BCSC

Exemption Orders (Discretionary)

COGECO CABLE INC.

IN THE MATTER OF THE SECURITIES ACT
R.S.B.C. 1996, c. 418

AND

IN THE MATTER OF COGECO CABLE INC.

AND

IN THE MATTER OF LÉVESQUE BEAUBIEN GEOFFRION INC.

AND

IN THE MATTER OF NESBITT BURNS INC.

AND

IN THE MATTER OF GRIFFITHS MCBURNEY & PARTNERS

AND

IN THE MATTER OF MERRILL LYNCH CANADA INC.

Exemption Order Under Section 48

WHEREAS Lévesque Beaubien Geoffrion Inc. (“Lévesque”), Nesbitt Burns Inc. (“Nesbitt”), Griffiths McBurney & Partners (“Griffiths”) and Merrill Lynch Canada Inc. (“Merrill”) (collectively, the “Underwriters”) have applied to the Executive Director for an order under section 48 of the Securities Act, R.S.B.C. 1996, c. 418, (the “Act”) that the Underwriters be exempt from the requirements of section 78(2)(b) of the Securities Rules, R.B.C. Reg. 194/97 (the “Rules”) as modified by an order of the Superintendent of Brokers (now Executive Director) entitled “In the Matter of the Limitations on a Registrant Underwriting Securities of a Related Party or Connected Party of the Registrant” (BOR#92/2), in connection with the proposed issue of Cogeco Cable Inc. (“Cogeco”) to be made by means of a prospectus;

AND WHEREAS Cogeco and the Underwriters have represented to the Executive Director that:

1. Cogeco was incorporated under the Canada Business Corporations Act on March 24, 1992 and the subordinate voting shares of Cogeco (the “Shares”) are listed and posted for trading on The Toronto Stock Exchange and the Montreal Exchange;

2. Cogeco is a reporting issuer in each of the provinces of Canada and is not in default of any of the requirements of the Act or the Rules;

3. a receipt was issued under the Act for a prospectus filed by Cogeco on June 21, 1993 in respect of its initial public offering;

4. on November 24, 1998, Cogeco shall enter into an underwriting agreement (the “Underwriting Agreement”) with Lévesque, Nesbitt, Griffiths and Merrill whereby Cogeco agrees to issue and sell and the Underwriters agree to purchase the Shares to be issued in each of the jurisdictions in Canada pursuant to a short-form prospectus;

5. the total number of Shares to be sold to the Underwriters is 3,000,000 (the “Distribution”);

6. Cogeco intends to file a prospectus (the “Prospectus”) on November 24, 1998 in each of the jurisdictions in Canada to qualify up to 3,000,000 Shares;

7. the proportionate share of the Distribution underwritten by each of the Underwriters is as follows:

Underwriter Name	Proportionate Share of Offering
Lévesque	40%
Nesbitt	25%
Griffiths	20%
Merrill	15%

8. the Prospectus in respect of the Distribution will contain a certificate signed by each of the Underwriters;

9. in November 1996, Cogeco entered into an agreement providing for a $700,000,000 senior secured revolving term facility with a syndicate of banks in which National Bank of Canada’s interest is 8.5% and Bank of Montreal interest is 5% of this amount;

10. approximately $488 million is in circulation at this date;

11. the syndicate is managed by the Canadian Imperial Bank of Commerce (“CIBC”);

12. the proceeds of the Distribution will serve to decrease Cogeco’s indebtedness including, in large part, the senior secured revolving term facility;

13. Lévesque is related to the National Bank of Canada and Nesbitt is related to the Bank of Montreal;

14. neither Griffiths nor Merrill is related to a Canadian bank;

15. Lévesque and Nesbitt must all be considered a “connected party” to Cogeco within the meaning of section 75(1) of the Rules;

16. the underwriting syndicate does not comply with the proportional requirements of section 78(2)(b) of the Rules and cannot rely upon the relief set out in BOR#92/2 in connection with the Distribution;

17. Griffiths and Merrill are not “connected parties” to Cogeco within the meaning of section 75(1) of the Rules;

18. the subscription by Griffiths and Merrill exceeds 20% of the total Distribution;

19. each of the members of the underwriting syndicate, including Lévesque and Nesbitt, will be reimbursed in proportion to their interest in the senior secured revolving term facility and they will not be treated preferentially;

20. Cogeco is in good financial condition; and

21. the decision to make the Distribution and the determination of its terms are being made by Cogeco and the Underwriters without the involvement of the lenders;

AND WHEREAS the Executive Director considers that to do so would not be prejudicial to the public interest;

IT IS ORDERED under section 48 of the Act that the Underwriters are exempt from the requirements of section 78(2)(b) of the Rules in respect of the Distribution, provided that:

1. Griffiths and Merrill underwrites not less than 30% of the Distribution;

2. Griffiths and Merrill are identified in the Prospectus as independent underwriters;

3. Griffiths and Merrill participate in the due diligence process and prospectus drafting in relation to the Distribution and the extent of its participation is fully described in the prospectus; and

4. Griffiths and Merrill signs the Underwriters’ certificate in the Prospectus.

DATED at Vancouver, British Columbia, on November 30, 1998.

Gayle Carlson
A/Director