877	)		(2,531	)		188			396			(2,824	)
	Amounts receivable from parent company and from affiliated companies			498			(12,898	)		—			—			(12,400	)
	Other			(25,852	)		26,786			(489	)		—			445

				(89,560	)		(20,429	)		(20,763	)		396			(130,356	)
Cash flows from financing activities:
	Increase in long-term debt			447,000			—			—			—			447,000
	Repayment of long-term debt			(110,337	)		—			(26,370	)		—			(136,707	)
	Repayment of promissory note to the parent company			(300,000	)		—			—			—			(300,000	)
	Issuance of shares by a subsidiary			202,750			15,192			(217,942	)		—			—
	Advances on disposal of a preferred share issued by an affiliated company			(230,000	)		—			230,000			—			—
	Other			(4,690	)		—			(1,276	)		1,000			(4,966	)

				4,723			15,192			(15,588	)		1,000			5,327

Net increase (decrease) in cash and cash equivalents				76,718			(1,093	)		2,402			—			78,027
Cash and cash equivalents, beginning of year				(5,679	)		(1,232	)		(1,704	)		—			(8,615	)

Cash and cash equivalents, end of year			$	71,039		$	(2,325	)	$	698		$	—		$	69,412

F-31

CONSOLIDATED BALANCE SHEET
In accordance with United States GAAP
As at December 31, 2002

		Vidéotron Ltée			Subsidiary guarantors			Subsidiary non- guarantors			Adjustments and eliminations			Consolidated
		(in thousands of Canadian dollars)
Assets
Current assets:
	Cash and cash equivalents	$	14,870		$	47		$	1,124		$	—		$	16,041
	Accounts receivable		65,289			6,254			782			—			72,325
	Amounts receivable from affiliated companies		42,632			56,806			56,932			(145,278	)		11,092
	Inventories and prepaid expenses		10,578			11,888			525			—			22,991
	Future income taxes		8,948			3,190			387			—			12,525

			142,317			78,185			59,750			(145,278	)		134,974
Fixed assets			769,148			118,474			229,075			—			1,116,697
Goodwill			1,401,545			630,339			397,332			233,711			2,662,927
Deferred charges			23,763			502			3,274			(489	)		27,050
Future income taxes			—			14,835			—		��	—			14,835
Investments			492,895			—			878			(493,707	)		66

Total assets		$	2,829,668		$	842,335		$	690,309		$	(405,763	)	$	3,956,549

Liabilities and Shareholder's Equity
Current liabilities:
	Issued and outstanding cheques	$	1,015		$	918		$	12		$	—		$	1,945
	Accounts payable and accrued liabilities		160,567			22,892			30,932			45			214,436
	Amounts payable to a company under common control		110,862			55,976			4,377			(105,756	)		65,459
	Deferred revenue and prepaid services		53,794			5,111			21,026			—			79,931
	Current portion of long-term debt		86,142			—			—			—			86,142

			412,380			84,897			56,347			(105,711	)		447,913
Future income taxes			141,502			2,210			36,707			(1,826	)		178,593
Retractable preferred shares			332,480			37,187			—			(37,187	)		332,480
Long-term debt			910,435			71,642			145,260			(93,854	)		1,033,483
Non-controlling interest in a subsidiary			—			—			10			632			642

			1,796,797			195,936			238,324			(237,946	)		1,993,111
Shareholder's Equity:
	Capital shares		1			13,471			235,025			(248,496	)		1
	Contributed surplus		3,200,535			640,094			657,859			(21,907	)		4,476,581
	Deficit		(2,167,665	)		(7,166	)		(440,585	)		102,586			(2,512,830	)
	Other comprehensive loss		—			—			(314	)		—			(314	)

			1,032,871			646,399			451,985			(167,817	)		1,963,438

		$	2,829,668		$	842,335		$	690,309		$	(405,763	)	$	3,956,549

F-32

CONSOLIDATED STATEMENT OF OPERATIONS
In accordance with United States GAAP
For the year ended December 31, 2002

	Vidéotron Ltée			Subsidiary guarantors		Subsidiary non- guarantors			Adjustments and eliminations			Consolidated
	(in thousands of Canadian dollars)
Revenues	$	432,111		$	211,569	$	165,482		$	(28,122	)	$	781,040
Direct cost		156,081			57,144		48,409			(2,590	)		259,044
Operating and administrative expenses		178,868			76,275		56,569			(25,760	)		285,952
Depreciation and amortization		83,901			36,393		17,721			(328	)		137,687
Financial expenses		57,588			6,262		10,556			(1,556	)		72,850
Impairment of goodwill		1,613,220			—		390,780			—			2,004,000
Other items		493			—		113			—			606

(Loss) income before the undernoted		(1,658,040	)		35,495		(358,666	)		2,112			(1,979,099	)
Income taxes		(16,414	)		10,153		11,427			—			5,166

		(1,641,626	)		25,342		(370,093	)		2,112			(1,984,265	)
Share in the results of a company subject to significant influence		(310	)		—		(666	)		976			—
Non-controlling interest		—			—		95			93			188

Net (loss) income	$	(1,641,316	)	$	25,342	$	(369,522	)	$	1,043		$	(1,984,453	)

F-33

CONSOLIDATED STATEMENT OF CASH FLOWS
In accordance with United States GAAP
For the year ended December 31, 2002

			Vidéotron Ltée			Subsidiary guarantors			Subsidiary non- guarantors			Adjustments and eliminations			Consolidated
			(in thousands of Canadian dollars)
Cash flows from operating activities:
	Net income (loss)		$	(1,641,316	)	$	25,342		$	(369,522	)	$	1,043		$	(1,984,453	)
	Items not involving cash:
		Depreciation and amortization		88,242			41,755			17,987			(328	)		147,656
		Future income taxes		(17,829	)		7,309			10,612			—			92
		Write-off of goodwill		1,613,220			—			390,780			—			2,004,000
		Gain on foreign currency denominated debt		—			—			(1,628	)		(583	)		(2,211	)
		Other		(1,392	)		1,041			1,010			96			755
	Changes in non-cash operating working capital			106,998			(52,045	)		(30,689	)		(486	)		23,778

				147,923			23,402			18,550			(258	)		189,617
Cash flows from investing activities:
	Acquisition of fixed assets			(49,993	)		(29,568	)		(12,853	)		—			(92,414	)
	Net change in deferred charges			(923	)		9,566			(89	)		258			8,812
	Amounts receivable from parent company and from affiliated companies			—			(2,088	)		—			—			(2,088	)
	Other			1,677			142			(1,690	)		—			129

				(49,239	)		(21,948	)		(14,632	)		258			(85,561	)
Cash flows from financing activities:
	Repayment of long-term debt			(155,868	)		—			(3,409	)		—			(159,277	)
	Other			—			—			(95	)		—			(95	)

				(155,868	)		—			(3,504	)		—			(159,372	)

Net increase (decrease) in cash and cash equivalent				(57,184	)		1,454			414			—			(55,316	)
Cash and cash equivalents, beginning of year				71,039			(2,325	)		698			—			69,412

Cash and cash equivalents, end of year			$	13,855		$	(871	)	$	1,112		$	—		$	14,096

F-34

CONSOLIDATED BALANCE SHEET
In accordance with United States GAAP
As at December 31, 2003

		Vidéotron Ltée			Subsidiary guarantors		Subsidiary non- guarantors			Adjustments and eliminations			Consolidated
		(in thousands of Canadian dollars)
Assets
Current assets:
	Cash and cash equivalents	$	27,772		$	89	$	468		$	—		$	28,329
	Marketable securities		22,100			—		1,030			—			23,130
	Accounts receivable		63,125			5,464		499			—			69,088
	Amounts receivable from affiliated companies		86,109			127,157		335,968			(549,129	)		105
	Income taxes receivable		—			4,950		1,585			—			6,535
	Inventories and prepaid expenses		14,615			14,881		640			—			30,136
	Future income taxes		7,451			1,999		1,312			—			10,762

			221,172			154,540		341,502			(549,129	)		168,085
Fixed assets			743,100			81,285		225,206			(489	)		1,049,102
Goodwill			1,399,533			631,239		396,844			233,711			2,661,327
Deferred charges			12,117			407		3,435			—			15,959
Future income taxes			2,063			2,813		—			500			5,376
Investments			458,053			—		976			(458,963	)		66

Total assets		$	2,836,038		$	870,284	$	967,963		$	(774,370	)	$	3,899,915

Liabilities and Shareholder's Equity
Current liabilities:
	Issued and outstanding cheques	$	2,584		$	416	$	51		$	—		$	3,051
	Accounts payable and accrued liabilities		127,805			32,847		31,084			(27	)		191,709
	Amounts payable to a company under common control		210,192			98,642		258,623			(549,102	)		18,355
	Deferred revenue and prepaid services		50,536			18,900		19,879			—			89,315
	Income taxes payable		310			7,784		45			—			8,139
	Current portion of long-term debt		50,000			—		—			—			50,000

			441,427			158,589		309,682			(549,129	)		360,569
Retractable preferred shares			2,000			—		—			—			2,000
Future income taxes			123,138			4,763		47,373			—			175,274
Long-term debt			887,401			—		123,984			(23,368	)		988,017
Non-controlling interest in a subsidiary			—			—		10			693			703

			1,453,966			163,352		481,049			(571,804	)		1,526,563
Shareholder's Equity:
	Capital shares		173,236			43,427		235,025			(278,452	)		173,236
	Contributed surplus		3,476,551			643,065		660,187			(25,369	)		4,754,434
	Deficit		(2,266,499	)		20,440		(407,744	)		101,255			(2,552,548	)
	Other comprehensive loss		(1,216	)		—		(554	)		—			(1,770	)

			1,382,072			706,932		486,914			(202,566	)		2,373,352

		$	2,836,038		$	870,284	$	967,963		$	(774,370	)	$	3,899,915

F-35

CONSOLIDATED STATEMENT OF OPERATIONS
In accordance with United States GAAP
For the year ended December 31, 2003

	Vidéotron Ltée			Subsidiary guarantors			Subsidiary non- guarantors			Adjustments and eliminations			Consolidated
	(in thousands of Canadian dollars)
Revenues	$	424,904		$	245,920		$	159,945		$	(25,768	)	$	805,001
Direct cost		162,244			37,449			47,906			(1,632	)		245,967
Operating and administrative expenses		139,858			103,718			61,103			(23,875	)		280,804
Depreciation and amortization		82,468			33,048			17,794			(307	)		133,003
Financial expenses		79,425			(1,557	)		(13,555	)		(1,889	)		62,424

(Loss) income before the undernoted		(39,091	)		73,262			46,697			1,935			82,803
Income taxes		(14,811	)		25,656			11,908			1,326			24,079

		(24,280	)		47,606			34,789			609			58,724
Share in the results of a company subject to significant influence		6,470			—			77			(6,547	)		—
Non-controlling interest		—			—			—			(49	)		(49	)

Net (loss) income	$	(17,810	)	$	47,606		$	34,866		$	(5,987	)	$	58,675

F-36

CONSOLIDATED STATEMENT OF CASH FLOWS
In accordance with United States GAAP
For the year ended December 31, 2003

			Vidéotron Ltée			Subsidiary guarantors			Subsidiary non- guarantors			Adjustments and eliminations			Consolidated
			(in thousands of Canadian dollars)
Cash flows from operating activities:
	Net income (loss)		$	(17,810	)	$	47,606		$	34,866		$	(5,987	)	$	58,675
	Items not involving cash:
		Depreciation and amortization		86,340			37,250			17,484			(307	)		140,767
		Net premium and write-off of financing cost upon early redemption of long-term debt		17,094			—			—			—			17,094
		Future income taxes		(16,361	)		14,592			10,459			1,326			10,016
		Adjustment of goodwill		2,012			—			488			—			2,500
		Loss on disposal of fixed assets		(110	)		18,507			50			—			18,447
		Gain on foreign currency denominated debt		(1,649	)		—			(21,251	)		(723	)		(23,623	)
		Share in the results of a company subject to significant influence		(6,470	)		—			(77	)		6,547			—
		Other		102			(148	)		1,729			(811	)		872
	Changes in non-cash operating working capital			63,759			(71,359	)		(23,225	)		(45	)		(30,870	)

				126,907			46,448			20,523			—			193,878
Cash flows from investing activities:
	Acquisition of fixed assets			(54,598	)		(21,154	)		(19,879	)		5,347			(90,284	)
	Disbursements for deferred charges			—			(113	)		—			—			(113	)
	Acquisition of short-term investments			(22,100	)		—			(1,030	)		—			(23,130	)
	Proceeds on disposal of fixed assets			5,651			3,494			27			(5,347	)		3,825
	Proceeds from investment			7,231			(7,231	)		—			—			—
	Other			—			(900	)		—			—			(900	)

				(63,816	)		(25,904	)		(20,882	)		—			(110,602	)
Cash flows from financing activities:
	Repayment of long-term debt			(1,033,321	)		—			(24	)		—			(1,033,345	)
	Issuance of long-term debt			1,038,732			—			—			—			1,038,732
	Financing cost on long-term debt			(9,086	)		—			—			—			(9,086	)
	Recouping fees and termination swaps			(48,375	)		—			—			—			(48,375	)
	Dividends to parent company			(19,956	)		—			—			—			(19,956	)
	Other			20,248			(20,000	)		(312	)		—			(64	)

				(51,758	)		(20,000	)		(336	)		—			(72,094	)

Net increase (decrease) in cash and cash equivalents				11,333			544			(695	)		—			11,182
Cash and cash equivalents, beginning of year				13,855			(871	)		1,112			—			14,096

Cash and cash equivalents, end of year			$	25,188		$	(327	)	$	417		$	—		$	25,278

F-37

23. ISSUANCE OF SENIOR NOTES

On November 15, 2004, the Company entered into a purchase agreement for the sale and purchase of US$315 million aggregate principal amount of 6⁷/8% Senior Notes due January 15, 2014 with Banc of America Securities LLC, Citigroup Global Markets Inc., RBC Capital Markets Corporation, Harris Nesbitt Corp., Scotia Capital (USA) Inc., TD Securities (USA) LLC, CIBC World Markets Corp., Credit Suisse First Boston LLC, NBF Securities (USA) Corp. and HSBC Securities (USA) Inc., and concurrently with the closing of this Offering, the Company proposes to amend its credit facilities such that they will consist of a five-year revolving credit facility of $450 million and the Term C loan, amounting to $318.1 million as at September 30, 2004, will be entirely repaid.

F-38

VIDÉOTRON LTÉE

INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS

Nine-month periods ended September 30, 2003 and 2004
(in thousands of Canadian dollars)
(Unaudited)

		Nine-month period ended
		September 30, 2003			September 30, 2004
		(Restated)
Operating revenues:
	Cable television	$	418,383		$	428,542
	Internet		133,033			162,603
	Video stores		28,267			32,590
	Other		16,123			16,652

			595,806			640,387
Operating expenses:
	Direct costs		182,847			182,651
	Operating, general and administrative expenses		212,679			204,235

			395,526			386,886

Operating income before the undernoted			200,280			253,501
Depreciation and amortization			87,326			94,797
Financial expenses (note 3)			34,361			133,339
Dividend income from parent company (note 5)			—			(85,626	)
Other item			(2,500	)		—

Income before income taxes and non-controlling interest			81,093			110,991
Income taxes (note 4):
	Current		4,133			(797	)
	Future		20,023			11,008

			24,156			10,211

			56,937			100,780
Non-controlling interest in a subsidiary			46			79

Net income		$	56,891		$	100,701

See accompanying notes to unaudited interim consolidated financial statements.

F-39

VIDÉOTRON LTÉE

INTERIM CONSOLIDATED STATEMENTS OF SHAREHOLDER'S EQUITY

Nine-month periods ended September 30, 2003 and 2004
(in thousands of Canadian dollars)
(Unaudited)

	Common capital stock		Contributed surplus			Deficit			Total shareholder's equity
Balance as at December 31, 2002	$	1	$	84,357		$	(429,547	)	$	(345,189	)
Conversion of 1 Series E preferred share into 750,000 common shares		26,829		—			—			26,829
Excess of the preferred share retractable value over the stated capital converted into Class A shares		—		301,170			—			301,170
Conversion of 1 Series E preferred share into 70,000 common shares		4,481		—			—			4,481
Net income		—		—			56,891			56,891

Balance as at September 30, 2003		31,311		385,527			(372,656	)		44,182
Excess of purchase price over the carrying value of the assets transferred by the parent company		—		—			(2,000	)		(2,000	)
Issuance of shares		141,925		—			—			141,925
Transfer of tax deductions from a company controlled by the ultimate parent company		—		3,382			—			3,382
Excess of consideration issued to the parent company over the net book value of business acquired		—		(26,699	)		(76,437	)		(103,136	)
Net income		—		—			6,420			6,420
Dividend		—		—			(19,956	)		(19,956	)

Balance as at December 31, 2003		173,236		362,210			(464,629	)		70,817
Transfer of tax deductions from a company controlled by the ultimate parent company		—		(66	)		—			(66	)
Excess of the preferred share retractable value over the stated capital (note 7)		—		—			(1,660	)		(1,660	)
Net income		—		—			100,701			100,701
Dividend		—		—			(80,025	)		(80,025	)

Balance as at September 30, 2004	$	173,236	$	362,144		$	(445,613	)	$	89,767

See accompanying notes to unaudited interim consolidated financial statements.

F-40

VIDÉOTRON LTÉE

INTERIM CONSOLIDATED BALANCE SHEETS

As at December 31, 2003 and September 30, 2004
(in thousands of Canadian dollars)
(Unaudited)

		December 31, 2003			September 30, 2004
					(Unaudited)
Assets
Current assets:
	Cash and cash equivalents	$	28,329		$	25,747
	Marketable securities		23,130			—
	Accounts receivable		69,088			71,423
	Amounts receivable from affiliated companies		105			—
	Income taxes receivable		6,535			5,382
	Inventories		23,198			23,784
	Prepaid expenses		6,938			10,192
	Future income taxes		10,762			7,972

			168,085			144,500
Fixed assets			901,561			888,146
Goodwill			433,215			438,360
Deferred charges			17,302			23,237
Future income taxes			5,376			13,963
Investments (note 5)			66			1,100,066

		$	1,525,605		$	2,608,272

Liabilities and Shareholder's Equity
Current liabilities:
	Issued and outstanding cheques	$	3,051		$	13,069
	Accounts payable and accrued liabilities		163,074			126,797
	Amounts payable to affiliated companies		18,355			16,668
	Deferred revenue		89,315			97,241
	Income taxes payable		8,139			2,348
	Current portion of long-term debt (note 6)		50,000			50,000

			331,934			306,123
Deferred revenue			—			10,403
Forward exchange contract			15,272			31,818
Future tax liabilities			118,202			135,029
Retractable preferred shares (note 7)			2,000			—
Long-term debt (note 6)			986,677			2,034,368
Non-controlling interest in subsidiaries			703			764

			1,454,788			2,518,505
Shareholder's equity:
	Common shares (note 7)		173,236			173,236
	Contributed surplus		362,210			362,144
	Deficit		(464,629	)		(445,613	)

			70,817			89,767

		$	1,525,605		$	2,608,272

Contingencies and guarantees (note 10)

See accompanying notes to unaudited interim consolidated financial statements.

F-41

VIDÉOTRON LTÉE

INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS

Nine-month periods ended September 30, 2003 and 2004
(in thousands of Canadian dollars)
(Unaudited)

			Nine-month period ended
			September 30, 2003			September 30, 2004
			(Restated)
Cash flows from operating activities:
	Net income		$	56,891		$	100,701
	Adjustments for the following items:
		Depreciation and amortization		95,670			95,761
		Future income taxes		20,023			11,008
		Non-controlling interest in a subsidiary		46			79
		Loss on disposal of fixed assets		11,597			12,020
		(Gain) loss on foreign currency denominated debt		(19,489	)		2,312
		Other items		(146	)		1,849

	Cash flows from operations			164,592			223,730
	Changes in non-cash operating items:
		Accounts receivable		160			(2,335	)
		Current income taxes		2,045			(4,764	)
		Net amounts receivable and payable from/to affiliated companies		(27,154	)		(1,101	)
		Inventories		(3,779	)		467
		Prepaid expenses		(1,729	)		(3,254	)
		Accounts payable and accrued liabilities		(79,551	)		(34,052	)
		Deferred revenue		10,274			10,874

				(99,734	)		(34,165	)

	Cash flows from operating activities			64,858			189,565
Cash flows from investing activities:
	Acquisition of fixed assets			(55,398	)		(96,434	)
	Net change in deferred charges			(358	)		(347	)
	Acquisition of goodwill			—			(92	)
	Proceeds on disposal of fixed assets and investments			2,734			1,019
	Acquisition of video stores			—			(7,052	)
	Acquisition of shares of parent company			—			(1,100,000	)
	Proceeds on disposal of marketable securities			—			23,131
	Acquisition of non-controlling interest			—			(10	)
	Acquisition of Internet subscribers			(900	)		—

	Cash flows used in investing activities			(53,922	)		(1,179,785	)
Cash flows from financing activities:
	Repayment of long-term debt			(253,267	)		(37,500	)
	Increase in long-term debt			85,000			—
	Financing costs on long-term debt			—			(1,195	)
	Increase in long-term intercompany loan from parent company			150,000			1,100,000
	Redemption of retractable preferred share			—			(3,660	)
	Dividend to parent company			—			(80,025	)
	Recouponing fees and termination of swaps			(13,539	)		—
	Other			(64	)		—

	Cash flows from (used in) financing activities			(31,870	)		977,620

Net change in cash and cash equivalents				(20,934	)		(12,600	)
Cash and cash equivalents at beginning of period				14,096			25,278

Cash and cash equivalents at end of period			$	(6,838	)	$	12,678

Cash and cash equivalents are comprised of:
	Cash and cash equivalents		$	816		$	25,747
	Issued and outstanding cheques			(7,654	)		(13,069	)

			$	(6,838	)	$	12,678

See accompanying notes to unaudited interim consolidated financial statements.

F-42

1. BASIS OF PRESENTATION AND ACCOUNTING CHANGES:

The Company is a distributor of pay-television services in the Province of Québec providing cable television and Internet access services. It also operates the largest chain of video stores in Québec.

The accompanying unaudited interim consolidated financial statements of the Company have been prepared in accordance with Canadian generally accepted accounting principles on a basis consistent with those followed in the most recent audited annual consolidated financial statements. These unaudited interim consolidated financial statements do not include all information and note disclosures required by Canadian generally accepted accounting principles for annual financial statements, and, therefore, should be read in conjunction with the December 31, 2003 audited consolidated financial statements and the notes below.

New accounting policies since previous year-end

(a): Equipment subsidies and reconnection costs:

•: The operating revenues increased by $12.6 million;
•: The direct and operating costs increased by $41.0 million;
•: The depreciation expense decreased by $19 million;
•: The income tax expense decreased by $2.3 million; and
•: The net income decreased by $7.1 million.
(b): Revenue recognition and revenue arrangements with multiple deliverables:

In 2004, the Company revised and adopted an accounting policy for the timing of revenue and expense recognition regarding connection fees based on the CICA Emerging Issues Committee Abstracts 141 and 142. The Company chose to adopt the new policy prospectively without restatement of prior periods.

Effective January 1, 2004, the connection fee revenues are now deferred and recognized as revenues over 30 months, that is the estimated average period that subscribers are expected to remain connected to the network. The incremental and direct costs related to connection fees, in an amount not exceeding the revenue, are now deferred and recognized as an operating expense over the same 30-month period. Previously, the connection fees and the incremental and direct costs were recognized immediately in the operating revenues and expenses. This change in accounting policy had an impact of $0.2 million on the amounts of operating income and net income. Deferred revenue and deferred charges increased by $7.7 million and $7.5 million, respectively, as of September 30, 2004.

2. BUSINESS ACQUISITION:

On July 6, 2004, a subsidiary of the Company acquired Jumbo Entertainment Inc. for a price of $7.1 million.

The assets acquired are as follows:

	(in thousands of Canadian dollars)
Inventories	$	1,053
Fixed assets		897
Goodwill		5,102

	$	7,052

F-43

3. FINANCIAL EXPENSES:

		Nine-month period ended
		September 30, 2003			September 30, 2004
		(Restated)
		(in thousands of Canadian dollars)
Third parties:
	Interest on long-term debt	$	48,064		$	42,492
	Write-off and amortization of deferred financing costs		3,809			965
	Amortization of debt premium and discount		(874	)		(574	)
	(Gain) loss on foreign denominated debt		(17,838	)		2,312
	Gain on foreign denominated short-term monetary items		(3,190	)		(418	)
	Bank fees		982			1,185
	Other interest and penalty charges		91			384

			31,044			46,346
	Interest income		(137	)		(655	)

			30,907			45,691
Parent company:
	Interest expense		3,697			87,648
	Interest income		(243	)		—

			3,454			87,648

		$	34,361		$	133,339

The interest paid in the nine-month periods ended September 30, 2003 and 2004 amounted to $54.6 million and $97.9 million, respectively.

4. INCOME TAXES:

The following schedule reconciles income taxes computed on the income before income taxes and non-controlling interest in a subsidiary according to the consolidated basic income tax rate and the effective income tax rate:

	Nine-month period ended
	September 30, 2003			September 30, 2004
	(Restated)
	(in thousands of Canadian dollars)
Income taxes based on the consolidated federal and provincial (Québec) basic income tax rate of 31.12% (2003 — 33.12%)	$	26,858		$	34,539
Federal large corporations tax		1,804			1,992
Foreign exchange (gain) loss on foreign denominated debt taxable at a lower rate		(2,583	)		276
Non-taxable dividend from the parent company		—			(26,647	)
Reduction of enacted tax rate		(823	)		—
Other		(1,100	)		51

	$	24,156		$	10,211

Income taxes paid in the nine-month periods ended September 30, 2003 and 2004 amounted to $2.4 million and $10.2 million.

5. INVESTMENTS:

On January 16, 2004, Vidéotron (1998) Ltée, a subsidiary of the Company, contracted a subordinated loan of $1.1 billion from Quebecor Media Inc. (see note 6 (a)). On the same day, Vidéotron (1998) Ltée invested the whole proceeds of $1.1 billion into 1,100,000 preferred

F-44

shares, Series D of Quebecor Media Inc. Those shares, carrying the rights to receive an annual dividend of 11%, are payable in June and December of each year. As at September 30, 2004, the dividend receivable amounted to $33.9 million and is accounted for in the amounts payable to affiliated companies.

6. LONG-TERM DEBT:

		December 31, 2003		September 30, 2004
		(in thousands of Canadian dollars)
Bank facility:
	Term-loan C	$	355,630	$	318,130
Senior Secured First Priority Notes			100,615		97,112
Senior Notes			430,432		419,126
Subordinated loan — Quebecor Media Inc.			150,000		150,000
Subordinated loan — Quebecor Media Inc. (a)			—		1,100,000

			1,036,677		2,084,368
Short-term portion of the long-term debt			50,000		50,000

Long-term portion of the long-term debt		$	986,677	$	2,034,368

(a): Subordinated loan to a subsidiary — Quebecor Media Inc.:

On January 16, 2004, Vidéotron (1998) Ltée, a subsidiary of the Company, contracted a subordinated loan of $1.1 billion from Quebecor Media Inc. maturing in 2019. This subordinated loan bears interest at 10.75%, payable in June and December of each year. The obligations of the Company are subordinated in right of payment to the prior payment in full of all existing and future indebtedness of the Company under or in connection with the credit agreement. The holders of all other senior indebtedness of the Company will be entitled to receive payments in full of all amounts due on or in respect of all other existing and future senior indebtedness of the Company before the lender is entitled to receive or retain payment of principal, except that the proceeds from the sale of preferred shares Series D held in Quebecor Media Inc. will be used first to redeem this debt. The interest owed to Quebecor Media Inc. as at September 30, 2004 totalled $33.2 million and is accounted for in the amounts payable to affiliated companies.

Minimum principal payments on long-term debt in each of the next years are as follows:

	(in thousands of Canadian dollars)
2005	$	50,000
2006		50,000
2007		147,112
2008		50,000
2009		118,130
2010 and thereafter		1,669,126

F-45

7. SHARE CAPITAL AND RETRACTABLE PREFERRED SHARES:

		December 31, 2003				September 30, 2004
		Common shares		Retractable preferred shares		Common shares		Retractable preferred shares
		(in thousands of Canadian dollars)
Issued and paid:
	11,174,813 common shares	$	173,236	$	—	$	173,236	$	—
	1 preferred share, Series F		—		2,000		—		—
	133,000 preferred shares, Series G		—		—		—		—

		$	173,236	$	2,000	$	173,236	$	—

On January 16, 2004, Vidéotron Ltée issued 88,000 preferred shares, Series G, to Groupe de Divertissement Superclub Inc., the wholly-owned subsidiary of Le Superclub Vidéotron Ltée, for a total cash consideration of $88.0 million. Series G shares are eliminated upon consolidation.

On March 26, 2004, the Company redeemed the Series F preferred share, for an amount of $3.7 million. The excess of the consideration paid over the preferred share retractable value, in the amount of $1.7 million, has been charged to retained earnings.

On September 30, 2004, Vidéotron Ltée issued 45,000 preferred shares, Series G, to Groupe de Divertissement Superclub Inc., the wholly-owned subsidiary of le Superclub Vidéotron Ltée, for a total cash consideration of $45.0 million. Series G shares are eliminated upon consolidation.

8. SIGNIFICANT DIFFERENCES BETWEEN GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP) IN CANADA AND THE UNITED STATES:

The interim consolidated financial statements have been prepared in accordance with generally accepted accounting principles ("GAAP") in Canada which are different in some respects from those in the United States ("US"), as described below. The following tables set forth the impact of material differences between Canadian GAAP and US GAAP on the Company's interim consolidated financial statements, including disclosures that are required under US GAAP.

Consolidated Statements of Operations for the:

		Nine-month period ended
		September 30, 2003			September 30, 2004
		(restated)
		(in thousands of Canadian dollars)
Net income for the period based on Canadian GAAP		$	56,891		$	100,701
Adjustments:
	Push-down basis of accounting (i)		(5,557	)		(5,804	)
	Development and pre-operating costs (iii)		173			179
	Accounting for derivative instruments and hedging activities (iv)		8,986			11,174
	Income taxes (v)		(55	)		(56	)

Net income for the period based on US GAAP			60,438			106,194
Other comprehensive income (loss) (vi)
	Accounting for derivative instruments and hedging activities (iv)		—			(2,540	)

Comprehensive income based on US GAAP		$	60,438		$	103,654

Accumulated other comprehensive loss at beginning of period		$	(314	)	$	(1,770	)
Change in the period			—			(2,540	)

Accumulated other comprehensive loss at end of period		$	(314	)	$	(4,310	)

F-46

Consolidated Shareholder's Equity

As at

		December 31, 2003			September 30, 2004
		(in thousands of Canadian dollars)
Shareholder's equity based on Canadian GAAP		$	70,817		$	89,767
Cumulative adjustments:
	Push-down basis of accounting (i)		4,321,121			4,315,317
	Goodwill impairment (ii)		(2,004,000	)		(2,004,000	)
	Development and pre-operating costs (iii)		(446	)		(267	)
	Accounting for derivative instruments and hedging activities (iv)		(13,352	)		(4,718	)
	Income taxes (v)		139			83
	Pension and postretirement benefits (vii)		(927	)		(927	)

Shareholder's equity based on US GAAP		$	2,373,352		$	2,395,255

(i): Push-down basis of accounting

The basis of accounting used in the preparation of these financial statements under US GAAP reflects the push-down resulting from the acquisition on October 23, 2000 by Quebecor Media Inc. of the parent of each of the consolidated entities. Under Canadian GAAP, each entity has retained the historical carrying value basis of its assets and liabilities. The excess of the purchase price over the value assigned to the net assets of the Company at the date of acquisition has been allocated to goodwill and has been amortized, up to December 31, 2001, on the straight-line basis over 40 years.

(a): The carrying values of fixed assets were increased by $114.6 million;
(b): The deferred charges related to financing fees and exchange losses on long-term debt have been written off to reflect the fair value of the assumed long-term debt, and further reduction in deferred charges was recorded for a total amount of $22.6 million;
(c): Accrued charges increased by $40.3 million;
(d): Future income tax liability increased by $24.9 million; and
(e): The $4,360.5 million excess of parent's cost over the value assigned to the net assets of the Company at the date of acquisition has been recorded as goodwill and $4,387.3 million was credited as contributed surplus.

(ii): Goodwill impairment

The accounting requirements for goodwill under Canadian GAAP and US GAAP are similar in all material respects. However, in accordance with the transitional provisions contained in Section 3062 of the CICA Handbook, an impairment loss recognized during the financial year in which the new recommendations are initially applied, is recognized as the effect of a change in accounting policy and charged to opening retained earnings, without restatement of prior periods. Under US GAAP, an impairment loss recognized as a result of a transitional goodwill impairment test is recognized as the effect of a change in accounting principles in the statement of operations above the caption "net income".

(iii): Development and pre-operating costs

Under Canadian GAAP, certain development and pre-operating costs, which satisfy specified criteria for recoverability, are deferred and amortized. Under US GAAP, these costs are expensed as incurred.

F-47

(iv): Accounting for derivative instruments and hedging activities

The Company adopted, at the beginning of 2001, Statement of Financial Accounting Standards No. 133 "Accounting for Derivative Instruments and Hedging Activities" as amended (SFAS 133), which establishes accounting and reporting standards for derivative instruments and hedging activities and requires that all derivatives be recorded as either assets or liabilities in the balance sheet at fair value with changes in fair value recorded in the statement of operations, unless the instrument is effective and qualifies for hedge accounting. As of the adoption date, the Company did not hold any of these instruments. Under Canadian GAAP, derivative financial instruments are accounted for on an accrual basis. Realized and unrealized gains and losses are deferred and recognized in income in the same period and in the same financial statement category as the income or expense arising from the corresponding hedged position. Furthermore, under Canadian GAAP, the change in foreign exchange rate on long-term foreign currency denominated instruments is recorded either as an asset or liability when hedge accounting is used. Under US GAAP, these changes are recorded in the statement of operations or other comprehensive income based on whether a hedging relationship has been established which qualifies as a hedging relationship under US GAAP.

(v): Income taxes

This adjustment represents the tax impact of the US GAAP adjustments. Furthermore, under Canadian GAAP, income taxes are measured using substantially enacted tax rates, while, under US GAAP, measurement is based on enacted tax rates.

(vi): Comprehensive income

Comprehensive income is presented in accordance with FAS No. 130, "Reporting Comprehensive Income". This standard defines comprehensive income as all changes in equity other than those resulting from investments by owners and distributions to owners. Other comprehensive income consists of adjustments to shareholder's equity and the accrued benefit liability, representing the excess of the accumulated pension benefit obligation as compared to the fair value of plan assets and to changes in the derivative fair values of contracts that are designated effective and qualify as cash flow hedges.

(vii): Pension and postretirement benefits

(viii): Operating income before the undernoted

(ix): Consolidated Statements of Cash Flows

(x): Revenue recognition:

Under Canadian GAAP, hook-up revenues are deferred and amortized over the estimated average period that subscribers are expected to remain connected to the network; incremental and direct costs related to connection fees, in an amount not exceeding the revenue, are deferred and amortized over the same period. Under US GAAP, initial hook-up revenues are recognized as revenue to the extent of direct selling costs incurred. Only the excess of revenue is deferred and amortized over the estimated average period that subscribers are expected to remain connected to the system. Hook-up charges, excluding initial subscriber installation costs, which are capitalized and amortized, are expensed as incurred.

For the nine-month period ended September 30, 2004, this GAAP difference had no impact on net income.

(xi): Recent accounting pronouncements

The Financial Accounting Standards Board, or FASB, recently issued several new Statements and Interpretations. Statements and Interpretations recently issued by the FASB that are applicable to the Company have had little or no immediate effect. Those

F-48

statements included No. 143.Accounting for Asset Retirement Obligations, No. 144,Accounting for the Impairment or Disposal of Long-Lived Asset, No. 145,Rescission of FASB Statements No. 4, 44 and 64, No. 146,Accounting for Costs Associated with Exit or Disposal Activities, Amendment of FASB, Statement No. 13 (Leases), and Technical Corrections; No. 149, Amendment of Statement No. 133 on Derivative Instruments and Hedging Activities and No. 150,Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity.

(xii): Guaranteed debt

The consolidated information below has been presented in accordance with the requirements of the Securities and Exchange Commission for guarantor financial statements.

The Company's Senior Notes due 2014 (note 6) are guaranteed by specific subsidiaries of the Company (the "Subsidiary Guarantors"). The accompanying condensed consolidated financial information as at December 31, 2003 and September 30, 2004 and the nine-month periods ended September 30, 2003 and 2004 has been prepared in accordance with US GAAP. The information under the column headed "Consolidated Guarantors" is for all the Subsidiary Guarantors. Investments in the Subsidiary Guarantors are accounted for by the equity method in the separate column headed "Vidéotron Ltée". Each Subsidiary Guarantor is wholly owned by the Company. All guarantees are full and unconditional, and joint and several (to the extent permitted by applicable law).

The main subsidiaries included under the column "Subsidiary Guarantors" are Vidéotron TVN Inc., Vidéotron (1998) Ltée and Le Superclub Vidéotron Ltée and its subsidiary, Groupe de Divertissement Superclub Inc.

The "Subsidiary Non-Guarantors" are CF Cable TV Inc., Vidéotron (Régional) Ltée, Télé-Câble Charlevoix (1977) Inc. and Société d'Édition et de Transcodage T.E. Ltée.

F-49

Consolidated Balance Sheet
As at December 31, 2003

		Vidéotron Ltée			Subsidiary guarantors		Subsidiary non-guarantors			Adjustments and eliminations			Consolidated
		(in thousands of Canadian dollars)
Assets
Current assets:
	Cash and cash equivalents	$	27,772		$	89	$	468		$	—		$	28,329
	Marketable securities		22,100			—		1,030			—			23,130
	Accounts receivable		63,125			5,464		499			—			69,088
	Amounts receivable from affiliated companies		86,109			127,157		335,968			(549,129	)		105
	Income taxes receivable		—			4,950		1,585			—			6,535
	Inventories and prepaid expenses		14,615			14,881		640			—			30,136
	Future income taxes		7,451			1,999		1,312			—			10,762

			221,172			154,540		341,502			(549,129	)		168,085
Fixed assets			743,100			81,285		225,206			(489	)		1,049,102
Goodwill			1,399,533			631,239		396,844			233,711			2,661,327
Deferred charges			12,117			407		3,435			—			15,959
Future income taxes			2,063			2,813		—			500			5,376
Investments			458,053			—		976			(458,963	)		66

Total assets		$	2,836,038		$	870,284	$	967,963		$	(774,370	)	$	3,899,915

Liabilities and Shareholder's Equity
Current liabilities:
	Issued and outstanding cheques	$	2,584		$	416	$	51		$	—		$	3,051
	Accounts payable and accrued liabilities		127,805			32,847		31,084			(27	)		191,709
	Amounts payable to a company under common control		210,192			98,642		258,623			(549,102	)		18,355
	Deferred revenue and prepaid services		50,536			18,900		19,879			—			89,315
	Income taxes payable		310			7,784		45			—			8,139
	Current portion of long-term debt		50,000			—		—			—			50,000

			441,427			158,589		309,682			(549,129	)		360,569
Retractable preferred shares			2,000			—		—			—			2,000
Future income taxes			123,138			4,763		47,373			—			175,274
Long-term debt			887,401			—		123,984			(23,368	)		988,017
Non-controlling interest in a subsidiary			—			—		10			693			703

			1,453,966			163,352		481,049			(571,804	)		1,526,563
Shareholder's equity:
	Capital shares		173,236			43,427		235,025			(278,452	)		173,236
	Contributed surplus		3,476,551			643,065		660,187			(25,369	)		4,754,434
	Deficit		(2,266,499	)		20,440		(407,744	)		101,255			(2,552,548	)
	Other comprehensive income		(1,216	)		—		(554	)		-			(1,770	)

			1,382,072			706,932		486,914			(202,566	)		2,373,352

		$	2,836,038		$	870,284	$	967,963		$	(774,370	)	$	3,899,915

F-50

Consolidated Statement of Operations
For the nine-month period ended September 30, 2003 (restated)

	Vidéotron Ltée			Subsidiary guarantors			Subsidiary non-guarantors			Adjustments and eliminations			Consolidated
	(in thousands of Canadian dollars)
Revenues	$	315,725		$	179,306		$	119,853		$	(19,078	)	$	595,806
Direct cost		120,162			28,434			35,833			(1,582	)		182,847
Operating and administrative expenses		113,297			70,991			43,406			(17,259	)		210,435
Depreciation and amortization		62,327			20,090			13,051			(237	)		95,231
Financial expenses		52,345			(11,649	)		(10,859	)		(4,890	)		24,947

(Loss) income before the undernoted		(32,406	)		71,440			38,422			4,890			82,346
Income taxes		(12,378	)		23,809			10,435			(4	)		21,862

		(20,028	)		47,631			27,987			4,894			60,484
Share in the results of a company subject to significant influence		7,879			—			75			(7,954	)		—
Non-controlling interest		—			—			—			(46	)		(46	)

Net (loss) income	$	(12,149	)	$	47,631		$	28,062		$	(3,106	)	$	60,438

F-51

Consolidated Statement of Cash Flows
For the nine-month period ended September 30, 2003 (restated)

			Vidéotron Ltée			Subsidiary guarantors			Subsidiary non-guarantors			Adjustments and eliminations			Consolidated
			(in thousands of Canadian dollars)
Cash flows from operating activities:
	Net (loss) income		$	(12,149	)	$	47,631		$	28,062		$	(3,106	)	$	60,438
	Adjustments for:
		Depreciation and amortization		65,936			23,444			13,192			(237	)		102,335
		Future income taxes		(13,392	)		21,341			9,784			(4	)		17,729
		Loss on foreign denominated debt		—			—			(17,214	)		(624	)		(17,838	)
		Other		(6,196	)		11,488			1,234			7,126			13,652
	Net change in non-cash operating working capital			20,116			(102,852	)		(25,709	)		(3,155	)		(111,600	)

				54,315			1,052			9,349			—			64,716
Cash flows from investing activities:
	Acquisition of fixed assets			(41,503	)		(4,585	)		(9,310	)		—			(55,398	)
	Net change in deferred charges			(156	)		(60	)		—			—			(216	)
	Proceeds on disposal of fixed assets			73			2,661			—			—			2,734
	Acquisition of internet subscribers			—			(900	)		—			—			(900	)
	Other			249			—			87			(336	)		—

				(41,337	)		(2,884	)		(9,223	)		(336	)		(53,780	)
Cash flows from financing activities:
	Increase in long-term debt			235,000			—			—			—			235,000
	Repayment of long-term debt			(253,242	)		—			(25	)		—			(253,267	)
	Other			(13,539	)		—			(400	)		336			(13,603	)

				(31,781	)		—			(425	)		336			(31,870	)

Net decrease in cash				(18,803	)		(1,832	)		(299	)		—			(20,934	)
Cash and cash equivalents, beginning of period				13,855			(871	)		1,112			—			14,096

Cash and cash equivalents, end of period			$	(4,948	)	$	(2,703	)	$	813		$	—		$	(6,838	)

F-52

Consolidated Balance Sheet
As at September 30, 2004

		Vidéotron Ltée			Subsidiary guarantors			Subsidiary non-guarantors			Adjustments and eliminations			Consolidated
		(in thousands of Canadian dollars)
Assets
Current assets:
	Cash and cash equivalents	$	23,546		$	89		$	2,112		$	—		$	25,747
	Accounts receivable		63,925			6,912			586			—			71,423
	Amounts receivable from affiliated companies		793,969			296,103			261,789			(1,351,861	)		—
	Income taxes receivable		—			5,364			26			(8	)		5,382
	Inventories and prepaid expenses		15,888			17,052			1,036			—			33,976
	Future income taxes		6,323			520			1,095			34			7,972

			903,651			326,040			266,644			(1,351,835	)		144,500
Fixed assets			730,266			69,941			226,415			(489	)		1,026,133
Goodwill			1,399,533			636,384			396,844			233,711			2,666,472
Deferred charges			10,943			441			3,434			—			14,818
Future income taxes			—			13,888			80			(5	)		13,963
Investments			421,963			1,171,792			166,075			(659,764	)		1,100,066

Total assets		$	3,466,356		$	2,218,486		$	1,059,492		$	(1,778,382	)	$	4,965,952

Liabilities and Shareholder's Equity
Current liabilities:
	Issued and outstanding cheques	$	11,831		$	1,110		$	128		$	—		$	13,069
	Accounts payable and accrued liabilities		122,303			23,551			23,178			(233	)		168,799
	Amounts payable to a company under common control		155,040			808,572			404,683			(1,351,627	)		16,668
	Deferred revenue and prepaid services		51,996			21,746			20,008			—			93,750
	Income taxes payable		284			884			1,180			—			2,348
	Current portion of long-term debt		50,000			—			—			—			50,000

			391,454			855,863			449,177			(1,351,860	)		344,634
Deferred revenue			4,694			—			1,745			—			6,439
Future income taxes			134,231			4,728			49,959			(311	)		188,607
Long-term debt			833,141			1,100,000			121,346			(24,234	)		2,030,253
Non-controlling interest in a subsidiary			—			—			—			764			764

			1,363,520			1,960,591			622,227			(1,375,641	)		2,570,697
Shareholder's equity:
	Capital shares		306,236			196,558			165,025			(494,583	)		173,236
	Contributed surplus		3,475,340			619,072			661,293			(1,337	)		4,754,368
	(Deficit) retained earnings		(1,674,984	)		(557,735	)		(388,499	)		93,179			(2,528,039	)
	Other comprehensive loss		(3,756	)		—			(554	)		—			(4,310	)

			2,102,836			257,895			437,265			(402,741	)		2,395,255

		$	3,466,356		$	2,218,486		$	1,059,492		$	(1,778,382	)	$	4,965,952

F-53

Consolidated Statement of Operations
For the nine-month period ended September 30, 2004

	Vidéotron Ltée			Subsidiary guarantors			Subsidiary non-guarantors			Adjustments and eliminations			Consolidated
	(in thousands of Canadian dollars)
Revenues	$	365,337		$	213,623		$	138,554		$	(69,672	)	$	647,842
Direct cost		118,364			21,721			43,282			(716	)		182,651
Operating and administrative expenses		139,579			92,992			48,231			(68,953	)		211,849
Depreciation and amortization		61,021			28,984			14,008			—			104,013
Financial expenses		(13,531	)		113,850			22,405			(759	)		121,965
Dividend income from related companies		—			(92,515	)		(12,844	)		19,733			(85,626	)

Income (loss) before the undernoted		59,904			48,591			23,472			(18,977	)		112,990
Income taxes		15,504			(13,287	)		4,334			166			6,717

		44,400			61,878			19,138			(19,143	)		106,273
Share in the results of a company subject to significant influence		7,777			—			108			(7,885	)		—
Non-controlling interest		—			—			(1	)		(78	)		(79	)

Net income (loss)	$	52,177		$	61,878		$	19,245		$	(27,106	)	$	106,194

F-54

Consolidated Statement of Cash Flows
For the nine-month period ended September 30, 2004

			Vidéotron Ltée			Subsidiary guarantors			Subsidiary non-guarantors			Adjustments and eliminations			Consolidated
			(in thousands of Canadian dollars)
Cash flows from operating activities:
	Net income (loss)		$	52,177		$	61,878		$	19,245		$	(27,106	)	$	106,194
	Adjustments for:
		Depreciation and amortization		61,786			28,984			14,007			—			104,777
		Future income taxes		14,285			(9,650	)		2,721			158			7,514
		Loss on foreign denominated debt		—			—			2,303			9			2,312
		Other		(8,611	)		2,948			4,527			7,089			5,953
	Net change in non-cash operating working capital			(84,660	)		816			46,492			8			(37,344	)

				34,977			84,976			89,295			(19,842	)		189,406
Cash flows from investing activities:
	Acquisition of fixed assets			(56,683	)		(33,056	)		(19,111	)		12,416			(96,434	)
	Net change in deferred charges			—			(188	)		—			—			(188	)
	Acquisition of goodwill			—			(92	)		—			—			(92	)
	Proceeds on disposal of fixed assets			511			12,562			362			(12,416	)		1,019
	Acquisition of video stores			—			(7,052	)		—			—			(7,052	)
	Proceeds on disposal of short-term investments			22,100			—			1,031			—			23,131
	Acquisition of shares of parent company			—			(1,100,000	)		—			—			(1,100,000	)
	Other			70,000			—			(70,010	)		—			(10	)

				35,928			(1,127,826	)		(87,728	)		—			(1,179,626	)
Cash flows from financing activities:
	Repayment of long-term debt			(37,500	)		—			—			—			(37,500	)
	Financing cost on long-term debt			(1,195	)		—			—			—			(1,195	)
	Increase in long-term intercompany loan from parent company			—			1,100,000			—			—			1,100,000
	Redemption of retractable preferred shares			(3,660	)		—			—			—			(3,660	)
	Dividends			(42,023	)		(57,844	)		—			19,842			(80,025	)

				(84,378	)		1,042,156			—			19,842			977,620

Net (decrease) increase in cash				(13,473	)		(694	)		1,567			—			(12,600	)
Cash and cash equivalents, beginning of period				25,188			(327	)		417			—			25,278

Cash and cash equivalents, end of period			$	11,715		$	(1,021	)	$	1,984		$	—		$	12,678

9. EMPLOYEE FUTURE BENEFITS:

The following table presents the Company's net benefit costs:

	Nine-month period ended
	September 30, 2003		September 30, 2004
	(in thousands of Canadian dollars)
Net benefit costs	$	2,446	$	3,831

F-55

10. CONTINGENCIES AND GUARANTEES:

(a): In 1999, the purchaser of a business sold by the Company initiated an arbitration by which he claims an amount of $8.6 million as a reduction of the purchase price of the business. It is not possible at this stage to determine the outcome of this claim.

On March 13, 2002, a legal action was initiated by the shareholders of a cable company against Vidéotron Ltée. They contend that Vidéotron Ltée did not respect its commitment related to a stock purchase agreement signed in August 2000. The plaintiffs are requesting compensations totalling $26.0 million. Vidéotron Ltée's management believes that this action is not justified and intends to defend its case before the Courts.

In the normal course of its business, the Company is party to various claims and lawsuits. Even though the outcome of these various pending cases as at September 30, 2004 cannot be determined with certainty, the Company believes that their outcome will not have a materially adverse impact on its operating results or financial position.

(b): Disclosure of guarantees:

In the normal course of its business, the Company enters into numerous agreements containing features that meet the AcG-14 criteria for a guarantee including the following:

Operating leases:

The Company has guaranteed a portion of the residual values of certain assets under operating leases for the benefit of the lessor. If the fair value of the assets, at the end of their respective lease terms, is less than the residual value guaranteed, the Company must, under certain conditions, compensate the lessor for a portion of the shortfall. As at September 30, 2004, the maximum exposure in respect of these guarantees is $7.0 million and no amount has been recorded in the financial statements.

Guarantees under lease agreements:

A subsidiary of the Company has provided guarantees to the lessor of certain of the franchisees for operating leases, with expiry dates through 2013. If the franchisee defaults under the agreement, the subsidiary must, under certain conditions, compensate the lessor for the default. The maximum exposure in respect of these guarantees is $12.0 million. As at September 30, 2004, the subsidiary has not provided for any liability associated with these guarantees, since it is its present estimation that no franchisee will default under the agreement. Recourse against the sub-lessee is also available, up to the total amount due.

Guarantees related to the Senior Notes:

Under the terms of the indenture governing the Senior Notes, the Company is committed to pay any amount of withholding tax that could eventually be levied by any Canadian Taxing Authority on payments made to the lenders so that the amounts the lenders would receive are not less than amounts receivable if no taxes are levied. The amount of such guarantee is not limited and it is not possible for the Company to establish a maximum amount of the guarantee as it is dependent exclusively on future actions, if any, by the Taxation Authorities. Although no recourse exists for such liability, the Company has the right to redeem such long-term debt at their face value if such taxes were levied by the Canadian Taxing Authorities, thereby terminating the guarantee.

11. ISSUANCE OF SENIOR NOTES

F-56

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

TO THE DIRECTORS OF VIDEOTRON TELECOM LTD.

We have audited the balance sheets of Videotron Telecom Ltd. (the "Company") as at December 31, 2002 and 2003 and the statements of operations and deficit and cash flows for each of the years in the two-year period ended December 31, 2003. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

In our opinion, these financial statements present fairly, in all material respects, the financial position of the Company as at December 31, 2002 and 2003 and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2003 in accordance with Canadian generally accepted accounting principles.

Montréal, Canada	/s/ KPMG LLP
January 22, 2004	Chartered Accountants

F-57

VIDEOTRON TELECOM LTD.

STATEMENTS OF OPERATIONS AND DEFICIT

Years ended December 31, 2002 and 2003
(in thousands of Canadian dollars)

		2002			2003
Operating revenue		$	90,048		$	75,558
Direct costs			14,413			10,976

			75,635			64,582
Operating and administrative expenses (note 4)			44,619			47,261

Operating income before the undernoted			31,016			17,321
Depreciation and amortization (note 5)			35,507			35,866
Other income (note 6)			(393	)		(1,423	)
Other items (note 7)			5,103			2,492

			40,217			36,935

Loss before income taxes			(9,201	)		(19,614	)
Income taxes (note 8):
	Current		541			612
	Future		(1,342	)		(6,054	)

			(801	)		(5,442	)

Net loss			(8,400	)		(14,172	)
Deficit at beginning of year			(69,638	)		(78,038	)

Deficit at end of year		$	(78,038	)	$	(92,210	)

See accompanying notes to financial statements.

F-58

VIDEOTRON TELECOM LTD.

BALANCE SHEETS

As at December 31, 2002 and 2003
(in thousands of Canadian dollars)

		2002			2003
Assets
Current assets:
	Accounts receivable (note 9)	$	27,423		$	14,113
	Amounts receivable from parent company		—			4,385
	Inventories		6,200			4,886
	Prepaid expenses		2,240			1,966
	Future tax assets (note 8)		1,760			1,665

			37,623			27,015
Fixed assets (note 10)			231,218			215,167
Future tax assets (note 8)			31,236			37,385
Other assets (note 11)			4,730			1,602

		$	304,807		$	281,169

Liabilities and Shareholder's Equity
Current liabilities:
	Bank indebtedness	$	1,157		$	920
	Accounts payable and accrued liabilities		21,048			18,546
	Accounts payable to affiliated companies (note 12)		1,573			1,067
	Amounts payable to parent company		5,828			—
	Deferred revenue		3,079			2,956
	Income taxes payable		109			—
	Current portion of obligations under capital lease		161			—

			32,955			23,489
Retractable preferred shares (note 13)			1,543			1,543
Shareholder's equity:
	Share capital (note 13)		344,212			344,212
	Contributed surplus		4,135			4,135
	Deficit		(78,038	)		(92,210	)

			270,309			256,137
Commitments (note 15)
Contingencies (note 18)

		$	304,807		$	281,169

See accompanying notes to financial statements.

F-59

VIDEOTRON TELECOM LTD.

STATEMENTS OF CASH FLOWS

Years ended December 31, 2002 and 2003
(in thousands of Canadian dollars)

			2002			2003
Cash flows from operating activities:
	Net loss		$	(8,400	)	$	(14,172	)
	Adjustments for:
		Depreciation and amortization		35,507			35,866
		Future income taxes		(1,342	)		(6,054	)
		Write-down and write-off of assets (note 7)		219			2,492
		Gain on disposal of assets		(42	)		(150	)

				25,942			17,982
	Net change in non-cash operating items (note 14 (a))			(689	)		40

				25,253			18,022
Cash flows from investing activities:
	Change in other assets			(1,468	)		(80	)
	Acquisition of fixed assets			(19,878	)		(17,839	)
	Business acquisition (note 3)			(4,050	)		—
	Proceeds from sale of fixed assets			542			295

				(24,854	)		(17,624	)
Cash flows from financing activities:
	Repayment of obligations under capital lease			(369	)		(161	)

Net increase in cash and cash equivalents				30			237
Cash and cash equivalents, beginning of year				(1,187	)		(1,157	)

Cash and cash equivalents, end of year			$	(1,157	)	$	(920	)

See accompanying notes to the consolidated financial statements.

F-60

VIDEOTRON TELECOM LTD.

NOTES TO FINANCIAL STATEMENTS

Years ended December 31, 2002 and 2003
(tabular amounts in thousands of Canadian dollars)

The Company was incorporated under Part 1A of the Québec Companies Act and provides telecommunication services in the business sector.

1. ACCOUNTING CHANGE:

Disclosure of guarantees:

In February 2003, the Canadian Institute of Chartered Accountants ("CICA") issued Accounting Guideline 14 ("AcG-14"),Disclosure of Guarantees, which requires that certain disclosures be made by a guarantor about its obligations under guarantees in its interim and annual financial statements for the year beginning on or after January 1, 2003.

A guarantee is a contract or an indemnification agreement that contingently requires the Company to make payments to the other party of the contract or agreement, based on changes in an underlying obligation that is related to an asset, a liability or an equity security of the other party, or based on a third party failure to perform under an obligating agreement. It could also be an indirect guarantee of the indebtedness of another party, even though the payment to the other party may not be based on changes in an underlying obligation that is related to an asset, a liability or an equity security of the other party.

In the normal course of business, the Company enters into numerous agreements containing features that meet the AcG-14 criteria for a guarantee including the following:

Operating leases

The Company has guaranteed a portion of the residual values of certain assets under operating leases for the benefit of the lessor. If the fair value of the assets, at the end of their respective lease terms, is less than the residual value guaranteed, then the Company must, under certain conditions, compensate the lessor for a portion of the shortfall. The maximum exposure in respect of these guarantees is $254,000.

2. SIGNIFICANT ACCOUNTING POLICIES:

(a): Cash and cash equivalents:

Cash and cash equivalents are comprised of cash and term deposits with initial maturities of less than three months, less outstanding cheques.

(b): Inventories:

Inventories consist primarily of fiber optic cables and related electronics equipment and are valued at the lower of cost, determined essentially on a weighted average cost basis, or replacement value.

(c): Fixed assets:

Fixed assets are recorded at cost, net of related grants and investment tax credits. Cost includes primarily equipment and direct labour, but also includes financial expenses relating to projects to construct and connect external and internal telecommunication networks for those projects that extend beyond a three-month period. Acquisition, improvement and replacement costs are capitalized, whereas expenses for maintenance and repairs are charged to operating and administrative expenses.

Depreciation is calculated using the following depreciation methods and periods or rates:

Asset	Method	Rate/period
Telecommunication networks	Straight-line	20 years
Technical equipment	Mainly straight-line	3 to 20 years
Furniture and fixtures	Declining balance	20%
Buildings	Declining balance	5%
Leasehold improvements	Straight-line	Over the lease term

Equipment under capital leases is depreciated using the same method, rate or period than the purchased equipment.

F-61

(d): Other assets:

Deferred charges are recorded at cost and include primarily expenses relating to the pre-operating period of certain telecommunication operations. These charges are amortized on a straight-line basis over a period of three to five years. Licenses are amortized using the straight-line over a period of eight years.

(e): Future taxes:

Future income tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Future income tax assets and liabilities are measured using enacted or substantively enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. Future income tax assets and liabilities resulting from a change in tax rates are recognized in income in the period that includes the enactment date. Future income tax assets are recognized and, if realization is not considered "more likely than not", a valuation allowance is provided.

(f): Revenue recognition and deferred revenue:

Operating revenue related to service contracts is recognized in income over the life of the specific contracts on a straight-line basis. Operating revenue from telecommunication services, network access fees and point-to-point telephony is recorded when services are provided. When customers are invoiced, the portion of unearned revenue is recorded as deferred revenue.

(g): Currency translation:

Revenue and expense items arising from transactions in foreign currency are converted into Canadian dollars at the rates in effect on the transaction date. Monetary assets and liabilities are converted into Canadian dollars at the rates in effect at the balance sheet date, non-monetary items are translated at the rates in effect on the transaction date. Exchange gains or losses are recognized in income.

(h): Pensions:

Certain employees of the Company participate in a multi-employer defined benefits pension plan sponsored by affiliated companies. This plan provides for the payment of benefits based on the number of years of service and career average earnings of the employees covered by the plans. Accordingly, pension costs are recorded as if the plan is a defined contribution plan.

Also, other employees of the Company participate in defined contribution pension plans sponsored by affiliated companies. The Company also contributes to its unionized and administrative employees personal registered retirement savings plans. The Company accounts for the cost of its share of the defined contribution pension plans and to the retirement savings plan on the accrual basis of accounting.

(i): Use of estimates:

The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

3. BUSINESS ACQUISITION:

On March 27, 2002, the Company acquired certain operating assets and working capital items in Ontario for a total cash consideration of $4,050,000. This business acquisition was accounted for using the purchase method.

This acquisition is summarized as follows:

Assets acquired:
	Accounts receivable	$	531
	Inventories		1,028
	Fixed assets		1,949
	Licenses		542

Assets acquired at fair value		$	4,050

F-62

4. OPERATING AND ADMINISTRATIVE EXPENSES:

Pension plans:

Pension plan costs recorded for the pension plans and the retirement savings plan amounted to $852,000 for the year ended December 31, 2002 and to $1,290,000 for the year ended December 31, 2003 and were charged to operating and administrative expenses.

5. DEPRECIATION AND AMORTIZATION:

	2002		2003
Fixed assets	$	32,845	$	32,928
Deferred charges		2,494		2,753
Licenses		52		69
Other		116		116

	$	35,507	$	35,866

6. OTHER INCOME:

	2002			2003
Interest on advances to an affiliated company	$	71		$	(248	)
Other interest (revenues) expenses		(376	)		23
Foreign exchange gain		(88	)		(1,198	)

	$	(393	)	$	(1,423	)

7. OTHER ITEMS:

	2002		2003
Network outages (i)	$	3,838	$	—
Severance pay and other charges (ii)		1,265		—
Loss on write-down of fiber optic (iii)		—		1,704
Write-off of fixed assets (ii) and (iv)		—		788

	$	5,103	$	2,492

(i): In August 2002, the Company encountered several network outages due to vandalism on its network. Consequently, costs were incurred to repair the network and to rebuild the confidence of customers.
(ii): In 2002, the Company recorded a restructuring charge associated with the downsizing of its workforce consisting mainly of severance payments which will have been disbursed. Furthermore, assets from non-core activities amounting to $219,000 were written off or disposed of.
(iii): In November 2003, the Company concluded an agreement with a supplier to settle a claim for breach of contract related to the purchase of fiber optic cables. Under this agreement and to meet the conditions of its purchase agreements, the Company paid $2.9 million for fiber optic having a fair value of $1.2 million. Accordingly, a write-down of $1.7 million has been recorded.
(iv): In June 2003, the Company reduced its administration office space which resulted in a net write-off of fixed assets of $788,000.

F-63

8. INCOME TAXES:

The following schedule reconciles income taxes computed on the loss before income taxes under the combined basic income tax rate to the effective income tax amount:

		2002			2003
Income taxes based on the combined:
	Federal and provincial basic income tax rate of 33.12% (2002 — 35.12%)	$	(3,230	)	$	(6,492	)
Change due to the following items:
	Change in enacted tax rate		1,823			—
	Non-deductible charges		—			45
	Federal large corporation tax		538			490
	Other		68			515

Effective income tax		$	(801	)	$	(5,442	)

The tax effects of significant items comprising the Company's net future tax assets are as follows:

		2002			2003
Future tax assets:
	Operating loss carryforwards	$	25,958		$	22,544
	Fixed assets and other assets		5,278			14,841
	Provisions		1,760			1,665

	Net future tax assets		32,996			39,050
Less current future tax asset			(1,760	)		(1,665	)

Net long-term future tax asset		$	31,236		$	37,385

As at December 31, 2003, the Company had net operating loss carryforwards for income tax purposes available to reduce future federal and provincial taxable income of approximately $77,300,000 and $60,500,000 as follows:

	Federal		Provincial
2005	$	13,500	$	10,600
2006		4,700		4,300
2007		17,600		17,600
2008		6,000		2,300
2009		—		—
2010		35,500		25,700

	$	77,300	$	60,500

9. ACCOUNTS RECEIVABLE:

		2002		2003
Trade:
	Third parties	$	7,506	$	5,924
	Companies under common control		19,492		7,892
	Parent company		299		291
	Ultimate parent company		73		—
Current portion of loans to employees			53		6

		$	27,423	$	14,113

F-64

10. FIXED ASSETS:

	2002
	Cost		Accumulated depreciation		Net book value
Telecommunication networks	$	132,801	$	31,252	$	101,549
Technical equipment		152,786		74,881		77,905
Furniture and equipment		73,642		37,358		36,284
Buildings		14,350		3,306		11,044
Leasehold improvements		5,755		2,469		3,286
Land		1,150		—		1,150

	$	380,484	$	149,266	$	231,218

	2003
	Cost		Accumulated depreciation		Net book value
Telecommunication networks	$	137,702	$	38,020	$	99,682
Technical equipment		163,253		90,514		72,739
Furniture and equipment		75,220		46,779		28,441
Buildings		14,463		3,858		10,605
Leasehold improvements		5,132		2,582		2,550
Land		1,150		—		1,150

	$	396,920	$	181,753	$	215,167

Included in technical equipment is equipment under capital lease having a cost of $1,040,000 and accumulated depreciation of $579,000 and $728,000 as at December 31, 2002 and 2003, respectively.

11. OTHER ASSETS:

	2002		2003
Deferred charges (including $13,409 of accumulated depreciation) (2002 — $10,386)	$	3,853	$	1,180
Licenses (including $121 of accumulated depreciation) (2002 — $52)		491		422
Long-term maintenance contract		270		—
Other		116		—

	$	4,730	$	1,602

12. ACCOUNTS PAYABLE TO AFFILIATED COMPANIES:

	2002		2003
Companies under common control	$	52	$	203
Ultimate parent company		1,521		864

	$	1,573	$	1,067

F-65

13. SHARE CAPITAL:

Authorized:

An unlimited number, without par value:

Class A shares, voting and participating

Class B shares, non-voting, participating, retractable at the amount of paid-up capital

Class C shares, non-voting, non-participating, fixed monthly non-cumulative preferred dividend of 1% computed on the redemption price of the preferred shares, retractable and redeemable

		2002			2003
Issued and paid:
	1,171,772 Class A shares	$	160,357		$	160,357
	183,855 Class B shares		183,855			183,855
	1 Class C share		1,543			1,543

			345,755			345,755
Retractable preferred shares:
	1 Class C share (a)		(1,543	)		(1,543	)

		$	344,212		$	344,212

(a): In 1996, the CICA issued Section 3860,Financial Instruments, and the application of its recommendations was deferred until the fiscal year beginning on January 1, 2002 for non-public entities. In accordance with Section 3860, the issue of a financial instrument by a private entity that becomes a public entity should disclose, on a retroactive basis, the fair value and classify the instrument or its component parts as a liability or as equity in accordance with the substance of the contractual agreement on initial recognition and the definition of a financial liability and an equity instrument. The retractable shares are presented as a liability because the Company has the obligation to pay cash upon the request for retraction by the holder of the preferred shares.

14. ADDITIONAL CASH FLOW INFORMATION:

		2002			2003
(a) Net change in non-cash operating items:
	Accounts receivable	$	(4,148	)	$	13,310
	Inventories		1,263			(390	)
	Prepaid expenses		519			544
	Accounts payable and accrued liabilities		2,671			(2,473	)
	Amounts receivable from/payable to affiliated companies		(23,672	)		(10,719	)
	Current income taxes		(242	)		(109	)
	Deferred revenue		377			(123	)
	Promissory note		22,543			—

		$	(689	)	$	40

(b) Other items:
	Income taxes paid	$	439		$	596
	Interest paid		373			98
	Interest received		(667	)		(117	)
(c) Purchase of fixed assets financed by accounts payable			185			156
Purchase of fixed assets financed through obligation under capital leases			344			—

F-66

15. COMMITMENTS:

Under the terms of various operating leases, the Company is committed to make the following minimum annual rental payments:

2004	$	4,117
2005		3,744
2006		3,362
2007		2,447
2008		1,511
2009 and subsequent years		12,269

16. FINANCIAL INSTRUMENTS:

(a): Fair value:

The carrying value of accounts receivable, amounts receivable from parent company, cash net of issued and outstanding cheques, marketable securities, accounts payable and accrued expenses and amounts payable to companies under common control approximates their fair value, as these items are short-term in nature.

(b): Credit risks:

In the normal course of business, the Company assesses regularly the financial position of its clients and reviews the credit history of all new clients. The Company records an allowance for doubtful accounts to cover its exposure to specific customers' credit risks, historical trends and other information on the economic situation. The Company does not believe to be exposed to an above-average credit risk level by its customers.

17. RELATED PARTY TRANSACTIONS:

In addition to transactions disclosed elsewhere in the financial statements, the Company has entered into the following related party transactions, in the normal course of business. These transactions have been recorded at the exchange value, which is the amount established and agreed to by the related parties:

		2002			2003
Ultimate parent company:
	Operating revenue	$	63		$	80
	Operating and administrative expenses		900			900
Parent company:
	Interest expenses (revenues)		286			(248	)
Companies under common control:
	Operating revenue		34,440			24,725
	Operating and administrative expenses		256			884
	Acquisition of fixed assets		102			26
	Interest		(215	)		—

18. CONTINGENCIES:

In the normal course of business, the Company is involved in various claims and litigations. The Company is also being sued by former management employees for wrongful dismissal and other reasons following the reorganization plan established in February 2001. Even if the outcome of these various pending cases as at December 31, 2003 cannot be determined with certainty, the Company believes that they will not have a material adverse impact on its financial position or operating results.

19. SIGNIFICANT DIFFERENCES BETWEEN GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP) IN CANADA AND THE UNITED STATES:

The financial statements have been prepared in accordance with generally accepted accounting principles ("GAAP") in Canada which are different in some respects from those in the United States ("US"), as described below. The following tables set forth the impact of significant differences between Canadian GAAP and US GAAP on the Company's financial statements.

F-67

Consolidated Statements of Operations

		2002			2003
Net loss for the year based on Canadian GAAP		$	(8,400	)	$	(14,172	)
Adjustments:
	Goodwill impairment (i) and (ii)		(270,627	)		-
	Development and pre-operating costs (iii)		(1,223	)		493
	Income taxes (iv)		430			(163	)

Net loss and comprehensive loss for the year based on US GAAP		$	(279,820	)	$	(13,842	)

Consolidated Shareholder's Equity

		2002			2003
Shareholder's equity based on Canadian GAAP		$	270,309		$	256,137
Cumulative adjustments:
	Push-down basis of accounting (i)		270,627			270,627
	Goodwill impairment (ii)		(270,627	)		(270,627	)
	Development and pre-operating costs (iii)		(1,223	)		(730	)
	Income taxes (iv)		430			267

Shareholder's equity based on US GAAP		$	269,516		$	255,674

(i): Push-down basis of accounting:

The reconciliation of net income and shareholder's equity from Canadian GAAP to US GAAP reflects the push-down of the purchase price in connection with the acquisition on October 23, 2000, by Quebecor Media Inc., the ultimate parent company of Videotron Telecom Ltd. Under Canadian GAAP, each entity has retained the historical carrying value basis of its assets and liabilities. The excess of the purchase price over the fair value assigned to the net assets of the Company at the date of acquisition has been allocated to goodwill and has been amortized, up to December 31, 2001, on the straight-line basis over 40 years.

The principal adjustment, taking into account the final allocation of the purchase price finalized in the fourth quarter of 2001, to the historical consolidated financial statements of the Company to reflect Parent's cost basis consisted in the recording of goodwill in the amount of $270.6 million with a corresponding amount in the contribution surplus.

(a): The carrying values of fixed assets decreased by $3.8 million;
(b): Accrued charges increased by $1.2 million;
(c): Future income tax asset increased by $0.5 million; and
(d): The $270.6 million excess of parent's cost over the value assigned to the net assets of the Company at the date of acquisition has been recorded as goodwill and $266.1 million was credited to additional paid-in capital.

(ii): Goodwill impairment:

The accounting requirements for goodwill under Canadian GAAP and US GAAP are similar in all material respects. However, in accordance with the transitional provisions contained in Section 3062 of the CICA Handbook, an impairment loss recognized during the financial year, in which the new recommendations are initially applied, is recognized as the effect of a change in accounting policy and charged to opening retained earnings, without restatement of prior periods. Under US GAAP, an impairment loss recognized as a result of a transitional goodwill impairment test is recognized as the effect of a change in accounting principles in the statement of operations.

(iii): Development and pre-operating costs:

Under Canadian GAAP, certain development and pre-operating costs, which satisfy specified criteria for recoverability, are deferred and amortized. Under US GAAP, these costs are expensed as incurred.

(iv): Income taxes:

This adjustment represents the tax impact of the US GAAP adjustments.

F-68

VIDEOTRON TELECOM LTD.

INTERIM STATEMENTS OF OPERATIONS

(Unaudited)
Nine-month periods ended September 30, 2003 and 2004
(in thousands of Canadian dollars)

		September 30, 2003			September 30, 2004
Operating revenues		$	58,658		$	56,094
Direct costs			8,910			7,370

			49,748			48,724
Operating, general and administrative expenses			36,974			37,316

Operating income before the undernoted			12,774			11,408
Depreciation and amortization			27,039			25,184
Other revenues (note 3)			(1,047	)		(40	)
Other item (note 4)			788			1,700

Loss before income taxes			(14,006	)		(15,436	)
Income taxes (note 5):
	Current		463			340
	Future		(4,317	)		(4,816	)

			(3,854	)		(4,476	)

Net loss			(10,152	)		(10,960	)
Deficit at beginning of period			(78,038	)		(92,210	)
Wind-up of a subsidiary acquired in March 2004 (note 2)			—			(2,583	)

Deficit at end of period		$	(88,190	)	$	(105,753	)

See accompanying notes to unaudited interim financial statements.

F-69

VIDEOTRON TELECOM LTD.

INTERIM BALANCE SHEETS

(Unaudited)
As at December 31, 2003 and September 30, 2004
(in thousands of Canadian dollars)

		December 31, 2003			September 30, 2004
					(Unaudited)
Assets
Current assets:
	Accounts receivable	$	14,113		$	15,237
	Amounts receivable from parent company		4,385			1,648
	Inventories		4,886			4,135
	Prepaid expenses		1,966			2,885
	Future tax assets		1,665			1,211

			27,015			25,116
Fixed assets			215,167			206,827
Future tax assets			37,385			43,341
Other assets			1,602			788

		$	281,169		$	276,072

Liabilities and Shareholder's Equity
Current liabilities:
	Bank indebtedness	$	920		$	3,883
	Accounts payable and accrued liabilities		18,546			21,017
	Amounts payable to affiliated companies		1,067			3,553
	Deferred revenue		2,956			2,796

			23,489			31,249
Retractable preferred shares (note 6)			1,543			2,229
Shareholder's equity:
	Share capital (note 6)		344,212			160,357
	Contributed surplus (note 6)		4,135		��	187,990
	Deficit		(92,210	)		(105,753	)

			256,137			242,594

		$	281,169		$	276,072

Contingencies and guarantees (note 9)

See accompanying notes to unaudited interim financial statements.

F-70

VIDEOTRON TELECOM LTD.

INTERIM STATEMENTS OF CASH FLOWS

(Unaudited)
Nine-month periods ended September 30, 2003 and 2004
(in thousands of Canadian dollars)

			Nine-month periods ended
			September 30, 2003			September 30, 2004
Cash flows from operating activities:
	Net loss		$	(10,152	)	$	(10,960	)
	Adjustments for the following items:
		Depreciation and amortization		27,039			25,184
		Future income taxes		(4,317	)		(4,816	)
		Gain on disposal of fixed assets		(150	)		(82	)
		Other items		788			-

	Cash flows from operations			13,208			9,326
	Changes in non-cash operating items:
		Accounts receivable		16,095			(1,077	)
		Current income taxes		(109	)		—
		Net amounts receivable and payable from/to affiliated companies		(17,513	)		2,593
		Inventories		2,378			751
		Prepaid expenses		79			(919	)
		Accounts payable and accrued liabilities		(2,006	)		2,016
		Deferred revenue		(68	)		(160	)

				(1,144	)		3,204

	Cash flows from operating activities			12,064			12,530
Cash flows from investing activities:
	Acquisition of fixed assets			(13,126	)		(15,632	)
	Change in other assets			(38	)		21
	Proceeds from sales of fixed assets			220			118

	Cash flows used in investing activities			(12,944	)		(15,493	)
Cash flows from financing activities:
	Repayment of obligations under capital lease			(116	)		—

Net change in cash and cash equivalents				(996	)		(2,963	)
Cash and cash equivalents at beginning of period				(1,157	)		(920	)

Cash and cash equivalents at end of period			$	(2,153	)	$	(3,883	)

Cash and cash equivalents are comprised of:
	Cash and cash equivalents		$	1		$	166
	Issued and outstanding cheques			(2,154	)		(4,049	)

			$	(2,153	)	$	(3,883	)

See accompanying notes to unaudited interim financial statements.

F-71

VIDEOTRON TELECOM LTD.

NOTES TO INTERIM FINANCIAL STATEMENTS

(Unaudited)
Nine-month periods ended September 30, 2003 and 2004
(Tabular amounts in thousands of Canadian dollars)

1. BASIS OF PRESENTATION AND ACCOUNTING CHANGES:

The Company is a provider of telecommunication services in the business sector in the Province of Québec and Ontario.

The accompanying unaudited interim financial statements of the Company have been prepared in accordance with Canadian generally accepted accounting principles on a basis consistent with those followed in the most recent audited annual financial statements. These unaudited interim consolidated financial statements do not include all information and note disclosures required by Canadian generally accepted accounting principles for annual financial statements, and, therefore, should be read in conjunction with the December 31, 2003 audited financial statements and the notes below.

2. CORPORATE REORGANIZATION:

On March 1, 2004, the Company has acquired from its parent company all the outstanding shares of Mensys Business Solutions Centre Inc. ("Mensys"), at an agreed value of $686,000. On December 19, 2003, Mensys sold its entire business to a third party and, since then, Mensys is an inoperative company. As consideration, the Company issued one Class C share, with a stated capital of $686,000. The Company wound up Mensys on the same date. As this transaction is between companies under common control, the net assets acquired were recorded at the carrying amount in the books of Mensys. The impact of the acquisition and wind-up is summarized as follows:


Net liabilities acquired:
	Future tax assets	$	686
	Taxes receivable		47
	Assumption of amounts payable to affiliated companies		(2,630	)

Net liabilities assumed		$	(1,897	)

Consideration:
	Issuance of 1 Class C retractable preferred share	$	686
	Deficit assumed upon wind-up of Mensys		(2,583	)

		$	(1,897	)

3. OTHER REVENUES:

	2003			2004
Interest revenues on advances to an affiliated company	$	(161	)	$	(124	)
Foreign exchange (gain) loss		(962	)		65
Other interest expense		76			19

	$	(1,047	)	$	(40	)

Interests paid in the period ended September 30, 2003 and 2004 amounted to $31,443 and $12,203, respectively.

4. OTHER ITEMS:

	2003		2004
Write-off of fixed assets	$	788	$	—
Settlement of claims (i)		—		1,700

	$	788	$	1,700

(i): In September 2004, the Company has settled outstanding claims with former management employees, for a total amount of $3.2 million of which $1.5 million was already recorded in the books.

F-72

5. INCOME TAXES:

The following table reconciles income taxes computed on the loss before income taxes using statutory and effective income tax rates:

	2003			2004
Income taxes based on the consolidated federal and provincial (Québec and Ontario) basic income tax rate of 31.12% (2003 — 33.12%)	$	(4,639	)	$	(4,804	)
Federal large corporations tax		367			301
Non-deductible charges		34			32
Other		384			(5	)

	$	(3,854	)	$	(4,476	)

Income taxes paid in the nine-month periods ended September 30, 2003 and 2004 amounted to $452,000 and $376,000.

6. SHARE CAPITAL:

		December 31, 2003			September 30, 2004
Issued and paid:
	2,515,276 Class A shares (1,171,772 in 2003)	$	160,357		$	160,357
	Nil Class B non-voting shares (183,855 in 2003)		183,855			—
	2 Class C shares (1 in 2003)		1,543			2,229

			345,755			162,586
Less retractable preferred shares:
	2 Class C shares (1 in 2003)		(1,543	)		(2,229	)

		$	344,212		$	160,357

(a): In June 2004, the Company converted the 183,855 Class B shares into 1,343,504 Class A shares. Furthermore, the Company has reduced the paid-up capital of the Class A shares by $183,855,000 and has credited this amount to contributed surplus.
(b): On March 1, 2004, the Company issued 1 Class C share for the payment of the acquisition of all outstanding shares of an inactive subsidiary of the parent company (see note 2).

7. SIGNIFICANT DIFFERENCES BETWEEN GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP) IN CANADA AND THE UNITED STATES:

The interim financial statements have been prepared in accordance with generally accepted accounting principles ("GAAP") in Canada which are different in some respects from those in the United States ("US"), as described below. The following tables set forth the impact of material differences between Canadian GAAP and US GAAP on the Company's interim financial statements.

Statements of Operations

		2003			2004
Net loss for the period based on Canadian GAAP		$	(10,152	)	$	(10,960	)
Adjustments:
	Reversal of amortization on capitalized development and pre-operating costs (iii)		370			367
	Income taxes (iv)		(123	)		(115	)

Net loss for the period and comprehensive loss based on US GAAP		$	(9,905	)	$	(10,708	)

F-73

Shareholder's Equity

		December 31, 2003			September 30, 2004
Shareholder's equity based on Canadian GAAP		$	256,137		$	242,594
Cumulative adjustments:
	Push-down basis of accounting (i)		270,627			270,627
	Goodwill impairment (ii)		(270,627	)		(270,627	)
	Development and pre-operating costs (iii)		(730	)		(363	)
	Income taxes (iv)		267			152

Shareholder's equity based on US GAAP		$	255,674		$	242,383

(i): Push-down basis of accounting

The reconciliation of net income and shareholder's equity from Canadian GAAP to US GAAP reflects the push-down of the purchase price in connection with the acquisition on October 23, 2000, by Quebecor Media Inc., the ultimate parent company of Videotron Telecom Ltd. Under Canadian GAAP, each entity has retained the historical carrying value basis of our assets and liabilities. The excess of the purchase price over the fair value assigned to the net assets of the Company at the date of acquisition has been allocated to goodwill and has been amortized, up to December 31, 2001, on the straight-line basis over 40 years.

The principal adjustments, taking into account the final allocation of the purchase price finalized in the fourth quarter of 2001, to the historical financial statements of the Company to reflect Parent's cost basis, were:

(a): The carrying value of fixed assets was decreased by $3.8 million;
(b): Accrued charges increased by $1.2 million;
(c): Future income tax asset increased by $0.5 million; and
(d): The $270.6 million excess of parent's cost over the value assigned to the net assets of the Company at the date of acquisition has been recorded as goodwill and $266.1 million was credited to additional paid-in capital.

(ii): Goodwill impairment

The accounting requirements for goodwill under Canadian GAAP and US GAAP are similar in all material respects. However, in accordance with the transitional provisions contained in Section 3062 of the CICA Handbook, an impairment loss recognized during the financial year, in which the new recommendations are initially applied, is recognized as the effect of a change in accounting policy and charged to opening retained earnings, without restatement of prior periods. Under US GAAP, an impairment loss recognized as a result of a transitional goodwill impairment test is recognized as the effect of a change in accounting principles in the statement of operations.

(iii): Development and pre-operating costs

Under Canadian GAAP, certain development and pre-operating costs, which satisfy specified criteria for recoverability, are deferred and amortized. Under US GAAP, these costs are expensed as incurred.

(iv): Income taxes

This adjustment represents the tax impact of the US GAAP adjustments.

F-74

8. EMPLOYEE FUTURE BENEFITS:

The following table presents the Company's net benefit costs:

		September 30, 2003			September 30, 2004
Net benefit costs		$	862		$	605

9. CONTINGENCIES AND GUARANTEES:

(a): In the normal course of business, the Company is involved in various claims and litigations. The Company is also being sued by former management employees for wrongful dismissal and other reasons following the reorganization plan established in February 2001. Even if the outcome of these various pending cases as at September 30, 2004 cannot be determined with certainty, the Company believes that it will not have a material adverse impact on its financial position or operating results.
(b): Disclosure of guarantees:

In the normal course of its operations, the Company enters into numerous agreements containing features that meet the AcG-14 criteria for a guarantee including the following:

Operating leases:

The Company has guaranteed a portion of the residual values of certain assets under operating leases for the benefit of the lessor. If the fair value of the assets, at the end of their respective lease terms, is less than the residual value guaranteed, the Company must, under certain conditions, compensate the lessor for a portion of the shortfall. As at September 30, 2004, the maximum exposure in respect of these guarantees is $95,000 and no amount has been recorded in the financial statements.

F-75

VIDÉOTRON LTÉE

INTRODUCTION TO PRO FORMA COMBINED FINANCIAL INFORMATION

As at and for the nine-month period ended September 30, 2004 and for the
years ended December 31, 2001, 2002 and 2003

Vidéotron Ltée and Videotron Telecom Ltd. are companies under common control. These companies intend to merge their operations in 2005. This combination will be accounted for using the continuity of interests method under Canadian generally accepted accounting principles.

The following pro forma combined financial statements present the consolidated financial position and consolidated results of operations of Vidéotron Ltée and the financial position and results of operations of Videotron Telecom Ltd. as at and for the nine-month period ended September 30, 2004 and for the years ended December 31, 2001, 2002 and 2003.

The pro forma combined financial statements are based on (a) for the balance sheet as of September 30, 2004, and the statement of operations for the nine-month period then ended, the unaudited historical consolidated financial statements of Vidéotron Ltée and the unaudited historical financial statements of Videotron Telecom Ltd. (b) for the statement of operations for the three-year period ended December 31, 2003, the audited historical consolidated financial statements of Vidéotron Ltée and the audited historical financial statements of Videotron Telecom Ltd. The audited historical consolidated financial statements for the three-year period ended December 31, 2003 and as at and for the nine-month period ended September 30, 2004 of Vidéotron Ltée and the audited historical financial statements for the two-year period ended December 31, 2003 and as at and for the nine-month period ended September 30, 2004 of Videotron Telecom Ltd. are included elsewhere in this prospectus.

The pro forma combined statements of operations for the nine months ended September 30, 2004 and the three years ended December 31, 2003 give effect to the combination as if they had occurred on January 1, 2001, and the pro forma combined balance sheet gives effect to the combination as if it had occurred on September 30, 2004. The transaction set forth above and the related adjustments are more fully described in the accompanying notes.

The pro forma combined statements of operations and balance sheet do not purport to represent what the results of operations or financial position would have been had the transaction set forth above in fact occurred on the date indicated above or to project results of operations or financial position for any future period or at any future date.

In preparing the pro forma combined statements of operations and the pro forma combined balance sheet, no adjustments have been made to reflect the additional costs or savings that could result from the combination of Vidéotron Ltée and of Videotron Telecom Ltd.

The pro forma combined financial statements are prepared on the basis of generally accepted accounting principles in Canada which differ in some respects from the generally accepted accounting principles in the United States of America. The significant differences are presented in a note to this pro forma financial information.

All references in this prospectus to "dollars" or "$" are to Canadian dollars.

F-76

VIDÉOTRON LTÉE

PRO FORMA COMBINED BALANCE SHEET

As at September 30, 2004
(in thousands of Canadian dollars)
(Unaudited)

		Vidéotron Ltée			Videotron Telecom Ltd.			Pro forma adjustments (a)			Pro forma as adjusted
ASSETS
Current assets:
	Cash and cash equivalents	$	25,747		$	166		$	—		$	25,913
	Accounts receivable		71,423			16,885			(2,731	)		85,577
	Income taxes receivable		5,382			—			—			5,382
	Inventories		23,784			4,135			—			27,919
	Prepaid expenses		10,192			2,885			—			13,077
	Future income taxes		7,972			1,211			—			9,183

			144,500			25,282			(2,731	)		167,051
Fixed assets			888,146			206,827			—			1,094,973
Goodwill			438,360			—			—			438,360
Deferred charges			23,237			788			—			24,025
Future income taxes			13,963			43,341			—			57,304
Investments			1,100,066			—			—			1,100,066

		$	2,608,272		$	276,238		$	(2,731	)	$	2,881,779

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
	Issued and outstanding cheques	$	13,069		$	4,049		$	—		$	17,118
	Accounts payable and accrued liabilities		126,797			21,017			—			147,814
	Amounts payable to affiliated companies		16,668			3,553			(2,731	)		17,490
	Deferred revenue		97,241			2,796			—			100,037
	Income taxes payable		2,348			—			—			2,348
	Current portion of long-term debt		50,000			—			—			50,000

			306,123			31,415			(2,731	)		334,807
Deferred revenue			10,403			—			—			10,403
Forward exchange contract			31,818			—			—			31,818
Future tax liabilities			135,029			—			—			135,029
Retractable preferred shares			—			2,229			—			2,229
Long-term debt			2,034,368			—			—			2,034,368
Non-controlling interest in subsidiaries			764			—			—			764

			2,518,505			33,644			(2,731	)		2,549,418
Shareholders' equity:
	Share capital		173,236			160,357			—			333,593
	Contributed surplus		362,144			187,990			—			550,134
	Deficit		(445,613	)		(105,753	)		—			(551,366	)

			89,767			242,594			—			332,361

		$	2,608,272		$	276,238		$	(2,731	)	$	2,881,779

F-77

VIDÉOTRON LTÉE

PRO FORMA COMBINED STATEMENT OF OPERATIONS

Nine-month period ended September 30, 2004
(in thousands of Canadian dollars)
(Unaudited)

		Vidéotron Ltée			Videotron Telecom Ltd.			Pro forma adjustments (a)			Pro forma as adjusted
Operating revenues		$	640,387		$	56,094		$	(9,329	)	$	687,152
Expenses:
	Direct costs		182,651			7,370			(4,452	)		185,569
	Operating, general and administrative expenses		204,235			37,316			(4,877	)		236,674
	Depreciation and amortization		94,797			25,184			—			119,981
	Financial expenses		133,339			(40	)		—			133,299
	Dividend income from parent company		(85,626	)		—			—			(85,626	)
	Other item		—			1,700			—			1,700

			529,396			71,530			(9,329	)		591,597

Income (loss) before income taxes and non-controlling interest			110,991			(15,436	)		—			95,555
Income taxes			10,211			(4,476	)		—			5,735
Non-controlling interest in subsidiaries			79			—			—			79

Net income (loss)		$	100,701		$	(10,960	)	$	—		$	89,741

F-78

VIDÉOTRON LTÉE

PRO FORMA COMBINED STATEMENT OF OPERATIONS

Year ended December 31, 2003
(in thousands of Canadian dollars)
(Unaudited)

		Vidéotron Ltée			Videotron Telecom Ltd.			Pro forma adjustments (a)			Pro forma as adjusted
Operating revenues		$	805,001		$	75,558		$	(19,895	)	$	860,664
Expenses:
	Direct costs		245,967			10,976			(12,228	)		244,715
	Operating, general and administrative expenses		283,784			47,261			(7,667	)		323,378
	Depreciation and amortization		122,958			35,866			—			158,824
	Financial expenses		64,602			(1,423	)		—			63,179
	Other items		(2,500	)		2,492			—			(8	)

			714,811			95,172			(19,895	)		790,088

Income (loss) before income taxes and non-controlling interest			90,190			(19,614	)		—			70,576
Income taxes			26,830			(5,442	)		—			21,388
Non-controlling interest in subsidiaries			49			—			—			49

Net income (loss)		$	63,311		$	(14,172	)	$	—		$	49,139

F-79

VIDÉOTRON LTÉE

PRO FORMA COMBINED STATEMENT OF OPERATIONS

Year ended December 31, 2002
(in thousands of Canadian dollars)
(Unaudited)

		Vidéotron Ltée		Videotron Telecom Ltd.			Pro forma adjustments (a)			Pro forma as adjusted
Operating revenues		$	781,040	$	90,048		$	(29,870	)	$	841,218
Expenses:
	Direct costs		259,686		14,413			(21,210	)		252,889
	Operating, general and administrative expenses		285,816		44,619			(8,660	)		321,775
	Depreciation and amortization		120,016		35,507			—			155,523
	Financial expenses		76,188		(393	)		—			75,795
	Other items		25,000		5,103			—			30,103

			766,706		99,249			(29,870	)		836,085

Income (loss) before income taxes and non-controlling interest			14,334		(9,201	)		—			5,133
Income taxes			2,663		(801	)		—			1,862
Non-controlling interest in subsidiaries			188		—			—			188

Net income (loss)		$	11,483	$	(8,400	)	$	—		$	3,083

F-80

VIDÉOTRON LTÉE

PRO FORMA COMBINED STATEMENT OF OPERATIONS

Year ended December 31, 2001
(in thousands of Canadian dollars)
(Unaudited)

		Vidéotron Ltée			Videotron Telecom Ltd.			Pro forma adjustments (a)			Pro forma as adjusted
Operating revenues		$	765,454		$	94,278		$	(28,236	)	$	831,496
Expenses:
	Direct costs		227,322			23,507			(19,250	)		231,579
	Operating, general and administrative expenses		274,202			47,920			(8,986	)		313,136
	Depreciation and amortization		116,692			34,139			—			150,831
	Financial expenses		101,307			609			—			101,916
	Other items		95,570			23,059			—			118,629

			815,093			129,234			(28,236	)		916,091

Loss before income taxes and non-controlling interest			(49,639	)		(34,956	)		—			(84,595	)
Income taxes			(10,076	)		(7,825	)		—			(17,901	)
Non-controlling interest in subsidiaries			145			—			—			145

Loss before amortization of goodwill			(39,708	)		(27,131	)		—			(66,839	)
Amortization of goodwill			13,331			—			—			13,331

Net loss		$	(53,039	)	$	(27,131	)	$	—		$	(80,170	)

F-81

VIDÉOTRON LTÉE

NOTES TO PRO FORMA COMBINED FINANCIAL INFORMATION

As at and for the nine-month period ended September 30, 2004 and for the
years ended December 31, 2001, 2002 and 2003
(in thousands of Canadian dollars)
(Unaudited)

(a): Assumptions underlying the pro forma combined balance sheet and statements of operations:

Elimination of intercompany transactions and balances:

All significant transactions and balances between Vidéotron Ltée and its subsidiaries and Videotron Telecom Ltd. have been eliminated in these pro forma financial statements.

(b): Significant differences between generally accepted accounting principles (GAAP) in Canada and the United States:

The pro forma combined financial statements of operations have been prepared in accordance with generally accepted accounting principles ("GAAP") in Canada which are different in some respects from those in the United States ("US"), as described below. The following tables set forth the impact of significant differences between Canadian GAAP and US GAAP on the pro forma combined financial statements of operations and shareholders' equity.

F-82

Pro Forma Combined Statements of Operations

		December 31, 2001			December 31, 2002			December 31, 2003			September 30, 2004
					(12 months)						(9 months)
Net income (loss) for the period based on Canadian GAAP		$	(80,170	)	$	3,083		$	49,139		$	89,741
Adjustments:
	Push-down basis of accounting (i)		(59,053	)		2,838			(7,954	)		(5,804	)
	Goodwill impairment (i) and (ii)		—			(2,274,627	)		—			—
	Development and pre- operating costs (iii)		(2,931	)		1,521			2,978			546
	Accounting for derivative instruments and hedging activities (iv)		(17,454	)		3,338			1,607			11,174
	Interest on debt contracted by the parent company for financing of its subsidiary		(14,319	)		—			—			—
	Income taxes (v)		17,209			(426	)		(937	)		(171	)

Net income (loss) for the period based on US GAAP			(156,718	)		(2,264,273	)		44,833			95,486
Other comprehensive loss (vi):
	Pension and postretirement benefits (vii)		(314	)		—			(613	)		—
	Accounting for derivative instruments and hedging activities (iv)		—			—			(843	)		(2,540	)

Comprehensive income (loss) based on US GAAP		$	(157,032	)	$	(2,264,273	)	$	43,377		$	92,946

Accumulated other comprehensive loss at beginning of period		$	—		$	(314	)	$	(314	)	$	(1,770	)
Changes in the period			(314	)		—			(1,456	)		(2,540	)

Accumulated other comprehensive loss at end of period		$	(314	)	$	(314	)	$	(1,770	)	$	(4,310	)

Consolidated Shareholders' Equity		September 30, 2004
Shareholders' equity based on Canadian GAAP		$	332,361
Cumulative adjustments:
	Push-down basis of accounting (i)		4,585,944
	Goodwill impairment (ii)		(2,274,627	)
	Development and pre-operating costs (iii)		(630	)
	Accounting for derivative instruments and hedging activities (iv)		(4,718	)
	Income taxes (v)		235
	Pension and postretirement benefits (vii)		(927	)

Shareholders' equity based on US GAAP		$	2,637,638

(i): Push-down basis of accounting

The basis of accounting used in the preparation of these financial statements under US GAAP reflects the push-down of the purchase price paid in connection with the acquisition on October 23, 2000 by Quebecor Media Inc. of the parent of each of the combined entities. Under Canadian GAAP, each entity has retained the historical carrying value basis of its assets and liabilities. The excess of the purchase price over the value assigned to the net assets of the combined companies at the date of acquisition has been allocated to goodwill and has been amortized, up to December 31, 2001, on the straight-line basis over 40 years.

(a): The carrying values of fixed assets were increased by $110.8 million;
(b): The deferred charges related to financing fees and exchange losses on long-term debt have been written off to reflect the fair value of the assumed long-term debt, and further reduction in deferred charges was recorded for a total amount of $22.6 million;
(c): Accrued charges increased by $41.5 million;

F-83

(d): Future income tax liability increased by $24.4 million; and
(e): The $4,631.1 million excess of parent's cost over the value assigned to the net assets of the combined companies at the date of acquisition has been recorded as goodwill and $4,653.4 million was credited to contributed surplus.

(ii): Goodwill impairment

The accounting requirements for goodwill under Canadian GAAP and US GAAP are similar in all material respects. However, in accordance with the transitional provisions contained in Section 3062 of the CICA Handbook, an impairment loss recognized during the financial year in which the new recommendations are initially applied, is recognized as the effect of a change in accounting policy and charged to opening retained earnings, without restatement of prior periods. Under US GAAP, an impairment loss recognized as a result of a transitional goodwill impairment test is recognized as the effect of a change in accounting principles in the statement of operations.

(iii): Development and pre-operating costs

Under Canadian GAAP, certain development and pre-operating costs, which satisfy specified criteria for recoverability, are deferred and amortized. Under US GAAP, these costs are expensed as incurred.

(iv): Accounting for derivative instruments and hedging activities

Vidéotron Ltée adopted, at the beginning of 2001, Statement of Financial Accounting Standards No. 133 "Accounting for Derivative Instruments and Hedging Activities" as amended (SFAS 133), which establishes accounting and reporting standards for derivative instruments and hedging activities and requires that all derivatives be recorded as either assets or liabilities in the balance sheet at fair value with changes in fair value recorded in the statement of operations, unless the instrument is effective and qualifies for hedge accounting. As of the adoption date, the Company did not hold any of these instruments. Under Canadian GAAP, derivative financial instruments are accounted for on an accrual basis. Realized and unrealized gains and losses are deferred and recognized in income in the same period and in the same financial statement category as the income or expense arising from the corresponding hedged position. Furthermore, under Canadian GAAP, the change in foreign exchange rate on long-term foreign currency denominated instruments is recorded either as an asset or liability when hedge accounting is used. Under US GAAP, these changes are recorded in the statement of operations or other comprehensive income based on whether a hedging relationship has been established which qualifies as a hedging relationship under US GAAP.

(v): Income taxes

This adjustment represents the tax impact of the US GAAP adjustments.

(vi): Comprehensive income

Comprehensive income is presented in accordance with FAS No. 130, "Reporting Comprehensive Income". This standard defines comprehensive income as all changes in equity other than those resulting from investments by owners and distributions to owners. Other comprehensive income consists of adjustments to shareholders' equity and the accrued benefit liability, representing the excess of the accumulated pension benefit obligation as compared to the fair value of plan assets and to changes in the derivative fair values of contracts that are designated effective and qualify as cash flow hedges.

(vii): Pension and postretirement benefits

The accounting requirements for pension and postretirement benefits under Canadian GAAP and US GAAP are similar in all material respects. However, under US GAAP, if the accumulated benefit obligation exceeds the fair value of a pension plan's assets, the entity is required to recognize a minimum accrued liability equal to the unfunded accumulated benefit obligation, which is recorded as a separate component of shareholders' equity under the caption "other comprehensive income".

F-84

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Vidéotron Ltée

Offer to Exchange All Outstanding US$315,000,000
Principal Amount of
6⁷/8% Senior Notes due January 15, 2014
Issued on November 19, 2004
for US$315,000,000 Principal Amount of
6⁷/8% Senior Notes due January 15, 2014
That Have Been Registered Under the Securities Act of 1933

PROSPECTUS
January , 2005

No dealer, salesperson or other person is authorized
to give any information or to represent anything not contained in this prospectus.
You must not rely on any unauthorized information or representations.

This prospectus is an offer to exchange only the old notes for the new notes
in accordance with the terms included in this prospectus, but only under circumstances
and in jurisdictions where it is lawful to do so.
The information contained in this prospectus is current only as of its date.

Until February , 2005, all dealers that effect transactions in these securities,
whether or not participating in this offering, may be required to deliver a prospectus.
This is in addition to the dealers' obligation to deliver a prospectus when acting as
underwriters and with respect to their unsold allotments or subscriptions.

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 20. Indemnification of Officers and Directors.

Each of the following summaries is qualified in its entirety by reference to the complete text of the applicable statutes, certificates of incorporation and bylaws referred to below.

Each of Vidéotron Ltée, Vidéotron TVN inc., Le SuperClub Vidéotron ltée, Vidéotron (1998) ltée, Groupe de Divertissement SuperClub Inc., SuperClub Vidéotron Canada inc. and Les Propriétés SuperClub inc. is incorporated under the laws of the Province of Québec.

Under theCompanies Act (Québec), the Registrant shall assume the defense of a director or officer prosecuted by a third party for an act done in the exercise of his duties and shall pay damages, if any, resulting from that act, unless the director or officer has committed a grievous offence or a personal offence separable from the exercise of his duties.

However, in penal or criminal proceeding, the Registrant shall assume only the payment of the expenses of the director or officer if he had reasonable grounds to believe that his conduct was in conformity with the law, or the payment of the expenses of the director or officer if he has been freed or acquitted.

The Registrant shall assume the expenses of the director or officer, if, having prosecuted him for an act done in the exercise of his duties, it loses its case and the court so decides.

If the Registrant wins its case only in part, the court may determine the amount of the expenses it shall assume.

Item 21. Exhibits and Financial Statement Schedules.

(a) Exhibits.

The exhibits to this registration statement are listed in the Exhibit Index to this registration statement, which Exhibit Index is hereby incorporated by reference.

(b) Financial Statement Schedules.

Schedule II — Valuation and Qualifying Accounts for the three years ended December 31, 2004 is included in the registration statement as Exhibit 12.4.

Item 22. Undertakings.

(a): Each undersigned registrant hereby undertakes:

(1) to file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement;

(i) to include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;

(ii) to reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of a prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; and

(iii) to include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;

(2) that, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof;

(3) to remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering; and

(4) to file a post-effective amendment to the registration statement to include any financial statements required by Item 8.A. of Form 20-F at the start of any delayed offering or throughout a continuous offering. Financial statements and information otherwise required by Section 10(a)(3) of the Act need not be furnished,provided, that the registrant includes in the prospectus, by means of a post-effective amendment, financial statements required pursuant to this paragraph (a)(4) and other information necessary to ensure that all other information in the prospectus is at least as current as the date of those financial statements.

(b) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of each registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by a registrant of expenses incurred or paid by a director, officer or controlling person of such registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, such registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

(c) Each undersigned registrant hereby undertakes: (i) to respond to requests for information that is incorporated by referenced into the prospectus pursuant to Item 4, 10(b), 11 or 13 of this form, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means; and (ii) to arrange or provide for a facility in the U.S. for the purpose of responding to such requests. The undertaking in subparagraph (i) above includes information contained in documents filed subsequent to the effective date of the registration statement through the date of responding to the request.

(d) Each undersigned registrant hereby undertakes to supply by means of a post-effective amendment all information concerning a transaction and the company being acquired involved therein, that was not the subject of and included in the registration statement when it became effective.

SIGNATURES

Pursuant to the requirements of the Securities Act, each co-registrant has duly caused this amendment to the registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Montreal, the Province of Québec, Canada on this 14^th day of January, 2005.

		VIDÉOTRON LTÉE
		By:	/s/ JACQUES MALLETTE Name: Jacques Mallette Title: Executive Vice President and Chief Financial Officer

		VIDÉOTRON TVN INC.
		By:	/s/ JACQUES MALLETTE Name: Jacques Mallette Title: Executive Vice President and Chief Financial Officer

		LE SUPERCLUB VIDÉOTRON LTÉE
		By:	/s/ RICHARD SOLY Name: Richard Soly Title: President

		VIDÉOTRON (1998) LTÉE
		By:	/s/ JACQUES MALLETTE Name: Jacques Mallette Title: Executive Vice President and Chief Financial Officer

		GROUPE DE DIVERTISSEMENT SUPERCLUB INC.
		By:	/s/ RICHARD SOLY Name: Richard Soly Title: President

		SUPERCLUB VIDÉOTRON CANADA INC.
		By:	/s/ RICHARD SOLY Name: Richard Soly Title: President

		LES PROPRIÉTÉS SUPERCLUB INC.
		By:	/s/ RICHARD SOLY Name: Richard Soly Title: President

Pursuant to the requirements of the Securities Act of 1933, this amendment to the registration statement has been signed by the following persons in the capacities and on the dates indicated.

VIDÉOTRON LTÉE

Name and Signature	Title	Date

* Robert Dépatie	Director and President and Chief Executive Officer	January 14, 2005

* Jacques Mallette	Director and Executive Vice President and Chief Financial Officer	January 14, 2005

* Serge Gouin	Chairman of the Board of Directors and Director	January 14, 2005

* Jean La Couture	Director	January 14, 2005

* François Laurin	Director	January 14, 2005

* Jean-Louis Mongrain	Director	January 14, 2005

* Pierre Karl Péladeau	Director	January 14, 2005

VIDÉOTRON TVN INC.

Name and Signature	Title	Date

* Robert Dépatie	Director and President and Chief Executive Officer	January 14, 2005

* Jacques Mallette	Director and Executive Vice President and Chief Financial Officer	January 14, 2005

* Pierre Karl Péladeau	Director	January 14, 2005

LE SUPERCLUB VIDÉOTRON LTÉE

Name and Signature	Title	Date

* Richard Soly	Director and President	January 14, 2005

* Jacques Collins	Director, Finance and Control	January 14, 2005

* Natalie Larivière	Director	January 14, 2005

* Jacques Mallette	Director	January 14, 2005

VIDÉOTRON (1998) LTÉE

Name and Signature	Title	Date

* Robert Dépatie	Director and President and Chief Executive Officer	January 14, 2005

* Jacques Mallette	Director and Executive Vice President and Chief Financial Officer	January 14, 2005

* Pierre Karl Péladeau	Director	January 14, 2005

GROUPE DE DIVERTISSEMENT SUPERCLUB INC.

Name and Signature	Title	Date

* Richard Soly	Director and President	January 14, 2005

* Jacques Collins	Director, Finance and Control	January 14, 2005

* Natalie Larivière	Director	January 14, 2005

* Jacques Mallette	Director	January 14, 2005

SUPERCLUB VIDÉOTRON CANADA INC.

Name and Signature	Title	Date

* Richard Soly	Director and President	January 14, 2005

* Jacques Collins	Director, Finance and Control	January 14, 2005

* Natalie Larivière	Director	January 14, 2005

* Jacques Mallette	Director	January 14, 2005

LES PROPRIÉTÉS SUPERCLUB INC.

Name and Signature	Title	Date

* Richard Soly	Director and President	January 14, 2005

* Jacques Collins	Director, Finance and Control	January 14, 2005

* Natalie Larivière	Director	January 14, 2005

* Jacques Mallette	Director	January 14, 2005


*By:	/s/ JACQUES MALLETTE Name: Jacques Mallette Title: Attorney-in-fact

Pursuant to the requirements of Section 6(a) of the Securities Act of 1933, the undersigned certifies that it is the duly authorized United States representative of each co-registrant and has duly caused this amendment to the registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Newark, the State of Delaware, this 14^th day of January, 2005.

		PUGLISI & ASSOCIATES (Authorized U.S. Representative)
		By:	/s/ GREGORY F. LAVELLE Name: Gregory F. Lavelle Title: Managing Director

EXHIBIT INDEX

1.1†		Purchase Agreement dated as of November 15, 2004 by and among Vidéotron Ltée, the subsidiary guarantors signatory thereto and Banc of America Securities LLC, Citigroup Global Markets Inc., RBC Capital Markets Corporation, Harris Nesbitt Corp., Scotia Capital (USA) Inc., TD Securities (USA) LLC, CIBC World Markets Corp., Credit Suisse First Boston LLC, NBF Securities (USA) Corp. and HSBC Securities (USA) Inc. (Exhibits C and D to this Exhibit 1.1 are included as Exhibits 4.5 and 10.2, respectively.)
3.1**		Articles of Incorporation of Vidéotron Ltée (translation).
3.2		Articles of Amendment dated January 16, 2004 to Articles of Incorporation of Vidéotron Ltée (translation) (incorporated by reference to Exhibit 1.2 to Vidéotron Ltée's Annual Report on Form 20-F for the year ended December 31, 2003 dated April 29, 2004).
3.3**		By-laws of Vidéotron Ltée.
3.4		By-law No. 2004-1 of Vidéotron Ltée adopted January 16, 2004 (translation).
3.5**		Articles of Incorporation of Vidéotron TVN inc. (translation).
3.6**		By-laws of Vidéotron TVN inc.
3.7**		Articles of Incorporation of Vidéotron (1998) ltée (translation).
3.8		Articles of Amendment dated January 16, 2004 to Articles of Incorporation of Videotron (1998) ltée (translation).
3.9**		By-laws of Vidéotron (1998) ltée.
3.10		By-law No. 2004-1 of Vidéotron (1998) ltée (translation).
3.11**		Articles of Incorporation of Le SuperClub Vidéotron ltée (translation).
3.12**		By-laws of Le SuperClub Vidéotron ltée.
3.13**		Articles of Incorporation of Groupe de Divertissement SuperClub inc. (translation).
3.14		Articles of Amendment dated January 16, 2004 to Articles of Incorporation of Groupe de Divertissement SuperClub inc. (translation).
3.15**		By-laws of Groupe de Divertissement SuperClub inc.
3.16		By-law No. 2004-1 of Groupe de Divertissement SuperClub inc. adopted January 16, 2004 (translation).
3.17		Articles of Incorporation of SuperClub Vidéotron Canada inc. (translation).
3.18		By-laws of SuperClub Vidéotron Canada inc. (translation).
3.19		Articles of Incorporation of Les Propriétés SuperClub inc. (translation).
3.20		By-laws of Les Propriétés SuperClub inc. (translation).
4.1*		Form of 6⁷/8% Senior Notes due January 15, 2014 of Vidéotron Ltée being registered pursuant to the Securities Act of 1933 (included as Exhibit A to Exhibit 4.3 below).
4.2*		Form of Notation of Guarantee by the subsidiary guarantors of the 6⁷/8% Senior Notes due January 15, 2014 of Vidéotron Ltée (included as Exhibit E to Exhibit 4.3 below).
4.3*		Indenture dated as of October 8, 2003 (the "Indenture") by and among Vidéotron Ltée, the subsidiary guarantors signatory thereto and Wells Fargo Bank Minnesota, N.A. (now named Wells Fargo Bank, National Association), as trustee.
4.4†		First Supplemental Indenture dated as of July 12, 2004 by and among Vidéotron Ltée, SuperClub Vidéotron Canada inc., Les Propriétés SuperClub inc. and Wells Fargo Bank, National Association, as trustee.
4.5†		Registration Rights Agreement dated as of November 19, 2004 by and among Vidéotron Ltée, the subsidiary guarantors signatory thereto and Banc of America Securities LLC, Citigroup Global Markets Inc., RBC Capital Markets Corporation, Harris Nesbitt Corp., Scotia Capital (USA) Inc., TD Securities (USA) LLC, CIBC World Markets Corp., Credit Suisse First Boston LLC, NBF Securities (USA) Corp. and HSBC Securities (USA) Inc.

4.6		Form of 9¹/8% Senior Secured First Priority Notes due 2007 of CF Cable TV Inc. (incorporated by reference to Exhibit 4.2 to CF Cable TV Inc.'s Amendment No. 1 to the Registration Statement on Form F-1 dated July 6, 1995, Registration Statement No. 33-93440).
4.7		Form of Indenture dated as of July, 1995 among CF Cable TV Inc., the guarantors signatory thereto and Chemical Bank (now named JPMorgan Chase Bank), as trustee (the "CF Cable Indenture") (incorporated by reference to Exhibit 4.1 to CF Cable TV Inc.'s Amendment No. 1 to the Registration Statement on Form F-1 dated July 6, 1995, Registration Statement No. 33-93440).
4.8		First Supplemental Indenture dated as of November 1, 1996 among CF Cable TV Inc., the guarantors signatory thereto and The Chase Manhattan Bank (formerly named Chemical Bank, now named JPMorgan Chase Bank), as trustee.
4.9		Second Supplemental Indenture dated as of October 28, 1998 among CF Cable TV Inc., the guarantors signatory thereto and The Chase Manhattan Bank (formerly named Chemical Bank, now named JPMorgan Chase Bank), as trustee.
4.10		Third Supplemental Indenture dated as of December 21, 2001 among CF Cable TV Inc., the guarantors signatory thereto and JPMorgan Chase Bank (formerly named The Chase Manhattan Bank and previously named Chemical Bank), as trustee.
4.11		Fourth Supplemental Indenture dated as of March 11, 2002 among CF Cable TV Inc., the guarantors signatory thereto and JPMorgan Chase Bank (formerly named The Chase Manhattan Bank and previously named Chemical Bank), as trustee.
4.12		Forms of Guarantee under the CF Cable Indenture (incorporated by reference to Exhibit 4.3 to CF Cable TV Inc.'s Amendment No. 1 to the Registration Statement on Form F-1, dated July 6, 1995, Registration Statement No. 33-93440).
4.13		Forms of Deed of Hypothec under the CF Cable Indenture (incorporated by reference to Exhibit 4.4 to CF Cable TV Inc.'s Amendment No. 1 to the Registration Statement on Form F-1 dated July 6, 1995, Registration Statement No. 33-93440).
4.14		Form of General Security Agreement under the CF Cable Indenture (incorporated by reference to Exhibit 4.4 to CF Cable TV Inc.'s Amendment No. 1 to the Registration Statement on Form F-1 dated July 6, 1995, Registration Statement No. 33-93440).
4.15		Form of General Assignment of Book Debts under the CF Cable Indenture (incorporated by reference to Exhibit 4.4 to CF Cable TV Inc.'s Amendment No. 1 to the Registration Statement on Form F-1 dated July 6, 1995, Registration Statement No. 33-93440).
4.16		Forms of Mortgage under the CF Cable Indenture (incorporated by reference to Exhibit 4.4 to CF Cable TV Inc.'s Amendment No. 1 to the Registration Statement on Form F-1 dated July 6, 1995, Registration Statement No. 33-93440).
4.17*		Inter-Creditor Agreement made as of June 29, 2001 among Royal Bank of Canada, The Chase Manhattan Bank, CF Cable TV Inc. and the guarantors signatory thereto (the "Inter-Creditor Agreement").
4.17*		Amending Agreement to the Inter-Creditor Agreement made as of October 8, 2003 among Royal Bank of Canada, JPMorgan Chase Bank (formerly known as The Chase Manhattan Bank), CF Cable TV Inc., Vidéotron (Regional) Ltée and Télé-Câble Charlevoix (1977) Inc.
5.1†		Opinion of Arnold & Porter LLP, U.S. counsel to Vidéotron Ltée, dated December 6, 2004.
5.2†		Opinion of Ogilvy Renault, Canadian counsel to Vidéotron Ltée, dated December 6, 2004.
8.1†		Opinion of Arnold & Porter LLP, U.S. counsel to Vidéotron Ltée, dated December 6, 2004 regarding U.S. federal income tax considerations (included in Exhibit 5.1 above).
8.2†		Opinion of Ogilvy Renault, Canadian counsel to Vidéotron Ltée, dated December 6, 2004 regarding Canadian federal income tax considerations (included in Exhibit 5.2 above).

10.1*		Sixth Amending Agreement, dated as of October 8, 2003, to the Credit Agreement dated as of November 28, 2000, as amended by the 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 and a Fifth Amending Agreement dated as of March 24, 2003, among Vidéotron Ltée, Royal Bank of Canada, as administrative agent, and the financial institutions signatory thereto and acknowledged by Le SuperClub Vidéotron ltée, Groupe de Divertissement SuperClub inc., Vidéotron (1998) ltée, CF Cable TV Inc., Videotron (Regional) Ltd, Télé-Câble Charlevoix (1997) inc., Vidéotron TVN inc. and Câblage QMI inc., as guarantors, and by Quebecor Media Inc.
10.2†		Seventh Amending Agreement dated as of November 19, 2004 to the Credit Agreement dated as of November 28, 2000, as amended by the 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 and a Sixth Amending Agreement dated as of October 8, 2003, among Vidéotron Ltée, Royal Bank of Canada, as administrative agent, and the financial institutions signatory thereto and acknowledged by Le SuperClub Vidéotron ltée, Groupe de Divertissement SuperClub inc., Vidéotron (1998) ltée, CF Cable TV Inc., Videotron (Regional) Ltd., 9139-3256 Québec inc., Vidéotron TVN inc., Les Propriétés SuperClub inc. and SuperClub Vidéotron Canada inc., as guarantors (the "Guarantors"), and by Quebecor Media Inc.
10.3†		Form of Amended and Restated Credit Agreement (the "Credit Agreement") entered into as of November 28, 2000, as amended by a First Amending Agreement dated as of January 5, 2001, as 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 Vidéotron Ltée, Royal Bank of Canada, as administrative agent, and the financial institutions signatory thereto (included as Schedule 2 to Exhibit 10.2 above).
10.4		Form of Guarantee by the Guarantors of the Credit Agreement (incorporated by reference to Schedule D of Exhibit 10.5 to Quebecor Media Inc.'s Registration Statement on Form F-4 dated September 5, 2001, Registration Statement No. 333-13792).
10.5		Form of Share Pledge of the shares of Vidéotron Ltée and the Guarantors of the Credit Agreement (incorporated by reference to Schedule E of Exhibit 10.5 to Quebecor Media Inc.'s Registration Statement on Form F-4 dated September 5, 2001, Registration Statement No. 333-13792).
10.6*		Management Services Agreement effective as of January 1, 2002 between Quebecor Media Inc. and Vidéotron Ltée.
10.7*		Subordinated Loan Agreement dated as of March 24, 2003 (the "2003 Subordinated Loan Agreement") between Quebecor Media Inc. and Vidéotron Ltée.
10.8*		First Amending Agreement to the 2003 Subordinated Loan Agreement, dated as of October 8, 2003, between Quebecor Media Inc. and Vidéotron Ltée.
10.9		Subordinated Loan Agreement, dated as of January 16, 2004 (the "2004 Subordinated Loan Agreement"), between Quebecor Media Inc. and Vidéotron (1998) ltée.
10.10		Subordination Agreement dated as of January 16, 2004 by Vidéotron (1998) ltée and Quebecor Media Inc. to Wells Fargo Bank Minnesota, N.A. (now named Wells Fargo Bank, National Association), for itself and as trustee under the Indenture, with respect to the 2004 Subordinated Loan Agreement.
10.11		Subordination Agreement dated as of January 16, 2004 by Vidéotron (1998) ltée and Quebecor Media Inc. to Royal Bank of Canada for itself and as agent under the Credit Agreement, with respect to the 2004 Subordinated Loan Agreement.
10.12		Lease Agreement dated November 24, 1993 between Le Groupe Vidéotron Ltée and National City Bank of Canada for the property located at 300 Viger Street East, Montreal, Province of Quebec, Canada, together with a summary thereof in the English language (incorporated by reference to Exhibit 10.3 to Quebecor Media Inc.'s Registration Statement on Form F-4 dated September 5, 2001, Registration Statement No. 333-13792).

12.1†		Statement of Computation of Ratio of Earnings to Fixed Charges.
12.2†		Statement of Computation of Ratio of Long-term Debt, excluding QMI Subordinated Loans, to EBITDA.
12.3†		Statement of Computation of Ratio of EBITDA to Cash Interest Expense.
12.4†		Schedule of Valuation and Qualifying Accounts.
21.1†		Subsidiaries of Vidéotron Ltée.
23.1†		Consent of KPMG LLP, dated December 6, 2004.
23.2†		Consent of Arnold & Porter LLP, U.S. counsel to Vidéotron Ltée (included in Exhibit 5.1 above).
23.3†		Consent of Ogilvy Renault, Canadian counsel to Vidéotron Ltée (included in Exhibit 5.2 above).
23.4		Consent of KPMG LLP, dated January 14, 2005.
24.1†		Powers of Attorney.
25.1*		Statement of Eligibility and Qualification under the Trust Indenture Act of 1939 of Wells Fargo Bank Minnesota, N.A. (now named Wells Fargo Bank, National Association), as trustee, on Form T-1.
99.1†		Form of Letter of Transmittal.
99.2†		Form of Notice of Guaranteed Delivery.
99.3†		Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and other nominees.
99.4†		Form of Letter to Clients.
99.5†		Instructions to Registered Holders from Beneficial Owners.
99.6†		Guidelines for Certification of Taxpayer Identification Number

*: Previously filed as, and incorporated by reference to, the applicable exhibit to Vidéotron Ltée's Registration Statement on Form F-4 dated November 24, 2003, Registration Statement No. 333-110697.
**: Previously filed as, and incorporated by reference to, the applicable exhibit to Vidéotron Ltée's Amendment No. 1 to the Registration Statement on Form F-4 dated January 8, 2004, Registration Statement No. 333-110697.
†: Previously filed as such exhibit to Vidéotron Ltée's Registration Statement on Form F-4 dated December 6, 2004, Registration Statement No. 333-121032.

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