Cogeco 2013 Annual Report Download - page 91

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90 COGECO CABLE INC. 2013 Consolidated financial statements
C) GUARANTEES
In the normal course of business, the Corporation enters into agreements containing features that meet the criteria of a guarantee including
the following:
Business combinations and asset disposals
In connection with the acquisition or sale of a business or assets, in addition to possible indemnification relating to failure to perform covenants
and breach of representations and warranties, the Corporation has agreed to indemnify the seller or the purchaser against claims related to
events that occurred prior to the date of acquisition or sale. The term and amount of such indemnification will in certain circumstances be
limited by the agreement. The nature of these indemnification agreements prevents the Corporation from estimating the maximum potential
liability required to be paid to guaranteed parties. In management's opinion, the likelihood that a significant liability will be incurred under these
obligations is low. The Corporation has purchased directors' and officers' liability insurance with a deductible per loss. At August 31, 2013 and
2012, no liability has been recorded with respect to these indemnifications, except for those disclosed in note 14.
Long-term debt
Under the terms of the Senior Secured Notes, the Corporation has agreed to indemnify the other parties against changes in regulations relative
to withholding taxes and costs incurred by the lenders due to changes in laws. These indemnifications extend for the term of the related
financings and do not provide any limit on the maximum potential liability. The nature of the indemnification agreement prevents the Corporation
from estimating the maximum potential liability it could be required to pay. At August 31, 2013 and 2012, no liability has been recorded with
respect to these indemnifications.
24. GOVERNMENT ASSISTANCE
In 2013 and 2012, the Corporation recorded tax credits related to research and development costs in the amount of $690,000 and $1,144,000,
respectively. These credits were accounted as a reduction of operating expenses in 2013 and as a reduction of property, plant and equipment
and of operating expense for amounts of $382,000 and $762,000, respectively, in 2012.