CSII Implements CCAA Plan and Completes Sale of Cabovisão to Cogeco Cable

On August 1, 2006, Cable Satisfaction International Inc. (CSII), acting through RSM Richter Inc. (Richter) in its capacity as monitor and interim receiver of CSII, completed the implementation of its plan of arrangement and reorganization under the Companies' Creditors Arrangement Act (Canada), immediately followed by the sale of its wholly owned subsidiary, Cabovisão–Televisão por Cabo, S.A. (Cabovisão) to Cogeco Cable Inc. (Cogeco) based on an enterprise value of approximately €465 million. The plan was sponsored by Catalyst Fund Limited Partnership I (Catalyst).

Upon implementation of the plan, (a) all of the existing shares of CSII were cancelled, (b) newly created common shares of CSII representing 42 per cent of its common shares were issued to Catalyst Fund Limited Partnership I, (c) rights to purchase common shares of CSII representing 28 per cent of the common shares were issued to affected creditors under the plan, and (d) common shares of CSII representing 30 per cent of its common shares were issued to affected creditors under the plan in full satisfaction of their claims against CSII.

The transaction with Cogeco, which resulted in a subsidiary of Cogeco acquiring Cabovisão, the second-largest cable operator in Portugal, also included the purchase of debt and security and the payment of certain liabilities of Cabovisão. The net proceeds received by CSII from the sale of Cabovisão and the implementation of the plan, after deducting fees and expenses and subject to a working capital adjustment after closing, were in excess of €200 million. Cogeco's acquisition was financed by Canadian Imperial Bank of Commerce and its syndicate of lenders.

After closing, effective on August 30, 2006, CSII redeemed all of the rights to purchase its common shares issued upon the implementation of the plan. At a special meeting of the shareholders of CSII held on September 7, 2006, the shareholders unanimously approved a return of capital in order to distribute CSII proceeds from the Cogeco transaction to the holders of common shares of CSII distributed in connection with the implementation of the plan.

Richter and, following the implementation of the plan, CSII, was represented by Osler, Hoskin & Harcourt LLP in Montreal, with a team that included Martin Desrosiers, David Tardif-Latourelle and Allon Pollak (insolvency) and Jean Setlakwe and Julie Lambert (corporate). Catalyst was represented by Davies Ward Phillips & Vineberg LLP, with a team that included Denis Ferland and Louis-Martin O'Neill (litigation and insolvency); Jay Swartz, Vincent Mercier, Tarne Whiteley, Christian Gauthier and Andrea Jeffery (corporate) and John Zinn, Neal Armstrong and Claire Kennedy (tax).

Cabovisão was represented in Portugal by Abreu, Cardigos & Associates. Telemax B.V., a direct wholly owned subsidiary of CSII, was represented in the Netherlands by Loyens & Loeff. The ad hoc committee of senior note holders of CSII was represented by Goodmans LLP with a team that included Rob Chadwick, Fred Myers and Joseph Pasquariello (insolvency).

Cogeco was represented in Canada by Fraser Milner Casgrain LLP, with a team that included John Elder, Ross Walker, Ron Matheson, Roger Simard, Heidi Clark, Sander Grieve, Ted Shoub, Lou Morreale, Jeff Smolkin and Chantal Da Silva. Cogeco was represented in Portugal by Goncalves Pereira, Castelo Branco & Associates and in Luxembourg by Phillippe & Partners. The secured lenders to which Cabovisão was indebted were represented by Weil, Gotshal & Manges LLP. Canadian Imperial Bank of Commerce was represented by Blake, Cassels and Graydon LLP with a team that included Ric McIvor and Sue Grundy.